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Reso 0501-12/1978 EXHIBIT "A" RESOLUTION 501 NOTICE INVITING BIDS $898,400 IMPROVEMENT BONDS ASSESSMENT DISTRICT NO. 76-1 (LAS POSAS) SAN MARCOS COUNTY WATER DISTRICT NOTICE IS HEREBY GIVEN that a representative of the Board of Directors of the San Marcos County Water District, County of San Diego, State of California, will receive sealed bids for the purchase of the following described bonds at the office of the Water District, 788 San Marcos Boulevard, San Marcos, California, 92069, up to the hour of 2:00 P.M., January 8, 1979. Said bids will be opened at said time and place. The bonds to be sold are bonds to be issued to represent unpaid assessments levied upon the lands within Assessment District No. 76-1 of said Water District, to pay the cost of the acquisition of certain property and the construction of certain waterworks system improvements, appurtenances and all appurtenant work in connection therewith within said Assessment District, which assessments have been made under the Municipal Improvement Act ofl913, Division 12 of the Strcets and Highways Code. Said bonds will Be issued under the Improvement Bond Act of 1915, Division 10 of the Streets and Highways Code; and, except as otherwise provided in the Municipal Improvement Act of 1913, the provisions of said Division 10 apply to said bonds and govern as to the issuance, collection and enforcement thereof. Proposals for the purchase of the bonds will be made and considered subject to the following terms and conditions: BONDS: $898,400 principal amount of the bonds numbered consecutively from 1 to 180, dated January 2, 1979, all in the denomination of $5,000 (except Bond No. 1, which is in the denomination of $3,400). The bonds are authorized to be issued pursuant to the proceedings for said Assessment District. The bonds will mature in consecutive numerical order over a period commencing July 2, 1980 and ending July 2, 1999 according to the following schedule: Principal Principal Year Maturing Year Maturing 1980 ............................... $ 3,400 1990 ............................... $45,000 1981 ............................... 20,000 1991 ............................... 45,000 1982 ............................... 25,000 1992 ............................... 50,000 1983 ............................... 25,000 1993 ............................... 55,000 1984 ............................... 25,000 1994 ............................... 60,000 1985 ............................... 30,000 1995 ............................... 65,000 1986 ............................... 30,000 1996 ............................... 70,000 1987 ............................... 35,000 1997 ............................... 75,000 1988 ............................... 35,000 1998 ............................... 80,000 1989 ............................... 40,000 1999 ............................... 85,000 Interest on the bonds for the first twelve months will be payable on January 2, 1980. Thereafter interest will be payable semi-annually on July 2 and January 2 of each year. REDEMPTION: Any bond may be redeemed on any January 2 or July 2 prior to its fixed maturity date, at the option of the Water District, upon giving the notice provided in the Improvement Bond Act of 1915 and upon payment of the principal amount thereof and interest accrued thereon to the date of redemption, plus a redemption premium of five percent (5%) of the principal amount thereof. AUTHORITY FOR ISSUANCE: The improvement proceedings for San Marcos County Water District Assessment District No. 76-1 are being conducted pursuant to the Municipal Improvement Act of 1913 in accor- dance with Resolution of Intention No. 476 adopted by the Board of Directors on July 3, 1978. The Bonds repre- sent the unpaid assessments levied against private property in the Assessment District in accordance with the provisions of the Municipal Improvement Act of 1913, and will be issued pursuant to the Improvement Bond Act of 1915. VALIDATION PROCEEDINGS: The Water District has caused to be filed in the Superior Court of the State of California in and for the County of San Diego an action brought pursuant to the in rein validation pro- cedures provided for in Section 860, and following, of the Code of Civil Procedure of the State of California, being Case No. N 11347, entitled SAN MARCOS COUNTY WATER DISTRICT, a municipal corporation of the State of California, Plaintiff, vs. ALL PERSONS INTERESTED IN THE MATTER OF THE VALIDITY OF THE ASSESSMENTS LEVIED AND CONFIRMED BY THE SAN MARCOS COUNTY WATER DISTRICT IN ASSESSMENT DISTRICT NO. 76-1, Defendants. The primary issues raised in such action relate to the effect of Article XIIIA of the California Constitution (Prop- osition 13 - the Jarvis-Gann Initiative) upon the validity of the assessments levied in the proceedings for the Assessment District. On December 12, 1978 judgment was entered in said action in favor of the plaintiff, adjudging, declaring, and decreeing, among other things, that: 1) The assessments, and each of them, confirmed and levied in