HomeMy WebLinkAboutMINUTES - 02062001 - SD.4 (2) OFFICIAL STATEMENT
COUNTY OF CONTRA COSTA, CALIFORNIA
TAXABLE PENSION OBLIGATION BONDS,
REFUNDING SERIES 2001
INTRODUCTORY STATEMENT
This Introductory Statement is subject in all respects to the more complete information
set forth in this Official Statement, including the cover page and the appendices hereto (the
"Official Statement"). The descriptions and summaries of various documents herein do not
purport to be comprehensive or definitive and are qualified in their entirety by reference to each
document. For definitions of certain terms used but not otherwise defined herein, see
"APPENDIX D - SUMMARY OF CERTAIN PROVISIONS OF THE TRUST AGREEMENT"
attached hereto.
The purpose of this Official Statement is to provide certain information concerning the
issuance, sale and delivery of the County of Contra Costa, California Taxable Pension Obligation
Bonds, Refunding Series 2001 (the "2001 Bonds"), in the aggregate principal amount of
Pursuant to Section 31554 of the County Employees Retirement Law of 1937, as
amended (the "Retirement Law"), the Board of Supervisors (the "Board of Supervisors") of the
County of Contra Costa, California (the "County") is obligated to appropriate and make
payments to the County of Contra Costa Employees' Retirement Fund (the "Retirement Fund")
arising as a result of retirement benefits accruing to members of the County of Contra Costa
Employees' Retirement Association (the "Association"), including any unfunded accrued
actuarial liability with respect to such benefits. In respect of the statutory obligation of the
County to make such payments, in 1994 the County executed a debenture, dated as of March 1,
1994, in favor of the Association (the "Debenture"). Also in 1994, the County issued
$337,365,000 of County of Contra Costa, California Taxable Pension Obligation Bonds, 1994
Series A (the "1994 Bonds," and together with the 2001 Bonds, the "Bonds") pursuant to a trust
agreement, dated as of February 1, 1994 (the "Original Trust Agreement"), in order to refund the
obligation of the County to the Association evidenced by the Debenture and to provide a
payment obligation with an effective interest rate lower than the rate then charged to the County
on its then current unfunded accrued actuarial liability. As of January 1, 2001, $302,275,000 of
1994 Bonds were outstanding. Immediately following the issuance of the 2001 Bonds,
$ of 1994 Bonds will be outstanding.
The 2001 Bonds are being issued to purchase and cancel, pursuant to a tender offer
program, and/or refund, a portion of the 1994 Bonds and to pay costs of issuance relating to the
2001 Bonds. The 2001 Bonds are being issued pursuant to the Original Trust Agreement and the
First Supplemental Trust Agreement thereto, dated as of December 1, 2000 (together, the "Trust
Preliminary,subject to change.
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Agreement"), between the County and BNY Western Trust Company, as trustee (the "Trustee").
Issuance of the 2001 Bonds was approved by a resolution of the Board of Supervisors adopted on
November_, 2000. The 2001 Bonds will be payable on a parity with the 1994 Bonds and any
Additional Bonds (as defined in Appendix D attached hereto)hereafter issued by the County.
THE COUNTY'S OBLIGATION WITH RESPECT TO THE 2001 BONDS IS AN
ABSOLUTE AND UNCONDITIONAL OBLIGATION IMPOSED UPON THE COUNTY BY
LAW AND ENFORCEABLE AGAINST THE COUNTY PURSUANT TO THE
RETIREMENT LAW AND IS NOT LIMITED AS TO PAYMENT TO ANY SPECIAL
SOURCE OF FUNDS 'OF THE COUNTY. THE 2001 BONDS DO NOT CONSTITUTE AN
OBLIGATION OF THE COUNTY FOR WHICH THE COUNTY IS OBLIGATED TO LEVY
OR PLEDGE ANY FORM OF TAXATION. NEITHER THE 2001 BONDS NOR THE
OBLIGATION OF THE COUNTY TO MAKE PAYMENTS WITH RESPECT TO THE 2001
BONDS CONSTITUTES A DEBT OR AN INDEBTEDNESS OF THE COUNTY, THE
STATE OF CALIFORNIA, OR ANY OF ITS POLITICAL SUBDIVISIONS WITHIN THE
MEANING OF ANY CONSTITUTIONAL OR STATUTORY. DEBT. LIMITATION OR
RESTRICTION:
DESCRIPTION OF THE 2001 BONDS
General
The 2001 Bonds will be issued in the aggregate principal amount of$ ' , will be
dated the date of their initial is and will mature, subject to. prior redemption, on June 1,
2014. The 2001 Bonds will initially be issued in the Weekly Mode. The 2001 Bonds will
thereafter bear interest at Daily Rates, Weekly Rates or the Fixed Rate determined by the
Remarketing Agent from time to time, as described below; provided that in no event will the per
annum interest rate on the 2001.Bonds (other than Provider Bonds) exceed the Maximum Rate of
15%. See "Interest on the 2001 Bonds"herein.
The Interest Payment Dates for the 2001 Bonds include any. Mode Change Date and the
Maturity Date, and for 2001 Bonds in the Daily Mode or the Weekly Mode, the first Business
Dayof each month, and for.2001 Bonds in the Fixed Rate Mode, each June 1 and December 1.
The Authorized Denominations of the 2.001 Bonds in the Daily Mode or the Weekly
Mode will be $100,000 and any integral multiple of$5,000 in excess thereof, and in the Fixed
Rate Mode will be $5,000 and any.integral multiple thereof.
The owners of 2001 Bonds in the Daily Mode or. the Weekly Mode ("Variable Rate
Bonds") may elect to have their 2001 Bonds (or portions thereof in Authorized Denominations)
purchased on any Business Day, and under certain circumstances the Variable Rate Bonds are
subject to mandatory purchase, as described below. See "Optional Tender for Purchase of 2001
Bonds" and "Mandatory Purchase of 2001 Bonds"herein.
Preliminary,subject to change.
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The 2001 Bonds, when issued, will be registered in the name of Cede & Co., as nominee
of The Depository Trust Company, New York, New York ("DTC"). DTC will act as securities
depository of the 2001 Bonds. Ownership interests in the 2001 Bonds may be purchased in
book-entry form only. Beneficial Owners (as defined herein) of the 2001 Bonds will not receive
physical certificates representing the 2001 Bonds purchased, but will receive a credit and balance
on the books of DTC. The 2001 Bonds will not be transferable, except for transfer to DTC,
another nominee of DTC, a successor Securities Depository or a nominee of such successor
Securities Depository. . The principal or purchase price of, premium, if any, and interest on the
2001 Bonds will be paid by the Trustee or the Tender Agent to DTC, or its nominee, which will
in turn remit such amounts to its participants for subsequent disbursement to the Beneficial
Owners of the 2001 Bonds as described herein. So long as Cede & Co. is the registered owner of
the 2001 Bonds, as nominee of DTC, references herein to Bondowners or registered owners shall
mean Cede & Co., and shall not mean the Beneficial Owners. See "Book-Entry System"herein.
Interest on the 2001 Bonds
Determination, of Interest Rate During the Daily Mode and the Weekly Mode. The
interest rate for any 2000 Bond in the Daily Mode or Weekly Mode shall be the rate of interest
per annum determined by the Remarketing Agent on and as of the applicable Rate Determination
Date as the minimum rate of interest which, in the opinion of the Remarketing Agent under then-
existing market conditions would result in the sale of such 2000 Bond on the Rate Determination
Date at a price equal to the principal amount thereof, plus accrued and unpaid interest, if any.
During the Daily Mode, the Remarketing Agent shall establish the Daily Rate by 10:00
A.M. Eastern Time on each Rate Determination Date. The Daily Rate for any day during the
Daily Mode which is not a Business Day shall be the Daily Rate established on the immediately
preceding Rate Determination Date. The Remarketing Agent shall make the Daily Rate
available by telephone to any Bondowner requesting such rate.
During the Weekly Mode, the Remarketing Agent shall establish the Weekly Rate by
4:00 P.M.Eastern Time on each Rate Determination Date. .The Weekly.Rate shall be in effect (i)
initially, from and including the first day the 2001 Bonds become subject to.the Weekly Mode to
and including the following Tuesday and (ii) thereafter, from and including each Wednesday to
and including the following Tuesday. The Remarketing Agent shall make the Weekly Rate
available after 4:00. P.M. Eastern Time on the Rate Determination Date by telephone to any
Bondowner requesting such rate.
Determination: of Fixed Rate. The Remarketing Agent shall determine the Fixed Rate
for the 2001 Bonds in the manner described in the Trust Agreement. See "APPENDIX D—
.SUMMARY.OF CERTAIN PROVISIONS OF THE TRUST.AGREEMENT" attached hereto.
Alternate Rates. If(i.) the Remarketing Agent fails or is unable to determine the interest
rate for any 2000 Bond or (ii) the method by which the Remarketing Agent determines the
interest rate with respect to a 2000 Bond shall be held to. be unenforceable by a court of law of
competent jurisdiction, then the following shall be the methods by which the interest rates shall
be determined for the affected 2001 Bonds until such time as the events described in clause (i) or
(ii) above are no longer applicable:
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(a) 2001 Bonds in the Daily Mode shall bear interest during each subsequent
Interest Period at the last lawful interest rate for such 2000 Bond set by the Remarketing
Agent; and
(b) 2001 Bonds in the Weekly Mode shall bear interest at the greater of
(1) 30-day AA financial commercial paper as posted on the Federal Reserve Board's
website (www.bog.frb.fed.us\releases\cp) and (2) 30-day LIBOR.
Changes in Mode. All of the 2001 Bonds in any Mode, other than the Fixed Rate Mode,
.may be changed;to any other Mode at the times and in the manner described below. Subsequent
to such change in Mode (other than a change to the Fixed Rate Mode), any 2000 Bond may again
.be.changed to .a different Mode at the times and in the manner hereinafter provided. The Fixed
Rate Mode shall be in effect until the Maturity Date, or acceleration thereof prior to the Maturity
Date, and may not be changed to any other Mode.
Notice to Bondowners. Not later than the thirtieth (30th) day next preceding the Mode
Change Date, the Tender Agent shall mail, in the name of the County, a notice of such proposed
change to the Bondowners of the 2001 Bonds being converted stating that the Current Mode will
be changed to. a new Mode, the. proposed Mode Change .Date and that such Bondowner is
required to tender such Bondowner's 2001 Bonds for purchase on such proposed Mode Change
Date.. The Mode Change Date shall be a Business Day.
Conditions Precedent for Change to Daily Mode or Weekly. Mode. A change to the
Daily Mode or the Weekly Mode shall not occur unless the following items shall have been
delivered to the Trustee, the Tender Agent and the Remarketing Agent on the Mode Change
Date:
(a) a Rating Confirmation Notice; and
(b) a Liquidity. Facility with a principal component equal to the principal
amount. of the 2001 Bonds. being converted, and with an appropriate interest component
for the applicable Mode and.with an Expiration Date not earlier than five (5) days after
the end of the initial Interest Accrual Period for such 2001 Bonds.
Conditions. Precedent for Change to Fixed Rate Mode. A change to the Fixed Rate
Mode shall.not occur unless there shall have been delivered to the Trustee and the Remarketing
Agent on the Mode Change Date a Favorable Opinion of Bond Counsel dated the Mode Change
Date and addressed'to the Trustee and the Remarketing Agent.
Failure to Satisfy Conditions Precedent to Mode Change. In the event the conditions
described above for a Mode change have not been satisfied by the applicable Mode Change Date,
then the New Mode shall not take effect. If the failed change in Mode was from the Daily Mode,
the 2001 Bonds shall remain in the Daily Mode, and if the failed change in Mode was from the
Weekly Mode, the 2001 Bonds shall remain in the Weekly Mode, in each case with interest rates
established in accordance with the Trust Agreement on and as of the failed Mode Change Date.
Calculation of Interest. When the Daily Mode or the Weekly Mode is in effect, interest
shall be calculated for the actual number of days elapsed on the basis of a 360-day year. When
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the Fixed Rate Mode is in effect, interest shall be calculated on the basis of a 360-day year
comprised of twelve 30-day months. Payment of interest on each 2000 Bond shall be made on
each Interest Payment Date for such 2000 Bond for unpaid interest accrued during the Interest
Accrual Period to the Bondowner of record of such 2000 Bond on the applicable Record Date.
Payment of Interest and Principal. The interest on the 2001 Bonds shall become due
and payable on the Interest Payment Dates in each year to and including the Maturity Date, and
on each Redemption Date and on the date of any acceleration prior thereto. The first Interest
Payment Date will be , 2001'. The interest on the 2001 Bonds shall be paid by the
Trustee on the Interest Payment Dates (i) in the case of 2001 Bonds in the Daily Mode or the
Weekly Mode, by wire transfer of immediately available funds to an account specified by the
Bondowner of record thereof on the applicable Record Date in a writing delivered to the Trustee
and (ii) in the case of 2001 Bonds in the Fixed Rate Mode, by check mailed by the Trustee to the
respective Bondowners of record thereof on the applicable Record Date at their addresses as they
appear in the books required to be kept by the Trustee pursuant to the Trust Agreement, except
that in the case of such a Bondowner of$1,000,000 or more in aggregate principal amount of
2001 Bonds, upon the written request of such Bondowner to the Trustee, specifying the account
or accounts to which such payment shall be made, payment of interest shall be made by wire
transfer of immediately available funds on the Interest Payment Date following such.Record
Date. Any such request shall remain in effect until revoked.or revised by such Bondowner by an
instrument in writing delivered to the Trustee. The principal of and premium, if any, on each
2000 Bond shall be payable on the Principal Payment Date, upon surrender thereof at the office
of the Trustee.
Optional Tender for Purchase of 2001 Bonds
Optional Tenders of 2001 Bonds in Daily Mode or Weekly Mode. The Bondowners in
the Daily Mode or the Weekly Mode may elect to have their 2001 Bonds (or portions thereof in
Authorized Denominations) purchased on any Business Day at a price equal to the principal
amount thereof, plus accrued interest, if any, to the Purchase Date (the "Purchase Price"), (i) in .
the case of 2001 Bonds in the Daily Mode, upon delivery of an irrevocable telephonic notice of
tender to the Remarketing Agent not later than 11:00 A.M. Eastern Time on the Purchase Date
specified by the Bondowner; and (ii). in the case of 2001 Bonds in the Weekly Mode, upon
delivery of an irrevocable written notice of tender or irrevocable telephonic notice of tender to
the Remarketing Agent, promptly confirmed in writing to the Tender Agent, not later than 4:00
P.M. Eastern Time on a Business Day not less than seven-.(7) days before the Purchase Date
specified by the Bondowner in such notice. Such notices of tender shall state the CUSIP
number, bond number and the principal amount of such 2000 Bond and that such 2000 Bond
shall be purchased on the Purchase Date specified above. The 2000 Bond shall be delivered
(with all necessary endorsements) at or before 12:00 noon Eastern Time on the Purchase Date at
the office of the Tender Agent in New York, New York; provided, however, that payment of the
Purchase Price shall be made only if the 2000 Bond so delivered to the Tender Agent conforms
in all respects to the description thereof in the required notice.
Preliminary,subject to-change.
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Repurchase by Agreement. A Bondowner who gives the notice of tender as described
above may repurchase the 2001 Bonds so tendered on such Purchase Dates if the Remarketing
Agent agrees to sell the 2001 Bonds so tendered to such Bondowner. If such Bondowner decides
to repurchase such 2001 Bonds and the Remarketing Agent agrees to sell the specified 2001
Bonds to such Bondowner, the delivery requirements set forth above shall be waived.
Mandatory Purchase of 2001 Bonds
Mandatory Purchase on Mode Change Date. The 2001 Bonds to be changed from one
Mode to another Mode are subject to mandatory purchase on the Mode Change Date at the
Purchase Price. 2001 Bonds purchased pursuant to such a Mode change shall be delivered by the
Bondowners (with all necessary endorsements) to the office of the Tender Agent in New York,
New York, at or.before 12:00 noon Eastern Time on the Mode Change Date.
Mandatory Purchase upon Substitution of Alternate Liquidity Facility. In the event
that an Alternate Liquidity Facility is to be substituted for an existing Liquidity Facility, the 2001
Bonds shall be subject to mandatory purchase on the date the Alternate Liquidity Facility is to be
substituted therefor, at the Purchase Price.
Mandatory Purchase upon Liquidity Facility Expiration or Default. The 2001 Bonds
shall be subject to mandatory.purchase at the Purchase Price on each Mandatory Purchase Date
described below:
(i) on the Business Day designated by the Trustee, which day shall be not more
than ten (10) days following receipt by the Trustee of notice from the Liquidity Facility
Provider that an "Event of Default" has occurred under the Liquidity Facility with respect
to the 2001 Bonds; or
(ii) on the Business Day not later than five (5) days preceding the Expiration
Date.of any Liquidity Facility with respect to.the 2001 Bonds.
