RES-1989-295CITY OF ANAHEIM RESOLUTION NO. 89R- 295
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ANAHEIM,
CALIFORNIA RELATING TO THE ISSUANCE OF ELECTRIC REVENUE
ANTICIPATION NOTES OF SAID CITY PURSUANT TO ORDINANCE
NO. 5032 OF SAID CITY COUNCIL.
WHEREAS, the ~ity Council of the City of Anaheim (the
"City") at its meeting on June 20, 1989, adopted an Ordinance,
designated as Ordinance No. 5032, establishing new procedures for
the issuance, sale and securing of Electric Revenue Anticipation
Notes of the City and providing the terms and conditions of said
Notes (the "Ordinance"); and
WHEREAS, capitalized terms used herein and not defined
herein shall have the meanings ascribed thereto in the Ordinance;
and
WHEREAS, the City Council has determined that it is in
the best interests of the City to adopt the following resolution
(the "Resolution',):
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF ANAHEIM
DOES HEREBY RESOLVE, DETERMINE AND ORDER AS FOLLOWS:
Section 1. Definitions. As used in this Resolution,
""Charter, ""Dealer,""Determination,
"Agreements, ""Constitution, ,,
" "ERAN Account, ,,
"Electric System, " "Issuing and Paying Agent,
" "Notes " "Outstanding,
"Issuing and Paying Agent Agreement, , ,,
"Qualified Obligations Account," "Revolving Credit Agreement" and
"Surplus Revenues" shall have the respective meanings ascribed
thereto in the Ordinance. As used in this Resolution:
"Authorized Person" shall mean each of the Public
Utilities General Manager of the City, the Assistant General
Manager-Finance and Administration of the Public Utilities
Department of the City, the Financial Services Manager of the
Public Utilities Department of the City, the City Treasurer and the
Finance Director of the City.
"Bond" shall mean any revenue bond, revenue note, warrant
or other evidence of indebtedne~ iz~ued, incurred or delivered for
the financing or refinancing of extensions of, additions to,
repairs and replacements to, renewals of, and improvements of the
Electric System, designated by the City at the initial delivery
thereof as payable from Surplus Revenues in the Qualified
Obligations Account. "Bond" shall not include any Obligation or
1989 Certificate.
"Bond Counsel" shall mean (a) ~udge Rose Guthrie
Alexander & Ferdon, Los Angeles, California, and Rourke & Woodruff,
Orange, California, co-bond counsel to the City in connection with
the issuance of the Notes and the 1983 Notes or (b) any other
nationally recognized law firm specializing in the area of tax-
exempt municipal finance appointed by the City in connection with
the Notes.
"Maximum Annual Qualified Obligation Service" shall mean,
as of any date, the maximum amount of Qualified Obligation Service
payable in any subsequent Fiscal Year.
"1989 Certificates" shall mean the City of Anaheim,
Electric System Certificates of Participation executed (Combustion
Turbine Peaking Plant) and delivered pursuant to the Trust
Agreement among the City, the Anaheim Public Improvement
Corporation and the trustee thereunder.
"Obligation" shall mean any contract, instrument or other
agreement for the purchase, acquisition or lease of facilities,
properties, structures or equipment for the Electric System,
designated by the City at the initial delivery thereof as payable
from Surplus Revenues in the Qualified Obligations Account, and the
final payments under which are due more than one year following the
incurrence thereof. "Obligation" shall not include any Bond or
1989 Certificate.
"Qualified Obligations" shall mean (a) the 1989
Certificates; and (b) Bonds and Obligations which at the time of
initial delivery thereof satisfy the requirements of Section 10
hereof.
"Qualified Obligation Service" shall mean, with respect
to any period, the amount of principal and interest or other
payments accrued or to accrue in such period with respect to all
outstanding Qualified Obligations (excluding the amount of proceeds
of Qualified Obligations held in any fund or account for the
payment of Qualified Obligation Service accrued or to accrue during
such period). For purposes of accrual under this definition, all
payments with respect to Qualified Obligations due in a calendar
month shall be deemed due on the first day of such calendar month.
section 2. Represen~a~ions and Warran~ies.
