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CC Resolution 1991-0612 ^ ?X RESOLUTION NO. 91-61 RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LA QUINTA, CALIFORNIA, PROVIDING FOR THE ISSUANCE AND SALE OF BONDS FOR ASSESSMENT DISTRICT NO. 91-1 IN THE AMOUNT OF $2,240,866.05 WHEREAS, on May 7, 1991 the City Council of the City of La Quinta the City") adopted Resolution No. 91-31 the Resolution of Intention") declaring its intention, pursuant to the provisions of the Municipal Improvement Act of 1913 Division 12 of the Streets and Highways Code of the State of California), to order the acquisition of certain property and the construction of certain improvements, and appurtenances and appurtenant work and incidental costs and expenses in connection therewith and to form Assessment District No. 91-1 the Assessment District"); and WHEREAS, by its Resolution No. 91-31 adopted on May 7, 1991, this City Council has authorized the formation of the Assessment District, has approved a final Engineer*s Report describing the public improvements to be constructed and acquired pursuant to these proceedings the Improvements"), and has confirmed the assessment and diagram for the Assessment District; and WHEREAS, on July 23, 1991, the City Council adopted Resolution No. 91-60 determining the assessments remaining unpaid following the 30-day cash payment period; and WHEREAS, by this Resolution, the City now wishes to provide for the issuance of bonds, in the manner provided in the Improvement Bond Act of 1915 Division 10 of the Streets and Highway Code of the State of California) the Act"), and specifically to provide for the issuance of such bonds in a principal amount of $2,240,866.05, to represent and be secured by the unpaid assessments in the Assessment District the Bonds"); WHEREAS, on July 23, 1991, Stone & Youngberg the Purchaser") submitted the bid with the lowest net interest cost on the Bonds and by its Resolution No. 91-62 the City awarded the Bonds to the Purchaser; and NOW, THEREFORE, the City Council of the City of La Quinta, DOES HEREBY FIND, DETERMINE, RESOLVE AND ORDER as follows: BIB] 07-30-1998-U01 03:16:07PM-U01 ADMIN-U01 CCRES-U02 91-U02 61-U02 2 ^ ?X IL Section 1. Unpaid Assessments. The assessments now remaining unpaid as determined by Resolution No. 90-60 are in the aggregate amount of $2,240,866.05. For a particular description of the lots or parcels of land bearing the respective assessment numbers and upon which assessments remain unpaid, severally and respectively, reference is hereby made to the assessment and to the diagram recorded in the office of the Public Works Manager acting as Superintendent of Streets. Section 2. Issuance of Bonds; Maturity of Principal. Serial bonds shall be issued upon the security of said unpaid assessments in the aforesaid amount, in accordance with the provisions of the Act and the proceedings thereunder duly had and taken. The Bonds shall be issued in one series, in an aggregate amount of $2*240,866.05. Each of said Bonds shall be designated United States of America, State of California, County of Riverside, Limited Obligation Improvement Bond, City of La Quinta, California, Assessment District No. 91-1", and shall be a serial bond of the denomination of $5,000 each, except one bond of the 1992 maturity shall be of the denomination of $5,866.05), or any integral multiple of $5,000 over and above such amount, herein referred to as the Bonds"). The Bonds shall be issued and shall mature on September 2 of each year in the principal amounts and at the interest rates hereafter set forth: YEAR AMOUNT INTEREST RATE 1992 $ 70,666.05 6.70% 1993 100,000.00 6.70% 1994 105,000.00 6.70% 1995 110,000.00 6.70% 1996 120,000.00 6.70% 1997 125,000.00 6.70% 1998 135,000.00 6.70% 1999 145,000.00 6.70% 2000 155,000.00 6.80% 2001 165,000.00 6.80% 2002 175,000.00 6.80% 2003 190,000.00 6.80% 2004 200,000.00 6.80% 2005 215,000.00 6.80% 2006 230,000.00 6.80% $2,240,866.05 The Bonds shall be in the form of fully registered bonds without coupons. The Bonds shall be dated as of July 17, 1991. The Bonds shall be substantially in the form set forth in Exhibit A hereto attached and by reference made a part hereof. o7,*n,q1 BIB] 07-30-1998-U01 03:16:07PM-U01 ADMIN-U01 CCRES-U02 91-U02 61-U02 2 ^ ?X II Section 3. Interest. The Bonds shall bear interest at the rates set forth in Section 2 hereof, and such interest shall be payable semiannually on March 2 and September 2 of each year the Interest Payment Date"), commencing March 2, 1992. Each Bond shall bear interest from the interest payment date next preceding the date of registration thereof unless: i) it is registered after the fifteenth day of the month preceding an Interest Payment Date and on or before such Interest Payment Date, in which event it shall bear interest from such Interest Payment Date, or ii) it is registered on or prior to February 15, 1992, in which event it shall bear interest from the original Issue Date. Registration of Bonds issued upon exchanges and transfers of Bonds shall be dated so that no gain or loss of interest shall result from the exchange or transfer. Interest on the Bonds shall be paid by the Paying Agent by check or draft mailed on the Interest Payment Date to the registered owner of each Bond as his name and address appear on the register kept by the Agent as of the close of business on each Interest Payment Date. Each Bond shall continue to bear interest after maturity at the rate stated therein to the date of payment, provided that on the date it is presented for payment, payment thereof is refused on the sole ground that there is not sufficient money in the Redemption Fund hereinafter referred to with which to pay same. If a Bond is not presented at maturity, and there is sufficient money in the Redemption Fund with which to pay the same, interest thereon shall run only until maturity. Section 4. Execution and Authentication. The Bonds shall be signed on behalf of the City by the City Treasurer and the City Clerk and the corporate seal of the City shall be affixed to the Bonds. Such signatures and corporate seal may be reproduced on the Bonds by engraved, printed or lithographed facsimile thereof, and such signing and sealing shall constitute and be a sufficient and binding execution of each and every one of the Bonds. If any officer whose signature appears on the Bonds ceases to be such officer before the delivery of the Bonds to the purchaser, such signature shall be as valid as if such officer remained in office until the delivery of the Bonds. only such of the Bonds as shall have printed or engraved thereon a certificate of authentication and registration, substantially in the form set forth in Exhibit A, hereto attached and by reference made a part hereof, duly executed by the Paying Agent, shall be entitled to any rights, benefits or security under this resolution. No Bond shall be valid or obligatory for any purpose unless and until such certificate of authentication