Notice of Mandatory Purchase. The Tender Agent shall give notice of such mandatory
purchase by mail to the Bondowners of the 2001 Bonds subject to mandatory purchase no less
than thirty (30) days (seven (7) days in the case of purchases upon a Liquidity Facility default
described in clause (i) above) prior to the Mandatory Purchase Date. The notice shall state the
Mandatory Purchase Date, the Purchase .Price and that interest on 2001 Bonds subject to
mandatory purchase shall cease to accrue from and after the Mandatory Purchase Date. The
failure to mail such notice with respect to any 2000 Bond shall not affect the validity of the,
mandatory purchase of any. other 2000 Bond with respect to which notice was so'mailed. Any
notice mailed will be conclusively presumed to have been given, whether or not actually
received by any Bondowner. 2001 Bonds so purchased shall be delivered by the Bondowners
(with all necessary endorsements) to the office of the Tender Agent in New York, New York, at
or before 12:00 noon Eastern Time on the Mandatory Purchase Date.
Payment of Purchase Price
Source of Funds. On each Purchase Date or Mandatory Purchase Date, the Tender
Agent shall direct the Trustee to draw on the Liquidity Facility by 11:00 A.M. Eastern Time or,
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in the case of a Daily Mode, by 11:45 A.M. Eastern Time in an amount equal to the Purchase
Price of all 2001 Bonds tendered or deemed tendered less the aggregate amount of remarketing
proceeds received from the remarketing of 2001 Bonds. At or before 2:30 P.M. Eastern Time on
each Purchase Date or Mandatory Purchase Date and upon receipt by the Tender Agent of 100%
of the aggregate purchase price of the tendered 2001 Bonds, the Tender Agent shall pay the
Purchase Price of the 2001 Bonds from the Purchase Fund to the Bondowners thereof by bank
wire transfer in immediately available funds. Funds for the payment of such Purchase Price shall
be derived solely from the following sources in the order of priority indicated, and neither the
Tender.Agent nor the Remarketing Agent shall be obligated to provide funds from any other
source:
(i) immediately available funds on deposit in the Remarketing Proceeds Account
representing the proceeds of 2001 Bonds successfully remarketed by the Remarketing
Agent; and
(ii) immediately available funds on deposit in the Liquidity Deposit Account
representing draws under the Liquidity Facility.
See."THE LIQUIDITY FACILITY" and "THE BANK"herein.
Inadequate Funds for Tenders. If the funds available for purchases of 2001 Bonds
pursuant to the Trust Agreement are inadequate for the purchase of all 2001 Bonds tendered on
any Purchase Date, no purchase shall be consummated and the Tender Agent shall, after any
applicable grace period: (i) return all tendered 2001 Bonds to the Bondowners thereof, (ii) return
all moneys held in the Remarketing Proceeds Account to the Remarketing Agent for return to the
persons providing such moneys; and (iii) return all moneys held in the Liquidity Deposit
Account to the Liquidity Facility Provider.
Undelivered 2001 Bonds. If 2001 Bonds to be purchased are not delivered by the
Bondowners to the Tender Agent by 12:00 noon on the Purchase Date or the Mandatory
Purchase Date, as the case may be, the Tender Agent shall hold any funds received for the
purchase of those 2001 Bonds in trust in a separate account and shall pay such funds to the
former Bondowners upon presentation of the 2001 Bonds. Such undelivered 2001 Bonds shall
cease to accrue interest as to the former Bondowners on the Purchase Date or the Mandatory
Purchase Date, as the case may be, and moneys representing the Purchase Price shall be
available against delivery of those 2001 Bonds at the Principal Office of the Tender Agent;
provided, however, that any funds which shall be so held by the Tender Agent and which remain
unclaimed by the former Bondowner of a 2000 Bond not presented for purchase for a period of
two years after delivery of such funds to the Tender Agent, shall, to the extent permitted by law,
upon request in writing by the County and the furnishing of security or indemnity to the Tender
Agent's satisfaction, be paid to the County free of any trust or lien and thereafter the former
Bondowner shall look only to the County and then only to the extent of the amounts so received
by the County without any interest thereon, and the Tender Agent shall have no further
responsibility with respect to such moneys or payment of the purchase price of such 2001 Bonds.
The Tender Agent shall authenticate a replacement 2000 Bond for any undelivered 2000 Bond
which may then be remarketed by the Remarketing Agent.
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No Purchases or Sales After Payment Default. If there shall have occurred and be
continuing an Event of Default under the Trust Agreement involving the failure to pay the
principal of or interest on the 2001 Bonds, the Remarketing Agent shall not remarket any 2001
Bonds.
Redemption of the 2001 Bonds
Optional Redemption of 2001 Bonds in Daily Mode or Weekly Mode. The 2001 Bonds
in the Daily Mode or the Weekly Mode are subject to optional redemption by the County, in
whole or in part, in Authorized Denominations on any Business Day, at a redemption price equal
to the principal amount thereof, plus accrued and unpaid interest, if any.
Optional Redemption of 2001 Bonds in Fixed Rate Mode. The 2001 Bonds in the Fixed
Rate Mode may be subject to optional redemption as provided in the Trust Agreement. See
"APPENDIX D.—SUMMARY OF CERTAIN PROVISIONS OF THE TRUST AGREEMENT"
attached hereto.
Mandatory.Sinking Fund Redemption. The 2001 Bonds are also subject to mandatory
sinking fund redemption prior to maturity, in part on June 1 of each year on and after June 1,
by lot, from and in the amount of the mandatory sinking account payments set forth below
at a redemption price equal to the sum of the principal amount thereof plus accrued interest
thereon to the redemption date, without premium. Such scheduled redemption may be satisfied
by the allocation of 2001 Bonds thereto that have been optionally redeemed.
Redemption Date
(June 1) Principal Amount
t
Maturity
Selection of 2001 Bonds for Redemption.. 2001 Bonds held by the Liquidity Provider
shall be redeemed prior to any other 2001 Bonds. If less than all Outstanding 2001 Bonds are to
be redeemed at any one time, the' Trustee shall select the 2001 Bonds to be redeemed in any
manner that it deems appropriate and fair and shall promptly notify the County in writing of the
numbers of the 2001 Bonds so selected for redemption. For purposes of such selection, 2001
Bonds shall be deemed to be composed of multiples of minimum Authorized Denominations and
any such multiple may be separately redeemed. In the event 2001 Bonds are optionally
redeemed, the County may designate which'sinking account payments are allocated to such
optional redemption.
Notice of Redemption; Cancellation; Effect of Redemption. Notice of redemption shall
be mailed by first-class mail by the Trustee, not less than thirty (30) nor more than sixty (60)
days prior to the redemption date to the respective Bondowners of the 2001 Bonds designated for
redemption at their addresses appearing on the registration books of the Trustee. Each notice of
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redemption shall state the date of such notice, the date of issue of the 2001 Bonds, the Series, the
redemption date, the redemption price, the place or places of redemption (including the name and
appropriate address of the Trustee), the CUSIP number (if any) of the maturity, and, if less than
all of any such maturity is to be redeemed, the distinctive certificate numbers of the 2001 Bonds
of such maturity, to be redeemed and, in the case of 2001 Bonds to.be redeemed in part only, the
respective portions of the principal amount thereof to be redeemed. Each such notice shall also
state that on said date there will become due and payable on each of said 2001 Bonds the
redemption price thereof, together with interest accrued thereon to the redemption date, and that
from and after such redemption date'interest thereon shall cease to accrue, and shall require that
such 2001 Bonds be then surrendered at the address of the Trustee specified in the redemption
notice. Failure to receive such notice or any defect therein shall not invalidate any of the
proceedings taken in connection with such redemption.
The County may, at its option, prior to the date fixed for redemption in any notice of
redemption rescind and cancel such notice of redemption by Written Request to the Trustee and
the Trustee shall mail notice of such cancellation to the recipients of the notice of redemption
being canceled. If notice of redemption has been duly given as aforesaid and money for the
payment of the redemption price of the 2001 Bonds called for redemption is held by the Trustee,
then on the redemption date designated in such notice 2001 Bonds so called for redemption shall
become due and payable, and from and after the date so designated interest on such 2001 Bonds
shall cease to accrue, and the Bondowners of such 2001 Bonds shall have no rights in respect
thereof except to receive payment of the redemption price thereof.
Book-Entry System
The information in this section concerning.DTC and DTC's book-entry system has been
obtained from, sources. that the Cou.ntjy believes to be reliable, but the County takes no
responsibility for the accuracy.thereof.
The Depository Trust Company ("DTC"), New York, New York, will act as securities
depository for the 2001. Bonds. The 2001 Bonds will be issued as fully registered securities
registered in the name of Cede & Co. (DTC's partnership. nominee) or such other name as may
be requested by an authorized representative of 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 (the
"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
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trust companies that clear through or maintain a custodial relationship with a Direct .Participant,
either directly or indirectly (the "Indirect Participants"). The rules applicable to DTC and its
Participants are on file with the Securities and Exchange Commission.
Purchases of the 2001 Bonds under the DTC system must be made by or through Direct
Participants, which will receive a credit for the 2001 Bonds on DTC's records. The ownership
interest of each actual purchaser of each 2000 Bond (the "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 2001 Bonds 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 the 2001 Bonds,
except in the event that use of the book-entry system for the 2001 Bonds is discontinued.
To facilitate subsequent transfers,.all 2001 Bonds.deposited by Participants with DTC are
registered in the name of DTC's partnership nominee, Cede & Co. or such other name as
requested by an authorized representative of DTC. The deposit of 2001 Bonds with DTC and
their registration in the'name of Cede & Co. or such other DTC nominee do not effect any
change in beneficial ownership. DTC. has no knowledge of the actual Beneficial Owners of the
2001 Bonds; DTC's records reflect only the identity of the Direct Participants to whose accounts
such 2001 Bonds are credited, which may or may not be the Beneficial Owners. The Participants
will remain responsible for keeping account of their holdings on behalf of their customers.
Conveyance of notices and other communications by DTC to Direct Participants, by
Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to
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.
Redemption notices shall be sent to DTC. If less than all of the 2001 Bonds within a
maturity are being redeemed, DTC's practice is to. determine by lot the amount of the interest of
each Direct Participant in such maturity to be redeemed.
Neither DTC nor Cede & Co. (nor such other DTC nominee) will consent or vote with
respect to 2001 Bonds. 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 2001 Bonds are credited on the
record date (identified in a listing attached to the Omnibus Proxy).
Principal, redemption price and interest payments on the 2001. Bonds will be made to
Cede &Co. or such other nominee as may be requested by an authorized representative of DTC.
DTC's practice is to credit Direct Participants' accounts upon DTC's receipt of funds and
corresponding detail information from the County or the Trustee, on the payable date in
accordance with their respective holdings shown on DTC's records. 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
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name," and will be the responsibility of such Participant and not of DTC (nor its nominee), the
County or the Trustee, subject to any statutory or regulatory requirements as may be in effect
from time to time. Payment of principal, redemption price and interest to Cede &Co. (or such
other nominee as may be rcquestcd by an authorized representative of DTC) is the responsibility
of the County or the Trustee, disbursement of such payments to Direct Participants is the
responsibility of DTC, and disbursement of such payments to Beneficial Owners is the
responsibility of Direct and Indirect Participants.
DTC may discontinue providing its services as securities depository with respect to the
2001 Bonds at any time by giving reasonable notice to the County or the Trustee. Under such
circumstances, in the event that a successor securities depository is not obtained, 2001 Bonds are
required to be printed and delivered.
The County may decide to discontinue use of the system of book-entry transfers through .
DTC (or a successor securities depository). In that event, the 2001 Bonds will be printed and
delivered.
PLAN OF REFUNDING
The 2001 Bonds are being issued to purchase and cancel, pursuant to a tender offer
program, and/or refund, a portion of the 1994 Bonds and to pay costs of issuance relating to the
2001 Bonds. See `.`ESTIMATED SOURCES AND. USES OF FUNDS" herein. The County
believes that by purchasing and/or refunding a portion of the 1994 Bonds, it may be able to
reduce its debt service costs prior to the final maturity of the 1994 Bonds on June 1, 2011. In
addition, the County intends to restructure the amortization schedule of the Bonds (including the
2001 Bonds) to a final maturity date of June 1, 2014.
If sufficient 1994 Bonds are not tendered and accepted for purchase pursuant to the
County's tender offer program to meet its restructuring objectives, the County may use
remaining proceeds of the 2001 Bonds to refund to maturity a portion of the 1994 Bonds (the
"Defeased Bonds"). The County will effect this refunding by depositing such 2000 Bond
proceeds into an escrow fund (the "Escrow Fund") established by the Escrow Agreement, dated
as of December 1, 2000 (the "Escrow Agreement"), between the County and BNY Western Trust
Company, as escrow agent. Amounts in the Escrow Fund will be invested in United States
Treasury securities or other securities eligible to defease the Bonds pursuant to the provisions of
the Trust Agreement. Such securities will be calculated to generate sufficient cash flow, together
with the cash to be held in the Escrow Fund, to.pay all principal of and interest on the Defeased
Bonds when due. See "VERIFICATION OF MATHEMATICAL COMPUTATIONS" herein.
[Final Official Statement will indicate which 1994 Bonds are to. be purchased and/or refunded to
maturity.]
THE LIQUIDITY FACILITY
10021499/594236.4 w97 1]
5D z1
;2 -G-o/
THE BANK
Background Information
Westdeutsche Landesbank Girozentrale ("WestLB"), which traces its history to 1832,
was created by the merger of two central banks, or Landesbanks (German State Banks), in the
State of North Rhine-Westphalia, the Federal Republic of Germany ("Germany") on January 1,
1969. As a German universal bank, WestLB provides commercial and investment banking
services regionally, nationally and internationally to public, corporate and bank customers.
WestLB is the largest of the Landesbanks and, on the basis of total assets at December 31, 1999,
was the fourth largest bank in Germany. At December 31, 1999, WestLB had total assets of
approximately E 308 billion (US$ 369.billion).
WestLB also performs the functions of a state and municipal bank for the State of North
Rhine-Westphalia and acts as the central bank of the Sparkassen (savings banks) in North Rhine-
Westphalia (Germany's most populous state). It conducts a comprehensive range of wholesale
banking business and has the power to issue mortgage bonds, municipal bonds and other bonds
and is the largest continuous issuer of long term debt in Germany. In its capacity as central bank,
WestLB acts as the clearing and depository bank for the savings banks in North Rhine-
Westphalia. As a state bank, WestLB provides trustee services for state-supported lending
programs for housing, regional economic assistance, middle market firms and environmental
protection. Internationally, the WestLB Group (the "Group") operates through an extensive
network of banking subsidiaries, branches and representative offices to provide a range of
financial services to its clients.
Pursuant to a guaranty obligation (Gewahrtragerhaftung) set forth in Section 37 of the
North Rhine-Westphalia Savings Bank Act and Section 5 of the Ordinances of WestLB; North
Rhine-Westphalia together with the other guarantors specified therein (including regional
authorities and savings bank associations) are jointly and severally liable without restriction for
all obligations of WestLB, including all obligations of WestLB New York. The guaranty
obligation gives creditors a direct claim against North Rhine-Westphalia only if the claims of the
creditors have not first been satisfied out of the assets of WestLB, including the assets of
WestLB New York.
In addition to being liable under the guaranty obligation, North Rhine-Westphalia, having
established WestLB, is responsible to WestLB for the performance of WestLB's obligations,
10021499/594236.4 w97 12
including all obligations of WestLB New York. This maintenance obligation (Anstaltslast),
while not a formal guaranty affording creditors of WestLB a direct claim against North Rhine-
Westphalia, requires North Rhine-Westphalia to keep WestLB in a position to perform its
functions and to enable it, in the event of .financial difficulties, to perform its obligations, when
due.
The New York Branch
The New York Branch of WestLB ("WestLB New York") is licensed and subject to
supervision and regulation by the Superintendent of Banks of the State of New York. WestLB
New. York is examined by the New York State Banking Department and is subject to banking
laws and regulations applicable to a foreign bank that operates a New York branch. In addition
to being subject to New York banking laws and regulations, WestLB and WestLB New York are
also subject to. the International Banking Act of 1978 (the "IBA") and the Foreign Bank
Supervision Enhancement Act of 1991, and WestLB is subject to federal regulation under the
IBA and the Bank Holding Company Act of 1956.
Summary of Results of Operations and Financial Condition fore the Fiscal Year Ended
December 31, 1999
In the fiscal year ended December 31, 1999, WestLB's total assets grew by 11% from E
277. billion to E 308 billion (US$ 309 billion). As of December 31, 1999, total deposits and
borrowed. funds totaled E 280 billion (US$ 281 billion), an increase of 11% from the previous
year's amount by E 253 billion. WestLB's capital and reserves (including supplementary capital)
increased to.E 13,963 million (US$ 14,027 million) as of December 31, 1999 (as compared to E
11,472 million as of December 31, 1998).
WestLB's operating profit before risk provisions/result of evaluation of E 776 million
(US$ 792 million) decreased by 2% over the previous year. Interest surplus increased by 15%
(from E. 1,750 million in 1998 to E 2,010 million in 1999). Commission surplus increased by
57% (from E 233 million in 1998 to E 366 million in 1999). Staff expenses increased by 29% to
E 911 million (US$ 915 million) in 1999, with other administrative expenses showing an
increase of 22.0% to E 827 million (US$ 831 million) in 1999.
United States and German Exchange Rates, and Generally Accepted Accounting Principles
The financial information for the year ended December 31, 1999 is derived from the
audited statements of WestLB, does not include the consolidated subsidiaries of the WestLB
Group and has been prepared in accordance with accounting principles, practices, laws and
regulations generally accepted in Germany. German accounting principles differ in certain
respects from accounting principles generally accepted in the United States.