The City represents and warrants, with respect to the
Electric System, that:
(a) It is a municipal corporation duly organized and
validly existing under the Constitution and laws of the State of
California, and has all requisite power and authority to conduct
its business, to own its properties and to execute, deliver and
perform all of its obligations under the Ordinance, this Resolution
and the Agreements; and to issue each of the Notes.
(b) ~ issuance, execution, del_.ery and performance
by the City of the Notes, the Ordinance, this Resolution and the
Agreements have been duly authorized and do not (i) violate any
provision of the Charter, any law, rule, regulation, order, writ,
judgment, injunction, decree, determination or award presently in
effect having applicability to the Electric System, (ii) result in
a breach of or constitute a default under any resolution of the
City with respect to the Electric System or any indenture or loan
or credit agreement or any other agreement, lease or instrument
with respect to the Electric System to which the City is a party
or by which the City or any of its Electric System properties may
be bound or affected, or (iii) result in, or require, the creation
or imposition of any mortgage, deed of trust, pledge, lien,
security interest or other charge or encumbrance of any nature,
other than those imposed in the Ordinance, this Resolution and the
Agreements, upon or with respect to any of the assets now owned or
hereafter acquired by the City for the Electric System; and the
City is not in any material respect in violation of or in default
under any such law, rule, regulation, order, writ, judgment,
injunction, decree, determination or award or any such indenture,
agreement, lease or instrument material to its operation of the
Electric System.
(c) No authorization, consent, approval, license,
exemption of or registration with any court or governmental
department, commission, board, bureau, agency or instr%n~entality,
domestic or foreign, has been or will be necessary for the valid
execution, delivery and performance by the City of the Ordinance,
this Resolution and the Agreements, except for (i) those which have
already been given, obtained or accomplished or (ii) those which
are required in the future.
(d) The Ordinance, this Resolution and the Agreements,
when the Ordinance has become effective and such Agreements have
been executed and delivered by the parties thereto, constitute
legal, valid and binding obligations of the City enforceable
against the City in accordance with their respective terms, except
as they may be limited by applicable bankruptcy, insolvency,
moratorium, reorganization or similar laws affecting the
enforcement of creditors' rights generally.
(e) The Notes will be, when executed and delivered,
valid and binding obligations of the City, enforceable in
accordance with their respective terms, except as they may be
limited by applicable bankruptcy, insolvency, moratorium,
reorganization or similar laws affecting the enforcement of
creditors' rights generally.
Sectio.. 3. Tax Covenants Relating t. the Internal Revenue
Co~e of 1986.
Notes:
The City shall do the following with respect to the
(a) The City shall comply with each applicable
requirement of the Internal Revenue Code of 1986 (the "Code")
necessary to maintain the exclusion of interest on the Notes from
gross income for Federal income tax purposes. In furtherance of
the covenant contained in the preceding sentence, the City agrees
to comply with the provisions of the Tax Certificate as to
Arbitrage and Instructions as to Compliance with the Provisions of
Section 103(a) of the ~nternal Revenue Code of 1986 (the "Tax
Certificate") as most recently executed by the City on May 2, 1988,
and as amended on May 18, 1988, as such Tax Certificate may be
further amended from time to time, as a source of guidance for
achieving compliance with the Code.
(b) The City shall make any and all payments required
to be made to the United States Department of the Treasury in
connection with the Notes pursuant to Section 148(f) of the Code
from amounts on deposit in the funds and accounts established under
the Ordinance or otherwise available therefor.
(c) The City covenants that it will not issue any Notes
or other commercial paper, any proceeds of which will not be used
to refund maturing Notes without an opinion of Bond Counsel to the
effect that interest on the Notes being so issued will be excluded
from gross income for Federal income tax purposes.
(d) Notwithstanding any other provision of the Ordinance
or this Resolution to the contrary, so long as necessary to
maintain the exclusion from gross income of interest on the Notes
for Federal income tax purposes, the covenants contained in this
Section 3 shall survive the payment of the Notes and the interest
thereon.
