HomeMy WebLinkAboutItem 4.11 Exhibit E Certificates of Participation -
NEW ISSUE-FULL BOOK ENTRY
In the opinion of Brown&Wood,San Francisco,California,Special Counsel,based on existing statutes,regulations,rulings and judicial decisions and assuming
compliance with certain covenants described herein and requirements of the Internal Revenue Code of 1986,as amended(the "Code"),as described herein,
the portion of each Lease Payment due under the Lease designated as and comprising interest and received by owners of the Certificates tes is not includable
in gross income of the owners thereof for federal income tax purposes. hi the further opinion of Special Counsel,the portion of each Lease Payment due
under the Lease designated as and comprising interest and received by owners of the Certificates will not be treated as an item of tax preference in
calculating the federal alternative minimum taxable income of individuals and corporations. However,such portion of each Lease Payment
will be included as an adjustment in the calculation of federal corporate alternative minimum taxable income and may therefore affect
a corporation's alternative minimum tax and environmental tax liabilities. In the further opinion of Special Counsel,the portion
of each Lease Payment due under the Lease designated as and comprising interest and received by owners of the Cemficates
is exempt from personal income taxes imposed by the State of California. See "TAX MATTERS"herein.
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CERTIFICATES OF PARTICIPATION
(1993 Civic Center Refunding Project)
Evidencing Direct, Undivided Proportionate Interests
of the Owners Thereof in Lease Payments
to be Made by the
CITY OF DUBLIN
(Alameda County, California)
Dated: June 1,1993 Dues February 1,as shown below
The Certificates are being sold to provide funds to refund outstanding City of Dublin 1988 Certificates of Participation originally sold to(i)refund outstanding City
of Dublin 1985 Certificates of Participation,and(ii)provide additional moneys to complete the City's Civic Center.
Interest represented by the Certificates is payable semiannually on February 1 and August 1 each year,commencing February 1, 1994. The Certificates will be
delivered as fully registered Certificates and,when issued,will be registered in the name of Cede&Co.,as nominee of The Depository Trust Company,New York,New York
("DTC"). DTC will act as the initial Securities Depository for the Certificates. Individual purchases of Certificates will be made in book-entry form only,in the principal
amount of$5,000 or any integral multiple thereof. Purchasers of such interests will not receive physical certificates representing the Certificates purchased. Principal of and
interest on the Certificates will be paid by First Interstate Bank of California,as trustee(the"Trustee"),to DTC,which will in turn remit such principal and interest to its
participants for subsequent disbursement to the beneficial owners of the Certificates. See"THE CERTIFICATES—Book-Entry Only System."
The Certificates are subject to optional and mandatory prepayment,as described herein,prior to their stated maturities.
The City has covenanted in the Lease to make all Lease Payments provided for therein subject to complete or partial abatement of such Lease Payments resulting
from substantial interference with use and possession by the City of the Project caused by damage or destruction of the Project or taking by eminent domain or condemnation
thereof. The City has also covenanted in the Lease to take such action as may be necessary to include such Lease Payments in its annual budgets and to make the necessary
annual appropriations therefor.
THE OBLIGATION OF THE CITY TO PAY LEASE PAYMENTS DOES NOT CONSTITUTE A DEBT OF THE CITY,THE STATE OF CALIFORNIA OR
ANY POLITICAL SUBDIVISION THEREOF WITHIN THE MEANING OF ANY CONSTITUTIONAL OR STATUTORY DEBT LIMITATION OR RESTRICTION NOR
DOES IT CONSTITUTE AN OBLIGATION FOR WHICH THE CITY IS OBLIGATED TO LEVY OR PLEDGE ANY FORM OF TAXATION OR FOR WHICH THE CITY
HAS LEVIED OR PLEDGED ANY FORM OF TAXATION.
This cover page contains information for quick reference only. It is not a summary of this issue. Potential investors must read the entire Official Statement
to obtain information essential to making an informed decision.
MATURITY SCHEDULE
S Serial Certificates
Maturity Maturity
Date Interest Price or Date Interest Price or
(February 1) Amount Rate Yield (February 1) Amount Rate Yield
$ _%Term Certificates Due February 1,20_—Price %
(Plus Accrued Interest from June 1,1993)
The Certificates are offered when,as and if sold and received by the Underwriter,subject to approval as to their legality by Special Counsel,
Brown&Wood,San Francisco,California. Certain legal matters will be passed upon for the Underwriter by Orrick,Herrington&
Sutcliffe,San Francisco,California,and for the City by the City Attorney. It is anticipated that the Certificates in
definitive form will be available for delivery to DTiC in New York,New York,on or about lune 1993.
Rauscher Pierce Refsnes, Inc"
Dated: May_, 1993
• Preliminary,subject to change. fib.
by
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Certain of the information set forth herein has been
obtained from the City, the Lessor and other sources which are
believed to be reliable. Such information is not guaranteed as
to accuracy or completeness and is not to be construed as a
representation by the Underwriter. The information and
expressions of opinion 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 or the Lessor since the date hereof. This Official
Statement and its distribution have been duly authorized and
approved by the City Council. This Official Statement is
submitted in connection with the sale of the Certificates and may
not be reproduced or used, in whole or in part, for any other
purpose, unless authorized in writing 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 Certificates by any person in any jurisdiction in
which it is unlawful for such person to make such an offer,
solicitation or sale. No dealer, broker, salesperson or other
person has been authorized to give any information or to make any
representations other than those contained in this Official
Statement. If given or made, such other information or
representations must not be relied upon as having been authorized
by the City, the Lessor or the Underwriter. This Official
Statement is not to be construed as a contract with the
purchasers of the Certificates. Statements contained in this
Official Statement which involve estimates, projections,
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 facts.
IN CONNECTION WITH THE OFFERING OF THE CERTIFICATES, THE
UNDERWRITER MAY OVERALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE
OR MAINTAIN THE MARKET PRICE OF THE CERTIFICATES OFFERED HEREBY
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 CERTIFICATES TO
CERTAIN DEALERS, INSTITUTIONAL INVESTORS AND OTHERS AT PRICES
LOWER THAN THE PUBLIC OFFERING PRICES STATED ON INSIDE COVER
PAGES HEREOF AND SAID PUBLIC OFFERING PRICES MAY BE CHANGED FROM
TIME TO TIME BY THE UNDERWRITER.
SF2-14290.5
CITY OF DUBLIN, CALIFORNIA
City Council
Peter W. Snyder
Mayor
David C. Burton
Vice Mayor
Lisbeth A. Howard
Paul C. Moffatt
Guy S. Houston
CITY STAFF
Richard C. Ambrose, City Manager
Paul S. Rankin, Assistant City Manager
Stanley F. Stephens, Jr. , Interim Finance Director
Elizabeth H. Silver, City Attorney
PROFESSIONAL SERVICES
Brown & Wood
San Francisco, California
Special Counsel
First Interstate Bank of California
San Francisco, California
Trustee
First Trust California
San Francisco, California
Escrow Agent
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TABLE OF CONTENTS
Page
INTRODUCTORY STATEMENT 1
THE REFUNDING PLAN 2
THE CERTIFICATES 2
General Provisions 2
Book-Entry Only System 3
Prepayments 7
Manner of Selection of Certificates for Prepayment . . 7
Notice of Prepayment 8
Trustee 8
Lease Payment Schedule 8
SECURITY FOR THE CERTIFICATES . . . . . . . . . . . . 9
General 9
Reserve Fund 10
Insurance 10
ESTIMATED SOURCES AND USES OF FUNDS 11
THE PROJECT 11
RISK FACTORS 12
Lease Not a General Obligation 12
City's Lease Payments 12
No Liability by the Lessor to the Owners 13
Limited Recourse on Default 13
Abatement 13
No Acceleration Upon Default 14
Insolvency or Bankruptcy of the Lessor 14
State Budget 14
CONSTITUTIONAL AND STATUTORY LIMITATIONS ON
TAXES AND APPROPRIATIONS 14
Article XIII A of the California Constitution 14
Court Challenges to Article XIII A 15
Article XIII B of the California Constitution 16
Statutory Spending Limitations 17
ECONOMIC CONDITIONS IN CALIFORNIA 18
CITY OF DUBLIN FINANCIAL INFORMATION 19
City Budget 19
General Fund Financial Summary 19
City of Dublin Direct and Overlapping Bonded
Debt Statement 21
CITY OF DUBLIN 22
General 22
City Growth 22
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Page
Population 22
Labor Relations 23
Property Taxation 23
Economic Structure 24
Employment 24
Building and Construction 27
Community Facilities 27
Parks and Recreation 28
Hospitals 28
Churches 28
Financial Institutions 29
Education 29
Transportation 30
Utilities 30
LESSOR 30
UNDERWRITING 30
RATING 31
TAX MATTERS 31
VERIFICATION OF MATHEMATICAL ACCURACY 32
LITIGATION 32
The City 32
Richmond School District Case 33
APPROVAL OF LEGALITY 34
OTHER MATTERS 34
APPENDIX A - CITY OF DUBLIN AUDITED FINANCIAL STATEMENTS FOR
THE FISCAL YEAR ENDED JUNE 30, 1992
APPENDIX B - SUMMARIES OF PRINCIPAL LEGAL DOCUMENTS
APPENDIX C - FORM OF OPINION OF SPECIAL COUNSEL
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CERTIFICATES OF PARTICIPATION
(1993 Civic Center Refunding Project)
Evidencing Direct, Undivided Proportionate
Interests of the Owners. Thereof in
Lease Payments to be Made by the
CITY OF DUBLIN
(Alameda County, California)
INTRODUCTORY STATEMENT
The following introductory statement is subject in all
respects to the more complete information set forth in this
Official Statement, including the cover page and the appendices
hereto (the "Official Statement") . The descriptions and
summaries of the Constitution and laws of the State of California
or various documents hereinafter set forth do not purport to be
comprehensive or definitive and are qualified in their entirety
by reference to the complete provisions or documents. All
capitalized terms used in this Official Statement and not
otherwise defined herein shall have the same meanings as in the
Trust Agreement (as defined herein) .
