90-293 CIT~ OF ANAf~IM
RESOLUTION NO. 90R-293
RESOLUTION OF Tf~E CITY COUNCIL OF T~E CITY OF
ANAHEIM, CALIFORNIA, AUTHORIZING THE ISSUANCE
OF $9,000,000 WATEK REVENUE ~ONDS, 1990
SERIES, OF THE CITY AND PROVIDING TH~ TER~
AND CONDITIONS OF SUCH BONDG
ADOPTED: AUGUST 14, 1990
94601.16.6056.01:2
TABLE OF CONTEN~S
Paqe
Section 1. DEFINITIONS. 4
Section 2. EQUALITY OF 1990 BONDS AND PARITY
BONDS; PLEDGE OF REVENUES. 7
Section 3. PURPOSE OF THE 1990 BONDS. 7
Section 4. SPECIAL OBLIGATIONS; NO GENERAL CITY
LIABILITY. 8
Section 5. DESCRIPTION OF THE 1990 BONDS. 8
Section 6. PLACE OF PAYMENT. 9
Section 7. EXECUTION AND AUTHENTICATION OF THE
1990 BONDS. 9
Section 8. REGISTRATION AND TRANSFER. . 9
Section 9. REDEMPTION OF 1990 BONDS. .10
Section 10. FUNDS AND ACCOUNTS. .13
Section 11. DISPOSITION OF BOND PROCEEDS. .14
Section 12. REVENUE ACCOUNT ....... 15
Section 13. M&0 ACCOUNT. .15
Section 14. BOND SERVICE ACCOUNT; SINKING
ACCOUNT. .15
Section 15. RESERVE FUND. .17
Section 16. R&R ACCOUNT. .18
Section 17. E&I ACCOUNT. .18
Section 18. SURPLUS MONEYS IN THE REVENUE
ACCOUNT. .18
Section 19. INVESTMENTS. .19
Section 20. W~RRANTY. .20
Section 21. COVENANTS. .20
Covenant 1. Punctual Payment. .20
Covenant 2. Discharge Claims. .20
Covenant 3. Commence Acquisition and
Construction. .21
Covenant 4. Operate Enterprise in
Efficient and Economical
Manner. .21
Covenant 5. Against Sale, Eminent Domain,
Existing and Future
Agreements. .21
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TABLE OF cONTENTS, Continued
Page
Covenant 6. Insurance. .22
Covenant 7. Records and Accounts. .23
Covenant 8. Collection of Charges. .23
Covenant 9. Rates and Charges. .23
Covenant 10. No Priority for Additional
Indebtedness. .24
Covenant 11. Limits on Parity Bonds. .24
Covenant 12. Tax Covenants Relating to the
Internal Revenue Code of
1986. .26
Section 22. LOST, STOLEN, DESTROYED, OR
MUTILATED 1990 BONDS. 26
Section 23. CANCELLATION OF 1990 BONDS. 26
Section 24. CONSENT OF 1990 BONDOWNERS. 27
Section 25. 1990 BOND FORM. 30
Section 26. TEMPORARY 1990 BONDS. 30
Section 27. BOOK-ENTRY FORMAT. 31
Section 28. RESOLUTION CONSTITUTES CONTRACT;
CERTAIN AMENDMENTS, ETC. .33
Section 29. DEFEASANCE. .34
Section 30. FUTURE CONTRACTS. .35
Section 31. SEVERABILITY. .35
Section 32. SUBSTITUTES. .35
Section 33. EFFECTIVE DATE. .36
Exhibit A MATURITY SCHEDULE AND SINKING FUND
ALLOCATIONS. A-1
Exhibit B BOND FORM. .B-1
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CITY OF ANAI~IM RESOLUTION NO. 90R-293
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ANAHEIM,
CALIFORNIA, AUTHORIZING THE ISSUANCE OF $9,000,000 WA'r~
REVENUE BONDS, 1990 SERIES, OF THE CITY AND PROVIDING THE
TERMS AND CONDITIONS OF SUCH BONDS
WI{EREAS, the City of Anaheim (the "City") is a municipal
corporation organized and existing under a charter duly and regularly
adopted pursuant to the provisions of the Constitution of the State
of california (the "Charter"); and
WHEREAS, Section 1210 of the Charter ("Section 1210") pro-
vides as follows:
~w'
"Bonds which are payable only out of such revenues as
may be specified in such bonds may be issued when the City
Council by ordinance shall have established a procedure for
the issuance of such bonds. Such bonds, payable only out
of revenues, shall not constitute an indebtedness or gen-
eral obligation of the city. No such bonds payable out of
revenues shall be issued without the assent of a majority
of the voters voting upon the proposition for issuing the
same at an election at which such proposition shall have
been duly submitted to the qualified electors of the City.
It shall be competent for the city to make contracts
and covenants for the benefit of the holders of any such
bonds payable only from revenues and which shall not con-
stitute a general obligation of the City for the establish-
ment of a fund or funds, for the maintaining of adequate
rates or charges, for restrictions upon further indebted-
ness payable out of the same fund or revenues, for restric-
tions upon transfer out of such fund, and other appropriate
covenants. Money placed in any such special fund for the
payment of principal and/or interest on any issue of such
bonds or to assure the application thereof to a specific
purpose shall not be expended for any other purpose what-
ever except for the purpose for which such special fu~d was
established and shall be deemed segregated from all other
funds of the City and reserved exclusively for the purpose
for which such special fund was established u~til the pur-
pose of its establishment shall have been fully
accomplished.
94601.16.6056.01:2
Notwithstanding the foregoing, the City may sell and
issue at any time and from time to time revenue bond antic-
ipation notes (including renewal revenue bond anticipation
notes) in anticipation of the revenue bonds authorized by
the voters on June 2, 1981; provided that the aggregate
principal amount of such revenue bond anticipation notes
and revenue bonds outstanding in accordance with their
terms at any one time shall not exceed $92 million. Such
revenue bond anticipation notes may be sold, issued and
secured in such manner and subject to such terms and condi-
tions as the City Council may prescribe by ordinance; pro-
vided that such revenue bond anticipation notes shall not
constitute an indebtedness or general obligation of the
City of Anaheim and are not to be secured by the taxing
power of said City.
Notwithstanding the foregoing, the City may also sell
and issue at any time and from time to time revenue bond
anticipation notes (including renewal revenue bond antici-
pation notes) in anticipation of any electric or water rev-
enue bonds theretofore or hereafter authorized by the
voters; provided that (i). the aggregate principal amount of
such electric revenue bond anticipation notes and the elec-
tric revenue bonds in anticipation of which such electric
revenue bond anticipation notes were issued outstanding in
accordance with their terms at any one time shall not
exceed the principal amount of such electric revenue bonds
authorized by the voters and (ii) the aggregate principal
amount of such water revenue bond anticipation notes and
the water revenue bonds in anticipation of which such water
revenue bond anticipation notes were issued outstanding in
accordance with their terms at any one time shall not
exceed the principal amount of such water revenue bonds
authorized by the voters. Such revenue bond anticipation
notes may be sold, issued and secured in such manner and
subject to such terms and conditions as the City Council
may prescribe by ordinance; provided that such revenue bond
anticipation notes shall not constitute an indebtedness or
general obligation of the City of A~aheim and are not to be
secured by the taxing power of said City.
Notwithstanding the foregoing, the City may also sell
and issue at any time and from time to time revenue antici-
pation notes (including renewal revenue anticipation notes)
in anticipation of the receipt of revenues of the City's
water and electric utilities; provided that the aggregate
principal amount of such revenue anticipation notes
outstanding in accordance with their terms at any one time
shall not exceed, for each of such utilities, an amount
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94601.16.6056.01:2
equal to 25% of the gross revenue earned by the respective
utility during the immediately preceding fiscal year as set
forth in the audited financial statements of such utility
for such year. Such revenue anticipation notes may be
sold, issued, and secured in such manner and subject to
such terms and conditions as the City Council may prescribe
by ordinance; provided that such revenue anticipation notes
shall not constitute an indebtedness or general obligation
of the City of Anaheim and are not to be secured by the
taxing power of said city."; and
WHEREAS, Ordinance No. 2933 of the City Council, incor-
porating cert3in sections of the Revenue Bond Law of 1941 (Chapter 6,
Part 1, Division 2, Title 5 of the Government Code of the State of
California), establishes a procedure for the issuance of water reve-
nue bonds as provided for in Section 1210 (including refunding water
revenue bonds as provided in Section 1210.1); and
WHEREAS, pursuant to Section 1210, Ordinance No. 2933, and
Resolution No. 87R-321 of the City Council, a special municipal elec-
tion was held in the City on November 3, 1987, for the purpose of
submitting to the qualified voters of the City the following
proposition:
"Shall the City of Anaheim be authorized to finance
the acquisition and construction of additions to and
improvements of the water system of said city by the issu-
ance of revenue bonds, not payable from property taxes, in
an amount not to exceed 14 million dollars?"; and
W~EREAS, said proposition (the "1987 Proposition") was
approved by the votes of more than a majority of the voters voting on
the 1987 Proposition at said special municipal election: and
WHEREAS, of said authorized amount of $14,000,000, the City
has heretofore issued $5,000,000 water revenue bonds designated
"Water Revenue Bonds, 1988 Series"; and
WHEREAS, this City Council deems it necessary to issue for
the purposes hereinafter set forth, $9,000,000 principal amount of
water revenue bonds authorized by the 1987 Proposition, to be desig-
nated "Water Revenue Bonds, 1990 Series"; and the Water Revenue
Bonds, 1990 Series, shall be on a parity with the City's Water
Revenue Bonds, 1980 Series, Water Revenue Bonds, 1984 Series, Water
Revenue Bonds, 1986 Series, Water Revenue Bonds, 1988 Series and any
other parity water revenue bonds which may be issued in the future by
the City;
94601.16. 6056.01:2
NOW, THEREFORE, the city Council of the City of Anaheim,
California, DOES HEREBY RESOLVE, DETERMINE AND ORDER as follows:
sECTION 1. Definitions. As used in this Resolution,
unless the context otherwise requires:
(a) "Authorized Investments" means any obligations in
which the City may lawfully invest its funds.
(b) "City" means the City of Anaheim, California.
(c) "City Council" means the City Council of the
City.
(d) "DTC" means the Depository Trust Company, New
York, New York, a limited purpose trust company organized
under the laws of the State of New York, in its capacity as
securities depository for the 1990 Bonds.
(e) "Enterprise" means the entire waterworks system
of the City, including all additions to, and improvements
and extensions of, said system later constructed or
acquired.
(f) "Fiscal Agent" means the fiscal agent under the
1980 Bond Resolution, the 1984 Bond Resolution and the 1986
Bond Resolution.
(g) "Fiscal Year" means the year period beginning on
July i and ending on the next following June 30.
(h) "Information Services" means Financial
Information, Inc.'s "Daily Called Bond Service," 30
Montgomery Street, loth Floor, Jersey City, New Jersey
07302, Attention: Editor; Kenny Information Services
"Called Bond Service," 55 Broad Street, 28th Floor, New
York, New York 10004; Moody's "Municipal and Government,"
99 Church Street, 8th Floor, New York, New York 10007,
Attention: Municipal News Reports; and Standard & Poor's
"Called Bond Record," 25 Broadway, 3rd Floor, New York, New
York 10004; or to such other addresses and/or such other
services providi~ information with respect to called bonds
as the city may designate.
