HomeMy WebLinkAboutFull Book Entry on Countywide Public Financing Authority (1996) NEW ISSUE: FULL BOOK-ENTRY RATINGS:
Standard & Poor's: "AAA"
Moody's: "Asa"
MBIA Insured
(See "RATINGS" herein)
- In the opinion of Jones Hall Hill& White, A Professional Law Corporation, San Francisco, California, Bond Counsel, subject, however, to certain
qualifications described herein,under existing law,the Interest on the Bonds is excluded from gross income for federal income tax purposes and such interest is
not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations, although for the purpose of
computing the alternative minimum tax imposed on certain corporations,such interest is taken into account in determining certain income and earnings.In the
further opinion of Bond Counsel,such interest is exempt from California personal income taxes.See "TAX MATTERS"herein.
$27,725,000
COUNTYWIDE PUBLIC FINANCING AUTHORITY
1996 Revenue Bonds
Dated as of: Date of Delivery Due: August 1, as shown below
The above-captioned bonds(the"Bonds") are being issued by the Countywide Public Financing Authority(the"Authority"),a joint exercise of powers
authority established by the Cities of Brea, Buena Park, Fullerton, Garden Grove, Orange,Santa Ana, Seal Beach, Stanton and Tustin (collectively, the
"Members"),in accordance with the provisions of Article l through 4(commencing with Section 6500)of Chapter 5 of Division 7 of Title 1 of the California
Government Code (the"Act").The Bonds will be delivered as fully registered bonds without coupons,and when delivered,will be registered in the name of
Cede&Co.,as nominee of the Depository Trust Company,New York,New York ("DTC").See"THE BONDS—Book-Entry Only System"herein.
Payment of the principal of and interest and premium,if any,on the Bonds will be made by U.S. Trust Company of California, N.A.,Los Angeles,
California,as trustee (the"Trustee") to DTC,which will in turn remit such principal and interest (and premium,if any) to its participants for subsequent
dispersal to beneficial owners of the Bonds,as described herein.Interest on the Bonds is payable semiannually on each February 1 and August I,commencing
February 1,1997.Principal of any Bond and any premium upon redemption will be paid by check of the Trustee upon presentation and surrender thereof at the
corporate trust office of the Trustee in Los Angeles,California.
The Bonds are subject to mandatory redemption as described herein under the captions "THE BONDS—Mandatory Redemption from Optional
Prepayment of Lease Payments"and"—Special Mandatory Redemption."
The Bonds are being issued and delivered pursuant to an Indenture of Trust,dated as of July 1,1996(the"Indenture"),by and between the Authority and
the Trustee,and in accordance with the provisions of Article 4 of the Act (the"Bond Law").The proceeds from the sale of the Bonds will be used by the
Authority (i) to provide financing for the portions of a County-wide communications system within Orange County allocable to the Members and to finance
other capital projects for certain Members within their respective geographical boundaries (collectively,the"Project"), (ii) to fund a Reserve Account,and
(ill)to pay the costs of issuance of the Bonds,In order to provide for the repayment of the Bonds,each Member has agreed to lease certain real property and
improvements (collectively,the"Leased Premises") to the Authority pursuant to separate Site and Facility Leases,each dated as of July 1, 1996 between the
Authority,as lessee,and each Member,as lessor(the"Site Leases") and to lease back said Leased Premises from the Authority pursuant to separate Lease
Agreements,each dated as of July 1,1996 between the Authority,as lessor,and each Member,as lessee (the"Lease Agreements").Pursuant to the Lease
Agreements,each Member has agreed to pay installments of rent for the Leased Premises to the Authority(the"Lease Payments")which have been calculated
to be sufficient,in the aggregate,to enable the Authority to pay the principal of and interest and premium,if any,on the Bonds when due and payable.See
"DEBT SERVICE FOR THE BONDS"and"APPENDIX A—Summary of Principal Legal Documents—The Lease Agreements"herein.
Payment of the principal of and interest on the Bonds when due will be guaranteed by a municipal bond insurance policy to be issued by MBIA Insurance
Corporation (the"Insurer') concurrently with the delivery of the Bonds.See"MUNICIPAL BOND INSURANCE POLICY"herein.
AABIA
The Bonds are special obligations of the Authority payable solely from the revenues pledged under the Indenture as described herein,consisting primarily of
the Lease Payments.The Lease Payments are subject to abatement under certain circumstances as described herein.See"SECURITY FOR THE BONDS—
Lease Payments"and"RISK FACTORS—Abatement"herein.
Each Member has covenanted under its respective Lease Agreement that it will take such action as may be necessary to include its Lease Payments in its
budgets during the term of its Lease Agreement and to make the necessary annual appropriations therefor.Neither the Bonds nor the obligation of each Member
to make Lease Payments constitutes an obligation of such Member for which such Member is obligated to levy or pledge any form of taxation or for which such
Member has levied or pledged any form of taxation.The Authority has no taxing power.Neither the Bonds nor the obligation of each Member to make Lease
Payments under its Lease Agreement constitutes a debt of such Member,Orange County,the State of California or any of its political subdivisions within the
meaning of any constitutional or statutory debt limitations or restrictions.
MATURITY SCHEDULE
Due Principal Interest Price Due Principal Interest Price
(August 1) Amount Rate or Yield (August 1) Amount Rate or Yield
1997 $2,025,000 4.10% 3.80% 2005 $2,905,000 5.25% 5.30%
1998 2,115,000 4.10 100.00 2006 3,060,000 5.30 5.40
1999 2,200,000 4.30 4.35 2007 500,000 5.40 5.50
2000 2,300,000 4.60 100.00 2008 530,000 5.50 5.60
2001 2,405,000 4.75 4.80 2009 560,000 5.60 5.70
2002 2,515,000 4.90 4.95
2003 2,640,000 5.00 5.10 2010 585,000 5.70 5.75
2004 2,765,000 5.10 5.20 2011 620,000 5.75 5.80
THIS COVER PAGE CONTAINS CERTAIN INFORMATION FOR QUICK REFERENCE ONLY.IT IS NOT A SUMMARY OF THIS ISSUE.
INVESTORS MUST READ THE ENTIRE OFFICIAL STATEMENT TO OBTAIN INFORMATION ESSENTIAL TO THE MAKING OF AN
INFORMED INVESTMENT DECISION.
The Bonds will be offered when,as and if delivered to and received by the Underwriter,subject to the approval of their validity and the legality of the Lease
Agreements by Jones Hall Hill&White,A Professional Law Corporation,San Francisco,California,Bond Counsel,and certain other conditions.Certain matters
will be passed upon for the Underwriter by Cox,Castle&Nicholson,LLP,Los Angeles,California,for the Authority by Jones Hall Hill&White,A Professional
Law Corporation,San Francisco, California, and for each Member by its City Attorney. D is anticipated that the Bonds will be available for delivery to The
Depository Trust Company in New York New York on or about July 31, 1996.
Stone & Youngberg Inc
Dated: July 16, 1996
COUNTYWIDE PUBLIC FINANCING AUTHORITY
Authority Members
City of Brea
City of Buena Park
City of Fullerton
City of Garden Grove
City of Orange
City of Santa Ana
City of Seal Beach
City of Stanton
City of Tustin
Authority Staff
Chris Meyer, Chairman
Ronald A. Nault, Vice Chairman
David N. Ream, Executive Director
Roderick R. Coloma, Treasurer
Janice C. Guy, Secretary
SPECIAL SERVICES
Bond Counsel
Jones Hall Hill & White,
A Professional Law Corporation
San Francisco, California
Trustee
U.S. Trust Company of California, N.A.
Los Angeles, California
Financial Advisor
Public Financial Management, Inc.
Newport Beach, California
Underwriter's Counsel
Cox, Castle & Nicholson, LLP
Los Angeles, California
TABLE OF CONTENTS
SUMMARY iii
INTRODUCTION 1
THE AUTHORITY 2
THE BONDS 2
General Provisions 2
Book-Entry Only System 3
Mandatory Redemption from Optional Prepayment of Lease Payments 5
Special Mandatory Redemption 5
Notice of Redemption 5
Selection of Bonds for Redemption 6
Purchase of Bonds in Lieu of Redemption 6
Transfer and Exchange of Bonds 6
Bonds Mutilated, Lost, Destroyed or Stolen 7
SECURITY FOR THE BONDS 7
Lease Payments 7
Reserve Account 7
Covenant to Budget and Appropriate 8
No Additional Bonds 8
MUNICIPAL BOND INSURANCE POLICY 8
ESTIMATED SOURCES AND USES OF FUNDS 10
DEBT SERVICE FOR THE BONDS 11
RISK FACTORS 12
No Full Faith and Credit 12
Financial Condition of Members 13
Abatement 13
Limited Recourse on Default 14
Loss of Tax Exemption 14
Constitutional Limitations on Taxation and Appropriations 14
THE MEMBERS AND THE LEASED PREMISES 16
General; Leased Premises 16
General Funds; Economic and Statistical Data 17
Sales Tax Revenues 17
Assessed Valuation and Tax Collection 17
The Teeter Plan 18
Other Tax Revenues 19
THE PROJECT 19
SUMMARY
The following information is furnished solely to provide limited introductory information regarding
the Bonds and does not purport to be comprehensive. All such information is qualified in its entirety by
reference to the more detailed descriptions appearing in this Official Statement, including the appendices
hereto. All capitalized terms used in this Official Statement not otherwise defined shall have the meanings
ascribed to them in the Indenture. The definitions of certain of such terms are set forth in Appendix A
hereto.
Issuer: The Bonds are being issued by the Countywide Public Financing Authority (the
"Authority"). See "THE AUTHORITY" herein.
Security: The Bonds are special obligations of the Authority payable solely from revenues
pledged under the Indenture, consisting primarily of Lease Payments made by the
Cities of Brea, Buena Park, Fullerton, Garden Grove, Orange, Santa Ana, Seal
Beach, Stanton and Tustin (the "Members"), under Lease Agreements between
the Authority and each of the Members. The Members' Lease Payments are
subject to abatement under certain circumstances as described herein. See
"SECURITY FOR THE BONDS" and "APPENDIX A - Summary of Principal
Legal Documents" herein.
Payment of the principal of and interest on the Bonds will be further secured by
a municipal bond insurance policy issued by MBIA Insurance Corporation. See
"MUNICIPAL BOND INSURANCE POLICY" herein.
Purpose: Proceeds from the sale of the Bonds will be used by the Authority (i) to provide
financing for the Project, (ii) to fund the Reserve Account, and (iii) to pay the
costs of issuance of the Bonds. See "THE PROJECT" herein.
Redemption: Mandatory Redemption from Optional Prepayment of Lease Payments. The Bonds
maturing on or after August 1, 2007 are subject to mandatory redemption as a
whole or in part on any date on or after August 1, 2006, from the optional
prepayment of Lease Payments by a Member under its Lease Agreement, at the
redemption prices described herein, together with accrued interest thereon to the
date fixed for redemption. See "THE BONDS - Redemption - Mandatory
Redemption from Optional Prepayment of Lease Payments" herein.
Special Mandatory Redemption. The Bonds are subject to redemption as a whole
or in part on any date, to the extent the Trustee has received title or hazard
insurance proceeds or condemnation proceeds not used to repair or replace any
portion of the Leased Premises of a Member damaged or destroyed and elected
by such Member to be used for such purpose as provided in the Indenture, at a
redemption price equal to one hundred percent (100%) of the principal amount
thereof plus interest accrued thereon to the date fixed for redemption, without
premium. See "THE BONDS - Redemption - Special Mandatory Redemption"
herein.
Form and
Denominations: The Bonds are being issued in fully registered form, without coupons, in
denominations of$5,000 or any integral multiple thereof.
iii
$27,725,000
COUNTYWIDE PUBLIC FINANCING AUTHORITY
1996 Revenue Bonds
INTRODUCTION
This Introduction is subject in all respects to the more complete information contained elsewhere
in this Official Statement, and the offering of the Bonds to potential investors is made only by means of
the entire Official Statement. Terms used in this Official Statement and not otherwise defined shall have
the meanings ascribed to them in the Indenture. The definitions of certain of such terms are set forth
in Appendix A hereto.
The purpose of this Official Statement is to provide certain information concerning the issuance by
the Countywide Public Financing Authority(the "Authority") of its Countywide Public Financing Authority
1996 Revenue Bonds (the "Bonds")in an aggregate principal amount of$27,725,000. The Bonds are being
issued pursuant to an Indenture of Trust, dated as of July 1, 1996 (the "Indenture"), by and between the
Authority and U.S. Trust Company of California, N.A., Los Angeles, California, as trustee(the "Trustee").
The Authority was established pursuant to a joint exercise of powers agreement among the Members,
which include the Cities of Brea, Buena Park, Fullerton, Garden Grove, Orange, Santa Ana, Seal Beach,
Stanton and Tustin. See "THE AUTHORITY" herein.
The proceeds from the sale of the Bonds will be used by the Authority (i) to provide financing for
the portions of a County-wide communications system within Orange County allocable to the Members and
to finance other capital projects for certain Members within their respective geographical boundaries
(collectively, the "Project"), (ii) to fund a Reserve Account, and (iii) to pay the costs of issuance of the
Bonds. In order to provide for the repayment of the Bonds, each Member has agreed to lease certain real
property and improvements (collectively, the "Leased Premises") to the Authority pursuant to separate Site
and Facility Leases, each dated as of July 1, 1996 between the Authority, as lessee, and each Member, as
lessor (the "Site Leases"), and to lease back said Leased Premises from the Authority pursuant to separate
Lease Agreements, each dated as of July 1, 1996 between the Authority, as lessor, and each Member, as
lessee (the "Lease Agreements"). Pursuant to the Lease Agreements, each Member has agreed to pay
installments of rent for the Leased Premises to the Authority (the "Lease Payments") which have been
calculated to be sufficient, in the aggregate, in both time and amount, to enable the Authority to pay the
principal of and interest and premium, if any, on the Bonds when due and payable. Pursuant to the
Indenture, the Authority has assigned to the Trustee, for the benefit of the owners of the Bonds, certain of
its rights under the Lease Agreements, including its right to receive and enforce payment of the Lease
Payments to be made by the respective Member. See "SECURITY FOR THE BONDS" and "APPENDIX
A - Summary of Principal Legal Documents - Lease Agreements" herein.
Pursuant to the Lease Agreements, each Members has covenanted that it will take such action as may
be necessary to include all its Lease Payments in its budgets and to make the necessary annual appropriations
therefore. The Lease Payments to be made by each Member are subject to abatement during any period in
which the Leased Premises are not available to such Member for use and occupancy due to damage or
destruction. See "SECURITY FOR THE BONDS - Covenant to Budget and Appropriate," "RISK
FACTORS - Abatement" and "APPENDIX A - Summary of Principal Legal Documents - Lease
Agreements" herein.
Neither the Bonds nor the obligation of each Member to make Lease Payments constitutes an
obligation of such Member for which such Member is obligated to levy or pledge any form of taxation or
for which such Member has levied or pledged any form of taxation. The Authority has no taxing power.
a Record Date and on or before the following Interest Payment Date, in which event it shall bear interest
from such Interest Payment Date, or (ii) it is authenticated on or before January 15, 1996, in which event
it shall bear interest from the date of issuance thereof; provided, however, that if, as of the date of
authentication of any Bond, interest thereon is in default, such Bond shall bear interest from the Interest
Payment Date to which interest has previously been paid or made available for payment thereon.
Principal of any Bond and any premium upon redemption will be paid by check of the Trustee upon
presentation and surrender thereof at the corporate trust office of the Trustee in Los Angeles, California.
The Bonds will be issued in fully registered form, without coupons, registered in the name of The
Depository Trust Company, New York, New York ("DTC") or its nominee. DTC will act as securities
depository for the Bonds. Purchases of beneficial interest in the Bonds will be made in book-entry form
only in denominations of$5,000 or any integral multiple thereof. So long as the Bonds are held in the book-
entry system of DTC, all payments of principal, interest and premium, if any, will be made by the Trustee
to DTC as the registered owner of the Bonds. For a more complete discussion of DTC and its book-entry
system, see "Book-Entry Only System" below.
Book-Entry Only System
The information in this section concerning DTC and DTC's book-entry system is based solely on
information provided by DTC. Accordingly, no representations can be made by the Authority concerning
these matters and neither the DTC Participants nor the Beneficial Owners should rely on the foregoing
information with respect to such matters, but should instead confirm the same with DTC or the DTC
Participants, as the case may be.
DTC will act as securities depository for the Bonds. The Bonds will, when issued, be payable to
Cede & Co. (DTC's partnership nominee). One or more fully registered Bond will be issued for each
maturity of Bonds and will be deposited with DTC.
DTC is a limited-purpose trust company organized under the laws of the State of New York, a
"banking organization" within the meaning of the laws of the State of New York, a member of the Federal
Reserve System, a "clearing corporation" within the meaning of the New York Uniform Commercial Code
and a "clearing agency" registered pursuant to the provisions of Section 17A of the Securities Exchange Act
of 1934, as amended. DTC holds securities that its participants ("DTC Participants") deposit with DTC.
DTC also facilitates the settlement among DTC participants of securities transactions, such as transfers and
pledges, in deposited securities through electronic computerized book-entry changes in accounts of DTC
Participants,thereby eliminating the need for physical movement of securities certificates. DTC Participants
include securities brokers and dealers, banks, trust companies, clearing corporations and certain other
organizations (the "Direct Participants"). DTC is owned by a number of its Direct Participant and by the
New York Stock Exchange, Inc., the American Stock Exchange, Inc., and the National Association of
Securities Dealers, Inc. Access to the book-entry system is also available to others such as banks, securities
brokers and dealers and trust companies that clear through or maintain a custodial relationship with a DTC
Participant, either directly or indirectly (the "Indirect Participants"). The rules applicable to DTC and its
Direct and Indirect Participants are on file with the Securities and Exchange Commission.
Purchases of the Bonds under the DTC System must be made by or through Direct Participants,
which will receive a credit balance in the records of DTC. The ownership interest of each actual purchaser
of each Bond("Beneficial Owner") is in turn to be recorded on the Direct and Indirect Participants' records.
Beneficial Owners will not receive written confirmation from DTC of their purchase, but Beneficial Owners
are expected to receive written confirmation providing details of the action, as well as periodic statements
3
DTC Participant, (ii) the payment by DTC or any DTC Participant of any amount in respect of the principal
of, premium, if any, or interest on the Bonds, (iii) any consent given or other action taken by DTC as
registered owner, or (iv) any other purpose. The Authority cannot and does not give any assurances that
DTC, DTC Participants or others will distribute payments of principal of or interest on the Bonds paid to
DTC or its nominee, as the registered owner, or any notices to the Beneficial Owners or that they will do
so on a timely basis or will serve and act in a manner described in this Official Statement. The Authority
is not responsible or liable for the failure of DTC or any DTC Participant to make any payment or give any
notice to a Beneficial Owner with respect to the Bonds or any error or delay relating thereto.
Mandatory Redemption from Optional Prepayment of Lease Payments
The Bonds maturing on or after August 1, 2007 are subject to mandatory redemption as a whole or
in part upon ninety(90) days written notice to the Trustee by a Member of its intention to optionally prepay
its Lease Payments, on any date on or after August 1, 2006, from any available source of funds of the
Member so electing to prepay, at the following redemption prices (expressed as a percentage of the principal
amount of the Bonds to be redeemed), together with accrued interest thereon to the date fixed for
redemption:
Redemption Period Redemption Price
August 1, 2006 through July 31, 2007 102%
August 1, 2007 through July 31, 2008 101%
August 1, 2008 and thereafter 100%
Any such redemption shall be in such order of maturity as the Member electing to prepay its Lease
Payments shall designate(and, if no specific order of redemption is designated by such Member, in inverse
order of maturity); provided, however, that only Bonds in which such Member has an interest (see the
percentage table under the caption "DEBT SERVICE FOR THE BONDS"herein)may be redeemed by such
Member's election.
Special Mandatory Redemption
The Bonds are also subject to redemption as a whole, or in part on a pro rata basis among
maturities, on any date, to the extent the Trustee has received title or hazard insurance proceeds or
condemnation proceeds not used to repair or replace any portion of the Leased Premises of a Member
damaged or destroyed and elected by such Member to be used for such purpose as provided in the Indenture,
at a redemption price equal to one hundred percent (100%) of the principal amount of the Bond to be
redeemed, plus interest accrued thereon to the date fixed for redemption, without premium.
