86R-072
1 CITY OF ANAHEIM RESOLUTION NO. R~R-7?
2 RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ANAHEIM,
3 CALIFORNIA
4 AMENDING CERTAIN PROVISIONS OF RESOLUTION NO. 83R-168
5 OF. THE CITY COUNCIL (AS HERETOFORE SUPPLEMENTED AND
6 AMENDED).
7 WHEREAS, the City Council of the City of Anaheim (the
8 "City") at its meeting on April 27, 1983 adopted a Resolution,
9 designated as Resolution No. 83R-168, relating to the issuance of
10 Electric Revenue Anticipation Notes of the CitYi and
11 WHEREAS, the City Council at its meeting on May 24, 1983
12 adopted a Resolution, designated as Resolution No. 83R-2l0,
13 amending and supplementing said Resolution No. 83R-168i and
14 WHEREAS, the City Council at its meeting on August 28,
IS 1984, adopted a Resolution, designated as Resolution No. 84R-334,
16 supplementing said Resolution No. 83R-168i and
17 WHEREAS, the City Council at its meeting on November 16,
18 1984 adopted a Resolution, designated as Resolution No. 84R-442,
19 supplementing and amending said Resolution No. 83R-168i and
20 WHEREAS, said Resolution No. 83R-168, as so supplemented
21 and amended, is herein referred to as the "Resolution"; and
22 WHEREAS, it is in the best interest of the City to fur-
23 ther supplement and amend the Resolution in certain respects.
24 NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF ANAHEIM
25 DOES HEREBY RESOLVE, DETERMINE AND ORDER AS FOLLOWS:
26 SECTION 1. Section 2 of the Resolution is hereby
27 amended to read, in its entirety, as follows:
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Section 2. Covenants that Note to Remain Tax
Bxeapt, Arbitrage.
The City hereby covenants that it will not
use, or permit to be used, any of the property acquired
out of, or the costs of which were reimbursed from, Note
proceeds in such manner as would result in loss of tax
exemption of interest on the Notes otherwise afforded
under Section l03(a) of the Internal Revenue Code of
1954, as heretofore amended and as amended from time to
time hereafter (the "Code").
The City covenants that it will not take any
action or fail to take any action with respect to the
investment of the proceeds of any Notes issued under the
Ordinance or in any other respect which would result in
constituting the Notes "arbitrage bonds" within the
meaning of such term as used in Section l03(c) of the
Code or which would violate Treasury Regulations under
Section l03(c) of the Code applicable to the Notes.
The City covenants that it will not expend,
or permit to be expended, Note proceeds in any manner
inconsistent with its reasonable expectations as certi-
fied in the Nonarbitrage Certificates to be executed
from time to time with respect to the Notes; provided,
however, that the City may expend Note proceeds in any
manner if the City first obtains an unqualified opinion
of Mudge Rose Guthrie Alexander & Ferdon and Rourke &
Woodruff ("Bond Counsel") that such expenditures will
2
1 not impair the exemption from Federal income taxes of
2 interest paid on the Notes.
3 The City covenants that proceeds from any
4 sale or other disposi tion of any portion of the Electric
5 System. or of any portion of the City's fuel inventory
6 C including nuclear fuel) will be expended for additional
7 construction of or improvements to the Electric System,
8 for additions to the City's fuel inventory, or for the
9 payment, purchase, or redemption of Notes or other City
10 indebtedness incurred in connection with the Electric
11 System.
12 The City covenants that it will not enter
13 into, amend, modify or otherwise al ter power sale con-
14 tracts that would result in any of the output of an
15 Electric System facility to be constructed, recon-
16 structed or acquired with Note proceeds being sold, on a
17 take or payor take and pay basis, to one or more person
18 each of whom is not an "exempt person" within the mean-
19 ing of Treasury Regulations Section 1.I03-7Cb) (2)
20 C excl uding f rom such def ini tion any organizations qual i-
21 fying under Section SOICc) (3) of the Code with respect
22 to the trade or business carried on by such organi-
23 zations which is not unrelated trade or business deter-
24 mined by applying Section SI3Ca) of the Code to such
25 organizations) provided, however, that the City may
26 amend, modify, alter or enter into power sale contracts
27 of such types if the City first obtains an unqualified
28 opinion of Bond Counsel that such action will not impair
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the exemption from Federal income taxes of interest paid
on the Notes.
