HomeMy WebLinkAboutAgenda Report - July 17, 1996 (63)CITY OF LODI
COUNCIL COMMUNICATION
AGENDA TITLE: Approve Sale of Central City Revitalization Assessment District Bonds
MEETING DATE: July 17, 1996
PREPARED BY: Finance Director
RECOMMENDED ACTION: Council adopt two resolutions approving the issuance and sale of the
Central City Revitalization Assessment District Bonds.
BACKGROUND INFORMATION: The City of Lodi has approved the formation of a Central City Revitalization
Assessment District pursuant to the Municipal Improvement Act of 1913. The City has to now approve the issuance
and sale of bonds pursuant to the Improvement Bond Act of 1915, and provide for the levy of annual special
assessments on property to pay for the improvements financed.
At the April 17, 1996 Council meeting, Council approved a contract with NBS/Lowry, Inc., a firm with a fifty year
engineering and assessment distinct history, to provide quality and cost-effective assessment administration services.
In addition to providing for the annual levy, these administrative services include numerous other duties and
covenants involved with such districts and bonds including monitoring and pursuing delinquencies, initiating judicial
foreclosure actions, providing payoff calculations, tracking parcel changes and apportionments, adjusting for agency
costs, crediting the parcels for excess funds and interest eamings, calling bonds, and providing information on the
bonds and district status to interested parties. Most of these requirements are set forth in the Califomia Streets and
Highways Code, Division 10: Others are as dictated in the Bond Transcripts.
Tim Hachman, Bond Counsel, and John Fitzgerald, Siedler/Fitzgerald Public Finance, have been working closely with
city staff to prepare the necessary financing documents. They will be present to answer any questions on the bond
financing.
Financial Impact:
Due to the code and current taxation policy, these Assessment Districts must cover their costs and not be paid for by
General Fund moneys. Therefore, all costs for administering these districts are captured in the annual levy and there
is no direct cost to the City of Lodi. This articulates with the costs for the trustee/paying agent, incremental outside
auditor fees, county tax collector charges, arbitrage rebate services, and similar expenses which shall be
incorporated into the annual levy and spread to the parcels within the district.
FUNDING: No direct cost to City for administration of the assessments. Annual debt service payments
will be made from assessment levies.
Vicky McAt ie
Finance Director
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APPROVED:
H. Dixon Flynn — City Manager
RESOLUTION NO. 95-101
BEFORE THE CITY COUNCIL OF THE CffY OF LODI, CALIFORNIA
A RESOLUTION DETERMINING UNPAID ASSESSMENTS AND
PROVIDING FOR ISSUANCE OF BONDS ,
LODI CENTRAL CITY REVITALIZATION ASSESSMENT DISTRICT NO. 95-1
RESOLVED, by the City Council of the City of Lodi, California, as follows:
RECITALS
1. On September 20, 1995, this Council adopted its Resolution No. 95-119, A
Resolution of Intention to Acquire and/or Construct Improvements and to Refund Prior
Bonds Issued (the "Resolution of Intention"), relating to the acquisition and/or
construction of public improvements under and pursuant to the provisions of the
Municipal Improvement Act of 1913, Division 12 of the Streets and Highways Code of the
State of California for the Lodi Central City Revitalization Assessment District No. 95-1
(the "Assessment District"). By the Resolution of Intention, the Council provided that
improvements bonds would be issued thereunder pursuant to the provisions of the
Improvement Bond Act of 1915, Division 10 of the Streets and Highways Code of the
State of California (the "Bond Law") and reference to the Resolution of Intention is hereby
expressly made for further particulars.
2. Notice of the recordation of the assessment and the opportunity to pay all or a
portion thereof and the time so provided for receiving payment of assessments in cash
has expired, and there is on file with the City Finance Director a list of all assessments
which remain unpaid.
3. This Council now intends to provide for the issuance of improvement bonds
upon the security of the unpaid assessments, all as hereinafter provided.
ARTICLE I
Section 1.01 DEFINMONS. Unless the context otherwise requires, the terms
defined in this Section shall, for all purposes of this Resolution and of any Supplemental
Resolution and of the Bonds and of any certificate, opinion, request or other document
herein mentioned, have the meanings herein specified.
"Act" means the Municipal Improvement Act of 1913, Division 12 of the Streets and
Highways Code of the State of California.
"Agent" means the First Trust of California National Association, St. Paul
Minnesota, appointed under Section 2.06 hereof to perform the duties of registrar, paying
agent and transfer agent, for the authentication, registration, transfer and payment of the
Bonds and the Agent's assigns or any other corporation or association which may at any
time be substituted in its place.
"Assessment or Assessments" means the unpaid amounts of the special
assessments levied against all taxable real property within the boundaries of the
Assessment District pursuant to the Act and the proceedings of the Council under the
Resolution of Intention, for the purpose of paying Debt Service on the Bonds under the
Bond Law.
"Assessment District" means that portion of the City designated "Lodi Central City
Revitalization Assessment District No. 95-1," as established in proceedings under the Act
and Resolution of Intention.
"Authorized Investments" means any (i) securities (other than those identified in
paragraphs (a) and (d) of Section 53601 of the Government Code of the State) in which
the City may legally invest funds subject to its control, pursuant to Article 1, commencing
with Section 53600 of Chapter 4 of Part 1 of Division 2 of Title 5 of the Government Code
of the State, as now or hereafter amended; (ii) shares in a California common law trust
established pursuant to Title 1, Division 7, Chapter 5 of the Government Code of the State
which invests exclusively in investments permitted by Section 53635 of Title 5, Division 2,
Chapter 4 of the Government Code of the State, as it may be amended, including but not
limited to the California Arbitrage Management Program (CAMP); and (iii) the Local
Agency Investment Fund, Sections 53600-53609 of the Government Code of the State,
as now in effect or as may be amended or recodified from time to time, to the extent the
Finance Director is authorized to register such investment in the Finance Director's name,
and may restrict such investment if required to keep monies available for the purposes of
this Resolution.
"Auditor" means the Auditor/Controller or Tax Collector of the County or other
official of the County responsible for preparing property tax bills.
"Available Surplus Funds" means any surplus moneys held by the City at the end
of each Fiscal Year in excess of the amounts required to pay lawful municipal obligations
incurred in that Fiscal Year.
"Bond Date" means the date of initial issuance and delivery of the Bonds.
"Bond Denomination" means the amount of $5,000 or any integral multiple thereof,
which is the minimum amount in which the Bonds may be issued, except that one Bond
may be issued in an odd amount.
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"Bond Law" means the Improvement Bond Act of 1915, Division 10 of the
California Streets and Highways Code.
"Bond Purchase Contract" means the agreement or contract whereby the City
agrees to sell and the Original Purchaser agrees to buy all or a designated portion of the
Bonds.
"Bond Register" means the books maintained by the Agent pursuant to Section
2.12 for the registration and transfer of ownership of the Bonds.
"Bond Year" means the twelve-month period beginning on September 2 in each
year and ending on the day prior to September 2 in the following year except that (i) the
first Bond Year shall begin on the Closing Date and end on the day prior to September 2
of the next calendar year, and (ii) the last Bond Year may end on a prior redemption date.
"Bonds" or 'Bonds of this Issue" means Limited Obligation Improvement Bonds,
City of Lodi, Series 1996-1, Lodi Central City Revitalization Assessment District No. 95-1,
issued under this Resolution and the Bond Law, and at any time Outstanding.
"Certificate of the City" means a written certificate, statement, request, order or
requisition signed by an Officer of the City duly authorized by the Council for that purpose.
"City" means the City of Lodi, County of San Joaquin, a municipal corporation of
the State of California, duly organized and validly existing under and by virtue of the
Constitution and the laws of the State of California.
"City Manager" means the City Manager or the Assistant City Manager of the City.
"Clerk" means the City Clerk of the City or Deputy City Clerk or designee thereof.
"Closing Date" means the date upon which there is an exchange of the Bonds for
the proceeds representing the purchase price of such Bonds by the Original Purchaser
thereof.
"Continuing Disclosure Certificate" means that certain Continuing Disclosure
Certificate executed by the issuer dated the date of issuance and delivery of the Bonds,
as originally executed and as it may be amended from time to time in accordance with
the terms thereof.
"Costs of Issuance" means all expenses incurred in connection with the
authorization, issuance, sale and delivery of the Bonds, including but not limited to
compensation, fees and expenses of the City and the Agent and their respective counsel,
compensation to any financial consultants and underwriters (other than those taken at
discount on the Closing Date), legal fees and expenses, filing and recording costs, costs
of preparation and reproduction of documents, costs of compliance with the Tax Code
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relating to rebate to the United States under Section 5.08 and costs of printing, mailing
and publication of notices with respect to the City and the Project.
"Costs of Issuance Fund" means the City of Lodi, Lodi Central City Revitalization
Assessment District No. 95-1, Limited Obligation Improvement Bonds, Costs of Issuance
Fund estabished under Section 4.03 of this Resolution.
"Council" means the City Council of the City.
"County" means the County of San Joaquin, State of California.
"Debt Service" means the scheduled amount of interest and amortization of
principal payable on the Bonds during the period of computation including any Sinking
Fund Payments, excluding amounts scheduled during such period which relate to
principal which has been retired before the beginning of such period.
"Escrow Fund" means the City of Lodi, Lodi Central City Revitalization Assessment
District No. 95-1, Limited Obligation Improvement Bonds, Escrow Fund established under
Section 4.06 of this Resolution.
"Federal Securities" means any of the following which at the time of investment are
legal investments under the laws of the State for the moneys proposed to be invested
therein:
(a) direct general obligations of the United States of America (including
obligations issued or held in book entry form on the books of the Department of
the Treasury of the United States of America); and
(b) obligations of any department, agency, or instrumentality of the United
States of America, the timely payment of principal of and interest on which are
unconditionally and fully guaranteed by the United States of America.
"Finance Director" means the Finance Director of the City or designee thereof.
"Fiscal Year" means the period commencing on July 1 of each year and ending on
the next succeeding June 30.
"Improvement Fund" means the City of Lodi, Lodi Central City Revitalization
Assessment District No. 95-1, Limited Obligation Improvement Bonds, Improvement
Fund established under Section 4.02 of this Resolution.
"Interest Payment Date" means each date upon which interest on the Bonds is
payable, beginning March 2, 1997, and semiannually on each September 2 and March 2
thereafter until maturity.
"Officer of the City" means the City Manager, Finance Director, City Clerk, Director
of Public Works, or any other official of the City authorized by the Council to carry out the
terms of this Resolution. _
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"Original Purchaser" means the first purchaser of the Bonds from the City under
the Bond Purchase Contract.
"Outstanding," when used as of any particular time with reference to the Bonds,
means all Bonds theretofore executed, issued and delivered by the _ City and
authenticated by the Agent under this Resolution except:
(a) Bonds theretofore cancelled by the Agent or surrendered to the Agent for
cancellation;
(b) Bonds paid or deemed to be paid within the meaning of Section 6.03; and
(c) Bonds in lieu of or in substitution for which other Bonds shall have been
executed, issued and delivered by the City and authenticated by the Agent
pursuant to this Resolution or any Supplemental Resolution.
"Owner" or "Registered Owner," when used with respect to any Outstanding Bond,
means the person in whose name the ownership of such Bond shall be registered on the
Bond Register.
"Principal Office" means the First Trust Center of the Agent in St. Paul, Minnesota,
or such other office as shall be designated by the Agent in writing to the City.
"Prior Bonds" means the improvement bonds, Series 1984-1, issued by the City
May 24, 1984, in its proceedings for the Lodi United Downtown Assessment District,
Beautification Project.
"Project" means the the acquisition and improvements described in the Resolution
of Intention and any changes and modifications thereto approved by the Council.
"Rebate Fund" means the fund by that name established by the City pursuant to
the Tax Certificate.
"Record Date" means, with respect to the Bonds, the fifteenth (15th) day
immediately preceding an Interest Payment Date.
"Redemption Fund" means the City of Lodi, Lodi Central City Revitalization
Assessment District No. 95-1, Limited Obligation Improvement Bonds, Redemption Fund
estabished under Section 4.04 of this Resolution.
"Redemption Premium" means two percent (2%) of the principal amount of the
Bonds payable upon optional advance redemption of the Bonds as set forth in Section
2.14 of this Resolution.
"Redemption Price" means, with respect to any Bond, the principal amount
thereof, plus the applicable premium, if any, payable upon redemption thereof pursuant
to this Resolution.
"Refunding Date" means the date (as specified in Exhibit A) prior to which the
Bonds are not subject to refunding pursuant to Section 2.15 of this Resolution.
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"Reserve Fund" means the City of Lodi, Lodi Central City Revitalization
Assessment District No. 95-1, Limited Obligation Improvement Bonds, Reserve Fund
estabished under Section 4.05 of this Resolution.
"Reserve Requirement" means the amount not exceeding the lesser of (a) ten
percent (10%) of the principal amount of the Bonds, (b) 125% of the average annual Debt
Service of the Bonds, or (c) the maximum annual Debt Service of the Bonds.
"Resolution" or "Resolution of Issuance" means this Resolution, as originally
adopted or as it may from time to time be supplemented, modified or amended by any
Supplemental Resolution pursuant to the provisions hereof.
"Resolution of Intention" means Resolution No. 95-123, A Resolution of Intention to
Acquire and/or Construct Improvements and to Refund Prior Bonds Issued, adopted by
the Council on September 20, 1995, as modified or amended and in effect on the Closing
Date.
"State" means the State of California.
"Supplemental Resolution" means any resolution, agreement or other instrument
hereafter duly adopted or executed by the City in accordance with the provisions of this
Resolution.
"Tax Certificate" means the Tax Certificate executed and delivered by the City on
the date of initial issuance and delivery of the Bonds setting forth the requirements of the
Tax Code with respect to the Bonds and incorporated herein pursuant to Section 5.08.
"Tax Code" means the Internal Revenue Code of 1986 as in effect on the date of
issuance of the Bonds or (except as otherwise referenced herein) as it may be amended
to apply to obligations issued on the date of issuance of the Bonds, together with
applicable temporary and final regulations promulgated under the Code.
Section 1.02 RULES OF CONSTRUCTION. All references in this Resolution to
"Articles," "Sections," and other subdivisions are to the corresponding Articles, Sections
or subdivisions of this Resolution; and the words "herein," "hereof," "hereunder" and other
words of similar import refer to this Resolution as a whole and not to any particular
Article, Section or subdivision hereof.
Words of the masculine gender shall be deemed and construed to include
correlative words of the feminine and neuter genders. Unless the context shall otherwise
indicate, words importing the singular number shall include the plural number and vice
versa, and words importing persons shall include corporations and associations,
including public bodies, as well as natural persons.
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Section 1.03 EQUAL SECURITY. In consideration of the acceptance of the Bonds
by the Owners thereof, this Resolution shall be deemed to be and shall constitute a
contract between the City and the Owners from time to time of the Bonds; and the
covenants and agreements herein set forth to be performed on behalf of the City shall be
for the equal and proportionate benefit, security and protection of all Owners of the
Bonds without preference, priority or distinction as to security or otherwise of any of the
Bonds over any of the others by reason of the number or date thereof or the time of sale,
execution or delivery thereof, or otherwise for any cause whatsoever, except as expressly
provided therein or herein.
ARTICLE II
ISSUANCE OF BONDS
Section 2.01 BONDS AUTHORIZED. All acts, conditions and things required by
law to exist, happen and be performed precedent to and in the issuance of the Bonds
have existed, happened and been performed in due time, form and the manner as
required by law, and the Council is now authorized pursuant to each and every
requirement of law to issue the Bonds in the manner and form as in this Resolution
provided. The Bonds will be issued as serial and/or term bonds as set forth in the Bond
Purchase Contract and Exhibit A hereto.
Section 2.02 UNPAID ASSESSMENTS. The Assessments now remaining unpaid
are as shown on the list of unpaid assessments on file with the Finance Director, which
list is hereby approved and which is incorporated herein by this reference and made a
part hereof. For a particular description of the lots or parcels of land bearing the
respective assessment numbers set forth in that list, reference is hereby made to the
assessment and to the diagram, and any amendments thereto, recorded in the office of
the Director of Public Works of the City, after confirmation thereof by the Council.
Section 2.03 ISSUANCE OF BONDS. The Bonds, in the aggregate principal
amount of not to exceed $2,100,000, shall be issued as hereinafter provided and be
secured by the moneys in the Redemption Fund and by the Assessments, or portion
thereof, in accordance with, under and pursuant to the provisions of the Resolution of
Intention and the proceedings thereunder duly had and taken. The actual principal
amount shall be as set forth in Exhibit A hereto. The Bonds shall be known as "Limited
Obligation Improvement Bonds, City of Lodi, Series 1996-1, Lodi Central City
Revitalization Assessment District No. 95-1", and shall be dated the Bond Date. The
Bonds are limited obligations of the City pursuant to Section 5.03 of this Resolution.
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Section 2.04 MATURITIES OF BONDS. The Bonds shall be issued in only fully
registered form, without coupons, in the Bond Denomination, so long as no Bond shall
have more than one maturity date. The Bonds shall be dated with the Bond Date and
mature on September 2 in each of the years and in the amounts set forth in Exhibit A
hereto. The Bonds shall be numbered or otherwise identified as determined by the Agent.
Section 2.05 INTEREST ON BONDS. The Bonds shall bear interest at the rate or
rates set forth in Exhibit A hereto.
Interest on the Bonds shall be payable on each Interest Payment Date to the
person whose name appears on the Bond Register as the Owner thereof as of the
Record Date immediately preceding each such Interest Payment Date, such interest to
be paid by check of the Agent mailed by first class mail on or before each Interest
Payment Date to the Owner, at the address of such Owner as it appears on the Bond
Register. Principal of and premium (if any) on any Bond shall be paid upon presentation
and surrender thereof at the Principal Office of the Agent. Both the principal of and
interest and premium (if any) on the Bonds shall be payable in lawful money of the United
States of America. Upon the written request of an Owner of $1,000,000 or more in
aggregate principal amount of Bonds, such interest shall be paid on the Interest Payment
Date by wire transfer in immediately available funds to an account in the continental
United States of America designated by such Owner to the Agent on or before the
applicable Record Date preceding such Interest Payment Date.
Interest shall be computed on the basis of a 360 -day year comprised of twelve
30 -day months. The Bonds shall bear interest from the Interest Payment Date next
preceding the date of authentication of the Bonds, except for any Bond which is
authenticated on an Interest Payment Date, in which event such Bond shall bear interest
from such date of authentication, and except for any Bond which is authenticated prior to
the first Interest Payment Date, in which event such Bond shall bear interest from the
Bond Date; provided, however, that if, as of the date of authentication of any Bond,
interest thereon is in default, such Bond shall bear interest from the date to which interest
has previously been paid or made available for payment in full. The Bonds shall continue
to bear interest after maturity at their interest rates, provided that they are presented at
maturity and payment thereof is refused upon the sole ground that there are not sufficient
moneys in the Redemption Fund. If not presented at maturity, interest will run on the
Bonds until maturity.
Section 2.06 DESIGNATION OF AGENT. First Trust of California National
Association, at its corporate trust office, San Francisco, California, is hereby designated
as the Agent to perform the actions and duties required under this Resolution for the
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authentication, registration, transfer, and payment of the Bonds. The City Manager is
hereby authorized and directed to enter into an appropriate agreement with the Agent for
such purposes.
Section 2.07 FORM OF BONDS. The Bonds, the form of Agent's certificate of
authentication, and the form of assignment to appear thereon, shall be substantially in the
respective forms set forth in Exhibit B attached hereto and by this reference herein
incorporated, with necessary or appropriate variations, omissions and insertions, as
permitted or required by this Resolution. "CUSIP" identification numbers shall be
imprinted on the Bonds, but such numbers shall not constitute a part of the contract
evidenced by the Bonds and any error or omission with respect thereto shall not
constitute cause for refusal of any purchaser to accept delivery or pay for the Bonds. In
addition, failure on the part of the City or the Agent to use such CUSIP numbers in any
notice to Owners shall not constitute an event of default or any violation of the City's
contract with such Owners and shall not impair the effectiveness of any such notice.