Unless indicated otherwise, currency amounts are stated in Euro ("E" or "Euros") or
United States dollars ("US$" or "U.S. dollars"). Merely for the convenience of the reader, this
summary contains translations of certain Euro amounts into U.S. dollars at specified rates. These
translations should not be construed as representations that the Euro amounts actually represent
such U.S. dollar amounts or could be converted into U.S. dollar amounts at the rate indicated.
Unless otherwise indicated, the translations of Euro into.U.S. dollars have been made at E 1.0046
10021499/594236.4 w97 13
= US$ 1.00, which was the official (Frankfurt fixing) exchange rate on'December 30, 1999. In
certain instances, figures reflect the effect of rounding.
SECURITY AND SOURCE OF PAYMENT FOR THE 2001 BONDS
Obligation Imposed by Law; Deposits to Trustee
The obligation of the County to make payments with respect to the 2001 Bonds is an
absolute and unconditional obligation of the County imposed upon the County by law and
enforceable against the County pursuant to the Retirement Law. Payment of principal of,
premium, if any, and interest on the 2001 Bonds is not limited to.any special source of funds.
The Trust Agreement requires the County to deposit or cause to be deposited with the
Trustee the amount which, together with any moneys transferred from the Surplus Account, will
be sufficient to pay the County's obligations on the Bonds (including the 2001 Bonds) and Swap
Payments for each fiscal year within 30 days of the commencement of such fiscal year. For
purposes of such deposit, the County shall assume that interest on Swapped Bonds is payable at
the swap rate and that the interest rate on Bonds in the Daily Mode or the Weekly Mode is equal
to 100% of the average interest rate on such Bonds during the prior fiscal year, or 100% of the
initial rate upon issuance of such Bonds. If the Trustee determines, at any time after such
deposit, that insufficient funds are held in the Bond Fund established by the Trust Agreement to
pay principal of and interest on the Bonds estimated to be due in such fiscal year, the Trust
Agreement requires the Trustee to notify the County promptly of such deficiency, and the
County is'required to make the necessary deposit to eliminate such deficiency.
The Trust Agreement also provides that all Swap Revenues shall be deposited in the
Bond Fund as and when received. Such Swap Revenues are expected to be sufficient in amount
to pay interest on Swapped Bonds above the swap rate; provided, however, if such amounts are
not sufficient or are not received for any reason, the County is required to deposit promptly with
the Trustee the amount of any such deficiency. The Trustee shall establish separate subaccounts
within the Bond Fund for each Series of Bonds and funds deposited with respect to one Series of
Bonds shall not be available to pay debt service on a different Series of Bonds unless such funds
are deposited in the Surplus Account, from which the Trustee may transfer funds to any
subaccount of the Principal Account or Interest Account. See "APPENDIX D - SUMMARY OF
CERTAIN PROVISIONS OF THE TRUST AGREEMENT. - Bond Fund; Deposits to Bond
Fund" attached hereto.
In the event the Board of Supervisors fails or neglects to. make appropriations and
transfers in respect of its obligation to pay the 2001 Bonds, the Retirement Law requires that the
County Auditor transfer from any money available in any fund in the County treasury amounts
necessary to make such payments, with such transfer having the same force and effect as.an
appropriation by the Board of Supervisors. No assurance can be given as to the amount and
source of funds available in the County treasury for such transfer at any particular time.
The 2001 Bonds will be payable on a parity with the 1994 Bonds and any Additional
Bonds hereafter issued by the County.
10021499/594236.4 w97 14
z-G-ol
THE 2001 BONDS DO NOT CONSTITUTE AN OBLIGATION OF THE COUNTY
FOR WHICH THE COUNTY IS OBLIGATED TO LEVY OR PLEDGE ANY FORM OF
TAXATION. NEITHER THE 2001 BONDS NOR THE OBLIGATION OF THE COUNTY TO
MAKE PAYMENTS WITH RESPECT TO THE 2001 BONDS CONSTITUTES A DEBT OR
AN INDEBTEDNESS OF.THE COUNTY, THE STATE OF CALIFORNIA, OR ANY OF. ITS
POLITICAL SUBDIVISIONS WITHIN THE MEANING OF ANY CONSTITUTIONAL OR
STATUTORY DEBT LIMITATION OR RESTRICTION.
Interest Reserve Account
Pursuant to the Trust Agreement, the County will establish a separate subaccount within
the Surplus Account entitled the "Interest Reserve Account for Variable Rate Bonds" (the
"Interest Reserve Account"). The County covenants to maintain the Interest Reserve Account
with the Trustee for any period (i) during which Variable Rate Bonds remain Outstanding and
are not Swapped Bonds with fixed Swap Payments and (ii) during which the County is obligated
for Swap Payments that are variable.
The initial deposit to the Interest Reserve Account for the period commencing on the
Closing Date and ending with the fiscal year ending June 30, 2001. shall be $ . See
"ESTIMATED SOURCES. AND USES OF FUNDS" herein. Commencing with the fiscal year
beginning July 1, 2001, the County shall deposit to the Interest Reserve Account within 30 days
of the commencement of such fiscal year that amount, if any, which is necessary to bring the
amount on deposit in the Interest Reserve Account up to one percent (1%) of the Outstanding
principal amount of Variable Rate Bonds that are not Swapped Bonds with fixed Swap Payments
and one percent (1%) of the notional amount of Swapped Bonds with variable Swap Payments
(the"Interest Reserve Account Requirement").
On any Interest Payment Date or payment date for Swap Payments, if the amount of
interest or Swap Payments then due and payable by the County exceeds the amount assumed by
the County in making its annual deposit to the Bond Fund, the Trustee shall withdraw the
differential between the amount assumed and the actual amount then due and payable from
available money in the Interest Reserve Account until such account is depleted.
At the beginning of each fiscal year, any amounts on deposit in the Interest Reserve
Account in excess of the Interest Reserve Account Requirement for such year shall be transferred
by the Trustee to the Bond Fund.
ESTIMATED SOURCES AND USES OF FUNDS
The proceeds of the 2001 Bonds, together with certain funds of the County, are estimated
to be applied as set forth in the following table.
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Estimated Sources of Funds
Principal Amount of 2001 .Bonds $
County Contribution(1)
Total Estimated Sources $
.Estimated Uses of Funds
Purchase of 1994 Bonds $
Deposit to Escrow Fund
Deposit to.Interest Reserve Account(2)
Costs of Issuance(3)
Total Estimated Uses $
Amount estimated to be received by the County in connection with the termination of all or a portion of a Debt
Service Forward Delivery Agreement relating to the 1994 Bonds.
121 See"SECURITY AND SOURCE OF PAYMENT FOR THE 2001 BONDS—Interest Reserve Account."
c3� Includes fees of the Underwriter,Bond Counsel,Bank Counsel,the Financial Advisor and the Trustee,fees relating
to the tender offer program,and other costs of issuance.
DEBT.SERVICE REQUIREMENTS
The debt .service requirements for the Bonds (excluding the Defeased Bonds) are as
follows:
TOTAL DEBT SERVICE REQUIREMENTS FOR THE BONDS
1994 Bonds 2001 Bonds
Annual Annual Annual Annual
Principal Interest Principal Interest Total Debt
Payment Date Payment Payments Payment PaymentsService Payment
June 1, 2001
June 1,2002
June 1,2003
June 1,2004
June 1, 2005
June 1,2006
June 1,2007
June 1,2008
June 1, 2009
June 1, 2010
June 1, 2011
June 1, 2012
June 1,2013
June 1, 2014
TOTAL
Assumes an interest rate on the 2001 Bonds of %per annum.
10021499/594236.4 w97 16
5;D,
COUNTY INFORMATION
For a discussion of certain economic and demographic information about the County, see
"APPENDIX A—GENERAL COUNTY ECONOMIC AND DEMOGRAPHIC INFORMATION"
attached hereto. For certain financial information about the County, see "APPENDIX B—
COUNTY FINANCIAL INFORMATION' and "APPENDIX C—AUDITED FINANCIAL
STATEMENTS OF THE COUNTY FOR THE FISCAL YEAR ENDED JUNE 30, 1999" attached
hereto.
CONSTITUTIONAL AND STATUTORY LIMITATIONS ON
TAXES, REVENUES AND APPROPRIATIONS
Article XIII A of the California Constitution
In 1978, California voters approved Proposition 13, adding Article XIII A to. the
California Constitution. Article XIII A was subsequently amended in 1986, as discussed below.
Article XIII A limits the amount of any ad valorem tax on real property to 1% of the full cash
value thereof, except that additional ad valorem taxes may be levied to pay debt service on
indebtedness approved by the voters prior to July 1, 1978 and on bonded indebtedness for the
acquisition or improvement of real property which has been approved on or after July 1, 1978 by
two-thirds of the voters voting on such indebtedness. Article XIII A defines full cash value to
mean "the county assessor's valuation of real property as shown on the 1975/76 tax bill under
"full cash" or thereafter, the appraised value of real property when purchased, newly constructed,
or a change in ownership have occurred after the 1975 assessment." This full cash value may be
increased at a rate not to exceed 2%per year to account for inflation.
Article XIII A has subsequently been amended to permit reduction of the "full cash
value" base in the event of declining property values caused by damage, destruction or other
factors, to provide that there would be no increase in the "full cash value" base in the event of
reconstruction of property damaged or destroyed in a disaster.
Legislation Implementing Article XIII A
Legislation has been enacted and amended a number of times since 1978 to implement
Article XIII A. Under current law, local agencies are no longer permitted to levy directly any
property tax (except to pay voter-approved indebtedness). The 1% property tax is automatically
levied by the County and distributed according to a formula among taxing agencies. The
formula apportions the tax roughly in proportion to the relative shares of taxes levied prior to
1979.
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.
10021499/594236.4 w97 17
S,a-
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 1990/91 each appropriations limit must be recalculated
using the actual 1986/87 appropriations limit and making the applicable annual adjustments as if
the provisions of Proposition 111 had been in effect.
Appropriations subject to limitations of a 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. Proceeds of taxes include, but are not limited to, all tax revenues plus the proceeds to an
entity of government from (i) regulatory licenses, user charges and user fees (but only to the
extent such proceeds exceed the cost of providing the service or. regulation), (ii) the investment
of tax revenues, and (iii) 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 must be returned by revising tax
rates or fee schedules over the subsequent two years. As amended by Proposition 98, Article
XIII B provides for the payment of a portion of any excess revenues to a fund established to
assist in financing certain school needs. Appropriations for "qualified capital outlays" are
excluded from the limits of Proposition 111.
For Fiscal Year 2000-2001, the County's Article XIII B limit is estimated to be
$3,584,519,056 and budget appropriations subject to limitation are estimated to be $183,748,841.
The County has never exceeded its Article XIII B appropriations limit and does not anticipate
having any difficulty in operating within the appropriations limit.
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 added 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 likely will be determined by the courts with
10021499/594236.4 w97 18
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 that the County imposed, extended or
increased without.voter approval after December 31, 1994 may continue to be. imposed only if
approved by a majority vote in an election which must be held within two years of November 5,
1996. The County believes that no existing County-imposed taxes deposited into its General
Fund will be affected by the voter approval requirements of Proposition 218, although as
indicated below certain tax levies may be affected by Proposition 62. The voter approval
requirements of Proposition 218 reduce the flexibility of the County to raise revenues for the
General Fund, and no assurance can be given that the County will be able.to impose, extend or
increase such taxes in the future to meet increased expenditure needs.
Article XIII D also adds several provisions making it generally more difficult for local
agencies to levy and maintain fees, charges, and assessments for municipal services and
programs. These provisions include, among other things, (i) a prohibition against assessments
which exceed the.reasonable cost of the proportional special benefit conferred on a parcel, (ii) a
requirement that assessments must confer a "special benefit," as defined.in Article XIII D, over
and above any general benefits conferred, (iii) a majority protest procedure for assessments
which involves the mailing of notice and a ballot to. the record owner of each affected parcel, a
public hearing and the tabulation of ballots weighted according to the proportional financial
obligation of the affected party, and (iv) a prohibition against fees and charges that are used for
general governmental services, including police, fire or library services, where the service is.
available to the public at large in substantially the same manner as it is to property owners. The
County anticipates 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 reduction or repeal occurs, the County's ability to repay the 2001 Bonds
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). 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
10021499/594236.4 w97 19
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) requires 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.
The County has two taxes to which Proposition 62 could apply: a business license tax
enacted in 1991, which generates approximately $950,000 per year, and a transient occupancy
tax, an increase in which was enacted in 1990, that generates approximately $1,200,000 per year
(approximately $180,000 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 pursuant to an emergency services request under federal law), and public
school education at elementary, secondary and post-secondary levels. Among other things,
Proposition 187 also requires state and local agencies to report persons who are suspected illegal
aliens to the California Attorney General and the United States Immigration and Naturalization
Service (the "INS").
The Legislative Analyst estimated the most significant fiscal effects of Proposition 187
would fall into the following three categories:
Program Savings. State and local governments (primarily counties) would realize
savings from denying certain benefits and services to persons who cannot document their
citizenship or legal immigration status. The savings to State and local governments statewide
could be in the range of $200 million annually, based on the current estimated use -of these
services and benefits by illegal immigrants.
Verification Costs. State, local governments and schools would incur significant costs to
verify-citizenship or immigration status of students, parents, persons seeking health care or social
services, and persons who are arrested. Ongoing annual costs could be in the tens of millions of
dollars, with first-year costs considerably higher(potentially in excess of$100 million).
Potential Losses of Federal Funds. Proposition 187 places at risk up to $15 billion
annually in California alone in federal funding for education, health and welfare programs due to
conflicts with federal requirements.
10021499/594236.4 w97 20
S v. �
A number of lawsuits filed in state and federal court challenging the validity of
Proposition 187 under the California and U.S. Constitutions were consolidated for trial in the
U.S. District Court. On November 2, 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." 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 Court 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 aperson'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 Dan Lungren was filed with
the Ninth Circuit Court of Appeals on March 25, 1998. In April 1999, the court agreed to. the
request of,Governor Davis to allow the United States Ninth Circuit of Appeals to serve as
mediator on the issue. Thereafter, the parties entered into a stipulation, approved by the court on
September 13, 1999, which dismissed the State's appeal of the cases. The period to challenge
the Court's approval expired on October 13, 1999, without a challenge being filed. When the
Stipulation becomes final, it will end the litigation among the parties and provisions of
Proposition 187 affecting public education will be overturned. However, as of this date, the
Court of Appeals'is continuing to hear arguments on whether the voluntary dismissal of the case
was appropriate. .It cannot be predicted what the nature or outcome of such appeal will be or the
ultimate fiscal impact of Proposition 187.
Future Initiatives and Changes of Law
Article XIII A, Article XIII B, Article XIII C, Article XIII D, Proposition 62, and
Proposition 187 were each 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. In addition, the State legislature could amend or enact laws resulting in a
reduction of moneys available to the County. Similarly, the State legislature could enact
legislation with the approval of the electorate amending the State Constitution, which could
result in a reduction of moneys available to the County.
Limitations on Remedies
The rights of the Bondowners are subject to the limitations on legal remedies against
counties in the State, including applicable bankruptcy, insolvency, reorganization, moratorium
and similar laws affecting the enforcement of creditors' rights generally, now or hereafter in
effect, and to the application of general principles of equity, including concepts of materiality,
reasonableness, good faith and fair dealing and the possible unavailability of specific
performance or injunctive relief, regardless of whether considered in a proceeding in equity or at
law.
10021499/594236.4 w97 21
sDy
TAX MATTERS
In the opinion of Orrick, Herrington & Sutcliffe LLP, Bond Counsel, based upon an
analysis of existing laws, regulations, rulings, and court decisions, interest on the 2001 Bonds is
exempt from State of California personal income taxes. Bond Counsel expresses no opinion as to
the exclusion from gross income for federal income taxes purposes of interest on the 2001 Bonds
or regarding any other federal or state tax consequences relating to the accrual or receipt of
interest on the 2001 Bonds. NO ATTEMPT HAS BEEN OR WILL BE MADE TO COMPLY
WITH CERTAIN REQUIREMENTS RELATING TO THE EXCLUSION FROM GROSS
INCOME FOR FEDERAL INCOME TAX PURPOSES OF INTEREST ON THE 2001
BONDS. Interest on the 2001 Bonds is not excludable from gross income for federal income
purposes. A copy of the proposed form of Bond Counsel opinion is set forth in Appendix E
attached hereto.
Although Bond Counsel has rendered an opinion that interest on the 2001 Bonds is
exempt from California personal income taxes, the ownership or disposition of, or the accrual or
receipt of interest on, the 2001 Bonds may otherwise affect a Bondowner's federal or state tax
liability. The nature and extent of these other tax consequences will depend upon the particular
tax status of the Bondowner or the Bondowner's other items of income or deduction. Bond
Counsel expresses no.opinion regarding any such other tax consequences.