This Official Statement sets forth certain information in
connection with the offering of the Certificates of Participation
(1993 Civic Center Refunding Project) (the "Certificates") in the
aggregate principal amount of $ * to refund the
City of Dublin 1988 Refunding Certificates of Participation (the
"Refunded Certificates") . The Refunded Certificates were
originally issued to (i) refund outstanding City of Dublin 1985
Certificates of Participation, and (ii) provide additional moneys
to complete the City' s Civic Center ("the Project") . The
Certificates evidence and represent direct, undivided
proportionate interests of the registered owners thereof (the
"Owners") in lease payments (the "Lease Payments") to be made by
the City of Dublin (the "City' ) . to Dublin Information, Inc. (the
"Lessor") as rental for the Project to be used by the City
pursuant to a lease agreement, dated as of June 1, 1993 (the
"Lease") , between the City and the Lessor. The rights of the
Lessor to receive payments under the Lease will be assigned to
First Interstate Bank of California, as trustee (the "Trustee")
under an assignment agreement, dated as of June 1, 1993 (the
"Assignment Agreement") , whereby the Lessor shall assign to the
Trustee for the benefit of the Owners its rights (i) to receive
Lease Payments payable by the City under the Lease and (ii) to
enforce amounts payable upon default. In addition, under the
trust agreement, dated as of June 1, 1993, among the City, the
Trustee and the Lessor (the "Trust Agreement") , the Lease
Payments are irrevocably pledged to the payment of the principal
* Preliminary, subject to change.
SF2-14290.5
1 � ,
and interest represented by the Certificates. The . Certificates
are being executed and delivered pursuant to the Trust Agreement.
In general, the City is required to pay to the Trustee all
of the Lease Payments required under the Lease, subject to
complete or partial abatement of such Lease Payments resulting
from substantial interference with the use and possession by the
City of the Project caused by damage, destruction or taking by
eminent domain or condemnation thereof. See "RISK FACTORS" and
"APPENDIX B - SUMMARIES OF PRINCIPAL LEGAL DOCUMENTS. " Under the
Lease, the City is also required to pay any taxes, assessments,
insurance premiums or maintenance and repair costs in connection
with the Project. The City has also covenanted in the Lease to
take such action as may be necessary to include the Lease
Payments in its annual budgets and to make the necessary annual
appropriations therefor following completion of the Project. For
certain financial information with respect to the City, see "CITY
OF DUBLIN FINANCIAL INFORMATION" and "APPENDIX A. "
THE REFUNDING PLAN
A portion of the proceeds of the Certificates, together with
a portion of the monies deposited in funds and accounts
established with respect to the Refunded Certificates, will be
deposited in an irrevocable escrow fund (the "Escrow Fund")
established by First Trust California, as escrow agent (the
"Escrow Agent") pursuant to an escrow agreement, dated as of
June 1, 1993 (the "Escrow Agreement") , between the City and the
Escrow Agent. The Escrow Fund will be invested in bills,
certificates of indebtedness, notes, bonds or similar securities
which are direct obligations of, or the principal and interest of
which securities are guaranteed by, the United States; the
interest and principal payments from which will secure, and are
calculated to provide sufficient funds to pay the principal of
and interest and prepayment premium, if any, with respect to the
Refunded Certificates on their respective payment or prepayment
dates. The Escrow Agent is irrevocably committed to pay the
principal and interest and prepayment premium, if any,
represented by the Refunded Certificates when and as required,
but only from monies available in the Escrow Fund.
THE CERTIFICATES
General Provisions
The Certificates will be executed and delivered in the
aggregate principal amount of $ . * The
Certificates are deliverable in fully registered form in
denominations of $5, 000 or any integral multiples thereof. Each
Certificate will be dated June 1, 1993 and interest represented
thereby will be payable from the February 1 or August 1 (each a
* Preliminary, subject to change
SF2-14290.5 2
"Certificate Payment Date") next preceding the date of execution
thereof, unless: (a) it is executed as of a Certificate Payment
Date, in which event interest represented thereby shall be
payable from the date thereof; or (b) it is executed after the
close of business on the fifteenth day of the month immediately
preceding a Certificate Payment Date, in which event interest
represented thereby shall be payable from such Certificate
Payment Date; or (c) it is executed prior to the close of
business on January 15, 1994, in which event interest represented
thereby shall be payable from June 1, 1993 .
The interest represented by the Certificates will be
calculated from June 1, 1993, at the rates per annum set forth on
the cover page hereof, payable semiannually on February 1 and
August 1 of each year commencing. February 1, 1994, and will
represent the sum of the portions of the Lease Payments
designated as interest components coming due on the Certificate
Payment Dates in each year.
The principal represented by the Certificates will be
payable, subject to prior prepayment, on February 1 in each of
the designated years and in the principal amounts set forth on
the cover page hereof.
Book-Entry Only System
The information in this section concerning DTC and DTC's
book-entry only system has been obtained from sources that the
Trustee, the City and the Underwriter believe to be reliable, but
the Lessor, the Trustee, the City and the Underwriter take no
responsibility for the accuracy thereof. The Beneficial Owners
should confirm the following information with DTC and DTC
Participants.
The Depository Trust Company, New York, New York ("DTC")
will act as securities depository for the. Certificates., The
Certificates will be executed and delivered as fully-registered
certificates registered in the name of Cede & Co. (DTC's
partnership nominee) . One fully-registered certificate will be
executed and delivered for each principal payment date of the
Certificates, each in the aggregate principal amount due on such
principal payment date, and will be deposited with DTC.
DTC is a limited purpose trust company organized under the
New York Banking Law, a "banking organization" within the meaning
of the New York Banking Law, a member of the Federal Reserve
System, a "clearing corporation" within the meaning of the New
York Uniform Commercial Code, and a "clearing agency" registered
pursuant to the provisions of Section 17A of the Securities
Exchange Act of 1934. DTC holds securities that its participants
("Participants"). deposit with DTC. DTC also facilitates the
settlement among Participants of securities transactions, such as
transfers and pledges, in deposited securities through electronic
computerized book-entry changes in Participants' accounts,
SF2-14290.5 3
thereby eliminating the need for physical movement of securities
certificates. Participants include securities brokers and -
dealers, banks, trust companies, clearing corporations and
certain other organizations ("Direct. Participants") . DTC is
owned by a number of its Direct Participants and by the New York
Stock Exchange, Inc. , the American Stock Exchange, Inc. and the
National Association of Securities Dealers, Inc. Access to the
DTC system is also available to others such as securities brokers
and dealers, banks, and trust companies that clear through or
maintain a custodial relationship with a Direct Participant,
either directly or indirectly ("Indirect Participants") . The
Rules applicable to DTC and its participants are on file with the
Securities and Exchange Commission.
Purchases of Certificates under the DTC system must be made
by or through Direct Participants, which will receive a credit
for the Certificates on DTC's records. The ownership interest of
each actual purchaser of each Certificate ("Beneficial Owner") is
in turn to be recorded on the Direct and Indirect Participants'
records. Beneficial Owners will not receive written confirmation
from DTC of their purchase, but Beneficial Owners are expected to
receive written confirmations providing details of the
transaction,, as well as periodic statements of their holdings,
from the Direct or Indirect Participant through which the
Beneficial Owner entered into the transaction. Transfers of
ownership interests in the Certificates are to be accomplished by
entries made on the books of Participants acting on behalf of
Beneficial Owners. Beneficial Owners will not receive
Certificates representing their ownership interests, except in
the event that use of the book-entry system for the Certificates
is discontinued.
To facilitate subsequent transfers, all Certificates
deposited by Participants with DTC are registered in the name of
DTC' s partnership nominee, Cede& Co. The deposit of
Certificates with DTC and their registration in the name of Cede
& Co. effect no change in beneficial ownership. DTC has no
knowledge of the actual Beneficial Owners of the Certificates;
DTC' s records reflect only the identity of the Direct
Participants to whose accounts such Certificates are credited,
which may or may not be the Beneficial Owners. The Participants
will remain responsible for keeping account of their holdings on
behalf of their customers.
So long as Cede & Co. is the registered owner of the
Certificates, as nominee of DTC, references herein to the holders
or registered owners of the Certificates will mean Cede & Co. and
will not mean the Beneficial Owners of the Certificates.
Conveyance of notices and other communications by DTC to
Direct Participants, by Direct Participants to Indirect
Participants, and by Direct Participants and Indirect
Participants to Beneficial Owners will be governed by
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arrangements among them, subject to any statutory or regulatory
requirements as may be in effect from time to time.
Redemption notices shall be sent to Cede & Co. If less than
all of the Certificates within a maturity are being redeemed,
DTC's practice is to determine by lot the amount of the interest
of each Direct Participant in such issue to be redeemed.
Neither DTC nor Cede & Co. will consent or vote with respect
to the Certificates. Under its usual procedures, DTC mails an
Omnibus Proxy to the issuer of the securities as soon as possible
after the record date. The Omnibus Proxy assigns Cede & Co. ' s
consenting or voting rights to those Direct Participants to whose
accounts the Certificates are credited on the record date
(identified in a listing attached to the Omnibus Proxy) .
Principal and interest payments with respect to the
Certificates will be made. to DTC. DTC' s practice is to credit
Direct Participants' accounts on the payable date in accordance
with their respective holdings shown on DTC's records unless DTC
has reason to believe that it will not receive payment on the
payable date. Payments by Participants to Beneficial Owners will
be governed by standing instructions and customary practices, as
is the case with securities held for the accounts of customers in
bearer form or registered in "street name, " and will be the
responsibility of such Participant and not of DTC, the Trustee,
the Lessor or the City, subject to any statutory or regulatory
requirements as may be in effect from time to time. Payment of
principal and interest to DTC is the responsibility of the Lessor
or the Trustee, fiscal agent or other designated agent,
disbursement of such payments to Direct Participants shall be the
responsibility of DTC, and disbursement of such payments to the
Beneficial Owners shall be the responsibility of Direct and
Indirect Participants.