Section 2.08 PREPARATION AND DELIVERY OF BONDS. Upon execution of the
Bond Purchase Contract on behalf of the City, the Finance Director is hereby directed to
cause the Bonds to be prepared in accordance with this Resolution and to cause their
delivery upon their completion and execution to the Agent, who shall authenticate and
deliver the Bonds to the Original Purchaser, upon receipt of the purchase price therefor,
and upon receipt of the request of the City.
Section 2.09 EXECUTION OF BONDS. The Bonds shall be signed in the name
and on behalf of the City with the manual or facsimile signatures of the Finance Director
and attested by the manual or facsimile signature of the Clerk. The Bonds shall then be
delivered to the Agent for authentication. In case any officer who shall have signed any of
the Bonds shall cease to be such officer before the Bonds so signed shall have been
authenticated or delivered by the Agent or issued by the City, such Bonds may
nevertheless be authenticated, delivered and issued and, upon such authentication,
delivery and issuance, shall be as binding upon the City as though the individual who
signed the same had continued to be such officer of the City. Also, any Bond may be
signed on behalf of the City by any individual who on the actual date of execution of such
Bond shall be the proper officer although on the nominal date of such Bond such
individual shall not have been such officer.
Only such of the Bonds as shall bear thereon a certificate of authentication in
substantially the form set forth in Exhibit B, manually executed by the Agent, shall be valid
or obligatory for any purpose or entitled to the benefits of this Resolution, and such
certificate of the Agent shall be conclusive evidence that the Bonds so authenticated
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have been duly authenticated and delivered hereunder and are entitled to the benefits of
this Resolution. The Agent's certificate of authentication on any Bonds shall be deemed
to be executed by it if signed by the Agent or by an authorized officer or signatory of the
Agent, but it shall not be necessary that the same officer or signatory sign the certificate
of authentication on all of the Bonds issued hereunder.
Section 2.10 TEMPORARY BONDS. The Bonds may be issued initially in
temporary form exchangeable for definitive Bonds when ready for delivery. The
temporary bonds may be printed, lithographed or typewritten, shall be of such
denominations as may be determined by the Finance Director and may contain such
reference to any of the provisions of this Resolution as may be appropriate. Every
temporary bond shall be executed by the officers designated and in the manner provided
in Section 2.09 hereof and be registered and authenticated by the Agent upon the same
conditions and in sustantially the same manner as definitive Bonds. If the City issues
temporary Bonds, it will execute and furnish definitive Bonds without delay, and
thereupon the temporary Bonds may be surrendered for cancellation, in exchange
therefor at the Principal Office of the Agent and the Agent shall authenticate and deliver in
exchange for such temporary Bonds an equal aggregate principal amount of definitive
Bonds of authorized denominations. Until so exchanged, the temporary Bonds shall be
entitled to the same benefits under this Resolution as definitive Bonds authenticated and
delivered hereunder.
Section 2.11 TRANSFER AND EXCHANGE OF BONDS. Any Bond may, in
accordance with its terms, be transferred upon the Bond Register by the person in whose
name it is registered, in person or by his duly authorized attorney, upon surrender of
such Bond for cancellation, accompanied by delivery of a written instrument of transfer in
a form approved by the Agent, duly executed. Whenever any Bond shall be surrendered
for transfer, the Agent shall thereupon authenticate and deliver to the transferee a new
Bond or Bonds of like tenor, maturity and aggregate principal amount. Bonds may be
exchanged at the Principal Office of the Agent for Bonds of the same tenor and maturity
and of other authorized denominations. No Bonds the notice of redemption of which has
been given pursuant to Section 2.14 shall be subject to transfer or exchange pursuant to
this Section. Neither the City nor the Agent shall be required to make such exchange or
registration or transfer of Bonds on or after the Record Date. For any transfer or
exchange under this Section, the City and the Agent may require the payment of a
reasonable fee to cover the costs and expenses of the City and the Agent.
Section 2.12 BOND REGISTER. The Agent will keep or cause to be kept at its
Principal Office a Bond Register for the registration and transfer of the Bonds, which shall
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at all times during regular business hours be open to inspection by the City with
reasonable prior notice; and, upon presentation for such purpose, the Agent shall, under
such reasonable regulations as it may prescribe, register or transfer or cause to be
registered or transferred, on such books, Bonds as hereinbefore provided.
Section 2.13 BONDS MUTILATED, LOST, DESTROYED OR STOLEN. If any Bond
shall become mutilated, the Agent shall thereupon authenticate and deliver a new Bond
of like maturity and principal amount in an authorized denomination in exchange and
substitution for the Bond so mutilated, but only upon surrender to the Agent of the Bond
so mutilated. Every mutilated Bond so surrendered to the Agent shall be cancelled by it
and destroyed. If any Bond issued hereunder shall be lost, destroyed or stolen, evidence
of such loss, destruction or theft may be submitted to the City and the Agent and, if such
evidence is satisfactory to them and indemnity satisfactory to them shall be given, the
Agent shall thereupon authenticate and deliver a new Bond of like maturity and principal
amount in an authorized denomination in lieu of and in substitution for the Bond so lost,
destroyed or stolen (or if any such Bond shall have matured or shall have been called for
redemption, instead of issuing a substitute Bond the Agent may pay the same without
surrender thereof upon receipt of indemnity satisfactory to the Agent). The City and the
Agent may require payment of a reasonable fee for each new Bond issued under this
Section and of the expenses which may be incurred by the City and the Agent. Any Bond
issued under the provisions of this Section in lieu of any Bond alleged to be lost,
destroyed or stolen shall constitute an original contractual obligation on the part of the
City whether or not the Bond alleged to be lost, destroyed or stolen be at any time
enforceable by anyone, and shall be equally and proportionately entitled to the benefits of
this Resolution with all other Bonds secured by this Resolution and any Supplemental
Resolution.
Section 2.14 REDEMPTION PRIOR TO MATURITY.
Optional Redemption. Each Outstanding Bond, or any portion thereof in the
amount of the Bond Denomination, may be redeemed and paid in advance of maturity
upon any Interest Payment Date in any year by giving 30 days notice by registered or
certified mail or personal service to the Registered Owner as required by applicable
provisions of the Bond Law and by paying the principal amount thereof together with the
Redemption Premium plus interest to the date of advanced maturity, unless sooner
surrendered, in which event such interest shall be paid to the date of payment, all in the
manner and as provided in the Bond Law. Neither the failure of any Registered Owner to
receive redemption notice nor any defect in such notice shall affect the sufficiency of the
proceedings for redemption of such Bonds.
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The Finance Director shall cause to be called for redemption and retire Bonds
upon prepayment of Assessments in amounts sufficient therefor, or whenever sufficient
surplus funds are available therefor in the Redemption Fund.
The provisions of Part 11.1 of the Bond Law are applicable to the advance
payment of Assessments and to the calling of the Bonds.
Section 2.15 REFUNDING OF BONDS. The Bonds may be refunded by the City
pursuant to the procedures of Division 11 or 11.5 of the Streets and Highways Code of
California upon the conditions as set forth in appropriate proceedings therefor, all as
determined by the Council; provided, however, that the Council hereby determines that
the Bonds shall not be subject to such refunding procedures prior to the Refunding Date.
This determination shall not apply to, or in any manner limit, advancement of the maturity
of any Bond or Bonds pursuant to Parts 8, 9, 11 or 11.1 of the Bond Law, nor shall this
determination apply to, or in any manner limit, the redemption and payment of any Bonds
pursuant to any subsequent proceedings which provide for the payment in full of all
amounts necessary to eliminate any fixed special assessment liens previously imposed
upon any assessment parcel within the Assessment District.
ARTICLE III
SALE AND DELIVERY OF BONDS
Section 3.01 SALE OF BONDS. The Bonds shall be sold to the Original Purchaser
pursuant to a Bond Purchase Contract between the City and the Original Purchaser. The
City Manager is hereby authorized to negotiate and execute the Bond Purchase Contract
with the Original Purchaser for the sale of the Bonds, subject to such conditions as shall
be provided by separate resolution of the Council.
Section 3.02 FURTHER AUTHORITY. The Officers of the City are hereby
authorized and directed to execute all documents and take such actions as they may
deem necessary or advisable in order to carry out and perform the purposes of this
Resolution, and the execution or taking of such action shall be conclusive evidence of
such necessity or advisability.
The City Manager and the Clerk are authorized to complete and to approve
changes in any provisions of this Resolution and Exhibit A hereto in order to accomplish
the delivery of any of the Bonds on schedule; such changes may be accomplished by
attachment of a certificate, executed by both such officers, to this Resolution on file in the
office of the Clerk. _
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ARTICLE IV
APPLICATION OF PROCEEDS OF BONDS
ESTABLISHMENT OF FUNDS
Section 4.01 APPLICATION OF PROCEEDS OF SALE OF BONDS. Upon receipt
of the proceeds of sale of the Bonds on the Closing Date, the proceeds thereof shall be
forthwith set aside, paid over and deposited by the Finance Director, as set forth in the
Bond Purchase Contract, a Certificate of the City, this Article IV and Exhibit A hereto.
Section 4.02 IMPROVEMENT FUND. The Improvement Fund is hereby
established as a separate fund to be held by the Finance Director to the credit of which
deposits shall be made as required by Sections 4.01 and 4.03. The moneys in the
Improvement Fund shall be disbursed for the purpose of paying or reimbursing the costs
of acquiring and constructing the Project, including but not limited to all costs incidental
to or connected with such acquisition and construction. Disbursements from the
Improvement Fund shall be subject to the provisions of Sections 5.08 hereof. Any
surplus remaining after payment of all such costs and expenses shall be used as set forth
in the proceedings pursuant to the Resolution of Intention and applicable provisions of
the Act and the Improvement Fund shall be closed.
Section 4.03 COSTS OF ISSUANCE FUND. The Costs of Issuance Fund is
hereby established as a separate fund to be held by the Finance Director. The moneys in
the Costs of Issuance Fund shall be used solely for the purpose of the payment of Costs
of Issuance on or after the Closing Date. Any funds remaining in the Costs of Issuance
Fund on the date that is six months after the Closing Date shall be transferred to the
Improvement Fund and the Costs of Issuance Fund shall be closed.
Section 4.04 REDEMPTION FUND.
(A) Establishment of Redemption Fund. The Redemption Fund is hereby
established as a separate fund to be held by the Finance Director to the credit of which
deposits shall be made as required by Sections 4.01, 4.05(D), 5.01 and, if applicable,
Section 4.02 and any other amounts required to be deposited therein by this Resolution
or the Bond Law. Moneys in the Redemption Fund shall be held for the benefit of the City
and the Owners of the Bonds, shall be disbursed for the payment of the principal of, and
interest and any premium on, the Bonds as provided below.
(B) Disbursements. On or before each Interest Payment Date, there shall be
withdrawn from the Redemption Fund and delivered to the Agent for payment to the
Owners of the Bonds the principal of, and interest and any premium, then _due and
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payable on the Bonds. Five (5) business days prior to each Interest Payment Date, the
Finance Director shall determine if the amount then on deposit in the Redemption Fund is
sufficient to pay the Debt Service due on the Bonds on such Interest Payment Date; and if
such amount is insufficient for such purpose, the Finance Director shall transfer to the
Redemption Fund from the Reserve Fund, to the extent of any funds available therein, the
amount of such insufficiency. Amounts so withdrawn from the Reserve Fund and
deposited to the Redemption Fund shall be applied to the payment of the Bonds. If, after
such transfers, there are insufficient funds in the Redemption Fund to make the payments
provided for in the first sentence of this Section 4.04(B), the available funds shall be
applied first to the payment of interest on the Bonds, then to the payment of principal due
on the Bonds, and then to payment of principal due on the Bonds by reason of Bonds
called for redemption pursuant to Section 2.14 hereof.
Section 4.05 RESERVE FUND.
(A) Establishment of Fund. The Reserve Fund is hereby established as a
separate fund to be held by the Finance Director to the credit of which an initial deposit
shall be made on the Closing Date as required by Section 4.01, which Reserve
Requirement is equal initially to seven percent (7%) of the principal amount of the Bonds.
Proceeds from redemption or sale of properties with respect to which payment of
delinquent Assessments and interest thereon was made from the Reserve Fund, shall be
credited to the Reserve Fund. Moneys or assets in the Reserve Fund shall be held in
trust for the benefit of the City and the Owners as a reserve for the payment of principal
of, and interest and any premium on, the Bonds. The Finance Director shall cause the
Reserve Fund to be administered in accordance with Part 16 of the Bond Law.
(B) Use of Fund. Except as otherwise provided in this Section 4.05, all amounts
deposited in the Reserve Fund shall be used and withdrawn solely for the purpose of
making transfers to the Redemption Fund in the event of any deficiency at any time in the
Redemption Fund of the amount then required for payment of the principal of, and
interest and any premium on, the Bonds or in accordance with the provisions of this
Section 4.05, for the purpose of redeeming Bonds.
(C) Prepayment of Assessments. Whenever, after the issuance of the Bonds, an
Assessment is prepaid, in whole or in part, as provided in the Bond Law, the Reserve
Fund may be reduced in an amount equal to the product of the ratio of the original
amount of the Assessment so paid to the original amount of all Assessments, times the
initial Reserve Requirement. The prepayor shall be entitled to a credit in a like amount in
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determining the amount of such prepayment, and the amount of such credit shall be
transferred from the Reserve Fund to the Redemption Fund.
(D) Transfer of Excess of Reserve Requirement. Whenever the balance in the
Reserve Fund exceeds the then applicable Reserve Requirement, there shall, except as
provided in Section 5.08 hereof for purposes of rebate, be transferred on or before the
next Interest Payment Date an amount equal to the excess from the Reserve Fund to the
Redemption Fund to be used in accordance with Part 16 of the Bond Law. If such
balance when added to the Redemption Fund is sufficient to retire all the Outstanding
Bonds, whether by advance retirement or otherwise, collection of the principal and
interest on the Assessments shall be discontinued and the Reserve Fund liquidated in
retirement of the Outstanding Bonds at the written direction of the City. If such balance in
the Reserve Fund at the time of liquidation exceeds the amount required to retire all of the
Outstanding Bonds, the excess after payment of amounts due to the Finance Director,
shall be transferred to the City to be used in accordance with the Act and the Bond Law.
Section 4.06 ESCROW FUND. The Escrow Fund is hereby established as a
separate fund to be held by the Finance Director to the credit of which an initial deposit
shall be made on the Closing Date as required by Section 4.01. The Escrow Fund shall
be maintained and disbursed solely for the advance redemption of the Prior Bonds
outstanding on the Closing Date.
(A) The Finance Director shall direct the paying agent for the Prior Bonds to give
written notice by registered mail, substantially in the form attached hereto as Exhibit C
and herein incorporated by this reference, to each holder or owner of the Prior Bonds at
least 60 days prior to January 2, 1997, the date of advanced maturity.
(B) The Finance Director shall pay from the Escrow Fund to the paying agent for
the Prior Bonds the amount of such agent's fee and costs incurred for such notice and
upon the surrender of the Prior Bonds to such agent shall pay to the agent the amount of
the principal of, the premium on and interest accrued to the date of payment or date of
advanced maturity, whichever is earlier.
(C) In the event that any of such Prior Bonds are not timely surrendered for
redemption, the Finance Director shall hold in the Escrow Fund for the credit of the owner
or holder of such Prior Bonds the amount of the principal of, the premium, and interest
accrued, on such Prior Bond to such date of advanced maturity and interest thereon shall
cease.
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Section 4.07 INVESTMENT OF FUNDS. Moneys in the Improvement Fund, the
Costs of Issuance Fund, the Redemption Fund, the Reserve Fund, and the Escrow Fund
shall, whenever practicable, be invested in Authorized Investments, maturing not more
than five (5) years after the date of investment. Any income therefrom or interest thereon
shall accrue to and be deposited in the fund from which such moneys were invested,
subject to the provisions of Sections 4.05 and 5.10 hereof. The Agent shall invest any
moneys held by it only upon written direction of the City.
ARTICLE V
COVENANTS OF THE CITY; TAX COVENANTS
Section 5.01 COLLECTION OF UNPAID ASSESSMENTS. The City shall comply
with all requirements of the Act, the Bond Law and this Resolution to assure the timely
collection of the Assessments, including, without limitation, the enforcement of delinquent
Assessments. To that end, the following shall apply:
(A) The Assessments as set forth on the list on file with the Finance Director
together with the interest thereon, shall be payable in annual installments corresponding
in number and proportionate amount to the number of installments and principal
amounts of Bonds maturing or becoming subject to mandatory prior redemption under
Section 2.14 hereof. An annual proportion of each assessment shall be payable in each
Fiscal Year preceding the date of maturity or mandatory prior redemption date of each of
the Bonds issued, sufficient to pay the Bonds when due (including Sinking Fund
Payments). All sums received from the collection of the Assessments and of the interest
and penalties thereon, less amounts retained by the City for administrative costs, shall be
placed in the Redemption Fund immediately upon receipt from the County Tax Collector.
(B) The Finance Director shall, before the final date on which the Auditor will
accept the transmission of the Assessments for the parcels within the Assessment District
for inclusion on the next tax roll, prepare or cause to be prepared, and shall transmit to
the Auditor, such data as the Auditor requires to include the installments of the
Assessments on the next secured tax roll. The Finance Director is hereby authorized to
employ consultants to assist in computing the installments of the Assessments hereunder
and in reconciling Assessments billed to amounts received as provided in subsection (C)
of this Section 5.01.
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(C) The annual proportion of each Assessment coming due in any year, together
with the annual interest thereon, shall be payable and be collected in the same manner
and at the same time and in the same installments as the general taxes on real property
are payable, and have the same priority, become delinquent at the same time and in the
same proportionate amounts and bear the same proportionate penalties and interest
after delinquency as do the general taxes on real property. In addition to any amounts
authorized pursuant to section 8682 of the Bond Law to be included with the annual
amounts of installments as aforesaid, the City, pursuant to section 8682.1 of the Bond
Law, may cause to be entered on the assessment roll on which taxes will next become
due, opposite each lot or parcel of land within the Assessment District in the manner set
forth in section 8682 of the Bond Law, each lot's or parcel's pro rata share of the
estimated annual expenses of the City in connection with the administrative duties thereof
for the Bonds, including, but not limited to, the costs of registration, authentication,
transfer of the Bonds, the administration and collection of assessments, the
administration of the Reserve Fund or other related funds, and compliance with the
provisions of this Article V and payment of amounts required to be rebated to the United
States pursuant to the Tax Code. If the City performs any transfer, registration,
authentication, payment or other function described in this Article V, the expenses shall
include a pro rata amount of the salaries of the City employees involved in the
performance of such functions and all other costs incurred by the City in connection
therewith. Pursuant to the provisions of section 10312 of the Act, the Council has
established a maximum amount of two percent (2%) of each annual installment of
principal and interest due on the Bonds issued to reimburse the City for such costs.
Delinquent Assessments shall be subject to foreclosure pursuant to Section 5.02 hereof.
Section 5.02 FORECLOSURE. The City hereby covenants with and for the benefit
of the Owners of the Bonds that it will, subject to the conditions below, order, and cause
to be commenced within 150 days after the occurrence of a delinquency and thereafter
diligently prosecute an action in the superior court to foreclose the lien of any
Assessment or installment thereof which has been billed, but has not been paid, pursuant
to and as provided in Part 14, commencing with section 8830, of the Bond Law. On or
before February 1st and June 1st of each fiscal year during the term of the Bonds the
Finance Director shall cause the records of the County Tax Collector to be monitored to
determine if there are any delinquencies in the payment of such Assessments. If the
amount of the delinquencies exceeds seven percent (7%) of the installments due and the
Reserve Fund balance is less than the Reserve Requirement, or if -a single
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property owner in the Assessment District is delinquent in excess of $10,000 with respect
to the Assessment installments due, the Finance Director shall notify the City Attorney of
any such delinquency of which the Finance Director is aware. If the City does not
determine to advance any funds necessary to cover debt service on the Bonds, the City
Attorney shall commence, or cause to be commenced, such foreclosure proceedings.
The City Attorney is hereby authorized to employ counsel to conduct any such
foreclosure proceedings.
Section 5.03 NO ADVANCES FROM AVAILABLE SURPLUS FUNDS. The City
shall not be obligated to advance Available Surplus Funds of the City to cure any
deficiency which may occur in the Redemption Fund.
