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86R-072 1 CITY OF ANAHEIM RESOLUTION NO. R~R-7? 2 RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ANAHEIM, 3 CALIFORNIA 4 AMENDING CERTAIN PROVISIONS OF RESOLUTION NO. 83R-168 5 OF. THE CITY COUNCIL (AS HERETOFORE SUPPLEMENTED AND 6 AMENDED). 7 WHEREAS, the City Council of the City of Anaheim (the 8 "City") at its meeting on April 27, 1983 adopted a Resolution, 9 designated as Resolution No. 83R-168, relating to the issuance of 10 Electric Revenue Anticipation Notes of the CitYi and 11 WHEREAS, the City Council at its meeting on May 24, 1983 12 adopted a Resolution, designated as Resolution No. 83R-2l0, 13 amending and supplementing said Resolution No. 83R-168i and 14 WHEREAS, the City Council at its meeting on August 28, IS 1984, adopted a Resolution, designated as Resolution No. 84R-334, 16 supplementing said Resolution No. 83R-168i and 17 WHEREAS, the City Council at its meeting on November 16, 18 1984 adopted a Resolution, designated as Resolution No. 84R-442, 19 supplementing and amending said Resolution No. 83R-168i and 20 WHEREAS, said Resolution No. 83R-168, as so supplemented 21 and amended, is herein referred to as the "Resolution"; and 22 WHEREAS, it is in the best interest of the City to fur- 23 ther supplement and amend the Resolution in certain respects. 24 NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF ANAHEIM 25 DOES HEREBY RESOLVE, DETERMINE AND ORDER AS FOLLOWS: 26 SECTION 1. Section 2 of the Resolution is hereby 27 amended to read, in its entirety, as follows: 28 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 2S 26 27 28 Section 2. Covenants that Note to Remain Tax Bxeapt, Arbitrage. The City hereby covenants that it will not use, or permit to be used, any of the property acquired out of, or the costs of which were reimbursed from, Note proceeds in such manner as would result in loss of tax exemption of interest on the Notes otherwise afforded under Section l03(a) of the Internal Revenue Code of 1954, as heretofore amended and as amended from time to time hereafter (the "Code"). The City covenants that it will not take any action or fail to take any action with respect to the investment of the proceeds of any Notes issued under the Ordinance or in any other respect which would result in constituting the Notes "arbitrage bonds" within the meaning of such term as used in Section l03(c) of the Code or which would violate Treasury Regulations under Section l03(c) of the Code applicable to the Notes. The City covenants that it will not expend, or permit to be expended, Note proceeds in any manner inconsistent with its reasonable expectations as certi- fied in the Nonarbitrage Certificates to be executed from time to time with respect to the Notes; provided, however, that the City may expend Note proceeds in any manner if the City first obtains an unqualified opinion of Mudge Rose Guthrie Alexander & Ferdon and Rourke & Woodruff ("Bond Counsel") that such expenditures will 2 1 not impair the exemption from Federal income taxes of 2 interest paid on the Notes. 3 The City covenants that proceeds from any 4 sale or other disposi tion of any portion of the Electric 5 System. or of any portion of the City's fuel inventory 6 C including nuclear fuel) will be expended for additional 7 construction of or improvements to the Electric System, 8 for additions to the City's fuel inventory, or for the 9 payment, purchase, or redemption of Notes or other City 10 indebtedness incurred in connection with the Electric 11 System. 