Notice of Redemption
Notice of redemption must be mailed by first-class mail, postage prepaid, not less than thirty (30)
nor more than sixty (60) days before any redemption date, to the respective registered owners of any Bonds
designated for redemption at their addresses appearing on the registration books kept by the Trustee, and
to the Securities Depositories and Information Services in accordance with the terms of the Indenture. Each
notice of redemption must state the date of the notice, the redemption date, the place or places or
redemption, whether less than all of the Bonds (or all Bonds of a single maturity) are to be redeemed, the
CUSIP numbers and (in the event that not all Bonds within a maturity are called for redemption) Bond
numbers of the Bonds to be redeemed, the maturity or maturities of the Bonds to be redeemed and in the
5
Bonds Mutilated, Lost, Destroyed or Stolen
If any Bond shall become mutilated, the Authority, at the expense of the registered owner of said
Bond, shall execute, and the Trustee shall thereupon authenticate and deliver, a new Bond of like tenor in
exchange and substitution for the Bond so mutilated, but only upon surrender to the Trustee of the Bond so
mutilated. Every mutilated Bond so surrendered to the Trustee must be canceled by it and destroyed. If
any Bond is lost, destroyed or stolen, evidence of such loss, destruction or theft may be submitted to the
Authority and the Trustee and, if such evidence is satisfactory to them and indemnity satisfactory to them
shall be given, the Authority, at the expense of the owner of such lost, destroyed or stolen Bond, shall
execute, and the Trustee shall thereupon authenticate and deliver, a new Bond of like tenor in lieu of and
in substitution for the Bond so lost, destroyed or stolen (or if any such Bond shall have matured or shall
have been called for redemption, instead of issuing a substitute Bond, the Trustee may pay the same without
surrender thereof upon receipt of indemnity satisfactory to the Trustee). The Authority may require payment
by the owner of a sum not exceeding the actual cost preparing each new Bond issued under the Indenture
and of the expenses which may be incurred by the Authority and the Trustee in the preparation, execution,
authentication and delivery thereof. Any Bond issued in lieu of any Bond alleged to be lost, destroyed or
stolen will constitute an original additional contractual obligation on the part of the Authority whether or not
the Bond so alleged to be lost, destroyed or stolen be at any time enforceable by anyone, and shall be
entitled to the benefits of the Indenture with all other Bonds secured by the Indenture.
SECURITY FOR THE BONDS
Lease Payments
The Bonds are special obligations of the Authority payable from revenues pledged under the
Indenture, consisting primarily of Lease Payments, and from certain funds held under the Indenture. Lease
Payments are to be made by the Members from yearly appropriations which are payable out of any source
of legally available funds. The Members have covenanted under their respective Lease Agreements to make
such yearly appropriations. See "Covenant to Budget and Appropriate" below and "APPENDIX A -
Summary of Principal Legal Documents - Lease Agreements" herein. The Lease Payments to be made by
each Member are subject to abatement during any period in which the Leased Premises are not available to
such Member for use and occupancy due to damage or destruction, as described herein under "RISK
FACTORS- Abatement." Neither the full faith and credit nor the taxing power of the Members, the County
or the State is pledged to the payment of the Bonds or the Lease Payments. The Authority has no taxing
power. The Authority has assigned its right under each Lease Agreement to receive Lease Payments and
other amounts payable thereunder to the Trustee for the benefit of the owners of the Bonds.
Reserve Account
A portion of the proceeds from the sale of the Bonds will be deposited into the Reserve Account in
an amount equal to the Reserve Requirement (as defined below). In addition, the Trustee is required under
the Indenture to deposit a portion of the Lease Payments into the Reserve Account, to the extent such Lease
Payments are not required to be deposited into the Interest Account or the Principal Account, as may be
required to maintain therein an amount equal to the Reserve Requirement. Amounts in the Reserve Account
will be used and withdrawn by the Trustee solely for the purpose of(i) paying the principal of or interest
on the Bonds when due and payable to the extent that moneys deposited in the Interest Account or the
Principal Account are not sufficient for such purpose, and (ii) making the final payments of principal of and
interest on the Bonds on the date on which all Bonds shall be retired under the Indenture or provision is
made therefor.
7
Upon receipt of telephonic or telegraphic notice, such notice subsequently confirmed in writing by
registered or certified mail, or upon receipt of written notice by registered or certified mail, by the Insurer
from the Trustee or any owner of a Bond the payment of an insured amount for which is then due, that such
required payment has not been made, the Insurer on the due date of such payment or within one business
day after receipt of notice of such nonpayment, whichever is later, will make a deposit of funds, in an
account with State Street Bank and Trust Company, N.A., New York, New York, or its successor, sufficient
for the payment of any such insured amounts which are then due. Upon presentment and surrender of such
Bonds or presentment of such other proof of ownership of the Bonds, together with any appropriate
instruments of assignment to evidence the assignment of the insured amounts due on the Bonds as are paid
by the Insurer, and appropriate instruments to effect the appointment of the Insurer as agent for such owners
of the Bonds in any legal proceeding related to payment of insured amounts on the Bonds, such instruments
being in a form satisfactory to State Street Bank and Trust Company, N.A., State Street Bank and Trust
Company, N.A. shall disburse to such owners or the Trustee payment of the insured amounts due on such
Bonds, less any amount held by the Trustee for the payment of such insured amounts and legally available
therefor.
The Insurer, formerly known as Municipal Bond Investors Assurance Corporation, is the principal
operating subsidiary of MBIA Inc., a New York Stock Exchange listed company. MBIA Inc. is not
obligated to pay the debts of or claims against the Insurer. The Insurer is domiciled in the State of New
York and licensed to do business in all 50 states, the District of Columbia, the Commonwealth of Puerto
Rico, the Commonwealth of the Northern Mariana Islands, the Virgin Islands of the United States and the
Territory of Guam. The Insurer has one European branch in the Republic of France.
As of December 31, 1995 the Insurer had admitted assets of$3.8 billion(audited), total liabilities
of$2.5 billion(audited), and total capital and surplus of$1.3 billion(audited)determined in accordance with
statutory accounting practices prescribed or permitted by insurance regulatory authorities. As of March 31,
1996, the Insurer had admitted assets of$4.0 billion(unaudited), total liabilities of$2.7 billion(unaudited),
and total capital and surplus of$1.3 billion(unaudited)determined in accordance with statutory accounting
practices prescribed or permitted by insurance regulatory authorities. All information regarding the Insurer,
a wholly owned subsidiary of MBIA Inc., including the financial statements of the Insurer for the year ended
December 31, 1995, prepared in accordance with generally accepted accounting principles, included in the
Annual Report on Form 10-K of MBIA Inc. for the year ended December 31, 1995 is hereby incorporated
by reference into this Official Statement and shall be deemed to be a part hereof. Any statement contained
in a document incorporated by reference herein shall be modified or superseded for purposes of this Official
Statement to the extent that a statement contained herein or in any other subsequently filed document which
also is incorporated by reference herein modifies or supersedes such statement. Any statement so modified
or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this Official
Statement.
Furthermore, copies of the Insurer's year end financial statements prepared in accordance with
statutory accounting practices are available from the Insurer. _A copy of the_Annual Report on Form 10-K
of MBIA Inc. is available from the Insurer or the Securities and Exchange Commission. The address of the
Insurer is 113 King Street, Armonk, New York 10504.
Moody's Investors Service ("Moody's") rates the claims paying ability of the Insurer "Aaa".
Standard & Poor's Ratings Services ("Standard & Poor's"), a division of The McGraw Hill
Companies, Inc., rates the claims paying ability of the Insurer "AAA".
Fitch Investors Service, L.P., rates the claims paying ability of the Insurer "AAA".
9
DEBT SERVICE FOR THE BONDS
The following table sets forth the debt service requirements for the Bonds:
Payment Principal Interest Total Debt Service
Date Ending Due on Bonds Due on Bonds Due on Bonds
Feb. 1, 1997 $ - $679,667.57 $ 679,667.57
Aug. 1, 1997 2,025,000 675,912.50 2,700,912.50
Feb. 1, 1998 - 634,400.00 634,400.00
Aug. 1, 1998 2,115,000 634,400.00 2,749,400.00
Feb. 1, 1999 - 591,042.50 591,042.50
Aug. 1, 1999 2,200,000 591,042.50 2,791,042.50
Feb. 1,2000 - 543,742.50 543,742.50
Aug. 1, 2000 2,300,000 543,742.50 2,843,742.50
Feb. 1,2001 - 490,842.50 490,842.50
Aug. 1, 2001 2,405,000 490,842.50 2,895,842.50
Feb. 1,2002 - 433,723.75 433,723.75
Aug. 1, 2002 2,515,000 433,723.75 2,948,723.75
Feb. 1, 2003 - 372,106.25 372,106.25
Aug. 1, 2003 2,640,000 372,106.25 3,012,106.25
Feb. 1, 2004 - 306,106.25 306,106.25
Aug. 1, 2004 2,765,000 306,106.25 3,071,106.25
Feb. 1, 2005 - 235,598.75 235,598.75
Aug. 1, 2005 2,905,000 235,598.75 3,140,598.75
Feb. 1, 2006 - 159,342.50 159,342.50
Aug. 1, 2006 3,060,000 159,342.50 3,219,342.50
Feb. 1, 2007 - 78,252.50 78,252.50
Aug. 1, 2007 - 500,000 78,252.50 578,252.50
Feb. 1, 2008 - 64,752.50 64,752.50
Aug. I, 2008 530,000 64,752.50 594,752.50
Feb. 1, 2009 - 50,177.50 50,177.50
Aug. 1, 2009 560,000 50,177.50 610,177.50
Feb. 1, 2010 - 34,497.50 34,497.50
Aug. 1, 2010 585,000 34,497.50 619,497.50
Feb. 1, 2011 - 17,825.00 17,825.00
Aug. 1, 2011 620.000 17 825.00 637,825.00
$27,725,000 $9,380,400.07 $37,105,400.07
11
obligations which may constitute additional charges against its general revenues and thereby adversely affect
the availability of funds to make Lease Payments.
Financial Condition of Members
Many of the Members are heavily dependent on intergovernmental revenues from the State and the
federal government, which sources of revenue may themselves be dependent on the transferring
government's budgetary and financial condition. In addition, property and other forms of taxation
comprising an additional significant source of revenue for many Members are subject to statutory and
constitutional limitations which may impede their growth and availability for Member expenditures. In
particular, if any Member were to exceed or to approach exceeding its appropriations limit described in
Article XIIIB of the California Constitution, such Member could choose to fund other expenditures to the
exclusion of the Lease Payments. See "Constitutional Limitations on Taxation and Appropriation" below
for a discussion of certain California constitutional and statutory provisions imposing limitations on the
taxing and appropriation powers of California political subdivisions. See "THE MEMBERS AND THE
LEASED PREMISES" and "APPENDIX B - Information Concerning the Members and Description of
Leased Premises" for certain general, financial and economic information relating to the Members.
No Member has covenanted to pay the Lease Payments of any other Member or to make up any
deficit in the payment to registered owners of the Bonds which occurs by reason of another Member's
nonpayment; provided, however, that moneys in the Reserve Account will be used for such purpose, if
available. For this reason, one Member's default in the payment of its Lease Payments will cause a default
in the payments of principal of and interest on the Bonds in the event that moneys in the Reserve Account
are insufficient to make up the deficit caused by such nonpayment.
Abatement
The Lease Payments under each Lease Agreement will be abated during any period in which, by
reason of damage or destruction (other than by eminent domain, as discussed below), there is substantial
interference with the applicable Member's use and occupancy of all or any portion of its Leased Premises.
The amount of such abatement will be agreed upon by the Member and the Authority such that the resulting
Lease Payments represent fair consideration for the use and occupancy of the remaining usable portions of
the Leased Premises. Such abatement will continue for the period commencing with such damage or
destruction and ending with the substantial completion of the work of repair or reconstruction. In the event
of any such damage or destruction, the applicable Lease Agreement will continue in full force and effect and
each Member has waived any right to terminate the Lease Agreement by virtue of any such damage or
destruction.
Pursuant to each Lease Agreement, if all of the applicable Leased Premises is taken permanently
under the power of eminent domain or sold to a government threatening to exercise the power of eminent
domain, the term of the Lease Agreement will cease with respect to such Leased Premises as of the day
possession shall be so taken. If less than all of the Leased Premises is taken permanently, or if all of the
Leased Premises or any part thereof is taken temporarily under the power of eminent domain, (i) the Lease
Agreement will continue in full force and effect and will not be terminated by virtue of such taking and the
parties waive the benefit of any law to the contrary, and (ii) there will be a partial abatement of Lease
Payments in an amount to be agreed upon by the Member and the Authority such that the resulting Lease
Payments for such Leased Premises represent fair consideration for the use and occupancy of the remaining
usable portion of such Leased Premises.
13
States Constitution. The Court stated, among other things, that(i) the State has a legitimate interest in local
neighborhood preservation, continuity and stability, and consequently may decide to structure its tax system
to discourage rapid turnover in ownership of homes and businesses, and (ii) the State may legitimately
conclude that a new owner at the time of acquiring his or her property does not have the same reliance
interest warranting protection against higher taxes as does an existing owner. Notwithstanding the
Nordlinger ruling, however, there can be no assurance that Article XIIIA will not be challenged on other
constitutional grounds in the future.
Legislation Implementing Article XIIIA
Legislation has been enacted and amended a number of times since 1978 to implement Article XIIIA.
Under current law, local agencies are no longer permitted to levy directly any ad valorem property tax. The
1% property tax is automatically levied annually by the county and distributed according to a formula among
using agencies. The formula apportions the tax roughly in proportion to the relative shares of taxes levied
prior to 1978. Any special tax to pay voter-approved indebtedness is levied in addition to the basic 1%
property tax.
In the general election held November 4, 1986, voters of the State of California approved two
measures, Propositions 58 and 60, which further amend Article XIIIA. Proposition 58 amends Article XIIIA
to provide that the terms "purchased" and "change of ownership," for purposes of determining full cash
value of property under Article XIIIA, do not include the purchase or transfer of(1) real property between
spouses, and (2) the principal residence and the first $1,000,000 of other property between parents and
children.
Proposition 60 amends Article XIIIA and allows persons age 55 or older to transfer the lower
assessed value of their current residence to another newly purchased residence of equal or lesser value. For
the exemption to apply, the new residence must be located in the same county and be purchased within two
years after the sale of the previous residence. Proposition 60, as such, has no direct State or local fiscal
effect unless the county board of supervisors passes an ordinance implementing it.
Proposition 62
On November 4, 1986, an initiative statute("Proposition 62 ")was adopted by the voters of the State
which (i) requires that any tax for general governmental purposes imposed by local governmental entities
be approved by resolution or ordinance adopted by a two-thirds vote of the governmental entity's legislative
body and by a majority vote of the electorate of the governmental entity, (ii) requires that any special tax
(defined as taxes levied for other than general governmental purposes) imposed by a local governmental
entity be approved by a two-thirds vote of the voters within that jurisdiction, (iii) restricts the use of
revenues from a special tax to the purposes or for the service for which the special tax was imposed, (iv)
prohibits the imposition of ad valorem taxes on real property by local governmental entities except as
permitted by Article XIIIA, (v) prohibits the imposition of transaction taxes and sales taxes on the sale of
real property by local governmental entities, and (vi) requires that any tax imposed by a local governmental
entity on or after August 1, 1985 be ratified by a majority vote of the electorate within two years of the
adoption of the initiative or be terminated by November 15, 1988.
Various provisions of Proposition 62 were declared unconstitutional at the appellate court level. On
September 28, 1995, the California Supreme Court, in Santa Clara County Local Transportation Authority
v. Guardino,upheld the constitutionality of the portion of Proposition 62 requiring a two-thirds vote in order
for a local government or district to impose a special tax, and by implication upheld a parallel provision
requiring a majority vote in order for a local government or district to impose any general tax.
15
General Funds; Economic and Statistical Data
Set forth in Appendix B hereto are summaries of financial statements for the General Fund of each
Member. The General Fund is a budget unit specifically defined under California law which serves as the
main financing instrument for general governmental activities in California cities,towns,counties and school
districts. Also set forth in Appendix B is certain economic and statistical information pertaining to each
Member.
Sales Tax Revenues
Sales tax revenues constitute a significant source of revenues for each of the Members. Sales taxes
are collected from each business engaged in retail sales in California (except for exempt items) and
distributed by the State Board of Equalization (the "SBE") to the jurisdiction where the sale took place.
Estimated advance payments are made monthly for the three months of each quarter followed by clean-up
payments which adjust for actual collections. Each quarter's estimate is based upon the previous year's sales
tax collections, as well as general economic trends determined by the SBE. Increases in sales taxes based
upon new development are not fully reflected in quarterly estimates until a full calendar year after the
opening of the new development for retail business. Sales taxes collected from merchants with no permanent
place of business (i.e., certain vendors, construction contractors, etc.) are accumulated to a County-wide
or State-wide (for out-of-state businesses) pool and distributed to cities and counties in proportion to their
collections from sales tax payers.
With limited exceptions, the sales taxes imposed upon business transactions in California cities are
subject to the sales tax levied statewide by the State. The California Legislature could change the
transactions and items upon which the State-wide tax and the sales and use tax are imposed. Any such
change or amendment could have an adverse effect on sales tax revenues in each of the Members. The
Members are not aware of any proposed legislative change which could have an adverse effect on sales tax
revenues.
Appendix B includes a summary of taxable sales transactions for the Members since 1990. The
value and volume of taxable transactions are dependent on a variety of market and economic factors. Some
of these factors include the level of inflation affecting the price of goods and services, the rate of population
growth in the general market area, the characteristics of the specific retail developments within a given city,
the market service areas of the respective developments, mobility and disposable incomes of the consumers
within the market areas, any planned and proposed retail developments existing and planned competitive
retail establishments outside of a city.
Assessed Valuation and Tax Collections
Taxes are levied for each fiscal year on taxable real and personal property which is situated in the
Member city as of the preceding January 1, at the completion of new construction or when a change in
ownership occurs. For assessment and collection purposes, property is classified either as "secured,"
"unsecured" or "supplemental" and is listed accordingly on separate parts of the assessment roll. The
"secured roll" is that part of the assessment roll containing State-assessed public utilities property and
property the taxes on which are secured by a lien on real property sufficient, in the opinion of the county
assessor, to secure payment of the taxes. Other property is assessed on the "unsecured roll" except
properties classified as "supplemental" which include property on which construction has been completed
or for which a change of ownership has occurred during the fiscal year.
17
actual collections of unsecured taxes. A one-time adjustment for changes in the tax roll is made in the
following year.
The County's cash position is protected by a special fund, known as the Tax Losses Reserve Fund,
which is generated from the collection of penalties, interest and other charges on County-wide delinquent
taxes and special assessments, as well as other cash reserves. In the event proceeds from the sale of tax-
deeded property are insufficient to pay the full amount of delinquent taxes, the County Treasurer may draw
on its Tax Losses Reserve Fund to make up the deficiency. Section 4703 of the California Revenue and
Taxation Code allows any county to draw down the Tax Losses Reserve Fund to a balance equal to 3% of
the total of all taxes and assessments levied on its secured roll for that year if the secured tax delinquency
has been 3% of the total or less for the preceding three consecutive years. After utilizing this procedure,
if the county incurs a rate of secured tax delinquency that excess 3% of the total of all taxes and assessments
levied on its secured roll, the Tax Losses Reserve Fund must accumulate to a balance equal to 5% of the
total of all taxes and assessments levied on the secured roll for that fiscal year and remain at that level until
the county experiences three consecutive years in which the secured tax delinquency rate is under 3%.
Other Tax Revenues
In general, cities may adopt measures imposing taxes on certain local activities, such as hotel
occupancy and utility consumption taxes. See "RISK FACTORS - Constitutional and Statutory Limits on
Taxes and Appropriations - Proposition 62" for a discussion of certain limitations imposed upon the
imposition of such taxes.
THE PROJECT
The Project is comprised of (i) various capital improvements to be financed by certain Members
within their geographic boundaries, and (iii) all or a portion of each Member's share of a County-wide
coordinated communications system (the "Communications System") designed to support and facilitate all
public safety and public works radio communications throughout the County. Construction of the
Communications System is currently estimated to cost approximately $70,000,000, and will be directed by
Motorola Communications and Electronics, Inc. ("Motorola"). The Communications System has been
planned as an 81-channel, 800 MHz radio communications system enabling mutual cross-communications
among 100 city and County law, public works and fire operations. Once installed and implemented, the
Communication System is expected to be the largest multi-user, multi-owned radio system in the world.