(e) Notwithstanding any other provision of the Ordinance
or this Resolution to the contrary, upon the City's failure to
observe or refusal to comply with the above covenants, the holders
of the Notes, or the Trustee acting on their behalf, shall be
entitled to the rights and remedies provided to Note holders under
the Ordinance or this Resolution, other than the right (which is
abrogated solely in regard to the failure to observe or refusal to
comply with the covenants of this Section 3) to declare the
principal of all Notes then outstanding, and the interest accrued
thereon, to be due and payable.
Section 4. NO Litigation.
The City hereby represents that there is no litigation
pending involving the City wherein an unfavorable decision, ruling
or finding would adversely affect the validity of the Notes, the
Ordinance, this ..~solution or the Agreement~, except for any such
litigation as to which there has been rendered an opinion of Bond
Counsel that such litigation is without merit.
Section 5. Covenants Relating to Notes.
The City hereby covenants that:
(a) No Note issued under the Ordinance, other than any
Note issued pursuant to the Revolving Credit Agreement, shall
mature more than two hundred seventy (270) days from the date of
issuance thereof.
(b) A Note need not bear interest from its date, if the
Determination given or delivered with respect to such Note pursuant
to the Ordinance shall specify an interest rate of zero.
(c) So long as any Note is Outstanding, the City will
not at any time amend or modify the Ordinance or this Resolution,
without the written consent of the holder of each Note Outstanding
at such time, provided, however, that such consent shall not be
required: (i) if the amendment or modification shall be, and be
expressed to be, inapplicable to all Notes Outstanding prior to
the effectiveness of such amendment or modification; and (ii) to
amend or modify the Ordinance or this Resolution for the purpose
of compensating the commercial bank(s) under the Revolving Credit
Agreement, for changes in such commercial bank's or banks'
financial benefits derived under the Revolving Credit Agreement,
arising as a result of Federal income tax law changes and banking
regulation changes, or for the purpose of substituting a financial
institution under the Revolving Credit Agreement with a financial
institution of equal or higher credit rating as determined by each
of Moody's Investors Service and Standard & Poor's Corporation.
Section 6. Additional Covenants Relating to the Notes
and the Electric System.
So long as any of the Notes are outstanding, the City
makes the following covenants with the Note holders under the
provisions of Section 1210 of the Charter (to be performed by the
City or its proper officers, agents or employees), which covenants
are necessary, convenient and desirable to secure the Notes and
tend to make them more marketable; provided, however, that said
covenants do not require the City to expend any moneys other than
from the Surplus Revenues in the ERAN Account.
Covenant 1. Punotual Payment. The City will duly and
punctually pay or cause to be paid the principal of and interest
on every Note issued hereunder on the date, at the place and in the
manner mentioned in the Notes and in accordance with this
Resolution, in strict conformity with the terms of the Notes and
of this Resolution, and it will faithfully observe and perform all
of the conditions, covenants and requirements of this Resolution
and all resolutions supplemental thereto and of the Notes issued
hereunder, and %_.at the time of such payments and performance is
of the essence of the City's contract with the Note holders.
Covenant 2. operate Electric 8yste~ in Efficient and
Economical Manner. The City shall operate the Electric System in
an efficient and economical manner and shall operate, maintain and
preserve the Electric system in good repair and working order.
Covenant 3. Insurance. The City shall at all times
maintain with responsible insurers all such insurance on the
Electric System as is customarily maintained by similar utilities
systems with respect to works or properties of like character
against accident to, loss of or damage to such works or properties
and against loss of revenues. The City shall also maintain with
responsible insurers worker's compensation insurance and insurance
against public liability and property damage to the extent
reasonably necessary and obtainable. Notwithstanding the
foregoing, the City may provide any insurance required hereby
through a self-insurance program or as part of any blanket
coverages maintained by the City.
Covenant 4. Recor4s an4 Accounts. The City shall keep
proper books of record and accounts of the Electric System,
separate from all other records and accounts, in which complete
and correct entries shall be made of all transactions relating to
the Electric System. The City shall cause the books and accounts
of the Electric System to be audited annually by an independent,
certified public accountant or firm of certified public accountant.