APPROVAL OF LEGALITY
Validation Proceedings
On November 19, 1993, the County, acting pursuant to the provisions of Sections 860 et
seq. of the California Code of Civil Procedure, filed a complaint in the Superior Court of the
State of California for the County of Contra Costa seeking judicial validation of the transactions
relating to the issuance of the Debenture and the 1994 Bonds and certain other matters (The
County of Contra Costa vs. All Persons Interested etc., Case No. C93-05180)..On December 22,
1993, the court entered a default judgment to the effect, among other things, that the Debenture,
the 1994 Bonds and the Original Trust Agreement are valid, legal and binding obligations of the
County in accordance with their terms and were and are in conformity with applicable provisions
of all laws. The judgment also covers Additional Bonds (such as the 2001 Bonds) and
supplemental trust agreements (such as the First Supplemental Trust Agreement). The time
period for the filing of appeals with respect to the judgment has expired and no appeals have
been filed. Therefore, the judgment.has become final and unappealable.
Opinions of Counsel
The validity of the 2001 Bonds and certain other legal matters are subject to the
approving opinion of Orrick, Herrington & Sutcliffe LLP, San Francisco, California, Bond
Counsel. Bond Counsel undertakes no responsibility for the accuracy, fairness or completeness
of this Official Statement. A copy of the proposed form of Bond Counsel opinion is set forth in
Appendix E attached hereto. Certain legal matters will be passed upon for the County by County
Counsel, for the Underwriter by its counsel, Fulbright & Jaworski L.L.P., Los Angeles,
California, and for the Bank by its counsel, Winston & Strawn, New York, New York.
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5'�.s!
LITIGATION
The County is not aware of any action, suit or proceeding pending or threatened,
challenging the legality or enforceability of the Trust Agreement or restraining or enjoining the
issuance of the 2001 Bonds, or the execution and delivery of the First Supplemental Trust
Agreement, or in any way contesting or affecting the legality, enforceability or validity of any of
the foregoing or any proceedings of the County taken with respect to any of the foregoing.
RATINGS
Moody's Investors Service ("Moody's") and Standard & Poor's Ratings Services
("S&P") are expected to assign to the. 2001 Bonds the ratings of "VMIG1" and "A-1+",
respectively, with the understanding that upon the delivery of the 2001 Bonds, the Liquidity
Facility will be delivered by the Bank. Any explanation of the significance of such ratings may
only be obtained from the rating agencies furnishing such ratings. The County furnished to
Moody's and S&P certain information and materials concerning the 2001 Bonds and the County.
Generally, rating agencies base their ratings on such information and materials and on
investigations, studies and assumptions made by the rating agencies themselves. There is no
assurance that any rating assigned to the 2001 Bonds by a rating agency will be maintained for
any given period of time or that it will not be lowered or withdrawn entirely by such rating
agency if in its judgment circumstances so warrant. Neither the County nor the Underwriter has
undertaken any responsibility either to bring to the attention of the owners of the 2001 Bonds any
proposed change in or withdrawal of such ratings or to oppose any such proposed change or
withdrawal. Any such downward change in or withdrawal of the ratings may have an adverse
effect on the market price of the 2001 Bonds.
UNDERWRITING
The 2001 Bonds will be purchased for reoffering by Bear, Stearns & Co. Inc. (the
"Underwriter"). The Underwriter has agreed to purchase the 2001 Bonds at a purchase price of
$ less an underwriting fee of $ The Bond Purchase Contract
provides that the Underwriter will purchase all of the 2001 Bonds if any are purchased. The
obligation of the Underwriter to. accept delivery of the 2001 Bonds is subject to various
conditions contained in the Bond Purchase Contract.
The Underwriter will offer the 2001 Bonds to the public initially at the offering price set
forth on the cover page of this Official Statement, which may subsequently change without any
prior notice. The Underwriter reserves the right to offer and sell the 2001 Bonds to certain
dealers (including dealers depositing the 2001 Bonds into investment trusts) at prices lower than
the public offering price.
Bear, Stearns & Co. Inc. will also serve as the initial Remarketing Agent for the 2001
Bonds.
VERIFICATION OF MATHEMATICAL COMPUTATIONS
The accuracy of the mathematical computations regarding the adequacy of the cash flow
generated by the securities and cash, if any, to be held in the Escrow Fund to pay the principal of
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and interest on the Defeased Bonds when due will be verified by a firm of independent certified
public accountants selected by the County.
ADDITIONAL INFORMATION
The purpose of this Official Statement is to supply information to prospective purchasers
of the,2001 Bonds. Summaries and explanations of the 2001 Bonds, the Trust Agreement, the
Liquiity Facility and the statutes and other documents contained herein do not purport to be
complete, and reference is made to such 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 2001 Bonds.
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 2000 Bond may obtain a
copy of any such report, as available, from the County by writing to Director, Capital Facilities
and Debt Management, County Administrator's Office, 651 Pine Street, 6t1i Floor, Martinez,
California 94553-0063, or by calling (925) 335-1093.
All data contained herein have been taken or constructed from County records and other
sources. Appropriate County officials, acting in their official capacity, 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 the
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 2001 Bonds. Preparation of
this Official Statement and its distribution have been duly authorized and approved by the Board
of Supervisors of the County.
COUNTY OF CONTRA COSTA, CALIFORNIA
Philip J. Batchelor
County Administrator and Clerk
of the Board of Supervisors
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APPENDIX A
GENERAL COUNTY ECONOMIC AND DEMOGRAPHIC INFORMATION
General
The County. of Contra Costa, California (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 easterly 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"), which has
encouraged the expansion of both residential and commercial development. In addition, economic
development along the Interstate 680 corridor in the County has been substantial and 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
member of which is elected to a four-year term, serves as the County's legislative body. Also elected are
the County Assessor, Auditor-Controller, Clerk-Recorder, District Attorney-Public Administrator,
Sheriff-Coroner and Treasurer-Tax Collector. A County Administrator appointed by the Board of
Supervisors runs the day-to-day business of the County. The current County Administrator, Philip J.
Batchelor, is scheduled to retire in March 2001. The Board of Supervisors recently announced the
appointment of John R. Sweeten as the new County Administrator, effective March 2, 2001.
Population
The County is the ninth most populous county in California, with its population reaching
approximately 930,000 as of January 1, 2000. . This represents an increase of approximately 16%
compared to the County's population in 1990. The availability of rapid transit, close proximity to major
employment hubs in San Francisco and Oakland, and relatively affordable existing and new housing have
combined to attract more residents to the County over the past decade.
While population grew in every city in the County during the 1990s, population growth has been
strongest in unincorporated areas as well as in the eastern portion of the County, particularly in Antioch,
Brentwood and Clayton.
The following is a summary of the County's population levels since 1960.
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COUNTY OF CONTRA COSTA
POPULATION"'
Special
Census
1960 1970 1975 1980 1990 2000
Antioch 17,305 28,060 33,215 42,683 62,195 84,500
Brentwood 2,186 2,649 3,662 4,434 7,563 23,100
Clayton -- 1,385 1,790 4,325 7,317 11,350
Concord . 36,208 85,164 94,673 103,763 111,308 114,900
Danville* -- -- -- 26,143 31,306 40,500
El Cerrito 25,437 25,190 22,950 22,731 22,869 23,850
Hercules 310 252 121 5,963 16,829 19,550
Lafayette -- 20,484 19,628 . 20,837 23,366 24,350
Martinez 9,604 16,506 18,702 22,582 31,810 37,050
Moraga -- 14,205 14,418. 15,014 15,987 17,000
Orinda* -- -- -- 17,070 16,642 17,450
Pinole 6,064 15,850 15,337 14,253 17,460 18,650
Pittsburg 19,062 20,651 24,347 33,465 47,607 . 54,400
Pleasant Hill -- 24,610 25,398 25,547 31,583 33,150
Richmond 71,584 79,043 70,126 74,676 86,019 94,400
San Pablo 19,687 21,461 19,392 19,750 25,158 26,850
San Ramon* -- -- -- 20,511 35,303 45,700
Walnut Creek 9,903 39,844 46,034 54,033 60,569 64,700
Unincorporated 191,680 163,035 173,036 128,551 152,841 178,600
Total 409.030 55389 582.829 656,331 803T732 930.000
California 15.717204 1&,=136,45 21. 1
35,00 23&68 145 2 758 213 34 316.00P
Totals may not equal sums due to independent rounding; official data not yet available for the City of Oakley which
incorporated in 1999.
* Dates of incorporation: Danville (7/1/82); Orinda (7/1/85); San Ramon (7/1/83); the 1990 Census Report created 1980
population levels for these cities prior to official incorporation.
Source: United States Census: 1960-1990;State Department of Finance: 2000.
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 1999 job base of 328,400
having grown about 15% since 1993.
As shown below, the County's civilian labor force was 489,300 in 1999. With average 1999
unemployment rates of 3.0% and 5.2% for the County and the State, respectively, the County has
achieved a lower unemployment rate than the State in each of the past seven years.
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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 Force") 448.5 454.0 456.0 460.5 472.8 479:0 489.3
Employment 419.4 426.0 429.9 437.9 453.2 461.6 474.5
County Unemployment 29.1 28.0 26.1 22.6 19.6 17.3 14.8
Unemployment Rate:
County 6.5% 6.2% 5.7% 4.9% 4.1% 3.8% 3.0%
State of California 9.4% 8.6% 7.8% 7.2% 6.3% 5.9% 5.2%
Wage and Salary Employment('-) 1993 1994 1995 1996 1997 1998 1999
-Agriculture 1.3 1.2 1.0 1.0 1.1 0.9 0.8
Mining and Construction 19.8 19.8 19.7 20.5 22.1 23.3 26.9
Manufacturing 28.8 27.2 26.6 26.0 26.0 25.6 23.9
Transportation and Public Utilities 18.8 20.2 20.3 19.8 20.4 20.1 20.1
Wholesale Trade 10.2 10.5 10.6 11.8 11.3 11.0 12.5
Retail Trade 56.5 56.2 56.1 56.2 57.4 59.2 59.7
Finance,Insurance,and Real Estate 29.0 28.4 26.7 26.0 27.9 28.1 28.9
Services 76.4 81.0 86.7 91.1 98.9 103.8 108.5
Government 44.0 44.8 45.1 45.3 45.6 45.5 47.1
Total(') 284.8 289.3 292.7 297.7 310.8 317.6 328.4
Based on place of residence.
(�) Based on place of work.
(') "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, telecommunications, financial and
retail services, steel manufacturing, prefabricated metals, chemicals, electronic equipment,paper products
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 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
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business. Petroleum products are also shipped by truck and 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 requirements for electricity and steam.
A number of Chevron's divisions are located throughout the County: Chevron Products Company
is located in Richmond where approximately 1,500 employees work at an oil refinery and management
office. Chevron Research and Technology Company, located in Richmond, is the only non-geological
research arm of the company. This facility employs approximately 400 people and is used by Chevron 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 over 1,000 employees
operate the accounting and credit card center for Chevron's entire domestic operations. Chevron also
operates a facility in San Ramon where approximately 2,100 employees are involved in computer,
marketing, consumer services and other administrative functions and in Walnut Creek where
approximately 250 employees work in various divisions.
Chevron is the fifth largest company in the San Francisco Bay Area (as measured by net income)
and is one of the largest employers in.the County. The company has,approximately 6,500 employees
located among its various facilities in the County and East Bay communities.
Shell Oil Company, which 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. Approximately 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,rail car and truck.
Equilon employees in the County total approximately 900, of whom approximately. 850 work at
the Martinez complex and approximately 50 .work from their homes to provide marketing services to
Shell and Texaco gas stations.
Tosco Refining Company, a wholly owned subsidiary of Tosco 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 approximately 600 full-time employees at the
refinery and approximately 75 at the distribution terminal. Tosco also owns a carbon plant on Franklin
Canyon Road near Highway 4 in the County and until recently owned a refinery with a capacity of
150,000 barrels per day.at Avon near Martinez. Total Tosco employment in the County is approximately
1,200. Tosco shut down the 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 reopen the refinery as well
as adopt all 72 recommendations in a consulting firm's critical safety report on the plant. The refinery
reopened in June 1999. 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.
Recently, Tosco sold the Avon refinery to Ultramar Diamond Shamrock Corporation for approximately
$800 million. The new owners have retained outside experts to study the condition of the plant and to
assure that safety measures recommended by consultants for the County have been implemented.
Ultramar Diamond Shamrock Corporation expects to increase production at the refinery.
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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 areknown as
"Clean Fuels Projects. " The following are the locations and capital investment amounts undertaken for
each of the Clean Fuels Projects.
County of Contra Costa
Clean Fuels Projects
(as of December, 2000)
(in millions)
Company City Investment
Chevron Corp. Richmond $ 500
Tosco Avon 400
Equilon Martinez 1,300
Tosco Rodeo 300
Total 2 500
Health Care. One of the Bay Area's largest private employers, Kaiser Permanente Medical
Group ("Kaiser"), has approximately 4,730. employees in the County and East Bay communities. 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. SBC (formerly ]mown as ".Pacific Telesis"), a major provider of telephone
services, employs approximately 11,800 employees in the East Bay. Its headquarters in the East Bay is
located in the Bishop Ranch office complex in the County.
The following table provides a.listing of major employers headquartered or located in the East
Bay and their employment levels.
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MAJOR EMPLOYERS IN THE EAST BAY
WITH EMPLOYEES IN THE COUNTY")
PRIMARY LOCATION
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(') Martinez County Government 8,090
Safeway Countywide Supermarkets 8,000
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[') Walnut Creek,Martinez Health Care 4,730
Lucky Stores Countywide Supermarkets 4,631
Wells Fargo&Co. Countywide Banking 4,000
AT&T Countywide Telecommunications 3,341
Longs Drug Stores(') Walnut Creek Retail Drug Stores 2,900
Western Contra Costa
School District['-) Richmond K-12 Education 2,844
Mt.Diablo Unified School
District(z) Concord K-12 Education 2,502
John Muir/Mt. Diablo Health
System(') Walnut Creek Health Care 2,170
Contra Costa Newspaperss') Walnut Creek Newspaper Publishing 1,417
Round Table Franchise
Corp. Countywide Pizza Restaurants 1,230
Tosco Martinez Oil Refinery 1,200
Hill Physicians Med.Group Countywide Health Care 1,050
USS Posco Industries Pittsburg Steel Manufacturing 1,000
Shell Martinez Refining Co. Martinez Oil Refinery 930
Source: The companies; East Bay Business Times,November 2000; San Francisco Business Times,November 1999. Data is
for the reported entity's latest fiscal year.
(Z) Headquartered in the County.
Measures of Income
Due to the presence of relatively high-wage skilled jobs and relatively 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. According to the U.S. Department of Commerce's Bureau of Economic
Analysis, the County's per capita personal income of $33,869 in 1997 was the fifth highest among
California counties. The medians for the State were $36,483 (1998 household income) and $25,288
(1997 per capita income).
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Commercial Activity
Commercial activity comprises an important part of the County's economy, with taxable
transactions totaling approximately$11.1 billion in 1999.
COUNTY OF CONTRA COSTA
TAXABLE TRANSACTIONS
1994 TO 1999
(IN THOUSANDS)
1994. 1995 1996 . 1997 1998 1999
Apparel Stores $ 263,835 $ 246,879 $ 261,695 $ 277,962 $ 289,750 $304,915
General Merchandise Stores 1,166,204 1,223,187 1,213,152 1,283,994 1,379,504 1,467,490
Specialty Stores 754,092 817,531 890,623 957,508 1,070,135 1,259,681
Food Stores 428,585 433,694 458,877 478,924 486,580 509,062
Packaged Liquor Stores 38,242 39,972 42,925 44,700 48,261 54,563
Eating and Drinking Places 563,770 591,767 625,283 664,184 708,982 764,682
Home Furnishings and Appliances 270,691 283,020 323,400 333,179 366,400 414,384
Building Materials and Farm Implements 492,850 493,436 543,324 591,710 643,052 749,681
Service Stations 507,073 551,686 538,840 780,857 922,502 669,467
Automotive and Vehicle Dealers,Parts
and Supplies 868,095 ..927,563 1,046,980 1,143,170 1,308,493 1,524,336
Total Retail Outlets $5,353,437 $5,608,735 $5,945,099 $6,556,188 $7,223,699 $7,718,261
Business and Personal Services $ 326;664 $ 330,063 $ 365,029 $ 407,816 $ 442,696 $467,124
All Other Outlets 2,138,064 2,400,957 2,265,576 2,313,414 2,869,991 2,929,091
Total All Outlets $7,818,165 $8,339,755 $8,575,704 $9,277,418 $10,093,690 $11,114,476
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, Costco's large warehouse stores are located in
Richmond, 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 Washington Mutual, World Savings and
California Federal.
Construction Activity
The value of residential building activity rose in 1999 to the highest level in a decade. The
overall increase was attributable to gains in both single and multi-family units.
Within incorporated cities in the County, Brentwood accounted for the greatest activity with
$179.5 million of construction in 1999.
The following table provides a summary of building permit valuations and number of new
dwelling units authorized in the County since 1990.
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-54 Z),
COUNTY OF CONTRA COSTA
BUILDING PERMIT VALUATIONS 1990 TO 1999
Valuation($millions) Number of New.Dwelling Units
Residential Single Multiple
Year ew) Family Family Total.
1990 $ 560,193 3,132 1,149 4,281
1991 488,939 2,705 1,275 3,980
1992 638,714 3,279 614 3,893
1993 590,135 3,026 451 3,477
1994 699,395 3,682 230 3,912
1995 619,685 2,137 618 3,755
1996 584,108 3,094 450 3,580
1997 582,793 3,105 381 3,486
1998 738,939 3,144 999 4,142
1999 852,256 3,909 504 4,413
Note: Totals may not be precise due to independent rounding.