TAX MATTERS
In the opinion of Jones Hall Hill & White, A Professional Law Corporation, San Francisco,
California, Bond Counsel, subject, however, to the qualifications set forth below, under existing law, the
interest on the Bonds is excluded from gross income for federal income tax purposes and such interest is
not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals
and corporations, provided, however, that, for the purpose of computing the alternative minimum tax
imposed on corporations (as defined for federal income tax purposes), such interest is taken into account in
determining certain income and earnings.
The opinions set forth in the preceding paragraph are subject to the condition that the Authority and
the Members comply with all requirements of the Internal Revenue Code of 1986 (the "Code") that must
be satisfied subsequent to the issuance of the Bonds in order that such interest be, or continue to be,
19
FINANCIAL ADVISOR
The City has retained Public Financial Management, Inc., Newport Beach, California as Financial
Advisor for the sale of the Bonds. The Financial Advisor is not obligated to undertake, and has not
undertaken to make, an independent verification or to assume any responsibility for the accuracy,
completeness or fairness of the information contained in this Official Statement.
Public Financial Management, Inc. is a full service financial advisor and is not engaged in the
business of underwriting, trading or distributing municipal or other public securities. Public Financial
Management, Inc. is owned and operated by its twenty (20) Managing Directors each of whom is involved
in day to day client service.
CONTINUING DISCLOSURE
The Authority has covenanted for the benefit of holders and beneficial owners of the Bonds to
provide certain financial information and operating data relating to the Bonds by not later than six months
following the end of the Authority's fiscal year (which currently ends on June 30), commencing with the
report for the 1996-97 fiscal year (the "Annual Report"), and to provide notices of the occurrence of certain
enumerated events, if material. The Annual Report will be filed by the Authority with each Nationally
Recognized Municipal Securities Information Repository, and with the appropriate State information
depository, if any. The notices of material events will be filed by the Authority with the Municipal
Securities Rulemaking Board (and with the appropriate State information depository, if any). The specific
nature of the information to be contained in the Annual Report or the notices of material events is set forth
in "APPENDIX E - Form of Authority Continuing Disclosure Certificate." These covenants have been
made in order to assist the Underwriter in complying with Securities and Exchange Commission Rule 15c2-
12(b)(5) (the "Rule").
Each Member has covenanted for the benefit of holders and beneficial owners of the Bonds to
provide certain financial information and operating data relating to such Member by not later than six months
following the end of the Member's fiscal year (which currently ends on June 30), commencing with the
report for the 1996-97 fiscal year(the "Annual Report"). The Annual Report will be filed by each Member
with each Nationally Recognized Municipal Securities Information Repository,and with the appropriate State
information depository, if any. The specific nature of the information to be contained in the Annual Report
is set forth in "APPENDIX F- Form of Member Continuing Disclosure Certificate." These covenants have
been made in order to assist the Underwriter in complying with the Rule.
LITIGATION
Jones Hall Hill&White, A Professional Law Corporation, as counsel to the Authority, and the City
Attorney for each Member, will issue opinions in connection with the issuance of the Bonds to the effect
that there is no action, suit or proceeding known to the Authority or the applicable Member, as appropriate,
to be pending or threatened, restraining or enjoining the execution or delivery of the Bonds, the Indenture
of the Lease Agreements, or in any way contesting or affecting the validity of the foregoing or any
proceeding of the Authority or the Members taken with respect to any of the foregoing.
21
CERTAIN LEGAL MATTERS
Jones Hall Hill&White,A Professional Law Corporation,San Francisco, California,Bond Counsel,
will render an opinion with respect to the validity and enforceability of the Indenture and as to the validity
of the Bonds. The proposed form of such opinion is attached hereto as Appendix C.
Certain legal matters will be passed upon for the Underwriter by Cox, Castle & Nicholson, LLP,
Los Angeles, California, for the Authority by Jones Hall Hill & White, A Professional Law Corporation,
and for each Member by its City Attorney.
MISCELLANEOUS
The purpose of this Official Statement is to supply information to prospective buyers of the Bonds.
Quotations from and summaries and explanations of the Bonds, the Indenture and the Lease Agreements
contained herein do not purport to be complete and reference is made to said documents for full and
complete statements of their provisions.
Appropriate Authority and Member officials, acting in their official capacity, have reviewed this
Official Statement and have determined that as of the date thereof the information contained herein is, to the
best of their knowledge and belief, true and correct in all material respects and does not contain an untrue
statement of a material fact or omit to state a material fact necessary in order to make the statements made,
in the light of the circumstances under which they were made, not misleading. The appropriate Authority
and Member officials will execute certificates to this effect upon delivery of the Bonds.
This Official Statement and its distribution have been duly authorized and approved by the Authority
and the Members.
COUNTYWIDE PUBLIC FINANCING AUTHORITY
By: (:i(/(ss /C.f
Chairman
22
paid from available moneys in the Bond Fund after the deposit of moneys described above. For
purposes of acquiring any investments hereunder, the Trustee may commingle funds held by it
hereunder. The Trustee may act as principal or agent in the acquisition or disposition of any investment
and may impose its customary charges therefor. The Trustee or its affiliates may act as sponsor, advisor
or depository with respect to any Permitted Investment. To the extent that any Permitted Investment
purchased by the Trustee are registrable securities such Permitted Investment shall be registered in the
name of the Trustee. The Trustee shall incur no liability for losses arising from any investments made
pursuant to the Indenture.
Covenants
Punctual Payment. The Authority shall punctually pay or cause to be paid the principal of and
interest and premium (if any) on all the Bonds in strict conformity with the terms of the Bonds and of
the Indenture, according to the true intent and meaning thereof, but only out of Revenues and other
assets pledged for such payment as provided in the Indenture.
Extension of Payment of Bonds. The Authority shall not directly or indirectly extend or assent to
the extension of the maturity of any of the Bonds or the time of payment of any claims for interest by
the purchase of such Bonds or by any other arrangement,and in case the maturity of any of the Bonds
or the time of payment of any such claims for interest shall be extended, such Bonds or claims for
interest shall not be entitled,in case of any default under the Indenture,to the benefits of the Indenture,
except subject to the prior payment in full of the principal of all of the Bonds then Outstanding and of all
claims for interest thereon which shall not have been so extended. Nothing in the Indenture shall be
deemed to limit the right of the Authority to issue Bonds for the purpose of refunding any Outstanding
Bonds,and such issuance shall not be deemed to constitute an extension of maturity of the Bonds.
Against Encumbrances, The Authority shall not create, or permit the creation of, any pledge,
lien, charge or other encumbrance upon the Revenues and other assets pledged or assigned under the
Indenture while any of the Bonds are Outstanding, except the pledge and assignment created by the
Indenture.Subject to this limitation,the Authority expressly reserves the right to enter into one or more
other indentures for any of its corporate purposes, and reserves the right to issue other obligations for
such purposes.
Power to Issue Bonds and Make Pledge and Assignment. The Authority is duly authorized pursuant
to law to issue the Bonds and to enter into the Indenture and to pledge and assign the Revenues and
other assets purported to be pledged and assigned, respectively, under the Indenture in the manner
and to the extent provided in the Indenture. The Bonds and the provisions of the Indenture are and will
be the legal,valid and binding special obligations of the Authority in accordance with their terms, and
the Authority and the Trustee shall at all times, subject to the provisions of the Indenture and to the
extent permitted by law, defend, preserve and protect said pledge and assignment of Revenues and
other assets and all the rights of the Bond Owners under the Indenture against all claims and demands
of all persons whomsoever.
Accounting Records. The Trustee shall at all times keep, or cause to be kept, proper books of
record and account, prepared in accordance with industry standards, in which complete and accurate
entries shall be made of all transactions made by it relating to the proceeds of Bonds, the Revenues, the
Lease Agreements and all funds and accounts established pursuant to the Indenture. Such books of
record and account shall be available for inspection by the Authority and the Members, during business
hours and under reasonable circumstances.
No Additional Obligations. The Authority covenants that no additional bonds, notes or other
indebtedness shall be issued or incurred which are payable out of the Revenues in whole or in part.
Tax Covenants
(a)Private Business Use Limitation.The Authority shall assure that the proceeds of the
Bonds are not used in a manner which would cause the Bonds to be "private activity bonds"
within the meaning of section 141(a) of the Code.
Appendix A
Page 11
(a) Default in the due and punctual payment of the principal of any Bonds when and as the
same shall become due and payable, whether at maturity as tin the Indenture expressed, by
proceedings for redemption,by acceleration,or otherwise.
(b) Default in the due and punctual payment of any installment of interest on any Bonds when
and as the same shall become due and payable.
(c) Default by the Authority in the observance of any of the other covenants, agreements or
conditions on its part in the Indenture or in the Bonds contained,if such default shall have continued for
a period of sixty(60) days after written notice thereof,specifying such default and requiring the same to
be remedied, shall have been given to the Authority by the Trustee; provided, however, that if in the
reasonable opinion of the Authority the default stated in the notice can be corrected,but not within such
sixty (60) day period, such default shall not constitute an Event of Default under the Indenture if the
Authority shall commence to cure such default within such sixty (60) day period and thereafter
diligently and in good faith cure such failure in a reasonable period of time.
(d) The occurrence and continuation of an event of default under and as defined in any Lease
Agreement.
Remedies Upon Event of Default. Upon the occurrence and continuance of any Event of Default,
then and in every such case the Trustee in its discretion may, and upon the written request of the
Owners of not less than 25% in principal amount of the Bonds then Outstanding and receipt of
indemnity to its satisfaction,and payment of its fees and expenses,including the fees and expenses of its
counsel,shall in its own name and as the Trustee of an express trust:
(a)by mandamus,or other suit, action or proceeding at law or in equity, enforce all rights of the
Owners under, and require the Authority or the affected Member to carry out any agreements with or
for the benefit of the Owners of Bonds and to perform its or their duties under the Act, the affected
Lease Agreement, and the Indenture, provided that any such remedy may be taken only to the extent
permitted under the applicable provisions of the affected Lease Agreement or the Indenture,as the case
may be;
(b) bring suit upon the Bonds;
(c) by action or suit in equity require the Authority to account as if it were the trustee of an
express trust for the Owners of Bonds;or
(d)by action or suit in equity enjoin any acts or things which may be unlawful or in violation of
the rights of the Owners of Bonds.
Upon the occurrence of an Event of Default,the Trustee shall be entitled as a matter of right to
the appointment of a receiver or receivers for the Leased Premises, and of the revenues, income,
product, and profits thereof,ex parte,and without notice,and the Authority consents to the appointment
of such receiver upon the occurrence of an Event of Default. In the case of any receivership,insolvency,
bankruptcy, or other judicial proceedings affecting the Authority or the affected Member, the Trustee
shall be entitled to file such proofs of claims and other documents as may be necessary or advisable in
order to have the claims of the Trustee and the Bond Owners allowed in such proceedings, without
prejudice, however, to the right of any Bond Owner to file a claim on his or her own behalf; provided,
the Trustee shall be entitled to compensation and reimbursement for the reasonable fees and expenses
of its counsel and indemnity for its reasonable expenses and liability from the Authority, the affected
Member or the Bond Owners,as appropriate.
Application of Revenues and Other Funds After Default. If an Event of Default shall occur and be
continuing, all Revenues and any other funds then held or thereafter received by the Trustee under
any of the provisions of the Indenture shall be applied by the Trustee as follows and in the following
order:
Appendix A
Page 13
given to the Trustee written notice of the occurrence of an Event of Default; (b) the Owners of a majority
in aggregate principal amount of the Bonds then Outstanding shall have made written request upon the
Trustee to exercise the powers granted in the Indenture or to institute such suit, action or proceeding in
its own name; (c) such Owner or Owners shall have tendered to the Trustee reasonable indemnity
against the costs,expenses and liabilities to be incurred in compliance with such request; (d) the Trustee
shall have failed to comply with such request for a period of sixty (60) days after such written request
shall have been received by, and said tender of indemnity shall have been made to, the Trustee; and
(e) no direction inconsistent with such written request shall have been given to the Trustee during such
sixty (60) day period by the Owners of a majority in aggregate principal amount of the Bonds then
Outstanding.
Such notification, request, tender of indemnity and refusal or omission are declared, in every
case, to be conditions precedent to the exercise by any Owner of Bonds of any remedy under the
Indenture or under law; it being understood and intended that no one or more Owners of Bonds shall
have any right in any manner whatever by his or their action to affect, disturb or prejudice the security
of the Indenture or the rights of any other Owners of Bonds, or to enforce any right under the Bonds,
the Indenture, the Lease Agreements or other applicable law with respect to the Bonds, except in the
manner in the Indenture provided, and that all proceedings at law or in equity to enforce any such
right shall be instituted, had and maintained in the manner in the Indenture provided and for the
benefit and protection of all Owners of the Outstanding Bonds, subject to the provisions of the
Indenture.
Remedies Not Exclusive. No remedy in the Indenture conferred upon or reserved to the Trustee
or the Owners of the Bonds is intended to be exclusive of any other remedy or remedies, and each and
every such remedy, to the extent permitted by law, shall be cumulative and in addition to any other
remedy given under the Indenture or now or hereafter existing at law or in equity or otherwise.
No Waiver of Default.No delay or omission of the Trustee or any Owner of the Series A Bonds to
exercise any right or power arising upon the occurrence of any Event of Default shall impair any such
right or power or shall be construed to be a waiver of any such Event of Default or an acquiescence tin
the Indenture; and every power and remedy given by the Indenture to the Trustee or the Owners of
the Series A Bonds may be exercised from time to time and as often as may be deemed expedient.
Amendments Permitted
The Indenture and the rights and obligations of the Authority and of the Owners of the Bonds
and of the Trustee may be modified or amended from time to time and at any time by an indenture or
indentures supplemental thereto,which the Authority and the Trustee may enter into when the written
consents of the Owners of a majority in aggregate principal amount of all Bonds then Outstanding,shall
have been filed with the Trustee.No such modification or amendment shall(i) extend the fixed maturity
of any Bonds, or reduce the amount of principal thereof or extend the time of payment, or change the
method of computing the rate of interest thereon, or extend the time of payment of interest thereon,
without the consent of the Owner of each Bond so affected, or (ii) reduce the aforesaid percentage of
Bonds the consent of the Owners of which is required to effect any such modification or amendment, or
permit the creation of any lien on the Revenues and other assets pledged under the Indenture prior to
or on a parity with the lien created by the Indenture except as permitted in the Indenture, or deprive
the Owners of the Bonds of the lien created by the Indenture on such Revenues and other assets (except
as expressly provided in the Indenture), without the consent of the Owners of all of the Bonds then
Outstanding. It shall not be necessary for the consent of the Bond Owners to approve the particular form
of any Supplemental Indenture, but it shall be sufficient if such consent shall approve the substance
thereof.
The Indenture and the rights and obligations of the Authority, of the Trustee and the Owners of
the Bonds may also be modified or amended from time to time and at any time by a Supplemental
Indenture, which the Authority and the Trustee may enter into without the consent of any Bond
Owners, if the Trustee has been furnished an opinion of counsel that the provisions of such
Supplemental Indenture shall not materially adversely affect the interests of the Owners of the Bonds,
including,without limitation, for any one or more of the following purposes:
Appendix A
Page 15
Discharge of Liability on Bonds. Upon the deposit with the Trustee,in trust,at or before maturity,
of money or securities in the necessary amount to pay or redeem any Outstanding Bonds(whether upon
or prior to the maturity or the redemption date of such Bonds), provided that, if such Bonds are to be
redeemed prior to maturity,notice of such redemption shall have been given or provision satisfactory to
the Trustee shall have been made for the giving of such notice, then all liability of the Authority in
respect of such Bonds shall cease,terminate and be completely discharged,and the Owners thereof shall
thereafter be entitled only to payment out of such money or securities deposited with the Trustee as
aforesaid for their payment,subject,however,to the provisions of the Indenture.
The Authority may at any time surrender to the Trustee for cancellation by it any Bonds
previously issued and delivered, which the Authority may have acquired in any manner whatsoever,
and such Bonds,upon such surrender and cancellation,shall be deemed to be paid and retired.
Deposit of Money or Securities with Trustee. Whenever in the Indenture it is provided or
permitted that there be deposited with or held in trust by the Trustee money or securities in the
necessary amount to pay or redeem any Bonds,the money or securities so to be deposited or held may
include money or securities held by the Trustee in the funds and accounts established pursuant to the
Indenture and shall be:
(a) lawful money of the United States of America in an amount equal to the principal amount of
such Bonds and all unpaid interest thereon to maturity,except that,in the case of Bonds which are to be
redeemed prior to maturity and in respect of which notice of such redemption shall have been given or
provision satisfactory to the Trustee shall have been made for the giving of such notice, the amount to
be deposited or held shall be the principal amount of such Bonds and all unpaid interest thereon to the
redemption date; or
(b) Defeasance Obligations, the principal of and interest on which when due will,in the written
opinion of an Independent Accountant filed with the Members, the Authority and the Trustee,provide
money sufficient to pay the principal of and interest and premium (if any) on the Bonds to be paid or
redeemed, as such principal, interest and premium become due, provided that in the case of Bonds
which are to be redeemed prior to the maturity thereof, notice of such redemption shall have been
given as provided or provision satisfactory to the Trustee shall have been made for the giving of such
notice;
provided, in each case, that (i) the Trustee shall have been irrevocably instructed (by the terms of the
Indenture or by Written Request of the Authority) to apply such money to the payment of such
principal, interest and premium (if any) with respect to such Bonds, and (ii) the Authority shall have
delivered to the Trustee an opinion of Bond Counsel to the effect that such Bonds have been discharged
in accordance with the Indenture (which opinion may rely upon and assume the accuracy of the
Independent Accountant's opinion referred to above).
THE SITE AND FACILITY LEASES
A Site and Facility Lease will be entered into between each Member and the Authority. Under
each Site and Facility Lease, the Member agrees to lease its Leased Premises to the Authority for one
dollar for a term continuous with the term of its Lease Agreement. Each Member and the Authority
agree that the lease to the Authority of such Member's right, title and interest in its Leased Premises
pursuant to its Site and Facility Lease serves the public purposes of such Member by enabling such
Member to finance its portion of the Project.
THE LEASE AGREEMENTS
Lease of Leased Premises
The Authority leases its Leased Premises to each Member, and each Member leases its Leased
Premises from the Authority,upon the terms and conditions set forth in its Lease Agreement.
Appendix A
Page 17
and the Trustee, no later than ten days following the adoption of a budget for the current Fiscal Year, a
certificate stating that its Lease Payments due in that Fiscal Year have been included in the budget
approved by such Member for such Fiscal Year.
Assignment. Each Member understands and agrees that all Lease Payments have been assigned
by the Authority to the Trustee in trust,pursuant to the Indenture, for the benefit of the Owners of the
Bonds, and each Member assents to such assignment. The Authority directs each Member, and each
Member agrees,to pay all of its Lease Payments to the Trustee at its Office.
Security Deposit. Notwithstanding any other provision of its Lease Agreement, such Member
may on any date secure the payment of its Lease Payments for its Leased Premises in whole or in part
by depositing with the Trustee an amount of cash which, together with other available amounts,
including but not limited to amounts allocable to such Member on deposit in the Bond Fund and the
Reserve Fund, is either (i) sufficient to pay such Lease Payments, including the principal and interest
and premium, if any,components thereof, or (ii) invested in whole or in part in Defeasance Obligations
in such amount as will, in the opinion of an Independent Accountant,together with interest to accrue
thereon and together with any cash which is so deposited, be fully sufficient to pay such Lease
Payments when due under its Lease Agreement or on any optional prepayment date, as such Member
shall instruct at the time of said deposit.Said security deposit shall be deemed to be and shall constitute
a special fund for the payment of Lease Payments in accordance with the provisions of its Lease
Agreement.
Quiet Enjoyment
During the term of each Lease Agreement, the Authority shall provide each Member with quiet
use and enjoyment of its Leased Premises, and each Member shall, during such term, peaceably and
quietly have and hold and enjoy its Leased Premises without suit, trouble or hindrance from the
Authority, except as expressly set forth in its Lease Agreement. The Authority will, at the request of a
Member and at such Member's cost,join in any legal action in which such Member asserts its right to
such possession and enjoyment to the extent the Authority may lawfully do so. Notwithstanding the
foregoing, the Authority shall have the right to inspect all Leased Premises.
