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Reso 0713-01/1985 199 RESOLUTION NO. 713 RESOLUTION OF THE BOARD OF DIRECTORS AUTHORIZING AND PROVIDING FOR THE ISSUANCE OF BONDS PURSUANT TO THE "IMPROVEMENT BOND ACT OF 1915" WHEREAS, the BOARD OF DIRECTORS of the SAN MARCOS COUNTY WATER DISTRICT, CALIFORNIA, has heretofore undertaken proceedings pursuant to the "Municipal Improve- ment Act of 1913", being Division 12 of the Streets and Highways Code of the State of California, and has confirmed assessments upon lands within a special assessment district described in a Resolution of Intention previously adopted for said improve- ments, said special assessment District known and designated as ASSESSMENT DISTRICT NO. 83-1 (MYRTLE AVENUE SEWERS) (hereinafter referred to as the "Assessment District"); and, WHEREAS, said proceedings provided for the issuance of bonds pursuant to the "Improvement Bond Act of 1915", being Division 10 of the Streets and Highways Code of the State of California, and it is necessary to establish terms and provisions of such issuance; and, WHEREAS, the final unpaid balance to assessment, as well as the denomination and amounts to mature each year, cannot be determined until following the 30-day cash collection period after the recordation of said assessment. NOW, THEREFORE, IT IS HEREBY RESOLVED AS FOLLOWS: SECTION 1. That the above recitals are all true and correct. SECTION 2. Unpaid Assessments. The Auditor shall, immediately upon the comple- tion of the 30-day cash collection period, determine the assessments which are unpaid and the aggregate amount thereof as authorized by Section 8621 of the Streets and Highways Code of the State of California. SECTION 3. Registered Bonds. Said bonds shall be issuable only as fully regis- tered bonds in the denomination of $5,000, or any integral multiple thereof, except for one bond maturing in the first year of maturity, which shall include the amount by which the total issue exceeds the maximum integral multiple of $5,000 contained therein. SECTION 4. Date of Bonds. All of said bonds shall be dated the 2nd day of March, 1985, and interest shall accrue from that date. SECTION 5. Maturity and Denomination. The bonds shall be issued in serial form with annual maturities on July 2nd of every year succeeding the first ten (10) months after their date, until the whole is paid. The amount maturing each year shall be such as to result in approximately equal annual debt service during the term of the issue as reflected by the interest rate and/or rates and principal amounts maturing in the respective years of maturity, and the Auditor or designated Registrar shall, immediately upon completion of the cash collection period, prescribe the denominations of the bonds, which shall be in convenient amounts, not necessarily equal, and shall further provide for their issuance and delivery. SECTION 6. Interest. Each bond shall be of a single maturity and shall bear interest at the rate as set forth in the accepted bid proposal for said bonds from the interest payment date next preceding the date on which it is authenticated and registered, unless said bond is authen- ticated and registered as of an interest payment date, in which case it shall bear interest from said interest payment date, or unless said 201 bond is authenticated and registered prior to the first interest pay- ment date, in which case it shall bear interest from its date, until payment of its principal sum has been discharged. SECTION 7. Place of Payment. The principal and interest on the bonds shall be payable in lawful money of the United States of America at the office of the Auditor, or such paying agent as may be designated by Resolu- tion of the legislative body. Principal and interest on said bonds shall be paid by check or draft to the registered owner thereof at his address as it appears on the books of registration, or at such address as may have been filed with the Auditor for that purpose, as of the 15th day immediately preced- ing said interest payment date. SECTION 8. Redemption. This bond, or a portion thereof if issued in a denomina- tion greater than $5,000, shall be subject to redemption and payment in advance of maturity in increments of $5,000 as provided in Section 8768 of the Streets and Highways Code, on the 2rid day of January or July in any year, by giving the notice provided in said law to the registered owner thereof at his address as it appears on the books of registration and by paying principal of and accrued interest on such , redeemed amount, together with a premium equal to five percent (5%) of the redeemed principal amount. If less than the entire bond is redeemed, the unredeemed portion shall be reissued to the registered owner thereof. ; SECTION 9: Transfer of Registered Bonds. Any fully registered bond may, in accordance with its terms, be transferred upon the books of registra- tion required to be kept pursuant to the provisions of Section ll by the owner in whose name it is registered, or by his duly authorized attorney or legal representative, upon surrender of such fully registered bond for registration of such transfer, accompanied by delivery of a written instrument or transfer in a form approved by the Auditor and by the owner of said bonds, duly executed. The Auditor shall require the payment by the bondholder requesting such transfer of any tax or other governmental charge required to be paid with respect to such transfer and such