Assessment District No. 76-1 proceedings by the Board of Directors of the San Marcos County Water District, plaintiff, were duly, properly and legally con- firmed and levied pursuant to and in accordance with the provisions of all laws, statutory or constitutional or decisional, applicable to the confirmation and levy of said assessments; and 2) Said assessments and each Of them are not special taxes as that term is used in Section 4 of Article XIIIA of the Constitution of the State of California. Said assessments are benefit assessments which were confirmed and levied, and are to be enforced and collected, in return for benefits received and to be received from improve- ments to be acquired and constructed by and through the proceedings in which said assessments were so con- firmed and levied. For further information concerning the validation proceedings see the files for Case No. N11347 in the office of the Clerk of the Superior Court of the State of California in and for the County of San Diego. ' SECURITY OF THE BONDS: The bonds herein offered for sale are issued upon and secured by unpaid assessments together with interest thereon; and said 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; and all the bonds are secured by the monies in the Redemption Fund created pursuant to said proceedings and by the unpaid assessments levied to provide for payment of said acquisitions and improvements, and, as to principal and interest, are payable exclusively out of said Redemption Fund. The unpaid assessments are collected in semi-annual installments, together with interest on the declining bal- ances, on the tax roll on which general taxes for 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 as 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 non-payment of general taxes. In the event of a delinquency in the payment of any installment of principal and interest appearing on the tax roll, the Water District is obligated to advance from surplus funds the amounts of such delinquency to the Redemption Fund. Passage on June 6, of the Jarvis-Gann Initiative (Proposition 13), now Article XIII A of the California Con- stitution, will sharply reduce the amount of general property tax revenues received by the Water District, begin- ning in the fiscal year 1978/79; such reduction in tax revenues makes it less likely that the Water District will have surplus funds to advance to the Redemption Fund to cover delinquencies. In addition, passage ofsaid lnitiative and subsequent statutory enactments eliminate the formerly applicable mandatory duty on the part of the Water District to levy and collect a special tax (in the amount necessary to meet delinquencies, but not to exceed 10¢ per $100 of assessed valuation of property within the Water District) if surplus funds are not available to cover delinquencies. LETTER OF CREDIT: In order to provide the Water District with a source of funds which it could advance to the Redemption Fund in the event of deficiencies in said fund, the Water District and various property owners in the Assessment District have entered into agreements which will enable the Water District to obtain letters of credit from Security Pacific National Bank under which letters of credit the Water District may draw funds for such purpose. The maximum aggregate amount available under the letters of credit will be equal to the maxi- mum annual debt service on the Bonds; and, although said amount will be reduced in the event of a reduction in the maximum annual debt service, additional funds will not be made available thereunder to replace amounts paid to the Water District pursuant to the letters of credit. FORECLOSURE POLICY: The Board of Directors of the Water District by resolution adopted on Dec- ember 4, 1978 declared its intention to foreclose through Superior Court action, pursuant to the provisions of Part 14 (commencing with Section 8830) of the Improvement Bond Act of 1915, any and all properties delinquent in payment for any installment of principal or interest on an assessment levied in connection with the Assessment District. TERMS OF SALE INTEREST RATE: The bonds shall bear interest from their date at a rate or rates to be determined at the sale thereof, not to exceed the legal maximum of eight percent (8%) per annum. Said bonds shall be represented by two coupons payable semi-annually on January 2 and July 2 in each year except the first coupon, which will be for interest from the date of said bonds to January 2, 1980. Bidders may specify any number of separate interest rates, and any rate may be repeated as often as desired; provided, however, that (i) the difference between the highest and lowest coupon rates specified in any bid shall not exceed two percent (2%); (ii) each interest rate specified must be in a multiple of 1/20 of 1% and a zero rate of interest cannot be specified; (iii) no bond shall bear more than one rate of interest, no interest shall be evidenced by more than one coupon and supplemental coupons will not be permitted; (iv) each bond shall bear interest from its date to its stated maturity date at