Additional Payments
In addition to its Lease Payments, each Member shall pay when due the following Additional
Payments:
(a) any fees and expenses incurred by the Authority in connection with or by reason of its
leasehold estate in its Leased Premises as and when the same become due and payable;
(b) any reasonable compensation to the Trustee pursuant to the Indenture for all services
rendered under the Indenture and for all reasonable expenses, charges, costs, liabilities, legal fees and
other disbursements incurred in and about the performance of its powers and duties under the
Indenture;
(c) any reasonable fees and expenses of such accountants, consultants, attorneys and other
experts as may be engaged by the Authority or the Trustee to prepare audits, financial statements,
reports, opinions or provide such other services required under its Lease Agreement or the Indenture;
and
(d)any reasonable out-of-pocket expenses of the Authority in connection with the execution and
delivery of its Lease Agreement or the Indenture, or in connection with the issuance of the Bonds,
including any and all expenses incurred in connection with the authorization, issuance, sale and
delivery of the Bonds, or incurred by the Authority in connection with any litigation which may at any
time be instituted involving its Lease Agreement, its Site and Facility Lease, the Bonds, the Indenture
or any of the other documents contemplated thereby, or otherwise incurred in connection with the
administration thereof.
Appendix A
Page 19
for bodily and personal injury, death or property damage occasioned by reason of the operation of its
Leased Premises. Said policy or policies shall provide coverage in the minimum liability limits of
$1,000,000 for personal injury or death of each person and$3,000,000 for personal injury or deaths of two
or more persons in each accident or event, and in a minimum amount of $100,000 (subject to a
deductible clause of not to exceed$5,000) for damage to property resulting from each accident or event.
Such public liability and property damage insurance may, however, be in the form of a single limit
policy in the amount of $3,000,000 covering all such risks. Such liability insurance may be maintained
as part of or in conjunction with any other liability insurance coverage carried by such Member, and
may be maintained in the form of insurance maintained through a joint exercise of powers authority
created for such purpose or in the form of self-insurance by such Member. The Net Proceeds of such
liability insurance shall be applied toward extinguishment or satisfaction of the liability with respect to
which the insurance proceeds shall have been paid.
Fire and Extended Coverage Insurance. Each Member shall procure and maintain, or cause to be
procured and maintained, throughout the term of its Lease Agreement, insurance against loss or
damage to any structures constituting part of its Leased Premises by fire and lightning, with extended
coverage and vandalism and malicious mischief insurance. Said extended coverage insurance shall, as
nearly as practicable, cover loss or damage by explosion, windstorm, riot, aircraft, vehicle damage,
smoke and such other hazards as are normally covered by such insurance. Such insurance shall be in an
amount equal to the greater of (a) one hundred percent (100%) of the replacement cost of its Leased
Premises, or (b) the aggregate principal amount of the Outstanding Bonds. Such insurance may be
subject to deductible clauses of not to exceed $100,000 for any one loss. Such insurance may be
maintained as part of or in conjunction with any other fire and extended coverage insurance carried by
such Member and may be maintained in whole or in part in the form of insurance maintained through
a joint exercise of powers authority created for such purpose or in the form of self-insurance by such
Member.
Each Member agrees to procure and maintain, or cause to be procured and maintained,
throughout the term of its Lease Agreement, insurance against earthquake loss or damage to its Leased
Premises in such amounts as an independent insurance consultant shall annually determine is necessary
to protect such Member for such risk. Such insurance may be subject to a deductible clause of not to
exceed ten percent(10%) for any one loss. Such insurance may be maintained as part of or in conjunction
with any other insurance coverage carried by such Member. If such Member cannot purchase such
insurance on the open market from reputable insurers at reasonable cost, such Member agrees to self-
insure for such coverage.
Rental Interruption Insurance. Each Member shall procure and maintain through the term of its
Lease Agreement, rental interruption or use and occupancy insurance, if commercially available, to
cover loss, total or partial, of the use of any part of its Leased Premises during the term of its Lease
Agreement as a result of any of the hazards covered in the insurance required by its Lease Agreement,
in an amount at least equal to two times the portion of the Reserve Requirement allocable to such
Member. The Net Proceeds of such insurance shall be paid to the Trustee and deposited in the Bond
Fund, and shall be credited towards the payment of its Lease Payments in the order in which such
Lease Payments would otherwise come due and be payable.
Title Insurance. On or before the Closing Date such Member shall, at its expense, (a) cause its
Lease Agreement and the Site and Facility Lease, or a memorandum thereof or thereof, and a
memorandum of the assignment made pursuant to the Indenture, in each case in form and substance
approved by Bond Counsel,to be recorded in the office of the Orange County Recorder, and (b) obtain
a CLTA policy of title insurance which insures such Member's leasehold estate in its Leased Premises in
an amount equal to the aggregate principal amount of the Bonds. All Net Proceeds received under said
policy shall be deposited with the Trustee in the Redemption Fund and shall be applied to the
redemption of Bonds pursuant to the Indenture.
Net Proceeds of Insurance; Form of Policies. Each policy of insurance required by its Lease
Agreement shall provide that all proceeds thereunder shall be payable to the Trustee as and to the
extent required under its Lease Agreement. All required insurance policies shall be provided by a
commercial insurer rated "A+" by A.M. Best & Company or rated in one of the two highest rating
Appendix A
Page 21
exercise the power of eminent domain, the Net Proceeds resulting therefrom shall be deposited in the
Insurance and Condemnation Fund and applied as set forth in the Indenture.
From Title Insurance Award.The Net Proceeds of any title insurance award shall be paid to the
Trustee,deposited in the Insurance and Condemnation Fund and applied as set forth in the Indenture.
Abatement of Lease Payments.
Abatement Due to Damage or Destruction. Its Lease Payments shall be abated during any
period in which by reason of damage to or destruction of its Leased Premises (other than by eminent
domain which is hereinafter provided for) which causes substantial interference with the use and
occupancy by such Member of its Leased Premises or any portion thereof. The amount of such
abatement shall be an amount agreed upon by such Member and the Authority such that the resulting
Lease Payments represent fair consideration for the use and occupancy of the portions of its Leased
Premises not damaged or destroyed. Such abatement shall continue for the period commencing with
such damage or destruction and ending with the substantial completion of the work of repair or
reconstruction. In the event of any such damage or destruction, its Lease Agreement shall continue in
full force and effect and such Member waives any right to terminate its Lease Agreement by virtue of
any such damage and destruction. There shall be no abatement of its Lease Payments to the extent that
moneys derived from any person as a result of such damage or destruction are available to pay the
amount which would otherwise be abated or if there is any money available in the Bond Fund or the
Reserve Account to pay the amount which would otherwise be abated.
Abatement Due to Eminent Domain. If all of its Leased Premises shall be taken permanently
under the power of eminent domain or sold to a government threatening to exercise the power of
eminent domain, the term of its Lease Agreement shall cease with respect to its Leased Premises as of
the day possession shall be so taken. If less than all of its Leased Premises shall be taken permanently,
or if all of its Leased Premises or any part thereof shall be taken temporarily under the power of
eminent domain, (a) its Lease Agreement shall continue in full force and effect and shall not be
terminated by virtue of such taking and the parties waive the benefit of any law to the contrary,and (b)
there shall be a partial abatement of Lease Payments in an amount to be agreed upon by such Member
and the Authority such that the resulting Lease Payments for its Leased Premises represent fair
consideration for the use and occupancy of the remaining usable portion of its Leased Premises.
Assignment,Leasing and Amendment
Assignment by the Authority. Certain rights of the Authority under each Lease Agreement,
including the right to receive and enforce payment of Lease Payments to be made by a Member under
its Lease Agreement, have been pledged and assigned to the Trustee for the benefit of the Owners of
the Bonds pursuant to the Indenture, to which pledge and assignment such Member consents. The
assignment of this Agreement to the Trustee is solely in its capacity as Trustee under the Indenture and
the duties,powers and liabilities of the Trustee in acting under its Lease Agreement shall be subject to
the provisions of the Indenture.
Assignment and Subleasing by such Member. No Lease Agreement may be assigned by a
Member. Each Member may sublease its Leased Premises or any portion thereof, but only upon
satisfaction of certain conditions set forth in its Lease Agreement.
Amendment of Lease. The Leased Premises may be substituted for other property,and portions of
the Leased Premises may be released, but only upon satisfaction of certain conditions set forth in its
Lease Agreement.
Events of Default.
The following shall be "Events of Default"under its Lease Agreement:
(a) Failure by such Member to pay any Lease Payment required to be paid under its Lease
Agreement at the time specified in its Lease Agreement.
Appendix A
Page 23
removal and storage of such property by the Authority or its duly authorized agents in accordance with
the provisions contained in its Lease Agreement.
(c) Each Member waives any and all claims for damages caused or which may be caused by the
Authority in re-entering and taking possession of its Leased Premises as provided in its Lease
Agreement and all claims for damages that may result from the destruction of or injury to its Leased
Premises and all claims for damages to or loss of any property belonging to such Member that may be
in or upon its Leased Premises.
(d) Each Member agrees that the terms of its Lease Agreement constitute full and sufficient
notice of the right of the Authority to re-lease its Leased Premises in the event of such re-entry without
effecting a surrender of its Lease Agreement, and further agrees that no acts of the Authority in
effecting such re-leasing shall constitute a surrender or termination of its Lease Agreement irrespective
of the term for which such re-leasing is made or the terms and conditions of such re-leasing, or
otherwise.
(e) Each Member further waives the right to any rental obtained by the Authority in excess of
its Lease Payments and conveys and releases such excess to the Authority as compensation to the
Authority for its services in re-leasing its Leased Premises.
Limitation on Remedies
Notwithstanding the foregoing, neither the Authority nor the Trustee shall exercise any
remedies against its Leased Premises to the extent such remedies would generate funds which are
subject to such lien and which are not available to satisfy the obligations of its Lease Agreement or the
Indenture.
No Remedy Exclusive
No remedy conferred in its Lease Agreement upon or reserved to the Authority is intended to
be exclusive and every such remedy shall be cumulative and shall, except as expressly provided in its
Lease Agreement to the contrary, be in addition to every other remedy given under its Lease
Agreement or now or hereafter existing at law or in equity. No delay or omission to exercise any right
or power accruing upon any default shall impair any such right or power or shall be construed to be a
waiver thereof,but any such right and power may be exercised from time to time and as often as may
be deemed expedient. In order to entitle the Authority to exercise any remedy reserved to it in its Lease
Agreement it shall not be necessary to give any notice, other than such notice as may be required in its
Lease Agreement or by law.
Provisions Relating to the Municipal Bond Insurance Policy and the Municipal Bond Insurer
Notwithstanding any other provision of the Indenture, in determining whether the rights of the
Owners will be adversely affected by any action taken pursuant to the terms and provisions of the
Indenture, the Trustee shall consider the effect on the Owners as if there was no Municipal Bond
Insurance Policy. Any provision of the Indenture expressly recognizing or granting rights in or to the
Municipal Bond Insurer may not be amended in any manner which affects the rights of the Municipal
Bond Insurer thereunder without the prior written consent of the Municipal Bond Insurer.
The Municipal Bond Insurer's consent shall be required in addition to Owner consent, when
required, for the following purposes: (i) execution and delivery of any amendment, supplement or
change to or modification of the Indenture or any Lease Agreement, (ii) removal of the Trustee and
selection and appointment of any successor trustee; and (iii) initiation or approval of any action not
described in(i) or(ii) of this paragraph which requires Owner consent. Anything in the Indenture to the
contrary notwithstanding, upon the occurrence and continuance of an Event of Default, the Municipal
Bond Insurer shall, after payment of principal and interest then due, if any, be entitled to control and
direct the enforcement of all rights and remedies granted to the Owners or the Trustee for the benefit of
the Owners under the Indenture and the Municipal Bond Insurer shall also be entitled to approve all
waivers of Events of Default.
Appendix A
Page 25
APPENDIX B
INFORMATION CONCERNING THE MEMBERS AND
DESCRIPTION OF LEASED PREMISES
CITY OF BREA
General
Location and Government. The City of Brea("Brea") encompasses 10.7 square miles and is located
at the northern end of the County,just south of the Los Angeles County line. It is approximately 25 miles
southeast of downtown Los Angeles, 15 miles north of Santa Ana, the County Seat, and 22 miles inland of
the Pacific Ocean. Neighboring communities include the Cities of Fullerton, Placentia, La Habra and Yorba
Linda.
Brea is a general law city and was incorporated in 1917, the eighth city to be incorporated in the
County. Brea has a Council-Manager form of municipal government. The City Council appoints the City
Manager who is responsible for the day-to-day administration of city business and the coordination of all
city departments. The City Council is composed of five members elected bi-annually at large to four-year
alternating terms. The Mayor is selected by the City Council from among its members. Under the 1995/96
fiscal year budget, Brea employs a staff of approximately 328 full-time employees and 101 part-time
employees under the direction of the City Manager, including 76 full-time equivalent contract police services
personnel to the City of Yorba Linda and three full-time equivalent contract recreation services personnel
to the City of Diamond Bar.
Community Services and Facilities. Brea provides police and fire protection, emergency
paramedics, sewer maintenance, water, trash collection, street sweeping, park maintenance and building
inspection, and cooperates with the County in the provision of flood control services.
Educational services are provided to Brea residents by several school districts, including the Brea-
Olinda, Fullerton, Yorba Linda and La Habra Unified School Districts. Available schools include six
elementary schools, three parochial schools, one junior high school, one high school and one public
continuation high school. In addition, there are several colleges and universities in nearby Fullerton,
including California State University (Fullerton), Fullerton Community College, Western State University
College of Law and Southern California College of Optometry.
Health facilities for the City include the Brea Community Hospital with 162 beds, a staff of 278
physicians, a 24-hour emergency service and adjacent medical office buildings housing 38 physicians or
physician's groups. There are also numerous professional service offices in Brea for medical doctors,
dentists,optometrists,chiropractors and podiatrists,as well as St.Jude's Medical Center in nearby Fullerton.
Police and Fire Protection. The City of Brea Police Department consists of 101 sworn, 167 non-
sworn and 58 volunteer personnel. It provides a full range of police services for the communities of Brea
and Yorba Linda, whose daytime population exceeds 150,000, and whose combined residential population
is 95,000. Brea has provided police services to its neighboring City of Yorba Linda for over 25 years.
B-1
CITY OF BREA
CONSTRUCTION ACTIVITY
(1991 through 1995)
(000's omitted)
1991 1992 1993 1994 1995
New Residential
Single Valuation $ 0 $19,410 $5,259 $2,930 $13,453
Multiple Valuation 433 324 1,263 3,422 0
Alterations/Additions 22 346 2.116 1,349 913 2.453
Total $2,779 $21,850 $7,871 $7,265 $15,906
New Non-Residential
Commercial $1,664 $ 420 $ 1,484 $11,809 $4,777
Industrial 4,782 43 0 0 0
Other 183 1,187 179 690 0
Alterations/Additions 12.233 77 790 12.163 7.796 5.876
Total $18,862 $9,440 $13,826 $20,295 $10,653
Total Building Valuations $21,641 $31,290 $21,697• $27,560 $26,559
No. of Single Units 0 102 45 20 91
No. of Multiple Units 5 2 13 51 0
Total Units 5 104 58 71 91
Source: City of Brea
B-3
Retail Sales. Brea has experienced a steady increase in retail sales growth. For the period from
1989 to 1993, Brea experienced an increase of 32.1% in retail sales transactions. 1995 retail sales data is
available through the second quarter only.
CITY OF BREA
Taxable Retail Sales Data
(000's omitted)
1990 through 1995
1990 1991 1992 1993 1994 19950)
Apparel Stores $57,909 $ 60,615 $ 66,936 $ 67,820 $ 80,935 $ 19,674
General Merchandise Stores 152,278 166,187 182,974 194,512 205,495 47,779
Drug Stores 2,449 2,223 3,166 2,966 2,875 1,100
Food Stores 28,624 33,146 28,687 23,798 22,105 5,939
Packaged Liquor Stores 2,064 1,993 1,952 1,826 1,838 452
Eating and Drinking Places 57,305 63,946 63,854 63,675 66,178 18,462
Home Furnishings and
Appliances 16,715 27,131 29,833 35,497 57,388 14,247
Building Materials and Farm
Implements 9,049 8,208 6,485 7,635 4,034 1,145
Auto Dealers and Auto
Supplies 14,587 13,333 13,384 11,107 14,050 4,070
Service Stations 17,950 21,390 21,978 19,920 18,838 5,116
Other Retail Stores 86,404 95,444 100,098 99,371 88,079 24 715
Total Retail Outlets 445,334 493,616 519,347 528,127 561,815 142,699
All Other Outlets 232 190 207;361 228.743 271.086 329.376 85813
Total All Outlets $677,524 $700,977 $748,090 $799,213 $891,191 $228,512
Source: State Board of Equalization
°' First two quarters of data through June 30, 1995.
B-5
CITY OF BREA
GENERAL FUND BALANCE SHEET
Fiscal Years 1992-93 through 1994-95
1992-93 1993-94 1994-95
Assets and Other Debits
Assets:
Cash and investments 0 0 $ 216,371
Restricted assets
Cash $ 4,099,003 $ 6,223,248 5,434,506
Due from County 0 0 424,099
Receivables:
Taxes 79,330 60,718 117,854
Accounts receivable 60,394 167,339 75,448
Interest 397,896 355,566 182,690
Notes 99,355 0 0
Other 380,222 1,031,703 186,544
Due from other funds 1,585,406 991,583 822,380
Due from other governments 1,255,765 2,146,771 2,757,982
Advances to component units 2,366,575 2,297,573 2,226,500
Total Assets and Other Debits $10,323,946 $13,274,501 $12,444,374
Liabilities, Equity and Other Credits
Liabilities:
Accounts payable $ 676,469 $ 743,260 $ 862,972
Accrued liabilities 511,214 624,288 487,027
Interest payable 137,541 195,000 217,973
Deposits payable 255,698 224,506 219,671
Deferred Revenue 427,526 1,047,236 147,601
Due to other funds 1,650,466 1,620,836 2,269,046
Notes payable 3,950,000 6,000,000 5,200,000
Total Liabilities 7,608,914 10,455,126 9,404,290
Equity and Other Credits:
Fund Balances:
Reserved 2,505,859 2,384,950 2,887,226
Unreserved (designated) 85,284 96,482 152,858
Unreserved (undesignated) 123,889 337,943 0
Total Equity and Other Credits 2,715.032 2,819,375 3,040,084
Total Liabilities, Equity and Other Credits $10,323,946 $13,274,501 $12,444,3740)
Source: City of Brea Comprehensive Annual Financial Reports, Fiscal Years 1992-93, 1993-94 and 1994-95; the annual financial
reports are available from the City of Brea,and investors are encouraged to review the entire reports, including the notes therein, before
making an investment decision with respect to the Bonds.
(n Excludes a balance of approximately$5,100,000 transferred to the Risk Management Fund. Brea may, with the approval of its City
Council, transfer these moneys back to the General Fund.
B-7
Sales Tax Revenues. The revenue from sales tax provided approximately 39.5% of Brea's total
local tax revenues in 1995. The following table presents information concerning the value of taxable retail
sales in Brea since 1990.
CITY OF BREA
Taxable Retail Sales
1990-1995
Year Ended 12/31 Taxable Sales
1990 $677,524,000
1991 700,977,000
1992 748,090,000
1993 799,213,000
1994 891,191,000
19950l 228,512,000
Source: State Board of Equalization
t') First two quarters of data through June 30, 1995
The table below shows sales tax revenues for Brea for the last five years and the projected sales tax
revenues for the 1995/96 fiscal year.
CITY OF BREA
Sales Tax Revenues
For the Fiscal Years Ended
June 30, 1990 Through June 30, 1996
Fiscal Year Sales Tax Revenues
1990/91 $ 7,686,394
1991/92 8,143,897
1992/93 8,600,037
1993/94 9,695,536
1994/95 10,485,677
1995/960l 11,232,000
Source: City of Brea
o0 Projected
B-9
Largest Taxpayers
The following table sets forth the top ten property taxpayers, based on secured assessed valuation.
CITY OF BREA
Top Ten Secured Property Taxpayers
1995-96
1995-96 % of
Taxpayer Assessed Valuation Total 0)
Corporate Property Investors $127,650,289 4.42%
Beckman Instruments, Inc. 103,661,206 3.59
Union Oil Company of California 93,178,040 3.23
BA Properties, Inc. 55,718,826 1.93
Brea Community Hospital Corporation 44,044,524 1.53
Nordstrom Realty Inc. 42,323,773 1.47
Imperial Center East Limited Partners 37,300,000 1.29
U.S. Suzuki Motor Corp. 28,015,338 0.97
Olen Commercial Realty Corp. 26,637,293 0.92
Tomlinson & Sons 26,551,452 0.92
Source: California Municipal Statistics, Inc.