Section 5.04 PUNCTUAL PAYMENT; COMPLIANCE WITH DOCUMENTS. The
City shall punctually pay or cause to be paid the interest and principal to become due
with respect to all of the Bonds in strict conformity with the terms of the Bonds and of this
Resolution, and will faithfully observe and perform all of the conditions, covenants and
requirements of this Resolution.
Section 5.05 NO PRIORITY FOR ADDITIONAL OBLIGATIONS. The City
covenants that no additional bonds or other obligations shall be issued or incurred on a
parity with, or having any priority over, the Bonds in the payment of principal or interest
out of the Assessments.
Section 5.06 DISCLOSURE REQUIREMENTS. The City and the Agent hereby
covenant and agree that they will comply with and carry out all of the provisions of the
Continuing Disclosure Certificate, and not later than December 31 of each year, the City
or its designee shall prepare and file the annual reports required thereunder.
Notwithstanding any other provisions of this Resolution, failure of the City or the Agent to
comply with the Continuing Disclosure Certificate shall not be considered an Event of
Default; however, any holder or beneficial owner of the Bonds may take such actions as
may be necessary and appropriate to compel performance, including seeking mandate
or specific performance by court order.
Section 5.07 FURTHER ASSURANCES. The City will adopt, make, execute and
deliver any and all such further resolutions, instruments and assurances as may be
reasonably necessary or proper to carry out the intention or to facilitate the performance
of this Resolution, and for better assuring and confirming unto the Owners of the Bonds
the rights and benefits provided by this Resolution.
5".
Section 5.08 TAX COVENANTS.
(A) The City covenants that it shall not take any action, or fail to take any action, if
such action or failure to take such action would adversely affect the exclusion from gross
income of the interest payable on the Bonds under section 103 of the Tax Code. Without
limiting the generality of the foregoing, the City covenants that it will comply with the
requirements of the Tax Certificate, which is incorporated herein as if fully set forth. This
covenant shall survive payment in full or defeasance of the Bonds.
(B) In the event that at any time the City is of the opinion that for purposes of this
Section it is necessary or helpful to restrict or limit the yield on the investment of any
moneys held by the Agent under this Resolution, the City shall so instruct the Agent
under this Resolution in writing, and the Agent shall take such action as may be
necessary in accordance with such instructions.
(C) Notwithstanding any provisions of this Section, if the City shall provide to the
Agent an opinion of counsel of recognized standing in the field of law relating to municipal
bonds that any specified action required under this Section is no longer required or that
some further or different action is required to maintain the exclusion from federal income
tax of interest on the Bonds, the Agent may conclusively rely on such opinion in
complying with the requirements of this Section and of the Tax Certificate, and the
covenants hereunder shall be modified to that extent.
ARTICLE VI
MISCELLANEOUS
Section 6.01 FUNDS AND ACCOUNTS. Any funds or accounts required by this
Resolution to be established by the Finance Director or the Agent and held and
maintained by the Agent may be established and maintained in the accounting records of
the Finance Director or the Agent either as a fund or an account, and may, for the
purposes of such records, any audits thereof and any reports or statements with respect
thereto, be treated either as a fund or an account, but all such records with respect to all
such funds or accounts shall at all times be maintained in accordance with sound
accounting practices and with due regard for the protection of the security of the Bonds
and the rights of every Owner thereof.
Section 6.02 PARTIAL INVALIDITY. If any one or more of the covenants or
agreements, or portions thereof, provided in this Resolution to be performed on the part
of the City, the Council or the Agent should be contrary to law, then such covenant or
covenants, such agreement or agreements, or such portions thereof, shall be null and
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void and shall be deemed separable from the remaining covenants and agreements or
portions thereof and shall in no way affect the validity of this Resolution or of the Bonds;
but the Owners shall retain all the rights and benefits accorded to them under applicable
provisions of law. The Council hereby declares that it would have adopted this
Resolution and each and every other section, paragraph, subdivision, sentence, clause
and phrase hereof, and would have authorized the issuance of the Bonds pursuant
hereto, irrespective of the fact that any one or more sections, paragraphs, subdivisions,
sentences, clauses or phrases of this Resolution or the application thereof, to any person
or circumstance may be held to be unconstitutional, unenforceable or invalid.
Section 6.03 DEFEASANCE. The Bonds shall no longer be deemed to be
outstanding and unpaid if the City shall have made adequate provision for the payment,
in accordance with the Bonds and this Resolution, of the principal, interest and
premiums, if any, to become due thereon at maturity or upon call and redemption prior to
maturity. Such provision shall be deemed to be adequate if the Council shall, on behalf of
the Assessment District, have irrevocably set aside, in a special trust fund or account,
cash or non -callable Federal Securities which when added to the interest earned or to be
earned thereon shall be sufficient to make such payments as they become due and to
redeem any Bonds Outstanding on the earliest possible redemption date. Such provision
may include, but is not limited to, the completion of proceedings and issuance of
refunding bonds under the provisions of the Refunding Act of 1984 for 1915 Improvement
Act Bonds, Division 11.5 of the California Streets and Highways Code, commencing with
section 9500.
Section 6.04 VALID" OF BONDS. The validity of the authorization and issuance
of the Bonds shall not be dependent upon the completion of the acquisition of the Project
or upon the performance by any person or such person's obligation with respect to the
Project.
Section 6.05 PLEDGE OF ASSESSMENTS. The Bonds shall be secured by a first
pledge (which pledge shall be effected in the manner and the extent herein provided) of
all of the Assessments and all moneys deposited in the Redemption Fund and the
Reserve Fund. The Assessments and all moneys deposited in those funds (except as
otherwise provided herein) are hereby dedicated to the payment of the principal of, and
interest and any premium on, the Bonds as provided herein and in the Bond Law until all
of the Bonds have been paid and retired or until moneys or Federal Securities have been
set aside irrevocably for that purpose in accordance with Section 6.03.
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Section 6.06 REPEAL OF INCONSISTENT RESOLUTIONS. Any resolution of the
Council and any part of such resolution, inconsistent with this Resolution, is hereby
repealed to the extent of such inconsistency.
Section 6.07 AUTHORITY OF FINANCE DIRECTOR. All actions mandated by this
Resolution to be performed by the Finance Director may be performed by the designee
thereof or such other official of the City or independent contractor, consultant or trustee
duly authorized by the City to perform such action or actions in furtherance of all or a
specific portion of the requirements hereof.
Section 6.08 CERTIFIED COPIES. The Clerk shall furnish a certified copy of this
Resolution to the Finance Director, to the Agent and to the County Auditor.
DATED: July 17, 1996
I, JENNIFER M. PERRIN, City Clerk of the City of Lodi, do hereby certify that
Resolution No. 96-! ioi was passed and adopted at a regular meeting of the City Council
of the City of Lodi, held July 17, 1996, by the following vote:
AYES: Councilmembers - Davenport, Mann, Pennino, Sieglock
and Warner (Mayor)
NOES: Councilmembers - None
ABSENT: Councilmembers - None
ABSTENTIONS: Councilmembers - None
;.�'r=, v' P1 MInFIE"...
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r"
CITY OF LODI
LODI CENTRAL CITY REVITALIZATION ASSESSMENT DISTRICT NO. 95-1
LIMITED OBLIGATION IMPROVEMENT BONDS
Terms and Conditions
The following terms and conditions form a part of the foregoing Resolution as if set forth
in the text thereof.
Bond Amount: Under Section 2.03 the actual aggregate principal amount of
the Bonds is $1,970,000.
Bond Maturities and Under Sections 2.04 and 2.05 the maturities and rates of
Interest Rates: interest of the Bonds are as follows:
Maturity Date Principal Amount Interest Rate
September 2
Serial Bonds:
[to be supplied]
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
Refunding Date: Under Section 2.15 the Refunding Date is March 2, 1997.
Deposit of Funds: Under Section 4.01, on the Closing Date the proceeds of the
sale of the Bonds will be deposited as follows:
To the Improvement Fund $
To the Costs of Issuance Fund $
To the Reserve Fund $
To the Escrow Fund $
Reserve Requirement: Under Section 4.05 the Reserve Fund shall be initially funded
in an amount not to exceed $137,900.00 and thereafter the
Reserve Requirement shall not exceed the maximum annual
Debt Service on the Bonds.
EXHIBIT A
United States of America
State of California
County of San Joaquin
REGISTERED
Number
REGISTERED
CITY OF LODI
LIMITED OBLIGATION IMPROVEMENT BOND
LODI CENTRAL CITY REVITALIZATION ASSESSMENT DISTRICT NO. 95-1
SERIES 1996-1
INTEREST RATE MATURITY DATE BOND DATE CUSIP NUMBER
REGISTERED OWNER:
PRINCIPAL AMOUNT:
DOLLARS
Under and by virtue of The Improvement Bond Act of 1915, Division 10
(commencing with Section 8500) of the California Streets and Highways Code (the "Act"),
the City of Lodi, County of San Joaquin, State of California (the "City"), will, out of the
redemption fund for the payment of the bonds issued upon the unpaid assessments for
the the acquisition, work and improvements more fully described in proceedings taken
pursuant to Resolution No. 95-123, adopted by the City Council of the City on September
20, 1995, pay to the registered owner named above, or registered 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 as of an interest payment date, in which event it shall bear interest from
such interest payment date, or unless this bond is authenticated prior to March 2, 1997,
in which event it shall bear interest from its date, until payment of the principal amount
shall have been discharged, at the rate per annum stated above, payable semiannually
on March 2 and September 2 in each year commencing on March 2, 1997. Interest is
based upon a 360 -day year divided into 12 months of 30 days each. The principal hereof
and any redemption premium shall be paid upon surrender to the City, at the principal
Corporate Trust Office of First Trust of California National Association (the "Agent"), or its
successor, as Registrar, Transfer Agent, and Paying Agent, in St. Paul, Minnesota, of
matured bonds or bonds called for redemption prior to maturity. The interest hereon is
payable by check or draft mailed by first class mail on the interest payment date to the
registered owner hereof at the registered owner's address as it appears on the records
of the Agent as of the 15th day (the "Record Date") immediately preceding each interest
payment date.
EXHIBIT B, Page 1
Provided, however, upon the written request made before the Record Date
preceding an interest payment date by an Owner of $1,000,000 or more in aggregate
principal amount of Bonds, payment will be made, at the owner's option, by wire transfer
of immediately available funds to an account in the continental United States designated
by such Owner to the Agent.
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 the redemption fund with which to pay the same. If
it is not presented at maturity, interest thereon will run until maturity.
This bond shall not be entitled to any benefit under the Act or the Resolution
Determining Unpaid Assessments and Providing For Issuance of 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 manually
signed by the Agent.
ADDITIONAL PROVISIONS OF THIS BOND ARE CONTINUED ON THE REVERSE
SIDE HEREOF AND SHALL FOR ALL PURPOSES HAVE THE SAME EFFECT AS
THOUGH FULLY SET FORTH HEREIN AT LENGTH.
IN WITNESS WHEREOF, the City of Lodi has caused this bond to be signed in
facsimile by its Finance Director and by its Clerk, and has caused its corporate seal to be
reproduced in facsimile hereon all as of the _ day of , 1996.
CITY OF LODI
City Clerk Finance Director
(SEAL)
Certificate of Authentication and Registration
This is one of the Bonds, described in the within mentioned
Resolution of Issuance, which has been authenticated and
registered on
First Trust of California National Association,
Registrar, Paying Agent and Transfer Agent
By
Authorized Officer
EXHIBIT B, Page 2
(Reverse side of Bond)
LIMITED OBLIGATION IMPROVEMENT BOND
CITY OF LODI
LODI CENTRAL CITY REVITALIZATION ASSESSMENT DISTRICT NO. 95-1
SERIES 1996-1
ADDITIONAL PROVISIONS OF THE BOND
This bond is one of several annual 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 the bond
redemption fund and by the unpaid assessments made for the payment of the
improvements, and, including principal and interest, is payable exclusively out of such
fund.
This bond is transferable by the registered owner hereof, in person or by the owner's
attorney duly authorized in writing, at the office of the 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 Agent shall not be required to make such exchange or
registration of transfer of bonds during the 15 days immediately preceding any interest
payment date.
Bonds shall be registered only in the name of an individual (including joint owners), a
corporation, a partnership, or a trust.
The City and the Agent may treat the owner hereof as the absolute owner for all
purposes, and the City and the Agent shall not be affected by any notice to the contrary.
This bond or any portion of it in the amount of five thousand dollars ($5,000), or any
integral multiple thereof, may be redeemed and paid in advance of maturity upon the
second day of March or September in any year by giving at least 30 days notice by
registered or certified mail or by personal service to the registered owner hereof at the
owner's address as it appears on the registration books of the Agent by paying principal
and accrued interest, together with a premium of two percent (2%) of the principal.
This bond is a Limited Obligation Improvement Bond. Under the Resolution of
Issuance, the City is not obligated to advance funds from the City treasury to cover any
deficiency which may occur in the redemption fund for the Bonds.
EXHIBIT B, Page 3
r"
LEGAL OPINION
hereby certify that the following is a correct copy of the signed legal opinion of
Timothy J. Hachman, Attorney at Law, Stockton, California, addressed to the City of
Stockton and on file in my office, dated the date of the Bonds.
(Insert opinion letter)
City Clerk
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of this Bond,
shall be construed as though written in full, according to applicable laws or regulations:
TEN COM - as tenants in common
TEN ENT - as tenants by the
entireties
JT TEN - as joint tenants with
right of survivorship and not
as tenants in common
UNIF GIFT MIN ACT - Custodian (Cust)
(Minor) under Uniform Gifts to
Minors Act (State)
ADDITIONAL ABBREVIATIONS MAY BE USED THOUGH NOT INCLUDED IN THE
ABOVE LIST
ASSIGNMENT
For value received, the undersigned do(es) hereby sell, assign and transfer unto
(Name, Address and Tax Identification or Social Security Number of Assignee)
the within Bond and do(es) hereby irrevocably constitute and appoint ,
attorney, to transfer the same on the registration books of the Agent, with full power of
substitution in the premises.
Dated:
NOTICE: The signature on this Assignment must
correspond with the name(s) as written on the face
of the within Bond in every particular without
alteration or enlargement or any change
whatsoever.
EXHIBIT B, Page 4
NOTICE OF ADVANCED MATURITY AND FULL REDEMPTION
$125,000, SERIES 19841
CITY OF LODI IMPROVEMENT BONDS
Lodi United Downtown Assessment District, Beautification Project
NOTICE IS HEREBY GIVEN to the holders or owners of the Bonds described herein that
the City of Lodi, California has advanced the maturity to and will redeem all outstanding
Bonds on January 2, 1997 (the "Redemption Date"), at the principal amount thereof and a
premium of five percent (5%) of such principal amount (the "Redemption Price"), together
with interest accrued to the Redemption Date.
Maturity Dates
July 2, 1997
July 2, 1998
July 2, 1999
Principal Amount
$40,000.00
$40,000.00
$45,000.00
CUSIP Numbers
267994XUO
267994XV8
267994XW6
FROM AND AFTER JANUARY 2, 1997, INTEREST SHALL CEASE TO ACCRUE ON THE
BONDS. INTEREST WILL BE PAID IN THE USUAL MANNER FOR THE PERIOD FROM
JULY 2, 1996 TO JANUARY 2, 1997.
Payment of the Redemption Price on the above Bonds will become due and payable on
the Redemption Date upon presentation and surrender thereof at the office of the Paying
Agent in the following manner:
ff by Mail:
First Trust National Association
First Trust Center
P. O. Box 64111
St. Paul, MN 55164-0111
If by Hand or Overnight Mail:
First Trust National Association
180 East Fifth Street
4th Floor - Bond Drop Window
St. Paul, MN 55101
Telephone (612) 973-6700 or (800) 934-6802
Bondholders presenting their Bonds in person for same day payment must surrender
their Bond(s) by 1:00 P.M. on the Redemption Date and a check will be available for pick
up after 2:00 P.M. Checks not picked up by 4:30 P.M. will be mailed to the bondholder
via first class mail. If payment of the Redemption Price is to be made to the registered
owner of the Bond, you are not required to endorse the bond to collect the Redemption
Price.
IMPORTANT NOTICE
Failure to submit a completed Form W-9 to certify tax identification number will result in a
31 % backup withholding to the holder, under the Interest and Dividend Tax Compliance
Act of 1983 as amended by the Energy Policy Act of 1992.
The Paying Agent shall not be held responsible for the selection or use of the CUSIP
number, nor is any representation made as to its correctness indicated in the
Redemption Notice. It is included solely for convenience of the holders.
Dated: , 1996
CITY OF LODI, County of San Joaquin, State of California
By First Trust of California National Association, as successor to
Bank of America National Trust and Savings Association, as Paying Agent
EXHIBIT C
RESOLUTION NO. 96-103
BEFORE THE CITY COUNCIL OF THE CITY OF LODI, CALIFORNIA
A RESOLUTION AWARDING SALE OF BONDS, APPROVING
BOND PURCHASE AGREEMENT AND AUTHORIZING ITS EXECUTION,
APPROVING PRELIMINARY OFFICIAL STATEMENT AND AUTHORIZING
ITS EXECUTION AND DISTRIBUTION, AND APPROVING CONTINUING
DISCLOSURE CERTIFICATE AND AUTHORIZING ITS EXECUTION
LODI CENTRAL CITY REVITALIZATION ASSESSMENT DISTRICT NO. 95-1
RESOLVED, by the City Council of the City of Lodi, California, that
WHEREAS, this Council has received from SEIDLER-FITZGERALD, Los Angeles,
California, as Underwriter, a proposal to purchase bonds to be issued to represent
unpaid assessments levied in the proceedings under Resolution No. 95-119 (the
"Resolution"), adopted on September 20, 1995, for the acquisition and/or construction of
public improvements, as more particularly described in the Resolution, and the public
interest, convenience and necessity will be served by the acceptance of the proposal;
WHEREAS, the Underwriter has presented for Council approval the Preliminary
Official Statement regarding the bonds to be issued herein;
WHEREAS, the Preliminary Official Statement presented includes as an Appendix
thereto, a Continuing Disclosure Certificate with regard to the bonds;
NOW, THEREFORE, IT IS ORDERED as follows:
1. Upon consummation of the proceedings the bonds be, and they are hereby
ordered sold to SEIDLER-FITZGERALD, Los Angeles, California, subject to all the terms
and conditions set forth in the agreement in the form attached hereto and marked Exhibit
A, and that the interest rate of the bonds be, and the same is hereby fixed at the market
rate effective on the date of the execution of the agreement as mutually determined by
the purchaser and the City Manager.
2. The bond purchase agreement is approved, and the City Manager is
authorized to execute the agreement and the City Clerk is authorized to attest his
signature.
3. The Preliminary Official Statement has been examined and determined to be
accurate in the information therein contained.
4. The City Council hereby approves the Preliminary Official Statement and
distribution thereof is hereby authorized.
5. The Preliminary Official Statement is final except for certain information which
will not be known until the time of sale and is therefore "deemed final" within the meaning
of Rule 15c2-12 under the Securities Exchange Act of 1934 of the federal Securities and
Exchange Commission.
6. The City Manager is authorized to sign on behalf of the City the Preliminary
Official Statement and the final Official Statement to be derived therefrom.
7. The Continuing Disclosure Certificate attached to the Preliminary Official
Statement is approved, and the City Manager is authorized to execute the agreement
and the City Clerk is authorized to attest his signature.
8. The Finance Director is directed to have the bonds printed, and that the same
be signed, sealed and delivered to the purchaser upon receipt of the amount therefor, in
accordance with the terms and conditions contained in the agreement and the
proceedings held pursuant to the Resolution and any amendments thereto.