DTC may discontinue providing its services as securities
depository with respect to the Certificates at any time by giving
reasonable notice to the Trustee and the City. Under such
circumstances, in the event that a successor securities
depository is not obtained, physical certificates are required to
be printed and delivered.
In the event the City and the Trustee determine not to
continue the DTC book-entry only system or DTC determines to
discontinue its services with respect to the Certificates and the
City does not select another qualified securities depository, the
City shall deliver one or more Certificates in such principal
amount or amounts, in authorized denominations, and registered in
whatever name or names, as DTC shall designate. In such event,
transfers and exchanges of Certificates will be governed by the
provisions of the Trust Agreement.
AS LONG AS A BOOK-ENTRY ONLY SYSTEM IS USED FOR THE
CERTIFICATES, THE TRUSTEE WILL SEND ANY NOTICE OF PREPAYMENT OR
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OTHER NOTICES TO HOLDERS ONLY TO CEDE & CO. , AS NOMINEE OF DTC.
ANY FAILURE OF DTC TO ADVISE ANY PARTICIPANT, OR OF ANY
PARTICIPANT TO NOTIFY ANY BENEFICIAL OWNER, OF ANY NOTICE AND ITS
CONTENT OR EFFECT WILL NOT AFFECT THE VALIDITY OR SUFFICIENCY OF
THE PROCEEDINGS RELATING TO THE PREPAYMENT OF THE CERTIFICATES
CALLED FOR PREPAYMENT OR OF ANY OTHER ACTION PREMISED ON SUCH
NOTICE.
THE CITY, THE LESSOR, THE UNDERWRITER AND THE TRUSTEE DO NOT
HAVE ANY RESPONSIBILITY OR OBLIGATION TO DTC PARTICIPANTS, TO THE
PERSONS FOR WHOM THEY ACT AS NOMINEES, OR TO ANY OTHER PERSON WHO
IS NOT KNOWN ON THE REGISTRATION BOOKS AS BEING AN OWNER OF THE
CERTIFICATES, WITH RESPECT TO (i) THE ACCURACY OF ANY RECORDS
MAINTAINED BY DTC OR ANY PARTICIPANT; (ii) THE PAYMENT BY DTC OR
ANY PARTICIPANT OF ANY AMOUNT IN RESPECT OF THE PRINCIPAL OF,
PREPAYMENT PRICE OF OR INTEREST WITH RESPECT TO THE CERTIFICATES;
(iii) THE DELIVERY OF ANY NOTICE WHICH IS PERMITTED OR REQUIRED
TO BE GIVEN TO REGISTERED OWNERS UNDER THE TRUST AGREEMENT;
(iv) THE SELECTION BY DTC OR ANY PARTICIPANT OF ANY PERSON TO
RECEIVE PAYMENT IN THE EVENT OF A PARTIAL PREPAYMENT OF THE
CERTIFICATES; (v) ANY CONSENT GIVEN OR OTHER ACTION TAKEN BY DTC
AS REGISTERED OWNER; OR (vi) ANY OTHER. PURPOSE.
THE CITY, THE LESSOR, THE UNDERWRITER AND THE TRUSTEE CANNOT
AND DO NOT GIVE ANY ASSURANCES THAT DTC WILL DISTRIBUTE PAYMENTS
TO PARTICIPANTS OR THAT PARTICIPANTS OR OTHERS WILL DISTRIBUTE
PAYMENTS WITH RESPECT TO THE CERTIFICATES RECEIVED BY DTC OR ITS
NOMINEES AS THE HOLDER OR ANY PREPAYMENT NOTICES OR OTHER NOTICES
TO THE BENEFICIAL HOLDERS, OR THAT THEY WILL DO SO ON A TIMELY
BASIS, OR THAT DTC WILL SERVICE AND ACT IN THE MANNER DESCRIBED
IN THIS OFFICIAL STATEMENT.
The foregoing description of the procedures and record
keeping with respect to beneficial ownership interests in the
Certificates, payment of principal, prepayment premium, if any,
and interest with respect to the Certificates to DTC, its
Participants or Beneficial Owners, confirmation and transfers of
beneficial ownership interests in the Certificates and other
related transactions by and between DTC, its Participants and the
Beneficial Owners is based solely on the City' s and the Trustee's
understanding of such procedures and record keeping from
information provided by DTC. Accordingly, no representations can
be made concerning these matters and neither DTC, its
Participants nor the Beneficial Owners should rely on the
foregoing information with respect to such matters, but should
instead confirm the same with DTC or its Participants, as the
case may be. The City and the Trustee understand that the
current "Rules" applicable to DTC are on file with the Securities
and Exchange Commission and that the current "Procedures" of DTC
to be followed in dealing with Participants are on file with DTC.
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Prepayments
Prepayment from Net Proceeds. The Certificates are subject
to mandatory prepayment prior to their respective maturity dates,
in whole or in part on any date, from the proceeds of insurance
or taking by eminent domain or condemnation credited towards the
prepayment of the Lease Payments by the City pursuant to the
Lease, at a prepayment price equal to the principal amount
thereof together with accrued interest to the date fixed for
prepayment, without premium.
Optional Prepayment. The Certificates maturing on or after
February 1, 1999 are also subject to prepayment prior to their
respective maturity dates, in whole or in part on any date on or
after February 1, 1998, at the option of the City, in the event
the City exercises its option under the Lease to prepay in whole
or in part the principal component of the Lease Payments in order
to cause prepayment in whole or in part of such Certificates, at
the prepayment prices, expressed as percentages of the principal
amount of such Certificates to be prepaid, set forth in the
following table, together with accrued interest to the date fixed
for prepayment:
Redemption Period Redemption Price
February 1, 1998 through January 31, 1999 101%
February 1, 1999 and thereafter 100
Mandatory Sinking Account Redemption. The Certificates
maturing on February 1, 20_, are subject to redemption prior to
maturity in part, by lot, at the principal amount thereof plus
accrued interest to the date of redemption, without premium, from
mandatory sinking account payments on February 1 of each year on
or after February 1, , at the respective principal amounts .
specified for each of the years set forth below:
Mandatory Sinking Account Mandatory Sinking
Payment Dates (February 1) Account Payments
Manner of Selection of Certificates for Prepayment
Whenever less than all of the outstanding Certificates are
called for prepayment, the Trustee will select Certificates for
prepayment in authorized denominations in such order of
maturities as shall be selected by the City, and by lot within
any maturity. The Trustee will promptly notify the City in
writing of the Certificates selected for prepayment.
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Notice of Prepayment
Notice of prepayment will be mailed by first class mail,
postage prepaid, to the Owners of Certificates designated for
prepayment at their addresses appearing on the Certificate
registration books,. at least 30 days but not more than 60 days
prior to the prepayment date; provided that neither failure to
receive such notice nor any defect in any notice so mailed will
affect the sufficiency of the proceedings for the prepayment of
such Certificates.
Trustee
First Interstate Bank of California, San Francisco,
California, has been appointed as Trustee. The Trustee will
receive all of the proceeds of the Certificates and will disburse
such proceeds in conformity with the Trust Agreement. In
addition to holding and administering various funds of the City,
the Trustee will invest the funds held in trust and will be the
recipient of the Lease Payments payable by the City for the
Project. The Trustee will also act as paying agent for the
purpose of disbursing payments of interest and principal
represented by the Certificates. The Trustee will act as
certificate registrar and will execute all Certificates.
Lease Payment Schedule
Lease Payments are required to be paid by the City under the
Lease on each January 25 and July 25 (or if such day is not a
Business Day (as defined in the Trust Agreement) , the immediately
preceding Business Day) , commencing January 25, 1994. Pursuant
to the Trust Agreement, the Lease Payments will be deposited in
the Lease Payment Fund and applied to pay the principal and
interest represented by the Certificates in accordance with the
following schedule:
Certificate Principal Interest Total
Payment Dates Component Component Payment
Total S S S
* Represents mandatory prepayments.
** Final Certificate Payment Date.
SF2-14290.5 8
SECURITY FOR THE CERTIFICATES
General
Each Certificate represents a direct, undivided
proportionate interest in Lease Payments to be made by the City
to the Lessor under the Lease. The Lessor, pursuant to the
Assignment Agreement and the Trust Agreement, has assigned all
its rights to receive Lease Payments under the Lease to the
Trustee for the benefit of the Owners of the Certificates.
Additionally, under the Trust Agreement, the Lease Payments are
irrevocably pledged to the payment of the principal and interest
represented by the Certificates. Lease Payments are subject to
complete or partial abatement, however, in the event of loss or
substantial interference in the use and possession of all or any
portion of the Project by the City caused by damage, destruction,
taking by eminent domain or condemnation of the Project. In the
case of damage or destruction, the amount of abatement will be
agreed upon by the City and the Lessor, or alternatively,
determined by an independent market valuation such that the
resulting Lease Payments represent fair consideration for the use
and occupancy of the portions of the Project not damaged or
destroyed. Such abatement shall continue for the period
commencing with the date of such damage, destruction or taking
and ending with the substantial completion of the replacement or
work or repair of the Project.
Additional lease payments due from the City to the Trustee
include amounts sufficient to pay certain taxes and assessments
charged with respect to the Project and administrative costs of
the Lessor. The City is also responsible for repair and
maintenance of the Project during the term of the Lease.
THE CITY HAS COVENANTED IN THE LEASE TO TAKE SUCH ACTION AS
MAY BE NECESSARY TO INCLUDE ALL SUCH LEASE PAYMENTS IN ITS ANNUAL
BUDGETS AND TO MAKE THE NECESSARY ANNUAL APPROPRIATIONS THEREFOR.