The City represents that it has not been
notified of any listing or proposed listing by the
Internal Revenue Service to the effect that it is a bond
issuer whose arbitrage certificates may not be relied
upon.
In order to maintain the exemption from fed-
eral income taxation of interest on the Notes, and for
no other purpose, the City covenants to comply with each
applicable requirement of the Tax Reform Bill of 1985
(H.R. 3838), as adopted by the United States House of
Representatives on December 17, 1985 (the ftBillft), anc
will comply specifically with the instructions in the
Letter of Instruction from Mudge Rose Guthrie Alexander
& Ferdon attached to this resolution, as supplemented by
that firm from time to time, except for any such
requirement with respect to which (a) the City receives
an opinion of Bond COunsel to the effect that continuing
compliance by the City with such requirement of the Bill
is not required in order to maintain the federal incane
tax exemption of interest on the Notes, or (b) congres-
sional action shall have taken place which is generally
accepted by the municipal bond market as providing
assurance that either the effective date with respect to
such requirement or the substantive requirement
applicable to the Notes set forth in the Bill will be
changed so that such requirement would no longer apply
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1 to the Notes. The provisions of this paragraph shall no
2 longer be of any force or effect upon receipt of an
3 opinion of Bond Counsel to the effect that noncompliance
4 with the applicable requirements of the Bill will not
change. the then current federal income tax status of the
interest on the Notes.
The City covenants that it will not issue any
Notes or other commercial paper, any proceeds of which
will ~ be used to refund maturing Notes (A) without an
~pinion of Bond Counsel that (i) interest on the Notes
being issued will be exempt from federal income taxation
and (ii) interest on the Notes being issued will be
exempt from Federal income taxation under the Bill (or
an opinion of Bond Counsel that such opinion is not
required) or (B) unless congressional action shall have
taken place which is generally accepted by the municipal
bond market as providing assurance that the effective
date with respect to such requirement or the substantive
requirement applicable to the Notes set forth in the
Bill will be changed so that such requirement would no
longer apply to the Notes. The provisions of this para-
graph shall no longer be of any force or effect upon
receipt of an opinion of Bond Counsel to the effect that
noncompliance with the applicable requirements of the
Bill will not change the then current federal income tax
status of the interest on the Notes.
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SECTION 2. T his Res 01 uti 0 n shall bee f f e c t i v e
immediately. Except as amended in accordance herewith, the
3 Resolution remains in full force and effect.
4
ADOPTED, SIGNED AND AP'PROVED this 25th day of
5 Fphrl1Rry , 1986.
~~~
May 0 r
,
Attest: Leonora N. Sohl
~ /l~(.. -- '/;l
~/L--.~
Ci ty Clerk
6
CLERK
STATE OF CALIFORNIA )
COUNTY OF ORANGE ) SSe
CITY OF ANAHEIM )
I, LEONORA N. SOHL, City Clerk of the City of Anaheim, do hereby certify that
the foregoing Resolution No. 86R-72 was introduced and adopted at a regular
meeting provided by law, of the City Council of the City of Anaheim held on
the 25th day of February, 1986, by the following vote of the members thereof:
AYES:
COUNCIL MEMBERS: Kaywood, Overholt, Pickler and Roth
NOES:
COUNCIL MEMBERS: None
ABS TAIN :
COUNCIL MEMBERS: Bay
AND I FURTHER certify that the Mayor of the City of Anaheim signed said
Resolution No. 86R-72 on the 25th day of February, 1986.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed the seal of the
City of Anaheim thi s 25th day of February, 1.....986. .. (. ........ __" ~ ()
~'^- /t ~___
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. 86R-72 duly passed
and adopted by the Anaheim City Council on February.25, 1986.