the interest rate must be paid in bank funds as part of the purchase price, and no bid will be accepted which provides for the can- cellation and surrender of any interest coupon or for the waiver of interest or other concession by the bidder as a substitute for payment in full of the purchase price in bank funds. Bids which do not conform to the terms ofthis paragraph will be rejected. DISCOUNT: No discount may be specified which is in excess of eight percent (8%) of the par value of the bonds offered for sale. HIGHEST BID: Each proposal must be for all of the bonds. The bonds will be awarded to the highest responsible and responsive bidder bidding for the bonds, considering the interest rates specified and the premium offered, if any, or the discount bid, if any. The highest bid will be determined by deducting the amount of the premium bid (if any) from, or by adding the amount of the discount bid (if any) to the total amount of interest which the Water District would be required to pay from the date of the bonds to their respective maturity dates at the coupon rates specified in the bid; and the award will be made on the basis of the lowest net cost to the Water District. In the event two or more bidders have the same lowest net cost to the Water District the awards shall be made by lot. The purchaser must pay accrued interest from the date of the bonds to the date of delivery. All interest will be computed on a 360-day year basis. The cost of printing the bonds will be borne by the Water District. DISCOUNT: No bid for less than ninety-two percent (92%) of par will be considered. FORM"OF BID: Each bid, together with the bid check, must be in a sealed envelope, addressed to the San Marcos County Water District, 788 San Marcos Boulevard, San Marcos, California 92069, with the envelope and bid clearly marked as follows: Proposal for Improvement Bonds San Marcos County Water District Assessment District No. 76-1 (Las Posas) All proposals must be delivered to the office of the San Marcos County Water District, 788 San Marcos Boule- vard, San Marcos, California 92069, up to the hour of 2:00 p.m., January 8, 1979. BID CHECK: With each proposal must be submitted a cashier's check for $30,000 drawn on a bank or trust company transacting business in the State of California, payable to the order of the San Marcos County Water District, to secure the Water District from any loss resulting from the failure of the bidder to comply with the terms of his bid. Checks of all bidders (except the successful bidder) will be returned by the Water District by mail promptly following the sale date above specified. No interest will be paid upon the deposit made by any bidder. NET INTEREST COST: Bidders are requested, but not required, to supply an estimate of the total net interest cost and the estimated net interest rate to the Water District on the basis of their respective bids, which shall be considered as informative only and not binding on either the bidder or the Water District. RIGHT OF REJECTION: The Water District reserves the right, in its discretion, to reject any and all proposals and to waive any irregularity or informality in any proposal. PROMPT AWARD: The Water District will take action awarding the bonds or rejecting the bids not later than 36 hours after the expiration of the time herein prescribed for the receipt of proposals, unless such time of award is waived by the successful bidder. PLACE OF DELIVERY: Delivery of the bonds will be made to the successful bidder at the office of the Water District, 788 San Marcos Boulevard, San Marcos, California 92069, or at Jeffries Banknote Company, 1330 West Pico Boulevard, Los Angeles, California 90015, or at any other place agreeable to the Water District and the successful bidder. PLACE OF DELIVERY; RIGHT OF CANCELLATION: It is expected the bonds will be ready for delivery within 15 days after their date. In the event the Water District shall fail to execute the bonds and tender the same for delivery within sixty (60) days from the date of sale thereof, the successful bidder shall have the right to cancel the contract of purchase, at his option; and, in case of such cancellation, the Water District shall return to the successful bidder the deposit which accompanied his bid. EXECUTION AND REGISTRATION: Coupon bonds will be issued by the Water District. The bonds will be executed by the manual signature of at least one official authorized to execute the bonds. The bonds are registerable only as to both principal and interest, and after being registered are not subject to discharge from registration. PAYMENT: Both principal and interest are payable in lawful money of the United States of America at the office of the Water District in San Marcos, California or at the main office of the Water District's paying agent. TAX EXEMPT STATUS: In the event that prior to the delivery of the bonds either (a) the income received by any private holder from bonds of the same type and character shall be declared to be taxable (either at the time of such declaration or at any future date) under any federal income