DATED: July 17, 1996
I, JENNIFER M. PERRIN, City Clerk of the City of Lodi, do hereby certify that
Resolution No. 96-.103 was passed and adopted at a regular meeting of the City Council
of the City of Lodi, held July 17, 1996, by the following vote:
AYES: Councilmembers - Davenport, Mann, Pennino, Sieglock
and Warner (Mayor)
NOES: Councilmembers - None
ABSENT: Councilmembers - None
ABSTENTIONS: Councilmembers - None
woo
.{fin
-2-
EXHIBIT A
Due September 2 Amount Rate Price
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
Exhibit A
Page 1
2203 1 JHHW:MDC:m-; 07/17/96
07/1 t/94
0710819(1
CITY OF LODI
Limited Obligation Improvement Bonds
Lodi Central City Revitalization Assessment District No. 95-1
Series 1996-1
CONTRACT OF PURCHASE
City of Lodi
221 West Pine Street
Lodi, California 95240
Ladies and Gentlemen:
1996
The undersigned (the 'Underwriter"), hereby offers to enter into this Contract of Purchase
with you, the City of Lodi, California (the "City"), for the purchase by the Underwriter and sale by
you of your City of Lodi, Limited Obligation Improvement Bonds, Lodi Central City Revitalization
Assessment District No. 95-1, Series 1996-1 specified below. This offer is made subject to
acceptance by the City prior to 11:59 o'clock P.M., Pacific time, on the date hereof, and upon such
acceptance this Contract of Purchase shall be in full force and effect in accordance with its ternis
and shall be binding upon both the City and the Underwriter.
1. Upon the terms and conditions and upon the basis of the representations set forth herein
the Underwriter hereby agrees to purchase from the City and the City hereby agrees to sell to the
Underwriter all (but not less than .ill) of the $ aggregate principal aniount of City of Lodi,
Limited Obligation Improvement Bonds, Lodi Central City Revitalization Assessment District No.
95-1, Series 1996.(the "Bonds"), to be dated the date of the delivery thereof (the Bonds being
more fully described in the Official Statement dated the date hereof relating to the Bonds, the
"Official Statement"), at an aggregate purchase price of S , consisting of the paramount of
S , less an underwriter's discount of S . The Bonds are being issued pursuant to the
provisions of The Bond Improvement Act of 1915 (the "Bond Act"). The Bonds shall be as
described in, and shall be issued and secured under and pursuant to a Resolution Detertnining
Unpaid Assessment. and Providing for the Issuance of Bonds adopted by the City Council of the
City on , 1996 (the "Resolution of Issuance"). Pursuant to the Resolution of issuance. First
Trust of California, National Association, will act as paying agent, registrar and transfer agent for
the Bonds ("Paying Agent"). The Bonds shall mature on September 2 in the years and 1n the
amounts, and shall bear interest, as set forth in Exhibit A attached hereto. The Bonds shall be
issued in the denominations of $5,000 or integral multiples thereof. The Underwriter agrees to
make a public offering of the Bonds at the initial offering prices as set forth in the Official
Statement, which prices may be changed from time to time by the Underwriter. You, the City,
authorize the use oi" copies of the Resolution of Issuance in connection with the public offering and
stile of the Bonds. -
(8) executed copy of the Continuing Disclosure Certificate;
(9) at or prior to the Closing. the Underwriter shall deliver its certificate to
the City, dated the date of Closing. to the effect that:
(i) To the hest of the Underwriter's knowledge. City has
responded fully and to the best of Underwriter's knowledore,
accurately. to all requests for itlfOrWation requested by Underwriter
for inclusion in clic Official Statement;
(ii) Underwriter has had access to and has rnado a complete
investigation of the facts aiicl circumstances relating to the project
and proceedings of the City Wnsistent with iLs diligence obligations
under the Federal securities laws, and to the Bonds to be issued with
respect thereto, including Without limitation, the following:
(1) The purpose of the project and the Bunds;
(?) The application of the proceeds of the Bonds to the
project;
(3) The types of the properties subject to the assess.inent
in the proceedings;
(4) The nature of the typical bondholders' risks in
investing in the Bon(bi.
(�) The bondholders' rights and reniedies in the event of
default in payment of the principal of and interest on
the Bond,;
(10) At or prior to the Closing, the Underwriter shall deliver a certificate in
form and substance satisfactory to Bond Counsel, substantially in the form of
Exhibit B hereto.
(11) such additional legal opinions, certificates, proceedings, instruments
and other dt>curnents as we may reasonably request to evidence compliance by the
City with legal requirements, the truth and accuracy, as of the time of Closing, of
the representations of the City herein rind the clue performance or satisfaction by the
City at or prior to such time of all agreements then to be performed and all
conditions then to be satisfied by the City.
5. If the City shall be unable to satisfy the conditions to the Underwriter's obligations
contained in this Contract of Purchase or if the Uiiderwriter's obligations shall be terminated for
any reason permitted herein, this Contract of Purchase shall terminate and neither the Underwriter
nor the City shall have any further obligation hereunder,
6. The Underwriter shall be unifier no obligation to pay and the City shall pay or cause to
be paid the expenses incident to the performance of the obligations of the City hereunder including
but not limited to (a) the costs of the preparation and printima, or other reproduction (for
distribution on or prior to the date hereof) of the resolutions and other legal proceedings and the
definitive Bonds, !b) the fees and disbursements of anv counsel, financial advisors, accountants or
other experts or consultants retained by the City; (c) the fees and disbursements of Bond Counsel
and Disclosure Counsel; (d) the cost of preparation and printing of the Preliminary Official
Statement and any supplements and ., nlendnlents thereto and the cost of preparation and printing of
the Official Statement, .including the requisite number of copies thereof for distribution by the
Underwriter; and (e) charges of rating :agencies for the rating of the Bonds. _
•h.
DECLARATION OF MAILING
NOTICE TO PAY ASSESSMENTS
LODI CENTRAL CITY REVITALIZATION ASSESSMENT DISTRICT NO. 95-1
I, the undersigned, declare and say:
I am a citizen of the United States and over the age of eighteen (18) years, my
business address is 1113 West Fremont Street, Stockton, California;
For and on behalf of the Finance Director of the City of Lodi, California, and on
May 24, 1996, 1 mailed to each person owning real property in the assessment district at
the last known address as it appears on the tax rolls of said City or on file in the office of
the City Clerk, or to both addresses if they were not the same, or to general delivery
when no address appeared, a statement containing a designation by street number or
other description of property assessed sufficient to enable the owner to identify the same,
the amount of the assessment, the date of recordation of the assessment, the time and
place of payment thereof, the effect of failure to pay within such time, and a statement
that bonds will be issued upon unpaid assessments pursuant to the provisions of The
Improvement Bond Act of 1915 (Division 10 of the Streets and Highways Code), in form a
copy of which notice is hereto attached and marked Exhibit A, and by reference made a
part hereof.
I further mailed on June 7, 1996 an amended notice extending the final date for
payment and amending the discount applicable for cash payments, in form a copy of
which notice is hereto attached and marked Exhibit B, and by reference made a part
hereof.
I declare under penalty of perjury that the foregoing is true and correct.
Executed on July 17, 1994, at Stockton, California.
1 �'
VICKY McATHIE
Finance Director, City of Lodi
P. O. Box 3006
Lodi, CA 95241-1910
NOTICE OF RECORD j ASSESSMENTAND
TIME FOR RECEIPT OF CASH PAYMENTS
Lodi Central City Revitalization
Assessment District No. 95-1
NOTICE IS HEREBY GIVEN that all owners of real property assessed to pay the costs and
expenses of the acquisition and/or construction of improvements described in the Engineer's
Report and Resolution No. 95-123, a Resolution of Intention to Acquire and/or Construct
Improvements and to Refund Prior Bonds Issued, adopted by the City Council oft the City of Lodi
on September 20, 1995, are hereby notified that on May 20, 1996, the assessment and diagram
were recorded in the office of the Director of Public Works of the City of Lodi.
The amount of the assessment on your property and its description is shown above. IF
YOU WISH TO PAY ALL (OR A PORTION) OF YOUR ASSESSMENT IN CASH, PAYMENT MUST
BE MADE TO THE CITY OF LODI AND DIRECTED TO:
FINANCE DIRECTOR
CITY HALL ANNEX, 212 WEST PINE STREET
(If by mail, P. 0. Box 3006)
LODI, CALIFORNIA 95241-1910
SUCH PAYMENT MUST BE RECEIVED ON OR BEFORE JUNE 19, 1996, AND BE
ACCOMPANIED BY THE IDENTIFICATION OF YOUR PROPERTY AS SHOWN ABOVE (you may
clip the top of this notice or copy the information to send with your payment for this purpose). If
you have any questions regarding your payment, please telephone Vicky McAthie (209)
333-6761.
IF YOU DO NOT WISH TO PAY YOUR ASSESSMENT IN CASH, YOU NEED DO NOTHING
AT THIS TIME. All assessments remaining unpaid on the above date will be financed by the
issuance by the City of Lodi of serial or term bonds pursuant to the Improvement Bond Act of
1915 (Division 10 of the Streets and Highways Code) and billed in annual installments, including
bond interest and administation costs, on your real property tax bill. The bonds will bear interest
at the best rate obtainable on the date of their sale, not to exceed twelve percent (12%) per
annum (the maximum allowed by law). The term of the bonds (fixing the number of years in
which the assessment installments will be included on your tax bill) will also be determined on the
date of sale of the bonds, but in any event will not exceed twenty (20) years. The City Council
has also determined that the applicable provisions of Part 11.1 of the Improvement Bond Act of
1915, providing an alternative procedure for the advance payment of assessments and the
calling of bonds, shall apply.
If you have any questions regarding the work of improvements or the district, please
telephone Richard Prima or Sharon Welch (209) 333-6706.
VICKY McATHIE, Finance Director
City of Lodi, California
EXHIBIT A
ViCKY MCATHIE i ;NDED
Finance Director, City of Lodi NOTICE OF RECORDING ASSESSMENT AND
P.O. Box 3006 TIME FOR RECEIPT OF CASH PAYMENTS
Lodi, CA 95241-1910 Lodi Central City Revitalization
Assessment District No. 95-1
Osbum, Ben & Geraldine
1535 S Cherokee Ln.
Lodi, CA 95240
Assessor's Parcel No: 062-080-26
Parcel Address: 1535 S. Cherokee Ln.
The assessment on your property is: $14,604.48
Amended cash payoff of the assessment is: $13;144.03
NOTICE IS HEREBY GiVEN that all owners of real property assessed to pay the costs and expenses
of the acquisition and/or construction of improvements described in the Engineer's Report and Resolution No.
95-123, a Resolution of Intention to Acquire and/or Construction Improvements and to Refund Prior Bonds
issued, adopted by the City Council of the City of Lodi on September 20, 1995, are hereby notified that on
May 20, 1996, the assessment and diagram were recorded in the office of the Director of Public Works on
the City of Lodi.
The amount of the assessment on your property and its description Is shown above. IF YOU WiSH
TO PAY ALL (OR A PORTION) OF YOUR ASSESSMENT iN CASH, PAYMENT MUST SE MADE TO THE
CITY OF LODi AND DIRECTED TO:
FINANCE DIRECTOR
CITY HALL ANNEK 212 WEST PINE STREET
(if by mail, P. 0. BOX 3006)
LODI, CALIFORNIA 95241-1910
SUCH PAYMENT MUST BE RECEIVED ON OR BEFORE JULY 1. 1990. AND BE ACCOMPANIED BY THE
IDENTIFICATION OF YOUR PROPERTY AS SHOWN ABOVE (you may clip the top of this notice or copy the
information to send with your payment for this purpose.) if you have any questions regarding your payment
please telephone Vicky McAthie (209) 333-6761.
IF YOU DO NOT WISH TO PAY YOUR ASSESSMENT IN CASH, YOU NEED DO NOTHING AT THIS
TIME. Ali assessments remaining unpaid on the above date will be financed by the issuance by the City of
Lodi of serial or term bonds pursuant to the improvement Bond Act of 1915 (Division 10 of the Streets and
Highways Code) and billed in annual installments, includmg bond interest and administration costs, on your
real property tax bill. The bonds will bear interest at the best rate obtainable on the date of their sale, not to
exceed twelve percent (12%) per annum (the maximum allowed by law). The bonds (Tvdng the number of
years in winch the assessment Installments will be included on your tax bill) wilt also be determined on the
date of sale of the bonds, but In any event will not exceed twenty (20) years. The City Council has also
determined that the applicable provisions of Part 11.1 of the Improvement Bond Act of 1915, providing an
alternative procedure for the advance payment of assessments and the calling of bonds, shall apply.
If you have any questions regarding the worts of improvements or the district, please telephone
Richard Prima or Sharon. Welch (209) 333706.
VICKY MCAT HIE, Finance Director
City of Lodi, Caiifomia
EXHIBIT B
22028-12 JHHW:MDC:mc
ExW1s1-r A
07/08/96
CITY OF LODI
Limited Obligation Improvement Bonds
Lodi Central City Revitalization Assessment District No. 95-1
[Series 19961
CONTRACT OF PURCHASE
City of Lodi
Lodi, California
Ladies and Gentlemen:
, 1996
The undersigned (the "Underwriter"), hereby offers to enter into this Contract of Purchase
with you, the City of Lodi, California (the "City"), for the purchase by the Underwriter and sale by
you of your City of Lodi, Limited Obligation Improvement Bonds, Lodi Central City Revitalization
Assessment District No. 95-1, [Series 1996,1 specified below. This offer is made subject to
acceptance by the City prior to 11:59 o'clock P.M., Pacific time, on the date hereof, and upon such
acceptance this Contract of Purchase shall be in full force and effect in accordance with its terms
and shall be binding upon both the City and the Underwriter.
1. Upon the terms and conditions and upon the basis of the representations set forth herein
the Underwriter hereby agrees to purchase from the City and the City hereby agrees to sell to the
Underwriter all (but not less than all) of the $ aggregate principal amount of City of Lodi,
Limited Obligation Improvement Bonds, Lodi Central City Revitalization Assessment District No.
95-1, Series 1996 (the "Bonds"), to be dated the date of the delivery thereof (the Bonds being
more fully described in the Official Statement dated the date hereof relating to the Bonds, the
"Official Statement"), at an aggregate purchase price of $ , consisting of the par amount of
$ , less an underwriter's discount of $ . The Bonds are being issued pursuant to the
provisions of The Bond Improvement Act of 1915 (the "Bond Act"). The Bonds shall be as
described in, and shall be issued and secured under and pursuant to a Resolution Determining
Unpaid Assessments and Providing for the Issuance of Bonds adopted by the City Council of the
City on , 1996 (the "Resolution of Issuance"). Pursuant to the Resolution of Issuance, First
Trust of California, National Association, will act as paying agent, registrar and transfer agent for
the Bonds ("Paying Agent"). The Bonds shall mature on September 2 in the years and in the
amounts, and shall bear interest, as set forth in Exhibit A attached hereto. The Bonds shall be
issued in book -entry form in the denominations of $5,000 or integral multiples thereof. The
Underwriter agrees to make a public offering of the Bonds at the initial offering prices as set forth
in the Official Statement, which prices may be changed from time to time by the Underwriter.
* Preliminary, subject to change.
You, the City, authorize the use of copies of the Resolution of Issuance in connection with the
public offering and sale of the Bonds.
To assist the Underwriter in complying with SEC Rule 15c2-12 (b)(5), the City will
undertake, pursuant to a Continuing Disclosure Certificate, to provide certain annual financial
information and notices of the occurrence of certain events, if material. A description of these
undertakings are set forth in the Preliminary Official Statement and will also be set forth in the
Final Official Statement.
Within seven (7) business days from the date hereof, the City shall deliver to the
Underwriter a final Official Statement, executed on behalf of the City by an authorized
representative of the City and dated the date hereof, which shall include information permitted to be
omitted by paragraph (b)(1) of SEC Rule 15(c)2-12 and with such other amendments or
supplements as shall have been approved by the City and the Underwriter.
2. The City represents to and agrees with the Underwriter that:
(a) the City is and will be at the date of Closing duly authorized and existing under
the Constitution and laws of the State of California with the powers and authority, among
others, (i) to issue the Bonds pursuant to the Constitution of the State of California and the
Bond Act, (ii) to execute and deliver this Contract of Purchase, and (iii) to carry out and
consummate the transactions contemplated by the Resolution of Issuance and this Contract
of Purchase;
(b) when delivered to and paid for by the Underwriter at the Closing in accordance
with the provisions of this Contract of Purchase, the Bonds will have been duly authorized,
executed, issued and delivered and will constitute valid and binding limited obligations of
the City of the character permitted to be issued by the Bond Act, in conformity with, and
entitled to the benefit and security of the Resolution of Issuance;
(c) by official action of the City prior to or concurrently with the acceptance hereof,
the City duly adopted the Resolution of Intention and authorized and approved the
execution and delivery of, and the performance by the City of the obligations on its part
contained in the Bonds and this Contract of Purchase;
(d) the execution and delivery of the Bonds and this Contract of Purchase, and
compliance with the provisions on the City's part contained therein, will not conflict with
or constitute a breach of or default under any law, administrative regulation, judgment,
decree, loan agreement, indenture, bond, note, resolution, agreement or other instrument to
which the City is party or is otherwise subject, nor will any such execution, delivery,
adoption or compliance result the creation or imposition of any lien, charge or other
security interest or encumbrance of any nature whatsoever upon any of the properties or
assets of the City under the terms of any such law, administrative regulation, judgment,
decree, loan agreement, indenture, bond, note, resolution, agreement or other instrument,
except as provided by the Resolution of Issuance;
(e) to the best of its knowledge, there is no action, suit, proceeding, inquiry or
investigation, at law or in equity, before or by any court, governmental agency, public
board or body, pending or threatened against the City affecting the existence of the City or
the titles of its officers to their respective offices or seeking to prohibit, restrain or enjoin
the sale, issuance or delivery of the Bonds or the collection of revenues pledged or to be
pledged to pay the principal of, and premium, if any, and interest on the Bonds, or the
pledge thereof, or in any way contesting or affecting the validity or enforceability of the
Bonds, the Resolution of Issuance, or this Contract of Purchase, or contesting the powers
-2-
of the City or its authority to issue, enter into, adopt or perform its obligations under any of
the foregoing;
(f) all approvals, consents, authorizations, certifications and other orders of any
governmental authority, board, agency or commission having jurisdiction, and all filings
with any such entities, which would constitute conditions precedent to or would materially
adversely affect the performance by the City of its obligations hereunder or under the
Resolution of Issuance, have been duly obtained and no further consent, approval,
authorization or other action by any governmental or regulatory authority having
jurisdiction over the City that has not been obtained is or will be required for the issue and
sale of the Bonds or the consummation by the City of the other transactions contemplated
by this Contract of Purchase, except as such may be required under the state securities or
Blue Sky laws in connection with the distribution of the Bonds by the Underwriter;
(g) the City will furnish such information, execute such instruments and take such
other action in cooperation with the Underwriter as the Underwriter may reasonably request
in order (1) to qualify the Bonds for offer and sale under the Blue Sky or other securities
laws and regulations of such states and other jurisdictions of the United States as the
Underwriter may designate and (2) to determine the eligibility of the Bonds for investment
under the laws of such states and other jurisdictions, and will use its best efforts to
continue such qualification in effect so long as required for distribution of the Bonds;
provided, however, that in no event shall the City be required to take any action which
would subject it to general or unlimited service of process in any jurisdiction in which it is
not now so subject;
(h) this Contract of Purchase has been duly authorized, executed and delivered by
the City and constitutes the valid, binding and enforceable limited obligation of the City in
accordance with its terms except as the same may be limited by bankruptcy, insolvency and
other laws affecting creditors' rights generally; and
(i) the Resolution of Issuance has been duly adopted by the City Council of the City
and constitutes the valid, binding and enforceable limited obligation of the City in
accordance with its terms except as the same may be limited by bankruptcy, insolvency and
other laws affecting creditors' rights generally.
The execution and delivery of this Contract of Purchase by the City shall constitute a
representation by the City to the Underwriter that the representations and warranties contained in
this Paragraph 2 are true as of the date hereof; provided that no member of the governing body of
the City shall be individually liable for the breach of any representation or warranty made by the
City in this Paragraph 2.