SUCH OBLIGATION AND THE OBLIGATION TO MAKE LEASE PAYMENTS DO NOT
CONSTITUTE DEBTS OF THE CITY, THE STATE OF CALIFORNIA OR ANY
POLITICAL SUBDIVISION THEREOF WITHIN THE MEANING OF ANY
CONSTITUTIONAL OR STATUTORY DEBT LIMITATION NOR OBLIGATIONS OF
THE CITY FOR WHICH THE CITY IS OBLIGATED OR PERMITTED TO LEVY OR
PLEDGE ANY FORM OF TAXATION OR FOR WHICH THE CITY HAS LEVIED OR
PLEDGED ANY FORM OF TAXATION.
Should the City default in its payment obligation under the
Lease or an event of default otherwise occurs under the Lease,
the Trustee, as assignee of the Lessor, may retain the Lease and
hold the City liable for all Lease Payments on an annual basis
and have the right to re-enter and re-let the Project. Such
re-entry and re-letting will not effect a surrender of the Lease.
Alternatively, the Trustee may terminate the Lease and proceed
against the City to recover damages pursuant to the Lease. No
assurance can be given that the Trustee will be able to re-let
the Project so as to provide rental income sufficient to make
SF2-14290.5 9
principal and interest payments with respect to the Certificates
in a timely manner, and the Trustee is not empowered to sell the
Project for the benefit of the Owners of the Certificates. See
"RISK FACTORS - Limited Recourse on Default. "
Reserve Fund
A Reserve Fund (the "Reserve Fund") will be established with
the Trustee pursuant to the Trust Agreement and will be funded
from proceeds of the Certificates in an amount initially equal to
$ . All moneys at any time on deposit in the Reserve
Fund shall be held by the Trustee in trust for the benefit of the
City and for the benefit of the Owners of the Certificates, as a
reserve for the payment when due of all the Lease Payments and
prepayments to be paid pursuant to the Lease and of all payments
on the Certificates and applied solely as provided in the Trust
Agreement. Upon receipt of any delinquent Lease Payment with
respect to which monies have been advanced from the Reserve Fund,
such Lease Payment, to the extent it is not needed to pay
interest and principal components payable to the Certificate
Owners on the next Certificate Payment Date, will be deposited in
the Reserve Fund to the extent of such advance. The City does
not otherwise have an obligation to restore the Reserve Fund in
the event moneys are withdrawn therefrom.
The City may satisfy its obligations under the Reserve Fund
at any time by the deposit in the Reserve Fund of a surety bond,
an insurance policy or letter of credit, or any combination
thereof, pursuant to the Trust Agreement. Upon receipt of any
delinquent Lease Payment with respect to which monies have been
drawn against such surety bond, insurance policy or letter of
credit, such Lease Payment, to the extent it is not needed to pay
interest and principal components payable to the Certificate
Owners on the next Certificate Payment Date, will be used, prior
to any possible deposit in the Reserve Fund as described in the
preceding paragraph, to reimburse the provider of any such surety
bond, insurance policy or letter of credit.
Insurance
The Lease requires the City to maintain fire, lightning and
extended coverage insurance on the Project in an amount equal to
the lesser of (a) the aggregate principal amount of the
outstanding certificates, or (b) the replacement cost of the
Project (subject to a deductible clause of not to exceed $100, 000
for any one loss) .
Such fire, lightning and extended coverage insurance may be
maintained in whole or in part in the form of self-insurance by
the City. Under the terms of the Lease, the City must annually
file a statement by its risk manager or an independent insurance
advisor identifying the extent of such self-insurance and stating
the determination that the City maintains sufficient reserves
with respect thereto. In the event that any such insurance shall
sae-14290.5 10
be provided in the form of self-insurance by the City, the City
shall not be obligated to make any payment with respect to any
insured event except from such reserves.
Under the terms of the Lease, the City is also required to
maintain rental interruption or use and occupancy insurance on
the Project to cover a partial or total loss of the use of the
Project in an amount at least equal to the maximum Lease Payments
payable during any two consecutive Fiscal Years.
The Lease does not require that the City maintain earthquake
insurance on the Project. At this time, the City does not
maintain earthquake insurance due to its determination that such
insurance is not available at a reasonable cost. However, the
City intends to reevaluate its options in the event such coverage
subsequently becomes available at a reasonable cost from a
reputable insurance company. There is no assurance, however,
that earthquake insurance will be available or obtained. The
Project, in any case, was designed to meet the stringent seismic
building standards of the State of California (the "State")
regarding an "Essential Service Facility" as well as the seismic
building standards of [BOND INSURER] . See "THE PROJECT. "
ESTIMATED SOURCES AND USES OF FUNDS
The proceeds to be received from the sale of the
Certificates (excluding accrued interest) and certain monies
relating to the Refunded Certificates are anticipated to be
applied as follows:
Sources of Funds
Principal Amount of Certificates $
Refunded Certificates Funds
Total Sources $
Uses of Funds
Deposit to the Escrow Fund $
Deposit to Reserve Fund
Underwriter' s Discount
Original Issue Discount
Costs of Issuance
Total Uses $
THE PROJECT
The Dublin Civic Center (the "Project") is located on a
10-acre site in the City, adjacent to a 23-acre sports park, near
the intersection of Interstate 580 and Interstate 680. The
53, 000 square-foot Project consists of two semi-circular wings
with a central courtyard. One wing contains a City Council
chamber, administrative offices, and a regional meeting room.
The second wing is designed as a police facility, and contains a
SB2-14290.5 11
dispatch area, administrative offices, evidence room, training
area, emergency operations center and other support facilities.
The Project was dedicated and occupied in October of 1989 .
The unique design of the Project resulted in a Merit Award for
"Best Public or Private Special Use" from the Pacific Coast
Builders Conference. The awards program covered entries from the
14 western states.
The Project grounds have also become a focal point for the
display of public art. Dublin Fine Arts Foundation (the
"Foundation") , a private entity, has arranged for the temporary
public display of large scale sculptures on loan from various
artists. In addition, the Foundation commissioned a mosaic
sculpture, by New York artist Ned Smyth, which is the centerpiece
of the interior courtyard and was presented as a gift to the
City.
As a public building which includes a police facility, it
was important for the structural design of the Project to meet
the State' s stringent seismic building code regulations. The
structural design was based upon a detailed geotechnical
investigation which analyzed the seismic response of the site.
This data was used by the structural engineer in designing a
facility to comply with the State building code requirements for
an "Essential Service Facility. " [Add appropriate language
regarding standards required by Bond Insurer. ]
RISK FACTORS
The following factors, along with the other information in
this Official Statement, should be considered by potential
investors in evaluating a purchase of the Certificates.
Lease Not a General Obligation
The obligation of the City to make Lease Payments does not
constitute an obligation of the City for which the City must levy
or pledge any form of taxation or for which the City has levied
or pledged any form of taxation, nor does it constitute a debt or
indebtedness of the City, the State of California or any of its
political subdivisions, within the meaning of any constitutional
or statutory debt limitation or restriction.
City's Lease Payments
The City' s Lease Payments and other payments due under the
Lease (including payment of costs of improvements, repair and
maintenance of the Project, taxes and other governmental charges
and assessments levied against the Projects) are not secured by
any pledge of taxes or other revenues of the City, but are
payable from any funds lawfully available to the City. In the
event the City's revenue sources are less than its total
obligations, the City could choose to fund other municipal
SF2-14290.5 12
services before making Lease Payments. The same result could
occur if, because of State Constitutional limits on expenditures,
the City is not permitted to appropriate and spend all of its
available revenues. For a discussion of the City' s current
appropriation limits, see "CONSTITUTIONAL AND STATUTORY
LIMITATIONS ON TAXES AND APPROPRIATIONS. "
No Liability by the Lessor to the Owners
Except as expressly provided in the Trust Agreement, the
Lessor shall not have any obligation or liability to the Owners
of the Certificates with respect to the payment when due of the
Lease Payments by the City, or with respect to the observance or
performance by the City of other agreements, conditions,
covenants and terms required to be observed or performed by it
contained in the Lease or the Trust Agreement, or with respect to
the performance by the Trustee of any obligation required to be
performed by it contained in the Trust Agreement.
Limited Recourse on Default
If the City defaults on its obligations to make Lease
Payments with respect to the Project, the Trustee, as assignee of
the Lessor, may retain the Lease and hold the City liable for all
Lease Payments on an annual basis and will have the right to
re-enter and re-let the Project. Such re-entry and re-letting
will not effect a surrender of the Lease. Alternatively, the
Trustee may terminate the Lease and proceed against the City to
recover damages pursuant to the Lease. No assurance can be given
that the Trustee will be able to re-let the Project so as to
provide rental income sufficient to make principal and interest
payments with respect to the Certificates in a timely manner, and
the Trustee is not empowered to sell the Project for the benefit
of the Owners of the Certificates. Moreover, due to the
governmental function of the Project, it is not certain whether a
court would permit the exercise of the remedies of repossession
and re-letting with respect thereto. Any suit for money damages
would be subject to limitations on legal remedies against cities
in California, including a limitation on enforcement of judgments
against funds needed to serve the public welfare and interest.
See "APPENDIX B - SUMMARIES OF PRINCIPAL LEGAL DOCUMENTS - - The
Lease - - Default by City. "
Abatement
In the event of loss or substantial interference in the use
and possession of all or any portion of the Project by the City
caused by damage or destruction to or taking by eminent domain or
condemnation of the Project, Lease Payments will be subject to
abatement. In the event the Project, if damaged or destroyed by
an insured casualty, could not be replaced during the period of
time that proceeds of the City's rental interruption insurance
will be available in lieu of Lease Payments plus the period for
which funds are available from the Reserve Fund, or in the event
SF2-14290.5 13
that casualty insurance proceeds or condemnation proceeds are
insufficient to provide for complete repair or replacement of the
Project or prepayment of the Certificates, there could be
insufficient funds to cover payments to Owners in full.
No Acceleration Upon Default
If the City defaults on its obligations to make Lease
Payments, the Trustee may have limited ability to re-let the
Project so as to preserve the tax-exempt nature of the interest
component of the Lease Payments and the Certificates. In the
event of a default, there is no available remedy of acceleration
of the total Lease Payments due over the term of the Lease. The
City will only be liable for Lease Payments on an annual basis,
and the Trustee would be required to seek a separate judgment
each Fiscal Year for that Fiscal Year's Lease Payments.