tax laws, either by the terms of such laws or by ruling of a federal income tax authority or official which is followed by the Internal Revenue Service, or by decision of any federal court, or (b) any federal income tax law is adopted which will have a substantial adverse tax effect on holders of the bonds as such, the successful bidder may, at his option, prior to the tender of the bonds by the Water District, be relieved of his obligation under the contract to purchase the bonds; and in such case the deposit accompanying his bid will be returned. LEGAL OPINION: The opinion of Stradling, Yocca, Carlson & Rauth, Attorneys at Law, approving the validity of said bonds will be furnished to the successful bidder at or prior to the date of delivery of the bonds, at no expense to the bidder. A copy of the legal opinion regarding the bonds, certified by the officer in whose office the original is filed, will be printed on each bond without charge to the successful bidder. ARBITRAGE CERTIFICATE: At the time of the delivery of and payment for the bonds, the Water District will deliver a certificate signed by an appropriate officer of the Water District, certifying its reasonable expecta- tions on the date of the issue of the bonds as to the future events regarding the bonds relative to a determination that the proceeds of the bonds will not be used in a manner that would cause the bonds to be arbitrage bonds. NO LITIGATION CERTIFICATE: At the time of payment for and delivery of said bonds, the Water Dis- trict will furnish the successful bidder a certificate that there is no litigation pending affecting the validity of the bonds. OFFICIAL STATEMENT: The Water District has had prepared an Official Statement, a copy of which will be furnished upon request to the Water District or to Stone & Youngberg Municipal Financing Consultants, Inc., the financing consultant to the Water District. One hundred (100) copies of said Official Statement will be made available to the successful bidder without charge. Requests for an Official Statement or for other information concerning the Assessment District should be addressed to: San Marcos County Water District 788 San Marcos Boulevard San Marcos, California 92069 Stone & Youngberg Municipal Financing Consultants, Inc. 1541 Wilshire Boulevard, Suite 402 Los Angeles, California 90017 Stone & Youngberg Municipal Financing Consultants, Inc. One California Street, Suite 2750 San Francisco, California 94111 GIVEN by order of the Board of Directors of the San Marcos County Water District, County of San Diego, California. Adopted on the 18th day of December, 1978. /s/James F. McKay Secretary San Marcos County Water District RESOLUTION NO. 501 RESOLUTION OF THE BOARD OF DIRECTORS OF SAN MARCOS COUNTY WATER DISTRICT, CALIFORNIA, PROVIDING FOR THE ISSUANCE AND SALE OF BONDS OF SAID DISTRICT FOR ASSESSMENT DISTRICT NO. 76-1 THEREOF IN THE TOTAL AMOUNT OF $898,400 WHEREAS, by Resolution No. 491 of the San Marcos County Water District, this Board of Directors confirmed an assessment on lands lying within Assessment District No. 76-1 of the San Marcos County Water District, and by said resolution ordered the assessment and diagram recorded and filed as required by the Municipal Improvement Act of 1913; and WHEREAS, said assessment and diagram were recorded' and filed as so required on October 20, 1978; and WHEREAS, the total assessment so confirmed was $898,400; and WHEREAS, by Resolution No. 476 of said District this Board of Directors resolved that serial bonds, bearing interest at a rate not to exceed eight percent (8%) per annum shall be issued under and as provided in the Improvement Bonds Act of 1915, i.e., Division 10 of the California Streets and Highways Code, to represent assessments not paid within thirty (30) days after recordation of said assessments; and WHEREAS, this Board of Directors has heretofore adopted its Resolution No. 498 finding and determining that assessments in the amount of $898,400 remain unpaid; and WHEREAS, this Board of Directors deems it proper and the necessity therefore appears that bonds to represent said unpaid assessments be issued and sold in the form and manner as hereinafter provided; NOW, THEREFORE, the Board of Directors of the San Marcos County Water District DOES HEREBY RESOLVE, DETERMINE AND ORDER as follows: SECTION 1. Bonds of said District in a total amount of $898,400 shall be issued and sold to represent assessments not paid within thirty (30) days after recordation of the assessment and diagram. Said bonds shall be designated "IMPROVEMENT BOND, SAN MARCOS COUNTY WATER DISTRICT, COUNTY OF SAN DIEGO, STATE OF CALIFORNIA, ASSESSMENT DISTRICT NO. 76-1." Said bonds shall be in the principal amount of $898,400 num- bered consecutively from 1 through 180 inclusive, dated January 2, 1979, in the denomination of $5,000 (except Bond No. 1, which shall be in the principal amount of $3,400), shall bear interest from their date at a rate or rates to be hereafter fixed (but not to exceed eight percent (8%) per annum), and shall mature in consecutive numerical order over a period