Covenant $. Collection of Charges. The City will permit
no free use of services of the Electric System. The City will pay
promptly to the account of the Electric System from the City's
General Fund (or other available funds) for all City use and
services of the Electric System. The City will not grant or
establish within any class of service preferential or
discriminatory rates, fees or charges for use and services of the
Electric System. For the purposes of setting such rates, fees and
charges, service located outside the city limits of the City of
Anaheim may be considered as separate classes of service. The City
covenants that it shall at all times during the period any of the
Notes are outstanding maintain and enforce valid regulations for
the payment of bills for electric service and that such regulations
shall at all times during such period provide that the City shall
discontinue electric service to any user whose electric bill has
not been paid within the time fixed by said regulations.
Covenant G. Defense of Security for Notes. The City
shall preserve and protect the security for the Notes and the
rights of the Note holders and warrant and defend their rights to
such security against all claims and demands of all persons.
ectxo_ 7
Warranties; Determination.
Affirmation of ~epresentations and
The representations and warranties made in this
Resolution are made solely on the basis of the law, facts and
circumstances existing on the effective date of this Resolution.
Each issuance of Notes by the City shall constitute an affirmation
on the part of the City that the representations and warranties of
the City contained in this Resolution were true and correct in all
material respects on the effective date of this Resolution, unless
prior to the issuance of such Notes the City shall have received
an opinion of Bond Counsel that the failure of the City to so
affirm such representations and warranties will not materially
adversely affect the authorization of the City to issue such Notes.
Such affirmation shall be evidenced by the execution and mailing
to Bond Counsel on the date of each such issuance of a certificate
signed by the Authorized Person, substantially in the form of
Exhibit A hereto, together with the form of the Determination,
attached hereto as Attachment A to Exhibit A. Each Determination
shall specify the maximum principal amount of Notes which may then
be issued (determined in accordance with Section 2 of the
Ordinance) together with the aggregate principal amount of the
Notes to be Outstanding and 1983 Notes to be outstanding in
accordance with their terms upon issuance and delivery of the Notes
covered by such Determination, together with, in the case of each
Note covered by such Determination, such Note's principal amount,
denomination, number, date of issue, maturity, rate of discount or
interest, or both, and the purchase price of such Note, the terms
and conditions of payment, a request that the Issuing and Paying
Agent authenticate such Note by manual countersignature of an
authorized officer and deliver it to the purchaser thereof upon
receipt of payment as specified, and such other terms and
conditions as shall be fixed by any Authorized Person at the time
of sale of such Note. Copies of such certificate and Determination
shall also be mailed on such day to the Dealer and to the Issuing
and Paying Agent.
Section S. Deposits to EIt%N Account~ Security for the
Notes; Deposits to Qu&lifie~ Oblig&tions Account; Security for
Qualified Obligations.
(a) surplus Revenues shall be transferred to the ERAN
Account in each month, in accordance with clause Second of Section
14 of the Ordinance, in an amount equal to the amount of all
principal of and interest on the Notes to become due and payable
prior to the end of the next succeeding month, less the sum of (i)
any amount already available in such Account for such payment and
(ii) the amount of proceeds of future Notes anticipated by the City
to be available for such payment. The Notes shall be secured as
provided in Section 15 of the Ordinance.
(b) Surplus Revenues shall be transferred to the
Qualified Obligations Account in each month, in accordance with
clause First of Section 14 of the Ordinance. Qualified Obligations
shall be secure as provided in the agree,.~nts and instruments
establishing the Qualified Obligations.
Section 9. Rates and Charges.
The City shall and hereby covenants that it shall
prescribe, revise and collect such charges for the services and
facilities of the Electric System so that, in each Fiscal Year, the
Surplus Revenues shall at least equal the sum of:
(a) 1.25 times the amount of Qualified Obligation
Service with respect to such Fiscal Year: and
(b) 1.00 timee the principal of and interest on the
Notes due and payable in such Fiscal Year.