(i) "Maximum Annual Debt Service" as computed from
time to time under Section 15 and Covenant ll of Section 21
hereof means the largest of the sums obtained for the
Fiscal Year of computation or any Fiscal Year thereafter by
totaling the following for each such Fiscal Year:
94601.16.6056.01:~
(1) The principal amount of all serial 1990 Bonds and
serial Parity Bonds payable in such Fiscal Year and
outstanding at the date of such computation;
(2) The minimum sinking account payments, if any, pay-
able in such Fiscal Year with respect to the term 1990
Bonds and any term Parity Bonds outstanding at the
date of such computation; and
(3) The interest which would be due during such Fiscal
Year on the aggregate principal amount of the 1990
Bonds and Parity Bonds which would be outstanding in
such Fiscal Year if the serial 1990 Bonds and serial
Parity Bonds outstanding on the date of such computa-
tion are retired as they mature and if the term 1990
Bonds and any term Parity Bonds outstanding on the
date of such computation, if any, are retired as
scheduled in this Resolution and in the Parity Bond
Resolution providing for the issuance of such term
Parity Bonds.
(j) "Net Revenues" of the Enterprise m~ans the amount
of the Revenues less the Operating Expenses.
(k) "1980 Bond Resolution" means Resolution
No. 80R-75 of the City Council, adopted February 26, 1980,
authorizing the issuance of the 1980 Bonds.
(1) "1980 Bonds" means the $7,350,000 water revenue
bonds designated "Water Revenue Bonds, 1980 Series".
(m) "1984 Bond Re solution" means Resolution
No. $4R-396 of the City Council, adopted October 9, 1984,
authorizing the issuance of the 1984 Bonds.
(n) "1984 Bonds" means the $6,650,000 water revenue
bonds designated "Water Revenue Bonds, 1984 Series".
(o) "1986 Bond Resolution" means Resolution
No. 86R-91 of the City Council, adopted March 4, 1986,
authorizing the issuance of the 1986 Bonds.
(p) "1986 Bonds" means the $7,160,000 refunding water
revenue bonds designated Water Revenue Bonds, 1986 Series.
(q) "1988 Bond Re solution" means Resolution
No. 88R-11 of the City Council, adopted January 12, 1988
authorizing the issuance of the 1988 Bonds.
94601.16. 6056.01: 2
(r) "1988 Bonds" means the $5,000,000 water revenue
bonds designated "Water Revenue Bonds, 1988 Series".
(s) "1990 Bonds" means the $9,000,000 aggregate prin-
cipal amount of bonds authorized and issued under this
Resolution pursuant to the 1987 Proposition.
(t) "Operating Expenses" of the Enterprise means the
reasonable and necessary current expenses of maintaining,
repairing and operating the Enterprise, including City
administrative expenses directly attributable to water
system functions, but excluding depreciation and amortiza-
tion, and debt service requirements of the City's general
obligation water bonds, all computed in accordance with
sound accounting principles and consistent with existing
accounting practices of the City.
(u) "Ordinance No. 2933" means Ordinance No. 2933 of
the City Council, adopted on June 1, 1971, as amended by
Ordinance No. 4536, adopted on September 4, 1984.
(v) "Parity Bonds" means the 1980 Bonds, the 1984
Bonds, 1986 Bonds, the 1988 Bonds and any other revenue
bonds, revenue notes or other similar evidences of indebt-
edness hereafter issued for the acquisition, construction
and financing of additions to, and improvements of the
Enterprise, payable out of the Net Revenues and which, as
provided in this Resolution, rank on a parity with the 1990
Bonds.
(w) "Parity Bond Resolution" means any resolution
authorizing the issuance of Parity Bonds.
(x) "Registrar" means Bank of America NT&SA and its
successor or successors and any other corporation which
may, within the sole discretion of the City, be substituted
in its place by the City.
(y) "Resolution" means this Resolution No. 90R-293
of the City Council.
(z) "Revenues" means all rates, fees and charges for
providing water service to persons and real property
(including connection fees) and all other fees, rents and
charges and other income derived by the City, from the
ownership, operation, use or services of the Enterprise.
(aa) "Securities Depositories" means The Depository
Trust Company, 711 Stewart Avenue, Garden City, New York
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94601.16.6056.01:2
11530, Fax-(516) 227-4039 or 4190; Midwest Securities Trust
Company, Capital Structures-Call Notification, 440 South
LaSalle Street, Chicago, Illinois 60605, Fax-(312)
663-2343; Philadelphia Depository Trust Company,
Reorganization Division, 1900 Market Street, Philadelphia,
Pennsylvania 19103, Attention: Bond Department, Dex-(215)
496-5058; or to such other addresses and/or such other
securities depositories as the City may designate.
(bb) "Treasurer" means the Treasurer of the city.
SECTION 2. Equality of 1990 Bonds and Parity Bonds; Pledge
of Revenues. Pursuant to Section 1210 of the City Charter,
Ordinance No. 2933 and this Resolution, the 1990 Bonds and all Parity
Bonds shall be equally secured by a pledge, charge and lien upon the
Net Revenues of the Enterprise without priority for number, date of
bonds, date of sale, date of execution, or date of delivery, and the
payment of the interest on and principal of the 1990 Bonds and all
Parity Bonds and any premiums upon the redemption of any thereof
shall be and are secured by an exclusive pledge of and charge and
lien upon the Net Revenues of the Enterprise, and all of the Net
Revenues of the Enterprise are hereby pledged, charged and assigned
for the security of the 1990 Bonds and all Parity Bonds, and such Net
Revenues and any interest earned on the Net Revenues shall constitute
a trust fund for the security and payment of the interest on and
principal of the 1990 Bonds and all Parity Bonds, and so long as any
of the 1990 Bonds, Parity Bonds or interest thereon are u~paid, the
Net Revenues and interest thereon shall not be used for any other
purpose, except as permitted by this Resolution or any Parity Bond
Resolution, and shall be held in trust for the benefit of the bond-
owners and shall be applied pursuant to this Resolution, or to this
Resolution as modified pursuant to provisions herein, and to any
Parity Bond Resolution.
Nothing in this Resolution shall preclude: (a) the redemp-
tion prior to maturity of any 1990 Bonds subject to call and redemp-
tion or payment of said Bonds at maturity from proceeds of refunding
bonds issued under Section 1210.1 of the City Charter as the same now
exists or as hereafter amended, or under any other law of the State
of California~ (b) the issuance, subject to the limitations contained
herein, of Parity Bonds; or (c) the issuance of additional indebted-
ness payable solely from surplus moneys in the Revenue Account pursu-
ant to Section 18 hereof.
S~TION 3. Pur~ose of the 1990 Bo~d~. Under and pursu-
ant to Section 1210 of the City Charter and Ordinance No. 2933 and in
accordance with the authorizations stated in the recitals hereof, the
1990 Bonds shall be issued for the purpose of financing the cost of
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94601.16.6056.01:2
the acquisition and construction of additions to and improvements of
the Enterprise.
SECTION 4. Special Obligations; No General city Liability.
The 1990 Bonds shall be special obligations of the City and shall be
payable as to the principal thereof and interest thereon and any pre-
mium upon the redemption of any thereof solely from the Net
Revenues. The general fund of the City is not liable for the payment
of the 1990 Bonds or their interest, nor is the credit or taxing
power of the City pledged for the payment of the 1990 Bonds or their
interest. The holders of the 1990 Bonds shall not be entitled to
compel the exercise of the taxing power by the city or the forfeiture
of any of its property. The principal of and interest on the 1990
Bonds and any premium upon the redemption of any thereof are not a
debt of the City or a legal or equitable pledge, charge, lien or
encumbrance upon any of its property or upon any of its income,
receipts or revenues, except the Net Revenues.
SECTION 5. Description of the 1990 Bonds. T h e 19 9 0
Bonds shall all be in the denomination of $5,000 or any integral
multiple of $5,000, and numbered consecutively from R-1 upwards. The
1990 Bonds shall be designated "WATER REVENUE BONDS, 1990 SERIES".
The 1990 Bonds shall be payable on October 1 in each year of maturity
in the amounts for each of the several years, and shall bear interest
payable semi-annually on the first days of April and October of each
year, commencing October 1, 1990, as set forth in Section 1 of
Exhibit A hereto. The City Council hereby determines that the maxi-
mum rate of interest which may be paid on the 1990 Bonds equals the
highest interest rate set forth in Section 1 of Exhibit A hereto.
Each 1990 Bond shall bear interest from the interest payment date
next preceding the date of its authentication, unless such 1990 Bond
is authenticated on an interest payment date, in which event from
such interest payment date or unless such 1990 Bond is authenticated
as of a day during the period from the day after the record date
immediately preceding an interest payment date to such interest pay-
ment date, inclusive, in which event such 1990 Bond shall bear inter-
est from such interest payment date; provided, however, that if the
date of authentication of any 1990 Bond shall be on or prior to
September 15, 1990, such 1990 Bond shall bear interest from July 1,
1990; provided, further, that if, as shown by the records of the
Registrar, interest on the 1990 Bonds shall be in default, 1990 Bonds
issued in exchange for 1990 Bonds surrendered for transfer or
exchange shall bear interest from the interest payment date to which
interest has been paid in full on the 1990 Bonds surrendered or if no
interest has been paid, July 1, 1990.
The 1990 Bonds designated as "Serial Bonds" in Section 1 of
Exhibit A hereto are sometimes referred to herein as "serial 1990
Bonds."
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94601.16.6056.01:2
SECTION 6. Place of Payment. If at the maturity date of
any 1990 Bond or if the same is redeemable and has been duly called
for redemption, funds are available for the payment or redemption
thereof in full accordance with the terms of this Resolution, said
1990 Bonds shall then cease to bear interest. The 1990 Bonds and the
interest thereon shall be payable in lawful money of the United
States of America. Subject to the provisions of Section 27 hereof,
the principal of the 1990 Bonds and any premium upon the redemption
thereof shall be payable at the principal corporate tin/st office of
the Registrar in San Francisco, California and at such other paying
agent (if any) designated by the City. subject to the provisions of
Section 27 hereof, interest on the 1990 Bonds shall be payable by
check mailed to the registered owner on the registration records
maintained by the Registrar, determined as of the close of business
on the 15th day of the calendar month immediately preceding an inter-
est payment date (including the date on which the principal of a 1990
Bond is to be paid).
SECTION 7. Execution an~ Authentication of the 1990 Bo~.
The Mayor of the City and the Treasurer are hereby authorized and
directed to sign the 1990 Bonds by their facsimile signatures, and
the city Clerk of the City is hereby authorized and directed to coun-
tersign the 1990 Bonds by facsimile signature and to affix thereto or
otherwise reproduce thereon the corporate seal of the City.
The 1990 Bonds shall bear thereon a certificate of authen-
tication, in the form set forth in Exhibit B hereto, executed manu-
ally by the Registrar. Only such 1990 Bonds as shall bear thereon
such certificate of authentication shall be entitled to any right or
benefit under this Resolution and no 1990 Bond shall be valid or
obligatory for any purpose until such certificate of authentication
shall have been duly executed by the Registrar. Such certificate of
the Registrar upon any 1990 Bond executed on behalf of the City shall
be conclusive evidence that the 1990 Bond so authenticated has been
duly authenticated and delivered under this Resolution and that the
owner thereof is entitled to the benefits of this Resolution.
SECTION 8. Registration and Tra~fer. The 1990 Bonds
shall be issued in fully registered form. The 1990 Bonds shall be
transferable only upon the books of the City, which shall be kept for
such purposes at the office of the Registrar, by the registered owner
thereof in person or by his attorney duly authorized in writing, upon
surrender thereof together with a written instrument of transfer sat-
isfactory to the Registrar duly executed by the registered owner or
his duly authorized attorney. Upon the transfer of any such regis-
tered 1990 Bond, the Registrar shall issue in the name of the trans-
feree a new registered Bond or 1990 Bonds of the same aggregate
principal amount and maturity as the surrendered 1990 Bond. The
Registrar may, with the concurrence of the City, designate an
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94601.16.6056.01:2
additional office where transfer of registered 1990 Bonds may be
effected by the Registrar provided in this Section.