and registration shall have been duly executed by the Paying Agent, and such certificate of the Paying Agent upon any such Bond shall be conclusive and the only evidence n7I*(' 101 BIB] 07-30-1998-U01 03:16:07PM-U01 ADMIN-U01 CCRES-U02 91-U02 61-U02 2 ^ ?X II that such Bond has been duly authenticated and delivered under this resolution. The Paying Agent's certificate of authentication and registration on any Bond shall be deemed to have been duly executed if signed by an authorized signatory of the Paying Agent, but it shall not be necessary that the same person sign the certificate of authentication and registration on all of the Bonds that may be issued hereunder at any one time. Section 5. Manner and Place of Payment. The principal on the Bonds shall be payable upon surrender in lawful money of the United States of America at the corporate trust office of the Paying Agent in Los Angeles, California. Interest on the Bonds shall be paid by the Paying Agent by check or draft as provided in Section 3 of this Resolution. Section 6. Redemption Prior to Maturity. The outstanding Bonds may be redeemed and paid in advance of maturity from prepaid assessments, the proceeds of refunding bonds, or other moneys deposited in the Redemption Fund, upon the second day of September or March in any year by giving the notice provided by law at least 30 days prior to the date of redemption and by paying principal and accrued interest together with a premium equal to at least three percent 3%) of the principal amount of the Bonds to be redeemed. Such notice shall specify the maturities of the Bonds to be redeemed, the redemption date and the place or places where amounts due upon such redemption will be payable and, if less than all of the Bonds of any like maturity are to be redeemed, the letters and numbers or other distinguishing marks of such Bonds so to be redeemed, and, in the case of a Bond to be redeemed in part only, such notice shall also specify the portion of the principal amount thereof to be redeemed. If there shall be so called for redemption less than all of a Bond, the City shall execute and the Paying Agent shall authenticate and deliver, upon the surrender of such Bond to the Paying Agent, without charge to the owner thereof, for the unredeemed balance of the principal amount of the Bond so surrendered, a Bond or Bonds of the same maturity and of any authorized denomination. All Bonds surrendered for redemption shall be canceled and returned to the Treasurer or destroyed by the Paying Agent as permitted by law and a certificate of destruction delivered to the City. Section 7. Transfer and Registration. All of the Bonds issued under this resolution shall be subject to the provisions for registration and transfer contained in this resolution and in the Bonds. So long as any of the Bonds shall remain outstanding, the Paying Agent shall maintain and keep, at its corporate trust office in Los Angeles, California, a bond reqister, being sufficient books for the registration or transfer of the Bonds, and, upon presentation of a bond for 07130/91 BIB] 07-30-1998-U01 03:16:07PM-U01 ADMIN-U01 CCRES-U02 91-U02 61-U02 2 ^ ?X II registration and transfer at said office, the Paying Agent shall register or cause to be registered therein, and permit to be transferred thereon, under such reasonable regulations as the City or the Paying Agent may prescribe, any bond entitled to registration or transfer. So long as any of the Bond remain outstanding, the District shall make all necessary provisions to permit the exchange of Bonds at said office of the Paying Agent. Section 8. Transfer and Exchange of Bonds. a) Each Bond shall be transferable only upon the Bond register of the Paying Agent referred to in Section 7 of this Resolution by the registered owner thereof in person or by his attorney duly authorized in writing, upon surrender thereof, together with a written instrument of transfer satisfactory to the Paying Agent duly executed by the registered owner or his duly authorized attorney. Neither the City nor the Paying Agent shall be required to make such exchange or registration of transfer of Bonds during the 15 days immediately preceding the selection of Bonds to be redeemed, or of any Bonds chosen for redemption. Upon the transfer of any such Bond, the City shall execute and the Paying Agent shall authenticate and shall issue in accordance with the provisions of this Resolution and in the name of the transferee a new Bond or Bonds of the same aggregate principal amount and maturity as the surrendered Bond or Bonds. All Bonds surrendered in any such exchanges or transfers shall be canceled by the Paying Agent and destroyed as permitted by law and a certificate of destruction delivered to the City. b) The Paying Agent may deem and treat the person in whose name any outstanding Bond shall be registered upon said Bond register of the Paying Agent as the absolute owner of such Bond, whether such Bond shall be overdue or not, for the purpose of receiving payment of, or on account of, the principal, or redemption price, if any, of and interest on such Bond and for all other purposes. All such payments so made to any such registered owner or upon his order shall be valid and effectual to satisfy and discharge the liability upon such Bond to the extent of the sum or sums so paid, and neither the City nor the Agent shall be affected by any notice to the contrary. c) For every such exchange or transfer of Bonds, whether temporary or definitive, the City or the Paying Agent may impose a charge sufficient to reimburse them for any tax, fee or other governmental charge required to be paid with respect to such exchange or transfer other than such as may have been imposed by the City), which sum or sums shall be paid by the person requesting such exchange or transfer as a condition precedent to the exercise of the privilege of making such exchange or transfer. O7/*O/9l BIB] 07-30-1998-U01 03:16:07PM-U01 ADMIN-U01 CCRES-U02 91-U02 61-U02 2 ^ ?X II Section 9. Bonds Mutilated, Destroyed, Stolen or Lost. In case any Bond shall become mutilated or be destroyed, stolen or lost, the City shall execute and the Paying Agent shall authenticate and deliver a new Bond of like maturity and principal amount as the Bond so mutilated, destroyed, stolen or lost, in exchange and substitution for such a mutilated Bond, upon surrender and cancellation of the mutilated Bond or in lieu of and in substitution for a destroyed, stolen or lost Bond, upon filing with the City and the Paying Agent evidence satisfactory to the City and the Paying Agent that the Bond has been destroyed, stolen or lost and proof of ownership thereof, and upon furnishing the City and the Paying Agent with indemnity satisfactory to each, complying with such other reasonable regulations as the City and the Paying Agent may impose; provided, however, that the City and the Paying Agent shall so execute, authenticate and deliver such new Bond only if the