3. At 8:00 o'clock A.M., Pacific time, on , 1996, or at such other time, or on such
earlier or later date as we mutually agree upon (the "Closing"), the City will deliver or cause to be
delivered to us, at the offices of Timothy J. Hachman ("Bond Counsel"), or at such other place as
we may mutually agree upon, the Bonds in definitive form, duly executed by the City and
authenticated by the Paying Agent; together with the other documents mentioned herein. It is
anticipated that CUSIP identification numbers will be printed on the Bonds, but neither the failure
to print such number on any Bond nor any error with respect thereto shall constitute cause for a
failure or refusal by the Underwriter to accept delivery of and pay for the Bonds in accordance with
the terms of this Contract of Purchase. All expenses in relation to the printing of CUSIP numbers
on said Bonds and the CUSIP Service Bureau charge for the assignment of said numbers shall be
paid for by the City and the Underwriter will accept such delivery and pay the purchase price
thereof as set forth in Paragraph 1 hereof by federal wire transfer in immediately available funds to
the order of the City, or, upon the order of the City, to the Paying Agent, in an amount equal to the
-3-
purchase price. The Bonds will be made available for checking and packaging at an office which
we may mutually agree upon one business day prior to the Closing.
4. The Underwriter hereby enters into this Contract of Purchase in reliance upon the
representations and warranties of the City contained herein and in reliance upon the representations
and warranties to be contained in the documents and instruments to be delivered at the Closing and
upon the performance by the City of its obligations hereunder, both on and as of the date hereof
and as of the date of the Closing. Accordingly, the Underwriter's obligations under this Contract
of Purchase to purchase, to accept delivery of and to pay for the Bonds shall be conditioned upon
the performance by the City of its obligations to be performed hereunder and under such
documents and instruments at or prior to the Closing, and shall also be subject to the following
additional conditions:
(a) the representations and warranties of the City contained herein shall be true,
complete and correct on the date hereof and as of the Closing, as if made on and at the
Closing;
(b) at the Closing, the Resolution of Issuance and this Contract of Purchase shall
be in full force and effect and shall not have been amended, modified or supplemented
except as may have been agreed to in writing by us; and there shall be in full force and
effect such resolutions as, in the opinion of Bond Counsel, shall be necessary in
connection with the transactions contemplated hereby;
(c) The Underwriter shall have the right to cancel their obligation to purchase the
Bonds if between the date hereof and the Closing, (i) legislation shall have been enacted by
the Congress of the United States or the legislature of the State of California or shall have
been reported out of committee of either body or be pending in committee of either body, or
a decision shall have been rendered by a court of the United States or of the State of
California or the Tax Court of the United States, or a ruling shall have been made or a
regulation or temporary regulation shall have been proposed or made or any other release or
announcement shall have been made by the Treasury Department of the United States or the
Internal Revenue Service, with respect to Federal or California taxation upon revenues or
other income of the general character to be derived by the City or upon interest received on
obligations of the general character of the Bonds, which in the reasonable judgment of the
Underwriter, materially adversely affects the market for the Bonds, or (ii) there shall have
occurred any outbreak of hostilities or other national or international calamity or crisis, the
effect of such outbreak, calamity or crisis on the financial markets of the United States
being such as, in the reasonable judgment of the Underwriter, would make it impracticable
for the Underwriter to market or enforce contracts for the sale of the Bonds, or (iii) there
shall be in force a general suspension of trading on the New York Stock Exchange or
minimum or maximum prices for trading shall have been fixed and be in force, or
maximum ranges for prices for securities shall have been required and be in force on the
New York Exchange, whether by virtue of a determination by that Exchange or by order of
the Securities and Exchange Commission or any other governmental authority having
jurisdiction, or (iv) a general banking moratorium shall have been declared by either
Federal or California authorities having jurisdiction and be in force, or (v) there shall be
established any new restriction on transactions in securities materially affecting the free
market for securities (including the imposition of any limitation on interest rates) or the
extension of credit by, or the charge to the net capital requirements of, Underwriter
established by the New York Stock Exchange, the Securities and Exchange Commission,
any other Federal or State agency or the Congress of the Unites States, or by Executive
Order, or (vi) a decision of any Federal or state court or a ruling or regulation (final,
temporary or proposed) of the Securities and Exchange Commission or other governmental
agency shall have been made or issued to the effect that (A) the Bonds or any securities of
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the City or of any similar body of the type contemplated herein are subject to the
registration requirements of the Securities Act of 1933 or (B) the qualification of an
indenture or resolution in respect of the Bonds or any such securities is required under the
Trust Indenture Act of 1939, as amended;
(d) at or prior to the Closing, we shall receive the following documents, in each
case satisfactory in form and substance to us:
(1) the unqualified approving opinion, dated the date of Closing, of Bond
Counsel, addressed to the City, in form and substance satisfactory to the
Underwriter, accompanied by a reliance letter to the Underwriter;
(2) a supplemental opinion of Bond Counsel, dated the Closing Date
and addressed to the Underwriter, in form and substance satisfactory to the
Underwriter, to the effect that the statements contained in the Official Statement on
the cover and under the captions ["INTRODUCTION," "THE BONDS,"
"SECURITY FOR THE BONDS," "LEGAL MATTERS - Legal Opinion," and
"TAX -EXEMPTION,"] insofar as such statements purport to summarize certain
provisions of the Resolution of Issuance, the Bonds and Bond Counsel's opinion
concerning certain federal and state tax matters relating to the Bonds, are accurate in
all material respects;
(3) a certificate or certificates, dated the date of Closing, signed by an
authorized official of the City, in form and substance satisfactory to the
Underwriter, to the effect that to the best of his or her knowledge, no litigation is
pending or threatened (a) to restrain or enjoin the issuance or delivery of the Bonds
or the collection of unpaid assessments that are the source of payment therefor, (b)
in any way contesting or affecting the authority for the issuance of the Bonds or the
validity of the Bonds, the Resolution of Issuance, or this Contract of Purchase, or
(c) in any way contesting the existence or powers of the City;
(4) two executed copies of the Resolution of Issuance and any and all other
documentation contemplated thereby;
(5) two certified copies of the resolutions of the City approving and
authorizing the execution of this Contract of Purchase and the sale of the Bonds and
any and all other documentation contemplated thereby; and
(6) a letter of Jones Hall Hill & White, A Professional Law Corporation,
San Francisco California, as disclosure counsel to the City, addressed to the
Underwriter and the City, dated the date of the Closing, to the effect that based
upon the information made available to them in the course of their participation in
the preparation of the Official Statement, and without having undertaken to
determine independently the accuracy or completeness of the statements contained
in the Official Statement, nothing has come to their attention which would lead them
to believe that the Official Statement (other than any financial or statistical data or
forecasts or projections included therein, as to which no opinion need be expressed)
contains an untrue statement of a material fact or omits to state a material fact
required to be stated therein or necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading.
(7) executed copy of the Continuing Disclosure Certificate; and
511
(8) such additional legal opinions, certificates, proceedings, instruments
and other documents as we may reasonably request to evidence compliance by the
City with legal requirements, the truth and accuracy, as of the time of Closing, of
the representations of the City herein and the due performance or satisfaction by the
City at or prior to such time of all agreements then to be performed and all
conditions then to be satisfied by the City.
5. If the City shall be unable to satisfy the conditions to the Underwriter's obligations
contained in this Contract of Purchase or if the Underwriter's obligations shall be terminated for
any reason permitted herein, this Contract of Purchase shall terminate and neither the Underwriter
nor the City shall have any further obligation hereunder.
6. The Underwriter shall be under no obligation to pay and the City shall pay or cause to
be paid the expenses incident to the performance of the obligations of the City hereunder including
but not limited to (a) the costs of the preparation and printing, or other reproduction (for
distribution on or prior to the date hereof) of the resolutions and other legal proceedings and the
definitive Bonds, (b) the fees and disbursements of any counsel, financial advisors, accountants or
other experts or consultants retained by the City; (c) the fees and disbursements of Bond Counsel
and Disclosure Counsel; (d) the cost of preparation and printing of the Preliminary Official
Statement and any supplements and amendments thereto and the cost of preparation and printing of
the Official Statement, including the requisite number of copies thereof for distribution by the
Underwriter; and (e) charges of rating agencies for the rating of the Bonds.
The Underwriter shall pay and the City shall be under no obligation to pay all expenses
incurred by it in connection with the public offering and distribution of the Bonds.
7. Any notice or other communication to be given to the City under this Contract of
Purchase may be given by delivering the same in writing at your address set forth above and any
such notice or other communications to be given to the Underwriter may be given by delivering the
same in writing to Seidler -Fitzgerald Public Finance, 515 South Figueroa Street, Suite 1100, Los
Angeles, California 90071 Attention: John C. Fitzgerald. The approval of the Underwriter when
required hereunder or the determination of its satisfaction as to any document referred to herein
shall be in writing signed by the Underwriter and delivered to you.
M
8. This Contract of Purchase is made solely for the benefit of the City and the Underwriter
(including the successors or assigns of the Underwriter) and no other persons, partnership,
association or corporation shall acquire or have any right hereunder or by virtue hereof. All
representations and agreements of the City in this Contract of Purchase shall remain operative and
in full force and effect regardless of any investigation made by or on behalf of the Underwriter and
shall survive the delivery of and payment for the Bonds. This Contract of Purchase shall be
governed by the laws of the State of California. This Contract of Purchase may be signed in
multiple counterparts.
SEIDLER-FITZGERALD PUBLIC
FINANCE
By: _
Title:
Accepted and Agreed to:
CITY OF LODI
By:
Title:
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22028-12 JHHW:MDC:sgm 07/08/96
PRELIMINARY OFFICIAL STATEMENT DATED , 1996
NEW ISSUE NOT RATED
In the opinion of Bond Counsel, ander existing laws, regulations, rulings and court decisions and assuming compliance with
certain covenants described herein, interest on the Bonds is excluded from gross income for federal income tax purposes and is exempt from
State of California personal income taxes. In Ile opinion of Bond Counsel, such interest is not an item of tax preference for purposes of
the federal individual or corporate alternative minimum taxes, although it is included in adjusted current earnings in calculating corporate
alternative minimum taxable income. Bond Counsel expresses no opinion regarding other tax consequences relating to the ownership or
disposition of, or the accrual or receipt of interest on, the Bonds. See "TAX -EXEMPTION" herein.
Limited Obligation Improvement Bonds
City of Lodi
Lodi Central City Revitalization Assessment District No. 95-1, Series
Dated: Date of Delivery Due: September 2 as shown below
The Limited Obligation Improvement Bonds hereby offered (the "Bonds") are being issued to (i) finance the
acquisition of certain improvements within the Lodi Central City Revitalization Assessment District No. 95-1 (the
"District") of the City of Lodi, California (the "City") (ii) to redeem the 1984 Lodi Central Downtown Assessment District
Beautification Bonds currently outstanding in the amount of $125,000, (iii) fund a reserve fund for the Bonds and (iv) pay
certain costs of issuance associated with the Bonds_
The acquisition and construction of the improvements described herein will be completed pursuant to the
Municipal Improvement Act of 1913 (Division 12 of the California Streets and Highways Code) (the "1913 Act"). The
Bonds are issued pursuant to provisions of the Improvetnent Bond Act of 1915 (Division 10 of the California Streets and
Highways Code) (the "Bond Law") and are secured by unpaid assessments levied in proceedings conducted by the City
pursuant to the 1913 Act.
Interest due with respect to the Bonds is payable semiannually on March 2 and September 2 of each year,
commencing March 7, 1997, by a check of First Trust of California, National Association, as transfer agent, registrar, and
paying agent (the "Agent"). Principal of and premium (if any) on any Bond will be paid upon presentation and surrender
thereof [at the principal office of the Agent in San Francisco, California.] Upon written request of an Owner of $1,000,000
or more in aggregate principal amount of Bonds, interest shall be paid on the Interest Payment Date by wire transfer in
immediately available funds to an account in the continental United States of America designated by such Owner to the
Agent on or before the applicable Record Date preceding such Interest Payment Date. Individual purchases will be made in
principal amounts of $5,000 and integral multiples thereof.
The Bonds are subject to redemption as described herein. The Bonds may be refunded pursuant to the Refunding
Act of 1984 for 1915 Act Improvetnent Bonds.
Under the provisions of the Bond Law, installments of principal and interest sufficient to meet annual Bond debt
service are included on the regular county tax bills to owners of property against which there are unpaid assessments. These
annual installments are to be paid into the Redemption Fund, to be held by the City and used to pay debt service on the
Bonds as it becomes due.
See the section of the Official Statement entitled "BONDOWNERS' RISKS" for a discussion of special factors
which should be considered, in addition to the other matters set forth herein, in considering the investment quality of the
Bonds.
To provide funds for payment of the Bonds and the interest thereon as a result of any delinquent installments, the
City will establish a Reserve Fund to be held by the City and will deposit therein Bond proceeds in the original amount
equal to the lesser of [10% of the principal amount of the Bonds, 125% of average Debt Service or maximum annual Debt
Service.] The City's liability to advance funds to the Redemption Fund in the event of delinquent assessment installments
shall not exceed the balance in the Reserve Fund. Additionally, the City has covenanted to initiate judicial foreclosure in
the event of a delinquency, under the circumstances described herein.
The District consists of _ parcels, generally consisting of two downtown areas of the City. Proceeds of the
Bonds will generally be applied to a revitalization of the downtown areas, including street and pedestrian improvements.
All of the parcels in the District are developed.
NEITHER THE FAITH AND CREDIT NOR THE TAXING POWER OF THE CITY OF LODI, THE STATE OF
CALIFORNIA OR ANY POLITICAL SUBDIVISION THEREOF IS PLEDGED TO THE PAYMENT OF THE BONDS.
The Bonds will mature and will bear interest at the rates set forth in the following schedule:
Preliminary, subject to change.
K,.
MATURITY SCHEDULE*
$ Serial Bonds
Due Interest Due
September 2 Amount Rate Price September 2
Interest
Amount Rate Price
The Bonds are offered when, as and if issued and delivered to the Underwriter subject to the approval of Timothy J.
Hachman, Esq., Stockton, California, Bond Counsel. It is expected that the Bonds in definitive form shall be available for
delivery in on or about , 1996.
SEIDLER-FITZGERALD PUBLIC FINANCE
Dated , 1996
* Preliminary, subject to change.
In connection with this offering, the Underwriter may overallot or effect transactions which
stabilize or maintain the market price of the Bonds at a level above that which might otherwise
prevail in the open market. Such stabilizing, if corrvnenced, may be discontinued at any time. The
Underwriter may offer and sell the Bonds to certain dealers and others at prices lower than the
public offering prices set forth on the cover page hereof and said public offering prices may be
changed from time to tithe by the Underwriter.
No dealer, broker, salesperson or other person has been authorized by the City to give any
information or to make any representations other than as contained in this Official Statement, and if
given or made, such other information or representations must not be relied upon as having been
authorized by the City.
This Official Statement does not constitute an offer to sell or the solicitation of an offer to
buy, nor shall there be any sale of the Bonds by any person in any jurisdiction in which it is
unlawful for such person to make such offer, solicitation or sale.
The Official Statement is not to be construed as a contract with the purchasers of the
Bonds. Statements contained in this Official Statement which involve estimates, forecasts or
matters of opinion, whether or not expressly so described herein, are intended solely as such and
are not to be construed as representations of fact.
The information set forth herein has been obtained from sources which are believed to be
reliable, but such information is neither guaranteed as to accuracy or completeness, nor to be
construed as a representation of such by the City or the Underwriter. The information -and
expressions of opinion stated herein are subject to change without notice. Neither the delivery of
this Official Statement nor any sale made hereunder may be inferred or relied upon, under any
circumstances, to create any implication that there has been no change in the affairs of the City, the
District or the property owners within the District, or in the condition of the improvements to be
acquired or the property within the District, since the date hereof. All summaries of legal or other
documents are made subject to the provisions of such documents and do not purport to be complete
statements of any or all such provisions.
This Official Statement is submitted in connection with the sale of the Bonds referred to
herein and may not be reproduced or used, in whole or in part, for any other purpose.
Limited Obligation Improvement Bonds
City of Lodi
Lodi Central City Revitalization Assessment District No. 95-1
MAYOR AND CITY COUNCIL
Stephen J. Mann, Mayor
David P. Warner, Major Pro Tempure
Ray G. Davenport, Councilmember
Phillip A. Pennino, Councilmember
Jack A. Sieglock, Councilmember
CITY STAFF
H. Dixon Flynn, City Manager
Vicky McAthie, Director of Finance
Randall Hays, Esq., City Attorney
Jennifer M. Perrin, City Clerk
BOND COUNSEL
Timothy J. Hachman, Esq.
Stockton, California
ASSESSMENT ENGINEER
Kjeldsen, Shuiock & Neudeck, Inc.
Stockton, California
TRANSFER AGENT, REGISTRAR, AND PAYING AGENT
First Trust of California, National Association
San Francisco, California
UNDERWRITER
Seidler Fitzgerald Public Finance
Los Angeles, California
TABLE OF CONTENTS
Page
INTRODUCTION............................................................................................
1
THEBONDS..................................................................................................
5
Authority for Issuance....................................................................................5
Purposeof Bonds.........................................................................................5
Descriptionof the Bonds.................................................................................5
DebtService Schedule....................................................................................5
Optional Redemption of Bonds.........................................................................
5
Term of Lien and Bonds........................................................................... ...
6
Refundingof Bonds......................................................................................
6
Estimated Sources and Uses of Funds.................................................................6
Establishment of Special Funds.........................................................................
7
SECURITY FOR THE BONDS............................................................................
8
Assessments...............................................................................................
8
Priorityof Lien............................................................................................
PropertyValues...........................................................................................
ReserveFund..............................................................................................9
Covenant to Commence Superior Court Foreclosure................................................10
THE DISTRICT..............................................................................................
1
Site Location and Land Use............................................................................
1
Property Values..........................................................................................
11
Property Ownership.....................................................................................11
Direct and Overlapping Bonded Indebtedness........................................................11
THE IMPROVEMENT PROJECT.........................................................................12
Allocation Of Assessment District Cost...............................................................13
BONDOWNERT RISKS..................................................................................
14
General................................................................................................... .
14
Depletion of Reserve Fund.............................................................................
15
Foreclosure and Sale Proceedings.....................................................................
16
Factors Affecting Parcel Value and Aggregate Values...............................................16
Other Possible Claims Upon the Value of an Assessment Parcel..................................17
Bankruptcy Proceedings................................................................................
1
Payment of the Assessment Not a Personal Obligation.............................................19
Limited City Obligation to Pay Debt Service.........................................................19
Lossof Tax Exemption.................................................................................19
LEGAL MATTERS......................................................................................... . 2
TAXEXEMPTION..........................................................................................20
NOLITIGATION............................................................................................20
NORATING.................................................................................................21
UNDERWRITING..........................................................................................21
MISCELLANEOUS.........................................................................................21
APPENDIX A - Economic Profile of the City of Lodi ................................................ A-1
APPENDIX B - Excerpts from the Engineer's Report ................................................ B-1
APPENDIX C - Form of Legal Opinion................................................................ C-1
APPENDIX D - Fonn of Continuing Disclosure Certificate .......................................... D-1
iii
LIMITED OBLIGATION IMPROVEMENT BONDS
CITY OF LODI
Lodi Central City Revitalization Assessment District No. 95-1
Introduction
The purpose of this Official Statement, which includes the cover page and Appendices
hereto (the "Official Statement"), is to provide certain information relating to the sale and issuance
of $ * principal amount of Limited Obligation Improvement Bonds (the 'Bonds") for
Lodi Central City Revitalization Assessment District No. 95-1 (the "District") by the City of Lodi,
California (the "City").
This Introduction is not a summary of this Official Statement. It is only a description of
and guide to, and is qualified by, more complete and detailed information contained in the entire
Official Statement, including the cover page and appendices hereto, and the documents summarized
or described herein. A full review should be made of the entire Official Statement. The offering of
the Bonds to potential investors is made only by means of the entire Oficial Statement.
The District
The District was formed pursuant to the Municipal Improvement Act of 1913 (Division 12
of the California Streets and Highways Code) (the "1913 Act").
The District consists of [347] parcels in two downtown areas of the City. Proceeds of the
Bonds are generally to be used for a downtown revitalization consisting of street and pedestrian
improvements. All of the parcels are developed, and no single property owner is responsible for
more than 5.1% of the total assessment securing the Bonds. Because the District consists of two
downtown areas, the parcels are predominantly commercial and retail, and residential owners have
been given the option to opt out of the District while the parcel remains in residential use.
The overall value -to -lien ratio (based on assessed value and the principal amount of the
Bonds) is 50* to 1. Of the total cost of the revitalization project of $6,240,618, $2,783,008 is
being raised through the issuance of Bonds and $3,457,610 is coining from available City capital.