Insolvency or Bankruptcy of the Lessor
Title to the Project will be held by the Lessor throughout
the term of the Lease. Therefore, the title to the Project may
be considered property of the estate of the Lessor which may be
disposed of by a bankruptcy court in the event of a bankruptcy,
insolvency or similar proceeding by or against the Lessor.
State Budget
The State of California (the "State") experienced a
significant budget deficit for the 1991-92 Fiscal Year and
according to a October 15, 1992 report issued by the Commission
on State Finance, is projected to face a total deficit at
June 30, 1993 of $2 .4 billion if no corrective action is taken.
The State's budget problems may decrease the City's share of
property tax revenues from the State. See "ECONOMIC CONDITIONS
IN CALIFORNIA. "
CONSTITUTIONAL AND STATUTORY LIMITATIONS ON TAXES
AND APPROPRIATIONS
Article XIII A of the California Constitution
Section 1 (a) of Article XIII A of the California
Constitution limits the maximum ad valorem tax on real property
to 1% of full cash value (as defined in Section 2 of
Article XIII A) , to be collected by each county and apportioned
among the county and other public agencies and funds according to
law. Section 1 (b) of Article XIII A provides that the 1%
limitation does not apply to ad valorem taxes to pay interest or
redemption charges on (1) indebtedness approved by the voters
prior to July 1, 1978 or (2) any bonded indebtedness for the
acquisition or improvement of real property approved on or after
July 1, 1978, by two-thirds of the votes cast by the voters
voting on the proposition. Section 2 of. Article XIII A defines
"full cash value" to mean "the County Assessor's valuation of
SF2-14290.5 14
real property as shown on the 1975/76 tax bill under `full cash
value' or, thereafter, the appraised value of real property when
purchased, newly constructed or a change in ownership has
occurred after the 1975 assessment. " The full cash value may be
adjusted annually to reflect inflation at a rate not to exceed 2%
per year or to reflect a reduction in the consumer price index or
comparable data for the. area under the taxing jurisdiction, or
reduced in the event of declining property values caused by
substantial damage, destruction or other factors. Legislation
enacted by the State Legislature to implement Article XIII A
provides that notwithstanding any other law, local agencies may
not levy any ad valorem property tax except to pay debt service
on indebtedness approved by the voters as described above.
In the June 1990 election, the voters of the State approved
amendments to Article XIII A permitting the State Legislature to
extend the replacement dwelling provisions applicable to persons
over 55 to severely disabled homeowners for a replacement
dwelling purchased or newly constructed on or after June 5, 1990,
and to exclude from the definition of "new construction".
triggering reassessment improvements to certain dwellings for the
purpose of making the dwelling more accessible to severely
disabled persons . In the November 1990 election, the voters of
the State approved an amendment of Article XIII A to permit the
State Legislature to exclude from the definition of "new
construction" seismic retrofitting improvements or improvements
utilizing earthquake hazard mitigation technologies constructed.
or installed in existing buildings after November 6, 1990.
Court Challenges to Article XIII A
In early 1989, the United States Supreme Court struck down
as a violation of equal protection certain property tax
assessment practices in West Virginia which had resulted in
vastly different assessments of similar properties. Since
Article XIII A provides that property may only be reassessed up
to 2% per year, except upon change of ownership or new
construction, recent purchasers may pay substantially higher
property taxes than long-time owners of comparable property in a
community. The Supreme Court in the West Virginia case expressly
declined to comment in any way on the constitutionality of
Article XIII A. Based on this decision, however, property owners
in California brought three suits challenging the acquisition
value assessment provisions of Article XIII A. Two cases
involved residential property, and one case involved commercial
property. In all three cases, State trial and appellate courts
upheld the constitutionality of Article XIII A's assessment rules
and concluded that the West Virginia case did not apply to
California' s laws. On June 3, 1991 the United States Supreme
Court agreed to hear the appeal in the challenge relating to
commercial property, but the plaintiff subsequently decided to
drop the case.
SF2-14290.5 15
On June 18, 1992 the United States Supreme Court announced
its decision in the case of Nordlinger vs. Hahn (one of the cases
involving residential property) and upheld by an 8 to 1 majority
the constitutionality of Article XIII A's method of assessing
property. The majority held that the assessment method serves a
rational state interest by providing certainty regarding property
taxes to homeowners and therefore does not violate provisions of
the Equal Protection Clause codified in the 14th Amendment of the
U.S. Constitution.
The City cannot predict whether future challenges to the
State' s present system of property tax assessment will be made,
when the ultimate resolution of any challenge will occur or the
ultimate effect any decision holding the State' s present system
of property tax assessment unconstitutional would have on the
City's revenues. One possible outcome of a decision to
invalidate Article XIII A would be a decrease in the amount of
property tax revenues paid to the City. Such a decrease could
have a negative impact on the City' s ability to pay Lease
Payments when due.
Article XIII B of the California Constitution
Article XIII B of the California Constitution limits the
annual appropriations of the State and of any city, county,
school district, authority or other political subdivision of the
State to the level of appropriations for the prior fiscal year,
as adjusted for changes in the cost of living, population and
services for which the fiscal responsibility is shifted to or
from the governmental entity. The "base year" for establishing
this appropriations limit is the 1978-79 fiscal year and the
limit is adjusted annually to reflect changes in population,
consumer prices and certain increases or decreases in the cost of
services provided by these public agencies.
Appropriations of an entity of local government subject to
Article XIII B generally include any authorizations to expend
during a fiscal year the proceeds of taxes levied by or for the
entity, exclusive of certain State subventions, refunds of taxes
and benefit payments from retirement, unemployment insurance and
disability insurance funds. "Proceeds of taxes" include, but are
not limited to, all tax revenues, most State subventions and the
proceeds to the local government entity from (1) regulatory
licenses, user charges, and user fees (to the extent that such
proceeds exceed the cost reasonably borne by such entity) and
(2) the investment of tax revenues. Article XIII B provides that
if a governmental entity's revenues in any year exceed the
amounts permitted to be spent, the excess must be returned by
revising tax rates or fee schedules over the subsequent two
years.
Article XIII B does not limit the appropriation of moneys to
pay debt service on indebtedness existing or authorized as of
January 1, 1979, or for bonded indebtedness approved thereafter
sFZ-14290.6 16
by a vote of the electors of the issuing entity at an election
held for that purpose.
In the June 1990 election, the voters of the State approved
Proposition 111, which amended the method of calculating State
and local appropriations limits. Proposition 111 made several
changes to Article XIII B, three of which are reflected in the
City's 1992-93 computation of its appropriations limit. First,
the term "change in the cost of living" was redefined as the
change in the California per capital personal income ( "CPCPI")
from the preceding year. Previously the lower of the CPCPI or
the United States Consumer Price Index was used. Second, the
appropriations limit for the fiscal year was recomputed by
adjusting the 1986-87 limit by the CPCPI for the three subsequent
years. Third, Proposition 111 excluded appropriations for "all
qualified capital outlay projects, as defined by the Legislature"
from the definition of "appropriations subject to limitation. "
At the time of preparing the Fiscal Year 1992-93 Budget, the
City calculated its appropriations limit at $18, 978, 048. The
1992-93 Fiscal Year Budget adopted by the City included
appropriations of $11, 339, 844 which were subject to the limit.
Therefore, the City has extensive appropriations capacity
available prior to reaching the legal appropriations limit for
this fiscal year. The impact of the appropriations limit on the
City's financial needs in the future is unknown.
Statutory Spending Limitations
A statutory initiative ( "Proposition 62") was adopted by the
voters of the State at the November 4, 1986 General Election
which (1) requires that any tax for general governmental purposes
imposed by local governmental entities be approved by resolution
or ordinance adopted by two-thirds vote of the governmental
agency' s legislative body and by a majority of the electorate of
the governmental entity, (2) requires that any special tax
(defined as taxes levied for other than general governmental
purposes) imposed by a local governmental entity be approved by a
two-thirds vote of the voters within the jurisdiction, -
(3) restricts the use of revenues from a special tax to the
purposes or for the service for which the special tax is imposed,
(4) prohibits the imposition of ad valorem taxes on real property
by local governmental entities except as permitted by
Article XIII A, (5) prohibits the imposition of transaction taxes
and sales taxes on the sale of real property by local
governmental entities and (6) requires that any tax imposed by a
local governmental entity on or after March 1, 1985 be ratified
by a majority vote of the electorate within two years of the
adoption of the initiative or be terminated by November 15, 1988 .
Several recent decisions of State Courts of Appeal have held that
all or portions of the provisions of Proposition 62 are
unconstitutional.
SF2-14290.5 17
The City cannot predict the outcome of the litigation
concerning the validity of Proposition 62 . If ultimately found
valid, however, Proposition 62 could affect the ability of the
City to continue the imposition of, or retain, certain taxes,
such as sales and transient occupancy taxes, and further restrict
the City' s ability to raise revenue.
ECONOMIC CONDITIONS IN CALIFORNIA
Since the start of the 1990-91 Fiscal Year, the State has
faced its worst economic, fiscal, and budget conditions since the
1930' s. The recession has seriously affected State tax revenues,
which basically mirror economic conditions. It has caused
increased expenditures for health and welfare programs. In
addition, the State is facing a structural imbalance in its
budget, with the largest programs supported by its General Fund
(health, welfare, K-14 education and corrections) growing at
rates significantly higher than the growth rates for the
principal revenue sources of the General Fund. As a result, the
State has entered a period of chronic budget imbalances; the
State Controller reports that expenditures exceeded revenues for
four of the last five fiscal years. By June 30, 1992, according
to the State Department of Finance, the State General Fund had an
accumulated deficit, on a budget basis, of approximately
$2 .2 billion. Additionally, because of a delay in the adoption
of a State Budget and because available cash resources were
insufficient to pay State obligations due through June 30, 1992,
the State issued registered warrants in the amount of
$475 million to cover the shortfall. As a result of the
deterioration in the State' s budget and cash situation and the
delay in adoption of the 1992-93 State Budget, the rating on the
State' s general obligation bonds was reduced by Standard & Poor's
Corporation from "AAA" to "A+, " by Moody' s Investors Service from
"Aaa" to "Aa, " and by Fitch Investors Service, Inc. from "AAA" to
On October 15, 1992, the Commission on State Finance (the
"Commission") issued its quarterly forecast, predicting that the
State economy' s stagnant condition could continue for up to two
or more years. The Commission concluded that the State could
face a total deficit at June 30, 1993 of about $2 .4 billion if no
corrective actions were taken during the fiscal year.