owner has paid the reasonable expenses and charges of the Paying Agent. All mutilated Bonds so surrendered to the Paying Agent shall be canceled and retired by the Paying Agent or destroyed as permitted by law and a certificate of destruction delivered to the City. If such Bond shall have matured, instead of issuing a new Bond, the Paying Agent may pay the same without surrender thereof. Section 10. Preparation of Definitive Bonds; Temporary Bonds. The definitive Bonds shall be lithographed or printed on steel engraved borders. Until the definitive Bonds are prepared, the City may execute, in the same manner as is provided in Section 4, and the Paying Agent may authenticate and deliver, in lieu of definitive Bonds, but subject to the same provisions, limitations and conditions as the definitive Bonds, except as to exchangeability for Bonds, one or more temporary Bonds which shall be registered as to principal and interest and may be in typewritten form), substantially of the tenor of the definitive Bonds in lieu of which such temporary Bond or Bonds are issued and with such omissions or insertions of and variations from the terms and conditions thereof as may be appropriate to temporary Bonds. The City at its expense shall prepare and execute and the Paying Agent upon the surrender of such temporary Bonds for exchange and the cancellation of such surrendered temporary Bonds, without charge to the holder thereof, shall authenticate and deliver in exchange therefor, at the corporate trust office of the Paying Agent in Los Angeles, California, definitive Bonds of the same aggregate principal amount and maturity as the temporary Bonds. Any temporary Bonds issued and delivered pursuant to this Resolution shall in all respects be entitled to the same benefits and security as definitive Bonds issued pursuant to this Resolution. All temporary Bonds surrendered in exchange for a definitive Bond or Bonds shall be canceled and retired by the Agent or destroyed as permitted by law and a certificate of destruction delivered to the City. *r' BIB] 07-30-1998-U01 03:16:07PM-U01 ADMIN-U01 CCRES-U02 91-U02 61-U02 2 ^ ?X II Section 11. Redemption Fund. a) The Treasurer shall establish and maintain a redemption fund designated the Assessment District No. 91-1, Redemption Fund" the Redemption Fund"). All sums received by the Treasurer from the collection of the assessments and of the interest and penalties thereon shall be deposited in the Redemption Fund. The Treasurer shall disburse moneys from the Redemption Fund to pay the principal of the Bonds and the interest and redemption premium, if any, due thereon. b) All Rebatable Arbitrage, as defined in Section 18 hereof, realized from the investment of money in the Redemption Fund shall be transferred to the Rebate Account created in Section 18 hereof. c) In the event the Treasurer determines that there is danger of an ultimate loss accruing to the Bondholders for any reason, the Treasurer shall withhold payment on all matured Bonds and interest on all Bonds outstanding and shall immediately initiate proceedings pursuant to Part 12 of Division 10 commencing with Section 8770) of the Streets and Highways Code. Section 12. Bond Proceeds. Upon delivery of the Bonds to the purchaser thereof, the Treasurer, shall receive the proceeds from the sale of the Bonds, and dispose of the proceeds and moneys as follows: 1) Deposit in the Reserve Fund established in Section 13 hereof, the amount required by Section 13 of this Resolution. 2) Deposit in the Redemption Fund an amount equal to accrued interest on the Bonds, if any, from July 17, 1991 to the Delivery Date. 3) After making the above deposits, the balance of proceeds from the sale of the Bonds shall be deposited in the Improvement Fund to pay costs of issuing the Bonds and costs of the acquisition and construction of the Improvements. Section 13. Reserve Fund. There is hereby created a special trust fund to be held by the Treasurer, designated as the Assessment District No. 91-1 Reserve Fund," the Reserve Fund"). There shall be initially deposited into the Reserve Fund an amount equal to ten percent 10%) of the original proceeds of the Bonds. The Reserve Fund shall constitute a trust fund for the benefit of the Bondholders, and shall be maintained, used, transferred, reimbursed and liquidated as follows: BIB] 07-30-1998-U01 03:16:07PM-U01 ADMIN-U01 CCRES-U02 91-U02 61-U02 2 ^ ?X II a) Whenever there are insufficient funds in the Redemption Fund to pay the next maturing installment of the principal of or interest on the Bonds, an amount necessary to pay such deficiency shall be advanced from the Reserve Fund to the Redemption Fund. The amounts so advanced shall be reimbursed from the proceeds of redemption or sale of the parcels for which payment of delinquent installments of assessments and interest thereon or real property taxes has been made from the Reserve Fund; provided, however, if said deficiency has been reimbursed to the Reserve Fund from interest earnings, said amount shall be deposited in the Redemption Fund and credited to the next installment of assessments to be levied. b) In the event an assessment is paid in advance, in whole or in part, the assessment thus paid shall be proportionally reduced based on the ratio of the total amount initially provided for the Reserve Fund for such series of Bonds to the total amount originally assessed in the proceedings for the issuance of such series of Bonds, and the amount thus determined shall be transferred from the Reserve Fund to the Redemption Fund as a credit against the unpaid assessment being paid. c) All Rebatable Arbitrage realized from the investment of money in the Reserve Fund in an amount in excess of the yield on the Bonds, shall be transferred within fifteen days of each anniversary of the Delivery Date to the Rebate Account created in Section 18 hereof. All other income derived from investment of amounts held in the Reserve Fund shall be retained in the Reserve Fund until the aggregate amount held in the Reserve Fund is equal to 10% of the original proceeds of Bonds then outstanding. Thereafter, investment income on amounts held in the Reserve Fund shall be transferred immediately upon receipt to the Redemption Fund. d) Whenever the balance in the Reserve Fund is sufficient to retire all remaining outstanding Bonds, whether by advance retirement or otherwise, collection of the principal and interest on the assessments shall be discontinued and the amounts held in the Reserve Fund shall be transferred to the Redemption Fund for retirement of the Bonds. e) At no time shall the amount of Bond proceeds deposited in the Reserve Fund exceed an amount equal to 10% of the original proceeds of the Bonds outstanding. Section 14. Improvement Fund. a) There is hereby created a special fund to be held by the Treasurer and designated the Assessment District No. 91-1 Improvement Fund" the Improvement Fund"). All moneys in the Improvement Fund shall be applied