The City, the Registrar and each paying agent may deem and
treat the person in whose name any 1990 Bond shall be registered upon'
the books of the City as the absolute owner of such 1990 BoRd,
whether such 1990 Bond shall be overdue or not, for the purpose of
receiving payment of, or on account of, the principal or redemption
price, if any, and interest on such 1990 Bond and for all other pur-
poses, and all such payments so made to any such registered owner or
upon his order shall be valid and effectual to satisfy and discharge
the liability upon such 1990 Bond to the extent of the sum or sums so
paid, and neither the City, the Registrar nor any paying agent shall
be affected by any notice to the contrary. The City agrees to indem-
nify and save the Registrar and each paying agent harmless fr~m and
against any and all loss, cost, charge, expense, Judgment or liabil-
ity incurred by it, acting in good faith and without negligence under
this Resolution, in so treating such registered owner.
In all cases in which the privilege of exchanging 1990
Bonds or transferring registered 1990 Bonds is exercised, the
Registrar shall authenticate and deliver 1990 Bonds in accordance
with the provisions of this Resolution. All 1990 Bonds surrendered
in any such exchanges or transfers shall forthwith be delivered to
the Registrar and cancelled by the Registrar and returned to the
City. For every such exchange or transfer of 1990 Bonds, whether
temporary or definitive, the City or the Registrar may make a charge
sufficient to reimburse it for any tax, fee or other governmental
charge required to be paid with respect to such exchange or
transfer. Neither the City nor the Registrar shall be required to
transfer or exchange any 1990 Bonds for a period of 15 days next pre-
ceding any selection of 1990 Bonds to be redeemed or thereafter until
after the first publication or mailing of any notice of redemption or
any 1990 Bonds called for redemption.
SECTION 9. Redemption of 1990 Bo~-. The 1990 Bonds
maturing on or after October 1, 1999 are subject to redemption prior
to maturity, at the option of the City, on and after October 1, 1998,
in whole at any time or in part on any interest payment date, at the
following redemption prices together with accrued interest to the
date of redemption:
Rede~ion Period
(Dmtee Inclusive) Redem~tion Price
october 1, 1998 to September 30, 1999 102%
October 1, 1999 to September 30, 2000 101
October 1, 2000 and thereafter 100
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94601.16.6056.01:2
If less than all of the 1990 Bonds are redeemed at any one
time, the city shall select the maturities to be redeemed and such
bonds shall be redeemed by lot within each maturity.
The term 1990 Bonds are also subject to mandatory sinking
fund redemption prior to maturity at the principal amount thereof
plus accrued interest to the redemption date as provided in
Section 14(B) hereof. The term 1990 Bonds to be so redeemed shall be
selected by lot within the maturity to which such redemption
relates.
The interest payment date on which 1990 Bonds which are
called are to be presented for redemption is herein sometimes called
the "redemption date."
(a) Notice of Redemption. The Registrar shall, at least
30 days but not more than 60 days prior to the redemption date, mail
by first-class, postage prepaid a notice to (i) the respective regis-
tered owners thereof at the addresses appearing on the registration
records maintained by the Registrar, as of the date of such notice
and (ii) one or more Information Services. Notice of redemption
shall also be given by telecopy, certified, registered or overnight
mail to the Securities Depositories two (2) days prior to the mailing
of notice of redemption to the holders and the Information Services.
The notice of redemption shall (a) state the redemption date; (b)
state the redemption price; (c) state the numbers and date of matu-
rity of the 1990 Bonds to be redeemed; provided, however, that when-
ever any call includes all of the outstanding 1990 Bonds subject to
redemption, the numbers of the 1990 Bonds need not be stated; (d)
require that such 1990 Bonds be surrendered at the principal corpo-
rate trust office of the Registrar, in San Francisco, California, or
at any paying agent which has been selected (in its sole discretion)
by the City; and (e) give notice that further interest on such 1990
Bonds will not accrue after the designated redemption date.
The actual receipt by the holder of any 1990 Bond of notice
of such redemption shall not be a condition precedent to redemption,
and failure to receive such notice shall not affect the validity of
the proceedings for redemption of such 1990 Bonds or the cessation of
interest on the redemption date. The mailed notice or notices
required by this Section 9(a) shall be given by the City.
Failure by the City to give notice pursuant to this Section
9(a) to any one or more of the Information Services or Securities
Depositories shall not affect the sufficiency of the proceedings for
redemption. Failure by the City to mail notice of redemption pursu-
ant to this Section 9(a) to any one or more of the respective holders
of any 1990 Bonds designated for redemption shall affect the
sufficiency of the proceedings for redemption only with respect to
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94601.16.6056.01:2
the holder or holders to whom such notice was not mailed. An
affidavit of the Public Utilities General Manager or his designee
that notice of redemption was mailed to holders shall be conclusive
evidence of the mailing of such notice.
(b) Redemption Fund. Prior to the redemption date there
shall be established and maintained by the Treasurer, so long as any
of the 1990 Bonds remain outstanding, a redemption fund to be
described as the Water Revenue Bonds Redemption Fund (herein referred
to as the "Redemption Fund"), and prior to the redemption date there
shall be set aside in the Redemption Fund moneys available for the
purpose and sufficient to redeem, at the prices payable as in this
Resolution provided, the 1990 Bonds designated in such notice of
redemption. Said moneys shall be set aside in the Redemption Fund
solely for that purpose and shall be applied on or after the redemp-
tion date to payment of the 1990 Bonds to be redeemed upon presenta-
tion and surrender of such 1990 Bonds. Any accrued interest due on
or prior to the redemption date shall be paid from the 1990 Bond
Service Account. Any interest due on or prior to the redemption date
upon 1990 Bonds shall be paid from the 1990 Bond Service Account.
If, after all of the 1990 Bonds have been redeemed and cancelled or
paid and cancelled, there ar~ moneys remaining in the Redemption
Fund, said moneys shall be transferred to the Revenue Account; pro-
vided, however, that if said moneys are part of the proceeds of
refunding bonds said moneys shall be transferred to the fund or
account created for the payment of principal of and interest on such
refunding bonds. The Redemption Fund may also be used to provide for
the redemption of Parity Bonds.
(c) Effect of the Notice of Redemption. When notice of
redemption has been given, and when the amount necessary for the
redemption of the 1990 Bonds called for redemption is set aside for
that purpose in the Redemption Fund, the 1990 Bonds designated for
redemption shall become due and payable on the redemption date, and
upon presentation and surrender of said 1990 Bonds at the place spec-
ified in the notice of redemption, such 1990 Bonds shall be redeemed
and paid at said redemption price out of the Redemption Fund, and no
interest will accrue on such 1990 Bonds called for redemption after
the redemption date specified in such notice, and the holders of said
1990 Bonds so called for redemption after such redemption date shall
look for the payment of such 1990 Bonds only to said Redemption
Fund. All 1990 Bonds redeemed shall be cancelled forthwith and shall
not be reissued.
All unpaid interest payable at or prior to the redemption
date shall continue to be payable to the respective registered owners
of such 1990 Bonds, or their order, but without interest thereon.
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94601.16. 6056.01: 2
SECTION 10. Funds and Accounts.
A. The Treasurer shall continue to maintain the following
funds and accounts, heretofore created pursuant to Section 1210 of
the City Charter, as provided for in the 1980 Bond Resolution, 1984
Bond Resolution, 1986 Bond Resolution and 1988 Bond Resolution, so
long as any of the 1980 Bonds, 1984 Bonds, 1986 Bonds, 1988 Bonds and
1990 Bonds remain outstanding:
(1) Water Enterprise Fund (the "Water Enterprise
Fund"), and the following accounts within said fund:
(a) Water System Revenue Account (the "Revenue
Account"); and
(b) Water System Maintenance and Operating
Account (the "M&O Account"); and
(c) Water System Renewal and Replacement Account
(the "R&R Account"); and
(d) Water System Extension and Improvement
Account (the "E&I Account").
B. The Fiscal Agent shall continue to maintain the follow-
ing funds so long as any of the 1980 Bonds remain outstanding:
(1) Water System Revenue Bond and Interest Fund (the
"Bond Service Fund");
(2) Water System Revenue Bond Reserve Fund (the
"Reserve Fund"); and
(3) Water System Revenue Bond Sinking Fund (the "1980
Sinking Fund").
From and after the retirement of all of the 1980 Bonds (or
the date on which provision for such retirement has been made so that
the 1980 Bonds are no longer outstanding within the meaning of the
1980 Bond Resolution) the Reserve Fund shall be maintained by the
Treasurer so long as any of the 1984 Bonds, 1986 Bonds, 1988 Bonds or
1990 Bonds remain outstanding.
C. The Treasurer shall continue to maintain the following
accounts, heretofore created under the 1984 Bond Resolution, so long
as any of the 1984 Bonds, 1986 Bonds, 1988 Bonds or 1990 Bonds remain
outstanding:
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94601.16.6056.01:2
(1) Water System Revenue Bond and Interest Account
(the "Bond Service Account");
(2) Water System Revenue Bond Sinking Account (the
"Sinking Account").
D. The following additional account is hereby created in
the Water Enterprise Fund and shall be maintained by the Treasurer so
long as any of the 1990 Bonds remain outstanding:
(1) Water System Revenue Bond, 1990 Construction
Account (the "1990 Construction Account").
E. Additional accounts in the Water Enterprise Fund may be
created by subsequent resolutions of the City Council.
SECTION 11. Disposition of Bond Proceeds.
A. The proceeds of the 1990 Bonds shall be deposited as
follows:
(1) An amount sufficient (together with amounts cur-
rently on deposit) to cause the amount in the Reserve Fund
to equal the Maximum Annual Debt Service for the 1980
Bonds, the 1984 Bonds, the 1986 Bonds, 1988 Bonds and the
1990 Bonds shall be deposited in the Reserve Fund.
(2) The amount of the accrued interest received by
the City with respect to the 1990 Bonds shall be deposited
in the Bond Service Account.
(3) The remainder shall be deposited in the 1990
Construction Account.
B. The City may deposit moneys, received from any source,
in the 1990 Construction Account. The moneys set aside and placed in
the 1990 Construction Account shall be expended solely for the pur-
poses for which the 1990 Bonds were issued.
C. If any sum remains in the 1990 Construction Account
after the full accomplishment (as certified by the General Manager of
the Public Utilities Department of the City) of the purposes for
which the 1990 Bonds were issued, it shall be transferred to the
Redemption Fund to be used to pay, by redemption or purchase at a
purchase price (incl%~di~g brokerage and other fees) not exceeding par
plus accrued interest, 1990 Bonds, or Parity Bonds issued for one or
more of the same purposes for which the 1990 Bonds were issued.
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94601.16. 6056.01: 2
SECTION 12. Revenue Account. The Revenues o f the
Enterprise shall be deposited with the Treasurer to the credit of the
Revenue Account. On or before the twentieth day of each calendar
month, there shall be withdrawn from the Revenue Account the entire
amount on deposit in the Revenue Account and there shall be allocated
and deposited such amount in the indicated priority to the following
accounts and funds.
SECTION 13. M&O Account. First, so long as any of the
1990 Bonds are outstanding, there shall be allocated to the M&O
Account amounts sufficient for the payment of the Operating Expenses
of the Enterprise as said expenses become due and payable. Amounts
in the M&O Account shall be used solely to pay Operating Expenses.
SECTION 14. Bond Service Account; Sinking Account.