0) 1995-96 Local Secured Assessed Valuation: $2,884,932,960
Summary of Significant Accounting Policies
Brea's financial statements have been prepared in conformity with generally accepted accounting
principles(GAAP) as applied to government units. The Governmental Accounting Standards Board(GASB)
is the accepted standard-setting body for establishing governmental accounting and financial reporting
principles.
City Budget
The City follows these procedures in establishing the budgetary data reflected in the general purpose
financial statements:
1. In May, the City Manager submits to the City Council a proposed operating budget for the
fiscal year commencing July 1. The operating budget includes proposed expenditures and
the means of financing them.
2. Public hearings are conducted at City Council meetings to obtain taxpayer comments.
3. During July the budget is adopted by Council action.
B-11
Direct and Overlapping Bonded Debt
The following table contains information on Brea's direct and overlapping bonded indebtedness as
of June 30, 1996.
CITY OF BREA
Direct and Overlapping Bonded Debt
1995-96 Assessed Valuation: $1,758,837,462 (after deducting $1,559,488,042 redevelopment incremental
valuation)
OVERLAPPING TAX AND ASSESSMENT DEBT: % Applicable Debt 6/30/96
Orange County 1.107% $ 4,373
Metropolitan Water District 0.217 1,312,622
City of Brea Community Facilities Districts 100.000 4,725,000
TOTAL OVERLAPPING TAX AND ASSESSMENT DEBT $6,041,995
DIRECT AND OVERLAPPING LEASE OBLIGATION DEBT:
Orange County General Fund Obligations 1.107% $6,194,041
Orange County Pension Obligations 1.107 3,450,574
Orange County Teeter Plan Obligations 1.107 1,715,850
Orange County Transit Authority 1.107 233,577
Orange County Water District Certificates of Participation 0.009 18,545
Municipal Water District of Orange County Water Facilities Corporation 1.670 1,378,669
Brea-Olinda Unified School District Certificates of Participation 90.377 32,309,778
Fullerton Joint Union High School District Certificates of Participation 1.397 126,162
City of Brea 100.000 0(1)
City of Brea Civic/Cultural Center Authority 100.000 20,910,000
Orange County Sanitation District No. 2 Certificates of Participation 4.295 5,769,686
Orange County Sanitation District No. 3 Certificates of Participation 1.366 1,733,175
Orange County Sanitation District No. 13 Certificates of Participation 0.443 1,392
TOTAL GROSS DIRECT AND OVERLAPPING LEASE OBLIGATION DEBT $73,841,449
Less: Orange County Transit Authority (80% self-supporting) 186,862
Orange County Water District Certificates of Participation(100% self-supporting) 18,545
MWDOC Water Facilities Corporation(100% self-supporting) 1,378,669
TOTAL NET DIRECT AND OVERLAPPING LEASE OBLIGATION DEBT $72,257,373
GROSS COMBINED TOTAL DEBT 79,883,444(2)
NET COMBINED TOTAL DEBT $78,299,368
(1) Excludes share of issue to be sold.
(2) Excludes tax and revenue anticipation notes, revenue, mortgage revenue and tax allocation bonds and non-bonded
capital lease obligations.
Ratios to Assessed Valuation:
Combined Direct Debt($20,910,000) 1.19%
Total Overlapping Tax and Assessment Debt 0.34%
Gross Combined Total Debt 4.54%
Net Combined Total Debt 4.45%
STATE SCHOOL BUILDING AID REPAYABLE AS OF 6/30/95: $0
Source: California Municipal Statistics, Inc.
B-13
CITY OF BUENA PARK
General
Location and Government. The City of Buena Park ("Buena Park") encompasses 10.27 square
miles and is located at the northern end of the County, just south of the Los Angeles County line. It is
approximately 22 miles southeast of downtown Los Angeles, 12 miles north of Santa Ana, the County Seat,
and 19 miles inland of the Pacific Ocean. Neighboring communities include the Cities of Anaheim,
Cerritos, Cypress, La Habra, La Mirada and La Palma.
Buena Park is a general law city and was incorporated in 1952. Buena Park has a Council-Manager
form of municipal government. The City Council appoints the City Manager who is responsible for the day-
today administration of city business and the coordination of all city departments. The City Council is
composed of five members elected bi-annually at large to four-year alternating terms. The Mayor is selected
by the City Council from among its members. Under the 1995-96 fiscal year budget, Buena Park employs
a staff of approximately 299 full-time employees and 128 part-time employees.
Community Services and Facilities. Buena Park provides police and fire protection, emergency
paramedics, sewer maintenance, water, trash collection, street sweeping, park maintenance and building
inspection, and cooperates with the County in the provision of flood control services.
Educational services are provided for Buena Park residents by several school districts, including
Anaheim, Buena Park, Fullerton and Centralia Unified School Districts, as well as numerous private school
systems. Available schools include fourteen elementary schools, seven junior high schools and nine high
schools. In addition, there are several colleges and universities in nearby Fullerton and Cypress, including
California State University (Fullerton), Cypress Community Colleges, Fullerton Community College,
Western State University of Law and Southern California College of Optometry.
Health facilities for the City include two general hospitals with a total bed capacity of 124. There
are also numerous professional service offices in Buena Park serving medical doctors,dentists, optometrists,
chiropractors and podiatrists, as well as St. Jude's Medical Center in nearby Fullerton.
Police and Fire Protection. The City of Buena Park Police Department consists of 89 sworn and
131 non-sworn personnel. It provides a full range of police services for the community whose daytime
population exceeds 125,000 and whose residential population is 74,000.
Besides the traditional efforts of the Police Department to respond to calls for service and enforce
laws and investigate traffic and crime-related issues, the department has implemented Problem Oriented
Policing, Anti-Gang Education and Citizen Police Academy programs.
Buena Park has three fire stations that provide twenty-four hour emergency response services to the
residential and business community of Buena Park. These services include paramedic, fire prevention and
fire suppression services and are provided, under contract, by the Orange County Fire Protection Agency.
The Orange County Fire Protection Agency responds to a wide variety of critical situations, including fires,
explosions, hazardous materials incidents, medical emergencies, accidents, and miscellaneous public
assistance requests.
Transportation. The Riverside Freeway(State Route 91), a major east-west corridor, the Santa Ana
Freeway (Interstate 5), a major north-south corridor, and Beach Boulevard (State Highway 39), a major
B-15
CITY OF BUENA PARK
CONSTRUCTION ACTIVITY
(1991 through 1995)
(000's omitted)
1991 1992 1993 1994 1995
New Residential $7,337 $3,691 $3,620 $279 $1,084
New Non-Residential
Commercial $7,892 $6,394 $21,329 $14,881 $10,508
Industrial 7,577 2,481 6,657 3,822 3,174
Alterations/Additions 6.460 6 408 9,032 1.639 2.010
Total Building Valuations $29,266 $18,974 $40,638 $20,621 $16,776
Number of Permits Issued
Residential 41 27 10 2 11
Commercial 172 186 198 190 78
Industrial 28 28 21 36 8
Alterations/Additions 868 878 1.037 895 321
Total Permits 1,109 1,119 1,266 1,123 418
Source: City of Buena Park-Development Services Department
Employment. The principal employers within Buena Park, their type of business and the
approximate number of employees are shown in the table below.
CITY OF BUENA PARK
PRINCIPAL EMPLOYERS
Company Product or Service Employees
Knott's Berry Farm Entertainment Theme Park 3,300
Lucky Stores Food Products Distributor 1,775
Nutrilite Vitamin Manufacturer 990
J.C. Penney Corporate Headquarters 620
Ultra Wheel Co. Automotive Accessory Manufacturer 470
Nabisco Food Product Manufacturer 390
Leach Corporation Electronics Manufacturer 450
Pepsi Bottling 375
FedCo. Department Store 360
Kraft Foods Food Product Manufacturer 350
City of Buena Park Municipal Government 300
Pacific Bell Telecommunications 295
Sears, Roebuck & Co. Department Store 290
Medieval Times Entertainment Center 250
Source: City of Buena Park-Finance Department
B-17
General Fund
The following tables summarize information taken from Buena Park's audited financial statements
regarding its General Fund Balance Sheet and Statement of Revenues, Expenditures and Changes in General
Fund Balances for the past three (3) fiscal years:
CITY OF BUENA PARK
GENERAL FUND BALANCE SHEET
Fiscal Years 1992-93 through 1994-95
1992-93 1993-94 1994-95
Assets and Other Debits
Assets:
Cash and investments $ 9,759,158 $ 6,814,413 $ 3,926,978
Receivables:
Accounts receivable 854,102 600,366 1,022,907
Interest 172,991 175,354 271,870
Due from other funds 459,841 875,176 674,125
Due from the County of Orange 0 0 1,471,160
Due from other governments 1,092,854 1,083,364 1,093,181
Advances to component units 5,744,922 6,260,274 6,677,459
Other assets 138,022 139,296 125.389
Total Assets and Other Debits $18.221,890 $15,948,243 $15,263,069
Liabilities, Equity and Other Credits
Liabilities:
Accounts payable $ 652,113 $ 498,731 $ 567,664
Accrued liabilities 677,756 772,577 597,220
Due to other funds 80,888 2,548 233,931
Deposits payable 678,241 831,993 762,236
Retentions payable 92,814 0 0
Deferred revenue 3,225,282 3,752,593 4.167.140
Total Liabilities • 5.407.094 5.858.442 6,328,191
Equity and Other Credits:
Fund Balances:
Reserved 3,478,658 3,284,629 4,875,874
Unreserved (designated) 5,167,643 4,734,894 2,650,907
Unreserved (undesignated) 4,168,495 2,070,278 1.408.097
Total Equity and Other Credits 12,814,796 10,089,801 8,934,878
Total Liabilities, Equity and Other Credits $18,221,890 $15,948,243 $15,263,069
Source: City of Buena Park Comprehensive Annual Financial Reports, Fiscal Years 1992-93, 1993-94 and 1994-95; the annual
financial reports are available from the City of Buena Park, and investors are encouraged to review the entire reports,
including the notes therein, before making an investment decision with respect to the Bonds.
B-19
Sales Tax Revenues. The revenue from sales tax provided approximately 31.4% of Buena Park's
total local tax revenues in 1995. The following table presents information concerning the value of taxable
retail sales in Buena Park since 1992.
CITY OF BUENA PARK
Taxable Retail Sales
1992-1995
Year Ended 12/31 Taxable Sales
1992 $739,329,200
1993 727,780,500
1994 769,261,000
1995 783,847,200
Source: State of California Board of Equalization
The table below shows sales tax revenues for Buena Park for the last five years and the projected
sales tax revenues for the 1995/96 fiscal year.
CITY OF BUENA PARK
Sales Tax Revenues
For the Fiscal Years Ended
June 30, 1990 Through June 30, 1996
Fiscal Year Sales Tax Revenues
1989-90 $10,348,960
1990-91 9,643,267
1991-92 8,254,357
1992-93 8,222,440
1993-94 8,126,734
1994-95 8,674,801
1995-961'1 9,250,000
Source: City of Buena Park
0) Projected
B-21
Largest Taxpayers
The following table sets forth the top ten property taxpayers, based on secured assessed valuation.
CITY OF BUENA PARK
Top Ten Secured Property Taxpayers
1995-96
1995-96 % of
Taxpayer Assessed Valuation Total (t)
Knotts Berry Farm $138,744,704 4.11%
Jim Dandy Markets 60,440,519 1.79
J.C. Penney Properties, Inc. 49,338,985 1.46
Nutrilite Products, Inc. 49,298,744 1.46
Nabisco, Inc. 45,889,874 1.36
Sunrise Buena Park 43,451,379 1.29
Kraft, Inc. 33,952,655 1.01
Sequoia Management 23,201,350 0.69
Teachers Insurance & Annuity Association 22,576,764 0.67
Yamaha International Corp. 21,137,037 0.63
Source: California Municipal Statistics, Inc.
(0 1995-96 Local Secured Assessed Valuation: $3,376,137,399
Summary of Significant Accounting Policies
Buena Park's financial statements have been prepared in conformity with generally accepted
accounting principles (GAAP) as applied to governmental units. The Governmental Accounting Standards
Board(GASB) is the accepted standard-setting body for establishing governmental accounting and financial
reporting principles.
City Budget
The City follows these procedures in establishing the budgetary data reflected in the general purpose
financial statements:
1. In May, the City Manager submits to the City Council a proposed operating budget for the
fiscal year commencing July 1. The operating budget includes proposed expenditures and
the means of financing them.
2. Public hearings are conducted at City Council meetings to obtain taxpayer comments.
3. During June, the budget is adopted by Council action.
B-23
Direct and Overlapping Bonded Debt
The following table contains information on Buena Park's direct and overlapping bonded
indebtedness as of June 30, 1996.
CITY OF BUENA PARK
Direct and Overlapping Bonded Debt
1995-96 Assessed Valuation: $3,224,231,859 (after deducting $430,231,121 redevelopment incremental
valuation)
OVERLAPPING TAX AND ASSESSMENT DEBT: % Applicable Debt 6/30/96
Orange County 2.029% $ 8,015
Metropolitan Water District .402 2,431,678
Centralia School District 64.426 641,039
Cypress Recreation and Park District 0.001 6
TOTAL OVERLAPPING TAX AND ASSESSMENT DEBT $3,080,738
DIRECT AND OVERLAPPING LEASE OBLIGATION DEBT:
Orange County General Fund Obligations 2.029% $11,352,945
Orange County Pension Obligations 2.029 6,324,494
Orange County Teeter Plan Obligations 2.029 3,144,950
Orange County Transit Authority 2.029 428,119
Orange County Water District Certificates of Participation 3.117 6,422,734
Municipal Water District of Orange County Water Facilities Corporation 3.081 2,543,520
Fullerton Joint Union High School District Certificates of Participation 15.224 1,374,868
Centralia School District Certificates of Participation 64.426 2,784,158
Cypress School District Certificates of Participation 4.780 163,954
Orange County Sanitation District No. 3 Certificates of Participation 10.127 12,849,093
City of Buena Park 100.000 0 (1)
TOTAL GROSS DIRECT AND OVERLAPPING LEASE OBLIGATION DEBT $47,388,835
Less: Orange County Transit Authority (80% self-supporting) 342,495
Orange County Water District Certificates of Participation (100% self-supporting) 6,422,734
MWDOC Water Facilities Corporation(100% self-supporting) 2,543,520
TOTAL NET DIRECT AND OVERLAPPING LEASE OBLIGATION DEBT $38,080,086
GROSS COMBINED TOTAL DEBT 50,469,573 (2)
NET COMBINED TOTAL DEBT $41,160,824
(1) Excludes share of issue to be sold.
(2) Excludes tax and revenue anticipation notes, revenue, mortgage revenue and tax allocation bonds and non-bonded
capital lease obligations.
Ratios to Assessed Valuation:
Combined Direct Debt 0.00%
Total Overlapping Tax and Assessment Debt 0.10%
Gross Combined Total Debt 1.57%
Net Combined Total Debt 1.28%
STATE SCHOOL BUILDING AID REPAYABLE AS OF 6/30/95: $20,664
Source: California Municipal Statistics, Inc.
B-25
The principal employers within Fullerton, their product or service and the number of employees are
shown in the table below.
CITY OF FULLERTON
PRINCIPAL EMPLOYERS
October, 1995
Company Employees
Manufacturing
Hughes Electronics Division 1,400
Beckman Instruments 1,250
Hunt Wesson Foods 1,100
Kaynar Manufacturing Co. 640
Kimberly-Clark 525
Non-Manufacturing
Cal State University, Fullerton 2,650
St. Jude Medical Center 1,700
Fullerton College 1,060
Fullerton Joint Union High School District 1,040
City of Fullerton 600
Hewlett-Packard 600
Source: City of Fullerton
Population. Since the 1990 census, Fullerton's population is estimated to have grown by
approximately 8.74%. The County's population is estimated to have expanded by approximately 7.11%
during the same interval. According to the City of Fullerton Office of Public Information, the population
estimate for Fullerton as of the beginning of 1995 was 123,692 with 44,099 households. This equates to
an average household size of 2.80 which is typical for Orange County. Per City statistics, the housing
diversity is approximately 50% single family detached, 8% single family attached; 40% multi-family
housing;and 2% mobile homes. The high multi-family is expected due to the five colleges in Fullerton with
the major college being California State University, Fullerton. Older housing is located south of
Commonwealth with smaller two and three-bedroom homes. North of Commonwealth and as you move
toward the hills, the homes are larger, newer, and well maintained. Two of the neighborhoods are built
around golf courses. The following table sets forth the population growth for Fullerton since 1980.
B-29
CITY OF FULLERTON
COMPARATIVE BALANCE SHEET
Fiscal Years 1993 through 1995
1993 1994 1995
Assets and Other Debits
Cash and investments $13,089,515 $12,432,531 $13,885,900
Receivables:
Taxes 236,422 245,388 146,216
Accounts receivable 556,109 322,621 1,450,607
Other accrued revenue receivable 1,209,944 5,392,768 3,295,542
Notes 4,950 3,300 1,650
Due from other funds 1,338,223 1,153,224 1,311,292
Advances to other funds 933,588 710,545 483,888
Inventory 350,464 311,094 250,081
Total Assets and Other Debits $17,719,215 $20,571,471 $20,825,176
Liabilities and Fund Balance
Liabilities:
Accounts payable $1,020,205 $1,229,675 $ 918,728
Other accrued liabilities 2,792,207 3,455,171 4,007,540
Deferred Revenue -0- 2,331,293 0
Notes payable 4,750,000 5,000,000 4,500,000
Advance from other funds 457,900 366,320
Total Liabilities 8,562,412 12,474,039 9,792,578
Equity and Other Credits:
Fund Balances:
Reserved for encumbrances 135,646 115,371 42,262
Reserved for advance to Brea Dam
recreational facilities 933,588 710,545 483,888
Reserved for inventory 350,464 311,094 250,081
Reserved for notes receivable 3,300 1,650 0
Reserved for long-term receivables
from County of Orange 0 0 1,003,853
Unreserved:
Designated for self-insurance 523,926 454,808 0
Designated for subsequent year
expenditures 4,250,206 3,574,631 5,723,205
Designated for emergencies 259,673 229,333 829,309
Designated for unexpected
financial losses 1,200,000 1,200,000 1,200,000
Designated for natural
disasters 1,500,000 1,500,000 1,500,000
Total Equity and Other Credits 9,156,803 8,097,432 11,032,598
Total Liabilities, Equity and Fund Balance $17,719,215 $20,571,471 $20,825,176
Source: City of Fullerton Comprehensive Annual Financial Reports, Fiscal Years 1992-93, 1993-94, 1994-95;the annual financial
reports are available from the City of Fullerton, and investors are encouraged to review the entire reports, including the
notes therein, before making an investment decision with respect to the Bonds.
B-31
Sales Tax Revenues. The revenue from sales tax provided approximately 33.4% of Garden
Grove's total local tax revenues in 1995. The following table presents information concerning the value
of taxable retail sales in Garden Grove since 1990.
CITY OF GARDEN GROVE
Taxable Retail Sales
1990 through 1995
Year Ended 12/31 Taxable Sales
1990 $1,142,952
1991 1,046,437
1992 999,671
1993 992,258
1994 989,806
1995 485,1600l
Source: City of Garden Grove
t0 1995 includes the first two quarters only
Property Tax Revenues
The total assessed valuation of the property within Garden Grove for the fiscal year 1994-95 was
$4,898,034,270. The total appropriations limit adopted by Garden Grove for fiscal year 1995-96 was
$49,603,100 and the actual appropriations for the same period was $25,566,400.
Garden Grove receives funds annually from the State based upon a percentage of property taxes
collected within the County computed on the City's respective assessed valuation, and a statutory system
of annual appropriations. The table below presents the assessed valuation of property within Garden
Grove for the past five fiscal years.
CITY OF GARDEN GROVE
Assessed Valuations
Total Before Total After
Fiscal Year Local Secured Utility Unsecured Redevelopment Redevelopment
1990-91 $4,917,423,755 $ 903,639 $378,301,239 $5,296,628,633 $4,358,807,353
1991-92 5,195,686,427 1,060,151 466,740,874 5,663,487,452 4,660,185,590
1992-93 5,460,472,012 914,265 487,905,340 5,949,291,617 4,954,228,462
1993-94 5,542,753,086 898,911 400,493,309 5,944,145,306 4,888,230,929
1994-95 5,528,471,115 791,702 385,782,186 5,915,045,003 4,898,034,270
1995-96 5,418,100,690 817,397 386,350,553 5,805,268,640 4,834,132,979
Source: County of Orange -Assessed Valuations
B-43
Largest Taxpayers
The following table sets forth the top ten property taxpayers, based on secured assessed
valuation.