exclusively to the payment of BIB] 07-30-1998-U01 03:16:07PM-U01 ADMIN-U01 CCRES-U02 91-U02 61-U02 2 ^ ?X I the acquisition costs of the Improvements and expenses incidental thereto, including the costs of issuing the Bonds. If and to the extent there shall be any surplus remaining in the Improvement Fund after payment of all acquisition and construction costs and all legal charges, claims and expenses payable from such Fund, such surplus shall be applied as a credit upon the assessment and upon any supplemental assessment in the manner provided in the Act. b) All Rebatable Arbitrage realized from the investment of money in the Improvement Fund shall be transferred by the Treasurer for deposit into the Rebate Account created in Section 18 hereof. Section 15. Paying Agent. This City Council hereby appoints Security Pacific National Bank, Los Angeles, California, as paying agent, transfer agent and registrar for the Bonds the Paying Agent") to act in accordance with the provisions of this Resolution and the Paying Agent Agreement. The City Council hereby approves the form of Paying Agent Agreement presented to this City Council and authorizes its execution by the Mayor and the City Clerk in substantially the form presented, with such minor changes or additions as they may approve, the approval of such Agreement to be conclusively established by the delivery thereof. Section 16. Unpaid Assessments as Trust Fund. The unpaid assessments set forth in Resolution No. 91-60 approved by this City Council are determined by this City Council to be correct, and said unpaid assessments, together with the interest thereon, shall remain and constitute a trust fund for the redemption and payment of the Bonds of each and every series and of the interest which may be due thereon. At the time a parcel of land in the Assessment District is divided into parcels or subdivided, the City, at the request of the landowner requesting a division of the unpaid assessment, will take such actions as may be reasonably requested of it to apportion the assessment to all or any portion of the subdivided parcels or lots in the manner provided in Part 10.5 of Division 10 of the Streets and Highways Code of the State of California. Section 17. Federal Tax Covenants. Notwithstanding any other provision of this Resolution, absent an opinion of Bond Counsel that the exclusion from gross income of the interest component of the obligation represented by the Bonds will not be adversely affected for federal income tax purposes, the City covenants to comply with all applicable requirements of the Code necessary to preserve such exclusion from gross income and specifically covenants, without limiting the generality of the foregoing, as follows: n* * *oi BIB] 07-30-1998-U01 03:16:07PM-U01 ADMIN-U01 CCRES-U02 91-U02 61-U02 2 ^ ?X II 1) Private Activity. The City will take no action or refrain from taking any action or make any use of the proceeds of the Bonds or of any other monies or property which would cause the obligation represented by the Bonds to be private activity bonds" within the meaning of Section 141 of the Code; 2) Arbitrage. The City will make no use of the proceeds of the Bonds or of any other amounts or property, regardless of the source, or take any action or refrain from taking any action which will cause the obligation represented by the Bonds to be arbitrage bonds" within the meaning of Section 148 of the Code; 3) Federal Guaranty. The City will make no use of the proceeds of the Bonds or take or omit to take any action that would cause the obligation represented by the Bonds to be federally guaranteed" within the meaning of Section 149(b) of the Code; 4) Information Reporting. The City will take or cause to be taken all necessary action to comply with the informational reporting requirement of Section 149(e) of the Code; 5) Hedge Bonds. The City will make no use of the proceeds of the Bonds or any other amounts or property, regardless of the source, or take any action or refrain from taking any action that would cause the obligation represented by the Bonds to be considered hedge bonds" within the meaning of Section 149(g) of the Code, unless the City takes all necessary action to assure compliance with the requirements of Section 149(g) of the Code to maintain the exclusion from gross income of the interest component obligation represented by the Bonds for federal income tax purposes; and 6) Miscellaneous. The City will take no action or refrain from taking any action inconsistent with its expectations stated in the Tax Certificate and will comply with the covenants and requirements stated therein and incorporated by reference herein. Section 18. Rebate Fund. a) Establishment of Rebate Fund. With respect to the execution and delivery of the Bonds, the Treasurer shall establish a special fund with respect to the Bonds designated as the Rebate Fund" the Rebate Fund"), and within the particular Rebate Fund shall establish a Rebate Account the Rebate Account") and comply with the requirements of Subsection 1) below and, if the City has elected in the Tax n* *n to 1 BIB] 07-30-1998-U01 03:16:07PM-U01 ADMIN-U01 CCRES-U02 91-U02 61-U02 2 ^ ?X II Certificate to pay a penalty in lieu of rebate with respect to the particular bond issue, pursuant to Section l48(f)(4)(C)(vii) of the Code the **l 1/2% Penalty"), within the particular Rebate Fund shall upon receipt of notification of the City*s election establish an Alternative Penalty Account the Alternative Penalty Account") and comply with the requirements of Subsection 2) below. All money at any time deposited in each Rebate Fund shall be held by the Treasurer in trust, for payment to the United States Treasury. All amounts on deposit in each Rebate Fund shall be governed by this Section 18, unless the City obtains an opinion of Bond Counsel that the exclusion from gross income of the interest component of the obligation represented by the Bonds will not be adversely affected for federal income tax purposes if such requirements are not satisfied. 