Second, so long as any of the 1990 Bonds are outstanding, in addition
to but on a parity with the transfers to the Bond Service Fund and
the 1980 Sinking Fund and the Sinking Account required by Section 14
of the 1986 Bond Resolution:
A. There shall be allocated to the Bond Service Account
the following amounts:
(1) one-sixth of the interest which will become due
and payable on the outstanding 1990 Bonds and Parity Bonds
(other than the 1980 Bonds) within the next ensuing six
months, except that, with respect to any interest payment
date, the monthly stun allocated shall be the interest which
will become due and payable on such interest payment date
less any portion of such interest which has been provided
for (a) by transfers required with respect to the 1990
Bonds by any Parity Bond Resolution, and (b) in the case of
any other Parity Bonds, any transfers required with respect
to such Parity Bonds by any other Parity Bond Resolution;
and
(2) one-twelfth of the principal amount which will
mature and be payable on the outstanding serial 1990 Bonds
and serial Parity Bonds (other than the 1980 Bonds) within
the next ensuing twelve months.
B. There shall be allocated to the Sinking Account, each
month during the twelve-month period preceding the dates (if any) set
forth in Section 2 of Exhibit A hereto, in addition to any amounts
which may be specified in any Parity Bond Resolution with respect to
any ter~ Parity Bonds to be issued by the city in the future, one-
twelfth of the amount (if any) set forth in Section 2 of Exhibit A
hereto in order to pay the principal of the respective amounts of
term 1990 Bonds which shall be called and redeemed on the dates (if
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94601.16.6056.01:2
any) set forth in Section 2 of Exhibit A hereto, unless such amounts
are used to purchase term 1990 Bonds as provided in this Section.
C. In any event, such sums shall be allocated from the
Revenue Account to the Bond Service Account and the Sinking Account
so that the full amount required to pay, as it becomes due, the
interest on said 1990 Bonds and Parity Bonds (other than the 1980
Bonds) and any installment of principal on said 1990 Bonds and Parity
Bonds (other than the 1980 Bonds with respect to sinking fund
payments) shall be set aside in the Bond Service Account and the
Sinking Account at least five days prior to the date the installment
of interest or principal becomes due.
If for any reason in any month there are insufficient
amounts in the Revenue Account to make all required deposits in the
Bond Service Fund, Bond Service Account, the 1980 Sinking Fund, and
the Sinking Account, then the amounts available shall be allocated
pro rata towards the required deposits and the deficiencies shall be
added to and become a part of the allocations required for the fol-
lowing calendar month.
Any moneys required to be set aside in the Bond Service
Account or the Sinking Account may be prepaid in whole or in part by
being earlier set aside therein, and in that event the monthly allo-
cation which has been so prepaid need not be made at the time
appointed therefor. Each monthly transfer shall be reduced by an
amount equal to any investment income received during its preceding
calendar month on moneys in the Bond Service Account or the Sinking
Account.
The 1990 Bonds shall recite that they are payable from the
Water Enterprise Fund, but notwithstanding such recital shall be paid
from the Bond Service Account, or from the Redemption Fund estab-
lished in accordance with Section 9(b) of this Resolution.
Moneys in the Sinking Account shall be used to redeem any
term 1990 Bonds and term Parity Bonds (other than the 1980 Bonds) at
the times and in the amounts as provided in this Section and any
Parity Bond Resolution. Any such call and redemption of term 1990
Bonds shall be made in accordance with Section 9 hereof, and for that
purpose moneys in the Sinking Account may be transferred to the
Redemption Fund for the payment of principal upon redemption of any
term 1990 Bonds called for redemption prior to maturity.
Moneys in the Sinking Account may also be used, prior to
the date when any ter~ 1990 Bonds or term Parity Bonds (other than
1980 Bonds) are selected by lot, in lieu of (or partially in lieu of)
mandatory call and redemption on the next succeeding sinking fund
redemption date, for the purchase of any such term 1990 Bonds or term
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94601.16.6056.01:2
Parity bonds (other than 1980 Bonds) at a purchase price (including
brokerage and other fees) not exceeding par plus accrued interest.
If after all of the 1990 Bonds and any Parity Bonds have
been redeemed and cancelled or paid and cancelled (or provision is
made therefor) there are moneys remaining in the Bond Service
Account, the Sinking Account or the Reserve Fund, said moneys shall
be transferred to the Revenue Account.
SECTION 15. Reserwe Fund. Third, so long as any of the
1990 Bonds are outstanding, there shall be transferred to the Reserve
Fund an amount (when added to amounts on deposit therein) which is
sufficient to provide a balance in the Reserve Fund equal to Maximum
Annual Debt Service.
Moneys in the Reserve Fund shall be used solely for the
purpose of paying the principal of and interest on the 1990 Bonds and
any Parity Bonds, in the event that moneys in the Bond Service Fund
or the 1980 sinking Fund (in the case of the 1980 Bonds), or the Bond
Service Account or the Sinking Account (in the case of the 1984
Bonds, 1986 Bonds, 1988 Bonds, 1990 Bonds or any other Parity Bonds)
are insufficient therefor. For that purpose, the Fiscal Agent or the
Treasurer, as appropriate, shall withdraw and transfer sufficient
moneys from the Reserve Fund to the Bond Service Fund, the Bond
Service Account, the 1980 Sinking Fund, or the Sinking Account, as
the case may be. If at any time the moneys in the Reserve Fund are
insufficient to make all such required transfers, the available
moneys in the Reserve Fund shall be distributed pro rata towards the
required deposits. Whenever moneys are withdrawn from the Reserve
Fund an equal amount of moneys shall be placed in the Reserve Fund by
transfers from the first available moneys in the Revenue Account.
Prior to the initial transfer from the Revenue Account pur-
suant to Section 12 hereof in each month, moneys in the Reserve Fund
in excess of Maximum Annual Debt Service shall be withdrawn from the
Reserve Fund and transferred to the Revenue Account.
If on the first day of a Fiscal Year in which the Maximum
Annual Debt Service calculated excluding such Fiscal Year is less
than the Maxim%a~ A~u~ual Debt Service calculated including such Fiscal
Year (in both cases after giving effect to any proposed redemption or
refunding of any 1990 Bonds or Parity Bonds during such Fiscal Year),
then in each month during such Fiscal Year, prior to the transfer
from the Revenue Account pursuant to Section 12 in each month, there
may be transferred from the Reserve Fund to the Revenue Account an
amount ec~ual to one-twelfth of the difference between the two calcu-
lations of Maximum Annual Debt Service. For purposes of calculating
amounts required to be in the Reserve Fund during such Fiscal Year,
the amounts so transferred shall be deemed to be on deposit in the
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94601.16.6056.01:2
Reserve Fund. Such amounts shall be used only for the purposes set
forth in Section 3 hereof or to pay the principal of 1990 Bonds or
Parity Bond~ at maturity, by redemption or by purchase at a purchase
price (including brokerage and other fees) not exceeding par plus
accrued interest.
SECTION 16. R&R Account. Fourth, so long as any of the
1990 Bonds are outstanding, there shall be allocated to the R&R
Account an amount equal to 2% of the Revenues received in the preced-
ing calendar month until a balance is established, or reestablished,
therein equal to 1% of the depreciated book value of the land, gen-
eral plant and equipment which constitute the net utility plant of
the Enterprise or such other balance as the consulting engineer may
recommend. The moneys contained in the R&R Account shall be used for
transfer to the Bond Service Account, the Bond Service Fund, the 1980
Sinking Fund, or the Sinking Account, as the case may be, to prevent
default in payment of the principal and interest on the 1990 Bonds or
any Parity Bonds, or for extraordinary maintenance and repairs,
renewals and replacements to the Enterprise, but not for additione to
and extensions of the Enterprise.
If at any time the balance in the R&R Account exceeds the
minimum balance herein identified, said excess may be transferred to
the Revenue Account.
SECTIOM 17. E&I Account. Fifth, so 10ng as the 1990
Bonds are outstanding, there shall be set aside out of the Revenue
Account into the E&I Account such amounts as shall be deemed desir-
able by the City Council or appropriate city staff by appointment of
the city Council. The moneys contained in said Account shall be used
for transfer to the Bond Service Account, the Bond Service Fund, the
1980 Sinking Fund, or the Sinking Account, as the case may be, to
prevent default in payment of principal and interest on the 1990
Bonds or any Parity Bonds, or for extension and improvement of the
Enterprise.
SECTION 18. Surplus Moneys in the Revenue Account. All
moneys remaining in the Revenue Account after all transfers required
hereunder have been made, shall be applied (i) to the payment of the
principal and interest on the City's Water Revenue Anticipation Notes
issued pursuant to Section 1210 of the City Charter and Ordinance
No. 4415 and Ordinance No. 4530 of the City Council, to the extent
available, (ii) for the redemption of any 1990 Bonds or Parity Bonds
which are subject to call and redemption prior to maturity or for the
purchase fro~ time to time in the open market of any outstanding 1990
Bonds or Parity Bonds whether or not subject to call and redemption
(irrespective of the maturity or number of such 1990 Bonds or Parity
Bonds) at prices and in such manner, either at public or private
sale, or otherwise, as the Treasurer in his or her discretion may
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94601.16.6056.01:2
determine, but such purchase price (including brokerage and other
charges, but excluding accrued interest) shall not exceed the princi-
pal amount or the redemption price of the callable 1990 Bonds or
Parity Bonds on the next redemption date, whichever is less; or
(iii) for any lawful purpose of the City, including but not limited
to the security and payment of other indebtedness incurred in connec-
tion with the Enterprise.
SECTION 19. Investments. Obligations purchased as
investments of moneys in any of the funds and accounts in which
investments are authorized shall be deemed at all times to be a part
of such funds and accounts and any income realized from such invest-
ments shall be credited to such funds and accounts and any losses
resulting from such investments shall be charged to such funds and
accounts. The Fiscal Agent or the Treasurer, as the case may be,
shall sell at the best price obtainable or present for redemption any
obligations so purchased whenever it may be necessary to do so in
order to provide moneys to meet any payment or transfer from such
funds and accounts. For the purpose of determining at any given time
the balance in any such funds and accounts, any such investments con-
stituting a part of such funds and accounts shall be valued at the
then estimated or appraised market value of such investments. Moneys
in all funds and accounts described in Section 10 hereof shall be
invested only in Authorized Investments, except that so long as any
of the 1980 Bonds are outstanding, amounts in the Revenue Account,
the M&O Account, the R&R Account, the E&I Account, the 1980 Sinking
Fund, the Bond Service Fund and the Reserve Fund shall be invested
only in direct obligations of or obligations guaranteed by the United
States of America, or certificates of deposit of recognized banks or
trust companies fully secured by direct obligations of or obligations
guaranteed by the United States of America. All investments of
moneys in such funds and accounts shall mature not later than such
times as the Treasurer estimates such moneys shall be needed for the
purposes for which such moneys are held.
Notwithstanding any other provision of this Resolution, and
except as provided below, none of the moneys contained in any of the
funds and accounts created or continued by this Resolution shall be:
(i) used in making loans guaranteed by the United States (or any
agency or instrumentality thereof), (ii) invested directly or indi-
rectly in deposits or accounts insured by the Federal Deposit
Insurance Corporation, the National Credit Union Administration or
any other similar Federally chartered corporation, or (iii) otherwise
invested directly or indirectly in obligations guaranteed (in whole
or in part) by the United States (or any agency or instrumentality
thereof); provided. however, that the above restrictions do not apply
(a) during the initial three year temporary period following issuance
and delivery of the 1990 Bonds, (b) to the investment of moneys held
in the Bond Service Account or the sinking Account or any other bona
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94601.16.6056.01:2
fide debt service funds, (c) to investments in the Reserve Fund,
(d) to investments in direct obligations of the United States
Treasury, (e) to investments in obligations guaranteed by the Federal
National Mortgage Association, Government National Mortgage
Association or the Federal Home Loan Mortgage Corporation, (f) to
investments permitted under regulations issued pursuant to
Section 149(b) (3) (B) of the Internal Revenue Code of 1986, as
amended, (g) to investments of amounts in the R & R Account or the E
& I Account, or (h) to such other investments as, in the opinion of
Mudge Rose Guthrie Alexander & Ferdon, are permitted investments
under the Resolution which do not jeopardize the exclusion from gross
income for Federal income tax purposes of the interest on the 1990
Bonds.