The Governor's Budget proposal for the 1993-94 Fiscal Year,
released on January 8, 1993 (the "Governor' s Budget") , confirmed
the earlier forecasts about the State' s economy. According to
the Governor' s Budget, recovery from the recession will begin
only in late 1993 or 1994, and the Governor's Budget predicted
the General Fund will end the 1992-93 Fiscal Year with a deficit
of $2 .1 billion, compared to a $2 .2 billion deficit at June 30,
1992 .
The Governor' s Budget identifies an estimated $2. 6 billion
decrease from current levels in funding for counties, cities and
SF2-14290.5 18
special districts. Under the proposed budget, approximately
$2 . 075 billion in property tax revenue is proposed to be shifted
from cities, counties and special districts. In the 1992-93
Fiscal Year, $1.1 billion in permanent property tax shifts from
local governments to schools resulted in a loss of approximately
$349 , 100 in City tax revenues.
The Governor' s Budget represents the initial stage of the
1993-94 Fiscal Year budget negotiations, and the City cannot
predict which, if any, of the provisions with respect to the
local governments will be included in the 1993-94 Fiscal Year
budget as finally enacted.
CITY OF DUBLIN FINANCIAL INFORMATION
City Budget
The City adopts a final budget annually by June 30 for the
following fiscal year. The City Manager prepares a proposed
budget which is presented to the Council . The proposed budget
may be modified by the City Council of the City (the "Council")
during the budget hearing process. After the hearings, a final
budget is adopted.
Throughout the fiscal year, all revenues and appropriations
are subject to review and since the budget must remain in
balance, any overall reduction in revenues would require a
reduction in appropriations.
General Fund Financial Summary
The information contained in the following table is
summarized from audited financial statements for fiscal years
1989-90 through 1991-92 .
SF2-14290.5 19
CITY OF DUBLIN
STATEMENT OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES
GENERAL FUND
FOR THE YEARS ENDED JUNE 30, 1990, 1991 AND 1992
REVENUES 6/30/90 6/30/91 6/30/92
Taxes $9, 662, 335 $10,204, 052 $9,700,250
Licenses and permits 315, 010 248, 116 246,459
Intergovernmental 932, 834 973,266 864, 647
Charges for Services 1, 090,386 1, 196,484 939, 833
Use of Money and Property 1,333, 673 1,338,947 1, 038,503
Fines and Forfeitures 19,415 19,476 25, 780
Other Revenues 20, 609 290. 254 310, 851
$13, 374,262 $14,270,595 $13, 126,323
EXPENDITURES
General Government $1, 335, 881 $2, 010, 105 $3,335,919
Facilities Rent 706, 909 1,579,472 (1)
Public Safety 4,420,424 4, 800,963 5,404, 855
Highways and Streets 519, 166 837, 547 841,414
Health and Welfare 24, 580 26,277 29,526
Community Development 1, 566, 774 1, 827,354 1,438,474
Culture and Leisure 1,250, 106 1,459,419 1, 682,262
Capital Outlay 1, 169, 032 848,439 231, 877
$10, 992, 872 $13, 389,576 $12,964,327
Revenue in Excess or
<less> than Expenditures $2,381, 390 $881, 019 $161,996
Other Financing Sources (uses)
Operating transfers in 849,435 15, 023
Operating transfers out (75, 524) (4. 174) (50, 064)
$ 773, 911 $ (4, 174) $ (35, 041)
REVENUES AND OTHER FINANCING
SOURCES IN EXCESS OR (LESS)
THAN EXPENDITURES AND OTHER
USES $ 3, 155, 301 $ 876, 845 $126,955
FUND BALANCE TRANSFER (67, 747) (13, 001)
FUND BALANCE BEGINNING 11, 376,484 14,464, 038 15,327. 882
FUND BALANCE END OF YEAR $14,464, 038 $15, 327, 882 $15,454, 837
Source: Compiled from the City's financial statements for the
individual years.
(1) Facilities rent for the fiscal year ended June 3,0, 1992 has been
accounted for in the City's Enterprise Fund, as detailed in the
financial statements attached hereto as Appendix A.
A copy of the City' s Audited General Purpose Financial
Statements for the fiscal year ended June 30, 1992 is attached as
Appendix A to this Official Statement. Audited financial
statements for prior years are available upon request from the
Finance Department of the City.
SF2-14290.5 20
The following table has been obtained from California
Municipal Statistics, Inc. The City and the Underwriter believe
the information to be reliable, but take no responsibility for
the accuracy thereof.
CITY OF DUBLIN
DIRECT AND OVERLAPPING BONDED DEBT STATEMENT
1992-93 Assessed Valuation: $1,470,529,568
DIRECT AND OVERLAPPING BONDED DEBT: % Applicable Debt 6/1/93
Alameda County Authorities 2.194% $ 7,378,620
Alameda County Superintendent of Schools Certificates of Participation 2.194 162,137
Oakland-Alameda County Coliseum Authority 1.097 140,361
Bay Area Rapid Transit District 0.856 2,400,438
Alameda County Flood Control District, Zone#7 12.946 55,021
Dublin Joint Unified School District 99.539 3,404,234
Dublin Joint Unified School District Certificates of Participation 99.539 77,640
Amador Valley Joint Union High School District 99.539 22,638
Murray School District 99.539 239,327
East Bay Regional Park District 1.263 1,476,700
City of Dublin 1988 Certificates of Participation 100. 15,895,000(1)
City of Dublin 1915 Act Bonds 100. 2.790.000
TOTAL GROSS DIRECT AND OVERLAPPING BONDED DEBT $34,042,116(2)
Less: Oakland-Alameda County Coliseum Authority(100% self-supporting) 140.361
TOTAL NET DIRECT AND OVERLAPPING BONDED DEBT $33,901,755
(1) Excludes refunding certificates of participation to be sold.
(2) Excludes tax and revenue anticipation notes, revenue, mortgage revenue and tax allocation bonds and
non-bonded capital lease obligations.
Ratio to Assessed Valuation:
Direct Debt 1.08%
Total Gross Debt 2.31%
Total Net Debt 2.31%
STATE SCHOOL BUILDING AND AID REPAYABLE AS OF 6/30/92: $889,141
Source: California Municipal Statistics, Inc.
sae-14290.5 21
CITY OF DUBLIN
General
The City of Dublin is located in the Tri-Valley in Alameda
County. The City is bordered to the south by the City of
Pleasanton and to the north by the City of San Ramon. The City
is 35 miles southeast of San Francisco, 395 miles north of Los
Angeles and is within a twenty-five minute drive from San Jose
and Oakland.
The City was incorporated on February. 1, 1982 and is
governed by a Council-Manager form of government. The City
Council consists of five members which includes a directly-
elected Mayor and four City Councilmembers. The Mayor is elected
to a two-year term, while each City Councilmember serves a four-
year term.
Interstate Freeways 580 and 680 intersect in Dublin and
allow easy access to the stable economy of the East Bay.
Residential areas are located 125 to 360 feet above sea level
with average temperatures of 80° in the summer and 60° in the
winter.
City Growth
At the time of its incorporation in 1982, the City covered
4.1 square miles. Since that time, the City has annexed
434 acres of land to the west which is primarily residential in
nature and 2, 713 .47 acres of primarily governmentally-owned land
to the east and now covers 9 . 02 square miles.
The City is nearing completion of a General Plan Amendment,
covering approximately 10 . 8 square miles of largely undeveloped
land. Approximately five square miles are covered by a Specific
Plan, which is being processed concurrently with the General Plan
Amendment. The draft plans being considered provide for a fully
integrated community including residential sites, commercial and
employment generating properties, schools, public buildings,
parks, and open space.
Population
The following table presents population data for the City,
Alameda County and the State of California since 1988 .
SF2-14290.5 22
CITY, COUNTY AND STATE POPULATION DATA
City of Alameda State of
Year Dublin County California
1988 20, 035 1,242,300 28, 060, 746
1989 21,420 1,261, 172 28,771,207
1990 23,229 1,279, 182 29, 760, 021
1991 23,450 1,290, 800 30,321, 000
1992 25, 150 1, 313, 300 30,989, 000
Sources: 1990 - - U.S. Census. 1988, 1989, 1991 and 1992 --
California State Department of Finance.
Labor Relations
The City provides many traditional municipal services
through contracts with both public and private entities. This
allows the City to operate with a small staff of only 36 full-
time positions. The Recreation Department supplements its
regular staff with between 30-35 seasonal/part-time employees.
Approximately 50 contract employees provide a variety of
municipal services from City facilities.
The City does not have any labor organizations which
represent City employees.
Property Taxation
City property taxes are assessed and collected by Alameda
County (the "County") at the same time and on the same rolls as
the property taxes are collected for the County, special
districts and school districts. Assessed valuations are based
upon 1008 of market value at the time of sale and are limited to
an increase of two percent per year. The value of improvements
to property is added to assessed value at 100 percent of cost.