1) Rebate Account. The following requirements shall be satisfied with respect to a Rebate Account: i) Annual Computation. Within 55 days of the end of each Bond Year, the City shall calculate or cause to be calculated the amount of rebatable arbitrage, in accordance with Section 148(f)(2) of the Code and Section 1.148-2T of the Rebate Regulations taking into account any applicable exceptions with respect to the computation of the rebatable arbitrage, described, if applicable, in the Tax Certificate *, the temporary investments exceptions of Section 148(f)(4)(B) and C) of the Code), and taking into account whether the 1 1/2% Penalty has been elected), for this purpose treating the last day of the applicable Bond Year as a computation date, within the meaning of Section l.148-BT(b) of the Rebate Regulations the Rebatable Arbitrage"). The City shall obtain expert advice as to the amount of the Rebatable Arbitrage to comply with this Section. ii) Annual Transfer. Within 55 days of the end of each applicable Bond Year, an amount shall at the written direction of the City be deposited to the applicable Rebate Account by the Treasurer from any legally available funds if and to the extent required, so that the balance in the Rebate Account shall equal the amount of Rebatable Arbitrage so calculated in accordance with i) of this Subsection a)(l). In the event that immediately following the transfer required by the previous sentence, the amount then on deposit to the credit of the applicable Rebate Account exceeds the amount required to be on deposit therein, the Treasurer shall withdraw the excess from the Rebate Account and then credit the excess to the Reserve Fund. iii) Payment to the Treasury. The Treasurer shall at the written direction of the City pay to the United States Treasury, out of amounts in each Rebate Account, fl7**fl*Q 1 BIB] 07-30-1998-U01 03:16:07PM-U01 ADMIN-U01 CCRES-U02 91-U02 61-U02 2 ^ ?X II X) Not later than 60 days after the end of A) the fifth Bond Year, and B) each applicable fifth Bond Year thereafter, an amount equal to at least 90% of the Rebatable Arbitrage calculated as of the end of such Bond Year; and Y) Not later than 60 days after the payment of all Bonds, an amount equal to 100% of the Rebatable Arbitrage calculated as of the end of such applicable Bond Year, and any income attributable to the Rebatable Arbitrage, computed in accordance with Section 148(f) of the Code. In the event that, prior to the time of any payment required to be made from a Rebate Account, the amount in the Rebate Account is not sufficient to make such payment when such payment is due, the City shall calculate or cause to be calculated the amount of such deficiency and deposit an amount received from any legally available source, including the Reserve Fund, equal to such deficiency in the particular Rebate Account prior to the time such payment is due. Each payment required to be made pursuant to this Subsection a)(l) shall be made to the Internal Revenue Service Center, Philadelphia, Pennsylvania 19255 on or before the date on which such payment is due, shall be accompanied by Internal Revenue Service Form 8038-T, or shall be made in such other manner as provided under the Code. 2) Alternative Penalty Account. i) Six-Month Computation. If an Alternative Penalty Account has been established, within 85 days of each particular Six-Month Period, the City shall determine or cause to be determined whether the 1 1/2% Penalty is payable and the amount of such penalty) as of the close of the applicable Six-Month Period. The City shall obtain expert advice in making such determinations. ii) Six-Month Transfer. Within 85 days of the close of each Six-Month Period, the City shall deposit in the Alternative Penalty Account from any legally available source of funds if and to the extent required, so that the balance in the particular Alternative Penalty Account equals the amount of 1 1/2% Penalty due and payable to the United States Treasury determined as provided in Subsection a)(2)(i) above. In the event that immediately following the transfer provided in the previous sentence, the amount then on deposit to the credit of the Alternative Penalty Account exceeds the amount required to be on deposit therein to make the payments required by Subsection iii) below, the City may withdraw the excess from the Alternative Penalty Account and credit the excess to the Reserve Fund. BIB] 07-30-1998-U01 03:16:07PM-U01 ADMIN-U01 CCRES-U02 91-U02 61-U02 2 ^ ?X II iii) Payment to the Treasury. The City shall direct the Treasurer to pay to the United States Treasury, out of amounts in an Alternative Penalty Account, not later than 90 days after the close of each Six-Month Period the 1 1/2% Penalty, if applicable and payable, computed in accordance with Section 148(f)(4) of the Code. In the event that, prior to the time of any payment required to be made from the Alternative Penalty Account, the amount in such Account is not sufficient to make such payment when such payment is due, the City shall calculate the amount of such deficiency and deposit an amount received from any legally available source of funds, including the Reserve Fund, equal to such deficiency into the Alternative Penalty Account prior to the time such payment is due. Each payment required to be made pursuant to this Subsection a)(2) shall be made to the Internal Revenue Service, Philadelphia, Pennsylvania 19255 on or before the date on which such payment is due, and shall be accompanied by Internal Revenue Service Form 8038-T, or shall be made in such other manner as provided under the Code. b) Disposition of Unexpended Funds. Any funds remaining in the Rebate Fund after payment or prepayment of the Bonds and the payments described in Subsection a)(1)(iii) or a)(2)(iii) whichever is applicable), may be withdrawn by the City and utilized in any manner by the City. c) Survival of Defeasance. Notwithstanding anything in this Section to the contrary, the obligation to comply with the requirements of this Section shall survive the defeasance of the Bonds. Section 19. Definitions. For the purpose of this Resolution, the following terms shall have the following meanings: Assessment District. The term Assessment District" means that certain district of land designated as Assessment District No. 91-1", and having the boundaries described in the Final Engineer*s Report approved by the City. Bond Counsel. The term Bond Counsel" means an attorney or firm of attorneys of nationally recognized standing in matters pertaining to the tax-exempt status of interest on tax-exempt obligations issued by states and their political subdivision and acceptable to the City. Bond Year. The term Bond Year" means the twelve 12) month period commencing on the Delivery Date and ending on the date selected in the Tax Certificate and each twelve-month period thereafter until there are no lonqer any Bonds outstanding. BIB] 07-30-1998-U01 03:16:07PM-U01 ADMIN-U01 CCRES-U02 91-U02 61-U02 2 ^ ?X II Code. The term Code" means the Internal Revenue Code of 1986. Delivery Date. The term Delivery Date" means the date the Bonds are delivered to the initial purchaser. Improvements. The term Improvements" means those public improvements set forth in the Final Engineer's Report relating to the Assessment District. Paying Agent Agreement. The term Paying Agent Agreement" means that certain agreement between the City and Security Pacific National Bank, as Paying Agent. Permitted Investments. The term Permitted Investments" shall have the meaning set forth in Section 20 of this Resolution. Resolution of Intention. The term Resolution of Intention" means Resolution No. 91-31 adopted by the La Quinta City Council of the City of La Quinta on May 7, 1991. Treasurer. The term Treasurer" means the person at any time acting as the City Treasurer, and his successors from time to time. Section 20. Investment of Funds. Monies