In complying with the above covenant, the City may (during the
period in which the Revolving Credit Agreement is in full force and
effect) anticipate the proceeds of additional Notes as the source
of payment of principal of and interest on the Notes as they become
due and payable.
Section 10. Limits on Bonds and Obligations.
(a) No Bond or Obligation shall be issued, incurred or
delivered unless, at the initial delivery thereof, the Surplus
Revenues calculated on sound accounting principles, as shown by the
books of the City for each of the last two completed Fiscal Years
prior to the adoption of the resolution approving the delivery of
such Bond or Obligation (as shown by an audit certificate or
opinion of an independent certified public accountant or firm of
certified public accountants employed by the City), plus, at the
option of the City, the allowance for earnings hereinafter set
forth in subparagraph (c) of this Section 10, shall have amounted
to at least 1.25 times the Maximum Annual Qualified Obligation
Service on all Qualified Obligations to be outstanding immediately
subsequent to the initial delivery of such Bond or Obligation.
(b) Subparagraph (a) of this Section 10 notwithstanding,
Bonds or Obligations may be issued to refund outstanding Qualified
Obligations if, after giving effect to the application of the
proceeds thereof, either (i) total Qualified Obligation Service
will not be increased in any Fiscal Year in which Qualified
Obligations (outstanding on the date of issuance or incurrence of
such refunding Bonds or Obligations, but excluding such refunding
Bonds or Obligations) not being refunded are outstanding, or (ii)
the Surplus Revenues, calculated on sound accounting principles,
as showll by the books of the City for each of the last two
completed Fiscal Years prior to the adoption of the resolution
approving the delivery of such Bond or Obligation (as shown by an
audit certificate or opinion of an independent certified public
accountant or firm of certified public accountants employed by the
City), plus, at the option of the City, the allowance for earnings
hereinafter set forth in subparagraph (c) of this Section 10, shall
have amounted to t least 1.25 times total ~alified Obligation
Service in the Fiscal Year next succeeding the Fiscal Year in which
such Bond or Obligation is initially delivered.
(c) The following may be added to the Surplus Revenues
of the Electric System for the purpose of applying the restrictions
contained in this Section 10:
An allowance for earnings arising from any
increase in the charges made for service from the
Electric System which has become effective prior to
the initial delivery of such Bond or Obligation but
which, during all or any part of said last two
completed ~iscal Years, was not in effect, in an
amount equal to 95% of the amount by which the
Surplus Revenues should have been increased if such
increase in charges had been in effect during the
whole of said last two completed Fiscal Years, as
shown by the certificate or opinion of an
independent certified accountant or firm of
certified public accountants employed by the City.
(d) The requirements of this Section 10 shall not apply
to the incurring by the City of its obligations with respect to the
1989 Certificates.
Section 11. Events of Def&ult and Rme4ies.
If one or more of the following events of default shall
occur and be continuing:
(a) a default in the due and punctual payment of the
principal of or interest on any Note when and as the same shall
become due and payable; or
(b) any representation or warranty of the City contained
in this Resolution shall prove to have been false in any material
respect on the effective date of this Resolution; or
(c) the City shall file any petition or action for
relief which impacts the obligations of the City with respect to
the Electric System under any bankruptcy, reorganization,
insolvency or moratorium law, or any other law for the relief of,
or relating to, debtors;
then, and in any such event the holder of any Note may, by notice
in writing to the City, declare such Note to be, and it shall
forthwith become, due and payable, without presentment, demand,
protest or other notice of any kind, all of which are hereby
expressly waived by the City.
12. Resolution to Constlt ..... · Contract.
The provisions of this Resolution shall constitute a part
of the contract between the City and the Note holders, created
pursuant to the Notes and the Ordinance, and such provisions shall
be enforceable by mandamus or any other appropriate suit, action
or proceeding at law or in equity in any court of competent
jurisdiction.
Section 13. Effective Date.
This Resolution shall become effective on the first date,
on or after the date of adoption hereof, that (a) the Ordinance (as
originally adopted) has ~ecome effective, and (b) Amendment No. 7
to Revolving Credit Agreement shall have been executed and
delivered by the City, Bank of America National Trust and Savings
Association and Morgan Guaranty Trust Company of New York.