Purpose of the Bonds
The proceeds from the sale of the Bonds will be used (i) to finance the acquisition and
construction of certain public improvements, (ii) to refund the 1984 Lodi Central Downtown
Assessment District Beautification Bonds currently outstanding in the amount of $125,000, (iii) to
pay certain costs of issuance of the Bonds and (iv) to fund a reserve fund for the Bonds. See
"THE BONDS - Purpose of Issue."
Authority for the Bonds
The Bonds are issued pursuant to the Improvement Bond Act of 1915 (Division 10 of the
California Streets and Highways Code) (the 'Bond Law") and a Resolution Determining Unpaid
Assessments and Providing for Issuance of Bonds, adopted by the City Council of the City on
_, 1996 (the "Resolution of Issuance"). See "THE BONDS - Authority for Issuance" herein.
* Preliminary, subject to change.
Description of the Bonds
Payments. Interest is payable beginning on March 2, 1997, and semiannually thereafter on
March 2 and September 2 each year (each, and "Interest Payment Date"). Principal of and
premium, if any, on the Bonds is payable at [the principal corporate trust office of First Trust of
California, National Association (the "Agent") in San Francisco, California.] Interest on the
Bonds is payable by check of the Agent mailed by first class mail on or before each Interest
Payment Date to the Owners as they appear in the registration books of the Agent, or by wire
transfer to requesting Owners of $1,000,000 or more in principal amount of Bonds. See "THE
BONDS - General Provisions."
Denominations. The Bonds will be issued in denominations of $5,000 each or integral
multiples thereof.
Redemption. The Bonds are subject to redemption prior to maturity. See "THE BONDS -
Redemption" herein.
Registration, transfers and exchanges. The Bonds will be issued in fully registered form
and may be transferred or exchanged upon presentation and surrender at the principal corporate
trust office of the Agent in St. Paul, Minnesota. See "THE BONDS - Registration, Transfer and
Exchange."
Sources of Payment for the Bonds.
The Bonds are limited obligation improvement bonds of the City. The Bonds are issued
upon and are secured by the unpaid assessments against the parcels in the District (the "Assessment
Parcels"). These unpaid assessments, together with interest thereon, constitute a trust fund for the
redemption and payment of the principal of the Bonds and the interest thereon. The Bonds are also
secured by the monies in the Redemption Fund and the Reserve Fund created under the Resolution
of Issuance. The City's obligation to advance funds to pay debt service on the
Bonds if assessment installment collections are insufficient is limited to amounts
on deposit in the Reserve Fund, and if so advanced, will reduce the Reserve
Fund by the amount of the funds advanced. See "SECURITY FOR THE BONDS"
herein.
Tax Exemption
Assuming compliance with certain covenants and provisions of the Internal Revenue Code
of 1986, in the opinion of Timothy J. Hachman, Esq., Stockton, California, Bond Counsel,
interest on the Bonds will not be includable in gross income for federal income tax purposes
although it may be includable in the calculation for certain taxes. Also in the opinion of Bond
Counsel interest on the Bonds will be exempt from State of California personal income taxes. See
"LEGAL MATTERS - Tax Exemption."
Offering and Delivery of the Bonds
The Bonds are offered when, as and if issued, subject to approval as to their legality by
Bond Counsel. It is anticipated that the Bonds in definitive form will be available for delivery in
on or about ------ 51996.
Bondowner's Risks
The Bonds are limited obligation improvement bonds payable from installment payments of
principal and interest on the unpaid assessments on the Assessment Parcels collected at the same
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time and in the same manner as property taxes. The City has no obligation to advance
funds to pay debt service on the Bonds if assessment installment collections are
insufficient, except from any money in the Reserve Fund.
The City has established a Reserve Fund for the Bonds. See "SECURITY FOR THE
BONDS - Reserve Fund." The Reserve Fund, if depleted, may be replenished from the payment
of delinquent installments of principal and interest and from the proceeds of judicial foreclosure
and sale proceedings. However, if delinquent payments or foreclosure sale proceeds are not
forthcoming, no replenishment can occur. The Reserve Fund will not be fully funded at the
Reserve Requirement on the date of issuance of the Bonds. See "SECURITY FOR THE BONDS
- Reserve Fund."
The City is obligated to bring judicial foreclosure and sale proceedings ("court
foreclosure") against Assessment Parcels delinquent in payment of the installments of principal and
interest on the assessments, under the circumstances described within. The maximum price
obtained from the court foreclosure of property may not be sufficient to cover the delinquency,
which may result in an ultimate loss to Bondowners. In addition, a court foreclosure may be
restrained or delayed by bankruptcy proceedings of the owner of a delinquent Assessment Parcel.
The values of the Assessment Parcels may be adversely affected by a number of factors
including, for example, naturally occurring conditions such as earthquakes, destructive storms or
drought, and imposition of legal restrictions on use or development.
The owners of Assessment Parcels are not personally obligated to pay the
assessments or the assessment installments; the assessments are obligations only
of the Assessment Parcels.
THE BONDS ARE NOT GENERAL OBLIGATIONS OF THE CITY, OF
THE STATE OF CALIFORNIA OR OF ANY OTHER POLITICAL SUBDIVISION
OF THE STATE AND NEITHER THE CITY NOR THE STATE NOR ANY
POLITICAL SUBDIVISION OF THE STATE HAS PLEDGED ITS FULL FAITH
AND CREDIT FOR THE PAYMENT THEREOF.
As a result of these and other factors, the Bonds, as an investment, have speculative
elements. See "SPECIAL RISK FACTORS" for a discussion of the risk factors that should be
considered, in addition to the other matters set forth herein, in deterrruning the quality or suitability
of the Bonds as an investment.
Continuing Disclosure
The City has covenanted for the benefit of Bondowners to provide certain annual financial
information and operating data (the "City Annual Report"). The City Annual Report shall be
delivered by not later than months following the end of its fiscal year (which currently would
be by of each year), commencing with the report for the 1995-96 fiscal year. The City
has also covenanted to provide notices of the occurrence of certain enumerated events, if material.
The City Annual Report will be filed by the City with each Nationally Recognized Municipal
Securities Information Repository, and with the appropriate State information depository, if any.
The notices of material events will be filed by the City with the Municipal Securities Rulemaking
Board (and with the appropriate State information depository, if any). The specific nature of the
information in the City Annual Report or the notices of material events is shown in "APPENDIX
D - Form of Continuing Disclosure Certificate." The City has never failed to comply, in all
material respects, with an undertaking to provide continuing disclosure pursuant to SEC Rule
15c2 -12(b)(5).
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Professionals Involved in the Offering
All proceedings for the issuance of the Bonds are subject to the approval of Timothy J.
Hachman, Stockton, California, Bond Counsel to the City. First Trust of California, National
Association, San Francisco, California will act as the City's Paying Agent. Jones Hall Hill &
White, A Professional Law Corporation, San Francisco, California will assist the City with the
preparation of the Official Statement.
Other Information
This Official Statement speaks only as of its date, and the information contained herein is
subject to change.
Copies of documents referred to herein and information concerning the Bonds are available
from the Finance Director of the City at 221 West Pine Street, Lodi, California 95240, (209)333-
6807. The City may impose a charge for copying, mailing and handling.
No dealer, broker, salesperson or other person has been authorized to give any information
or to make any representations other than as contained herein and, if given or made, such other
information or representations must not be relied upon as having been authorized by any of the
foregoing. This Official Statement does not constitute an offer to sell or the solicitation of an offer
to buy nor shall there be any sale of the Bonds by a person in any jurisdiction in which it is
unlawful for such person to make such an offer, solicitation or sale.
This Official Statement is not to be construed as a contract with the purchasers of the
Bonds. Statements contained in this Official Statement which involve estimates, forecasts or
matters of opinion, whether or not expressly so described herein, are intended solely as such and
are not to be construed as representations of fact. The summaries and references to documents,
statutes and constitutional provisions referred to herein, and the description of the Bonds included
in this Official Statement, do not purport to be comprehensive or definitive, and are qualified in
their entireties by reference to such documents, statutes and constitutional provisions.
The information set forth herein has been obtained from sources which are believed to be
reliable, but is not guaranteed as to accuracy or completeness and is not to be construed as a
representation by the City. The information and expressions of opinions herein are subject to
change without notice, and neither delivery of this Official Statement nor any sale made hereunder
shall, under any circumstances, create any implication that there has been no change in the affairs
of the City since the date hereof. This Official Statement is submitted in connection with the sale of
the Bonds referred to herein and may not be reproduced or used, in whole or in part, for any other
purpose.
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITER MAY
OVERALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE
MARKET PRICE OF THE BONDS AT A LEVEL ABOVE THAT WHICH MIGHT
OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH STABILIZING, IF COMMENCED,
MAY BE DISCONTINUED AT ANY TIME. THE UNDERWRITER MAY OFFER AND SELL
THE BONDS TO CERTAIN DEALERS AND DEALER BANKS AND BANKS ACTING AS
AGENTS AT PRICES LOWER THAN THE PUBLIC OFFERING PRICES STATED ON THE
COVER PAGE HEREOF AND SAID PUBLIC OFFERING PRICES MAY BE CHANGED
FROM TIME TO TIME BY THE UNDERWRITER.
-4-
THE BONDS
Authority for Issuance
The Bonds are issued pursuant to the provisions of the Bond Law and Resolution No.
(entitled "A Resolution Determining Unpaid Assessments and Providing for Issuance of
Bonds") adopted by the City Council on July _, 1996 (the "Resolution of Issuance"), and
represent and are secured by unpaid assessments levied against property in the District in
accordance with the provisions of the 1913 Act.
Purpose of Bonds
The proceeds from the sale of the Bonds will be used to (i) finance the acquisition and
construction of public improvements, as set forth in the Engineer's Report For Lodi Central City
Revitalization Assessment District No. 95-1, dated April 17, 1996 prepared by Kjeldsen, Sinnock
& Neudeck, Inc. (the "Engineer's Report," see "APPENDIX B - Excerpts from the Engineer's
Report"), (ii) to redeem the 1984 Lodi Central Downtown Assessment District Beautification
Bonds currently outstanding in the amount of $125,000 (the "Prior Bonds"), (iii) to pay certain
costs of issuance of the Bonds and (iv) to fund a reserve fund for the Bonds. See "THE
IMPROVEMENT PROJECT."
Description of the Bonds
The Bonds are issued as serial and term bonds and mature in various amounts and on the
dates set forth on the cover of this Official Statement. Principal of and premium (if any) on any
Bond will be paid upon presentation and surrender thereof at the [principal corporate trust office of
the Agent in San Francisco, California.] Interest on the Bonds is payable on March 2, 1997 and
semiannually thereafter on each March 2 and September 2 by a check of the Agent mailed by first
class mail to the registered owners thereof. Upon written request of an Owner of $1,000,000 or
more in aggregate principal amount of Bonds, each interest shall be paid on the Interest Payment
Date by wire transfer in immediately available funds to an account in the continental United States
of America designated by such Owner to the Agent on or before the applicable Record Date
preceding such Interest Payment Date. Individual purchases will be made in principal amounts of
$5,000 and integral multiples thereof.
Debt Service Schedule
The following table presents the debt service schedule for the Bonds, assuming no
redemptions are made:
Year Ending Interest Interest Principal
September 2 March 2 September 2 September 2 Total
Optional Redemption of Bonds
At the option of the City, any Bond, or a portion thereof if issued in a denomination greater
-5-
than $5,000, may be called for optional redemption prior to maturity on any March 2 or September
2, upon payment of the following redemption prices (expressed as a percentage of the principal
amount of Bonds called for redemption), plus accrued interest to the date of redemption:
Redemption Date Redemption Price
March 2, _ through September 2, _ 103%
March 2, , and September 2, _ 102%
March 2, _ and September 2,_ 101%
March 2, _ and thereafter 100%
No interest shall accrue on a Bond beyond the March 2 or September 2 date on which such
Bond is called for redemption. Notice of redemption must be given by registered or certified mail
or by personal service at least 30 days prior to the redemption date. The determination as to which
Bond or Bonds are to be called shall be made by the City under the Bond Law in accordance with
the Resolution of Issuance. Transfers of property ownership and certain other circumstances could
result in prepayment of assessments. Such prepayment would result in redemption of all or a
portion of the Bonds prior to their stated maturity, which would result in the reduction of portions
of the amount on deposit in the Reserve Fund allocable to the redeemed Bonds.
Term of Lien and Bonds
The Bonds and the original assessments shall remain in full force and effect and the Bonds
shall be secured by the original assessments until (i) the Bonds mature, (ii) assessments are prepaid
and the Bonds are redeemed, (iii) apportionment of the original assessments occurs pursuant to
Parts 10.0 and 10.5 of Division 10 of the Bond Law, or (iv) the original assessments are
superseded and supplemented by reassessments and refunding bonds issued pursuant to Division
11 or Division 11.5 of the Streets and Highway Code, at which time the refunding escrow shall
become the security for any outstanding Bonds not exchanged for refunding bonds.
Refunding of Bonds
The Bonds may, subject to the terms of the Resolution of Issuance, be refunded pursuant
to the Refunding Act of 1984 for 1915 Act Improvement Bonds, Division 11.5 of the Streets and
Highways Code of the State of California.
Estimated Sources and Uses of Funds
The estimated sources and uses of the proceeds of the Bonds are set forth below:
Sources:
Principal Amount of the Bonds
Less: Underwriter's Discount
Total Sources of Funds
Uses:
Deposit to Improvement Fund $
Deposit to Escrow Fund
Deposit to Costs of Issuance Fund
Deposit to Redemption Fund
Total Uses of Funds
Wes
Establishment of Special Funds
For administering the proceeds of the sale of Bonds and payment of interest and principal
on the Bonds, the City will establish and maintain five funds under the Resolution of Issuance to
be known as the Improvement Fund, the Costs of Issuance Fund, the Redemption Fund, the
Reserve Fund and the Escrow Fund.
Improvement Fund. The moneys in the Improvement Fund shall be disbursed for the
purpose of paying or reimbursing the costs of acquiring and constructing the Project, including but
not limited to all costs incidental to or connected with such acquisition and construction.
Disbursements from the Improvement Fund shall be subject to the provisions of the Resolution of
Issuance. Any surplus remaining after payment of all such costs and expenses shall be used as set
forth in the proceedings pursuant to the Resolution of Intention and applicable provisions of the
Act and the Improvement Fund shall be closed.
Cost of Issuance Fund. The moneys in the Costs of Issuance Fund shall be used solely for
the purpose of the payment of Costs of Issuance on or after the Closing Date. Any funds
remaining in the Costs of Issuance Fund on the date that is six months after the Closing Date shall
be transferred to the Improvement Fund and the Costs of Issuance Fund shall be closed.
Redemption Fund. All payments of principal and interest installments on the assessments,
together with penalties, if any, will be deposited in the Redemption Fund, which will be a trust
fund for the benefit of the Bondowners. Payment of the Bonds at scheduled mandatory or optional
redemption prior to maturity and at maturity, and all interest on the Bonds will be made from the
Redemption Fund. On or before each Interest Payment Date, there shall be withdrawn from the
Redemption Fund and delivered to the Agent for payment to the Bondowners the principal of
(including Sinking Fund Payments), and interest and any premium, then due and payable on the
Bonds. Five (5) business days prior to each Interest Payment Date, the City shall determine if the
amounts then on deposit in the Redemption Fund are sufficient to pay the Debt Service due on the
Bonds on such Interest Payment Date. In the event the amounts in the Redemption Fund are
insufficient for such purpose, the City shall cause to be withdrawn from the Reserve Fund to the
extent of any funds therein the amount of such insufficiency, and transferred to the Redemption
Fund. Amounts so withdrawn from the Reserve Fund and deposited to the Redemption Fund shall
be applied to the payment of the Bonds. If, after the foregoing transfers, there are insufficient
funds in the Redemption Fund to make the payments to the Bondowners, the available funds shall
be applied first to the payment of interest on the Bonds, then to the payment of principal due on the
Bonds (including Sinking Fund Payments), and then to payment of principal due on the Bonds by
reason of Bonds called for redemption.
Reserve Fund. There will be deposited into the Reserve Fund from proceeds of the Bonds
an amount equal to $ , which is approximately _% of the Reserve Requirement.
Pursuant to the Resolution of Intention, the Reserve Requirement is equal to the [lesser of _% of
the principal amount of the Bonds, 125% of average annual Debt Service or maximum annual Debt
Service,] as defined in the Resolution of Issuance. Interest earnings on amounts in the Reserve
Fund will be retained therein until the amounts in the Reserve Fund equal the Reserve
Requirement. See "SECURITY FOR THE BONDS - Reserve Fund."
Proceeds from redemption or sale of properties with respect to which payment of
delinquent assessments and interest thereon was made from the Reserve Fund, shall be credited to
the Reserve Fund. Moneys in the Reserve Fund shall be held in trust for the benefit of the City
and the Bondowners as a reserve for the payment of principal of (including Sinking Fund
Payments), and interest and any premium on, the Bonds. The Finance Director of the City is
required to cause the Reserve Fund to be administered in accordance with Part 16 of the Bond
Law.
WE
(a) Use of Reserve Fund. Except as otherwise provided in the Resolution of Issuance, all
amounts deposited in the Reserve Fund shall be used and withdrawn solely for the purpose of
making transfers to the Redemption Fund in the event of any deficiency at any time in the
Redemption Fund of the amount then required for payment of the principal of (including Sinking
Fund Payments), and interest and any premium on, the Bonds or in accordance with the provisions
of the Resolution of Issuance, for the purpose of redeeming Bonds.
(b) Transfer Due to Deficiency in Redemption Fund. Transfers shall be made from the
Reserve Fund to the Redemption Fund in the event of a deficiency in the Redemption Fund, in
accordance with the Resolution of Issuance.
(c) Prepayment of Assessments. Whenever, after the issuance of Bonds, an assessment is
paid, in whole or in part, as provided in the Bond Law, the Reserve Fund may be reduced in an
amount equal to the product of the ratio of the original amount of the assessment so paid to the
original amount of all assessments, times the initial Reserve Requirement. The prepayer will be
entitled to a credit in a like amount in determining the amount of such prepayment, and the amount
of such credit will be transferred from the Reserve Fund to the Redemption Fund.
(d) Transfer of Excess of Reserve Requirement. Whenever, on any Interest Payment
Date, or on any other date, the amount in the Reserve Fund exceeds the then applicable Reserve
Requirement, there shall, except as provided in the Resolution of Issuance for purposes of rebate,
be transferred on or before such Interest Payment Date an amount equal to the excess from the
Reserve Fund to the Redemption Fund to be used in accordance with Part 16 of the Bond Law.
(e) Transfer When Balance Exceeds Outstanding Bonds. Whenever the balance in the
Reserve Fund, when added to the balance in the Redemption Fund, is sufficient to retire all the
Outstanding Bonds, whether by advance retirement or otherwise, collection of the principal and
interest on the assessments shall be discontinued and the Reserve Fund liquidated in retirement of
the Outstanding Bonds at the written direction of the City. In the event that the balance in the
Reserve Fund at the time of liquidation exceeds the amount required to retire all of the Outstanding
Bonds, the excess after payment of amounts due to the City, shall be transferred to the City to be
used in accordance with the Act and the Bond Law.
Escrow Fund. The Escrow Fund will be maintained and disbursed solely for the advance
redemption of the Prior Bonds outstanding on the date of the delivery of the Bonds.
SECURITY FOR THE BONDS
Assessments
The Bonds are issued upon and secured by the unpaid assessments together with interest
thereon and such unpaid assessments together with interest thereon constitute a trust fund for the
redemption and payment of the principal of the Bonds and the interest thereon. All the Bonds are
secured by the monies in the Redemption Fund and the Reserve Fund created pursuant to the
assessment proceedings under the Resolution of Issuance and by the unpaid assessments levied.
Principal of and interest on the Bonds are payable exclusively out of the Redemption Fund and the
Reserve Fund.
Although the unpaid assessments constitute fixed liens on the lots and parcels assessed,
they do not constitute a personal indebtedness of the respective owners of such lots and parcels.
There is no assurance that the owners shall be financially able to pay the assessment installments or
that they shall pay such installments even though financially able to do so. See "BONDOWNERS'
-8.