in the Redemption Fund, the Reserve Fund and the Improvement Fund shall, whenever practicable, be invested in legal investments for the City under applicable law for moneys held pursuant to this Resolution at the time when any of such moneys are to be invested therein Permitted Investments"). Moneys in the Redemption Fund shall be invested and reinvested in Permitted Investments, provided that such investments mature by their terms prior to the date on which such invested amounts, together with other moneys held in such fund and available for such purpose are required to be paid in respect of principal of or interest on the Bonds on any payment date. Moneys in the Reserve Fund shall be invested solely in Government obligations investments set forth in Section 53635(b) of the Government Code of the State of California) having a maturity not lonqer than five years or the date at which it is anticipated that such moneys will be needed, whichever comes first. Moneys in the Rebate Fund shall be invested in Government Obligations which mature before the date such amounts are required to be paid to the United States. obligations purchased as an investment of moneys in any Fund or Account held by the Treasurer hereunder shall be deemed to be part of such fund. Except as provided in Section 18(b) hereof, any or all interest or gain received from such investments or moneys in any fund other than the Rebate Fund) shall first be transferred to the Reserve Fund, if the amount held in the Reserve Fund prior to BIB] 07-30-1998-U01 03:16:07PM-U01 ADMIN-U01 CCRES-U02 91-U02 61-U02 2 ^ ?X II any such transfer is less than 10% of the principal amount of the outstanding Bonds and, if the Reserve Fund is then in an amount equal to 10% of the principal amount of the outstanding Bond but not more than 10% of the original proceeds of the Bonds), investment income shall be deposited in the Redemption Fund and any loss incurred in connection with such investments shall be debited against the fund from which the investment was made. obligations purchased as an investment of moneys in any of the Funds or Accounts shall be deemed at all times to be a part of such respective fund and, except as provided in Section 18(b) hereof, the interest accruing thereon and any gain realized from an investment shall be credited to such fund and any loss resulting from any authorized investment shall be charged to such fund without liability to the City or the members and officers thereof. The Treasurer shall sell at the best price obtainable or present for redemption any obligation purchased whenever it shall be necessary to do so in order to provide moneys to meet any payment or transfer from such fund as required by this Resolution and shall incur no liability for any loss realized upon such a sale. The investment constituting a part of the fund shall be valued at the lower of cost or the then estimated or appraised market value of the investment, provided, however, that investments in the Reserve Fund and the Redemption Fund shall be valued at the cost thereof. All money retained by the Paying Agent after three years following payment of the Bonds shall be returned to the City. Section 21. Covenants. So long as any of the Bonds issued hereunder are outstanding and unpaid, the City makes the following covenants with the owners of the Bonds under the provisions of the Act and this Resolution, which covenants are necessary, convenient and desirable to secure the Bonds and tend to make them more marketable; provided, however, that said covenants do not require the City to expend any funds or monies other than the special assessments collected and amounts held in the Reserve Fund. 1. Covenant Punctual Payment. The City covenants that it will duly and punctually pay or cause to be paid the principal of and interest on every Bond issued hereunder, together with the premium thereon, if any be payable, on the date, at the place and in the manner mentioned in the Bonds in accordance with this Resolution to the extent special assessments are available therefor, that the payments into the Redemption Fund and the Reserve Fund will be made, all in strict conformity with the terms of said Bonds and this Resolution and that it will faithfully observe and perform all of the conditions, covenants and requirements of this Resolution and all resolutions supplemental hereto and of the Bonds issued hereunder and that time of such payment and performance is of the essence of the City*s contract with the owners of the Bonds. BIB] 07-30-1998-U01 03:16:07PM-U01 ADMIN-U01 CCRES-U02 91-U02 61-U02 2 ^ ?X II 2. Commence Foreclosure Proceedings. The City covenants for the benefit of the owners of the Bonds that it will on or prior to July 1 of each year renew the assessment records for Assessment District No. 91-1 and will commence appropriate foreclosure proceedings within 150 days from the date of said review, and diligently pursue to completion such foreclosure proceedings. Section 22. Incontestability. After the sale and delivery of the Bonds by the City, the Bonds shall be incontestable by the City. Section 23. Contract with Bondowners. The provisions of this Resolution and of any other resolution supplementing or amending this Resolution shall constitute a contract between the City and the owners of the Bonds herein referred to as the Bondowner"), and such provisions shall be enforceable by any Bondowner for the equal benefit and protection of all Bondowners similarly situated by mandamus, accounting, mandatory injunction or any other suit, action or proceeding at law or in equity that is now or may hereafter be authorized under the laws of the State of California in any court of competent jurisdiction. Said contract is made under and is to be construed in accordance with the laws of the State of California. No remedy conferred hereby upon any Bondowner is intended to be exclusive of any other remedy, but each such remedy is cumulative and in addition to every other remedy and may be exercised without exhausting and without regard to any other remedy conferred by law. No waiver of any default or breach of duty or contract by any Bondowner shall affect any subsequent default or breach of duty or contract or shall impair any right or remedies on said subsequent default or breach. No delay or omission of any Bondowners to exercise any right or power accruing upon any default shall impair any such right or power or shall be construed as a waiver of any default or acquiescence therein. Every substantive right and every remedy conferred upon the Bondowners may be enforced and exercised as often as may be deemed expedient. In case any suit, action or proceeding to enforce any right or exercise any remedy shall be brought or taken and should said suit, action or proceeding be abandoned, or be determined adversely to the Bondowners, then, and in every such case, the City and the Bondowners shall be restored to their former positions, rights and remedies