SECTION 20. Warranty. The City shall preserve and pro-
tect the security of the 1990 Bonds and the rights of the owners of
the 1990 Bonds and warrant and defend their rights against all claims
and demands of all persons.
SECTION 21. Covenants. So long as any of the 1990 Bonds
are outstanding, the city makes the following covenants with the
bondowners under the provisions of Section 1210 of the City Charter
(to be performed by the City or its proper officers, agents or
employees) which covenants are necessary, convenient and desirable to
secure the 1990 Bonds and tend to make them more marketable; pro-
vided, however, that said covenants do not require the city to expend
any moneys other than the Revenues of the Enterprise.
Covenant 1. Punctual Payment. The city covenants that it
will duly and punctually pay or cause to be paid the principal of and
interest on every 1990 Bond issued hereunder, together with the pre-
mium thereon, if any be payable, on the date, at the place and in the
manner mentioned in the 1990 Bonds and in accordance with this
Resolution, and that the payments into the Bond Service Account, the
Sinking Account and the Reserve Fund will be made, all in strict con-
formity with the terms of the 1990 Bonds and of this Resolution, and
that it will faithfully observe and perform all of the conditions,
covenants and requirements of this Resolution and all resolutions
supplemental thereto and of the 1990 Bonds issued hereunder, and that
time of such payment and performance is of the essence of the City's
contract with the bondowners.
C~ve~ant 2. Discharge Claims. The city covenants that in
order to preserve and protect the priority and security of the 1990
Bonds the City shall pay from amounts available in the M&O Account
and discharge all lawful claims for labor, materials and supplies
furnished for or in connection with the Enterprise which, if unpaid,
may become a lien or charge upon the property or Revenues of the
Enterprise prior or superior to the lien of the 1990 Bonds and impair
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94601.16.6056.01:2
the security of the 1990 Bonds. The City shall also pay from amounts
available in the M&O Account all taxes and assessments or other gov-
ernmental charges lawfully levied or assessed upon or in respect of
the Enterprise or upon any part thereof or upon any of the revenues
thereof.
Covenant 3. Commence Acquisition and Construction. The
City covenants that as soon as funds are available therefor, the City
will commence (to the extent not already commenced) the accomplish-
ment of the purposes for which the 1990 Bonds are issued and will
continue the same to completion with all practicable dispatch and in
an economical manner.
Covenant 4. Operate Enterprise in Efficient and Economical
Manner. The City covenants to operate the Enterprise in an efficient
and economical manner and to operate, maintain and preserve the
Enterprise in good repair and working order.
Covenant 5. Against Sale, Eminent Domain, Existing and
Future Agreements. Except as provided herein, the City covenants
that the Enterprise shall not be mortgaged or otherwise encumbered,
sold, leased, pledged, any charge placed thereon, or disposed of as a
whole or substantially as a whole unless such sale or other disposi-
tion be so arranged as to provide for sums adequate to provide for
the immediate payment of the principal of and interest on and premi-
ums, if any, due upon the call and redemption thereof, of the 1990
Bonds. The City further covenants that the Revenues of the
Enterprise or any other funds pledged or otherwise made available to
secure payment of the principal of and interest on the 1990 Bonds
shall not be mortgaged, encumbered, sold, leased, pledged, any charge
placed thereon, or disposed of or used except as authorized by the
terms of this Resolution. The City further covenants that it will
not enter into any agreement which impairs the operation of the
Enterprise or any part of it necessary to secure adequate revenues to
pay the principal of and interest on the 1990 Bonds or which other-
wise would impair the rights of the bondowners with respect to the
Revenues of the Enterprise. If any substantial part of the
Enterprise is sold, the payment therefor shall either be used for the
acquisition and/or construction of improvements and extensions of the
Enterprise or shall be placed in the appropriate funds or accounts
and shall be used to pay or call and redeem the 1990 Bonds and any
Parity Bonds in the manner provided in this Resolution or in any
Parity Bond Resolution.
The City covenants that any amounts received as awards as a
result of the taking of all or any part of the Enterprise by the
lawful exercise of eminent domain, if and to the extent that such
right can be exercised against such property of the City, shall
either be used for the acquisition and/or construction of
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94601.16.6056.01:2
improvements and extension of the Enterprise or shall be placed in
the appropriate funds or accounts and shall be used to pay or call
and redeem the 1990 Bonds and any Parity Bonds in the manner provided
in this Resolution or in any Parity Bond Resolution.
The City will not sell, lease or otherwise encumber any
part of the Enterprise except properties or facilities no longer
useful or necessary to its efficient and economical operation.
Notwithstanding any other provisions contained herein, the
City may: (i) sell or dispose of customer connections (and related
distribution lines) located outside the City limits; (ii) take all
action necessary to fulfill its commitments under its existing agree-
ments with Yorba Linda County Water District, and any subsequent
implemental agreements; and (iii) enter into, and take all actions
necessary to fulfill its commitments under, contractual agreements
concerning water service to all or part of any areas which are
annexed to the City of Anaheim after the sale and delivery of the
1990 Bonds, with parties organized to provide water service to all or
part of any such area. Any proceeds from the sale or disposition of
any part of the Enterprise or the granting of any service rights or
privileges pursuant to the Preceding sentence shall be used to defray
the cost of renewals, replacements, additions and extensions to the
Enterprise or shall be held for the redemption prior to maturity or
open market purchase of 1990 Bonds or Parity Bonds then outstanding,
but such purchase price (including brokerage and other charges, but
excluding accrued interest) shall not exceed 103% of the principal
amount or the redemption price of the callable bonds on the most
recent redemption date, whichever is less. Any proceeds from the
sale or disposition of any part of the Enterprise shall be placed in
the Revenue Account.
Covenant 6. Insurance. The City covenants that it shall
at all times maintain with responsible insurers all such insurance on
the Enterprise as is customarily maintained by similar utilities sys-
tems with respect to works and properties of like character against
accident to, loss of or damage to such works or properties. If any
useful part of the Enterprise shall be damaged or destroyed such part
shall be restored to use. The money collected from insurance against
accident, loss or damage shall be used for repairing or rebuilding
the lost, damaged or destroyed works and properties, and to the
extent not so applied, shall be applied to the retirement of out-
standing 1990 Bonds and any Parity Bonds issued for the Enterprise
and for such purpose paid into the appropriate funds or accounts.
The City shall also maintain with responsible insurers
workers' compensation insurance and insurance against public
liability and property damage to the extent reasonably necessary to
protect the City and the bondowners.
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94601.16.6056.01:2
Notwithstanding the foregoing, the city may provide any
insurance required by this Covenant 6 through a self-insurance
program.
Covenant 7. Records and Accounts. The City covenants
that it shall keep proper books of record and accounts of the
Enterprise, separate from all other records and accounts, in which
complete and correct entries shall be made of all transactions relat-
ing to the Enterprise. Said books shall at all times be subject to
the inspection of the holders of not less than 10% of the outstanding
1990 Bonds or their representatives authorized in writing.
The City covenants that it will cause the books and
accounts of the Enterprise to be audited annually by an independent
certified public accountant or firm of cel-tified public accountants
and shall furnish a copy of the audit report, upon request, to any
bondowner.
Covenant 8. Collection of Charges. The City will permit
no free connections with, or use and services of the E~terprise
except for the following: (i) public fire hydrants; (ii) public fire
flows; (iii) watering of public street dividers; and (iv) to the
extent, if any, provided in the City's existing agreements with Yorba
Linda County Water District. The city will pay promptly into the
Revenue Account from the City's General Fund (or other available
funds) for all City connections with, use and services of, the
Enterprise except the foregoing. The City will not grant or estab-
lish within any class of service preferential or discriminatory
rates, fees or charges for coru~ections with, and use and services of,
the Enterprise except as provided in the City's existing agreements
with Yorba Linda County Water District and subsequent implemental
agreements. For the purposes of setting such rates, fees and
charges, connections 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
1990 Bonds are outstanding maintain and enforce valid regulations for
the payment of bills for water service and that such regulations
shall at all times during such period provide that the city shall
discontinue water service to any user whose water bill has not been
paid within the time fixed by said regulations.
Covenant 9. Rates an4 Chaz~. The City shall and hereby
covenants that it shall prescribe, revise and collect such charges
for the services and facilities of the Enterprise which, after making
allowances for contingencies and error in the estimates, shall be at
least sufficient to pay the following amounts in the order set
forth:
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94601.16. 6056.01: 2
(a) All current expenses for the necessary and
reasonable Operating Expenses of the Enterprise as said
expenses become due and payable;
(b) The interest on and principal payments (including
any sinking account payments) of the outstanding 1990 Bonds
and Parity Bonds as they become due and payable;
(c) All payments required for compliance with this
Resolution including transfers required to be made from the
Revenue Account to other funds and accounts; and
(d) All payments required to meet any other obliga-
tions of the City which are charges, liens or enc~rances
upon or payable from the Revenues of the Enterprise;
and the charges shall be so fixed that the Net Revenues shall at
least equal 1.50 times the amounts payable under (b). For purposes
of this Section, Net Revenues shall include all investment income on
all accounts established in the Water Enterprise Fund and on all
other funds established for the benefit of the holders of the 1990
Bonds or Parity Bonds.
Covenant 10. No Priority for Additional Indebtedness.
The City covenants that no additional indebtedness shall be incurred
pursuant to Section 1210 and other provisions of the City Cha~-ter or
any law of the State of California having any priority in payment of
principal or interest out of the Revenues of the Enterprise over the
1990 Bonds.
Covenant 11. Limits on Parity Bonds. (a) Parity Bonds
may be issued to finance or re-finance any repairs, improvements,
enlargements or extensions of the Enterprise, provided that the City
covenants that, except for bonds issued to refund any 1990 Bonds or
Parity Bonds, no such additional indebtedness evidenced by revenue
bonds, revenue notes or any other evidence of indebtedness payable
out of the Revenues of the Enterprise and ranking on a parity with
the 1990 Bonds shall be created or incurred unless:
First: The city is not in default under the
terlns of this Resolution.
Second= The Net Revenues of the Enterprise,
calculated on sound accounting principles, as shown by
the books of the City for each of the last two com-
pleted Fiscal Years prior to the adoption of the reso-
lution approving the sale of such additional
indebtedness as shown by an audit certificate or
opinion of an independent certified public accountant
-24-
94601.16.6056.01:2
or firm of certified public accountants employed by
the City, plus, at the option of the City, the allow-
ance for earnings hereinafter set forth in
subparagraph (b) of this covenant, shall have amounted
to at least 1.50 times the Maximum Annual Debt Service
in any Fiscal Year thereafter on all indebtedness to
be outstanding immediately subsequent to the incurring
of such additional indebtedness.
(b) For the purposes of this covenant, the following may be
added to the Net Revenues of the Enterprise for the purpose of apply-
ing the restrictions contained in this covenant:
An allowance for earnings arising from any
increase in the charges made for service from the
Enterprise which has become effective prior to the
incurring of such additional indebtedness but which,
during all or any part of said last two completed
Fiscal Years, was not in effect, in an amount equal to
75% of the amount by which the Net Revenues should
have been increased if such increase in charges had
been in effect during the whole of said last two com-
pleted Fiscal Years, as shown by the certificate or
opinion of an independent certified accountant or firm
of certified public accountants employed by the City.
(c) For purposes of this Section, Net Revenues shall
include all investment income on all accounts established in the
Water Enterprise Fund and on all other funds established for the ben-
efit of the holders of the 1990 Bonds or Perity Bonds.