THE FOREGOIN STRUMENT 'S A ~ULLt TRUE AND
CORRECT COpy 0 H~IG'NAL ON F'1LE '~()jH~
OFFICE ATTEST: ". - ._~~..--.~..,~---~. ~
LEONORA N. SOHL. C~ITY Cl K OF THE CITV Of M~AUl'
/j
III '-.-/~ CZ
1 [Letterhead of Mudge Rose Guthrie Alexander & Ferdon]
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6 February ~, 1986
7
8 city of Anaheim, California
9 200 South Anaheim Blvd.
10 Anaheim, California 92805
11 Ladies and Gentlemen:
12 Pursuant to Resolution No. 83R-168 adopted by the City
13 Council of the Ci ty of Anaheim, Cal ifornia (the RCi ty") on April
14 27, 1983, as amended and supplemented to the date hereof (the
15 "Resolution"), this letter instructs you as to the requirements
16 of H.R. 3838 ("H.R. 3838"), adopted by the House of
17 Representatives on December 17, 1985, with respect to the City's
18 Electric Revenue Anticipation Notes, insofar as those require-
19 ments differ from present law requirements. This letter is
20 intended to provide you with guidance regarding compliance with
21 H.R. 3838; however, it is not intended to be exhaustive and may
22 not establish compliance with H.R. 3838. We may supplement this
23 letter from time to time and any references to this letter are
24 deemed to incl ude any supplements.
25 For purposes of this letter: (1) any instructions
26 relating to a fund or account under the Resolution shall be
27 deemed to apply only to the portion of such fund or account
28 allocable to the Electric Revenue Anticipation Notes, (2) any
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ref erence to II the date hereof II shall be deemed to mean the date
of issue of the Electric Revenue Anticipation Notes, and (3)
Electric Revenue Anticipation Notes Gross Proceeds shall mean (A)
amounts received by the City from the sale of the Electric
Revenue Anticipation Notes (excluding amounts used to pay
dealers' fees and other expenses of issuing the Electric Revenue
Anticipation Notes); (B) amounts received as a result of the
investment of amounts described in (A); (C) amounts treated as
transferred proceeds (as defined in Treasury Regulations
Section 1.103-l4(e) (2) (ii)) of the Electric Revenue Anticipation
Notes; (D) amounts treated as proceeds under Treasury Regulations
Section 1.103-13(g) (relating to invested sinking funds); (E)
amounts invested in any debt service reserve fund for the
Electric Revenue Anticipation Notes; (F) securities or obliga-
tions pledged as security for payment of debt service on the
Electric Revenue Anticipation Notes by the City; (G) amounts
received with respect to obligations acquired with Electric
Revenue Anticipation Notes Gross Proceeds; (H) amounts used to
pay debt service on the Electric Revenue Anticipation Notes; and
(I) amounts received as a result of investing any Electric
Revenue Anticipation Notes Gross Proceeds.
As to (F) above, Electric Revenue Anticipation Notes
Gross Proceeds include securities or obligations pledged to the
payment of debt service only if there is reasonable assurance
that such securities or obligations will be available to pay debt
service in the event that the City encounters financial
difficul ties.
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As to item (H), above, Electric Revenue Anticipation
Notes Gross Proceeds may include amounts set aside for the
payment of debt service unless deposited in a "bona fide debt
service fund" within the meaning of Treasury Regulations
Section 1.103-13(b) (12) and only if certain income tests are
met. A bona fide debt service fund must be depleted at least
once a year, except for a reasonable carryover amount not exceed-
ing the greater of one-twelfth of annual debt service on the
Electric Revenue Anticipation Notes or one year's earnings on the
fund, and all amounts deposited therein must be expended within
thirteen months of receipt. It appears that the City of Anaheim
Electric Revenue Anticipation Notes Account (the "Note Account")
and the City's account, the funds of which are used to pay inter-
est on the Electric Revenue Anticipation Notes, designated as
RANS Cash (together, the "Debt Service Accounts") qUalifY as bona
fide debt service funds under the Treasury Regulation. Any
amounts earned on the amounts deposited to the Debt Service
Accounts and amounts earned on such earnings, if allocated to the
Debt Service Accounts, shall be subject to rebate if the gross
earnings (determined in the same manner as for purposes of the
Rebate Requirement) on the Debt Service Accounts in any year
exceed $100,000, or if the City has irrevocably elected in the
Certificate as to Arbitrage to take into account such amounts for
purposes of calculating the Rebate Requirement (which it has not
done).