Source:Economic Sciences Corporation: 1990- 1999.
A number of major construction projects have been completed in the County, including $2.5
billion.that was 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 $10.8 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 approximately
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 have been 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 approximately 5,000 residential units.
Within the last year, the California Energy Commission has licensed and approved the
construction of two new natural gas energy plants within the County. Using state-of-the-art
environmental control technology, these new facilities will emit 90% less than the average gas-fired
utility power plant in the United States. The Calpine Corporation broke ground in February 2000 for the
construction of the $300 million Los Medanos Energy Center. Located in Pittsburg, this natural gas fired
facility will generate 500 megawatts of electricity upon completion in June 2001. In June 2000, the joint
partnership of Calpine Corporation and Bechtel Enterprises also broke ground on the Delta Energy
Center; this facility is estimated to cost$450 million and will generate 880 megawatts upon completion in
mid-2002.
Following months of hearings and the preparation of an environmental impact report, the Board
of Supervisors, on August 1, 2000, unanimously adopted an amendment to the Contra Costa County
General Plan, 1995-2010, which modifies the boundaries of the County's Urban Limit Line. This action
shrinks the growth limit line by 22 square miles, thus removing approximately 14,000 acres from future
development. The two regions primarily affected by the Board's action are eastern Contra Costa County
and the Tassajara Valley in the south-central part of the County. Two cities within the County have filed
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lawsuits challenging the environmental justifications for the boundary shift. The County anticipates that
other parties may also file lawsuits or take other actions challenging the boundary shift. Consequently,
the actual number of acres ultimately removed from future development may be less than 14,000.acres.
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.
Caltrans has completed Northern California's largest freeway interchange reconstruction project
at the intersection of Interstate 680 and Highway 24'in Walnut Creek. The $315 million project added
traffic lanes, an elevated bypass, and redesigned access patterns. Caltrans is currently widening Interstate
80 in the western portion of the County at a 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 service.is provided by Greyhound.
• Commuter rail service is provided by the Capital Corridor, with daily runs between the
Bay Area and Sacramento.
• 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.
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Major scheduled airline passenger and freight transportation for County.residents is available at
either Oakland or San Francisco International Airports, located about 20 and 30 miles, respectively, from
the County. In addition.there are two general aviation fields, one at Byron and the other at Concord.
Agriculture
The County is comprised of 470,400 acres, with over half(254,445) of these acres allocated to
farmlands and harvested cropland. In 1999, the total gross value. of agricultural products and crops
reached $86,693,780, a decline of$71,470.compared to 1998. The value of agricultural production.since
1995 is illustrated in the following table.
COUNTY OF CONTRA COSTA
AGRICULTURAL PRODUCTION, 1995 TO 1999
.1995. . .1996 . 1997 . . 1998 .1999. .
Nursery products. $21,782,000 $26,21.9,000 $31,287,800 $31,643,300 $28,202,200
Livestock&poultry 3,444,000 4,668,400 5,040,800 3,911,300 3,997,000
Field crops 10,616,900 12,281,800 12,696,000 9,291,000 9,525,000
Vegetable & seed
crops 19,037,000 19,899,000 20,033,000 . 16,756,000 18,298,000
Fruit and nut crops 14,967,500 15,294,000 18,520,000 17,180,400 18,197,300
Livestock, apiary &
poultry products 5,970,430 7,260,490 7,597,420 8,083,250 8,474,280
Total $75,817,830 $85,622,690 $95,175,220 $86,765,250 $86,693,780
Sourcc: Contra Costa County Dcpartment 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 from 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). EBMiID 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 constructed the Los Vaqueros Reservoir south of the City of Antioch at
an estimated cost of$450 million.
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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 that fall under the
jurisdiction of the U.S. Corps of Engineers and the State Department of Water Resources. The District
has recently completed construction of the West Antioch Capacity Improvement Project.
Education and Community Services
Public school education in the'County is available through nine elementary school districts, two
high school districts and seven unified school.districts. These districts provide 133 elementary schools,
35 middle, junior high and intermediate schools, 26 high schools, and a number of preschool, adult
school, and special education facilities. - In addition, there are 123 private schools with six or more
students in the County. School enrollment in January of 1999 numbered approximately 154,019 students
in public schools and 15,373 students in regular graded private schools. The County's average SAT
scores exceed.regional, State and national averages.
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 operates 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 the John F.
Kennedy University campus in Orinda, which is completing a move.into expanded space in downtown
Concord. 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 approximately 1,900 beds. Three of the private hospitals are run by Kaiser, the largest
health maintenance organization in the United States. Kaiser has 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 rebuilt and opened to the
public in 1998 on the existing campus in Martinez.
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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. The result
has been that the County has increased its contribution to maintain mandated services while optional local
services have been reduced. The Board of Supervisors has responded to this trend in part by instituting
measures to improve management, thereby reducing costs while 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 2000-01 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.
1999-2000 Fiscal.Year State Budget
o�
Following a severe recession beginning in 1990, the State's financial condition improved
markedly during.the fiscal years beginning with Fiscal Year. 1995-96, due to 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 five fiscal years.
The economy grew strongly during the fiscal years beginning with Fiscal.Year 1995-96, and as a
result, the General Fund took in substantially greater tax revenues (around $2.2 billion in Fiscal Year
1995-96, $1.6 billion in Fiscal Year 1996-97, $2.4 billion in Fiscal Year 1997-98, $1.7 billion in Fiscal
Year 1998-99, and $8.2 billion in Fiscal Year 1999-2000) 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 Fiscal Year 1995-96
and Fiscal Year 1996-97 and to fund new program initiatives, including education spending above
Proposition 98 minimums.
The principal features of the 1999 Budget Act included the following:
1. Proposition 98 funding for K-12 schools was increased by $1.6 billion in General Fund
moneys over revised Fiscal Year 1998-99 levels, $108.6 million higher than the minimum Proposition 98
guarantee. Of the Fiscal Year 1999-2000 funds, major new programs included money for reading
improvement, new textbooks, school safety, improving teacher quality, funding teacher bonuses,
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providing greater accountability for school performance, increasing preschool and after school care
programs and funding deferred maintenance of school facilities. The 1999 Budget Act also included $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 Fiscal Year 1998-
99 level. General Fund support was increased by $184 million (7.3 percent) for the University of
California system and $126 million (5.9 percent) for the California State University system. In addition,
Community Colleges funding increased by $324.3 million (6.6 percent). As a result, undergraduate fees
at University of California and California State University systems were reduced for the second
consecutive year, and the per unit charge at Community Colleges was reduced by $1.
3. Increased funding of nearly$600 million for health and human services.
4. About $800 million from the General Fund was 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 Vehicle
License Fee ("VLF") for calendar year 2000, at a General Fund cost of about $250 million in each of
Fiscal Year 1999-2000 and Fiscal Year 2000-01 to make up lost funding to local governments. Several
other targeted tax cuts, primarily for businesses, were also approved, at a cost of$54 million in Fiscal
Year 1999-2000.
6. A one-time appropriation of$150 million, split between cities and counties, was made to
offset property tax shifts during the early 1990s. 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 combination of resurging exports, a strong stock market, and a rapidly-growing economy in
1999 and early 2000 resulted in unprecedented growth in General Fund revenues during Fiscal Year
1999-2000. The latest estimates from the Department of Finance indicate revenues of about$71.2 billion,
an increase of over 20 percent over final Fiscal Year 1998-99 revenues and $8.2 billion higher than
projected for the 1999 Budget Act. The latest estimates indicate expenditures of$67.2 billion in Fiscal
Year 1999-2000, a $3.5 billion increase over the 1999 Budget Act, but the result still left a record balance
in the Special Fund for Economic Uncertainties("SFEU") at June 30, 2000 of over$7.2 billion.
2000-01 Fiscal Year State Budget
Background. On January 10, 2000, Governor Davis released his proposed budget for Fiscal Year
2000-01. The 2000-01 Governor's Budget ("2000 Governor's Budget") generally reflected an estimate
that General Fund revenues for Fiscal Year 1999-2000 would be higher than projections made at the time
of the 1999 Budget Act. Even these positive estimates proved to.be greatly understated as continuing
economic growth and stock market gains resulted in a surge of revenues. The Administration estimated
in the 2000 May Revision that General Fund revenues would total $70.9 billion in Fiscal Year 1999-2000,
and $73.8 billion in Fiscal Year 2000-01, a two-year increase of$12.3 billion above the 2000 Governor's
Budget revenue estimates. The latest estimates for Fiscal Year 1999-2000 are even higher, with revenues
now estimated at $71.2 billion.
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2000 Budget Act. The 2000 Budget Act was signed by the Governor on June 30, 2000. The
spending plan assumes General Fund revenues and transfers of$73.9 billion, an increase of 3.8 percent
above the estimates for Fiscal Year 1999-2000. The 2000 Budget Act appropriates $78.8 billion from the
General Fund, an increase of 17.3 percent over Fiscal Year 1999-2000, and reflects the use of$5.5 billion
from the SFEU. In order not to,place undue pressure on future budget years, about $7.0 billion of the
increased spending in Fiscal Year 2000-01 will be for one-time expenditures and investments.
The Department of Finance estimates the SFEU will have a balance of$1.781 billion at June 30,
2001. In addition, the Governor held back $500 million as a set-aside for litigation costs. If this amount
is not fully expended during Fiscal Year 2000-01, the balance will increase the SFEU. The Governor
vetoed just over$1 billion in General Fund and Special Fund appropriations from the 2000 Budget Act, in
order to achieve the budget reserve.
The 2000 Budget Act also includes Special Fund expenditures of$15.6 billion, and Bond Fund
expenditures of$5.0.billion. Special Fund revenues are estimated at$16.5 billion.
Some of the major features of the 2000.Budget Act were the following:
1. Proposition 98 funding for K-12 schools was increased by $3.0 billion in General Fund
moneys over revised Fiscal Year 1999-2000 levels, $1.4 billion higher than the minimum Proposition 98
guarantee. Per pupil spending is estimated at $6,701 per ADA, an 11 percent increase from the 1999
Budget Act. Of the Fiscal Year 2000-01 funds, over.$1.8 billion is allowed for discretionary spending by
school districts. Major new programs included money for high school scholarship to high-achieving
students, English language and literacy, improving teacher quality, funding teacher bonuses and salaries
for beginning teachers, increasing investments in technology and funding professional development
institutes. The 2000 Budget Act also includes an income tax credit to compensate credentialed teachers
for the purchase of classroom supplies and a $350 million repayment of prior years' loans to schools, as
part of the settlement of the CTA i,. Gould lawsuit.
2. Funding for higher education increased substantially above the revised 1999-2000 level.
General Fund support was increased by $486 million (17.9 percent) for the University of California
system and $279 million (12.7 percent) for the California State University system. In addition,
Community Colleges funding increased by $497 million (9.0 percent). Undergraduate fees at University
of California and California State University systems and the per-unit charge at Community Colleges will
be unchanged. The 2000 Budget Act anticipates enrollment increases in all sectors, and an expansion of
financial aid.
3. Increased funding of$2.7 billion General Fund for health and human services.
4. Significant moneys were devoted for capital outlay. A total of$2.0 billion of General
Fund money was appropriated for transportation improvements, supplementing gasoline tax revenues
normally used for that purpose. This was part of a $6.9 billion Transportation Congestion Relief Program
to be implemented over six years. In addition, the Budget Act included $570 million from the General
Fund in new funding for housing programs.
5. A total of about $1.5 billion of tax relief was enacted as part of the budget process. The
VLF reduction, started in 1998, was accelerated to the final 67.5 percent level for calendar year 2001, two
years ahead of schedule. The acceleration will cost the General Fund about $887 million in Fiscal Year
2000-01 and $1.426 billion in Fiscal Year 2001-02. A one-time Senior Citizens Homeowner and Renters
Tax Assistance program will cost about $154 million. A personal income tax credit for teachers will cost
$218 million and a refundable credit for child care expenses will cost $195 million. Several other
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targeted tax cuts, primarily for businesses, were also approved, at a cost of$89 million in Fiscal Year
2000-01.
6. A one-time appropriation of $212 million, to be split between cities and counties, was
made to offset property tax shifts during the early 1990s of which the County received $3.0 million.
Additionally, $121 million was appropriated for support of local law enforcement, and $75 million in
one-time funding was provided for local law enforcement agencies to. purchase high technology
equipment.
2001-02 Fiscal Year State Proposed Budget
Governor Davis recently released his proposed $104 billion budget for Fiscal Year 2001-02 (the
"Proposed Budget"). Among the key highlights of the Proposed Budget are:
1. A $1 billion set aside to help resolve the State's energy crisis;
2. Funding for K-12 education in the amount of $32.6 billion (which translates to $53.3
billion when federal funding and local property taxes are included), intended to increase
per pupil spending as well as to.lengthen the school year for middle school students;
3. A total of $160.4 million in capital outlay funding to build a tenth University of
California campus to be located in Merced and opened in 2004;
4. The sale of$323.7 million of general obligation bonds for parks, flood and bay protection
and acquisition of wild lands;
5. A total of$30 million to local organizations for crime labs;
6. Funding in the amount of $75 million to local law enforcement agencies for high
technology crime prevention equipment;
7. Dedication of$468 million of tobacco settlement revenues toward health care services,
particularly to provide health insurance to low-income families and the Medi-Cal
program;
8. Targeted tax credits to increase the manufacturing investment credit from 6% to 7% and
to provide a "back-to-school.sales tax holiday", which is expected to reduce family
clothing and school supply purchases by as much as 8.25% during the last week of
August;
9. A one-time discretionary allocation of $250 million to local governments and $200
million as incentive to cities and counties to increase the number of housing permits
issued; and
10. Maintenance of a $1.9 billion SFEU.
The State Legislature will review the Governor's Proposed Budget as well as any revisions to it
that may be announced in May 2001 before a FY 2001-02 Budget Act is returned to the Governor for
signature.
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From Welfare to Work
In Fiscal Year 1994-95, 4,600 single adults and 14,977 families were on welfare (based upon the
Fiscal Year 1994-95 average monthly caseload) in the County. In Fiscal Year 1999-2000, that number
was only 693 single adults and 10,919 families (based upon the Fiscal Year 1999-2000 average monthly
caseload). This dramatic decline, 41% overall, is in part due to State and federal policies which set time
limits on cash assistance and created.a new "welfare-to-work" system.
Driving Forces of Change. The federal government and the State have been the driving forces of
change in development of the current system. In 1996, Congress passed the Personal Responsibility and
Work Opportunity Reconciliation Act(the "Welfare Reform Act"),which placed a five-year lifetime limit
on cash welfare benefits and expanded the scope of the program to .include supportive services for
achieving economic self sufficiency. In California, the Welfare Reform Act has been implemented under
the California Work Opportunity and Responsibility to Kids Act ("CalWORKs"), which sets the
parameters under which counties provide welfare services, including cash benefits and supportive
services. In California, welfare recipients are eligible for up to two years of welfare-to-work services,
specifically designed to help the transition from welfare to work. In 1998, Congress also passed the
Workforce Investment Act, which reorganized federal funding for job training employment services,
broadened the program to include services for the welfare population and required consolidation of
employment services to one stop employment centers.
Employment and Human Services - the New Department. In 1998, the Board of Supervisors
created the Employment and Human Services Department (the "Department"), an amalgamation of the
County's Social Service Department and the Private Industry Council. The reorganization recognized the
convergence of the missions and mandates of the two former departments, driven by both the Welfare
Reform Act and the Workforce Investment Act. Both the organizational structure and budget structure of
the Department differ from its predecessors' departments. It is divided into five bureaus: Workforce
Services; the Workforce Investment Board; Children and Families Services; Aging and Adult Services;
and Administrative Support. The Department's budget units are aligned to ensure fiscal accountability.
In Fiscal Year 1994-95, the combined budgets of the two former departments were .$222.9
million, with a net County cost of $27.5 million. In Fiscal Year 2000-01, the Department's budget is
$259.6 million, with a net County cost of$24.5 million. Overall, the Department's reliance on County
General Funds has been reduced from 12.7% to 9.4%, demonstrating the County's ability to effectively
leverage State, federal and other funds to finance its welfare related programs and services.
Department Budget and County Cost
Fiscal Year 1994-1995 Fiscal Year.2000-01
Total Department Budget $215,608,937 $259,632,763
County Cost 27,466,711 24,501,866
County Cost as%of Total 12.7% 9.4%
Focusing on the Workforce. Economic self-sufficiency and prosperity are core missions of the
Department. The Department is focused on "a job, better job, a career" for its welfare clients. The two
bureaus with primary responsibility for fulfilling these missions are the Workforce Investment Board
("WIB")and the Workforce Services Bureau("WSB").
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The WIB is responsible for creating partnerships in the areas of education, training and career
development under the guidance of a countywide workforce development strategic plan. The purpose of
this plan is to identify the roles and responsibilities of each employment sector and to better link
educational and training service strategies with emerging employment needs for the businesses of the
County. In addition, the WIB is responsible for overseeing the One-Stop Career Centers, of which four
are currently operational. One-Stop Career Centers offer access to all job seekers and integrate numerous
employment and job training programs at one location.