(d) Junior lien bonds (payable in whole or in part from the
Net Revenues) may be issued to finance or refinence any repairs,
enlargements, extensions or improvements of the Enterprise, but no
Revenues mey be used for the payment of such junior lien bonds
(interest, principal, redemption premium or sinking fund
installments) or the establishment or maintenance of any funds or
accounts created in conjunction with their issuance, unless and
until: (i) the City has complied fully with all provisions of the
Resolution and has made all payments required to that time by the
Resolution; (ii) thm ReseL-re Fund contains an amount equal to no less
then the maximum combined annual principal and interest requirements
of all 1990 Bonds end Parity Bonds then outstanding.
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94601.16. 6056.01:2
Covenant 12. Tax Covenants Relating to the Internal
Revenue Code of 1986. The City shall do the following with respect
to the 1990 Bonds which, when initially issued, are the subject of an
opinion of counsel to the effect that interest thereon is excluded
from gross income for Federal income tax purposes pursuant to the
Internal Revenue Code of 1986 or any successor thereto:
(a) In order to maintain the exclusion of interest on the
1990 Bonds from gross income for Federal income tax purposes, and for
no other purpose, the City shall take actions necessary under the
provisions of the Internal Revenue Code of 1986 (the "Code"). In
furtherance of the covenant contained in the preceding sentence, the
City agrees to comply with the provisions of the Tax and
Non-Arbitrage Certificate and Instructions as to Compliance with the
Provisions of Section 103(a) of the Internal Revenue Code of 1986
(the "Tax Certificate") delivered by Mudge Rose Guthrie Alexander &
Ferdon on the date of initial issuance and delivery of the 1990
Bonds, as such Tax Certificate may be 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 1990 Bonds pursuant to Section 148(f) of the Internal
Revenue Code of 1986 from amounts on deposit in the funds and
accounts established under this Resolution and available therefor.
(c) Notwithstanding any other provision of this Resolution
to the contrary, so long as necessary in order to maintain the exclu-
sion from gross income of interest on the 1990 Bonds for Federal
income tax purposes, the covenants contained in this Section shall
survive the payment of the 1990 Bonds and the interest thereon,
including any payment or defeasance thereof pursuant to Section 29 of
this Resolution.
SECTION 22. Lost, Stolen, Deetroye~, or Mutilated 1990
Bonds. In the event that any 1990 Bond is lost, stolen, destroyed
or mutilated, the City will cause to be issued a new 1990 Bond simi-
lar to the original to replace the same in such manner and upon such
reasonable terms and conditions, including the payment of costs and
the posting of a surety bond if the city deems such surety bond nec-
essary, as may from time to time be determined and prescribed by
resolution. The City may authorize such new 1990 Bond to be signed
and authenticated in such manner as it determines in said
resolution.
S~CTIOII 23. Cancellation of 1990 B~nd~. All 1990 Bonds
surrendered to the Registrar or any paying agent of the City for
payment upon maturity or for redemption shall upon payment therefor
be cancelled immediately. Any 1990 Bonds purchased by the City as
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94601.16.6056.01:2
authorized herein shall be cancelled forthwith and shall not be
reissued.
SECTION 24. Consent of 1990 Bondowners. Except as per-
mitted by paragraphs (c) and (d) of Section 28 hereof, no amendment,
waiver or modification of any provision of this Resolution shall be
effective until the consent provided for by this Section 24 shall
have been obtained. Any act relating to the amendment, waiver or
modification of any of the provisions of this Resolution consented to
by bondowners holding a majority in aggregate principal amount of the
outstanding 1990 Bonds, exclusive of 1990 Bonds, if any, owned by the
city, shall be binding upon the holders of all of the 1990 Bonds, and
shall not be deemed an infringement of any of the provisions of this
Resolution, whatever the character of such act may be, and may be
done and performed as fully and freely as if expressly permitted by
the terms of this Resolution, and after such consent relating to such
specified matters has been given, no bondowner shall have any right
or interest to object to such action or in any manner to question the
propriety thereof or to enjoin or restrain the City or any officer
thereof from taking any action pursuant thereto.
Bondowners may consent by affirmative vote at a bondowners'
meeting or may consent in writing without a meeting, all as hereinaf-
ter provided.
No such amendment, waiver or modification shall be made
which will permit (i) a change in the maturity or term of redemption
of the principal of any 1990 Bond or any installment of interest
thereon or a reduction in the principal amount of or redemption price
or redemption premium or rate of interest upon any 1990 Bond without
the consent of the holder of such 1990 Bond; or (ii) a reduction of
the percentage of the principal amount of 1990 Bonds the vote or con-
sent of which is required to effect any such amendment.
(a) Calling Bondowners' Meeting. If the City shall desire
to obtain any such consent it may call a meeting of bondowners, by
resolution, for the purpose of considering the action, the consent to
which is desired.
(b) Notice of Meeting. Notice specifying the purpose,
place, date and hour of such meeting shall be published once in a
financial newspaper or journal of national circulation published in
or near the City of New York, New York, not less than sixty days and
not more than ninety days prior to the date fixed for the meeting.
Such notice shall set forth the nature of the proposed action, con-
sent to which is desired. The City Clerk of the City shall also on
or before the first publication of such notice, mail a similar
notice, Dostage prepaid, to the respective registered owners thereof
at their addresses appearing on the 1990 Bond registry books. The
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94601.16.6056.01:2
place, date and hour of holding such meeting and the date or dates of
publishing and mailing such notice shall be determined by the City,
in its discretion.
The actual receipt by any bondowner of notice of any such
meeting shall not be a condition precedent to the holding of such
meeting, and failure to receive such notice shall not affect the
validity of the proceedings thereat. A certificate by the City
Clerk, approved by resolution of the City Council, that the meeting
has been called and that notice thereof has been given as herein pro-
vided shall be conclusive as against all par~ies and it shall not be
open to any bondowner to show that he failed to receive notice of
such meeting.
(c) Voting Qualifications. Any bondowner may, prior to
any such meeting, deliver his 1990 Bond or 1990 Bonds to any agency
designated by the City for the purpose, and shall thereupon be enti-
tled to receive an appropriate receipt for the 1990 Bond or 1990
Bonds so deposited, calling for the redelivery of such 1990 Bond or
1990 Bonds at any time after the meeting. The Treasurer shall pre-
pare and deliver to the chairman of the meeting a list of the names
and addresses of the registered owners of 1990 Bonds, with a state-
ment of the maturities and serial numbers of the 1990 Bonds held and
deposited by each of such bondowners, and no bondowner shall be enti-
tled to vote at such meeting unless his name appears upon such list
or unless he shall present his 1990 Bond or 1990 Bonds at the meeting
or a certificate of deposit thereof, satisfactory to the City, exe-
cuted by a bank or trust company. No bondowner shall be permitted to
vote with respect to a larger aggregate principal amount of 1990
Bonds than is set against his name on such list, unless he shall
produce the 1990 Bonds upon which he desires to vote, or a certifi-
cate of deposit thereof as above provided.
(d) Issuer-owned 1990 Bonds. The City covenants that it
will present at the meeting a certificate, signed and verified by one
member of the City Council and by the Treasurer stating the maturi-
ties and serial numbers of all 1990 Bonds owned by, or held for
account of, the City, directly or indirectly. No person shall be
permitted at the meeting to vote or consent with respect to any 1990
Bond appearing upon such such certificate, or any 1990 Bond which it
shall be established st or prior to the meeting is owned by the City,
directly or indirectly, and no such 1990 Bond (in this Resolution
referred to as an "issuer-owned 1990 Bond") shall be counted in
determining whether a quorum is present.
(e) ~ioz~/~ a~d Procedure. A representation of at least a
majority in aggregate principal amount of the 1990 Bonds then
outstanding (exclusive of issuer-owned 1990 Bonds) shall be necessary
to constitute a quorum at any m~eting of bondowners, but less than a
-28-
94601.16.6056.01:2
quorum may adjourn the meeting from time to time, and the meeting may
be held as so adjourned without further notice, whether such adjourn-
ment shall have been had by a quorum or by less than a quorum. The
City shall, by an instrument in writing, appoint a temporary chairman
of the meeting, and the meeting shall be organized by the election of
a permanent chairman and a secretary. At any meeting each bondowner
shall be entitled to one vote for every $5,000 principal amount of
1990 Bonds with respect to which he shall be entitled to vote as
aforesaid, and such vote may be given in person or by proxy duly
appointed by an instrument in writing presented at the meeting. The
city, by its duly authorized representative, may attend any meeting
of the bondowners, but shall not be required to do so.
(f) Vote Required. At any such meeting held as aforesaid
there shall be submitted for the consideration and action of the
bondowners a statement of proposed action, consent to which is
desired, and if such action shall be consented to and approved by
bondowners holding at least a majority in aggregate amount of the
1990 Bonds then outstanding (exclusive of issuer-owned 1990 Bonds)
the chairman and secretary of the meeting shall so certify in writing
to the City, and such certificate shall constitute complete evidence
of consent of bondowners under the provisions of this Resolution. A
certificate signed and verified by the chairman and the secretary of
any such meeting shall be conclusive evidence and the only competent
evidence of matters stated in such certificate relating to proceed-
ings taken at such meeting.
(g) Written Consent of 1990 Bondowners. If the City shall
desire to obtain any such consent in writing, without a meeting of
bondowners, the City Council may, by resolution, propose the action,
to which consent is desired. A copy of such resolution, together
with a request to bondowners for their consent to the action proposed
therein, shall be published once in a financial newspaper or journal
of national circulation published in or near the City of New York,
New York. The City Clerk of the City shall also, on or before the
publication of such resolution and request, mail a copy thereof to
each registered owner at the address appearing on the bond registry
books.
The actual receipt by any bondowner of such resolution and
request shall not affect the validity of the proceedings for the
obtaining of such consent. A certificate by said City Clerk,
approved by resolution of the City Council, that said resolution and
request has been published and mailed as herein provided shall be
conclusive as against all parties, and it shall not be open to any
bondowner to show that he failed to receive such resolution and
consent.
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94601.16.6056.01:2
Each written consent shall be accompanied by proof of
ownership of the 1990 Bonds for which such consent is given. Proof
of ownership shall be made in such manner as shall be prescribed by
the resolution proposing the action. Any such written consent shall
be binding upon the holder of the 1990 Bonds giving such consent and
on any subsequent holder (whether or not such subsequent holder has
notice thereof) unless such consent is revoked in writing by the
holder giving such consent or by the subsequent holder. To be effec-
tive, any revocation of consent must be filed before the adoption of
the resolution accepting consents as hereinafter provided.
After the holders of at least a majority in aggregate prin-
cipal amount of the 1990 Bonds then outstanding (exclusive of
issuer-owned 1990 Bonds) shall have consented in writing, the City
Council shall adopt a resolution accepting such consents and such
resolution shall constitute complete evidence of the consent of bond-
owners under this Resolution.
(h) P~blication of Consent. Notice specifying the amend-
ment, waiver or modification that has received the consent of bond-
owners as required by this section shall be published once in a
financial newspaper or journal of national circulation published in
or near the City of New York, New York, not less than sixty days fol-
lowing the final action in the proceedings for the obtaining of such
consent. Said notice is only for the information of bondowners and
failure to publish such notice or any defect therein shall not affect
the validity of the proceedings theretofore taken in the obtaining of
such consent.
SECTION 25. 1990 Bond For~. Subject to the provisions
of the Resolution, the form of the 1990 Bonds and the Registrar's
Certificate of Authentication shall be substantially in the form set
forth in Exhibit B hereto.
S~CTION 26. Temporary 1990 ~oF~]~. Any 1990 Bonds may be
initially issued in temporary form exchangeable for definitive 1990
Bonds. The temporary 1990 Bonds may be printed, lithographed or
typewritten, shall be of such denominations as may be determined by
the City, shall be without coupons and may contain such reference to
any of the provisions of this Resolution as may be appropriate.