CITY OF GARDEN GROVE
Top Ten Secured Property Taxpayers
1995-96
1995-96 % of
Taxpayer Assessed Valuation Total ttl
Gateway Properties $ 50,107,288 0.92%
Fujita Corporation USA 41,255,709 0.76
American Medical International, Inc. 36,382,968 0.67
Swedlow, Inc. 35,672,991 0.66
Alps Electric (USA) Inc. 31,101,521 0.57
Hughes & Lyon Garden Grove Associates 30,184,515 0.56
Stanford Realty Group 17,940,915 0.33
TRA-TEL Centers 14,817,056 0.27
Shih-Yuan Chen 13,667,122 0.25
Sunbelt Stores, Inc. 12,675,231 0.23
Source: California Municipal Statistics, Inc.
io 1995-96 Local Secured Assessed Valuation: $5,418,100,960
Summary of Significant Accounting Policies
Garden Grove's accounting records for general government operations are maintained on the
modified accrual basis, with revenues being recorded when available and measurable, and expenditures
being recorded when the services or goods are received and the fund liabilities are incurred. Accounting
records for Garden Grove's Proprietary Funds are maintained on the accrual basis. Under the accrual
basis, revenues are recognized when earned, and expenses are recognized when incurred.
In developing Garden Grove's accounting system, consideration is given to the adequacy of
internal accounting controls. Internal accounting controls are designed to provide reasonable, but not
absolute, assurance regarding: (1) the safeguarding of assets against loss from unauthorized use or
disposition; and (2) the reliability of financial records for preparing financial statements and maintaining
accountability for assets. The concept for reasonable assurance recognizes that: (1) the cost of control
should not exceed the benefits likely to be derived; and (2) the evaluation of costs and benefits requires
estimates and judgments by management.
All internal control evaluations occur within the above framework. Garden Grove's internal
accounting controls are designed to adequately safeguard assets and provide reasonable assurance of
proper recording of financial transactions.
Budgetary control is maintained at the program level. Encumbrances of estimated purchase
amounts are made prior to the release of purchase orders to vendors. Open encumbrances are reported
as reservations of fund balance at June 30, 1995.
B-45
Invstment Policy
cy, and in
Under
Government Code, Garden Grove emay investrin the followingdtyp s ofance t h Section 53601 of
investments:
the California
Repurchase Agreements
Securities of the U.S. Government and its Agencies
Banks Acceptances
Certificates of Deposit
Commercial Paper
California Local Agency Investment Fund (LAIF)
Passbook Savings Accounts
Negotiable Certificates of Deposit
Although certificates of
ts are
lowed
under the California
ent Code,
le
this type
oinvestment t sbcurr currently not utilized. Garden lG ove's investment policy does not allow the
borrowing of funds to purchase investments on margin through reverse repurchase agreements.
Local Agency Investment Funds (LAIF). The LAIF is a special fund of the California State
Treasury through which local governments may pool investments. Investments in LAIF are highly
ed
in L IFssdn investment portfolio be certain derivative securi to cash within ties in hours
theform of loss
sttructtured notes and asset-
backed securities.LA
securities. LAIF's and Garden Grove's exposure to credit, market or legal risk is not available.
Repurchase Agreements. Throughout the year, Garden Grove utilizes overnight repurchase
agreements
ceedrtwo percentt of City funds. Such of Garden Grove's invest portfolio.agreements are used daily, but
generally do not ex
Description of Leased Premiss
The following real property
and n nimprovements constitute the Leased Premises under Garden
Grove's Site Lease and Lease Agree
he City
ice
eadquarters
PThe arkway inthe City of Gardenen G ove eTh sconsists
a 33,189 square foot facility which houseslocated
the 11301
ving
Acacia Police. Y the City's property
improvement
mt r mentivalueuof $4,509,794 nNo estimate was provided ford ltythe land underlying the facce schedule as ility. an
P
The City of Garden Grove's Site Lease and Lease Agreement will support the City's share of the
bonds which is $3,410,000.00.
Description of Project
The City of Garden Grove intends to use its portion of the Bond proceeds to finance a portion of
its share of the costs of the Orange County countywide 800 MHz communications system.
B-47
CITY OF ORANGE
General
Location and Government. The City of Orange ("Orange") encompasses 23.6 square miles and
is located in the central portion of the County, approximately 32 miles southeast of Los Angeles.
Orange is a general law city and was incorporated on April 6, 1888. Orange operates under the
council-manager form of government. Five City Council members, including the Mayor, are elected at
large. The Mayor is elected to serve a two year term. Council members serve alternating four year
terms. A City Manager is appointed by the City Council and Mayor to administer daily affairs of
Orange and to implement policies established by the City Council. The City Treasurer and City Clerk
are elected at large, serving four year terms. Under the 1995/96 fiscal year budget, Orange employs a
staff of approximately 643 full-time employees and 319 part-time employees under the direction of the
City Manager.
Community Services and Facilities. The City provides a full range of services for its citizens.
These services include police, fire, paramedic, library, recreation and parks, planning and development,
street improvements and lighting, and general administration. The City also operates a water utility and
provides for refuse collection and sanitation. In addition, the City provides aid to its citizens in the form
of residential and commercial rehabilitation loans and economic development programs. The City
contracts with a private non-profit agency to operate its senior citizen center.
Educational services are provided through Orange Unified School District, which is comprised of
24 elementary schools, 7 junior high schools and 4 high schools. There is one community college in the
City and one university. In addition, there are a number of private schools, including: seven parochial
schools, one high school for boys, one Lutheran high school, and three other private schools.
Orange has 4 general hospitals with a combined total bed capacity of 1,313, with an approximate
combined total of 1,500 physicians/surgeons on staff. There are 71 dentists, 16 optometrists and 25
chiropractors. Additionally, there are 53 churches, 3 libraries, 3 daily newspapers, 2 weekly
newspapers, 1 monthly newspaper, 2 TV cable systems, 29 banks, 17 savings and loans, and 15 parks
located within Orange.
Water is supplied by the City of Orange Public Works Department. Sewage treatment and
disposal is provided by the Sanitation District of Orange County and the City of Orange. Southern
California Gas Company supplies natural gas and electric power is provided by Southern California
Edison Company. Telephone service is available through Pacific Bell and major long distance carriers.
Orange has 147 sworn police officers, 43 crossing guards and is licensed for 50 reserve officers.
The Police Department has 30 marked units and 13 motorcycles. Orange also has 119 firemen, 7 fire
stations, 10 pumpers, 3 trucks and 3 rescue ambulances.
Transportation. Orange has access to five main freeways. The freeways include: the Garden
Grove Freeway, the Costa Mesa Freeway, the Orange Freeway, the Riverside Freeway and the Santa
Ana Freeway.
There are five airports that serve Orange. The Los Angeles International Airport is the largest
and is served by every major commercial and cargo airline. The four other airports are the John Wayne
B-49
Retail Sales. The following table summarizes the taxable sales within Orange by category for
the calendar years 1990 through 1994:
CITY OF ORANGE
SUMMARY OF TAXABLE SALES BY CATEGORY
CALENDAR YEARS 1990-1994
Sales (In thousands of dollars) 1990 1991 1992 1993 1994
Apparel Stores $ 58,717 $ 54,126 $ 49,627 $ 45,333 $ 40,759
General Merchandise 168,944 146,467 133,370 128,887 133,777
Drug Stores 18,741 19,030 21,686 20,099 20,476
Food Stores 63,827 74,183 85,601 60,341 60,585
Packaged Liquor Stores 12,909 12,397 12,496 11,482 10,939
Eating and Drinking Places 130,099 128,053 126,873 125,540 124,191
Home Furnishings and Appliances 74,004 63,744 56,938 58,675 66,522
Building Materials and Farm Tools 113,484 102,046 113,121 120,411 136,395
Auto Dealers and Supplies 234,422 193,704 203,740 203,993 213,641
Service Stations 94,431 83,614 85,881 82,607 73,894
Other Retail Stores 222,799 221,867 205,661 206 758 185,940
Subtotal: Retail Stores 1,192,377 1,099,231 1,094,994 1,064,126 1,067,119
All Other Outlets 601,124 598,904 568,637 523,364 521,075
Total: All Outlets $1,793,501 $1,698,135 $1,663,631 $1,587,490 $1,588,194
Source: State Board of Equalization
Population. The table below summarizes population information for Orange, since 1986.
POPULATION SUMMARY
CITY OF ORANGE
1986 through 1995
Year Population
1986 101,639
1987 103,264
1988 104,945
1989 106,358
1990 107,712
1991 112,709
1992 114,489
1993 116,259
1994 117,956
1995 120,078
Source: Population -State of California, Department of Finance
B-51
CITY OF ORANGE
COMBINED STATEMENT OF REVENUES,
EXPENDITURES AND CHANGES IN GENERAL FUND BALANCES
Fiscal Years 1992-93 through 1994-95
1992-93 1993-94 1994-95
Revenues:
Taxes $30,199,080 $27,611,710 $29,703,669
Franchise fees 1,255,263 1,620,570 1,827,260
Licenses and Permits 2,215,862 2,839,884 3,233,308
Revenues from use of money 772,761 2,376,724 1,933,970
Revenues from other agencies 4,486,390 4,655,114 4,543,501
Charges for service and fees 4,453,244 5,306,914 5,236,119
Fines and forfeitures 815,594 492,996 972,640
Other revenues 1.799,785 1,005,884 1,730,423
Total Revenues $45,997,979 $45,909,796 $49,180,890
Expenditures:
Current:
General government $ 6,563,557 $ 5,396,728 $ 5,511,725
Public safety 29,856,965 28,815,180 29,658,284
Public works 3,641,307 2,291,678 3,637,887
Community development 1,924,726 1,639,978 1,686,909
Parks and library 7,890,525 6,581,188 6,522,391
Capital outlay 199,346 156,309 166,056
Total Expenditures 50,076,426 44,881,061 47,183,252
Excess of Revenues Over
Expenditures (4,078,447) 1,028,735 1,997,638
Other Financing Sources (Uses):
Operating transfers in 473,000 6,758,473 0
Operating transfers (out) (5,696) 0 0
Loss on investment 0 0 (874,794)
Forgiveness of debt (1,250,000) 0 0
Total Other Financing Sources (Uses) (782,696) 6,758,473 (874,794)
Excess of Revenues and
Other Financing Sources Over Expenditures
and Other Financing Uses (4,861,143) 7,787,208 1,122,844
Fund Balance, beginning 13,497,662 8,636,519 16,423,727
Fund Balance, ending $ 8,636,519 $16,423,727 $17,546,571
Source: City of Orange Comprehensive Annual Financial Reports, Fiscal Years 1992-93, 1993-94 and 1994-95; the annual
financial reports are available from the City of Orange, and investors are encouraged to review the entire reports,
including the notes therein, before making an investment decision with respect to the Bonds.
B-53
The table below presents the property tax valuation and collection experience for Orange for
the last five fiscal years.
CITY OF ORANGE
Property Tax Levies and Collections
Last Five Fiscal Years
Amount Percentage
Fiscal Secured Delinquent Delinquent
Year Tax Charge June 30 June 30
1990-91 $11,386,918 $520,686 4.6%
1991-92 11,669,651 558,018 4.8
1992-93 10,837,030 534,302 4.9
1993-94 9,569,692 344,620 3.6
1994-95 9,596,960 336,581 3.5
Source: City of Orange
Largest Taxpayers
The following table sets forth the top ten property taxpayers, based on secured assessed
valuation.
CITY OF ORANGE
Top Ten Secured Property Taxpayers
1995-96
1995-96 % of
Taxpayer Assessed Valuation Total 0)
Metropolitan Life Insurance Co. $242,340,585 3.46%
ZML-Orange Limited Partnership 49,021,918 0.70
Center Associates Joint Venture 43,665,870 0.62
Connecticut General Life Insurance Co. 43,099,000 0.62
ZML-Town& Country Limited Partnership 39,000,000 0.56
Mutual Life Insurance Company of New York 32,504,572 0.46
Ronald M. Bonaguidi 27,201,000 0.39
Hilton Suites, Inc. 26,440,491 0.38
Catellus Development Corp. 25,890,193 0.37
Orange Mall Development Associates 24,816,020 0.35
Source: California Municipal Statistics, Inc.
1995-96 Local Secured Assessed Valuation: $7,005,117,583
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Direct and Overlapping Bonded Debt
The following table contains information on Orange's direct and overlapping bonded
indebtedness as of June 30, 1996.
CITY OF ORANGE
Direct and Overlapping Bonded Debt
1995-96 Assessed Valuation: $6,802,453,320 (after deducting $772,384,815 redevelopment incremental
valuation)
OVERLAPPING TAX AND ASSESSMENT DEBT: % Applicable Debt 6/30/96
Orange County 4.281% $ 16,910
Metropolitan Water District .846 5,117,412
City of Orange 1915 Act Bonds 100.000 20,197,750
East Orange County Water District 19.975 434,456
Irvine Ranch Water District, Improvement District No. 105 13.074 6,230,617
Irvine Ranch Water District, Improvement District No. 250 13.116 7,959,847
Orange Unified School District Community Facilities District No. 88-1 100.000 5,190,000
City of Orange 100.000 0 (1)
TOTAL OVERLAPPING TAX AND ASSESSMENT DEBT $45,146,992
DIRECT AND OVERLAPPING LEASE OBLIGATION DEBT:
Orange County General Fund Obligations 4.281% $23,953,651
Orange County Pension Obligations 4.281 13,344,091
Orange County Teeter Plan Obligations 4.281 6,635,550
Orange County Transit Authority 4.281 903,291
Orange County Water District Certificates of Participation 6.792 13,995,256
Municipal Water District of Orange County Water Facilities Corporation 6.502 5,367,726
Rancho Santiago Community College District Certificates of Participation 27.390 165,710
Saddleback Community College District Certificates of Participation .010 2,707
Orange Unified School District Certificates of Participation 56.877 7,132,376
City of Orange Certificates of Participation 100.000 13,360,000
Irvine Ranch Water District Certificates of Participation 1.562 937,200
Orange County Sanitation District No. 2 Certificates of Participation 16.970 22,796,642
Orange County Sanitation District No. 7 Certificates of Participation 9.588 2,682,653
Other County Sanitation Districts Certificates of Participation Various 59,137
TOTAL GROSS DIRECT AND OVERLAPPING LEASE OBLIGATION DEBT $111,335,990
Less: Orange County Transit Authority (80% self-supporting) 722,633
Orange County Water District Certificates of Participation (100% self-supporting) 13,995,256
MWDOC Water Facilities Corporation(100% self-supporting) 5,367,726
TOTAL NET DIRECT AND OVERLAPPING LEASE OBLIGATION DEBT $ 91,250,375
GROSS COMBINED TOTAL DEBT $156,482,982(2)
NET COMBINED TOTAL DEBT $136,397,367
(1) Excludes share of issue to be sold.
(2) Excludes tax and revenue anticipation notes,revenue,mortgage revenue and tax allocation bonds and non-bonded
capital lease obligations.
Ratios to Assessed Valuation:
Combined Direct Debt($13,360,000) 0.20%
Total Overlapping Tax and Assessment Debt 0.66%
Gross Combined Total Debt 2.30%
Net Combined Total Debt 2.01%
STATE SCHOOL BUILDING AID REPAYABLE AS OF 6/30/95: $0
Source: California Municipal Statistics,Inc.
B-57
CITY OF SANTA ANA
General
Location and Government. The City of Santa Ana ("Santa Ana"), county seat of Orange County
and one of the oldest communities in Southern California, is located 33 miles southeast of Los Angeles, 20
miles east of the Ports of Los Angeles and Long Beach, 10 miles inland from the Pacific Ocean, and 90
miles north of San Diego. It encompasses an area of approximately 27 square miles and lies on generally
level land at an elevation of 135 feet above sea level.
Santa Ana was established by William H. Spurgeon in 1869. It was incorporated on June 1, 1886
and reorganized under a City Charter in 1888. Santa Ana has served as the county seat since the formation
of Orange County in 1889.
Numerous government offices have taken advantage of Santa Ana's central location and position as
county seat. City, county, state and federal offices are conveniently located in the multi-government Civic
Center in the heart of Santa Ana. A strong industrial base undergirds the local economy.
In 1952, the voters approved a charter which established a council-manager form of government.
The six-member City Council and Mayor are elected at large. The current members of the City Council
and the expiration of their terms in office are summarized below:
CITY OF SANTA ANA
City Council
Council Member Term Expiration
Miguel A. Pulido, Mayor 1996
Robert L. Richardson, Mayor Pro Tem 1998
Tony Espinoza, Councilmember 1998
Thomas E. Lutz, Councilmember 1996
Patricia A. McGuigan, Councilmember 1998
Lisa Mills, Councilmember 1996
Ted R. Moreno, Councilmember 1996
The City Council appoints the City Manager, who acts in the capacity of chief executive officer, and
this post is held by David N. Ream. Santa Ana's full time employees numbered 1,595 as of March 31,
1996, of which 606 were assigned to the Police Department and 282 to the Fire Department. The Fire
Department operates 10 stations and Santa Ana has a class 1 fire insurance rating.
Community Services and Facilities. Santa Ana is served by various school districts. Approximately
75 percent of the city is in the Santa Ana Unified School District and approximately 25 percent is in the
Garden Grove Unified School District. Portions are also located in the Orange Unified School District,
Tustin Elementary and Tustin High School Districts. There are 30 public elementary schools,7 intermediate
and junior high schools, 4 high schools, 2 continuation high schools, and 1 special school for the
handicapped.
Rancho Santiago Community College, Santa Ana Campus, established in Santa Ana in 1915, offers
two-year academic programs leading to the Associate in Arts degree and a variety of technical training
B-59
west circulation along the northern city limits, linking the San Diego, Santa Ana and Newport Freeways.
The Newport Freeway skirts the eastern city limits, providing access to the Newport Beach area.
Rail freight service is provided by the Santa Fe Railway and the Southern Pacific Company. Amtrak
provides passenger service to San Diego to the south and Los Angeles and all other points to the north and
east. Overland bus service is provided by Trailways Bus System and Greyhound Bus Lines. Southern
California Rapid Transit District offers bus transportation throughout the four county Southern California
Metropolitan area. Orange County Transit District provides bus service between Santa Ana and other
Orange County cities. Most major truck lines serve Santa Ana.
Orange County Airport is located two miles south of Santa Ana. Los Angeles International Airport
is approximately 30 miles northeast of Santa Ana adjacent to the San Diego Freeway.
Santa Ana is within 20 miles of the Ports of Los Angeles and Long Beach, both readily accessible
via freeway.
Utilities. Water service to the community is provided by the City of Santa Ana's Water Enterprise.
The approximately 46,000 customer connections rely on local groundwater for 75% of the water supply and
25% from the Metropolitan Water District. Santa Ana owns and operates a total of 17 wells located within
the city limits with a total capacity of 64.3 million gallons per day. The city maintains 444 miles of water
mains, 8 reservoirs, and 27 booster pumps. The reservoirs have a combined capacity of 45 million gallons.
Electric service in Santa Ana is provided by Southern California Edison. Natural gas service is
provided by the Southern California Gas Company. Telephone service is provided by Pacific Bell.
Economic Growth and Development
Housing, Commercial and Industrial Development. The following table summarizes the building
permit activity in the City from 1991 through 1995.
B-61
Employment. Santa Ana is part of the Anaheim-Santa Ana Metropolitan Statistical Area. Set forth
below are two tables presenting certain information relating to employment and unemployment in the
Anaheim-Santa Ana Metropolitan Statistical Area.