The City has covenanted pursuant to a covenant adopted
on the date hereof, in substance, to comply with the requirements
of H.R. 3838, unless, in the opinion of Bond Counsel such
3
1 compliance is not required in order to maintain the exemption of
2 the interest on such Notes from Federal income taxation, or
3 unless congressional action shall have taken place which is gen-
4 erally accepted by the municipal bond market as providing assur-
5 ance that either the effective dates with respect to such
6 requirements or the substantive requirements applicable to such
7 Notes set forth in H.R. 3838 would no longer apply to such
8 Notes.
9 Currently, you have advised us that no Gross Proceeds
10 exist, nor are any expected to exist which are or will be
11 invested because proceeds of the initial issue of Electric
12 Revenue Anticipation Notes have been expended and proceeds of
13 each new issue of Electric Revenue Anticipation Notes are used
14 immediately to repay prior issues of Electric Revenue
IS Anticipation Notes. In addition, amounts earned in the Debt
16 Service Accounts will not exceed $100,000 in any year. Thus, it
17 is not expected that there will be any amounts requiring rebate
18 to the United States. If this information should change and
19 Gross Proceeds should arise, such rebates may be required.
20 However, some information should still be generated with respect
21 to the Rebate Requirement as listed below:
22 1. If rebates are required, the City must pay to
23 the United States Department of the Treasury from any
24 lawfully available moneys, not later than 30 days after
25 the maturity of each Electric Revenue Anticipation Note
26 issued on or after January 1, 1986, an amount which,
27 when aggregated with any prior payments, is equal to
28 100% of the Rebate Requirement;
4
1 2. In all events, the Rebate Requirement must be
2 calculated within 25 days after the maturity of each
3 Electric Revenue Anticipation Note issued on or after
4 January 1, 1986;
S 3. Notwithstanding anything in this letter or the
6 Resolution to the contrary, as between the City and the
7 United States Department of the Treasury, the obligation
8 of the City to remit the Rebate Requirement to the
9 United States Department of the Treasury must survive
10 the defeasance of the Electric Revenue Anticipation
11 Notes.
12 4. The City must retain records of the calculation
13 required by Section 2 until 6 years after the retirement
14 of the last obligation of the Electric Revenue
15 Anticipation Notes including any calculation leading to
16 the conclusion that no rebate need be made.
17 In order to perform the calculations required by
18 H.R. 3838 it is necessary to track separately all of the
19 Electric Revenue Anticipation Notes Gross Proceeds as they
20 may arise.
21 So long as there are no Gross Proceeds, such calcu-
22 lations will be zero; however, the determination that there
23 are no gross proceeds needs to be retained for six years as
24 set forth in Section 4 above.
2S Aside from the Rebate Requirement, H.R. 3838 will
26 require that an information report (previously Form 8038) be
27 filed by the 15th day of the second calendar month after the
28 end of each calendar quarter in which any Electric Revenue
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1 Anticipation Note is issued. Attached is a form of such
2 Form 8038 which must be filed (by May 15, 1986 for first
3 quarter issues). The form will need to have attached to it
4 a list of all Electric Revenue Anticipation Notes issued in
each quarter.
Very truly yours,
Received and acknowledged:
The City of Anaheim,
California
By:
Date:
Attachment
6
,~ 8038
Information Return for Private Activity Bond IHue.
u,., tecUoN 103(1) 1M lOU
owt_ ~~~
t.prw 12':11/17
1 ,...,.,. ~
The City of Anaheim, California
J NUIt'. .ftClltteM
200 South Anaheim Blvd.
Check bollf Amended Ret~m. t I
2 1......'em~~~nuI"*
~ I..,. ""m_
1
. c~ 01 ~. Stlte aftd Z!P eode
Anaheim, Callforni.a 92805
of ItaU. Check box.. th.t. I See At tachec
';"Ot~:::'I::= ~~p~en.t ~~ ~ID~').: . . . . . . . . . . . . . . . . .