Every temporary 1990 Bond shall be executed and sealed by the City
and authenticated by the Registrar in substantially the same manner
as provided in Section 7 hereof. If the City issues temporary 1990
Bonds it will execute and furnish definitive Bonds without delay and
thereupon the temporary 1990 Bonds may be surrendered for cancella-
tion at the office of the Treasurer, and the Treasurer shall deliver
in exchange for such temporary 1990 Bonds an equal aggregate
principal amount of definitive 1990 Bonds of the same interest rates
and maturities. Until so exchanged, the temporary 1990 Bonds shall
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94601.16.6056.01:2
be entitled to the same benefits under this Resolution as definitive
1990 Bonds issued hereunder.
SECTION 27. Book-Entry Format. (a) Except as provided
in subsection (c) of this Section, the registered owner of all of the
1990 Bonds shall initially be Cede & Co., as nominee of DTC. Payment
of interest for any 1990 Bonds registered as of the record date in
the name of Cede & Co. shall be made by wire transfer to the account
of Cede & Co. on the interest payment dates for the 1990 Bonds at the
address indicated on the record date for Cede & Co. in the registra-
tion books kept by the Registrar.
(b) The 1990 Bonds shall initially be issued in the form of
separate single authenticated fully registered 1990 Bonds in the
principal amount of each separate stated maturity of the 1990 Bonds.
Upon initial issuance, the ownership of each such 1990 Bond shall be
registered in the registration book kept by the Registrar in the name
of Cede & Co., as nominee of DTC. The Registrar shall treat UTC (or
its nominee) as the sole and exclusive owner of the 1990 Bonds regis-
tered in its name for the purposes of payment of the principal, pre-
mium or interest on the 1990 Bonds, selecting the 1990 Bonds or por-
tions thereof to be redeemed, giving any notice permitted or required
to be given to the registered owners thereof under this Resolution,
registering the transfer of 1990 Bonds, obtaining any consent or
other action to be taken by the registered owners thereof and for all
other purposes whatsoever; and the Registrar shall not be affected by
any notice to the contrary. The Registrar shall not have any respon-
sibility or obligation to any DTC participant (a "Participant"), any
person claiming a beneficial ownership interest in the 1990 Bonds (a
"Beneficial Owner") under or through DTC or any Participant, or any
other person which is not shown on the registration books kept by the
Registrar as being a registered owner of 1990 Bonds. The City and
the Registrar shall have no responsibility with respect to the accu-
racy of any records maintained by DTC, Cede & Co. or any Participant
with respect to any ownership interest in the 1990 Bonds; the payment
by DTC or any Participant to any Beneficial Owner of any amount of
principal, premium, if any, or interest on the 1990 Bonds; the deliv-
ery to any Participant or any Beneficial Owner of any notice which is
permitted or required to be given to the registered owners thereof
hereunder; the selection by DTC or any Paz~cicipant of any person to
receive payment in the event of a partial redemption of 1990 Bonds;
or any consent given or other action taken by DTC as the registered
owner thereof. The Registrar shall pay all principal, premium, if
any, and interest oh the 1990 Bo~ds only to or "upon the order of"
(as that ter~ is used 'in the Uniform Commercial Code as adopted in
the State of New Jersey) Cede & Co., as nominee of DTC, and all such
payments shall be valid and effective to fully satisfy and discharge
the City's obligations with respect to the principal, premium, if
any, and interest on the 1990 Bonds to the extent of the sum or sums
-31-
94601.16. 6056.01: 2
so paid. Said principal and premium, if any, shall be paid to DTC in
immediately available funds on October 1 of each year, beginning
October 1, 1992, and on each redemption date to:
Muni Redemption Department
The Depository Trust Company
55 Water Street
23rd Floor
New York, New York 10041
Attention: Collections Supervisor
Upon delivery by DTC to the Registrar of written notice to the effect
that DTC had determined to substitute a new nominee in place of Cede
& Co., and subject to the provisions herein with respect to record
dates, the word "Cede & Co." in this Resolution shall refer to such
new nominee of DTC.
(c) In the event the City determines that it is in the best
interest of the Beneficial Owners of the 1990 Bonds that they be able
to obtain bonds, the City will notify DTC and the Registrar of the
availability through DTC of 1990 Bonds. In such event, the Registrar
shall execute, transfer and exchange 1990 Bonds as requested by DTC
and any other registered owner thereof in appropriate amounts. DTC
may determine to discontinue providing its services with respect to
the 1990 Bonds at any time by giving notice to the City and the
Registrar and discharging its responsibilities with respect thereto
under applicable law. Under such circumstances (if there is no suc-
cessor securities depository), the City and the Registrar shall be
obligated to deliver 1990 Bonds as described in this Resolution. In
the event 1990 Bonds are issued to any registered owner other than
DTC, the provisions of this Resolution shall apply to, among other
things, the transfer and exchange of such 1990 Bonds and the method
of payment of principal, premium, if any, and interest on such 1990
Bonds. Whenever DTC requests the City and the Registrar to do so,
the Registrar and the City will cooperate with DTC in taking appro-
priate action after reasonable notice (a) to make available one or
more separate bonds evidencing the 1990 Bonds to any Participant
having 1990 Bonds credited to its DTC account or (b) to arrange for
another securities depository to maintain c~stody of bonds evidencing
the 1990 Bonds.
(d) In connection with any notice or other communication to
be provi4e4 to registered owners of 1990 Bonds pursuant to this
Resolution by the Registrar with respect to any consent or other
action to be taken by registered owners of 1990 Bo~ds so 10ng as any
1990 Bond is registered in the name of cede & Co., as nominee of DTC,
the Registrar shall establish a record date for such consent or other
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94601.16.6056.01:2
action and give DTC notice of such record date not less than 15
calendar days in advance of such record date to the extent possible.
SECTION 28. Resolution Constitutes Contract; Certain
Amendments, etc. (a) The provisions of this Resolution shall con-
stitute a contract between the City and the bondowners and the provi-
sions hereof shall be enforceable by any bondowner for the equal ben-
efit and protection of all bondowners similarly situated by mandamus,
accounting, mandatory injunction or any other suit, action or pro-
ceeding at law or in equity that is now or may hereafter be autho-
rized under the laws of the State of California in any court of com-
petent jurisdiction. Said contract is made under and is to be con-
strued in accordance with the laws of the State of California.
(b) No remedy conferred hereby upon any bondowner is
intended to be exclusive of any other remedy, but each such remedy is
cumulative and in addition to every other remedy and may be exercised
without exhausting and without regard to any other remedy conferred
by the Charter, Ordinance No. 2933 or any law of the State of
California. No waiver of any default or breach of duty or contract
by any bondowner shall affect any subsequent default or breach of
duty or contract or shall impair any rights or remedies on said sub-
sequent default or breach. No delay or omission of any bondowner to
exercise any right or power accruing upon any default shall impair
any such right or power or shall be construed as a waiver of any such
default or acquiescence therein. Every substantive right and every
remedy conferred upon the bondowners may be enforced and exercised as
often as may be deemed expedient. In case any suit, action or pro-
ceeding to enforce any right or exercise any remedy shall be brought
or taken and the bondowner shall prevail, said bondowner shall be
entitled to receive from the Water Enterprise Fund reimbursement for
reasonable costs, expenses, outlays and attorneys' fees and should
said suit, action or proceeding be abandoned, or be determined
adversely to the bondowners then, and in every such case, the City
and the bondowners shall be restored to their former positions,
rights and remedies as if such suit, action or proceeding had not
been brought or taken.
(c) Prior to the issuance of any 1990 Bonds under this
Resolution, any provision of this Resolution a~d the rights and obli-
gations of the City and of the holders of the 1990 Bonds and coupons
thereunder may be modified or amended in any respect without the con-
sent of any person, upon the adoption by the City of one or more sup-
plemental resolutions.
(d) After the issuance and delivery of the 1990 Bonds, the
provisions of this Resolution shall be irrepealable, but shall be
subject to modification, waiver and amendment to the extent and in
the manner provided in this Resolution, but to no greeter extent and
-33-
94601.16.6056.01:2
in no other manner. For any one or more of the following purposes
and at any time or from time to time, a supplemental resolution may
be executed and delivered by the City which shall be fully effective
in accordance with its terms:
(1) To close the Resolution against, or provide limi-
tations and restrictions in addition to the limitations and
restrictions contained in the Resolution on, the authenti-
cation and delivery of Parity Bonds or the issuance of
other evidences of indebtedness; or
(2) To add to the covenants and agreements of the
City in the Resolution, other covenants and agreements to
be observed by the City which are not contrary to or incon-
sistent with the Resolution as theretofore in effect; or
(3) To add to the limitations and restrictions in the
Resolution, other limitations and restrictions to be
observed by the City which are not contrary to or inconsis-
tent with the Resolution as theretofore in effect; or
(4) To confirm, as further assurance, the pledge cre-
ated under the Resolution; or
(5) To modify any of the provisions of the Resolution
in any other respect whatsoever, provided that (i) no 1990
Bonds shall be Outstanding at the date of the adoption of
such supplemental resolution or (ii) such modification
shall be, and be expressed to be, effective only after all
1990 Bonds outstanding at the date of the adoption of such
supplemental resolution shall cease to be outstanding; or
(6) To cure any ambiguity, supply any omission, or
cure or correct any defect or inconsistent provision in the
Resolution; or
(7) To insert such provisions clarifying matters or
questions arising under the Resolution as are necessary or
desirable and are not contrary to or inconsistent with the
Resolution as theretofore in effect.
SR~'~IO~ 29. D~feasa~ce. All or any portion of the 1990
Bonds shall no longer be deemed to be outstanding and unpaid if the
city shall have made adequate provision for the payment, in accor-
dance with the 1990 Bonds and this Resolution, of the principal,
interest and premium, if any, to become due thereon at maturity or
upon call and redemption prior to maturity. Such provision shall be
deemed to be adequate if the City shall have irrevocably set aside,
in a special trust fund or account, moneys which when added to the
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94601.16.6056.01:2
interest earned or to be earned from the investment or deposit
thereof shall be sufficient to make said payments as they become
due. Moneys so set aside may be invested in any direct obligations
of, or obligations guaranteed by, the United States of America, in
which the City may lawfully invest its money.
SECTION 30. Future Contracts. Nothing herein contained
shall be deemed to restrict or prohibit the City from making con-
tracts or creating bonded or other indebtedness payable from the gen-
eral fund of the City or from taxes or any source other than the
Revenues of the Enterprise, and from and after the sale of the 1990
Bonds the general fund of the City shall not include the Revenues of
the Enterprise and no contract or other obligation payable from the
general fund of the City shall be payable from the Revenues of the
Enterprise, except as provided herein.
SECTION 31. Severability. If any provision, or any por-
tion thereof, contained in this Resolution, or the application
thereof to any person or circumstance is held to be unconstitutional,
invalid or unenforceable, the remainder of this Resolution and the
application of any such provision, or portion thereof, to other per-
sons or circumstances shall be deemed severable and shall not be
affected thereby, and this Resolution and the 1990 Bonds shall remain
valid and the bondowners shall retain all valid rights and benefits
accorded to them under this Resolution, the City Charter and the
Constitution and laws of the State of California.
SECTION 32. Substitutes. The Mayor Pro-Tempore, any
Deputy City Clerk, and any duly authorized substitute for the
Treasurer, may act in the place and stead of the Mayor, the City
Clerk and the Treasurer, respectively, in the performance of any and
all things authorized or provided for in this Resolution, including
the signing of the 1990 Bonds.
-35-
94601.16. 6056.01:2
SECTION 33. Effective D~te. This Resolution shall take
effect immediately.
ADOPTED, SIGNED AND APPROVED this fourteenth day of August,
1990.