RISKS".
The unpaid assessments shall be collected in semi-annual installments, together with
interest on the declining balances, on the tax roll on which general taxes on real property are
collected and are payable and become delinquent at the same time and in the same proportionate
amounts and bear the same proportionate penalties and interest after delinquency as do general
taxes, and the properties upon which the assessments were levied are subject to the same
provisions for sale and redemption as are properties for nonpayment of general taxes.
Neither the faith and credit nor the taxing power of the City, the State of California or any
political subdivision thereof is pledged to the payment of the Bonds.
Priority of Lien
The assessment (and any reassessment thereof) and each installment thereof and any
interest and penalties thereon constitute a lien against the parcels on which they were imposed until
the same is paid. The lien is subordinate to all fixed special assessment liens imposed upon the
same property prior to the date that the assessments became a lien on the property assesses, but has
priority over all private liens and over all fixed special assessment liens which may thereafter be
created against the property. The lien is co -equal to and independent of the lien for general
property taxes and any community facilities district special taxes.
Although the unpaid assessments constitute fixed liens on the Assessment
Parcels, they do not constitute personal indebtedness of the owners of the
Assessment Parcels. Furthermore, there can be no assurance as to the ability of
the owners to pay the unpaid assessments.
Property Values
The assessed value of the Assessment Parcels as shown upon the last equalized assessment
roll of the County Assessor's Office is $100,139,064. The lien due to the aggregate assessments in
the District is $2,000,000* , which results in an aggregate value -to -lien ratio for the District of 50*
to 1. The parcels are all developed, and no one property owner is responsible for more than 5.1%
of the total assessments securing the Bonds. See "THE DISTRICT - Property Values" herein.
Reserve Fund
Out of the proceeds of the sale of the Bonds, the City will set aside the Reserve Fund an
amount equal to approximately _% of the Reserve Requirement. The Reserve Requirement is
defined in the Resolution to be [the lesser of 10% of the principal amount of the Bonds, 125% of
average annual Debt Service or maximum annual Debt Service,] where Debt Service means the
scheduled amount of interest and amortization of principal payable on the Bonds during the period
of computation including any Sinking Fund Payments, excluding amounts scheduled during such
period which relate to principal which has been retired before the beginning of such period.
Interest earning on amounts in the Reserve Fund are required to be retained therein until the amount
in the Reserve Fund reaches the Reserve Requirement. At an assumed interest rate of _%, and
assuming no draws on the Reserve Fund, the balance in the Reserve Fund is expected to reach the
Reserve Requirement by . Monies in the Reserve Fund will be held by the Agent for the
benefit of the City and the Bondholders as a reserve for the payment of principal of (including
required sinking fund payments), interest and any premiutn on the Bonds.
* Preliminary, subject to change.
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Monies in the Reserve Fund must be invested in Authorized Investments, as specified in
the Resolution of Issuance.
Covenant to Commence Superior Court Foreclosure
The Bond Law provides that in the event any assessment or installment thereof or any
interest thereon is not paid when due, the City may order the institution' of a court action to
foreclose the lien of the unpaid assessment. In such an action, the real property subject to the
unpaid assessment may be sold at judicial foreclosure sale. This foreclosure sale procedure is not
mandatory. However, the Resolution of Issuance provides that the City will commence
foreclosure proceedings within 150 days following the due date of any delinquent installment of
assessments securing the Bonds. On or before February 1 and June 1 of each fiscal year, the
Finance Director of the City will cause the records of the County Tax Collector to be monitored to
determine if there are any delinquencies in the payment of assessments in the District. If so, the
Finance Director must notify the City Attorney, who shall commence, or cause to be commenced,
foreclosure proceedings.
Delinquency in payment of current assessment installments does not result in an
acceleration of the entire unpaid amount of the assessment, and therefore, property may be sold at
foreclosure sale for only the amount of the currently due installments that are delinquent, plus
penalties, interest and costs.
In the event such Superior Court foreclosure or foreclosures are necessary, there may be a
delay in payments to Bondowners pending prosecution of the foreclosure proceedings and receipt
by the City of the proceeds of the foreclosure sale. Furthermore, it is also possible that no bid for
the purchase of the applicable property would be received at the foreclosure sale. See
"BONDOWNERS' RISKS".
THE DISTRICT
Site Location and Land Use
The District is situated in the City of Lodi in the County of San Joaquin, California, and
consists of [347] Assessment Parcels. The property is located in two separate zones, known as the
Downtown Zone (sometimes referred to as Zone A in the Engineer's Report) and the Cherokee
Lane Zone (sometimes referred to as Zone B in the Engineer's Report). The two zones do not
overlap. For purposes of the Assessment spread, the Downtown Zone has been divided into two
subzones, Subzone A-1 and Subzone A-2. See "THE IMPROVEMENT PROJECT - Method of
Assessment" below.
The Downtown Zone is located in the historic central downtown business area of the City;
the Cherokee Lane Zone is a commercial corridor also located in downtown Lodi. The
Improvement Project is one component of a comprehensive and detailed action program consisting
of public improvements, incentive programs, promotional programs and marketing strategies to
revitalize the downtown. The program is being implemented by the City through the Catalyst
Project for the Central City Revitalization Project, which was formally adopted by the City Council
of the City on April 12, 1995. See "THE IMPROVEMENT PROJECT" herein.
Downtown Zone. The Downtown Zone, which contains [230] Assessment Parcels,
encompasses a total of approximately 166 acres, or about 60 city blocks, which include streets and
public rights of way. The Downtown Zone encompasses most of the City's important historical
landmarks, civic buildings and cultural facilities. Current zoning within the Downtown Zone
includes Commercial, Public Use, and Light Industrial. Land use within Zone A is mixed and
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includes residential, commercial, multi -family, public facilities, non-profit organizations and light
industrial. Approximately _% of the total Assessments are levied on parcels in the Downtown
Zone.
Cherokee Lane Zone. The Cherokee Lane Zone, which contains [117] Assessment
Parcels, encompasses a total of approximately 107 acres, and extends almost the entire length of
Cherokee Lane, a few blocks south of the Downtown Zone. Cherokee Lane, a six -lane street, was
originally a section of State Highway 99, which was diverted when a new section of State
Highway 99 was constructed in _. Included in this Zone are all of the lots, parcels and/or
portions of subdivisions which physically front on the proposed Cherokee Lane Improvements.
Current zoning within the Cherokee Lane Zone includes Commercial and Light Industrial. Land
use within the Cherokee Lane Zone is mixed and includes residential, commercial, multi -family,
public facilities, non-profit organizations and light industrial, although the area is largely
commercial in character.
Property Values
For purposes off issuance of the Bonds, the City has not obtained a current market value
appraisal of the Assessment Parcels. Rather, the City has relied on the current assessed valuations
of the Assessment Parcels as shown on the records of the County Assessor for the fiscal year
1995-96. Those records indicate that the total assessed value of all Assessment Parcels in the
District is $100,139,064. When compared to the aggregate principal amount of the Bonds of
$2,000,000*, the aggregate value -to -lien ratio is 50 to 1. The table below sets forth the number of
parcels which fall into the indicated value -to -lien categories.
LODI ASSESSMENT DISTRICT No. 95-1
Value -to -Lien Categories
Value No. of Assessed % of Assessment % of
to Lien Parcels Value Total Lien Total
0 to 3:1
3:1to10:1
10:1 to 30:1
Over 30:1
Property Ownership
Property ownership in the District is well diversified. No one property owner owns more
than 6.9% of the property in the District (in terms of assessed valuation) or is responsible for more
than 5.1% of the total assessments in the District.
Because the District consists of two downtown areas, the parcels are predominantly
commercial and retail, and residential owners have been given the option to opt out of the District
while the parcel remains in residential use.
Direct and Overlapping Bonded Indebtedness
Contained within the boundaries of the District are numerous overlapping local agencies
providing public services. The direct and overlapping bonded indebtedness of property within the
* Preliminmy, subject to change.
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District with assessments securing the Bonds as of July 1, 1996 is shown in the table below. In
addition to the bonded debt set forth in the table, new assessment districts or community facilities
districts may be formed which encompass all or a portion of the property within the District and,
upon approval of registered voters or landowners within such districts, may issue more bonds and
levy additional special or other taxes or assessments.
In addition to the assessments described herein, the property owners within the District will
be required to pay the general ad valorem property tax.
LODI ASSESSMENT DISTRICT No. 95-1
STATEMENT OF DIRECT AND OVERLAPPING BONDED INDEBTEDNESS
WITHIN THE DISTRICT AS OF JULY 1, 1996
1995-96 Assessed Valuation: $100,139,064
DIRECT AND OVERLAPPING TAX AND ASSESSMENT DEBT: % Applicable Debt 7/1/96
City of Lodi Assessment District No. 95-1 100.000% $- (1)
TOTAL DIRECT AND OVERLAPPING TAX AND ASSESSMENT DEBT:
OVERLAPPING LEASE OBLIGATION DEBT:
San Joaquin County Certificates of Participation
0.464% $933,800
San Joaquin Delta Community College District Certificates of Participation
0.415 35,247
Lodi Unified School District Certificates of Participation
1.758 174,933
TOTAL OVERLAPPING LEASE OBLIGATION DEBT
1,143,880
COMBINED TOTAL DEBT
$1,143,880 (2)
(1) Excludes 1915 Act 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 Assessed Valuation:
DirectDebt ........................................................
Total Direct and Overlapping Tax and Assessment Debt....................0.00%
Combined Total Debt.................................................................1.14%
STATE SCHOOL BUILDING AID REPAYABLE AS OF 6/30/95: $8.444
Source: California Municipal Statistics, Inc.
THE IMPROVEMENT PROJECT
The following description of the improvements to be funded by the Bonds is adapted from
the Engineer's Report pertaining to the District prepared by Kjeldsen, Sinnock & Neudeck, Inc.
Excerpts from the Engineer's Report is included herein as Appendix B.
The total cost of Assessment District improvements to be paid from Bond proceeds is
$2,783,008. The City is providing a cash contribution for related improvements in the amount of
$3,457,610. The improvement project comprises acquisition of the improvements listed below:
Downtown Area
The installation of new pedestrian -scale street lighting, street trees, pedestrian benches, a
mini -pedestrian plaza, information kiosks, new sidewalks, trash receptacles, and various
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pedestrian amenities, together with related electrical and irrigation facilities, along School Street,
Oak Street and Pine Street. See "APPENDIX B- Excerpts from the Engineer's Report" for a more
detailed listing of the proposed improvements.
Cherokee Lane Area
The renovation of an existing street median, the installation of median trees, landscaping,
decorative street lights and other upgrades and improvements to the existing median. See
"APPENDIX B - Excerpts from the Engineer's Report" for a more detailed listing of the proposed
improvements.
Allocation Of Assessment District Cost
In general, Assessments for the District are apportioned in a manner intended to fairly and
equitably distribute the costs of the Improvement Project among all assessable lots, parcels or
subdivisions.
All Assessment Parcels in the District have been determined to benefit from the
improvements incurred by the District. The amounts being funded by the District represent the
total estimated costs for the construction of the revitalization improvements, the design and
construction contingencies, the incidental construction costs, and the incidental assessment
expenses, less the estimated construction fund interest earnings and the estimated City contribution
towards the total costs of the District improvements. Assessments are being allocated on
Assessment Parcels in the two Zones as follows:
Downtown Zone. Total assessable District costs allocable to the Downtown Zone will be
reduced by the amount of the cash contributed by the City towards certain improvements in the
Downtown Zone. The reduced cost will then be equally split and allocated such that fifty percent
of the total assessable Downtown Zone costs and expenses will be spread among the lots, parcels
and subdivisions of land lying within Subzone A-1, and fifty percent will be spread among the
lots, parcels and subdivisions of land lying within Subzone A-2.
The Subzone A-1 costs will be apportioned proportionately to the actual area of each lot,
parcel or subdivision of land as shown on the County Assessor's equalized tax roll as it existed on
September 20, 1995. Similarly, the Subzone A-2 costs will be apportioned proportionately to the
actual area of each lot, parcel or subdivision of land as shown on the County Assessor's tax roll.
Cherokee Lane Zone. Total assessable District costs allocable to the Cherokee Lane Zone
will also be reduced by the amount of the cash contributed by the City towards certain
improvements in the Cherokee Lane Zone. The reduced cost will then be equally split and
allocated such that fifty percent of the total assessable Cherokee Lane Zone costs and expenses will
be spread on the basis of the actual area of the lots, parcels and subdivisions of land in the
Cherokee Lane Zone. The remaining fifty percent of the cost will be spread proportionately
amongst all the assessable lots, parcels and subdivisions of land lying within the Cherokee Lane
Zone on the basis of the actual linear feet of frontage along Cherokee Lane of each lot, parcel or
subdivision of land, in proportion for the total assessable linear footage of all assessable lots,
parcels and subdivisions of land lying in the Cherokee Lane Zone.
Additionally, within both Zones of the District, those lots, parcels or subdivisions of land
which have outstanding unpaid principal balance of assessments allocable to the Prior Bonds will
be assessed their pro rata share for the prepayment of assessments securing the remaining principal
balance of such Prior Bonds. Lots, parcels and subdivisions within both Zones of the District
which are zoned Public Use and are currently occupied by public agencies, utilities or railroads, or
public easements or rights -of -ways, ore omitted from the assessment made to cover the costs and
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expenses of the Improvement Project.
BONDOWNERS' RISKS
This Special Risk Factors section of the Official Statement does not summarize the Official
Statement. Rather it supplements other sections in order to provide a practical perspective on the
material risks of the investment. Necessarily, the listing and discussion of risks is neither
comprehensive nor definitive. It is based largely upon typical experience with special assessment
bonds in other situations.
General
Debt service on the Bonds is payable from installment payments of principal and interest on
unpaid assessments on the Assessment Parcels. The principal of the assessment is the aggregate of
the amounts of the individual assessments levied against the Assessment Parcels. The individual
assessment on a parcel will be paid in annual installments, together with interest on the unpaid
balance, unless the unpaid balance is subsequently prepaid. The annual installments of principal
and interest with respect to an Assessment Parcel will be collected on the County tax roll at the
same time and in the same manner as general real property taxes are collected. The annual
installments of principal and interest with the respect to all Assessment Parcels are equal in the
aggregate to the annual debt service on the Bonds. The remaining unpaid balance will be paid in
annual installments together with interest thereon.
A Reserve Fund in an amount of the Reserve Requirement will be established from the
proceeds of the sale of the Bonds. Monies in the Reserve Fund will be used to pay debt service on
the Bonds in the event installment collections of the assessment are insufficient. There is no
assurance, however, that at any particular time the Reserve Fund will be sufficient for that
purpose. See the discussion below under the caption "Depletion of Reserve Fund."
Payment of the assessment installments is secured by the Assessment Parcels. In the event
an assessment installment is not paid when due, the City Council may institute foreclosure
proceedings in court to cause the Assessment Parcel to be sold in order to recover the delinquent
amount from the proceeds of the sale of the Assessment Parcel. The foreclosure remedy is
alternative to the usual property tax collection procedures which will be used unless foreclosure
proceedings are instituted. Foreclosure and sale and tax collection procedures, however, may not
result in the recovery of the full amount of delinquent assessment installments. See the discussion
below under the caption "Foreclosure and Sale Proceedings."
The sufficiency of tax or foreclosure sale proceeds to cover delinquent amounts depends in
part on the market for and the value of the Assessment Parcel at the time of the tax or foreclosure
sale. The facts and circumstances determining value at any given time may include contemplated
land ownership, development plans and other factors affecting the progress of land development,
economic conditions affecting real estate values and natural conditions affecting the use of the
Assessment Parcels, as well as a number of additional factors many of which are discussed or
referred to herein. Future substantial changes may result in future values and value relationships
that differ significantly from the present value and value relationships. See the discussion below
under the caption "Factors Affecting Parcel Value and Aggregate Values."
The sufficiency of tax or foreclosure sale proceeds to cover delinquent amounts may also
depend on the value of any prior or parity liens and similar claims. Governmental liens may
presently exist or may arise in the future with respect to an Assessment Parcel which, unless
subordinate to the assessment, may effectively reduce the realizable value of the parcel for the
benefit of the assessment. Other claims, such as hazardous substance claims, may also affect the
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realizable value even though such claims may not rise to the status of liens. See the discussion
below under the caption "Other Possible Claims Upon the Value of an Assessment Parcel."
Timely foreclosure and sale proceedings with respect to an Assessment Parcel may be
forestalled or delayed in the event the owner of the parcel becomes the subject of bankruptcy
proceedings. Not only may foreclosure and sale proceedings be forestalled and delayed, but sale
of an Assessment Parcel by the county tax collector may be similarly affected by bankruptcy.
Further, payment of assessment installments may be subordinated to bankruptcy law priorities.
See the discussion below under the caption "Bankruptcy Proceedings."
Although bankruptcy proceedings may forestall or delay a foreclosure and sale or a tax sale
of a delinquent parcel the assessment is secured by a lien which, assuming proper procedures are
followed, may be enforced against the parcel. The owner of an Assessment Parcel however, is not
personally obligated to pay the installment. See the discussion below under the caption "Payment
of the Assessment Not a Personal Obligation."
Further, except from the Reserve Fund, the City is not obligated to pay debt service on the
Bonds in the event assessment installment collections are delinquent, nor is the City obligated to
advance funds to pay debt service. See the discussion below under the caption "Limited City
Obligation to Pay Debt Service."
Finally, even if the debt service is timely paid the interest on a Bond may have to be
included in the gross income of the owner of the Bond by reason of some circumstance occurring
subsequent to issuance of the Bonds. See the discussion below under the caption "Loss of Tax
Exemption."
Depletion of Reserve Fund
Bond proceeds in an amount equal to the Reserve Requirement will be deposited in the
Reserve Fund. (See "SECURITY FOR THE BONDS - Reserve Fund"). Whenever there are
insufficient funds in the Redemption Fund to pay the next maturing installment of principal and
interest on the Bonds, the amounts necessary to make up the deficiency, to the extent available,
will be transferred from the Reserve Fund to the Redemption Fund. Amounts so transferred will
be reimbursed to the Reserve Fund from the payments of delinquent installments and from the
proceeds of redemption or sale of delinquent parcels.
The Reserve Fund is subject to reduction if and when the unpaid balance of the assessment
on a parcel is prepaid. Upon prepayment of an assessment in whole, the City is required to reduce
the Reserve Fund by a proportional reduction equal to the ratio of the amount initially provided for
the Reserve Fund to the total amount originally assessed. Upon prepayment of an assessment in
part only, the Reserve Fund is reduced by a proportionate lesser amount. A reduction in the
Reserve Fund by prepayment of an assessment is a permanent, non reimbursable reduction, but the
amount remaining in the Reserve Fund after a prepayment will bear approximately the same
proportionate relationship to outstanding Bonds as would be the case if the prepayment was not
made because accumulating assessment prepayments will be used to redeem Bonds earlier than
their maturity dates.
The Reserve Fund may be invested, and, to the extent that investment earnings will not
result in the interest on the Bonds becoming subject to federal income taxation, the investment
earnings may be deposited in the Reserve Fund thereby increasing the balance up to the Reserve
Requirement. Nevertheless, there is no assurance that the amount in the Reserve Fund will, at any
particular time, be sufficient to pay debt service on the Bonds nor that the Reserve Fund will be
fully reimbursed for any amounts expended for debt service.
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Foreclosure and Sale Proceedings
The City Council is obligated under certain conditions to institute foreclosure and sale
proceedings against Assessment Parcels which have delinquent assessment installments, and may
do so in other circumstances even if not so obligated. Foreclosure proceedings are instituted by the
bringing of an action in the superior court of the county in which the Assessment Parcel lies,
naming the owner and other interested persons as defendants. The action is prosecuted in the same
manner as other civil actions. Upon judgment of foreclosure the Assessment Parcel may be
offered for sale at a minimum price. The established minimum price will be sufficient to cover the
amount of the delinquent installments and unpaid interest together with penalties, costs, fees and
charges and the costs of execution and sale.
However, in the event an Assessment Parcel does not sell for the minimum price the court
may modify its judgment and reduce or eliminate the minimum price. In order to do so, however,
written notice of a hearing on the matter of reducing or eliminating the minimum price is required to
be given all registered Owners of the Bonds.