12 The City covenants that it will not enter 13 into, amend, modify or otherwise al ter power sale con- 14 tracts that would result in any of the output of an 15 Electric System facility to be constructed, recon- 16 structed or acquired with Note proceeds being sold, on a 17 take or payor take and pay basis, to one or more person 18 each of whom is not an "exempt person" within the mean- 19 ing of Treasury Regulations Section 1.I03-7Cb) (2) 20 C excl uding f rom such def ini tion any organizations qual i- 21 fying under Section SOICc) (3) of the Code with respect 22 to the trade or business carried on by such organi- 23 zations which is not unrelated trade or business deter- 24 mined by applying Section SI3Ca) of the Code to such 25 organizations) provided, however, that the City may 26 amend, modify, alter or enter into power sale contracts 27 of such types if the City first obtains an unqualified 28 opinion of Bond Counsel that such action will not impair 3 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 the exemption from Federal income taxes of interest paid on the Notes. The City represents that it has not been notified of any listing or proposed listing by the Internal Revenue Service to the effect that it is a bond issuer whose arbitrage certificates may not be relied upon. In order to maintain the exemption from fed- eral income taxation of interest on the Notes, and for no other purpose, the City covenants to comply with each applicable requirement of the Tax Reform Bill of 1985 (H.R. 3838), as adopted by the United States House of Representatives on December 17, 1985 (the ftBillft), anc will comply specifically with the instructions in the Letter of Instruction from Mudge Rose Guthrie Alexander & Ferdon attached to this resolution, as supplemented by that firm from time to time, except for any such requirement with respect to which (a) the City receives an opinion of Bond COunsel to the effect that continuing compliance by the City with such requirement of the Bill is not required in order to maintain the federal incane tax exemption of interest on the Notes, or (b) congres- sional action shall have taken place which is generally accepted by the municipal bond market as providing assurance that either the effective date with respect to such requirement or the substantive requirement applicable to the Notes set forth in the Bill will be changed so that such requirement would no longer apply 4 1 to the Notes. The provisions of this paragraph shall no 2 longer be of any force or effect upon receipt of an 3 opinion of Bond Counsel to the effect that noncompliance 4 with the applicable requirements of the Bill will not change. the then current federal income tax status of the interest on the Notes. The City covenants that it will not issue any Notes or other commercial paper, any proceeds of which will ~ be used to refund maturing Notes (A) without an ~pinion of Bond Counsel that (i) interest on the Notes being issued will be exempt from federal income taxation and (ii) interest on the Notes being issued will be exempt from Federal income taxation under the Bill (or an opinion of Bond Counsel that such opinion is not required) or (B) unless congressional action shall have taken place which is generally accepted by the municipal bond market as providing assurance that the effective date with respect to such requirement or the substantive requirement applicable to the Notes set forth in the Bill will be changed so that such requirement would no longer apply to the Notes. The provisions of this para- graph shall no longer be of any force or effect upon receipt of an opinion of Bond Counsel to the effect that noncompliance with the applicable requirements of the Bill will not change the then current federal income tax status of the interest on the Notes. 5 6 7 8 9 10 11 12 13 14 IS 16 17 18 19 20 21 22 23 24 2S 26 27 28 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 1 2 SECTION 2. T his Res 01 uti 0 n shall bee f f e c t i v e immediately. Except as amended in accordance herewith, the 3 Resolution remains in full force and effect. 4 ADOPTED, SIGNED AND AP'PROVED this 25th day of 5 Fphrl1Rry , 1986. ~~~ May 0 r , Attest: Leonora N. Sohl ~ /l~(.. -- '/;l ~/L--.