commencing July 2, 1980, and ending July 2, 1999, according to the following schedule: Principal Principal Year Maturing Year Maturing 1980 $ 3,400 1990 $45,000 1981 20,000 1991 45,000 1982 25,000 1992 50,000 1983 25,000 1993 55,000 1984 25,000 1994 60,000 1985 30,000 1995 65,000 1986 30,000 1996 70,000 1987 35,000 1997 75,000 1988 35,000 1998 80,000 1989 40,000 1999 85,000 Interest on the bonds for the first twelve months will be payable on January 2, 1980; and thereafter interest will be payable semiannually on July 2 and January 2 of each year. SECTION 2. Both the principal of and the interest on the bonds are payable at the offices of the San Marcos County Water District in San Marcos, California, or at the principal offices of the paying agent, Security Pacific National Bank, in Los Angeles and San Francisco, California. SECTION 3. The Auditor of the District and the Secre ~ary are hereby authorized and directed to sign all of said bonds. Said Secretary is further authorized and directed to affix the seal of the District to said bonds; and said Auditor is hereby authorized and directed to sign the interest coupons affixed to said bonds, and to number said interest coupons affixed to each of said bonds consecutively. The signature of said Auditor on the bonds and coupons may be an engraved, printed or li~hographed signature, and the seal may also be placed in like manner on the bonds. SECTION 4. Said bonds shall be issued in substantially the form set forth in Section 8652 of the Streets and Highways Code and the coupons for said interest thereon shall be in substantially the following form: (INTEREST COUPON FORM) On the Second day of , 19 the SAN MARCOS COUNTY WATER DISTRICT, California, will pay to the bearer, COUPON NO. at the offices of the District in San Marcos, California, or at the principal office of the paying agent, Security Pacific National Bank, in -2- in the cities.of Los Angeles and San Francisco, California, the sum of $ in lawful money of the United States of America, being the interest then due on its Improvement Bond No. Dated: January 2, 1979 Auditor of the San Marcos County Water District (REVERSE SIDE OF COUPON) If the bond to which this coupon is attached is redeemable and is duly called for redeption prior to the maturity date of this coupon, this coupon will be void. SECTION 5. Substantially the following provisions for registration' shall be printed on the reverse side of each bond: PROVISIONS FOR REGISTRATION This bond may be registered in the name of any persons as the registered owner hereof, both as to principal and interest, but, if registered, may not be discharged from registration. Each registration or transfer after registration of this bond shall be entered by the Auditor in books kept by him for the purpose and noted by him in the registration blank below. Upon registration, all unmatured coupons per- taining hereto shall be surrendered to the Auditor. So long as this bond is registered, no transfer hereof shall be valid for any purpose unless made by the registered owner and entered and noted as herein provided, and the principal hereof and any redemption premium shall be payable only to the registered owner, or to his order. Interest on this bond, if registered, shall be payable to the person whose name appears upon the registry books as the registered owner hereof at the close of business on the tenth day preceding the interest payment date, or to his order. Each request for registration or transfer must be in form satisfactory to the Auditor and must be made in writing, signed by the registered owner, or by his agent duly authorized in writing, or by the bearer, as the case may be. Date of In Whose Name Signature of Registration Registered Auditor SECTION 6. The proceeds of the sale of said bonds shall forthwith be placed in a fund of said District hereby created and designated -3- "Assessment District No. 76-1 Construction Fund", and the moneys in said fund shall be used only for the purposes authorized in the Municipal Improvement Act of 1913. SECTION 7. This Board of Directors does hereby call for sealed bids on the said bonds proposed to be issued to be received up to the time specified in the notice hereinafter set forth. SECTION 8. The Secretary shall cause a notice inviting such bids to be given by mailing copies thereof to such persons and investment bankers known by the Secretary to have an interest in purchasing such bonds, Said notice shall be in substantially the form attached hereto as Exhibit "A". ADOPTED, SIGNED AND APPROVED this 18th day of December, 1978. (SEAL) ATTEST: ounty -4- STATE OF CALIFORNIA ) COUNTY OF SAN DIEGO ) I, JAMES F. McKAY, Secretary of the San Marcos County Water District, California, DO HEREBY CERTIFY that the foregoing resolution was duly adopted by the Board of Directors of said District at a meeting of s'aid Board of Directors held on the 18th day of December, 1978, and that it was so adopted by the following vote: AYES: DIRECTORS: Keebaugh, Ferguson, Mahr, Blanchard NOES: DIRECTORS: None ABSENT: DIRECTORS: None ABSTAIN: DIRECTORS: Smith County (SEAL) -5-