as if such suit, action or proceeding had not been brought or taken. Section 24. Cessation of Agreements. When all of the Bonds and all interest to accrue thereon have been fully paid and discharged, the agreements in this Resolution contained shall cease and terminate, and the City shall be under no further obligation to do or perform any of the covenants, conditions or agreements in this Resolution contained. BIB] 07-30-1998-U01 03:16:07PM-U01 ADMIN-U01 CCRES-U02 91-U02 61-U02 2 ^ ?X II Section 25. Partial Invalidity. If any section, subsection, sentence, clause or phrase of this Resolution shall be for any reason held by a court of competent jurisdiction to be unconstitutional, invalid or unenforceable, such holding shall not affect the validity of the remaining portions hereof. This City Council hereby declares that it would have passed this Resolution and each section, subsection, sentence, clause or phrase hereof irrespective of the fact that any one or more sections, subsections, sentences, clauses or phrases be declared to be unconstitutional, invalid or unenforceable, such holding shall not affect the validity of the remaining portions hereof. This City Council hereby declares that it would have passed this resolution and each section, subsection, sentence, clause or phrase hereof irrespective of the fact that any one or more sections, subsections, sentences, clauses or phrases be declared to be unconstitutional, invalid or unenforceable. Section 26. Liberal Construction. This Resolution shall be liberally construed to the end that its purpose may be effected. No error, irregularity or informality and no neglect or omission herein or in any proceeding had pursuant hereto which does not directly affect the jurisdiction of this City Council shall void or invalidate this Resolution or such proceeding or any part thereof, or any act or determination made pursuant thereto. Section 27. No City Obligation. Pursuant to Streets and Highways Code Section 8769, this City Council hereby determines that the City will not obligate itself to advance available funds from the City Treasury to cure any deficiency which may occur in the Redemption Fund. Section 28. Amendments. This Resolution, and the rights and obligations of the City and of the Owners of the Bonds issued hereunder, may be modified or amended at any time by supplemental resolution adopted by the City: a) for any purpose at any time prior to the delivery of the Bonds; h) without the consent of Bondowners, if the modification or amendment is for the purpose of adding covenants and agreements further to secure Bond payment, to prescribe further limitations and restrictions on Bond issuance, to surrender rights or privileges of the City, to make modifications not affecting any outstanding series of Bonds only with the consent of the Treasurer, for the purpose of curing any ambiguities, defects or inconsistent provisions in this Resolution or to insert such provisions clarifying matters or questions arising under this Resolution as are necessary and desirable to accomplish the same, provided that the modifications or amendments do not adversely affect the rights of the Owners of any outstanding Bonds; or c) for any purpose with the consent of the Bondowners holding not less than sixty percent 60%) in aggregate principal amount of the outstanding Bonds, exclusive 07/30/91 BIB] 07-30-1998-U01 03:16:07PM-U01 ADMIN-U01 CCRES-U02 91-U02 61-U02 2 ^ ?X 11 of Bonds, if any, owned by the City, and obtained as hereinafter set forth; provided, however, that no modification or amendment shall, without the express consent of the Owner or registered owner of the Bond affected, reduce the principal amount of any Bond, reduce the interest rate payable on it, extend its maturity or the times for paying interest, change the monetary medium in which principal and interest is payable, or create a mortgage pledge or lien upon the revenues superior to or on a parity with the pledge and lien created for the Bonds or reduce the percentage of consent required for amendment or modification. Any act done pursuant to a modification or amendment permitted by this Section 29 shall be binding upon the Owners of all of the Bonds, and shall not be deemed an infringement of any of the provisions of this Resolution or of the Act, whatever the character of the act may be, and may be done and performed as fully and freely as if expressly permitted by the original terms of this Resolution, no Bondowner shall have any right or interest to object to the action, to question its propriety or to enjoin or restrain the City or its officers from taking any action pursuant to such modification or amendment. Section 29. Authorization of Officers. The officers of the City are hereby authorized and directed, jointly and severally, to do any and all things and to execute and deliver any and all documents which they may deem necessary or advisable in order to consummate the issuance, sale and delivery of the Bonds, and otherwise to effectuate the purposes of this Resolution, and such actions previously taken by such officers are hereby ratified and confirmed. Section 30. Effective Date. This Resolution shall become effective upon adoption. PASSED, APPROVED AND ADOPTED this 23rd day of July, 1991. 1*'*e4Ci*f La Mayor Quinta ATE*T: xCity Clerk of *e City of La Quinta 07/30/91 BIB] 07-30-1998-U01 03:16:07PM-U01 ADMIN-U01 CCRES-U02 91-U02 61-U02 2 ^ ?X II EXHIBIT A FACE OF BOND] UNITED STATES OF AMERICA STATE OF CALIFORNIA COUNTY OF RIVERSIDE CITY OF LA QUINTA, CALIFORNIA ASSESSMENT DISTRICT NO. 91-1 The City is not obligated to advance City funds to cure any deficiency in the Redemption Fund herein described.) No. $_______ Interest Maturity Original Rate Date Issue Date CUSIP 19 July 17, 1991 Registered Owner: Principal Amount: Pursuant to the Municipal Improvement Act of 1913, Division 12 of the Streets and Highways Code and under and by virtue of the Improvement Bond Act of 1915, Division 10 of the Streets and Highways Code the Act"), the City of La Quinta, County of Riverside, State of California the City"), will, out of the Redemption Fund hereinafter described for the payment of the Bonds issued upon the unpaid portion of assessments made for the work and improvements in Assessment District No. 91-1, more fully described in proceedings taken pursuant to Resolution of Intention No. 91-31 adopted by the City Council of the City on May 7, 1991 the Resolution of Intention"), pay to the registered owner stated above or its assigns, on the maturity date stated above, the principal amount stated above, in lawful money of the United States of America and in like manner will pay interest from the Interest Payment Date next preceding the date on which this Bond is authenticated, unless this Bond is authenticated and registered after the fifteenth day of the month preceding an Interest Payment Date and on or before such Interest Payment Date, in which event it shall bear interest from such