~ Ci ty Clerk 6 CLERK STATE OF CALIFORNIA ) COUNTY OF ORANGE ) SSe CITY OF ANAHEIM ) I, LEONORA N. SOHL, City Clerk of the City of Anaheim, do hereby certify that the foregoing Resolution No. 86R-72 was introduced and adopted at a regular meeting provided by law, of the City Council of the City of Anaheim held on the 25th day of February, 1986, by the following vote of the members thereof: AYES: COUNCIL MEMBERS: Kaywood, Overholt, Pickler and Roth NOES: COUNCIL MEMBERS: None ABS TAIN : COUNCIL MEMBERS: Bay AND I FURTHER certify that the Mayor of the City of Anaheim signed said Resolution No. 86R-72 on the 25th day of February, 1986. IN WITNESS WHEREOF, I have hereunto set my hand and affixed the seal of the City of Anaheim thi s 25th day of February, 1.....986. .. (. ........ __" ~ () ~'^- /t ~___ CITY CLERK OF THE CITY OF ANAHEIM (SEAL) I, LEONORA N. SOHL, City Clerk of the City of Anaheim, do hereby certify that the foregoing is the original of Resolution No. 86R-72 duly passed and adopted by the Anaheim City Council on February.25, 1986. THE FOREGOIN STRUMENT 'S A ~ULLt TRUE AND CORRECT COpy 0 H~IG'NAL ON F'1LE '~()jH~ OFFICE ATTEST: ". - ._~~..--.~..,~---~. ~ LEONORA N. SOHL. C~ITY Cl K OF THE CITV Of M~AUl' /j III '-.-/~ CZ 1 [Letterhead of Mudge Rose Guthrie Alexander & Ferdon] 2 3 4 5 6 February ~, 1986 7 8 city of Anaheim, California 9 200 South Anaheim Blvd. 10 Anaheim, California 92805 11 Ladies and Gentlemen: 12 Pursuant to Resolution No. 83R-168 adopted by the City 13 Council of the Ci ty of Anaheim, Cal ifornia (the RCi ty") on April 14 27, 1983, as amended and supplemented to the date hereof (the 15 "Resolution"), this letter instructs you as to the requirements 16 of H.R. 3838 ("H.R. 3838"), adopted by the House of 17 Representatives on December 17, 1985, with respect to the City's 18 Electric Revenue Anticipation Notes, insofar as those require- 19 ments differ from present law requirements. This letter is 20 intended to provide you with guidance regarding compliance with 21 H.R. 3838; however, it is not intended to be exhaustive and may 22 not establish compliance with H.R. 3838. We may supplement this 23 letter from time to time and any references to this letter are 24 deemed to incl ude any supplements. 25 For purposes of this letter: (1) any instructions 26 relating to a fund or account under the Resolution shall be 27 deemed to apply only to the portion of such fund or account 28 allocable to the Electric Revenue Anticipation Notes, (2) any 1 2 3 4 5 6 7 8 9 10 11 12 13 14 IS 16 17 18 19 20 21 22 23 24 25 26 27 28 ref erence to II the date hereof II shall be deemed to mean the date of issue of the Electric Revenue Anticipation Notes, and (3) Electric Revenue Anticipation Notes Gross Proceeds shall mean (A) amounts received by the City from the sale of the Electric Revenue Anticipation Notes (excluding amounts used to pay dealers' fees and other expenses of issuing the Electric Revenue Anticipation Notes); (B) amounts received as a result of the investment of amounts described in (A); (C) amounts treated as transferred proceeds (as defined in Treasury Regulations Section 1.103-l4(e) (2) (ii)) of the Electric Revenue Anticipation Notes; (D) amounts treated as proceeds under Treasury Regulations Section 1.103-13(g) (relating to invested sinking funds); (E) amounts invested in any debt service reserve fund for the Electric Revenue Anticipation Notes; (F) securities or obliga- tions pledged as security for payment of debt service on the Electric Revenue Anticipation Notes by the City; (G) amounts received with respect to obligations acquired with Electric Revenue Anticipation Notes Gross Proceeds; (H) amounts used to pay debt service on the Electric Revenue Anticipation Notes; and (I) amounts received as a result of investing any Electric Revenue Anticipation Notes Gross Proceeds. As to (F) above, Electric Revenue Anticipation Notes Gross Proceeds include securities or obligations pledged to the payment of debt service only if there is reasonable assurance