If at the hearing the court determines that such a sale will not result in an ultimate loss to the
Bondowners, or if the owners of seventy-five percent (75%) of the outstanding Bonds by principal
amount consent and the sale will not result in an ultimate loss to the nonconsenting owners of
Bonds, the court may reduce or eliminate the ininimu n price at which an Assessment Parcel may
be sold. Further, if the owners of seventy-five percent (75%) of the outstanding Bonds by
principal amount consent the court may reduce or eliminate the minimum price at which a
Assessment Parcel may be sold even if sale below the minimum price will result in an ultimate -loss
to nonconsenting owners of Bonds, provided that the court makes certain additional determinations
specified by statute including the reasonable unavailability of any other remedy acceptable to the
owners of seventy-five percent (75%) or more of the outstanding Bonds by principal amount.
Upon sale of the Assessment Parcel for less than the minimum price the remaining unpaid balance
of the assessment on the Assessment Parcel will be reduced by the difference between the
minimum price and the sale price. By such a reduction the aggregate principal amount of the
outstanding Bonds will exceed the aggregate principal amount of the unpaid assessment.
Under such circumstances, unless other funds are available or unless consenting owners of
Bonds agree to the protection from ultimate loss of nonconsenting owners of Bonds, proportionate
payments are to be made, periodically, of the unpaid principal and interest of the Bonds without
priority or preference between Bondowners as funds become available from collection of the
unpaid assessment installments. The maturity dates of the Bonds are to be disregarded and no
redemption premiums are to be payable on payments of the principal of Bonds the maturity dates of
which are subsequent to the date of any such payments. The Bondowners may be required to
surrender the Bonds for cancellation in order to participate in such proportionate payments.
Factors Affecting Parcel Value and Aggregate Values
The Bonds are secured by all of the unpaid assessments on all of the Assessment Parcels.
Therefore the value of the Assessment Parcels must also be evaluated in the aggregate. The
following are some of the factors which may affect the market for and value of particular
Assessment Parcels individually and in the aggregate.
The completion of Assessment District improvements. The basis for the assessment is the
benefit to the assessed parcels from the District improvements. Failure to complete the
improvements in a timely manner means that the assessment on the Assessment Parcels not served
or fully served by improvements may exceed the benefit, and even if benefit is not exceeded the
assessment may exceed a secure relationship to value.
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Geologic. topographic and climatic conditions. Values of Assessment Parcels can be
adversely affected by a variety of natural events and conditions. These include, without limitation:
- geologic conditions such as earthquakes;
- topographic conditions such as earth movements and floods; and
- climatic conditions such as droughts.
The possibility of the occurrence of some of these conditions and events has been taken
into account to a limited extent in the design of the District improvements and has been or will be
taken into account to a limited extent in the designs of other public improvements which may be
approved by the City or other public agencies. Building codes require that some of these
conditions be taken into account to a limited extent in the design of private improvements. Design
criteria in any of these circumstances are established upon the basis of a variety of considerations
and may change from time to time leaving previously designed improvements unaffected by more
stringent subsequently established criteria. In general, design criteria, at the time of their
establishment, reflect a balance between the present costs of protection and the future costs of lack
of protection, based in part upon a present perception of the probability that the condition will
occur and the seriousness of the condition should it occur. Also reflecting that balance are
decisions not to impose design criteria at all.
The City expects that one or more of these conditions may occur from time to time, and,
even if design criteria do exist, such conditions may result in damage to property improvements.
That damage may entail significant repair or replacement costs, and repair or replacement may
never occur. Under any of these circumstances, the value of the Assessment Parcels could
depreciate substantially notwithstanding the establishment of design criteria.
Legal requirements. Other events which may affect the value of an Assessment Parcel
include changes in the law or application of the law. Such changes may include, without limitation,
the following:
- local growth control initiatives;
- local utility connection moratoriums;
- local application of statewide tax and governmental spending limitation measures.
Prepayment of assessments. There is rarely a uniform relationship between the value of
Assessment Parcels and the proportionate share of debt service on the Bonds to be borne by the
Assessment Parcels.
One of the factors that may effect a significant change in the relationship between the
aggregate Assessment Parcel values and the assessment is the prepayment before final bond
maturity of the remaining balance of the assessments on particular Assessment Parcels. Should the
assessments on Assessment Parcels having a relatively high ratio of value to assessment be
prepaid, the security for the Bonds, as evidenced by the ratio of the aggregate remaining
Assessment Parcel values to the remaining balance of the assessment, will be reduced.
Other Possible Claims Upon the Value of an Assessment Parcel
While the assessment is secured by the Assessment Parcels the security only extends to the
value thereof that is not subject to priority and parity liens and similar claims relative to the
assessments.
Other governmental obligations may be authorized and undertaken or issued in the future
the tax, assessment or charge for which may become an obligation of one or more of the
Assessment Parcels and may be secured by liens on a parity with the liens of the assessments
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securing the Bonds.
In general, as long as installments of the assessment are collected on the county tax roll, the
installments and all other taxes, assessments and charges also collected on the tax roll are on a
parity. Questions of priority become significant when collection of one or more of the taxes,
assessments or charges is sought by some other procedure, such as foreclosure and sale. In the
event of proceedings of foreclosure for delinquency of installments of an assessment securing the
Bonds, the assessment will have priority over specific -amount special assessments levied
subsequent to the levy of the assessments but will be subordinate to those referred to above.
Otherwise, in the event of such foreclosure proceedings the installments of the assessment will
generally be on a parity with the other taxes, assessments and charges. The assessment will have
priority over non-governmental liens on an Assessment Parcel regardless of whether or not the
non-governmental liens are in existence at the time of the levy of the assessment.
While governmental taxes, assessments and charges are a common claim against the value
of an Assessment Parcel other less common claims may be relevant. One of the most serious in
terms of the potential reduction in the value that may be realized to pay the assessment installments
is a claim with regard to a hazardous substance. The City has experienced a soil and water
pollution problem below the central downtown area, that, according to a State -commissioned
study, may take 20 years and many millions of dollars to clean up. The contamination involves
PCE, or tetrachloroethene, a dry cleaning solvent, first found in a City well in 1989. Eleven
business have been named as confirmed sources of contamination; none of these businesses are
located in or are responsible for assessments in the District. An agreement is still being developed
between the City and the State Department of Toxic Substances Control to spell out responsibilities
and the cleanup plan. It is not known what impact the contamination and cleanup will have on
property values of parcels in the District.
In general, the owners and operators of an Assessment Parcel may be required by law to
remedy conditions of the Assessment Parcel relating to released or threatened releases of hazardous
substances. The federal Comprehensive Environmental Response, Compensation and Liability Act
of 1980, sometimes referred to as "CERCLA" or "Superfund Act", is the most well known and
widely applicable of these laws, but California laws with regard to hazardous substances are also
stringent and similar. Under many of these laws the owner or operator of a property is obligated to
remedy a hazardous substance condition whether or not the owner or operator has anything to do
with creating or handling the hazardous substance. The effect therefore, should any of the
Assessment Parcels be affected by a hazardous substance, is to reduce the marketability and value
of the parcel by the costs of remedying the condition.
The values shown in the section herein entitled "THE DISTRICT - Property Values" do not
take into account, unless otherwise noted, the possible reduction in marketability and value of any
of the Assessment Parcels by reason of the possible liability of the owner or operator for the
remedy of a hazardous substance condition of the Assessment Parcel.
Further, it is possible that liabilities may arise in the future with respect to any of the
Assessment Parcels resulting from the current existence on the Assessment Parcel of a substance
presently classified as hazardous but which has not been released or the release of which is not
presently threatened, or may arise in the future resulting from the existence on the Assessment
Parcel of a substance not presently classified as hazardous but which may in the future be so
classified. Further, such liabilities may arise not simply from the existence of a hazardous
substance but from the method of handling it. All of these possibilities could significantly affect
the value of an Assessment Parcel that is realizable upon delinquency.
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Bankruptcy Proceedings
Regardless of the priority of the assessment securing the Bonds over non-governmental
liens the exercise by the City of the foreclosure and sale remedy or by the county of the tax sale
remedy may be forestalled or delayed by bankruptcy, reorganization, insolvency or other similar
proceedings affecting the owner of an Assessment Parcel. The federal bankruptcy laws provide
for an automatic stay of foreclosure and sale or tax sale proceedings thereby delaying such
proceedings perhaps for an extended period. Delay in exercise of remedies, especially if the owner
owns Assessment Parcels the assessments of which are significant or if bankruptcy proceedings
are instituted with respect to a number of owners owning Assessment Parcels the assessments of
which are significant, may result in periodic assessment installment collections which, even in
conjunction with the Reserve Fund, may be insufficient to pay the debt service on the Bonds as it
comes due. Further, should remedies be exercised under the bankruptcy law against the
Assessment Parcels, payment of installments of the assessment may be subordinated to bankruptcy
law priorities. Therefore, certain claims may have priority over the assessment lien, even though
they would not were the bankruptcy law not applicable.
Payment of the Assessment Not a Personal Obligation
The owners of Assessment Parcels are not personally liable for the payment of the
assessment or the assessment installments. Rather, the assessment is an obligation only of the
Assessment Parcels. If the value of an Assessment Parcel is not sufficient to fully secure the
assessment on it the City has no recourse against the owner under the laws by which the
assessment has been levied and the Bonds have been issued.
Limited City Obligation to Pay Debt Service
The City has a limited obligation to advance funds to pay debt service on the Bonds in the
event assessment installment collections are insufficient. THE CITY'S OBLIGATION TO
ADVANCE FUNDS IS LIMITED, WILL NOT EXCEED THE AMOUNT ON
DEPOSIT FROM TIME TO TIME IN THE RESERVE FUND, AND IF SO
ADVANCED WILL REDUCE THE RESERVE FUND BY THE AMOUNT OF THE
FUNDS ADVANCED. Notwithstanding the limited nature of the City's obligation, the City
may, at its option and in its sole discretion, elect to advance available funds of the City in the
amount of any delinquent assessment installments to pay debt service on the Bonds. Should the
City do so it is entitled to reimbursement from the first proceeds of any payments of delinquent
installments or the redemption or sale of delinquent Assessment Parcels. OWNERS OF
BONDS MAY NOT RELY UPON THE CITY TO ADVANCE FUNDS TO PAY
DEBT SERVICE ON THE BONDS UPON DEPLETION OF THE RESERVE
FUND EVEN IF THE CITY MAY HAVE PREVIOUSLY DONE SO OR MAY DO
SO CONTEMPORANEOUSLY WITH RESPECT TO OTHER BONDS OR
OBLIGATIONS.
Loss of Tax Exemption
As discussed in the section herein entitled "LEGAL MATTERS - Tax Exemption," interest
on the Bonds could become includable in gross income for purposes of federal income taxation,
retroactive to the date of issuance, as a result of acts or omissions of the City subsequent to
issuance in violation of the City's covenants applicable to the Bonds. Should interest become
includable in gross income the Bonds are not subject to redemption by reason thereof and may
remain outstanding. The Bonds are subject to redemption for other reasons as discussed in the
section herein entitled "THE BONDS - Redemption."
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LEGAL MATTERS
All proceedings in connection with the issuance of the Bonds are subject to the approval of
Timothy J. Hachman, Esq., Bond Counsel for the City in connection with the Bonds. The form
of opinion of Bond Counsel is attached hereto as Appendix C and will be printed on each Bond.
Bond Counsel expresses no opinion with respect to this Official Statement. Bond Counsel's
engagement is limited to a review of the legal procedures required for the authorization of the
Bonds and to rendering an opinion as to the validity of the Bonds and the exemptions of interest on
the Bonds from income taxation (see section hereof entitled "TAX -EXEMPTION"). Timothy J.
Hachman, Esq. has been retained by the City as Bond Counsel on a contingent fee, payable solely
from the proceeds of the Bond issue.
TAX EXEMPTION
In the opinion of Bond Counsel, under existing laws, regulations, rulings and court
decisions, and assuming compliance with certain covenants described herein, interest on the Bonds
is exempt from personal income taxes imposed by the State of California, and is excluded from
gross income for federal income tax purposes, and is not an item of tax preference for purposes of
the federal alternative minimum tax imposed on individuals and corporations. However, Bond
Counsel notes that, with respect to corporations (as defined for federal income tax purposes),
interest on the Bonds will be included in determining corporate adjusted current earnings, a portion
of which may increase the alternative minimum taxable income of such corporations.
Bond Counsel's opinion as to the exclusion from gross income of interest on the Bonds is
subject to the condition that the City comply with all requirements of the Internal Revenue Code of
1986 (the "Code"), which must be satisfied subsequent to the issuance of the Bonds to assure that
such interest will not become includable in gross income for federal income tax purposes. Failure
to comply with such requirements could cause the interest on the Bonds to be included in gross
income for federal income tax purposes retroactive to the date of issuance of the Bonds. The City
has covenanted to comply with all such requirements. Bond Counsel has not undertaken to
determine (or to inform any person) whether any actions taken (or not taken) or events occurring
after the date of issuance of the Bonds may affect the tax status of interest on the Bonds.
Although Bond Counsel has rendered an opinion that interest on the Bonds is excluded
from gross income for federal income tax purposes, the ownership or disposition of, or the accrual
or receipt of interest on, the Bonds may otherwise affect the federal income tax liability of the
recipient. The extent of these other tax consequences will depend upon the recipient's particular
tax status and/or other items of income or deductions, and Bond Counsel expresses no opinion
regarding any such consequences. Accordingly, all potential purchasers should consult their tax
advisors before buying any of the Bonds.
Bond Counsel expresses no opinion regarding other income tax consequences caused by
ownership of, or receipt of interest on, the Bonds.
NO LITIGATION
There is no action, suit, or proceeding known by the City to be pending at the present time
restraining or enjoining the delivery of the Bonds or in any way contesting or affecting the validity
of the Bonds or any proceedings of the City taken with respect to the execution or delivery thereof.
A no litigation certificate executed by the City Attorney shall be required to be delivered to the
original purchaser of the Bonds simultaneously with the delivery of the Bonds.
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NO RATING
The City has not made, and does not contemplate making, application to any rating agency
for the assignment of a rating to the Bonds.
UNDERWRITING
The Bonds are being purchased by Seidler -Fitzgerald Public Finance (the "Underwriter").
The Underwriter has agreed to purchase the Bonds from the City at a price of $ ,
which is equal to the principal amount of the Bonds less an underwriter's discount of $ ,
less an original issue discount of $ . The public offering prices may be changed from time
to time by the Underwriter. The Underwriter may offer and sell Bonds to certain dealers and
others at a price lower than the offering price stated on the cover page of this Official Statement.
MISCELLANEOUS
Quotations from and summaries and explanations of the Bonds, the Resolution of
Issuance, and the statutes and other documents referenced herein, do not purport to be complete,
and reference is made to said documents and statutes for complete statements of their provisions.
Appropriate City officials, acting in their official capacities, have reviewed this Official
Statement and have determined that, as of the date hereof, the information contained herein is, to
the best of their knowledge and belief, true and correct in all material respects and does not contain
an untrue statement of a material fact or omit to state a material fact necessary in order to make the
statements made herein not misleading. This Official Statement is not to be construed as a contract
or agreement between the City and the purchasers or registered owners of any of the Bonds.
CITY OF LODI
By:
Assistant City Manager
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APPENDIX A
Economic Profile of the City of Lodi
The City, whose boundaries encompass approximately 5,785 acres or 12 square miles, is
located in California's San Joaquin Valley, 90 miles east of San Francisco and ten miles north of
Stockton. It is located on the main line of the Southern Pacific Railroad and is within five miles of
Interstate 5. The City was incorporated as a General Law city on December 6, 1906, and operates
under a Council -Manager form of government.
Lodi is a major agricultural shipping center in the San Joaquin Valley. The prime
agricultural land surrounding the City is a major producer of wine and brandy grapes, primarily the
Fame Tokay variety. In addition to the local wineries, a large cannery, Pacific Coast Producers, is
a prominent employer. The City is also the home of the west coast General Mills plant for the
production of cereals and food mixes.
Population
The historic population estimates of the City are shown in the following table.
Source: California State Department of Finance
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CITY OF LODI
Population
(as of January 1)
Year
Population
1991
52,700
1992
52,900
1993
52,900
1994
53,000
1995
53,600
1996
54,500
Source: California State Department of Finance
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Employment
The largest employers as of June 1995 are set forth below.
Company
Lodi Unified School District
General Mills
Pacific Coast Producers
Lodi Memorial Hospital
City of Lodi
Valley Industries
Guild Winery
George Reed Co.
Interlake/Lodi Fab
Farmers and Merchants Bank
RM Holz
Mervyn's
Source: City of Lodi
Effective Buying Income
CITY OF LODI
Largest Employers
June 1995
Product/Service Employees
Public Education
2,247
Cereals and Food Mixes
897
Can Manufacturer and Cannery
300-1,500
Healthcare
650
Government
410
Trailer Hitches
300
Wines, Brandy and Champagne
212
Building Materials, Cement
190
Machine Fabrication
185
Banking
183
Rubber Products
170
Retail
170
The following table summarizes the total effective buying income for the City, the State and
the United States for the period 1991 through 1995.
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CITY OF LODI
Effective Buying Income
As of January 1
Year and Area
Total Effective
Median Household
Buying Income
Effective
(in thousands)
Buying Income
1991
Outlets July 1
Taxable Sales
City of Lodi
$ 2,233,467
$23,497
California
444,988,647
30,713
United States
3,287,489,252
25,976
1992
4,339
1,727,262
City of Lodi
2,446,540
25,554
California
477,784,771
33,342
United States
3,499,365,237
27,912
1993
City of Lodi
2,468,450
28,274
California
490,749,649
36,943
United States
3,728,967,043
32,073
1994
City of Lodi
2,573,960
28,716
California
509,152,677
37,686
United States
3,916,947,023
33,178
1995
City of Lodi
2,641,525
29,830
California
528,958,745
39,330
United States
4,169,724,052
35,056
Source: Surve,, o�ying Power, Sales and Marketing Management Magazine
Commercial Activity
A summary of historic taxable sales within the City is shown below.
(1) First three quarters only; represents a 6.6% increase over taxable sales in the fust three quarters of 1993.
Source: State Board of Equalization
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CITY OF LODI
Taxable Transactions
($'s in thousands)
Year
Outlets July 1
Taxable Sales
1989
4,571
$1,690,162
1990
4,815
1,779,380
1991
4,498
1,723,746
1992
4,339
1,727,262
1993
4,339
1,696,736
1994(1)
4,166
1,316,543
(1) First three quarters only; represents a 6.6% increase over taxable sales in the fust three quarters of 1993.
Source: State Board of Equalization
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Construction Activity
Building activity for the past five years in the City is shown in the following table.
CITY OF LODI
Total Building Permit Valuations
($'s in thousands)
Source: Economic Sciences Corporation, California Building Permit Activit
Assessed Valuations
The following table presents a five-year history of assessed valuations of taxable properties
within the City's boundaries.
CITY OF LODI
Assessed Valuations
($'s in thousands)
Fiscal
Residential
Residential
Non -Residential
Total
Calendar Year
Permits
Valuation
Valuation
Valuation
1989
968
$ 93,868
$13,813
$150,857
1990
1,418
136,691
78,222
214,913
1991
954
100,027
77,965
177,993
1992
1,106
109,733
51,691
161,424
1993
1,174
121,147
67,410
188,557
1994
1,114
111,600
39,767
151,427
Source: Economic Sciences Corporation, California Building Permit Activit
Assessed Valuations
The following table presents a five-year history of assessed valuations of taxable properties
within the City's boundaries.
CITY OF LODI
Assessed Valuations
($'s in thousands)
Fiscal
Secured
Unsecured
Utility
Gross
Year
V111lue
Value
value
Assessed Value
1989-90
$5,163,523
$625,499
$13,826
$5,802,848
1990-91
5,815,783
680,990
13,407
6,510,180
1991-92
6,489,748
688,949
12,389
7,191,087
1992-93
6,908,249
707,843
8,627
7,624,720
1993-94
7,273,928
724,165
10,645
8,008,738
1994-95
7,35 8,321
744,923
11,171
8,114,415
Source: San Joaquin County Assessor's Office
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