[SEAL]
Attest:
~ City Clerk /
-36-
94601.16.6056.01:2
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. 90R-293 was introduced and adopted at a regular
meeting provided by law, of the City Council of the City of Anaheim held on
the 14th day of August, 1990, by the following vote of the members thereof:
AYES: COUNCIL MEMBERS: Daly, Ehrle, Kaywood, Pickler and Hunter
NOES: COUNCIL MEMBERS: None
ABSENT: COUNCIL MEMBERS: None
AND I FURTHER certify that the Mayor of the City of Anaheim signed said
Resolution No. 90R-293 on the 15th day of August, 1990.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed the seal of the
City of Anaheim this 15th day of August, 1990.
CITY CLERK OF THE 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. 90R-293, duly passed and
adopted by the Anaheim City Council on August 14, 1990.
.CITY OF
CLERK THE OF ANAHEIM
EXHIBIT A
Section 1. Maturity Schedule:
Due Interest
october 1 Amount Rate
1992 $150,000 6.25%
1993 155,000 6.25
1994 165,000 6.25
1995 180,000 6.25
1996 190,000 6.25
1997 200,000 6.35
1998 215,000 6.45
1999 230,000 6.55
2000 245,000 6.65
2001 260,000 6.70
2002 280,000 6.75
2003 295,000 6.80
2004 320,000 6.90
2005 340,000 6.95
2006 365,000 7.00
2007 390,000 7.00
2010 1,340,000 7.00
2016 3,680,000 7.00
serial 1990 Bonds: 1990 Bonds due on October 1 of the following
years are hereby designated "serial 1990 Bonds" and "Serial Bonds":
1992; 1993; 1994; 1995; 1996; 1997; 1998; 1999; 2000; 2001; 2002;
2003; 2004; 2005; 2006; and 2007.
term 1990 Bonds: 1990 Bonds due on October 1 of the following
years are hereby designated "term 1990 Bonds" and "Term Bonds":
2010; and 2016.
Section 2. Sinking Account ~11ocatlons~ The following are the
sinking Account Allocations for the term 1990 Bonds:
Term 1990 Bonds due October 1, 2010:
October 1, 2008 Sinking Account Allocation: $415,000;
October 1, 2009 Sinking Account Allocation: $445,000; and
October 1, 2010 (final maturity) Sinking Account Allocation:
$480,000.
Term 1990 Bonds due October 1, 2016:
October 1, 2011 Sinking Account Allocation: $510,000;
October 1, 2012 Sinking Account Allocation: $550,000;
October 1, 2013 Sinking Account Allocation: $590,000;
October 1, 2014 Sinking Account Allocation: $630,000;
October 1, 2015 Sinking Account Allocation: $675,000; and
October 1, 2016 (final maturity) Sinking Account Allocation:
$725,000.
[BOND FOI~]
UNITED STATE~ OF ~IC~
STATE OF Ci~IFORN][A
COUNTY OF ORANGE
CITY OF ANAHEIM
WATER REVENUE BOND, 1990 SERIES
No. R-__
Interest Rate: Maturity Date: Dated Date: CUSIP:
The CITY OF ANAHEIM, a municipal corporation situated in
the County of Orange, State of California (the "City"), FOR VALUE
RECEIVED, hereby promises to pay, solely from the Water Enterprise
Fund, as hereinafter provided, to or registered assigns, on
October 1, , upon presentation and surrender of this bond, the
sum of DOLLARS, with interest thereon at the Interest Rate
per annum stated hereon, payable semiannually on the first day of
April and October of each and every year, commencing October 1, 1990,
until the City's obligation with respect to the payment of such prin-
cipal sum shall be discharged. Such interest shall be payable from
the most recent interest payment date next preceding the date hereof
to which interest has been paid, unless the date hereof is an April 1
or October 1 to which interest has been paid, in which case from the
date hereof, or unless the date hereof is on or prior to September
15, 1990, in which case from July 1, 1990, or unless the date hereof
is between a record date and the next succeeding interest payment
date, in which case from such interest payment date; provided, fur-
ther, that if, as shown by the records of the Registrar, interest on
the 1990 Bonds shall be in default, 1990 Bonds issued in exchange for
1990 Bonds surrendered for transfer or exchange shall bear interest
from the interest payment date to which interest has been paid in
full on the 1990 Bonds surrendered or if no interest has been paid,
July l, 1990.
The terms and provisions of this bond and definitions of
certain terms used herein may be continued on the reverse side of
this bond and such continued terms and provisions and definitions
shall for all purp~ees have the same effect as though fully set forth
on the front of the bond.
This bond shall be negotiable, subject with respect to
transfer to the provisions for registration set forth on the reverse
hereof and in the Resolution.
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94601.16. 6056.01: 2
It is hereby certified and recited that any and all acts,
conditions and things required to exist, to happen and to be
performed precedent to and in the incurring of the indebtedness evi-
denced by this bond and in issuance of this bond exist, have hap-
pened, and have been performed in due time, form and manner as
required by the Constitution and laws of the State of California and
the City Charter and that this bond, together with all other indebt-
edness of the City pertaining to the City's water system, is within
every debt and other limit prescribed by the Constitution and laws of
the State of California and the City Charter.
This bond shall not be entitled to any benefit under the
Resolution or be valid or become obligatory for any purpose until
this note shall have been authenticated by the execution by the
Registrar of the Registrar's Certificate of Authentication hereon.
IN WITNESS WHEREOF, the City of Anaheim has caused this
bond to be signed by the Mayor and the City Treasurer of the City by
their facsimile signatures, countersigned by the City Clerk of said
City by her facsimile signature, and sealed with the corporate seal
of the City.
Mayor
CO~T~SIGN~D:
City Clerk City Treasurer
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94601.16. 6056.01:2
[FORM OF CERTIFICATE OF AUTHENTICATION ON ALL BONDS]
REGISTRAR'S CERTIFICATE OF AUTHENTICATION
This bond is one of the Bonds delivered pursuant to the
within-mentioned Resolution.
Registrar
By:
Authorized Officer
Date of Authentication and Registration:
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94601.16. 6056.01:2
[REVERSE OF BOND]
Both principal of and interest on this bond are payable in
lawful money of the United States of America. Except as otherwise
provided in the Resolution, the principal on this bond and any pre-
mium upon the redemption thereof are payable at the principal corpo-
rate trust office of Bank of America NT&SA in San Francisco,
California, or, at any other paying agent which has been selected (in
its sole discretion) by the City in New York, New York. Except as
otherwise provided in the Resolution, interest on this bond shall be
payable by check or draft mailed to the registered owner on the reg-
istration records maintained by the Registrar, determined as of the
close of business on the 15th day of the calendar month immediately
preceding an interest payment date (including the date on which the
principal of a Bond i~ to be paid).
This bond is one of a duly authorized issue of bonds of the
city designated "Water Revenue Bonds, 1990 Series" (the "1990
Bonds"), all of which have been issued pursuant to Section 1210 of
the City Charter and Ordinance No. 2933, as amended, of the city
Council (the "Ordinance"), for the purpose of financing the cost of
the acquisition and construction of additions to and improvements of
the City's water system, and the creation of said issue and the terms
and conditions of the 1990 Bonds are provided for by the resolution
of the City Council authorizing the 1990 Bonds adopted August 14,
1990, designated Resolution No. 90R- (the "Resolution"), a~d this
reference incorporates the Resolution and Section 1210 of the city
Charter and the Ordinance, and by acceptance hereof the holder of
this bond assents to said terms and conditions. The Resolution is
adopted under, and this bond, is issued u~der and, is to be construed
in accordance with, the City Charter, the Ordinance and the laws of
the State of California.
This bond and the interest hereon and any premium upon the
redemption hereof are not a debt of the City, nor a legal or equita-
ble pledge, charge, lien or encumbrance upon any of its property or
upon any of its income, receipts, or revenues, except the Net
Revenues (as defined in the Resolution) of the City's water system
pledged to its payment, and the principal of and the interest on this
bond and any premium upon the redemption hereof are payable solely
from the Net Revenues of the City's water system pledged to its pay-
ment and said City is not obligated to pay such principal, interest
and premiU~ exc~t fro~said Net Revenues. The Water Enterprise Fund
is established under and pursuant to Section 1210 of the City
Charter, the Ordinance and the Resolution, and under the provisions
of the Resolution the Revenues of the City's water system are
req~/ired to be deposited to the credit of the Water Enterprise Fund
and used only for the purposes authorized by the Resolution,
including the payment of principal and interest of the bonds.
94601.16.6056.01:2
By the terms of Section 1210 of the City Charter and the
Ordinance and by covenant expressed in the Resolution, the City is
obligated to prescribe, revise and collect charges for the services
and facilities of the water system of the City such as to provide
revenues sufficient to pay the interest on and principal of the 1990
Bonds as they become due and payable in addition to all other pay-
ments required for compliance with the Resolution and the necessary
and reasonable maintenance and operation costs of the City's water
system, is prohibited from issuing bonds having any priority with
respect to payment from the Revenues of the City's water system, and
is subject to conditions with respect to any sale of said water
system. In the manner provided in the Resolution, any or all of the
obligations referred to in this paragraph and certain other obliga-
tions mentioned in the Resolution may be waived with the consent of
the holders of a majority in aggregate principal amount of the out-
standing 1990 Bonds, exclusive of issuer-owned bonds.
If this bond matures on or after October 1, 1999 it is
redeemable in the manner and subject to the terms and provisions, and
with the effect, set forth in the Resolution referred to on the face
of this bond, at the option of the City, on and after October 1, 1998
in whole at any time or in part on any interest payment date. Notice
of such redemption shall be mailed first-class, postage prepaid to
the owner of record of this bond as of the date of such notice, which
shall be at least 30 days' prior to the date fixed for redemption.
Such redemption shall occur at the following redemption prices,
expressed as a percentage of the principal amount, together with
accrued interest to the date of redemption:
~.e~emption Dates R~-~tion Price
(Dates Inclusive)
October 1, 1998 to September 30, 1999 102%
October 1, 1999 to September 30, 2000 101
October 1, 2000 and thereafter 100
If this bond matures on or ,
it is also subject to mandatory redemption from payments required to
be made from time to time to the Sinking Account provided for by the
Resolution, at 100% of the principal amount so redeemed plus accrued
interest to the date of redemption.
The 1990 Bonds are issuable in the form of registered 1990
Bonds without coupons in the denominations of $5,000 or any integral
multiple of $5,000. The owner of any 1990 Bond or 1990 Bonds may
surrender the same (together with a written instrument of transfer
satisfactory to the Registrar duly executed by the registered owner
or his duly authorized attorney) at the principal corporate trust
office of Bank of America NT&SA in San Francisco, California, or, at
94601.16.6056.01:2
any other paying agent which has been selected (in its sole
discretion) by the City in exchange for an equal aggregate principal
amount of registered 1990 Bonds of any other authorized
denominations. Such exchanges shall be in the manner, subject to the
conditions and upon the payment of the charges provided in the
Resolution.
This bond is transferable, as provided in the Resolution,
only upon the books of the city kept for that purpose at the
above-mentioned principal corporate trust office of Bank of America
NT&SA in San Francisco, California, or, at any other paying agent
which has been selected (in its sole discretion) by the city, by the
registered owner hereof in person, or by his duly authorized attor-
ney, upon surrender of this bond together with a written instrument
of transfer satisfactory to the Registrar duly executed by the regis-
tered owner or his duly authorized attorney, and thereupon a new reg-
istered bond or bonds of this series, without coupons and in the same
aggregate principal amount, shall be issued to the transferee in
exchange therefor as provided in the Resolution, and upon payment of
the charges therein prescribed. The City, the Registrar and the
paying agents of the City may deem and treat the person in whose name
this bond is registered as the absolute owner hereof for the purpose
of receiving payment of, or on account of, the principal and interest
due hereon and for all other purposes.
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94601.16. 6056.01:2