Section 14. When Resolution No. 83R-168 Repeale4.
On and after the first day that all 1983 Notes are no
longer outstanding in accordance with their terms, this Resolution
shall repeal Resolution No. 83R-168 of the City Council and
Resolution No. 83R-168 shall be of no further force or effect.
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ADOPTED, SIGNED AND APPROVED thislS__thday of July, 1989.
(SEAL)
Attest:
City Clerk
11
CLERK
STATE OF CALIFORNIA )
COUNTY OF ORANGE ) ss.
CITY OF ANAHEIM )
I, LEONORA N. SOHL, City Clerk of the City of Anaheim, do hereby certify that
the foregoing Resolution No. 89R-295 was introduced and adopted at a regular
meeting provided by law, of the City Council of the City of Anaheim held on
the 18th day of July, 1989, by the following vote of the men~bers thereof'
AYES'
COUNCIL MEMBERS' Daly, Kaywood and Hunter
NOES'
COUNCIL MEMBERS' None
ABSENT: COUNCIL MEMBERS' Ehrle and Pickler
AND I FURTHER certify that the Mayor of the City of Anaheim signed said
Resolution No. 89R-295 on the 19th day of July, 1989.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed the seal of the
City of Anaheim this 19th day of July, 1989.
CITY CLERK OF THE CITY OF ANAHEIM
(SEAL)
I, LEONORA N. SOHL, City Clerk of the City of Anaheim, do hereby certify that
the foregoing is the original of Resolution No. 89R-295 duly passed and
adopted by the Anaheim City Council on July 18, 1989.
CITY CLERK OF THE CITY OF ANAHEIM
Bxhibi~ A
SUPPLEMENTAL ARBITRAGE
CERTIFICATE AND AFFIRMATION OF REPRESENTATIONS
AND WARRAHTIE8
Pursuant to the terms of Resolution No. 89R- of the
City Council of the City of Anaheim, as amended, and pursuant to
the Federal Treasury Regulations under Section 148 of~the Internal
Revenue Code, the following statements, affirmations, and
certifications are made on behalf of the City of Anaheim (the
"City"):
1. Today, , 19 (the "Issuance Date"),
the City has sold Electric Revenue Anticipation Notes in the
amounts, with the maturities, and bearing the interest rates set
forth in Attachment A, attached hereto (the "Notes").
2. The City affirms on the Issuance Date that the
representations and warranties set forth in Sections 2, 3 and 4 of
Resolution No. 89R- were true and correct on the effective date
of Resolution No. 89R- .
3. The City signed the Tax and Non-Arbitrage
Certificate [on May 2, 1988, and an amendment thereto on May 18,
1988]. By its signature to this document the City hereby reissues
said Tax and Non-Arbitrage Certificate [, as so amended,] with
respect to the Notes as of the Issuance Date.
EXECUTED this
day of , 19
CITY OF ANAHEIM
By.
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Attachment A to Exhibit A
, 1989
BankAmerica Trust Company
of New York
New York, New York
Re:
City of Anaheim
Electric ~evenue
Anticipation Notes
Gentlemen:
Please authenticate the following Note by manual
signature of an authorized officer, and deliver it to the purchaser
thereof against payment therefor in accordance with (i) Section 7
of Ordinance No. of the City, adopted , 1989,
and (ii) paragraph (c) of the Issuing and Paying Agent Agreement
dated as of , 198_ between BankAmerica Trust Company
of New York and the City:
Note Number:
Principal Amount of this
Note:
Date of Issue:
Maturity Date:
Interest Rate:
Purchase Price:
Purchaser:
Maximum Principal Amount
of Notes which may be
issued in accordance
with Section 2 of
Ordinance No. :
Aggregate principal amount
of the Notes and 1983 Notes to be outstanding
upon the issuance and delivery of
this Note:
The terms and conditions of payment of such Note are as
set forth in such Note.
Very truly Yours,
Authorized Person
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