For assessment and collection purposes, property is
classified either as "secured" or "unsecured" , and is listed,
accordingly, on separate parts of the assessment roll. The
"secured roll" is that part of the assessment roll containing
State assessed property, and property the taxes on which are a
lien on real property, sufficient, in the opinion of the County
Assessor, to secure payment of the taxes. All other property is
assessed on the "unsecured roll. "
The following table presents a summary of assessed
valuations in the City for fiscal years 1988-89 through 1992-93 .
sF2-14290.5 23
CITY OF DUBLIN
ASSESSED VALUATIONS
Fiscal Year Secured Unsecured State Board Exemptions Net Valuation
1988-89 $ 994,060,509 $84,480,331 $1,812,200 $31,333,584 $1,049,019,456
1989-90 1,127,686,003 95,509,285 1,812,200 41,999,100 1,183,008,388
1990-91 1,239,883,439 91,617,815 4,536,700 45,607,493 1,290,430,461
1991-92 1,331,220,658 93,627,706 4,536,700 46,860,508 1,382,524,556
1992-93 1,391,658,878 93,080,521 4,536,700 48,041,531 1,441,234,568
Source: Auditor-Controller of Alameda County.
Economic Structure
The City has approximately 800 commercial businesses serving
the Tri-Valley area ranging from large department stores and
discount stores to small individualized service stores. The
Stoneridge Shopping Center is located across Interstate 580
approximately one mile from the City.
Employment
The following table shows the major employers in the City.
CITY OF DUBLIN
MAJOR EMPLOYERS
Employer Industry Employees
County of Alameda County Jail 500
Dublin Unified School District Education 375
Lucky Store Inc. Headquarters for Retail Grocery Co. 300
Hexcel Corporation Mfg. Honeycomb Resins, Adhesives & Glass 300
United States Dept. of Justice Federal Correctional Institute 295
Smith-Kline Beecham Medical Laboratory 201
Unisource Wholesale Paper Products Distribution 200
Montgomery Wards Department Store 190
Target Stores Retail Department Store 167
Mervyn's Department Store 115
Tele-Vue Systems, Inc. Cable Television 100
Shamrock Ford Auto Dealer 86
National Food Laboratory Food Laboratory 85
Source: City of Dublin, Dublin Chamber of Commerce.
sae-14290.5 24
.
The following table shows employment figures for Alameda
County for the years 1987 through 1991.
ALAMEDA COUNTY EMPLOYMENT
Annual Averages (in thousands)
1987 1988 1989 . 1990 1991
Civilian Labor Force 639 . 8 662 .9 692 .0 675.7 679 .1
Employment 607.2 632 .2 662 . 8 647. 6 643 .2
Unemployment 32 .6 30 .7 29 .2 28 .1 35.9
Unemployment Rate 5.1% 4. 6% 4.2% 4.2% 5.3%
Source: California Employment Development Department.
As the following table shows, the County of Alameda has
consistently recorded a lower annual average unemployment rate
than the United States as a whole, and a significantly lower rate
than the State of California.
COUNTY OF ALAMEDA
STATE OF CALIFORNIA
UNITED STATES
COMPARISON OF ANNUAL AVERAGE UNEMPLOYMENT RATES
County of Alameda State of California United States
1987 5 .1 5. 8 6.2
1988 4 . 6 5 .3 5.5
1989 4.2 5 .1 5.3
1990 4 .2 7.4 6.6
1991 5.3 7.5 6.7
Source: California Employment Development Department
SF2-14290.5 25
The following table shows the value of taxable transactions
in the City for the years 1987 through 1991.
CITY OF DUBLIN
TAXABLE TRANSACTIONS
(in thousands of dollars)
1987 1988 1989 1990 1991
Apparel Stores $ 13,968 $ 14,920 $ 16,011 $ 17,630 $ 18,119
General Merchandise Stores 43,183 56,072 62,383 68,573 72,912
Drug Stores 8,724 (1) (1) (1) 7,689
Packaged Liquor Stores (1) (1) (1) 3,658 3,491
Food Stores 15,821 15,443 16,397 14,885 18,418
Eating & Drinking Places 26,305 30,233 27,541 26,548 27,341
Home Furnish and Appliances 28,565 43,231 48,688 51,211 49,643
Building Material and Farm Implements 26,765 31,305 36,188 33,098 25,213
Auto Dealers and Auto Supplies 120,050 116,696 113,929 121,088 108,433
Service Stations 15,737 16,748 17,417 19,752 19,493
Other Retail Stores 41,844 62,285 63,476 67,687 52,161
Retail Stores Totals 340,962 386,933 402,030 424,130 402,913
All Other Outlets 68,800 82,793 87,248 88,221 64,850
Total All Outlets $409,762 $469,726 $489,278 $507,351 467,763
Source: California State Board of Equalization.
(1) Sales omitted because their publication would result in the disclosure of confidential
information.
52-14290.5 26
,
Building and Construction
The following table shows the value of building permits issued
in the City between 1988 and 1992 .
CITY OF DUBLIN
BUILDING PERMIT VALUATIONS
(in thousands of dollars)
1988 1989 1990 1991 1992
Residential
New single-dwelling $ 4,182 $ 12,803 $ 0 $ 0 $ 7,756
New multi dwelling 7,740 21,025 5,320 5,500 0
Additions 494 578 783 494 631
Alterations 1.795 2.700 1,770 1,406 1.472
Total 14,221 37,106 7,873 7,400 9,859
Non-Residential
New commercial 885 417 3,590 1,128 0
New industrial 0 0 0 0 0
Other 3,094 681 1,101 4,331 3,309
Additions 200 0 120 0 0
Alterations 3.902 3.640 5.093 4,694 3,479
Total 8,081 4,738 9,904 10,153 6,518
TOTAL VALUATION $22,293 $41,844 $17,,777 $17,555 S16,3//
Number of New Dwelling Units
Single Family 182 29 29 4 6
Multi-Family 382 327 35 461 180
Total 564 356 64 465 186
Source: City of Dublin, Building Inspection Department
Note: Totals may not add due to independent rounding.
Community Facilities
The Dublin Library is one of the 12 branches of the Alameda
County Library System. The Library is a well-used resource in
the community and, as a result of City funding and support, the
facility is open seven days a week. The entire system provides
access to approximately 800, 000 volumes.
The City also operates Shannon Community Center and Dublin
Senior Center. These facilities provide space to accommodate
various community meetings, instructional classes, and
recreational activities. These facilities are also rented to
area residents for social functions, such as wedding receptions
and public dances. The Dublin Civic Center also provides meeting
space for community groups.
In addition to the public facilities located in Dublin.
several privately-owned businesses provide recreational
opportunities for area residents. Due to the city' s location, it
has become a central point for the location of various
entertainment-related businesses. This includes an ice skating
rink, a bowling alley, and two large movie theater complexes
containing a total of 14 screens.
SF2-14290.5 27
Parks and Recreation
The City' s Recreation Department is responsible for
providing recreation programs for the residents of the City.
Programs are offered on a quarterly basis and are publicized
through the "Schedule of Recreation Classes and Programs" mailed
to residents four times a year.
The Department currently offers programs in the following
areas:
Preschool Classes (2-5 years)
Leisure Enrichment Classes (All ages)
Afterschool Playground_ Program (1-6 grades)
Summer Playground Program (6-12 years)
Summer Youth Employment Program (13-21 years)
Special Events
Volleyball Leagues (Adult)
Teen Programs (trips & dances)
There are currently 57 acres of developed parkland within
the City, as follows:
Alamo Creek Park
Dolan Park
Dublin Sports Grounds
Kolb Park
Mape Park
Shannon Park & Community Center
Stagecoach Park
Dublin Swim Center
In addition, 100 acres of open space have been designated
for a future park. The City has also entered into a Facility Use
and Development Agreement with the Dublin Unified School District
which has resulted in improvement and maintenance of selected
school district athletic facilities by the City.
Hospitals
The City does not have a hospital within City limits;
however, nearby hospitals such as San Ramon Regional Medical
Center located in San Ramon, Valley Memorial Hospital located in
Livermore, Valley Care Medical Center located in Pleasanton and ,
Kaiser Permanente Hospital located in Walnut Creek are among
those serving the City of Dublin.
Churches
Churches located in the City include the following:
Church of Jesus Christ of Latter-Day Saints
Dublin Christian Church
Eagles Nest Christian Fellowship of No. California
S72-14290.5 28
- L }
John Knox Presbyterian Church
Lutheran Church of the Resurrection - ELCA
Parkway Baptist Church
St. Philip Lutheran Church
St. Raymond' s Catholic Church
Tri Valley Chinese Bible Church
Tri Valley. Church of God
Valley Christian Center
Valley Bible Church
Financial Institutions
Financial institutions located in the City include the
following:
Bank of America
Community First National Bank
Great Western Bank
Homestead Savings
Sanwa Bank of California
Wells Fargo Bank '
Education
The Dublin School District provides kindergarten through
12th grade education within the City. Its boundaries are
contiguous with those of the City. The district operates Dublin
High School, Valley Continuation High School, Wells Intermediate
School, and Fredericksen, Nielsen, and Murray Elementary Schools.
There are also five private schools located within the City.
Valley Christian Center operates the Valley Christian School, a
kindergarten through 8th grade program, located at a former
public school site. The Valley Christian Center also operates a
high school located on Valley Christian Center property in the
western foothills. St. Raymond' s Catholic Church operates a
school with a kindergarten through 8th grade program, and
St. Philip Lutheran Church operates an elementary school. In
addition, the Fountainhead Montessori School operates a school
with a preschool through 3rd grade program.
Los Positas College provides post-secondary education and is
operated by the South County Community Colleges District. East
Bay colleges and universities include the University of
California at Berkeley, California State University at Hayward,
Mills College, St. Mary' s College, Holy Names College and John F.
Kennedy University in Orinda. In addition, Stanford University,
the University of Santa Clara, San Jose State University and
Hastings College of Law are all within an hour' s drive of the
City.
SF2-14290.5 29
Transportation
The City is located at the intersection of Interstate 580
and Interstate 680. These interstates serve as major
transportation corridors to and from the City. Oakland
International Airport is within a 20 minute drive.