The WSB is responsible for operating the CaIWORKs program, including cash assistance and
supportive services, as well as the One-Stop Career Centers. The operational responsibility for the One-
Stop Career Centers is vested by the WIB to the Mandated One-Stop Operator Consortium of which the
WSB is lead agency.
Supportive Services — Partnerships in Practice. Many of the challenges faced by current and
former CaIWORKs families cannot be addressed by the Department alone. The Department has taken the
initiative to increase coordination, collaboration and partnerships among public agencies, the employer
community and community-based organizations as well as providing its own resources to increase
support of working CaIWORKs participants as well as ex-Ca1WORKs families. Partnerships include:
• Child Welfare Services. Managing both a family and work can be overwhelming for
some individuals. The Workforce Services Bureau works closely with Child Welfare
Services to support family stability.
• Mental Health. Mental health counseling services are available both to parents and their
children as part of a welfare to work plan.
• Substance Abuse. Similar to mental health, substance abuse treatment is available to both
parents and their children and is available on both an outpatient and inpatient basis.
• Child Care. The Department is working with the Local Child Care Planning
Development Council, schools and the County's Community Services Department to
address child care capacity issues. The County is recognized for. its innovation in
creating a full day, full year child care program, Child Start, which combines the
resources of the part day, part year federally funded Head Start, and State funded Child
Development programs. In Fiscal Year 1999-2000, 657. families in the County were
transitioned to non-subsidized child care, while 2,381 children in the County received
subsidized care.
• Transportation. Most low income families rely on public transit, which can be both time
consuming and expensive, particularly when a parent must drop off and pick up a child
from child care. The Department successfully competed for over. $750,000 of grant
funding for a demonstration program for child care transportation and is collaborating
with the public transit industry to better meet transportation needs of low income
families. .For example, night time bus service was instituted in North Richmond, a very
low income area of the County, in acknowledgment of the high number of night shift job
opportunities.
Job Retention and Career Development. For many CaIWORKs participants, their first job pays
minimum wage or a little more. To ensure that former CaIWORKs participants do not return to welfare
dependency, the Department is also focusing on education, skill development and training for,former
CaIWORKs recipients. This initiative is under the direction of the WIB through its education, training
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and career development partnerships. Job retention services are critical to forming long term attachments
to the workforce by former CalWORKs clients, which will help mitigate the caseload impact of an
economic downturn.
Declining Welfare Caseloads. To date, the implementation of the CalWORKs program has
continued the trend of declining welfare caseloads. The CaIWORKs caseload is projected to be 541,000
in Fiscal Year 2000-01, down from 579,000 cases in Fiscal Year 1999-2000 and down from a high of
921,000 cases in Fiscal Year 1994-95.
Although the Department has had substantial success in recent years, challenges still remain. The
decline of the CaIWORKs caseload has left the Department with a remaining caseload increasingly
concentrated with individuals experiencing severe barriers to employment such as mental illness and
substance abuse. The Department is currently implementing a collaborative effort with the County's
Health Services Department to provide specialized services to these program participants that will assist
them in overcoming their barriers to employment.
In addition, while the CaIWORKs caseload has declined substantially in recent years, many
CalWORKs participants have left cash assistance for low paying jobs at the margins of the workforce. A
continuing challenge for the Department is to assist former cash aid recipients in retaining their jobs and
advancing to better paying jobs. Effective job retention services will help stabilize the long-term
attachment of CaIWORKs participants to the workforce and mitigate the caseload impact of the next
economic downturn.
The Department has benefited financially from CaIWORKs "incentive funds" that the
Department receives from the State for decreasing cash assistance and moving program participants into
employment. The Department is increasingly using these incentive funds, which totaled $24 million in
Fiscal Year 1999-2000, to ensure that program participants successfully transition from welfare to work.
Health Care Funding
The County has the responsibility for providing health care to all persons, regardless of their
ability to pay or insurance status. In recent years, it has become more and more difficult to meet this
obligation as an "open door provider" for the federal and state governments, due to declining and
inadequate federal and state health care financing coupled with rising service demands and service costs.
The County is not alone in its health care financing difficulties. A recent survey of California's
ten major counties found that all public hospitals are experiencing revenue losses similar to the County's.
A May 2000 study by the Association-of American Medical Colleges reported that medical centers
providing indigent care must either close because of the cuts following the 1997 Balanced Budget Act or
must downsize to survive such cuts. The County has taken steps to eliminate the gap between revenue
and expenditures in its health care system.
Revenue Enhancement. Pursuant to the Master Settlement Agreement ("MSA") pertaining to
national tobacco litigation and the Memorandum of Understanding between the State and the.counties and
four cities in California which are parties thereto, the County expects to receive annual revenues from the
tobacco industry as reimbursement for prior expenditures on health problems related: to tobacco
consumption. The Board of Supervisors has dedicated 100% of its MSA revenues to the Health Services
Department. The County received approximately $3.7 million in discretionary revenue in Fiscal Year
1998-99 and approximately $9.5 million in Fiscal Year 1999-2000. The County anticipates that its share
of tobacco settlement revenues will be approximately$9.2 million in Fiscal Year 2000-01.
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A major new initiative is also expected to increase revenue through an increase in enrollment in
the County's health maintenance organization known as the Contra Costa Health Plan ("CCHP").
Currently, when Ca1WORKs clients transition from welfare to work, they lose eligibility to receive health
care from CCHP. Yet, depending upon income level, many are still eligible for Medi-Cal or for Healthy
Families (California's child health insurance program), both of which are eligible to receive health care
from CCHP. The Department has initiated a major outreach effort to increase CCHP enrollment by
working with school districts in the County to recruit eligible children. Health insurance assistance
centers have been set up in West County and Central County that target outreach through schools.
Additional centers are being set up. in East County. Initial data show that school outreach has been very
effective in increasing enrollment. In addition, this strategy has the further benefit of reducing non-
reimbursed health care costs and increasing revenue associated with health care plan enrollment.
Departmental Reductions and Internal Operational Efficiencies. On June 27, 2000, the Board
of Supervisors approved the closure of the Home Health Agency. This action recognized that the
program was no longer cost effective due to changes in Medicare reimbursement rates and reporting
requirements. The annual General Fund savings of the closure is estimated to be $740,000.
The Department is also reconfiguring services to be more cost effective. For example, an
estimated $720,000 per year of expenses will be avoided by transferring psychiatric patients from
institutes of mental disease, for which Medi-Cal does not pay the cost of care, to a new skilled nursing
facility,which is eligible for reimbursement.
Other reductions include the non-renewal of nonessential contracts and re-negotiation of
contracts wherever possible. For example, the Department realized budget savings of $102,000 by
negotiating a contract for beds at the Alameda County Criminal Inpatient Unit.
The Health Services Department is also involved in.a management consultant study to identify
management actions that could lead to additional budget savings.
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.$15.4 million in Fiscal Year
1999-2000 as a result of AB 233. The County's trial court funding requirement is expected to be
approximately $15.4 million 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, A.B.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.
The final decision as to who will finance new capital facility expenditures related to this period of time
and into the future is being evaluated by a State task force.
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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. Absentthe 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 of Supervisors adopts the County's Final Budget by August 30, or by October 2 if the Board of
Supervisors has adopted a resolution to extend the deadline.
The County adopted its Final Budget for 2000-01 on August 8, 2000, ahead of the legally
extended deadline of October 2, 2000.
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, 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 that 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 that 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 2000-01. For a summary of the actual audited financial
results of the County for Fiscal Year 1998-99, see "EXCERPTS FROM THE AUDITED FINANCIAL
STATEMENTS OF THE COUNTY FOR THE FISCAL YEAR ENDED JUNE 30, 2000" in Appendix C 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.
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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 1998-99. 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.
In Fiscal Year 1998-99, the County began receiving payments pursuant to the MSA and the
Memorandum of Understanding relating to the MSA between the State and the counties and four cities in
California which are parties thereto. The County has been allocating these revenues to the Health
Services Department. See "Health Care Funding — Revenue Enhancement. " The County received
approximately $3.7 million in Fiscal Year 1998-99 and approximately $9.5 million in Fiscal Year 1999-
2000. The County expects to receive approximately$9.2 million in Fiscal Year 2000-2001.
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 and in excess of $14 million in Fiscal Year 1999-2000 for health and children's
programs in the County.
Fiscal Year 1999-2000. The County's 1999-2000 Final Budget grew 13% over the prior year
budget. Public Assistance accounted for nearly half of the increase as State and federal government
revenues have enriched children and family services as well as employment training and referral services.
Public Works accounted for one quarter of the increase as federal, State and local revenues were allocated
primarily for State Highway 4 expansion. The remaining increase was attributable to staffing additions in
criminal justice and health services. The fund balance is expected to increase to $86.3 million.
Fiscal Year 2000-01. The County's Fiscal Year 2000-01 Final Adopted Budget was 4% larger
than the prior fiscal year. Salary and benefit increases accounted for the largest share of the increased
costs. Capital projects and building maintenance costs represent a smaller portion of the increase.
A comparison of the County's General Fund budgets for Fiscal Years 1999-2000 and 2000-01 is
shown below.
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COUNTY OF CONTRA COSTA
GENERAL FUND BUDGET
FOR FISCAL YEARS 1999-2000 AND 2000-01
(IN THOUSANDS OF DOLLARS)
Final Final
Adopted Adopted
Budget Budget
1999-2000 2000-01
REQUIREMENTS
General Government $ 99,309 $138,939
Public Protection 218,768 249,389
Health and Sanitation 168,717 184,432
Public Assistance 276,520 280,127
Education 161 172
Public Ways and Facilities 21484 19,625
Recreation and Culture 1 1
Reserves and Debt Service 16,251 15,501
Total Requirements800 911 _X888 186
AVAILABLE FUNDS
Property Taxes $ 93,202 $101,497
Fund Balance Available 44,648 63,882
Other Taxes 10,230 14,663
Licenses, Permits and Franchises 6,717 6,814
Fines,Forfeitures and Penalties 13,656 13,404
Use of Money and Property 11,943 13,011
Intergovernmental 443,444 484,010
Charges for Current Services 128,035 149,046
Other Revenue 49,036 41,859
Total Available Funds80$ 0,911888 186
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
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 I 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
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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
1950-51.
Major property tax assessment appeals by business and the oil industry total $5.3 billion in
disputed value, with 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 refining valuations, and the County Assessor will vigorously contest the appeals. A recent appeal of
$894 million by an oil refinery(Unocal)has been decided in favor of the County Assessor and may affect
future negotiations with companies whose appeals are pending. The oil refinery could appeal the recent
decision to the courts. Another oil refinery (Chevron) filed a number of tax appeals with the County and
an agreement was reached to reduce a portion of its assessed valuation. On June 11, 1999, the Contra
Costa County Assessment Appeals Board approved the reduction in assessed values for certain Chevron
parcels. The approved reductions and other adjustments to the assessed value of the Chevron refinery and
Chevron Research Center reduced the overall assessed value by $599.9 million, or approximately 10.3%
from 1996/97 through 1998/99, resulting 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. Four oil refineries
(Chevron, Tosco, Martinez Refining Co., and Unocal) are currently seeking property tax refunds totaling
$50 million for a number of tax years by attempting to reduce their assessments by as much as sixty (60)
percent. The total assessed values for the refineries over the years still under appeal amount to $6.9
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billion. The refiners are seeking value reductions of $4.482 billion. Heavy industry accounts for 17
percent of the collected property taxes in the County.
The County has incorporated $3.0 million of property tax revenue adjustments in its Fiscal Year
2000-2001 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 2000-2001
Balance in
Secured Current Tax %Levy Tax Losses
Property Tax Delinquencies Delinquent Reserve Fund
Fiscal Year Assessed Valuation Levies June 30 June 30 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
1997-98 70,314,800,892 892,581,453 15,547,736 1.74 19,508,732
1998-99 73,699,554,452 939,437,116 15,375,159 1.64 21,550,142
1999-00 76,811,775,675 981,579,866 15,904,158 1.62 23,054,893
2000-01 83,094,557,304
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 from Fiscal Year. 1994-95
through Fiscal Year 1996-97 reflected multiple reductions in minimum reserve requirements legislated
over that period. The impact of these reductions was to allow increased credits to the County General
Fund. No other material drawdowns have occurred.
Largest Taxpayers
The ten largest taxpayers in the County, as shown on the Fiscal Year 1999-2000 secured tax roll,
and the approximate amounts of their property tax payments are shown below. These ten taxpayers paid a
total of$97.8 million in taxes, or about 10.21% of the County's 1999-2000 secured tax collection.
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COUNTY OF CONTRA COSTA
TEN LARGEST PROPERTY TAXPAYERS
Company Total Taxes Paid 1999-2000 % of Total County Tax Roll
Chevron USA $23,546,329.03 2.46%
Pacific Gas& Electric 17,841,995.08 1.86
Tosco Corporation 15,670,776.34 1.64
Equilon/Shell 13,630,256.40 1.42
Pacific Bell 12,147,840.16 1.27
USS Posco 4,500,127.10 0.47
Seeno&Associates 4,228,763.20 0.44
Bank of America 2,378,178.02 0.25
Taubman(Mall) 2,034,934.17 0.21
Cornerstone(Buildings) 1,847,830.37 0.19
TOTAL $97,827,029.87 10.21%
Source: County Treasurer-Tax Collector
Taxation of State-Assessed Utility Property
The State Constitution provides that most classes of property owned or used by regulated utilities
be assessed by the State Board of Equalization (the "SBE") and taxed locally. Property valued by the
SBE as an operating unit in a primary function of the utility taxpayer is known as "unitary property", a
concept designed to permit assessment of the utility as a going concern rather than assessment of each
individual element of real and personal property owned by the utility taxpayer. State-assessed unitary and
"operating nonunitary" property (which excludes nonunitary property of regulated railways) is allocated
to the counties based on the situs of the various components of the unitary property. Except for unitary
property of regulated railways and certain other excepted property, all unitary and operating nonunitary
property is taxed at special county-wide rates and distributed to taxing jurisdictions according to statutory
formulae generally based on the distribution of taxes in the prior year. Currently,-approximately 3.69% of
the County's total net assessed valuation constitutes unitary property subject to State assessment by the
SBE, for which approximately $32,820,000 of property taxes were collected in Fiscal Year 1998-99. The
portion of these tax collections attributable to the County General Fund was$7,286,000.
Until recently, SBE assessment of investor-owned gas and electric companies, incumbent local
exchange companies, AT&T Corp., and AT&T Communications of California, Inc. was subject to a
Settlement Agreement, dated May 1, 1992, among those companies, the SBE and all California counties
(the "Agreement"), under which, for many fiscal years, the SBE set the assessed property value equal.to
historical cost less depreciation less 25% of each utility's deferred tax reserve (all as defined in the
Agreement). The Agreement provided that this valuation method was not intended to be precedent for
calculating fair market value in years after the term of the Agreement. The Agreement was in response to
a February 1, 1991, Sacramento Superior Court decision in AT&T Communication.' of California, Inc. et
al v. State Board of Equalization, 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. With the expiration of the Agreement, the
SBE has greater flexibility in determining the factors to be considered in establishing assessed property
values. The SBE has provided significant relief to various large companies during Fiscal Year 1999-2000
and Fiscal Year 2000-01, and such relief will result in the loss by the County of more than $2.3 million of
property taxes during this period.
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In 1999, the SBE adopted a rule that provides for local assessment of certain investor-owned
electric utility facilities. As a result of this rule, the County Assessor now assesses two power plants
located in the County.
For a discussion of two proposed power plants that are expected to increase assessed property
values in the County, see "GENERAL COUNTY ECONOMIC AND DEMOGRAPHIC
INFORMATION—Construction Activity" in Appendix A to this Official Statement.
In addition, 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. Further sales 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 further legislation may
be proposed or enacted in response to industry restructuring, or whether any future litigation may affect
methods of assessing utility property and the allocation of assessed value to or among 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.
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COUNTY OF CONTRA COSTA
COMMUNITY REDEVELOPMENT AGENCY PROJECTS
FULL CASH VALUE INCREMENTS AND TAX ALLOCATIONS"'
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 2,198,412,524141 5,687,404,922 60,454,787
1998-99 2,343,330,103 6,080,461,083 .64,427,525
1999-00 2,480,670,587 6,660,417,603 69,321,686.
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.
Does not include unitary and operating non-unitary utility roll values which are determined by the State Board of Equalization
on a countywide basis.
Actual tax revenues collected by the County which have been or will be paid to the community redevelopment agencies.
The Base Year Value is reduced to exclude project areas with negative increment.
Source: County Auditor-Controller
Accounting Policies, Reports and Audits
Except as mentioned below, the County believes that its 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 of
Supervisors, 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 of Supervisors. The
County has had independent audits for more than 40 years. See "APPENDIX C — EXCERPTS FROM THE
AUDITED FINANCIAL STATEMENTS OF THE COUNTY FOR THE FISCAL YEAR ENDED JUNE 30, 2000. "
In addition to the above-mentioned audits, the County Grand Jury may also conduct management
audits of certain offices of the County.
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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 of Supervisors.