. C QUlUft~ mot1Il,1 t;)Ond; (Ittach copy of Stat. ctrtlflQtian) Check box If you ,ttf;t to ...tMt.
.rbit,... proffts to the U.S. ~ O. . . . . . . . . . . . . . . . . . . . .
I 8 Quattftld veterln.' mortal'. bond. . . . . . . . . . .
10 ~. ...m,.c .ntlty bond. . . . . . . . . . . . .. .......
'"dust".' o.w"opm."t lontll:
11 . Industria' park bone&. . . . . . . . . . . . . . . .
12 t...... Smlll iUut ~O.: Cheek box if S10 million smaU I~u. election .. [J
11 Uema Activity Bond (check type(s) tMlow); .
. "eIid.nti.llWMlt proj~ (MCtiof'l103Cb)(4XA)). . . . . . . . . . . . . . . .
.. Sports fadUt,.. (MCtion l03(bX.XB)) . . . . . . . . . . . . . . . . . . .
c 8 Convention facUitj. (section lO3(b)(4Xe)); Check box if .xempt from vofumtlimftltiona ~ 8
4 Ai~rts. doekl, Itc.. (section lO3(b)(4XD)); ChICk box if exempt from vatu"" limitations ..
St\Iw'I' or waste dispos.l faciliti.. (tKtion l03(b)(4)(E)) . . . . . . . . . . . . .
~ ~'utton eontrot faciliti.. (section 103(b)(')(F)) . . .
~ Water fumist"na facilities (section l03(bX4)(G)) . . .
.....J Hydr~tctnc ..".retina flc.liti.. (section 103(b)(4)(H)) . .
H Mill commutlna v,thel. (section l03(b)(4)(1)) . . . . .
~ Local district h..t.". or cooH"1 flCllltles (section 103(b)(4)(J))
_ FICllttllS fortrte lOCal furnishin o1eltctnc .n. or IS section 103 b 4 E
D..ert tlon of Obll IttO"1
(A)
~ date
I Date of IUuI
1/3/86 to 3/31/86
,-~
(I)
,_ M*Int
(C)
Stated ,ntlf'elt I"IW
(0)
Tenn (In YWI'f)
See Exhiblt A
Mrs.
IIIIID It,ocHda of 'uu.
17 Tatal purchll. one. (rep. MCtion 1.103.13(Q)(2)). . . . . . .
1. ProcHGa uMO for bond issulnce COltS. . . . . . . . . . . .
1t PtocMa .1*,tICI to reuoftlbty ,..u.red r~ or reotlc.ment fund
20 Proc,", UMd to refund ,.,., 'U__. . . . . . . . . . . . . . . . .
21 Non.rtfuf'lOi"l DrocMCII of the """ (subtract Ii".. la. 1 t. Ind 20 from Iln. 17)
,., .............. Rtductleft Act NetIc-. ... ,... 1 .f the ..."ruett....
o
o
o
,.... 103. (Itw. 12...)
~:,:.:
~~ lOJa (...... \ 2 -&A '
IE De,crlptton ot Property Flnancaa by Non.refundl"l Proce.d'
(Do not compl.te for student loan bonds 0' mortal . bonds)
22 Type of Property f\nlftCN (or portion th.reof tln.ne.d by "on.refuncUnl prKM(t.)
. J.yr. ACRS propetty .
It S.y" ACRS prol)e1ty .
c 10.yr. ACRS property
d 1 S.yr ACRS prooerty
. ii-yr. ACRS property
f Cost of Ilnd
I Coat of o~er property (te. Instruction,)
.l3 Ot"'.r use of non.,.fundin proeHds subtract Iln.. 22.- from Part IV. lin, 21 IN instNcttonl
24 St.nd.rd .ndustrl.1 classlfiCltlon SIC of non'refundln procteds for tne financed pro tCt.
SIC Cod' Non.,efundlnl procMC2. S SIC Code
,.2
. .