ORANGE COUNTY METROPOLITAN STATISTICAL AREA
Estimated Wage and Salary Employment
Civilian Labor Force, Employment, and Unemploymentt1l
1990-1994 Annual Averages
1990 1991 1992 1993 1994
Total, All Industries $1,178,900 $1,151,100 $1,133,200 $1,124,000 $1,133,900
Total Farmt2> 6,600 7,400 7,200 6,700 7,500
Total Nonfarm 1,172,400 1,143,700 1,126,000 1,117,300 1,126,400
Goods Producing 302,300 282,000 267,500 253,600 253,900
Mining 1,200 1,300 1,100 900 1,000
Constructiont3) 57,200 51,100 47,700 43,700 46,900
Manufacturing 244,000 229,600 218,800 209,000 206,000
Durable Goods 174,700 160,100 150,800 139,400 136,500
Nondurable Goods 69,300 69,500 68,000 69,700 69,500
Service Producing 870,000 861,700 858,500 863,700 872,500
Transportation & Public Util. 36,400 36,500 35,400 37,000 38,800
Transportation 20,100 19,600 18,900 20,300 21,800
Communications & Public Util. 16,300 16,900 16,500 16,700 17,000
Trade 299,000 283,200 280,700 275,600 281,000
Wholesale Trade 81,400 79,300 79,200 75,600 7,800
Retail Trade 217,600 203,900 201,500 200,000 202,200
Finance, Insurance & Real Estate 96,000 94,200 94,400 92,300 94,300
Services 312,600 319,100 318,300 330,900 329,500
Govemmentt4> 126,100 128,700 127,400 127,900 128,900
Federal Government 15,900 15,600 15,300 15,700 15,500
State & Local Government 110,300 113,100 112,100 112,200 113,400
Unemployment
Labor Force 1,343,900 1,307,000 1,316,800 1,315,600 1,342,100
Employment 1,295,400 1,238,000 1,229,600 1,227,300 1,264,000
Unemployment 45,500 68,200 87,200 88,300 77,900
Unemployment Rate 3.6% 5.2% 6.6% 6.7% 5.8%
Source: California Employment Development Department
(I) Does not include proprietors,the self-employed,unpaid volunteers or family works,domestic workers in households,and persons
involved in labor management trade disputes. Employment reported by place of work.
(2) Excludes fanners and unpaid family workers.
to Includes employees of construction contractors and operative builders;does not include force account or government construction
workers.
(4) Includes all civilian employees of federal,state and local government regardless of the activity in which the employee is engaged.
Note: Detail may not add to totals due to independent rounding.
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Retail Sales. The table below provides a summary of taxable sales transactions in Santa Ana from
1990 through 1995. Information with respect to 1995 sales transactions is not expected until mid-1996, and
is therefore estimated.
CITY OF SANTA ANA
Taxable Retail Sales Data
(000's omitted)
1990 through 1995
1990 1991 1992 1993 1994 19950)
Apparel Stores $141,880 $145,726 $144,337 $136,629 $137,011 $ 59,977
General Merchandise Stores 194,766 197,807 204,435 208,110 209,049 94,223
Drug Stores 34,355 34,640 38,655 35,825 32,816 13,142
Food Stores 136,983 146,631 149,968 118,999 109,082 55,602
Packaged Liquor Stores 19,339 18,580 17,017 14,231 12,652 5,939
Eating and Drinking Places 201,010 190,687 180,866 185,998 186,443 95,727
Home Furnishings and Appliances 108,257 102,555 93,478 101,304 110,000 52,843
Building Materials and Farm Implements 149,947 151,823 136,320 155,532 164,008 85,700
Auto Dealers and Auto Supplies 201,435 187,366 185,234 178,948 199,686 106,074
Service Stations 135,285 126,172 134,400 123,612 121,419 62,027
Other Retail Stores 283,699 267,714 285,254 285,208 285,258 132,502
Total Retail Outlets 1,606,956 1,569,701 1569,964 1,544,396 1,567,424 763,756
All Other Outlets 912,306 925,141 995,863 1,018,044 1,073,333 574,531
Total All Outlets $2,519,262 $2,494,842 $2,565,827 $2,562,440 $2,640,757 $1,338,287
Source:State Board of Equalization
'First two quarters of data through June 30, 1995
Population. Santa Ana's 1995 population was estimated at 311,491 by the State Department of Finance.
This is a 6% increase over the 1990 Census count. Following are U.S. Census and State Department of Finance
data for Santa Ana for the last ten years:
CITY OF SANTA ANA
Population Summary
Year Population
1986 226,400
1987 227,400
1988 231,460
1989 237,348
1990 292,077
1991 300,256
1992 304,900
1993 308,379
1994 310,417
1995 311,491
Source: U.S. Census and State Department of Finance
B-65
CITY OF SANTA ANA
GENERAL FUND BALANCE SHEET
Fiscal Years 1992-93 through 1994-95
1992-93 1993-94 1994-95
Assets
Cash and investments $12,279,233 $ 1,154,904 0
Cash and investments with fiscal agents 0 82,239,202 $40,112,577
Receivables (net of allowance for uncollectibles):
Taxes 4,354,018 2,824,718 3,776,338
Accrued revenues 2,791,515 4,322,295 4,207,477
Due from other funds 2,448,991 0 0
Deposits 0 30.000 30,000
Total assets $21,873,757 $90,571,119 $48,126,392
Liabilities, Equity and Other Credits
Liabilities:
Accounts payable $4,863,462 $ 968,689 $ 801,181
Due to other funds 5,653,548 462,453 2,456,501
Deferred revenues 2,328,101 1,068,030 1,636,468
Deposits 0 30.000 30.000
Total Liabilities 12,845,111 2,529.172 4.924,150
Fund equity:
Fund balance:
Reserved:
For encumbrances and continuing appropriation 1,997,745 84,856,588 38,355,694
For non-current investment 0 0 13,341,121
Unreserved:
Designated for authorized projects 7,030,901 3,185,359 0
Undesignated 0 0 (8,494,573)
Total fund equity 9,028,646 88,041,947 43,202,242
Total Liabilities, Equity and Other Credits $21,873,757 $90,571,119 $48,126,392
Source: City of Santa Ana, Comprehensive Annual Financial Reports, Fiscal Years 1992-93, 1993-94 and 1994-95; the annual financial
reports are available from Santa Ana and investors are encouraged to review the entire reports, including the notes therein,
before making an investment decision with respect to the Bonds.
B-67
Sales Tax Revenues. The revenue from sales tax provided approximately 40.49% of Santa Ana's total
local tax revenues in Fiscal Year Ended June 30, 1995. The following tables present information concerning the
value of taxable retail sales and sales tax revenues in Santa Ana since 1990.
CITY OF SANTA ANA
Taxable Retail Sales (in thousands of dollars)
1990-1995
Year Ended 12/31 Taxable Sales
1990 $2,519,262
1991 2,494,842
1992 2,565,827
1993 2,562,440
1994 2,640,757
1995 1,338,287 l'l
Source: City of Santa Ana, State Board of Equalization
to First two quarters of data through June 30, 1995.
CITY OF SANTA ANA
Sales Tax Revenues
For the Fiscal Years Ended
June 30, 1990 through June 30, 1996
1989/90 $ 30,301,641
1990/91 28,625,927
1991/92 28,417,147
1992/93 29,272,161
1993/94 30,281,627
1994/95 31,016,779
1995/96t1i 32,092,345
Source: City of Santa Ana
Projected
Property Tax Revenues
The total assessed valuation of the property within Santa Ana for the fiscal year 1994-95 was $11.031
billion. The total appropriations limit adopted by Santa Ana's fiscal year 1994-95 was $362.16 million and the
actual appropriations subject to the limit for the same period was $73.9 million.
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Largest Taxpayers
The following table sets forth the top ten property taxpayers, based on secured assessed valuation.
CITY OF SANTA ANA
Top Ten Secured Property Taxpayers
1995-96
1995-96 % of
Taxpayer Assessed Valuation Total t'I
Santa Ana Venture $148,677,183 1.56%
Freedom Newspapers, Inc. 85,641,441 0.90
McDonnell Douglas Realty Co. 67,788,017 0.71
International Telephone & Telegraph 63,437,873 0.67
GT Partners 62,313,448 0.65
Tobishima Development Co. 55,913,800 0.59
Catellus Development Corp. 52,252,820 0.55
Birtcher Xerox Partners 45,684,559 0.48
Three Hutton Centre LP 41,127,426 0.43
State Compensation Insurance Fund 40,250,197 0.42
Source: California Municipal Statistics, Inc.
1995-96 Local Secured Assessed Valuation: $9,527,143,061
Sununary of Significant Accounting Policies
Santa Ana's financial statements have been prepared in conformity with generally accepted accounting
principles (GAAP) as applied to government units. The Governmental Accounting Standards Board (GASB) is
the accepted standard-setting body for establishing governmental accounting and financial reporting principles.
City Budget
The following procedures are utilized by Santa Ana in establishing the budgetary data reflected in its
audited financial statements:
General Budget Policies, Encumbrances, and Budgetary Basis of Accounting
Santa Ma and its component units' fiscal year begins on July 1 of each year and ends the thirtieth day
of June the following year. On or before the fifteenth of June of each year, the City Manager submits to the City
Council a proposed budget for the next ensuing fiscal year based on a detailed financial plan prepared by the
heads of the various offices, agencies and departments of Santa Ana and its component units. Upon receipt of
the proposed budget, the Council may make modifications with the affirmative vote of at least a majority of its
members. Before adoption of the budget, the Council holds a public hearing wherein the public is given an
opportunity to be heard, after which the Council may make any revisions deemed advisable. On or before the
thirty-first day of July, the City Council adopts the budget as amended by the affirmative vote of at least a
majority of its members. Upon final adoption, the budget is in effect for the ensuing fiscal year and becomes the
B-71
Direct and Overlapping Bonded Debt
The following table contains information on Santa Ana's direct and overlapping bonded indebtedness as
of June 30, 1996.
CITY OF SANTA ANA
Direct and Overlapping Bonded Debt
1995-96 Assessed Valuation: $8,395,442,668 (after deducting $2,217,196,507 redevelopment incremental
valuation)
OVERLAPPING TAX AND ASSESSMENT DEBT: % Applicable Debt 6/30/96
Orange County 5.283% $ 20,868
Metropolitan Water District 1.041 6,296,957
East Orange County Water District 0.229 4,981
Santa Ana Unified School District 59.533 297,665
City of Santa Ana 1915 Act Bonds 100.000 730,000
TOTAL OVERLAPPING TAX AND ASSESSMENT DEBT $7,350,471
DIRECT AND OVERLAPPING LEASE OBLIGATION DEBT:
Orange County General Fund Obligations 5.283% $29,560,181
Orange County Pension Obligations 5.283 16,467,375
Orange County Teeter Plan Obligations 5.283 8,188,650
Orange County Transit Authority 5.283 1,114,713
Orange County Water District Certificates of Participation 8.154 16,801,725
Community College District Certificates of Participation 0.299-30.540 578,133
Orange Unified School District Certificates of Participation 2.603 326,416
Santa Ana Unified School District Certificates of Participation 59.533 11,787,534
City of Santa Ana Lease Obligations 100.000 107,399,439(1)
City of Santa Ana Certificates of Participation 100.000 26,883,885
Irvine Ranch Water District Certificates of Participation 1.046 627,600
Orange County Sanitation District No. 1 Certificates of Participation 96.839 .49,337,544
Orange County Sanitation District No. 2 Certificates of Participation 4.136 5,556,094
Orange County Sanitation District No. 3 Certificates of Participation 0.043 ' 54,558
Orange County Sanitation District No. 7 Certificates of Participation 11.169 3,125.006
TOTAL GROSS DIRECT AND OVERLAPPING LEASE OBLIGATION DEBT $277,808,853
Less: Orange County Transit Authority (80% self-supporting) 891,770
Orange County Water District Certificates of Participation (100% self-supporting) 16,801,725
TOTAL NET DIRECT AND OVERLAPPING LEASE OBLIGATION DEBT $260,115,358
GROSS COMBINED TOTAL DEBT $285,159,324(2)
NET COMBINED TOTAL DEBT $267,465,829
(1) Excludes share of issue to be sold.
(2) Excludes tax and revenue anticipation notes, revenue,mortgage revenue and tax allocation bonds and non-bonded capital
lease obligations.
Ratios to Assessed Valuation:
Combined Direct Debt($134,283,324) 1.60%
Total Overlapping Tax and Assessment Debt 0.09%
Gross Combined Total Debt 3.40%
Net Combined Total Debt 3.19%
STATE SCHOOL BUILDING AID REPAYABLE AS OF 6/30/95: $0
Source: California Municipal Statistics,Inc.
B-73
Description of Project
The City of Santa Ana intends to use its portion of the Bond proceeds to finance a portion of its share
of the costs of the Orange County countywide 800 MHz communications system.
B-75
CITY OF SEAL BEACH
General
Location and Government. The City of Seal Beach ("Seal Beach") encompasses 11.97 square miles and
is located on the coast of northwestern Orange County. It is about 27 miles southeast of Los Angeles and seven
miles from the Port of Long Beach. Neighboring communities include Huntington Beach, Westminster, Los
Alamitos and Long Beach.
Seal Beach, incorporated in 1917, has operated under a City Charter since 1964. The City of Seal Beach
is governed and administered under a council-manager form of government. The five member City Council is
elected by district to serve four-year alternating terms. The Mayor and Mayor Pro Tempore are elected by the
Council from among its members for one-year terms. The City Clerk is also elected. The City Attorney and City
Manager are appointed by the City Council. Under the 1995/96 budget fiscal year budget, Seal Beach employs
a staff of approximately 103 full-time employees, 40 part-time employees, and 40 seasonal part-time under the
direction of the City Manager.
Community Services and Facilities. Seal Beach was originally established because of its attractiveness
as a seaside resort and recreation area. While the character of Seal Beach has undergone change during the last
decade from resort community to a stable residential community, recreation is still an important factor in the local
economy. Seal Beach estimates more than 3,000,000 visitors are attracted to the one mile City-owned ocean
recreational area each year. For the convenience and accommodation of these visitors, Seal Beach maintains a
1,860 foot municipal pier, and a beach park with picnic facilities. Swimming and surfboarding are popular sports
and are conducted under the supervision of municipal lifeguards.
At the southern end of Seal Beach, the Orange County Harbor District has developed the Aquatic Regional
Park, which provides an eight lane landing ramp capable of accommodating up to 500 boats per day, parking for
200 cars and boat trailers, and overnight space for 500 house trailers. The aquatic park provides public beach
and picnic facilities for 2,800 people, public fishing floats, and boat rentals, fueling docks, and berths for
recreational boating.
Education. The City of Seal Beach is served by two high schools and one elementary school district.
Most of Seal Beach is also within the Coast Community College District. The district operates three colleges
within Orange County. The 122-acre Huntington Beach Campus (Golden West College), which began classes
in 1966, is approximately eight miles from Seal Beach.
Orange County has five community colleges and eight institutions granting degrees for four-year or
graduate courses of study. The schools are: University of California at Irvine; California State University,
Fullerton; Chapman College, Orange; Southern California College, Costa Mesa; West Coast University, Orange;
Western State University, Santa Ana; and Pepperdine University, Santa Ana. A number of colleges and
universities are also located in the adjacent area of southern Los Angeles County, including the California State
University at Long Beach.
Police and Fire Protection. The City of Seal Beach Police Department consists of 33 sworn, 12 non-
sworn, 20 reserve officers, and 30 volunteers. It provides a full range of police services for a residential
population of 26,800. Besides the traditional efforts of the Police Department to respond to calls for service to
enforce laws, investigate traffic and crime-related issues, the department oversees the privatization contract for
the City Jail. The City has contracted with a private contractor to provide the day-to-day operation of the
detention facility. The facility has 30 beds available for low risk, work furlough offenders and has contracts with
B-77
General Fund
The following tables summarize information taken from Seal Beach's audited financial statements
regarding its General Fund Balance Sheet and Statement of Revenues, Expenditures and Changes in General Fund
Balances for the past three (3) fiscal years:
CITY OF SEAL BEACH
GENERAL FUND BALANCE SHEET
Years Ending 1992-93 through 1994-95
Assets 1992-93 1993-94 1994-95
Cash and investments $ 186,611 $ 319,698 $2,897,277
Cash with fiscal agent 0 2,061,828 0
Receivables:
Taxes 338,628 518,755 558,674
Grants 0 41,946 13,660
Accrued revenue 549,467 301,047 396,888
Due from other funds 3,887 0 0
Due from Redevelopment Agency funds 215,000 317,481 327,822
Due from PERS 194,432 153,128
Restricted assets:'
276,103
Cash and investments 0 0 0
Deferred compensation 0 0 0
Amount available in debt service fund 0 0 0
Amount to be provided for payment of long-term debt 0 0 0
Total Assets and Other Debits $1,488,025 $3,713,883 $4,470,424
Liabilities and Fund Equity
Liabilities:
Accounts payable $ 252,326 $ 115,140 $ 269,470
Accrued liabilities 211,408 197753 390,563
Deposits 00, 0
Due to other funds 575,872 0 0
Deferred revenue 409,432 381,028 241,574
Payable from restricted assets:
Accrued revenue bond interest 0 0 0
Deferred compensation 0 0 0
Tax Revenue Anticipation Notes 0 2,061828 2,100,000
Other long-term liabilities 00, 0
Total Liabilities 1,449,038 2,755,749 3,001,607
Fund Equity:
Retained earnings:
Reserved 0 0 0
Unreserved 0 0 0
Fund balance:
Reserved 0 227,900 276,103
Unreserved-designated 38,987 730,234 1,192,714
Total Fund Equity 38 987 958,134 1,468,817
Total Liabilities and Fund Equity $1,488,025 $3,713,883 $4,470,424
Source: City of Seal Beach Comprehensive Annual Financial Reports,Fiscal Years 1992-93, 1993-94 and 1994-95;the annual financial reports are
available from Seal Beach and investors are encouraged to review the entire reports, including the notes therein, before making an investment
decision with respect to the Bonds.
B-79
Sales Tax Revenues. The revenue from sales tax provided approximately 11% of the City's total local
tax revenues in 1995. The following table presents information concerning taxable retail sales in Seal Beach since
1989.
CITY OF SEAL BEACH
Trade Outlets and Taxable Sales
1989-1993
Year Outlets Taxable Sales
1989 583 $103,231
1990 595 111,749
1991 557 113,874
1992 589 115,877
1993 599 113,485
Source: This is the latest information available at the City
Property Tax Revenues.
The total assessed valuation of the property within the City of Seal Beach for the fiscal year 1994-95
was $1,865,791,748. The total appropriations limit adopted by the City for the fiscal year 1994-95 was
$10,602,624 and the actual appropriations subject to the limitation for the same period was $3,572,262.
CITY OF SEAL BEACH
Assessed Valuations
1990-91 through 1994-95
Fiscal Local Total Before Total After
Year Secured Utility Unsecured RDA Increment RDA Increment
1990-91 $1,599,211,470 $1,483,720 $61,136,941 $1,741,323,418 $1,661,832,131
1991-92 1,690,798,436 1,679,740 84,760,065 1,864,432,281 1,777,238,241
1992-93 1,750,478,335 1,679,740 87,872,367 1,929,723,320 1,840,030,442
1993-94 1,803,474,767 1,679,740 69,607,452 1,963,204,372 1,874,761,959
1994-95 1,804,388,399 1,679,740 59,723,609 1,955,464,745 1,865,791,748
Source: City of Seal Beach
B-81
City Budget
The City follows these procedures in establishing the budgetary data reflected in the general purpose
financial statements:
1. In May, the City Manager submits to City Counsel a proposed budget for the fiscal year
commencing July 1. The operating budget includes proposed expenditures for the means of financing them.
2. Public Hearings are conducted at City Council meetings to obtain taxpayer comments.
3. During the latter part of June or early July, the budget is adopted by Council action.
4. The City Manager is authorized to transfer funds appropriated with respect to those
classifications designated as other services, materials and supplies, within the same department. The City
Manager may transfer appropriated funds from any classification within other expenditures categories to the
capital outlay classification within the same department only, however, any revisions that alter the total
expenditures of any department must be approved by the City Council. Budget figures used in the financial
statements are the final adjusted amounts.
5. Formal budgetary integration is employed as a management control device during the year
for the governmental funds.
B-83
Investment Policy
Seal Beach annually adopts an Investment Policy. The Policy currently requires the investment
report on a monthly basis, which is more restrictive that the State quarterly requirement.
Description of Leased Premises
The property involved is the site of the Police Headquarters located at 911 Seal Beach Boulevard.
The building is approximately 22,000 square feet of masonry noncombustible material. It houses all police
activities within the City and a jail facility with a holding capacity of 32 prisoners.
The police station was built in 1978 at a cost of$1,325,000. It currently houses 33 sworn and 12
non-sworn employees, 20 reserve officers and 30 volunteers.
Based upon an appraisal dated September 14, 1994, conducted by Valuation Resource Management,
Inc., the station has been valued at $2,303,105.
The City of Seal Beach's Site Lease and Lease Agreement will support the City's share of the Bonds
which is $1,265,000.00.
Description of Project
The City of Seal Beach intends to use its portion of the Bond proceeds to (1) finance a portion of
its share of the costs of the Orange County countywide 800 MHz communications system, and (2) finance
the refurbishment of beach restrooms located under the Seal Beach Pier and provide alternative parking
facilities, including parking meters, automation and the beautification of the two beach lots.