that such securities or obligations will be available to pay debt service in the event that the City encounters financial difficul ties. 2 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 2S 26 27 28 As to item (H), above, Electric Revenue Anticipation Notes Gross Proceeds may include amounts set aside for the payment of debt service unless deposited in a "bona fide debt service fund" within the meaning of Treasury Regulations Section 1.103-13(b) (12) and only if certain income tests are met. A bona fide debt service fund must be depleted at least once a year, except for a reasonable carryover amount not exceed- ing the greater of one-twelfth of annual debt service on the Electric Revenue Anticipation Notes or one year's earnings on the fund, and all amounts deposited therein must be expended within thirteen months of receipt. It appears that the City of Anaheim Electric Revenue Anticipation Notes Account (the "Note Account") and the City's account, the funds of which are used to pay inter- est on the Electric Revenue Anticipation Notes, designated as RANS Cash (together, the "Debt Service Accounts") qUalifY as bona fide debt service funds under the Treasury Regulation. Any amounts earned on the amounts deposited to the Debt Service Accounts and amounts earned on such earnings, if allocated to the Debt Service Accounts, shall be subject to rebate if the gross earnings (determined in the same manner as for purposes of the Rebate Requirement) on the Debt Service Accounts in any year exceed $100,000, or if the City has irrevocably elected in the Certificate as to Arbitrage to take into account such amounts for purposes of calculating the Rebate Requirement (which it has not done). The City has covenanted pursuant to a covenant adopted on the date hereof, in substance, to comply with the requirements of H.R. 3838, unless, in the opinion of Bond Counsel such 3 1 compliance is not required in order to maintain the exemption of 2 the interest on such Notes from Federal income taxation, or 3 unless congressional action shall have taken place which is gen- 4 erally accepted by the municipal bond market as providing assur- 5 ance that either the effective dates with respect to such 6 requirements or the substantive requirements applicable to such 7 Notes set forth in H.R. 3838 would no longer apply to such 8 Notes. 9 Currently, you have advised us that no Gross Proceeds 10 exist, nor are any expected to exist which are or will be 11 invested because proceeds of the initial issue of Electric 12 Revenue Anticipation Notes have been expended and proceeds of 13 each new issue of Electric Revenue Anticipation Notes are used 14 immediately to repay prior issues of Electric Revenue IS Anticipation Notes. In addition, amounts earned in the Debt 16 Service Accounts will not exceed $100,000 in any year. Thus, it 17 is not expected that there will be any amounts requiring rebate 18 to the United States. If this information should change and 19 Gross Proceeds should arise, such rebates may be required. 20 However, some information should still be generated with respect 21 to the Rebate Requirement as listed below: 22 1. If rebates are required, the City must pay to 23 the United States Department of the Treasury from any 24 lawfully available moneys, not later than 30 days after 25 the maturity of each Electric Revenue Anticipation Note 26 issued on or after January 1, 1986, an amount which, 27 when aggregated with any prior payments, is equal to 28 100% of the Rebate Requirement; 4 1 2. In all events, the Rebate Requirement must be 2 calculated within 25 days after the maturity of each 3 Electric Revenue Anticipation Note issued on or after 4 January 1, 1986; S 3. Notwithstanding anything in this letter or the 6 Resolution to the contrary, as between the City and the 7 United States Department of the Treasury, the obligation 8 of the City to remit the Rebate Requirement to the 9 United States Department of the Treasury must survive 10 the defeasance of the Electric Revenue Anticipation 11 Notes. 