N(A,
NM.refundl pl ~MCtI ,
.
b
c
25
cI
2.
(A)
UMf
e
f
Av.r. e W'I hted economIC Iif. Of the oro!e<t (comPlete on' for lOB.)
Oe.crt,tlon of I.,ttl.t Prinel,., U..,.
(Do not comDt.t. tor student lOin bonds or mort.llt bonds)
Inltlll PrlncIP" Users:
i
, . . . . - . . .
(I)
~.
(C)
AdcI,..
~~/UftW
( i)
(il)
(v)
1
I
I
I
N/A
(IIi)
(i~)
27 Common o.ref'1t$ (It Iny) o1In'~I,1 Cf'nc.o,' ute's IIS1ecl aboYf
(A)
Uut(fro"" .
.aOl)wet .
ell
N.",.
(C)
Add,...
(01
~ .o...!ff\cWon num.,
N/A
ImIl ApprovI' of I.sue (Com~l.te only for 101.) :
~I Name 01 Governmenta. units ioprovlnl ,ssue ....................... _ . . . . . . . _ . . . . . . . . . . . . . . . . . ~l [\. - . . . . . . - . . . . . . . . . .
2' Names and pOSItions 01,pOh<:.able eleeted repreMntltlve$ or date 01 referenda 'P~OVI"1 ilSue. _ . . .. Nt !\.. . . ... . . . . . . . . . . -
....... .... ....... .... ............ ............. ....... ....... ... ........ .... ...................................,.............
Volume Umitations for u.Ufled Mort it '0' Veteranl' Bonds
1 Issuer's vOlume lImltat,on .
2 Amount of volume limitltion surrendered to other 'ssues (el., under section l03A<iX3XS) or
25(c)(2XA)(ii)). N/ A
3 Amount of bond$ prevtousty Issued . . . . . . . N A
. Unused volume limitation (subtr.ct lines 2 and' 3 from Iin. 1) . . . . . A
: uno., ~nllt,.. 01 oeflury, , ~Kl.re tt1.t t ~Iv, film,,,*, t"lt '.hI"" .no ICCOf'I'oanyl"l ~"'. .ftCI ..~ ,na te tt'M .. fit my .,..... atId bet4f.
flllSt !'~ .r. trvt. corrKt.ll\Q com,tete. OICI,rl~1O" of pttOItef (om<< ~." t....,.) It oaea ~... ",fllf'fl"labOn ~wfI.cft.,...., ........,.~.
Sian
Her.
\j I A
I .
i ~ 5'ln't",. 01 attteef
Pt"eNf"'"
PIlei ,..",tur.
"...,.,',
U.. Onl, '1', 'i,,,n "1",'(01 . ~
1OU", .f ,ttf..mDlOYH)
Ifla aGelr...
eRose Guthrle
180 Maiden Lane, New York, N. Y.
...... ............. ......... ..... '........,..."....
. ~ NCUf"CY ".,
I
! 0.,.
10038
FORR 8038 SDPPLBABNTa B.R. 3838 RlPORfIHG
RBOOIUJIBIft'S 'OR BSSBlftIAL PUHC'1'1011 8OtI)S
The following information is being provided based on the
U.S. House of Representatives adoption of H.R. 3838 which, as
adopted, has an effective date of January 1, 1986. ThiS supplement
is designed to correspond with the various Parts of FO~ 8038 where
possible. Sections referred to herein are proposed Sections of the
Internal Revenue Code under H.R. 3838.
~
PART I. Reporting Authority (see inforllllt1on reported on Pam 8038)
.......g..----.~ccc~==c......_...c===..~..~..........ccc==~~.....
PAaT II. Type of Ieau.
ESSENTIAL FUNCTION BONDS:
face Amount
x
Essential Function bond of the Issuer
(Section 141Ca)) . . . . . . . . . . . .
See Exhibit A
cBla APPROPRIA'lB AREAS (IF APPLICABLIU I
Essential function bond requiring unif1ed
volume cap allocation (Section 141(a)(3)).