Bay Area Rapid Transportation ("BART") has approved the
extension of a line from Hayward to the City. Current
projections are that the service could be in place by late 1995.
The new Dublin station will be located approximately one mile
from the Project. BART currently provides express bus service
from the City to its Hayward station.
Local bus service is provided by the Livermore Amador Valley
Transit Authority (LAVTA) . This is a joint powers authority with
representatives from the cities of Dublin, Livermore and
Pleasanton and from Alameda County. LAVTA also provides Para-
Transit services to its elderly and handicapped residents.
Utilities
Gas Electricity - Pacific Gas and Electric
Telephone - Pacific Bell
Cable Television - Viacom Cablevision
Garbage Service - Livermore-Dublin Disposal, which is a
division of Oakland Scavenger Company ( "OSC") . OSC is currently
owned by Waste Management Inc. , which provides collection
services and operation of the sanitary landfill. The landfill is
not located in the City.
Water and Sewer - These services are provided by Dublin San
Ramon Services District.
LESSOR
Dublin Information, Inc. is a non-profit public benefit
corporation organized under the laws of the State of California.
The Board of Directors of the Lessor is comprised of the members
of the City Council, the City Manager and the Assistant City
Manager.
UNDERWRITING
The Certificates will be purchased by Rauscher Pierce
Refsnes, Inc. , San Francisco, California (the "Underwriter") .
The Underwriter has agreed to purchase the Certificates at a ,
price equal to $ , plus accrued interest. The
initial public offering prices set forth on the cover page may be
changed by the Underwriter. The Underwriter may offer and sell
the Certificates to certain dealers and others at prices lower
SF2-14290.5 30
than the public offering prices set forth on the cover page
hereof. The Contract of Purchase between the City and the
Underwriter provides that the Underwriter will purchase all of
the Certificates if any are purchased.
RATINGS
[TO BE REVISED RE BOND INSURANCE]
Moody's Investors Service has given the Certificates c-
rating of and Standard & Poor' s Corporation has given
the Certificates a rating of . Any desired explanation
of the significance of such ratings should be obtained from the
respective rating agency furnishing the same. The City furnished
to such rating agencies certain information and materials with
respect to the Certificates and the City. Generally, rating
agencies base their ratings on the information and materials so
furnished to them and on investigations, studies and assumptions
by the rating agencies. There is no assurance that such ratings
will be retained for any given period of time or that it will not
be lowered or withdrawn entirely if, in the judgment of the
agencies originally establishing the ratings, circumstances so
warrant. Any such change in or withdrawal of such ratings could
have an adverse effect on the market price of the Certificates.
TAX MATTERS
In the opinion of Brown & Wood, San Francisco, California,
Special Counsel, based on existing statutes, regulations, rulings
and judicial decisions and assuming compliance with certain
covenants set forth in the Lease and Trust Agreement and
requirements of the Internal Revenue Code of 1986, as amended
(the "Code") , regarding the use, expenditure and investment of
proceeds of the Certificates and the timely payment of certain
investment earnings to the United States, the portion of each
Lease Payment due under the Lease designated as and comprising
interest and received by owners of the Certificates is not
includable in gross income of the owners thereof for federal
income tax purposes. Failure to comply with such covenants and
requirements may cause the portion of each Lease Payment due
under the Lease designated as and comprising interest and
received by owners of the Certificates to be included in federal
gross income retroactively to the date of execution and delivery
of the Certificates.
In the further opinion of Special Counsel, the portion of
each Lease Payment due under the Lease designated as and
comprising interest and received by owners of the Certificates
will not be treated as an item of tax preference in calculating
the federal alternative minimum taxable income of individuals and
corporations. However, such portion of each Lease Payment will
be included as an adjustment in the calculation of federal
corporate alternative minimum taxable income and may therefore
SF2-14290.6 31
affect a corporation' s alternative minimum tax and environmental
tax liabilities.
Ownership of, or the receipt of interest on, tax-exempt
obligations may result in collateral tax consequences to certain
taxpayers, including, without limitation, financial institutions,
property and casualty insurance companies, certain foreign
corporations doing business in the United States, certain S
corporations with excess passive income, individual recipients of
Social Security or Railroad Retirement benefits and taxpayers
that may be deemed to have incurred or continued indebtedness to
purchase or carry tax-exempt obligations. Special Counsel
expresses no opinion with respect to any collateral tax
consequences and, accordingly, prospective purchasers of the
Certificates should consult their tax advisors as to the
applicability of any collateral tax consequences.
In the further opinion of Special Counsel, the portion of
each Lease Payment due under the Lease designated as and
comprising interest and received by owners of the Certificates is
exempt from personal income taxes imposed by the State of
California.
A copy of the proposed form of opinion of Special Counsel is
attached hereto as APPENDIX C.
VERIFICATION OF MATHEMATICAL ACCURACY
Ernst & Young, independent certified public accountants upon
delivery of the Certificates, will deliver a report on the
mathematical accuracy of certain computations contained in the
schedules provided to them, which are based on assumptions and
information provided by the Underwriter on behalf of the City,
relating to the sufficiency of the principal of and interest on
the securities on deposit in the Escrow Fund to pay, when due,
principal of and interest on the Refunded Certificates.
The report of Ernst & Young will include the statement that
the scope of their engagement is limited to reviewing the
mathematical accuracy of the computations contained in the
schedules provided to them, and that they have no obligation to
update their report because of events occurring, or data or
information coming to their attention, subsequent to the date of
their report.
LITIGATION
The City
Upon the delivery of the Certificates, the City will provide
its certificate that there is no litigation of any nature now
pending against the City or, to the knowledge of its officers,
threatened, seeking to restrain or enjoin the execution or
delivery of the Lease or Trust Agreement or the issuance or sale
SF2-14290.5 32
C. C
of the Certificates or in any way contesting the validity of the
Lease, Trust Agreement, or the Certificates or any proceedings of
the City taken with respect to such execution, delivery or sale,
or the application of any monies or security provided for the
payment of the Lease Payments or the use of the Certificate
proceeds.
There are several lawsuits and claims pending against the
City. The aggregate amount of uninsured liabilities of the City
which may result from such suits and claims, as determined by the
City Attorney, will not, in the opinion of the City Attorney,
materially affect the City's finances or impair its ability to
pay the Lease Payments.
Richmond School District Case
In April, 1992, a complaint was filed in Superior Court in
Contra Costa County, California, seeking to enforce payments by
the Richmond Unified School District (the "District") under a
lease arrangement having features similar to the Lease of the
City. (This action is not against the City or the Lessor and
does not involve the Lease of the City. ) In an answer to the
complaint, the District, through its State-appointed trustee and
administrator, and the State Superintendent of Public
Instruction, another defendant in the action, contended, among
other things, that the District lease is unenforceable in that it
constitutes long-term debt of the District which has not received
voter approval as required by the State Constitution. The State
of California, another defendant, also answered the complaint
contending that the District lease and related documents were
entered into without proper authority and are without effect and
void. The Court, in October 1992, issued two bench rulings in
which the Court refused to issue writs of mandate to compel the
District to budget and appropriate rental payments pursuant to
its lease covenant. On December 11, 1992, the Court ruled that
the certificates of participation issue was a valid contract and
the District is obligated to pay holders of the defaulted
certificates of participation. On April 23, 1993, the Court
ruled that the District is obligated to pay past rents due under
the lease, but that the Court does not have the power to actually
order the appropriation or budgeting of money to make such
payments.
Brown & Wood, San Francisco, California, Special Counsel, is
delivering its Final Opinion, in the form of Exhibit C to the
Official Statement, incident to the closing of this transaction.
That opinion is its regular Special Counsel opinion for
transactions involving certificates of participation and
provides, in part, that the Lease is a valid and binding
obligation of the City and does not constitute a debt of the City
within the meaning of any constitutional debt limitation. The
opinion is subject to the standard conditions and limitations
contained in the opinion, including the fact that the rights and
obligations under the Lease may be subject to bankruptcy,
SF2-14290.5 33
�. 1. ,
insolvency, reorganization, arrangement, fraudulent conveyance,
moratorium and other laws relating to or affecting creditors'
rights, to the application of equitable principles and to the
exercise of judicial discretion in appropriate cases and to the
limitations on legal remedies against cities in the State of
California. Special Counsel expresses no opinion as to the
outcome or effect of the above-mentioned litigation.
APPROVAL OF LEGALITY
At the time of the delivery of the Certificates, Brown &
Wood, San Francisco, California, Special Counsel, will deliver
its opinion, substantially in the form attached hereto as
Appendix C. Certain legal matters will be passed upon for the
Underwriter by Orrick Herrington & Sutcliffe, San Francisco,
California, and for the City by the City Attorney.
OTHER MATTERS
This Official Statement is not to be construed as a contract
or agreement between the City and the purchasers or any of the
Owners of Certificates. Any statement made in this Official
Statement involving matters of opinion, whether or not expressly
so stated, are intended merely as an opinion and not as
representations of fact. The information and expressions of
opinion herein are subject to change without notice and neither
the delivery of this Official Statement nor any sale made
hereunder shall, under any circumstances, create any implication
that there has been no change in affairs in the City since the
date hereof. All references to the Trust Agreement, the Lease,
the Escrow Agreement and the Assignment Agreement are brief
outlines of certain provisions thereof. Such outlines do not
purport to be complete and reference is made to such documents
for a full and complete statement of such provisions.
The execution and delivery of this Official Statement have
been duly authorized by the City.
CITY OF DUBLIN
By
City Manager
SF2-14290.5 34
APPENDIX A ,
CITY OF DUBLIN
AUDITED FINANCIAL STATEMENTS FOR THE FISCAL YEAR
ENDED JUNE 30, 1992
SF2-14290.5 A-1
APPENDIX B
SUMMARIES OF PRINCIPAL LEGAL DOCUMENTS
[TO COME]
SP2-14290.5 B-1
S
APPENDIX C
FORM OF OPINION OF SPECIAL COUNSEL
[TO COME]
SF2-14290.5 C-1