charges as provided for in the system of registration for registered debt obligations. No transfer of fully registered bonds shall be required to be made during the fifteen (15) days next preceding each interest payment date. SECTION 10: Exchange of Registered Bonds. Fully registered bonds may be exchanged at the office of the Auditor, or designated transfer agent, for a like aggregate principal amount of bonds of the same series, interest rate and maturity, sub,~ect to the terms and conditions provided in the system of registration for registered debt obliga- tions, including the payment of certain charges, if any, upon surrender and cancellation of this bond. Upon such transfer and exchange, a new registered bond or bonds of any authorized denomina- tion or denominations of the same maturity for the same aggregate principal amount will be issued to the transferee in exchange therefor. SECTION 11. Books of Registration. There shall be kept by the Auditor sufficient books for the registration and transfer of the bonds and, upon pre- sentation for such purpose, the Auditor shall, under such reasonable regulations as it may prescribe, register or transfer or cause to be registered or transferred, on said register, bonds as hereinbefore provided. 203 SECTION 12. Execution of Bonds. The bonds shall be executed in facsimile by the Auditor and by the Secretary, and the corporate seal shall be imprinted in facsimile on the bonds. The bonds shall then be deli- vered to the transfer agent and registrar, for authentication and registration. In case an officer who shall have signed or attested to any of the bonds by facsimile or otherwise shall cease to be such officer before the authentication, delivery and issuance of the bonds, such bonds nevertheless may be authenticated, delivered and issued, and upon such authentication, delivery and issue, shall be as binding as though those who signed and attested the same had remained in office. SECTION 13. Authentication. Only such of the bonds as shall bear thereon a cer- tificate of authentication substantially in the form below, manually executed by the transfer agent and registrar, shall be valid or obligatory for any purpose or entitled to the benefits of this Reso- lution, and such certificate of the transfer agent and registrar shall be conclusive evidence that the bonds so authenticated have been duly executed, authenticated and delivered hereunder, and are entitled to the benefits of this Resolution. FORM OF CERTIFICATE OF AUTHENTICATION AND REGISTRATION This bond has been authenticated and registered on SAN MARCOS COUNTY WATER DISTRICT as Transfer Agent and Registrar By: SECTION 14. Negotiability, Registration and Transfer of Bonds. The transfer of any bond may be registered only upon such books of registration upon surrender thereof to the transfer agent and registrar, together with an assignment duly executed by the owner or his attorney or legal representative, in satisfactory form. Upon any such registration of transfer, a new bond or bonds shall be authenticated and delivered in exchange for such bond, in the name of the transferee, of any denomi- nation or denominations authorized by this Resolution, and in an aggregate principal amount equal to the principal amount of such bond or principal amount of such bond or bonds so surrendered. In all cases in which bonds shall be exchanged or transferred, the transfer agent and registrar shall authenticate at the earliest practical time, bonds in accordance with the provisions of this Resolution. All bonds surrendered in such exchange or registration transfer shall forthwith be cancelled. The legislative body may make a charge for every such exchange or registration of transfer of bonds sufficient to reimburse it for any tax or other governmental charge required to be paid with respect to such exchange or registration of transfer. The transfer agent and registrar shall not be required to make such exchange or registration of transfer of bonds during the fifteen (15) days immediately preceding any January 2nd or July 2nd. SECTION 15. Ownership of Bonds. The person in whose name any bond shall be registered shall be deemed and regarded as the absolute owner thereof for all purposes, and payment of or on account of the principal and redemption premium, if any, of any such bond, and the interest on any such bond, shall be made only to or upon the order of the registered owner thereof or his legal representative. All such payments shall be valid and effectual to satisfy and discharge the liability upon such bond, including the redemption premium, if any, and interest thereon, to the extent of the sum or sums so paid. SECTION 16. Mutilated, Destroyed, Stolen or Lost Bonds. In case any bond secured hereby shall become mutilated or be destroyed, stolen or lost, the legislative body shall cause to be executed and authenticated a new bond of like date and tenor in exchange and substitution for and upon 205 the cancellation of such mutilated bond or in lieu of and in substi- tution for such bond destroyed, stolen or lost, upon the owner's paying the reasonable expenses and charges in connection therewith, and, in the case of a bond destroyed, stolen or lost, his filing with the legislative body of evidence satisfactory to it and to the Auditor thereof that such bond was destroyed, stolen or lost, and of his ownership thereof, and furnishing the legislative body with indemnity satisfactory to it. SECTION 17. Cancellation