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, 2000 appears in Appendix C
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 1995-96 through 1999-00
(in thousands)
1995-96 1996-97 1997-98 1998-99 1999-00
REVENUES
Taxes $95,773 $99,974 $101,370 $110,242 $116,540
Licenses,permits&franchises 6,689 7,419 6,476 6,597 8,623
Fines, forfeitures&penalties 17,437 14,082 12,725 13,514 15,029
Use of money&property 13,406 12,062 13,459 14,937 14,858
Intergovernmental revenues 373,167 371,750 378,383 411,112 465,245
Charges for services 99,678 103,913 107,530 123,203 143,566
Other revenue 17,456 18,198 15,083 17,750 27,923
TOTAL REVENUES 623,606 627,398 635,026 697,355 791,784
EXPENDITURES
General government 82,256 77,199 83,847 105,967 100,734
Public protection 141,875 150,121 168,054 198,836 215,919
Health&sanitation 115,286 122,676 138,241 146,927 156,441
Public assistance 233,862 218,081 213,246 233,217 244,934
Education 130 133 145 144 145
Public ways and facilities 6,933 9,266 6,965 11,096 20,140
Recreation and culture 0 0 0 0 0
Interest 4,273 4,204 4,302 5,296 3,878
Capital outlay" 1,371 2,615 2,947 3,173 3,301
TOTAL EXPENDITURES 585,986 584,295 617,747 704,656 745,492
Excess of Revenues over(under)Expenditures 37,620 43,103 17,279 (7,301) 46,292
OTHER FINANCING SOURCES(USES)
Operating transfers in 18,804 24,581 31,318 49,025 31,294
Operating transfers out (50,911) (55,844) (42,005) (34,834) (55,993)
Capital lease ftnancingM 1,371 2,615 2,955 3,173 5,500
TOTAL OTHER FINANCING SOURCES(USES) 3( 0,736) 2( 8,648) (7,732) 17,364 (19,199
Excess.(Deficiency)of Revenues and Other Financing 6,884 14,455 9,547 10,063 27,093
Sources over(under)Expenditures and Other Financing
Uses
FUND BALANCE AT BEGINNING OF YEAR, 51,570 56,524 68,185 79,960 85,430
as Previously Reported
Adjustment to beginning fund balance (418) 0 0 0 0
FUND BALANCE AT BEGINNING OF YEAR, 51,152 56,524 68,185 79,960 85,430
as Restated
Residual equity transfers in 0 0 0 0 199
Residual equity transfers out (1,512) (2,794) (772) (1,593 (1)
FUND BALANCE at End of Year $56.524 $68 185 $76 $_85430 X112 21
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 employees follows:
COUNTY OF CONTRA COSTA
COUNTY EMPLOYEES("
As of Number of Permanent
June 30 Employees
1990 6,635
1991 7,008
1992 7,080
1993 6,689
1994 6,658
1995 6,822
1996 6,856
1997 6,974
1998 7,106
1999 7,683
2000- 8,090
" Excludes temporary or seasonal employees.
Source: County Auditor-Controller.
County employees are represented by 36 bargaining units of 13 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 September 1999 with the agreement providing for, among other
things, a five percent salary increase through September 30, 2000,a three percent salary increase effective
October 1, 2000, and a 4.0% salary increase effective October 1, 2001. The agreement covers
approximately 75%of the County's employees and expires in September 2002.
Contract negotiations with the firefighters were concluded in August 2000, with a 7% salary
increase through June 2001. The term of the contract expires in April 2002.
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.
The plan provides for retirement, disability, and 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 Board of Retirement as provided by State statutes.
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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 H.
The Tier II section includes all employees,hired on or after August 1, 1980 and all General members
electing to transfer from Tier I. The Safety section covers all employees in active law enforcement, active
fire suppression work or certain other "safety" classifications as designated by the CCCERA's Board of
Retirement.
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 II 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.
CCCERA Funding Status. The most recent actuarial report of the CCCERA reflects its financial
status as of December 31, 1999. The market value of the plan's assets was $2,987,089,000. The present
value of the plan's unfunded actuarial accrued liability ("UAAL") was estimated to be $372,039,000,
which includes the County's portion of the liability as well as that of the other entities comprising
CCCERA. The County-only portion of the UAAL is approximately 54%. The Board of Retirement
allocated $120,500,000 in 1999 from unrestricted excess earnings toward funding the UAAL. The GASB
Statement No:25 liabilities calculated for 1999 showed that the funded ratio was approximately 85%.
As of December 31, 1999, CCCERA had reserves as summarized below:
Type of Reserves Amount
Unrestricted $229,244,501
Market Stabilization 349,116,763
Total $578,361,264
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 C— EXCERPTS FROM THE AUDITED FINANCIAL STATEMENTS OF THE COUNTY FOR
THE FISCAL YEAR ENDED JUNE 30, 2000. "
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 Sheriff's Association v. Board of 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. The
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CCERA has settled its litigation of these two cases that were consolidated into one case, entitled Vernon
D. Paulson, et al. v. Board of Retirement of the Contra Costa Employees'Retirement Association, et. al.
The consolidated lawsuit was brought on behalf of a class of retired members of the Association
regarding the inclusions and the exclusions from "final" compensation that are used in calculating
members' retirement benefits as a result of the Ventura Decision. A settlement agreement has been
entered into with all parties and a petitioners' class has been certified consisting of all retired members of
the Association whose effective retirement date was on or before September 30, 1997 (i.e., the period
prior to the October 1, 1997 effective date of the Ventura Decision).
The Board of Retirement has designated $90 million from unrestricted.excess earnings to cover
the anticipated liability of the settlement.
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, 2000, see "APPENDIX C— EXCERPTS FROM THE AUDITED FINANCIAL STATEMENTS OF THE
COUNTY FOR THE FISCAL YEAR ENDED JUNE 30, 2000 -Notes to General Purpose Financial Statements"
attached hereto.
Annual debt service for the County's outstanding lease obligations and the. 1994 Pension
Obligation Bonds is shown in the next table.
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COUNTY OF CONTRA COSTA
Outstanding Lease Obligations and
1994 Pension Obligation Bonds
Fiscal Year Total Lease Total POB Total Net
Ending 6/30 Debt Service(l) Debt Service Debt Service(2) Debt Service(3)
2001 $ 24,142,071 $ 33,527,413 $ 57,669,484 $ 49,500,969
2002 25,981,307 35,409,713 61,391,019 52,652,360
2003 25,414,604 37,382,933 62,797,537 54,439,576
2004 25,405,271 39,459,053 64,864,324 56,386,237
2005 25,402,973 41,641,953 67,044,926 58,444,265
2006 25,409,129 43,935,590 69,344,719 60,608,196
2007 25,409,939 46,347,585 71,757,524 62,880,269
2008 25,427,243 48,879,460 74,306,703 65,264,260
2009 24,049,839 51,543,575 75,593,414 66,379,535
2010 22,831,805 44,576,215 67,408,020 58,512,163
2011 22,832,377 17,892,033 40,724,409 33,154,542
2012 22,833,368 - 22,833,368 16,163,569
2013 22,836,937 - 22,836,937 16,173,850
2014 22,837,174 - 22,837,174 16,175,284
2015 22,856,601 - 22,856,601 16,199,522
2016 22,847,910 - 22,847,910 16,190,367
2017 20,430,727 - 20,430,727 13,783,426
2018 20,425,907 - 20,425,907 13,784,313
2019 20,449,775 - 20,449,775 10,544,165
2020 18,722,880 - 18,722,880 12,271,899
2021 18,724,273 - 18,724,273 9,530,399
2022 15,965,766 - 15,965,766 9,835,887
2023 15,984,641 - 15,984,641 3,763,461
2024 6,041,949 - 6,041,949 5,400,008
2025 5,507,619 - 5,507,619 3,664,159
2026 3,709,920 - 3,709,920 3,709,920
2027 2,491,500 - 2,491,500 2,491,500
2028 2,488,500 - 2,488,500 2,488,500
TOTAL: $537,461,999 1140,5 523 $978.0551,519 790.392.595
" Includes 2001 Series A Bonds.
«' Excludes estimated reimbursement from the State for County hospital debt service and excludes estimated earnings on
various debt service and debt service reserve funds.
'" 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.
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Direct and Overlapping Debt. The County contains numerous municipalities, school districts
and special purpose districts, as well as the overlapping San Francisco 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 December 1, 2000. The
Debt Report is included for general information purposes only and the County does not guaranty the
completeness or accuracy of the information contained in the Debt Report.
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.
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CONTRA COSTA COUNTY
2000-01 Assessed Valuation: $84,593,430,240 (includes unitary utility valuation)
Redevelopment Incremental Valuation: 7,446,872,533
Adjusted Assessed Valuation: $77,146,557,707
OVERLAPPING TAX AND ASSESSMENT DEBT: %Applicable Debt 12/1/00
East Bay Municipal Water District and Special District No. 1 48.910&5.966% $ 6,142,705
Martinez Unified School District 100. 39,739,192
Pittsburg Unified School District and West Contra Costa Unified School District 100. 68,595,000
San Ramon Valley Unified School District 100. 70,000,000
San Ramon Valley Unified School District Lease Tax Obligations 100. 11,635,000
Acalanes and Liberty Union High School Districts 100. 106,539,911
Lafayette School District 100. 26,705,000
Other School Districts 0.442-100. 77,262,442
Cities 100. 6,495,000
East Bay Regional Park District 44.440 77,725,560
Other Special Districts 100. 2,360,000
Community Facilities Districts 100. 207,060,000
1915 Act Assessment Bonds(Estimate) 100. 405,078,554
TOTAL GROSS OVERLAPPING TAX AND ASSESSMENT DEBT $1,105,338,364
Less: East Bay Municipal Utility District(100%self-supporting) 3,423,700
TOTAL NET OVERLAPPING TAX AND ASSESSMENT DEBT $1,101,914,664
DIRECT AND OVERLAPPING GENERAL FUND OBLIGATION DEBT:
Contra Costa County General Fund Obligations 100. % $294,965,000 (1)
Contra Costa County Pension Obligations 100. 302,275,000
Contra Costa County Board of Education Certificates of Participation 100. 3,020,000
Contra Costa County Mosquito Abatement District Certificates of Participation 100. 1,495,000
Alameda-Contra Costa Transit District Certificates of Participation 10.575 2,503,631
Antioch Unified School District Certificates of Participation 100.' 21,109,844
San Ramon Valley Unified School District Educational Facilities Corporation 100. 31,215,000
Other School District General Fund Obligations 0.112-100. 44,035,583
City of Antioch General Fund Obligations 100. 15,908,728
City of Concord General Fund and Judgment Obligations 100. 34,005,000
City of Richmond General Fund Obligations 100. 26,746,595
City of Richmond Pension Obligations 100. 36,280,000
City of San Ramon General Fund Obligations 100. 22,420,000
Other City General Fund Obligations 100. 31,850,000
Hospital Authorities 100. 4,870,000
Other Special District Certificates of Participation 100. 11,980,000
TOTAL GROSS DIRECTAND OVERLAPPING GENERAL FUND OBLIGATION DEBT $884,679,381
Less: San Ramon Unified School District Certificates of Participation(self-supporting
from GIC from Bayerische Landesbank) 11,385,000
City of Concord lease bonds(100%self-supporting) 450,000
TOTAL NET DIRECT AND OVERLAPPING GENERAL FUND OBLIGATION DEBT $872,844,381
GROSS COMBINED TOTAL DEBT $1,990,017,745 (2)
NET COMBINED TOTAL DEBT $1,974,759,045
(I) Excludes lease revenue bonds to be sold.
(2) Excludes tax and revenue anticipation notes,revenue,mortgage revenue and tax allocation bonds and non-bonded capital lease obligations.
Ratios to 2000-01 Assessed Valuation:
Total Gross Overlapping Tax and Assessment Debt..................................... 1.31%
Total Net Overlapping Tax and Assessment Debt......................................... 1.30%
Ratios to Adjusted Assessed Valuation:
Combined Direct Debt ($597,240,000)........................................................0.77%
Gross Combined Total Debt..........................................................................2.58%
Net Combined Total Debt.............................................................................2.56%
STATE SCHOOL BUILDING AID REPAYABLE AS OF 6/30/00: $0
1 ,
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Future Financings
The County anticipates financing an ambulatory care clinic at the Contra Costa Regional Medical
Center in Martinez in early 2001. The County is also preparing to get authorization to issue taxable
pension obligation bonds in 2001 to finance the tender and/or defeasance of approximately $100 million
of its outstanding 1994 Pension Obligation Bonds. 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 and/or the Richmond Health Center in the next few years.
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 tamer 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 occurrence 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 (the "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$80.337 million at June 30, 2000 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.
For additional information on the County's insurance coverage, see "APPENDIX C— ExCERPTS
FROM THE AUDITED FINANCIAL STATEMENTS OF THE COUNTY FOR THE FISCAL YEAR ENDED JUNE 30,
2000 -Notes to General Purpose Financial Statements" attached hereto.
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APPENDIX C
AUDITED FINANCIAL STATEMENTS OF THE COUNTY
FOR THE FISCAL YEAR ENDED JUNE 30, 2000
593763.5 C-1
APPENDIX D
SUMMARY OF CERTAIN PROVISIONS OF THE TRUST AGREEMENT
593763.5 D-1
SD.�
APPENDIX E
PROPOSED FORM OF BOND COUNSEL OPINION
593763.5 E-1
REMARKETING AGREEMENT
Between
COUNTY OF CONTRA COSTA, CALIFORNIA
and
BEAR, STEARNS.& CO. INC.
Remarketing Agent
Dated as of 1, 2001
Relating to
County of Contra Costa, California
$ Taxable Pension Obligation Bonds,
Refunding Series 2001
593754.4
sa.-y
This REMARKETING AGREEMENT, dated as of 1, 2001 (the
"Agreement"), between the COUNTY OF CONTRA COSTA, CALIFORNIA (the "County")
and BEAR, STEARNS & CO. INC. (the "Remarketing Agent").
WIT.NES.SETH :
WHEREAS, the County has issued its $ Taxable Pension Obligation Bonds,
Refunding Series 2001 (the "Bonds") pursuant to that certain Trust Agreement, dated as of
February 1, 1994, as amended by the First Supplemental Trust Agreement, dated as of
1, 2001, each between the County and BNY Western Trust Company, as trustee
(the"Trustee") (collectively, the "Trust Agreement"); and
WHEREAS, Westdeutsche Landesbank Girozentrale, acting through its New. York
Branch (the "Liquidity. Provider") and the County have entered into a Standby Bond Purchase
Agreement, dated as of January 1, 2001 (the "Liquidity Facility') with respect to the Bonds; and
WHEREAS, the Bonds and the Trust Agreement provide for certain optional and/or
mandatory tenders for purchase of the Bonds by the registered owners (the "Owners") of the
Bonds, all in accordance with the terms of the Bonds and the Trust Agreement; and
WHEREAS, the Trust Agreement provides for the appointment of a remarketing agent to
perform certain duties, including the remarketing of any Bonds tendered or deemed tendered by
the Owners thereof for purchase; and
WHEREAS, the Remarketing Agent has agreed to accept the duties and responsibilities
with respect to the remarketing of the Bonds under the Trust Agreement and this Agreement.
NOW, THEREFORE, for and in consideration of the mutual covenants made herein and
other valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the
parties hereto agree as follows:
.Section 1. Definitions. Unless otherwise defined herein, all capitalized terms shall have
the meanings ascribed to them in the Trust Agreement.
Section 2. Appointment of Remarketing Agent. Subject to the terms and conditions
contained herein, the County hereby appoints Bear, Stearns & Co. Inc. as exclusive Remarketing
Agent for the Bonds (including, without limitation, any remarketing of the Bonds in connection
with the conversion of the Bonds from one Mode to another or to the Fixed Rate Mode), and
Bear, Stearns & Co. Inc. hereby accepts such appointment.
Section 3. Responsibilities of Remarketing Agent. (a) Subject to the terms and
conditions set forth in this Agreement, the Remarketing Agent agrees to perform the duties of
Remarketing Agent set forth in the Trust Agreement and in this Agreement. It is understood that
in undertaking to perform such duties, and in the performance thereof, it is the intention of the
parties that the Remarketing Agent will act solely as an agent and not as a principal, except as
expressly provided in Section 11 hereof. The duties of the Remarketing Agent shall be the
following:
593754.4 1
s V,
(i) Determination of Interest Rates. The Remarketing Agent shall determine
the interest rates on the Bonds in the manner and at the times specified therefor in the
Trust Agreement. In addition, to enable the County to monitor interest rates that have .
been determined by the Remarketing Agent, (i) by Wednesday of each week, the
Remarketing Agent shall provide to the County's Treasurer-Tax Collector the rate or
rates of interest borne by the Bonds for the seven (7) day period ending on the preceding
Tuesday and (ii) within ten (10) Business Days following each March 31, June 30,
September 30. and December 31 (commencing with the period ending March 31, 2001),
the Remarketing Agent shall provide to the County's Director,Capital Facilities and Debt
Management and the County's Treasurer-Tax Collector the rates of interest borne by the
Bonds for the immediately preceding quarter, together with the three-month London
Interbank Offered Rate for such period and the average daily difference between such
rates.
(ii) Remarketing of Tendered Bonds. The Remarketing Agent shall use its
best efforts to remark-et the applicable Bonds tendered and/or deemed tendered and in
connection with a conversion of the Bonds from one Mode to another Mode under the
terms and conditions provided for in the Trust Agreement.