Bond utilizing a transitional rule under
H.R. 3838.
-_.-.....~.._..........-._-_.-............_--_..........-.-._~~==
PART III. Description of Obligations (See information reported on
I'or. 8038)
........_.c.......~...........a==~=..............D...~._.....~==~
PAIr! IV. Proceed. of I..a. (se. inforatlO1l reported on Forti 8038)
.___.........-...._.C..D................D..~..._....CC..=c.......
.~ v. Vol.. Llaita~101U1 (CoIIplete for B88ential runctlon boMa if
required by Sectioa 1~1(.)(3)(A)). Bnelo... copy of the unified
volu.e cap allocatioft froa the authorized .Qtbor1~.
1. Unified volume cap allocation amount . .,
2. Amount of issue for which an allocation 1s
l'equ1re<l . . . . . . . . . . . . . . . .
3. Unused unified volume limitation (subtract
line 2 from 11ne 1). . . . . . . . . . .
.'~,,"
Exhibit A
This exhibit is intended to describe obligations issued
under a tax-exempt commercial paper program during the period indi-
cated on line 6 of Form 8038. Given the large number of obligations
issued under the program, the obligations are described on a computer
printout and information as to their issuance dates is listed in this
exhibit, which is intended as a substitute for Part III of the Form,
rather than on line 6 of the Form. Moreover, a column entitled
"Purchase price" (as computed under Treas. Reg. ~ l.l03-13{d) (2)) is
included because obligations may be issued at a discount and without
a coupon rate. The term of each obligation is stated in days rather
than years because such term may not exceed 270 days under the autho-
rization for the program.
The nature of a tax-exempt commercial paper program is such
that obligations may be issued with maturities as short as one day.
Furthermore, the obligations are constantly being rolled-over into
new obligations. Thus, the obligations issued during a calendar
quarter are refundings, or refundings thereof, and only a small por-
tion of the total amount of obligations issued during such quarter is
outstanding at anyone time. The amounts listed on lines 17 through
21 of the Form are gross amounts (in accordance with the literal
requirements of the Form) and are not net of refundings (or refund-
ings thereof in the case line 20 of the Form), even though such gross
amounts are somewhat misleading as indications of the true size of
the program. Under the authorization for the program, none of the
proceeds of all obligations issued under the program may be expended
for costs of the property described in Part v.
Line 14:
Date
of Issue
Maturity
Date
Face
Amount
Purchase
Price
Stated
Interest
Rate
Term
(in days)
(include computer printout)
Line 15:
No obligations may be issued under the tax-exempt commer-
cial paper program to which this Form relates with a maturity greater
than 270 days, therefore, the weighted average maturity of any issue
of obligations is 270 days or less.
A-I
Mudge Rose Guthrie Alexander & Ferdon
333 South Grand Avenue
Los Angeles, California 90071
Rourke & Woodruff 14
1055 North Main Street '5
Santa Ana, California 92701 #6
~ebruary __, 1986 #9
~ity Council
~ity of Anaheim
Anaheim, California
~ouncilmembers:
~e have examined the record of proceedings of the City of
Anaheim, a municipal corporation organized and existing under a
Charter adopted Rursuant to the provisions of the Constitution of the
State of ~alifornia (the "City"), in connection with the authoriza-
tion, ~xecution and delivery from time to time of Electric Revenue
Anticipation Notes (the "Notes"). ~he Notes are issued under and
pursuant to the Constitution and laws Qf the State of California, and
the provisions, terms and conditions Qf Section 1210 of the Charter
of the City, Qrdinance No. 4417 of the City adopted Qn April 26, 1983
(the"Ordinance"), and Resolution ~o. 83R-168 of the ~ity Council
adopted on April 27, 1983, as amended and supplemented lthe
"Resolution").
The Notes constitute and evidence only indebtedness of the
electric ~stem of the City, payable both as to principal and inter-
est solely from the sources set forth in Section 5 of the Ordinance.
~either the faith and credit nor the taxing power of the ~ity, the
State of California or any political subdivision thereof is 2ledged
to the payment of the Notes.