12 4. The City must retain records of the calculation 13 required by Section 2 until 6 years after the retirement 14 of the last obligation of the Electric Revenue 15 Anticipation Notes including any calculation leading to 16 the conclusion that no rebate need be made. 17 In order to perform the calculations required by 18 H.R. 3838 it is necessary to track separately all of the 19 Electric Revenue Anticipation Notes Gross Proceeds as they 20 may arise. 21 So long as there are no Gross Proceeds, such calcu- 22 lations will be zero; however, the determination that there 23 are no gross proceeds needs to be retained for six years as 24 set forth in Section 4 above. 2S Aside from the Rebate Requirement, H.R. 3838 will 26 require that an information report (previously Form 8038) be 27 filed by the 15th day of the second calendar month after the 28 end of each calendar quarter in which any Electric Revenue 5 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 2S 26 27 28 1 Anticipation Note is issued. Attached is a form of such 2 Form 8038 which must be filed (by May 15, 1986 for first 3 quarter issues). The form will need to have attached to it 4 a list of all Electric Revenue Anticipation Notes issued in each quarter. Very truly yours, Received and acknowledged: The City of Anaheim, California By: Date: Attachment 6 ,~ 8038 Information Return for Private Activity Bond IHue. u,., tecUoN 103(1) 1M lOU owt_ ~~~ t.prw 12':11/17 1 ,...,.,. ~ The City of Anaheim, California J NUIt'. .ftClltteM 200 South Anaheim Blvd. Check bollf Amended Ret~m. t I 2 1......'em~~~nuI"* ~ I..,. ""m_ 1 . c~ 01 ~. Stlte aftd Z!P eode Anaheim, Callforni.a 92805 of ItaU. Check box.. th.t. I See At tachec ';"Ot~:::'I::= ~~p~en.t ~~ ~ID~').: . . . . . . . . . . . . . . . . . . C QUlUft~ mot1Il,1 t;)Ond; (Ittach copy of Stat. ctrtlflQtian) Check box If you ,ttf;t to ...tMt. .rbit,... proffts to the U.S. ~ O. . . . . . . . . . . . . . . . . . . . . I 8 Quattftld veterln.' mortal'. bond. . . . . . . . . . . 10 ~. ...m,.c .ntlty bond. . . . . . . . . . . . .. ....... '"dust".' o.w"opm."t lontll: 11 . Industria' park bone&. . . . . . . . . . . . . . . . 12 t...... Smlll iUut ~O.: Cheek box if S10 million smaU I~u. election .. [J 11 Uema Activity Bond (check type(s) tMlow); . . "eIid.nti.llWMlt proj~ (MCtiof'l103Cb)(4XA)). . . . . . . . . . . . . . . . .. Sports fadUt,.. (MCtion l03(bX.XB)) . . . . . . . . . . . . . . . . . . . c 8 Convention facUitj. (section lO3(b)(4Xe)); Check box if .xempt from vofumtlimftltiona ~ 8 4 Ai~rts. doekl, Itc.. (section lO3(b)(4XD)); ChICk box if exempt from vatu"" limitations .. St\Iw'I' or waste dispos.l faciliti.. (tKtion l03(b)(4)(E)) . . . . . . . . . . . . . ~ ~'utton eontrot faciliti.. (section 103(b)(')(F)) . . . ~ Water fumist"na facilities (section l03(bX4)(G)) . . . .....J Hydr~tctnc ..".retina flc.liti.. (section 103(b)(4)(H)) . . H Mill commutlna v,thel. (section l03(b)(4)(1)) . . . . . ~ Local district h..t.". or cooH"1 flCllltles (section 103(b)(4)(J)) _ FICllttllS fortrte lOCal furnishin o1eltctnc .n. or IS section 103 b 4 E D..ert tlon of Obll IttO"1 (A) ~ date I Date of IUuI 1/3/86 to 3/31/86 ,-~ (I) ,_ M*Int (C) Stated ,ntlf'elt I"IW (0) Tenn (In YWI'f) See Exhiblt A Mrs. IIIIID It,ocHda of 'uu. 17 Tatal purchll. one. (rep. MCtion 1.103.13(Q)(2)). . . . . . . 1. ProcHGa uMO for bond issulnce COltS. . . . . . . . . . . . 1t PtocMa .1*,tICI to reuoftlbty ,..u.red r~ or reotlc.ment fund 20 Proc,", UMd to refund ,.,., 'U__. . . . . . . . . . . . . . . . . 21 Non.rtfuf'lOi"l DrocMCII of the """ (subtract Ii".. la. 1 t. Ind 20 from Iln. 17) ,., .............. Rtductleft Act NetIc-. ... ,... 1 .f the ..."ruett.... o o o ,.... 