(iii) Furnishing of Disclosure Material. The County shall timely furnish to the
Remarketing Agent at the County's expense the disclosure materials described in
Section 5 of this Agreement, and the Remarketing Agent shall, in turn, furnish such
materials to potential purchasers of the Bonds.
(iv) Other Duties. The Remarketing Agent shall perform such other duties as
are to be performed by the Remarketing Agent under Article XVI of the Trust Agreement
(which provisions are incorporated herein by reference) and such other obligations or
functions as may be reasonably requested by the County or the Liquidity Provider and
agreed to by the Remarketing Agent. Notwithstanding the foregoing, or any provision of
Article XVI of the Trust Agreement, the Remarketing Agent shall not be required to
remarket any Provider Bonds unless the Liquidity Provider has committed pursuant to the
terms of the Liquidity Facility to reinstate the Liquidity Facility upon a successful
remarketing.
(b) The Remarketing Agent at all times shall be construed to be acting
hereunder as an agent for and on behalf of the County, except as expressly provided in Section
11 hereof. It is understood and agreed upon by the parties hereto that the Remarketing Agent is
undertaking its obligations hereunder on a best-efforts basis. The Remarketing Agent shall not
act as an underwriter for the Bonds and is in no way obligated to advance its own funds to
purchase any Bonds.
(c) The Remarketing Agent agrees to hold (i) all Bonds delivered to it in
accordance with the Trust Agreement in trust for the benefit of the Owners of such Bonds until
such Bonds shall have been delivered by the Remarketing Agent to the purchasers thereof or
otherwise delivered as provided in the Trust Agreement and (ii) all moneys or other funds
(including a draw on the Liquidity Facility) delivered to it for payment of the purchase price of
Bonds tendered for remarketing in trust for the benefit of the respective Owners to which such
.593754.4 2
s'a• y
moneys are due until such moneys or other funds (including a draw on the Liquidity Facility)
have been paid to such Owners at which time such moneys shall be paid to the Liquidity
Provider or the Trustee, at the Trustee's direction.
(d) Neither the County nor the Remarketing Agent shall have any interest in
the proceeds of any Bonds remarketed pursuant hereto. The Remarketing Agent shall not
remarket any Bonds to the County or any person actually known to the Remarketing Agent to be
an officer or agent thereof acting in such capacity.
(e) Notwithstanding anything to the contrary contained herein, the
Remarketing Agent:
(i) will suspend its remarketing efforts upon the receipt of notice of the
occurrence of an event of default under the Bonds, the Trust Agreement or the Liquidity
Facility; and
(ii) may, in its sole discretion, suspend its remarketing efforts with respect to
the Bonds immediately upon the occurrence of any of the following events, which
suspension will continue so long as, in the Remarketing Agent's reasonable judgment,
such event continues to exist as to the Bonds:
(1) suspension or material limitation in trading in securities generally
on the New York Stock Exchange;
(2) a general moratorium on commercial banking activities in New
York is declared by either federal or New York State authorities;
(3) the engagement by the United States in hostilities if the effect of
such engagement, in the Remarketing Agent's judgment, makes it impractical or
impossible to proceed with the solicitation of offers to purchase the Bonds;
(4) legislation shall be. introduced by committee, by amendment or
otherwise, in, or be enacted by, the House of Representatives or the Senate of the
Congress of the United States, or a decision by a court of the United States shall
be rendered, or a stop. order, ruling, regulation or official statement by, or on
behalf of, the United States Securities Exchange Commission or other
governmental agency having jurisdiction of the subject matter shall be made or
proposed, to the effect that the offering or sale of obligations of the general
character of the Bonds, as contemplated hereby, is or would be in violation of any
provision of the Securities Act . of 1933, as amended and as then in effect, or the
Securities Exchange Act of 1934, as amended (the "Exchange Act") and as then
in effect, or with the purpose or effect of otherwise prohibiting the offering or sale
of obligations of the general character of the Bonds, or the Bonds themselves, as
contemplated hereby;
(5) any event shall occur or information shall become known, which,
in the Remarketing Agent's reasonable judgment, makes untrue, incorrect or
misleading in any material respect any statement or information contained in any
593754.4 3
disclosure document provided to the Remarketing Agent in connection with the
performance of its duties hereunder, whether provided pursuant to Section 5
hereof or otherwise, or causes such document to contain an untrue, incorrect or
misleading statement of a material fact or to omit to state a material fact required
to be stated therein or necessary to make the statements made therein, in the light
of the circumstances under which they were made, not misleading;
(6) any governmental authority shall impose, as to the Bonds, or
obligations of the general character of the Bonds, any material restrictions not
now in force, or increase materially those now in force;
(7) any of the representations and warranties of the County made
hereunder shall not have been true and correct on the date made;
(8) the County fails to observe any of the covenants or agreements
made herein;
(9) any rating agency then rating the Bonds or the Liquidity Provider
shall suspend or withdraw the then current short-term rating assigned to either the
Bonds or the Liquidity Provider; or
(10) an actual or imminent default or a moratorium in respect of
payment of any U.S. Treasury bills, bonds or notes the effect of which in the
Remarketing Agent's judgment makes it impractical to market the Bonds or to
enforce contracts for the sale of the Bonds.
Section 4. Resignation and Removal of Remarketing Agent. The Remarketing Agent
may at any time resign and be discharged of its duties and obligations hereunder upon providing
the County, the Trustee, the Tender Agent and the Liquidity Provider with thirty (30) days'
notice; provided, however, that such resignation shall not take effect unless and until a successor
Remarketing Agent has been appointed as provided in the Trust Agreement. The Remarketing
Agent may be removed at any time, at the direction of the County and upon written notice to the
Remarketing Agent, the Trustee, the Paying Agent, the Tender Agent and the Liquidity Provider.
Upon removal or resignation of the Remarketing Agent, the County shall promptly cause the
Trustee to give notice thereof by mail to all.Owners and to each rating agency that has assigned a
rating to the Bonds.
Section 5. Furnishing of Disclosure Materials. (a) The County represents and warrants
to the Remarketing Agent that by official action of the County, the County has authorized the
distribution of the Preliminary Official Statement (the "Preliminary Official Statement") and the
final Official Statement (the "Official Statement") with respect to the Bonds. The County agrees
to. furnish the Remarketing Agent with as many copies of the Official Statement as it may
reasonably need for remarketing and any supplement or amendment to the Official Statement.
(b) The County agrees to furnish the Remarketing Agent with such other
information with respect to the County as the Remarketing Agent shall reasonably request from
time to time in connection with the remarketing of the Bonds. The Remarketing Agent agrees
593754.4 4
not to distribute any information provided by the County to any person without the prior written
consent of the County.
(c) The County agrees with the Remarketing Agent that if, prior to the
termination of this Agreement, any event shall occur or condition shall exist relating to or
affecting the County, the Liquidity Provider or the ability of the County or the Liquidity Provider
to pay the principal of, purchase price of or interest with respect to the Bonds, pursuant to the
Liquidity Facility or the Trust Agreement which is reasonably expected to materially adversely
affect the interests of the Owners, or which is reasonably expected to affect in any material
respect the correctness of any statement of a material fact contained in the Official Statement (as
supplemented from time to time), the County will promptly, upon obtaining actual knowledge
thereof, notify the Remarketing Agent of the circumstances and details of such event or
condition.
(d) If, as a result of such event or condition, or any other event or condition, it
is necessary or advisable, in the opinion of counsel to the Remarketing Agent, to amend or
supplement the Official Statement or supplement thereto (other than regarding the financial
condition of the Liquidity Provider or the Remarketing Agent), in light of such event or
condition or any other event or condition, the County will have prepared forthwith, at the
expense of the County, a supplement or amendment to such Official Statement or any additional
reoffering statement, which supplement, amendment or additional reoffering statement shall be
in form and substance satisfactory to the Remarketing Agent; provided that the County shall
have no obligation to provide information or notify the Remarketing Agent with respect to the
Liquidity Provider.
(e) Compliance with Rule 15c2-12. In the event the Remarketing Agent is
asked to remarket the Bonds in any situation which requires compliance with Rule 15c2-12 of
the Exchange Act (the "Rule"), the County will provide such items as may be required by the
Rule at such time, including, but not limited to the following:
(i) the County will provide the Remarketing Agent with an official statement
relating to the Bonds which the County deems final as of its date (exclusive of pricing
and other sales information to the extent permitted by the Rule), prior to the date the
Remarketing Agent bids for, offers or sells any Bonds;
(ii) the County will provide the Remarketing Agent with such number of
copies of any preliminary official statement or other disclosure document prepared in
connection therewith as the Remarketing Agent may need to supply at least one copy
thereof to each potential customer who requests it;
(iii) the County will provide the Remarketing Agent within seven (7) Business
Days after the interest rate is determined or by the time "money confirmations" are to be
sent to customers, whichever is earlier, with a number of copies of the final official
statement or disclosure document adequate to provide at least one copy of such final
official statement or disclosure document to each customer and any potential customer
for a period commencing on.the date such final official statement or disclosure document
is available and extending for the underwriting period as defined in the Rule (the
593754.4 5
"Underwriting Period") and, thereafter, for as long as may be required by the Rule.
During the Underwriting Period, the County agrees to update, by written supplement or
amendment or otherwise, the final Official Statement or disclosure document such that at
all times during such period the final Official Statement or disclosure document will not
contain an untrue statement of a material fact or omit to state a material fact necessary to
make the statements therein, in the light of the circumstances under which they were
made, not misleading; and
(iv) the County will provide the Remarketing Agent with an executed
continuing disclosure certificate evidencing the County's intent to comply with the Rule.
Section 6. Fees and Expenses. For the Remarketing Agent's services under this
Agreement and the Trust Agreement, the County will pay the Remarketing Agent a fee equal to
0.070% of 1% of the weighted average daily principal amount of Bonds outstanding during such
periods in which the Bonds bear interest at a Daily Rate or a Weekly Rate. The County will pay
the fee quarterly in arrears commencing March 1, 2001, and each June 1, September 1 and
December 1 thereafter. The Remarketing Agent will invoice the County for such fee thirty (30)
days in advance of the due date thereof assuming for such invoice that the principal amount of
Bonds outstanding will remain outstanding for such quarter. When Bonds are remarketed in
connection with the conversion of the interest rate to the Fixed Rate, the County and the
Remarketing Agent will agree on a fee specifically for such remarketing.
The County will pay all expenses of delivering remarketed Bonds and reimburse the
Remarketing Agent for all direct, out-of-pocket expenses incurred by it as Remarketing Agent,
including reasonable counsel fees and reasonable disbursements.
Section 7. Representations, Warranties, Covenants and Agreements of the Remarketing
Agent. The Remarketing Agent, by its acceptance hereof, represents, warrants, covenants and
agrees with the County as follows:
(a) the Remarketing Agent is a member of the National Association of Bond
Dealers, having a capitalization of at least $15,000,000, and otherwise meets the requirements
for the Remarketing Agent set forth in Section 16.11 of the Trust Agreement;
(b) the Remarketing Agent has been duly incorporated, is validly existing and
is in good standing under the laws of the jurisdiction in which it is incorporated, and is
authorized by law to. perform all the duties and obligations imposed upon it as Remarketing
Agent by this Agreement and the Trust Agreement; and
(c) the Remarketing Agent has full power and authority to take all actions
required or permitted to be taken by'the Remarketing Agent by or under, and to perform and
observe the covenants and agreements on its part contained in, this Agreement and the Trust
Agreement.
Section 8. Representations, Warranties, Covenants and Agreements of the County. The
County, by its acceptance hereof, represents, warrants, covenants and agrees with the
Remarketing Agent that:
593754.4 6
5'Z)
(a) it has full power and authority to take all actions required to be taken by
the County by or under, and to perform and observe the covenants and agreements on its part
contained in, this Agreement, the Trust Agreement and the Liquidity Facility;
(b) it has, on or before the date hereof, duly taken all action necessary to be
taken by it prior to such date to authorize the execution, delivery and performance of this
Agreement, the Trust Agreement and the Liquidity Facility;
(c) it will provide the Remarketing Agent at the address noted in Section 13
hereof, within 210 days of the end of each fiscal year of the County, with a copy of its annual
audited financial statements for that fiscal year; and
(d) it will promptly notify the Remarketing Agent by telephone, promptly
confirmed in writing, of any material adverse change that may affect the remarketing of the
Bonds or any fact or circumstance which may constitute, or with the passage of time will
constitute, an event of default under the Bonds, the Trust Agreement or the Liquidity Facility.
(e) The County agrees that it shall immediately notify the Remarketing Agent
by telephone, confirmed in writing, of:
(i) the occurrence or existence or any event or condition which
becomes known to the County and which would make any of its representations,
warranties, covenants or agreements contained herein or incorporated herein by
reference incorrect or untrue in any material respect if made on and as of any day
during the term of this Agreement;
(ii) the occurrence or existence, on any day prior to the termination of
this Agreement, of any event or condition known to the County relating to or
affecting the County, the Trust Agreement, this Agreement, the Liquidity Facility
or the Bonds which might reasonably be expected to materially adversely affect
the Bonds;
(iii) the extension or termination of, or amendment to, the initial
Liquidity Facility or any Alternate Liquidity Facility;
(iv) any resignation or removal of, and appointment of a successor for,
the Trustee or the Tender Agent; or
(v) any amendment to the Trust Agreement.
Section 9. Term of this Agreement. This Agreement shall become effective on the date
hereof and shall continue in full force and effect until the payment in full of the Bonds or the
.earlier conversion of all Bonds to the Fixed Rate Mode, subject to the provisions of Section 3
and Section 4 hereof.
Section 10. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of California.
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Section 11. Dealing in Bonds by the Remarketing Agent; No Obligation to Purchase
Bonds. (a) The Remarketing Agent, in its individual capacity, may in good faith buy, sell, own,
hold and deal in any of the Bonds, including, without limitation, any Bonds offered and sold by
the Remarketing Agent pursuant to this Agreement, and, if it shall first give notice of its
resignation as Remarketing Agent, may join in any action which any Owner may be entitled to
take with like effect as if it did not act in any capacity hereunder; provided, however, that under
such circumstances the Remarketing Agent will only have the rights set forth in the Bonds. The
Remarketing Agent, in its individual capacity, either as principal or agent, may also engage in or
be interested in any financial or other transaction with the County and may act as depositary,
trustee or agent for any committee or body of Owners or other obligations of the County as
freely as if it did not act in any capacity hereunder.
(b) Nothing in this Agreement shall be deemed to constitute the Remarketing
Agent an underwriter of the Bonds or to obligate the Remarketing Agent to purchase any Bonds
at any time.
Section 12. Intention of Parties. It is the express intention of the parties hereto that any
purchase, sale or transfer of any Bonds, as herein provided, shall not constitute or be construed to
be the extinguishment of any Bonds or the indebtedness represented thereby or the reissuance of
any Bonds.
Section 13. Miscellaneous. (a) Except as otherwise specifically provided in this
Agreement, all notices, demands and formal actions under this Agreement shall be in writing and
either (i) hand delivered, (ii) sent by electronic means, or (iii) mailed by registered or certified
mail, return receipt requested, postage prepaid, to the address set forth in Section 17.05 of the
Trust Agreement, or as listed below:
The Remarketing Agent:
Bear, Stearns & Co. Inc.
245 Park Avenue, I oth Floor
New York,New York 10167
Attention: Kyle Pulling, Managing Director
Telephone: (212) 272-4930
Telecopy: (212) 272-7008
Each party hereto may, by notice given under this Agreement to the other party hereto,
designate other addresses to which subsequent notices, requests, reports or other communications
shall be directed.
(b) This Agreement shall inure to the benefit of and be binding only upon the
parties hereto and their respective successors and assigns. The rights and obligations of the
respective parties hereto may not be assigned or delegated to any other person without the prior
written consent of the other party hereto, and any assignment or delegation made without the
prior written consent of the other party shall be void. The terms "successors" and "assigns" shall
not include any purchaser of any of the Bonds merely because of such purchase. Neither the
593754.4 8
Liquidity Provider nor any Owner or other third party shall have any rights or privileges
hereunder.
(c) All of the representations, warranties and covenants of the County and the
Remarketing Agent in this Agreement shall remain operative and in full force and effect,
regardless of(i) any investigation made by or on behalf of the Remarketing Agent or the County,
(ii) the offering and sale of and any payment for any Bonds hereunder, or (iii) the suspension,
termination or cancellation of this Agreement.
(d) This Agreement and each provision hereof may be amended, changed,
waived, discharged, assigned, delegated or terminated only by an instrument in writing signed by
the parties hereto.
(e) Nothing herein shall be construed to make any party an employee of the
other or to establish any fiduciary relationship between the parties except as expressly provided
herein.
(f) If any provision or provisions of this Agreement shall be held or deemed
to be or shall, in fact, be invalid, inoperative or unenforceable for any reason, such circumstance
shall not have the effect of rendering any other provision or provisions of this Agreement invalid,
inoperative or unenforceable to any extent whatsoever.
(g) This Agreement may be executed in several counterparts, each of which
shall be regarded as an original and all of which shall constitute one and the same document.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of .
the date first above written.
CONTRA COSTA COUNTY, CALIFORNIA
By:
County Administrator and Clerk of the Board
of Supervisors
BEAR, STEARNS & CO. INC.
By:
Authorized Signatory
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