Ne are of the opinion that under existing laws each Note
(assuming due execution thereof and payment therefor) has been duly
authorized and issued and gonstitutes the legal, valid and binding
obligation of the City, subject ~o bankruptcy, insolvency, moratori-
um, reorganization and other similar laws relating to creditors'
rights generally.
#12
#13
#14
#16
#18
#19
#20
#21
#22
#23,24
#25
#26
#27,28
#29,30
#31
#(31)
#32
#33
#34
#35,36
#37
#(37)
#38
#39
#40
#41
#42
#(42)
~e are further of the opinion that, under existing stat- #43
utes, regulations, ~ulings and court decisions, ~he interest Qn each #44,44
Note will be exempt from income taxes of the United ~tates of America #46
and from personal income taxes of the State of ~alifornia. #47
Qn December 17, 1985, H.R. 3838 was adopted by the United #47.1
~tates House of Representatives. If H.R. 3838, as adopted by the #47.2,.
House of Representatives on December 17, 1985, is ~nacted into law, #47.4
the Notes (issued in 1986) would be subject to certain of its Rrovi- #47.5
sions retroactive to their date of issue. H.R. 3838 sets forth #47.6
certain requirements which must be met subsequent to the issuance and #47.7
delivery of the Notes for interest thereon ~o be and remain exempt #47.8
'10
from Federal income taxation. If H.R. 3838 (as so adopted) is
enacted into law, non-compliance with such requirements may cause the
interest Qn the Notes to be subject to Federal income taxation ~etro-
active to the date of issue of the Notes. These Kequirements
include, but are not limited to, provisions ~hich prescribe yield and
other limits within which the Rroceeds of the Notes and other amounts
are to be invested and require that certain investment earnings on
~he foregoing must be rebated on a periodic basis to the ~reasury
Department of the United States. H.R. 3838 also Qrescribes certain
time limitations within which the Qroceeds of the Notes must be
expended. Pursuant to the Resolution, the City has covenanted, in
substance, to comply ~ith the requirements of H.R. 3838, unless, in
the QPinion of Bond Counsel, 2uch Qompliance is not required in order
to maintain the ~xemption of the interest on the Notes from Federal
income taxation, or unless congressional action shall have taken
place which is generally accepted by the municipal Qond market as
providing assurance that either the effective gates with respect to
such requirements or the substantive Kequirements applicable to the
Notes set forth in H.R. 3838 ~ould no longer apply to the Notes.
assuming compliance with the aforementioned ~ovenant, interest on the
Notes would be exempt from ~ederal income taxation under H.R. 3838 as
adopted by the House of Representatives on December 17, 1985.
~urthermore, assuming compliance with the aforementioned covenant, as
affected by any aforementioned congressional gction with respect to
either effective dates or the substantive ~equirements applicable to
the Notes, which shall take Qlace as mentioned above, and assuming
that such Qongressional action is followed in the enactment of
H.R. 3838 into law, interest on the Notes would be exempt from
Federal income taxation under H.R. 3838 as adopted by ~he House of
Representatives on December 17, 1985. Pursuant to H.R. 3838, inter-
est received from certain tax exempt obliqations issued after
December 31, 1985 would be treated as a tax preference item for pur-
poses of com~utinq the 25% alternative minimum tax if such obliga-
tions are "non-essential function bonds" as defined in H.R. 3838.
The Bonds will not be "non-essential function bonds" as so defined.
you may rely on this opinion as to any Note issued after
the date of this opinion to the extent that on the date of such Note
(i) there is no change in law from that in effect on the date of this
opinion and (ii) the representations, warranties and ~ovenants con-
tained in the Ordinance and the Resolution gnd in certificates Qf
authorized officers of the City dated the date hereof continue to be
brue and correct and complied with.
yery truly yours,
=2-
#47.9
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#47.14
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#47.31
#47.32
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#47.45
#47.46
#47.47
#47.48
#47.50
1#47.5
1#47.5
1#47.5
1#47.5
1#47.5
1#47.5
#49
#50
#51
#52
#52.1,
#(53)
#54
#57
'2.3
'(2.3)