of Bonds. All bonds paid or redeemed, either at or before maturity, shall be cancelled upon the payment or redemption of such bonds, and shall be delivered to the transfer agent and regis- trar when such pa3rment or redemption is made. All bonds cancelled under any of the provisions of this Resolution shall be destroyed by the transfer agent and registrar, which shall execute a certificate in duplicate describing the bonds so destroyed, and shall retain said executed certificate in its permanent files for the issue. SECTION 18. Reserve Fund. Pursuant to Part 16 of Division 10 of the California Streets and Highways Code, as amended, there shall be created a special reserve fund for the bonds to be designated by the name of the Assessment District and specified as the special "Reserve Fund". The Reserve Fund shall be funded as follows: The initial designated amount shall be deposited in the Reserve Fund out of the bond proceeds. Periodically, at such times as may be determined by the legislative body, monies representing interest on funds on deposit in the Reserve Fund shall be transferred to the Reserve Fund, but only to the extent that the amount of interest credited thereto shall not result in the bonds becoming "arbitrage bonds" as defined in Section 103(c) of the Internal Revenue Code of 1954, as amended, and the regulations promulgated and proposed thereunder. Monies in the Reserve Fund shall be applied as follows: A. Amounts in said Reserve Fund shall be transferred to the Redemp- tion Fund for the bonds if, as a result of delinquencies in the payment of assessments, there are insufficient monies in said Redemption Fund to pay principal of and interest on the bonds. Amounts so transferred shall be repaid to the Reserve Fund from proceeds from the redemption or foreclosure of property with respect to which an assessment is unpaid and from payments of the delinquent assessments; B. Interest earned on monies in the Reserve Fund shall accrue to the Reserve Fund only to the extent that the amount of interest credited thereto shall not result in the bonds becoming "arbi- trage bonds" as defined in Section 103(c) of the Internal Revenue Code of 1954, as amended, and the regulations promulgated thereunder; C. Whenever monies in the Reserve Fund are sufficient to retire all of the bonds outstanding, plus accrued interest thereon, such money shall be transferred to the Redemption Fund for the bonds and collection of the remaining unpaid assessments shall cease. SECTION 19. Improvement Fund. The proceeds from the sale of the bonds, after deposit of required amounts in the Reserve Fund and the Redemption Fund, shall be placed in the fund hereby created, pursuant to Sections 10602 and 10424 of the California Streets and Highways Code, as amended, which shall be called the "Improvement Fund", and the monies in said Fund shall be used only for the purposes authorized in said assessment proceedings. Any surplus in the Improvement Fund after completion of the improvements shall remain in the Improvement Fund for a period not less than two (2) years from the receipt of bond proceeds as provided in Section 10427.1 of the California 263 Streets and Highways Code, and thereafter shall be utilized or dis- tributed as determined by the legislative body. SECTION 20. Redemption Fund. Principal of and interest on said bonds shall be paid out of the Redemption Fund created pursuant to Section 8671 of the California Streets and Highways Code. Accrued interest paid by the purchaser of the bonds, if any, shall be deposited in the Redemp- tion Fund. In all respects not recited herein, said bonds shall be governed by the provisions of the "Improvement Bond Act of 1915", Division lO of the California Streets and Highways Code, as amended. SECTION 21. Covenant to Foreclose. The legislative body hereby covenants that upon default of any assessment payment due, it will cause foreclosure proceedings to be brought within one hundred fifty (150) days of such default and thereafter diligently prosecute to completion such proceedings. SECTION 22. Order to Print and Authenticate Bonds. The Auditor is hereby instructed to cause bonds, as set forth above, to be printed, and to proceed to cause said bonds to be authenticated and delivered to an authorized representative of the purchaser, upon payment of the purchase price as set forth in the accepted proposal for the sale of bonds. SECTION 23. Arbitrage Certificate. On the basis of the facts, estimates and circumstances now in existence and in existence on the date of issue of the bonds, as determined by the Auditor, said Auditor is hereby authorized to certify that it is not expected that the proceeds of the issue will be used in a manner that would cause such obligations to be arbitrage bonds. Such certification shall be delivered to the purchaser together with the bonds. SECTION 24. Designation of Paying Agent. The CALIFORNIA FIRST BANK is hereby designated paying agent with respect to these proceedings and the bonds to be issued. PASSED, APPROVED and ADOPTED at a Regular Meeting of the Board of Directors of the San Marcos County Water District held this 15th day of January, 1985, by the following roll call vote: AYES: Directors: Newport, Mahr, Ferguson, Rutherford NOES: Directors: None ABSENT: Directors: Mason ABSTAIN: Directors: None ~- L'~1 7 ? PreSident, Board of Directors ATTEST: San Marcos County Water District Secretary, Board of Directors San Marcos County Water District