103. (Itw. 12...) ~:,:.: ~~ lOJa (...... \ 2 -&A ' IE De,crlptton ot Property Flnancaa by Non.refundl"l Proce.d' (Do not compl.te for student loan bonds 0' mortal . bonds) 22 Type of Property f\nlftCN (or portion th.reof tln.ne.d by "on.refuncUnl prKM(t.) . J.yr. ACRS propetty . It S.y" ACRS prol)e1ty . c 10.yr. ACRS property d 1 S.yr ACRS prooerty . ii-yr. ACRS property f Cost of Ilnd I Coat of o~er property (te. Instruction,) .l3 Ot"'.r use of non.,.fundin proeHds subtract Iln.. 22.- from Part IV. lin, 21 IN instNcttonl 24 St.nd.rd .ndustrl.1 classlfiCltlon SIC of non'refundln procteds for tne financed pro tCt. SIC Cod' Non.,efundlnl procMC2. S SIC Code ,.2 . . N(A, NM.refundl pl ~MCtI , . b c 25 cI 2. (A) UMf e f Av.r. e W'I hted economIC Iif. Of the oro!e<t (comPlete on' for lOB.) Oe.crt,tlon of I.,ttl.t Prinel,., U..,. (Do not comDt.t. tor student lOin bonds or mort.llt bonds) Inltlll PrlncIP" Users: i , . . . . - . . . (I) ~. (C) AdcI,.. ~~/UftW ( i) (il) (v) 1 I I I N/A (IIi) (i~) 27 Common o.ref'1t$ (It Iny) o1In'~I,1 Cf'nc.o,' ute's IIS1ecl aboYf (A) Uut(fro"" . .aOl)wet . ell N.",. (C) Add,... (01 ~ .o...!ff\cWon num., N/A ImIl ApprovI' of I.sue (Com~l.te only for 101.) : ~I Name 01 Governmenta. units ioprovlnl ,ssue ....................... _ . . . . . . . _ . . . . . . . . . . . . . . . . . ~l [\. - . . . . . . - . . . . . . . . . . 2' Names and pOSItions 01,pOh<:.able eleeted repreMntltlve$ or date 01 referenda 'P~OVI"1 ilSue. _ . . .. Nt !\.. . . ... . . . . . . . . . . - ....... .... ....... .... ............ ............. ....... ....... ... ........ .... ...................................,............. Volume Umitations for u.Ufled Mort it '0' Veteranl' Bonds 1 Issuer's vOlume lImltat,on . 2 Amount of volume limitltion surrendered to other 'ssues (el., under section l03A<iX3XS) or 25(c)(2XA)(ii)). N/ A 3 Amount of bond$ prevtousty Issued . . . . . . . N A . Unused volume limitation (subtr.ct lines 2 and' 3 from Iin. 1) . . . . . A : uno., ~nllt,.. 01 oeflury, , ~Kl.re tt1.t t ~Iv, film,,,*, t"lt '.hI"" .no ICCOf'I'oanyl"l ~"'. .ftCI ..~ ,na te tt'M .. fit my .,..... atId bet4f. flllSt !'~ .r. trvt. corrKt.ll\Q com,tete. OICI,rl~1O" of pttOItef (om<< ~." t....,.) It oaea ~... ",fllf'fl"labOn ~wfI.cft.,...., ........,.~. Sian Her. \j I A I . i ~ 5'ln't",. 01 attteef Pt"eNf"'" PIlei ,..",tur. "...,.,', U.. Onl, '1', 'i,,,n "1",'(01 . ~ 1OU", .f ,ttf..mDlOYH) Ifla aGelr... eRose Guthrle 180 Maiden Lane, New York, N. Y. ...... ............. ......... ..... '........,...".... . ~ NCUf"CY "., I ! 0.,. 10038 FORR 8038 SDPPLBABNTa B.R. 3838 RlPORfIHG RBOOIUJIBIft'S 'OR BSSBlftIAL PUHC'1'1011 8OtI)S The following information is being provided based on the U.S. House of Representatives adoption of H.R. 3838 which, as adopted, has an effective date of January 1, 1986. ThiS supplement is designed to correspond with the various Parts of FO~ 8038 where possible. Sections referred to herein are proposed Sections of the Internal Revenue Code under H.R. 3838. ~ PART I. Reporting Authority (see inforllllt1on reported on Pam 8038) .......g..----.~ccc~==c......_...c===..~..~..........ccc==~~..... PAaT II. Type of Ieau. ESSENTIAL FUNCTION BONDS: face Amount x Essential Function bond of the Issuer (Section 141Ca)) . . . . . . . . . . . . See Exhibit A cBla APPROPRIA'lB AREAS (IF APPLICABLIU I Essential function bond requiring unif1ed volume cap allocation (Section 141(a)(3)). Bond utilizing a transitional rule under H.R. 3838. -_.-.....~.._..........-._-_.-............_--_..........-.-._~~== PART III. Description of Obligations (See information reported on I'or. 8038) ........_.c.......~...........a==~=..............D...~._.....~==~ PAIr! IV. Proceed. of I..a. (se. inforatlO1l reported on Forti 8038) .___.........-...._.C..D................D..~..._....CC..=c....... .~ v. Vol.. Llaita~101U1 (CoIIplete for B88ential runctlon boMa if required by Sectioa 1~1(.)(3)(A)). Bnelo... copy of the unified volu.e cap allocatioft froa the authorized .Qtbor1~. 1. Unified volume cap allocation amount . ., 2. Amount of issue for which an allocation 1s l'equ1re<l . . . . . . . . . . . . . . . . 