Interest Payment Date, or unless this Bond is authenticated and registered on or prior to February 15, 1992, in which event it shall bear interest from the Original Issue Date, until payment of such principal sum shall have been discharged, at the rate per annum *VtlT*T* * BIB] 07-30-1998-U01 03:16:07PM-U01 ADMIN-U01 CCRES-U02 91-U02 61-U02 2 ^ ?X IL stated above, payable semiannually on March 2 and September 2 in each year commencing March 2, 1992. Both the principal hereof and redemption premium hereon are payable upon surrender of this bond at the corporate trust office of Security Pacific National Bank, as Transfer Agent, Registrar and Paying Agent the Paying Agent") in Los Angeles, California, and the interest hereon is payable by check mailed by first class mail to the owner hereof at the owner*s address as it appears on the records of the Paying Agent as of the fifteenth day immediately preceding each Interest Payment Date. REFERENCE IS MADE TO THE FURTHER PROVISIONS OF THIS BOND SET FORTH ON THE REVERSE SIDE HEREOF WHICH SHALL FOR ALL PURPOSES HAVE THE SAME EFFECT AS THOUGH FULLY SET FORTH HEREIN. This Bond will continue to bear interest after maturity at the rate above stated; provided, it is presented at maturity and payment thereof is refused upon the sole ground that there are not sufficient moneys in said redemption fund with which to pay same. If it is not presented at maturity, interest thereon will accrue only until maturity. This Bond shall not be entitled to any benefit under the Act or the Resolutior* of the Issuance of the Bonds the Resolution of Issuance") or become valid or obligatory for any purpose, until the certificate of authentication and registration hereon endorsed shall have been dated and signed by the Paying Agent. IN WITNESS WHEREOF, said City of La Quinta has caused this Bond to be signed in facsimile by the Treasurer of said City and its Clerk and has caused its corporate seal to be reproduced in facsimile hereon all as of the 17th day of July, 1991. CITY OF LA QUINTA, CALIFORNIA Clerk Treasurer SEAL] BIB] 07-30-1998-U01 03:16:07PM-U01 ADMIN-U01 CCRES-U02 91-U02 61-U02 2 ^ ?X 51 REVERSE OF BOND] LIMITED OBLIGATION IMPROVEMENT BOND CITY OF LA QUINTA, CALIFORNIA ASSESSMENT DISTRICT NO. 91-1 The City is not obligated to advance City funds to cure any deficiency in the Redemption Fund herein described.) This Bond is one of several series of Bonds of like date, tenor and effect, but differing in amounts, maturities and interest rates, issued by the City under the Act and the Resolution of Issuance, for the purpose of providing means for paying for the improvements described in the proceedings, and is secured by the moneys in said Redemption Fund and by the unpaid portion of assessments made for the payment of said improvements, and, including principal and interest, is payable exclusively out of said fund. This Bond is transferable by the registered owner hereof, in person or by the owner*s attorney duly authorized in writing, at the corporate trust office of the Paying Agent, subject to the terms and conditions provided in the Resolution of Issuance, including the payment of certain charges, if any, upon surrender and cancellation of this Bond. Upon such transfer, a new registered Bond or Bonds, of any authorized denomination or denominations, of the same maturity, for the same aggregate principal amount will be issued to the transferee in exchange therefor. The Bonds shall be registered only in the name of an individual including joint owners), a corporation, a partnership or a trust. Neither the City nor the Paying Agent shall be required to make such exchange or registration of transfer of Bonds during the 15 days immediately preceding the selection of Bonds to be redeemed, or of any Bonds chosen for redemption. The City and the Paying Agent may treat the owner hereof as the absolute owner for all purposes, and the City and the Paying Agent shall not be affected by any notice to the contrary. This Bond or any portion of it in the amount of five thousand $5,000), or any integral multiple thereof, may be redeemed and paid in advance of maturity upon the 2nd day of March or September in any year by giving at least 30 days* notice but not more than 60 days* notice by registered or certified mail or by personal service to the registered owner BIB] 07-30-1998-U01 03:16:07PM-U01 ADMIN-U01 CCRES-U02 91-U02 61-U02 2 ^ ?X II hereof at the owner*s address as it appears on the registration books of the Paying Agent by paying principal and accrued interest together with a premium equal to at least three percent 3*-*) of the principal. LEGAL OPINION I hereby certify that the following is a correct copy of the signed legal opinion of stradling, Yocca, Carlson & Rauth, a Professional Corporation, addressed to the original purchaser of the Bonds and dated as of the date of delivery of and payment for this Bond. City Clerk BIB] 07-30-1998-U01 03:16:07PM-U01 ADMIN-U01 CCRES-U02 91-U02 61-U02 2 ^ ?X II FORM OF ASSIGNMENT] FOR VALUE RECEIVED the undersigned hereby sell(s), assign(s) and transfer(s) unto PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE] Please print or typewrite name and address including postal zip code of assignee] the within Bond of the City, County of Riverside, California, and does hereby irrevocably constitute and appoint Attorney to transfer said Bond on the books of as Paying Agent, Transfer Agent and Registrar, with full power of substitution in the premises. Dated: 19 Signature Guaranteed: NOTICE: The signature to this assignment must correspond with the name as written upon the face of the within Bond in every particular without alteration or enlargement, or any change whatsoever. C BIB] 07-30-1998-U01 03:16:07PM-U01 ADMIN-U01 CCRES-U02 91-U02 61-U02 2 ^ ?X 5 FORM OF CERTIFICATE OF AUTHENTICATION AND REGISTRATION] This is one of the Bonds described in the within mentioned Resolution of Issuance. Dated: SECURITY PACIFIC NATIONAL BANK, Paying Agent, Transfer Agent and Registrar By: Authorized Signatory EXHIBIT A-6 BIB] 07-30-1998-U01 03:16:07PM-U01 ADMIN-U01 CCRES-U02 91-U02 61-U02 2 ^ ?XSTATE OF CALIFORNIA ss. COUNTY OF RIVERSIDE I, SAUNDRA JUHOLA, City Clerk of the City of La Quinta, do hereby certify that the foregoing resolution was duly adopted by the City Council of said City at a regular rneeting of said City held on the 23rd day of July, 1991, and that it was so adopted by the following vote: AYES: Council Member Rushworth, Mayor Pena NOES: None ABSENT: Council Member Frapklin ABSTAIN: Council Members B nenberger, Snif Clerk of the City of La Quinta SEAL) STATE OF CALIFORNIA ss. COUNTY OF RIVERSIDE I, SAUNDRA JUHOLA, City Clerk of the City of La Quinta, do hereby certify that the above and foregoing is a full, true and correct copy of RESOLUTION NO 91-61 of said City, and that the same has not been amended or repealed. DATED: July 23, 1991 lerk of t e Ci La Quinta BIB] 07-30-1998-U01 03:16:07PM-U01 ADMIN-U01 CCRES-U02 91-U02 61-U02