3. Unused unified volume limitation (subtract line 2 from 11ne 1). . . . . . . . . . . .'~,," Exhibit A This exhibit is intended to describe obligations issued under a tax-exempt commercial paper program during the period indi- cated on line 6 of Form 8038. Given the large number of obligations issued under the program, the obligations are described on a computer printout and information as to their issuance dates is listed in this exhibit, which is intended as a substitute for Part III of the Form, rather than on line 6 of the Form. Moreover, a column entitled "Purchase price" (as computed under Treas. Reg. ~ l.l03-13{d) (2)) is included because obligations may be issued at a discount and without a coupon rate. The term of each obligation is stated in days rather than years because such term may not exceed 270 days under the autho- rization for the program. The nature of a tax-exempt commercial paper program is such that obligations may be issued with maturities as short as one day. Furthermore, the obligations are constantly being rolled-over into new obligations. Thus, the obligations issued during a calendar quarter are refundings, or refundings thereof, and only a small por- tion of the total amount of obligations issued during such quarter is outstanding at anyone time. The amounts listed on lines 17 through 21 of the Form are gross amounts (in accordance with the literal requirements of the Form) and are not net of refundings (or refund- ings thereof in the case line 20 of the Form), even though such gross amounts are somewhat misleading as indications of the true size of the program. Under the authorization for the program, none of the proceeds of all obligations issued under the program may be expended for costs of the property described in Part v. Line 14: Date of Issue Maturity Date Face Amount Purchase Price Stated Interest Rate Term (in days) (include computer printout) Line 15: No obligations may be issued under the tax-exempt commer- cial paper program to which this Form relates with a maturity greater than 270 days, therefore, the weighted average maturity of any issue of obligations is 270 days or less. A-I Mudge Rose Guthrie Alexander & Ferdon 333 South Grand Avenue Los Angeles, California 90071 Rourke & Woodruff 14 1055 North Main Street '5 Santa Ana, California 92701 #6 ~ebruary __, 1986 #9 ~ity Council ~ity of Anaheim Anaheim, California ~ouncilmembers: ~e have examined the record of proceedings of the City of Anaheim, a municipal corporation organized and existing under a Charter adopted Rursuant to the provisions of the Constitution of the State of ~alifornia (the "City"), in connection with the authoriza- tion, ~xecution and delivery from time to time of Electric Revenue Anticipation Notes (the "Notes"). ~he Notes are issued under and pursuant to the Constitution and laws Qf the State of California, and the provisions, terms and conditions Qf Section 1210 of the Charter of the City, Qrdinance No. 4417 of the City adopted Qn April 26, 1983 (the"Ordinance"), and Resolution ~o. 83R-168 of the ~ity Council adopted on April 27, 1983, as amended and supplemented lthe "Resolution"). The Notes constitute and evidence only indebtedness of the electric ~stem of the City, payable both as to principal and inter- est solely from the sources set forth in Section 5 of the Ordinance. ~either the faith and credit nor the taxing power of the ~ity, the State of California or any political subdivision thereof is 2ledged to the payment of the Notes. Ne are of the opinion that under existing laws each Note (assuming due execution thereof and payment therefor) has been duly authorized and issued and gonstitutes the legal, valid and binding obligation of the City, subject ~o bankruptcy, insolvency, moratori- um, reorganization and other similar laws relating to creditors' rights generally. #12 #13 #14 #16 #18 #19 #20 #21 #22 #23,24 #25 #26 #27,28 #29,30 #31 #(31) #32 #33 #34 #35,36 #37 #(37) #38 #39 #40 #41 #42 #(42) ~e are further of the opinion that, under existing stat- #43 utes, regulations, ~ulings and court decisions, ~he interest Qn each #44,44 Note will be exempt from income taxes of the United ~tates of America #46 and from personal income taxes of the State of ~alifornia. #47 Qn December 17, 1985, H.R. 3838 was adopted by the United #47.1 ~tates House of Representatives. If H.R. 3838, as adopted by the #47.2,. House of Representatives on December 17, 1985, is ~nacted into law, #47.4 the Notes (issued in 1986) would be subject to certain of its Rrovi- #47.5 sions retroactive to their date of issue. H.R. 3838 sets forth #47.6 certain requirements which must be met subsequent to the issuance and #47.7 delivery of the Notes for interest thereon ~o be and remain exempt #47.8 '10 from Federal income taxation. If H.R. 3838 (as so adopted) is enacted into law, non-compliance with such requirements may cause the interest Qn the Notes to be subject to Federal income taxation ~etro- active to the date of issue of the Notes. These Kequirements include, but are not limited to, provisions ~hich prescribe yield and other limits within which the Rroceeds of the Notes and other amounts are to be invested and require that certain investment earnings on ~he foregoing must be rebated on a periodic basis to the ~reasury Department of the United States. H.R. 3838 also Qrescribes certain time limitations within which the Qroceeds of the Notes must be expended. Pursuant to the Resolution, the City has covenanted, in substance, to comply ~ith the requirements of H.R. 3838, unless, in the QPinion of Bond Counsel, 2uch Qompliance is not required in order to maintain the ~xemption of the interest on the Notes from Federal income taxation, or unless congressional action shall have taken place which is generally accepted by the municipal Qond market as providing assurance that either the effective gates with respect to such requirements or the substantive Kequirements applicable to the Notes set forth in H.R. 3838 ~ould no longer apply to the Notes. assuming compliance with the aforementioned ~ovenant, interest on the Notes would be exempt from ~ederal income taxation under H.R. 3838 as adopted by the House of Representatives on December 17, 1985. ~urthermore, assuming compliance with the aforementioned covenant, as affected by any aforementioned congressional gction with respect to either effective dates or the substantive ~equirements applicable to the Notes, which shall take Qlace as mentioned above, and assuming that such Qongressional action is followed in the enactment of H.R. 3838 into law, interest on the Notes would be exempt from Federal income taxation under H.R. 3838 as adopted by ~he House of Representatives on December 17, 1985. Pursuant to H.R. 3838, inter- est received from certain tax exempt obliqations issued after December 31, 1985 would be treated as a tax preference item for pur- poses of com~utinq the 25% alternative minimum tax if such obliga- tions are "non-essential function bonds" as defined in H.R. 3838. The Bonds will not be "non-essential function bonds" as so defined. you may rely on this opinion as to any Note issued after the date of this opinion to the extent that on the date of such Note (i) there is no change in law from that in effect on the date of this opinion and (ii) the representations, warranties and ~ovenants con- tained in the Ordinance and the Resolution gnd in certificates Qf authorized officers of the City dated the date hereof continue to be brue and correct and complied with. yery truly yours, =2- #47.9 #47.10 #47.11 #47.13 #47.14 #47.15 #47.16 #47.17 #47.19 #47.20 #47.21 #47.22 #47.23 #47.26 #47.27 #47.29 #47.30 #47.31 #47.32 #47.39 #47.41 #47.42 #47.43 #47.44 #47.45 #47.46 #47.47 #47.48 #47.50 1#47.5 1#47.5 1#47.5 1#47.5 1#47.5 1#47.5 #49 #50 #51 #52 #52.1, #(53) #54 #57 '2.3 '(2.3)