B-85
CITY OF STANTON
General
Location and Government. The City of Stanton ("Stanton")was incorporated as a general law city
in May, 1956. It consists of 3.1 square miles in Central Orange County, California. Nearby cities include
Anaheim, Buena Park, Garden Grove, Cypress and La Palma. Stanton is approximately 25 miles southeast
of Los Angeles and 9 miles northwest of Santa Ana.
Stanton is a general law city and is operated under the Council-Manager form of government. The
City Council is comprised of five members elected at large on a staggered basis for a term of four years.
The City Manager is appointed by the City Council and has the responsibility of administering municipal
services in accordance with the policies and annual budget adopted by the City Council.
Community Services and Facilities. Stanton's Cultural Arts and Recreation Center is the focal point
of services provided to the community. Many events are coordinated from this site including cultural,
theatrical, recreational and senior activities. Other recreational facilities operated by Stanton include six
parks and public tennis courts.
Stanton residents are served by the Savanna Elementary School District, the Magnolia Elementary
School District, the Garden Grove Unified School District and the Anaheim Union High School District.
Additional educational services are provided at Cypress College, a junior college located in the adjacent city
of Cypress.
The library is a part of the Orange County Public Library System. Other attractions within the area
include Disneyland, Knott's Berry Farm, Adventure City Children's Theme Park, Anaheim Stadium and the
Orange County Performing Arts Center. Regional recreational areas include beach resorts, 10 miles to the
south, and mountain resorts, 70 miles to the east.
Stanton provides building inspection, planning, code enforcement, parking control, public facility
and street maintenance and recreational services. Street sweeping and trash disposal are provided with
contracted services.
Police and Fire Protection. Police and fire services are provided by contracts with the Orange
County Sheriffs Department and the Orange County Fire Authority, respectively.
Transportation. Stanton enjoys easy freeway access, located between four freeways. The Garden
Grove Freeway, State Route 22, runs east-west and passes just south of Stanton. The San Gabriel River
Freeway, Interstate 605, runs north-south and is to the west of Stanton. The Santa Ma Freeway, Interstate
5, runs in a northwest-southeast course to the east. The Artesia Freeway, State Route 91, runs east-west
about two and a half miles north. State Highway 39 (Beach Boulevard) runs through the center of Stanton.
Air cargo and passenger flight services are provided at Los Angeles International Airport, 30 miles
west, which is served by all major airlines; Long Beach Airport, 10 miles west; and John Wayne Airport
in Orange County, 15 miles southeast. These airports all provide regional service. Fullerton Municipal
Airport, 7 miles north, also provides freight service as well as commuter service to Los Angeles
International Airport.
B-87
Employment. The principal employers within Stanton, their product or service and the number
of employees are shown in the table below.
CITY OF STANTON
PRINCIPAL EMPLOYERS
(June 30, 1995)
Company Product or Service Employees
CR&R, Inc. Waste Disposal 350
Boyd's Automotive, Industrial 198
Smith's Food & Drugs Centers, Inc. Grocery Store 180
Food 4 Less Grocery Store 175
Sam's Club Discount Retailer 167
Robinson Prezioso, Inc. General Building Contractor 155
HomeBase Lumber, Building Materials 128
All Metals Processing Fabricated Metal Products 125
Detector Systems, Inc. Electrical Equipment 82
Adventure City Amusement Park 80
Source: City of Stanton, Administrative Services Department, Business Licenses
B-89
Population. The table below summarizes population information for Stanton since 1986.
POPULATION SUMMARY
CITY OF STANTON
1986 through 1995
Year Population
1986 27,679
1987 28,119
1988 28,284
1989 28,353
1990 30,491
1991 30,818
1992 31,367
1993 31,978
1994 32,229
1995 32,404
Source: State of California, Department of Finance.
B-91
CITY OF STANTON
COMBINED STATEMENT OF REVENUES,
EXPENDITURES AND CHANGES IN GENERAL FUND BALANCES
Fiscal Years 1992-93 through 1994-95
1992-93 1993-94 1994-95
Revenues:
Taxes and assessments $4,539,827 $5,901,156 $5,845,286
Licenses and permits 205,149 172,165 260,674
Intergovernmental 1,158,087 1,163,477 1,222,680
Charges for services 75,528 67,500 58,024
Fines and forfeitures 171,551 165,849 205,793
Interest income 135,162 147,035 203,602
Rental income 695,993 810,240 928,732
Contribution from developers 0 0 625,000
Miscellaneous 96,789 216165 103.701
Total Revenues 7,078,086 8,643.587 9,453,492
Expenditures:
Current:
General government 1,028,497 1,080,318 1,300,139
Public safety 6,011,205 6,185,134 6,611,461
Urban Development 279,699 236,019 292,816
Health and welfare 329,478 112,152 0
Highways and streets 8,950 320,411 293,900
Culture and recreation 144.753 150.559 182.131
Total Expenditures 7,802,582 8,084,593 8,680,447
Excess of Revenues
Over Expenditures (724,496) 558,994 773,045
Other Financing Sources (Uses):
Operating transfers in 742,336 672,496 685,000
Operating transfers out (71,263) (72,990) (75,000)
Total Other Financing Sources (Uses) 671.073 599.506 610.000
Excess of Revenues and
Other Sources Over
Expenditures and Other Uses (53,423) 1,158,500 1,383,045
Fund Balance, Beginning, Restated 2,205,765 2,548,075 3,706,575
Equity Transfer 0 0 (900,000)
Fund Balance, Ending') $2,152,342 $3,706,575 $4,189,620
Source: City of Stanton Comprehensive Annual Financial Reports, Fiscal Years 1992-93, 1993-94 and 1994-95; the annual
financial reports are available from the City of Stanton, and investors are encouraged to review the entire reports,
including the notes therein, before making an investment decision with respect to the Bonds.
") Includes a restatement of the July 1, 1994 fund balance due to an accounting principle change pertaining to Governmental Accounting
Standards Board (GASB) Statement No. 22-Taxpayer Assessed Taxes, effective for years beginning after June 12, 1994.
B-93
Property Tax Revenues
The total assessed valuation of the property within Stanton for the fiscal year 1994-95 was
$1,094,257,111. The total appropriations limit adopted by Stanton for fiscal year 1994-95 was $14,155,782
and the actual appropriations for the same period was $6,731,909.
Stanton receives funds annually from the State based upon a percentage of property taxes collected
within the County computed on Stanton's respective assessed valuation, and a statutory system of annual
appropriations. The table below presents the assessed valuation of property within Stanton for the past five
fiscal years.
CITY OF STANTON
Assessed Valuations
Fiscal Total Before Incremental Total After
Year Local Secured Utility Unsecured Rdv. Increment Assessed Value Rdv. Increment
1990-91 $ 917,481,414 $5,788,667 $70,924,973 $ 994,195,054 $149,580,239 $844,614,815
1991-92 960,487,061 5,870,197 92,594,300 1,058,951,558 151,812,345 907,139,213
1992-93 1,006,164,287 4,451,167 97,798,130 1,108,413,584 147,371,535 961,042,049
1993-94 1,038,721,628 4,435,792 93,702,876 1,136,860,296 184,954,929 951,905,367
1994-95 1,018,884,613 5,248,116 70,127,496 1,094,260,225 157,551,789 936,708,436
urce: Orange County Auditor-Controller's Office
The table below presents Stanton's property tax valuation and collection experience for the last five
fiscal years.
CITY OF STANTON
Property Tax Levies and Collections
Last Five Fiscal Years
Amount Percentage
Fiscal Secured Delinquent Delinquent
Year Tax Charge June 30 June 30
1990-91 $1,276,571 $ 58,678 4.60%
1991-92 1,341,550 65,064 4.85
1992-93 1,239,186 57,806 4.66
1993-94 1,044,644 (1) N/A
1994-95 1,039,320 tll N/A
Source: County of Orange Auditor -Controller
t'I Beginning with fiscal year 1993-94,Stanton elected the Teeter Plan for property tax distribution in which the city receives the entire
secured levy in the current fiscal year, whether paid or not, and the County retains the penalties and interest on delinquent taxes
when paid.
B-95
Direct and Overlapping Bonded Debt
The following table contains information on Stanton's direct and overlapping bonded indebtedness
as of June 30, 1996.
CITY OF STANTON
Direct and Overlapping Bonded Debt
1995-96 Assessed Valuation: $903,107,526 (after deducting $146,686,587 redevelopment incremental
valuation)
OVERLAPPING TAX AND ASSESSMENT DEBT: % Applicable Debt 6/30/96
Orange County 0.568% $ 2,244
Metropolitan Water District 0.112 677.482
TOTAL OVERLAPPING TAX AND ASSESSMENT DEBT $679,726
DIRECT AND OVERLAPPING LEASE OBLIGATION DEBT:
Orange County General Fund Obligations 0.568% $ 3,178,153
Orange County Pension Obligations 0.568 1,770,484
Orange County Teeter Plan Obligations 0.568 880,400
Orange County Transit Authority 0.568 119,848
Orange County Water District Certificates of Participation 0.884 1,821,526
Municipal Water District of Orange County Water Facilities Corporation 0.858 708,322
Coast Community College District Certificates of Participation 0.383 78,147
City of Stanton Certificates of Participation 100.000 125,000(1)
Orange County Sanitation District No. 3 Certificates of Participation 2.872 3.643.981
TOTAL GROSS DIRECT AND OVERLAPPING LEASE OBLIGATION DEBT $12,325,861
Less: Orange County Transit Authority(80% self-supporting) 95,878
Orange County Water District Certificates of Participation (100% self-supporting) 1,821,526
MWDOC Water Facilities Corporation(100% self-supporting) 708.322
TOTAL NET DIRECT AND OVERLAPPING LEASE OBLIGATION DEBT $9,700,135
GROSS COMBINED TOTAL DEBT $13,005,587 (2)
NET COMBINED TOTAL DEBT $10,379,861
(1) Excludes share of issue to be sold.
(2) Excludes tax and revenue anticipation notes, revenue, mortgage revenue and tax allocation bonds and non-bonded
capital lease obligations.
Ratios to Assessed Valuation:
Combined Direct Debt($125,000) 0.01%
Total Overlapping Tax and Assessment Debt 0.08%
Gross Combined Total Debt 1.44%
Net Combined Total Debt 1.15%
STATE SCHOOL BUILDING AID REPAYABLE AS OF 6/30/95: $86,738
Source: California Municipal Statistics,Inc.
B-97
CITY OF TUSTIN
General
Location and Government. The City of Tustin is a general law city incorporated in 1927. It is
located in Central Orange County at the intersection of the I#5 and SR#55 freeways, approximately 40 miles
southeast of Los Angeles and 85 miles north of San Diego. The City has 98.5 miles of streets and covers
11.1 square miles, bounded by the cities of Orange on the north, Santa Ana on the west, and Irvine on the
south.
In 1868 the City's founder, Columbus Tustin, and his partner, Nelson Oscar Stafford, purchased
1,300 acres of Rancho Santiago De Santa Ana (originally a Spanish Land Grant). Tustin started "Tustin
City" on his portion of the property and offered lots to all who would settle on them, and an entire block
to families with several children. The orange industry began in Tustin around the year 1875 and the City
soon was surrounded by orange, apricot and walnut orchards. The orange groves gradually took over from
the other crops between 1900 and 1950, and processing citrus fruits was the City's most important industry.
Tustin grew along with all of Orange County during the population boom of the 1960's, from a census
figure of 2,006 in 1960 to 21,178 in 1970; the present population is 63,619.
Today the City operates as a general law city under a Council/Manager form of government and
provides public safety(police)services, community services, engineering services,planning services,public
works, general administrative services, and capital improvements. The Tustin Community Redevelopment
Agency was established in 1975 and works to eliminate blighted areas by encouraging the development of
residential, commercial, industrial, recreational and public facilities.
The City of Tustin employs 245 full-time personnel, 197 in classified service and 48 exempt.
Community Services and Facilities; Police and Fire Protection. There is one police station, with
88 sworn personnel, and fire protection services are contracted with the Orange County Fire Authority. The
City also contracts for refuse, animal control and cable television services, and is served by private utility
companies for electricity, natural gas and telephone; the water utility is operated by the City.
The Tustin Unified School District facilities consist of eleven elementary schools, four middle
schools, three high schools, an adult education site, a support services facility and an administration center.
The City has eleven public parks covering 65.7 acres, including a community center adjacent to the City
Hall, a Senior Center, and a new sports park in the Tustin Ranch area of the city.
B-99
Employment. The principal employers within Tustin, their product or service, and the number of
employees are shown in the table below.
CITY OF TUSTIN
PRINCIPAL EMPLOYERS
MANUFACTURING EMPLOYMENT
Company # of Employees Products
Steelcase 950 Office Furniture
Silicon Systems 548 Integrated Circuits Mfg.
Ricoh Electronics, Inc. 296 Manufacturer
Morton Electronics 140 Chemicals
NON-MANUFACTURING EMPLOYMENT
Marine Corps 3,000 Air Station-Tustin
Tustin Unified School Dis. 1,100 Education
Tustin Auto Mall 401 Auto Sales
City Hall 248
Toshiba America 200 Medical Systems
Home Depot 180 Home Improvement
KTBN Channel 40 274 24-Hour Christian TV
(Trinity Broadcasting)
Mervyn's 100 Retail Department Store
IKEA 170 Furniture, Household and Office
Supplies
K-Mart 110 Retail
Price Costco 174 Warehouse Sales
MicroCenter 150 Computers
Toys R Us 53 Toys Retail
Source: Chamber of Commerce
B-101
The principal taxpayers, type of business and valuation as of June 30, 1995 are shown in the table
below.
CITY OF TUSTIN
PRINCIPAL TAXPAYERS
BASED ON PROPERTY VALUATION
June 30, 1995
Percentage
1995 of Total
Taxpayer Type of Business Valuation Valuation
The Irvine Company Residential and Commercial Prop. $239,838,398 7.37%
Steelcase Inc. Manufacturing 69,178,679 2.13
Catellus Development Corp. Industrial/Commercial 50,075,545 1.54
Sanyo Foods Recreation 36,347,518 1.12
Baycrest Associates Residential 27,994,784 0.86
Ricoh Development Manufacturing 26,727,256 0.82
Patrick F. Cadigan Trust Commercial 18,994,281 0.58
Stacy Lynn Bartlett Trust Commercial 18,989,151 0.58
Trinity Christian Center Non-profit 18,503,721 0.57
AUD Corp. Manufacturing 17,617,000 0.54
MAC Pherson Properties Retail Sales 14,748,868 0.45
$539,015,201 16.56%
Source: Orange County Assessor's Office
B-103
General Fund
The following tables summarize information taken from Tustin's audited financial statements
regarding its General Fund Balance Sheet and Statement of Revenues, Expenditures and Changes in General
Fund Balances for the past three (3) fiscal years:
CITY OF TUSTIN
COMPARATIVE GENERAL FUND BALANCE SHEET
Fiscal Years 1992-93 through 1994-95
1992-93 1993-94 1994-95
Assets and Other Debits
Assets:
Cash and investments $ 11,156,282 $ 12,211,736 $ 14,191,252
Taxes receivable 760,934 1,024,412 1,403,396
Accrued interest receivable 210,139 123,085 212,657
Accounts receivable 197,557 102,293 1,216,066
Due from other governments 17,879 5,199 52,418
Due from other funds 38,648 28,512 199,176
Prepaid expenses 0 218.356 4.980
Total Assets $12,381,439 $13,713,593 $17,279,945
Liabilities and Fund Balance
Liabilities:
Accounts payable $ 1,921,383 $ 1,135,293 $ 2,156,450
Due to other funds 0 86,033 7,756
Deposits 2,677,556 2,266,302 3,688,908
Deferred revenue 0 568.878 332 938
Total Liabilities 4,598,939 4.056.506 6,186,052
Fund Balance:
Reserved for prepaid expenses 0 218,356 204,156
Unreserved:
Designated for capital outlay 3,172,071 3,371,873 3,591,043
Designated for self insurance 1,304,423 1,046,138 1,304,994
Designated for contingencies 3.306.006 5,020,720 5,993,700
Total Fund Balance 7.782.500 9,657,087 11,093,893
Total Liabilities and Fund Balance $12,381,439 $13,713,593 $17,279,945
Source: City of Tustin Comprehensive Annual Financial Reports, Fiscal Years 1992-93, 1993-94 and 1994-95;the annual financial
reports are available from the City of Tustin, and investors are encouraged to review the entire reports, including the
notes therein, before making an investment decision with respect to the Bonds.
B-105
Sales Tax Revenues. The revenue from sales tax provided approximately 39.5% of Tustin's total local
tax revenues in 1995. The following table presents information concerning the value of taxable retail sales in
Tustin since 1990.
CITY OF TUSTIN
Taxable Retail Sales
1991 Through 1995
Year Ended 12/31 Taxable Sales
1991 $ 807,211
1992 830,728
1993 918,110
1994 1,020,345
1995(l) 512,505
Source: California State Board of Equalization
(I) 1995 Data is through second quarter only
The table below shows sales tax revenues for Tustin for the last five fiscal years.
CITY OF TUSTIN
Sales Tax Revenues
For the Fiscal Years Ended
June 30, 1991 Through June 30, 1995
Fiscal Year Sales Tax Revenues
1991 $ 9,300,457
1992 9,178,468
1993 9,197,751
1994 11,048,745
1995 11,865,910
Source: City of Tustin
B-107
Summary of Significant Accounting Policies
The Financial Reporting Entity. The City of Tustin was incorporated in 1927 as a "General Law"
City governed by an elected five-member city council. As required by generally accepted accounting
principles, these financial statements present the City of Tustin (the primary government) and its component
units. The component units discussed below are included in the City's reporting entity because of the
significance of their operational or financial relationship with the City. These entities are legally separate from
each other. However, the City of Tustin elected officials have a continuing full or partial accountability for
fiscal matters of the other entities. The financial reporting entity consists of: (1) the City (2) organizations for
which the City is financially accountable and (3) organizations for which the nature and significance of their
relationship with the City are such that exclusion would cause the City's financial statements to be misleading
or incomplete.
An organization is fiscally dependent on the primary government if it is unable to adopt its budget, levy
taxes or set rates or charges, or issue bonded debt without approval by the primary government. In a blended
presentation, a component units'balances and transactions are reported in a manner similar to the balances and
transactions of the City. Component units are presented on a blended basis when the component unit's
governing body is substantially the same as the City's or the component unit provides services almost entirely
to the City.
Blended Component Units. The Tustin Community Redevelopment Agency was established October
20, 1976 pursuant to the State of California Health and Safety Code, Section 33000, entitled "Community
Redevelopment Law". Its purpose is to prepare and carry out plans for improvement, rehabilitation and
redevelopment of blighted areas within the territorial limits of the City of Tustin. The City provides
management assistance to the Agency, and the members of the City Council also act as the governing body of
the Agency.
The separate financial statements of the Tustin Redevelopment Agency may be obtained from the City
of Tustin Finance Department located in the Tustin Civic Center.
The City of Tustin Water Corporation was incorporated March 3, 1980 under the non-profit corporation
law of the State of California. Its purpose is to provide financial assistance to the City of Tustin by acquiring,
constructing and operating or providing for the operation of water facilities. The Corporation's original
governing body was appointed by the City Council. The City makes annual lease payments to the Corporation,
which are used for debt service on the Corporation's bonds.
Separate financial statements for the City of Tustin Water Corporation are not issued.
Description of Funds and Account Groups: The accounts of the City are organized on the basis of
funds or account groups, each of which is considered to be a separate accounting entity. The operations of
each fund are accounted for by providing a separate set of self-balancing accounts which comprise its assets,
liabilities, equity, revenues and expenditures. The various funds and account groups are defined as follows:
Governmental Fund Types:
The General Fund is used to account for all financial resources except those required to be accounted
for in another fund.
Special Revenue Funds are used to account for the proceeds of specific revenue sources that are
restricted by law or administrative action for specified purposes.
B-109
Accordingly, all assets and liabilities are included in their respective balance sheets, and the reported fund
equity (total reported assets, less total reported liabilities)provides an indication of the economic net worth of
the fund. Operating statements for proprietary fund types (on an income determination measurement focus)
report increases (revenues) and decreases (expenses) in determining total economic net worth. Under this
determination, unbilled service receivables are recorded at year-end.
This report has been prepared in conformance with Generally Accepted Accounting Principles (GAAP)
as promulgated by the Governmental Accounting Standards Board (GASB).
City Budget
The City follows these procedures in establishing the budgetary data reflected in the financial
statements:
1. The annual budget is adopted by the City Council after the holding of a hearing and provides
for the general operation of the City. The operating budget includes proposed expenditures
and the means of financing them.
2. The City Council approves total budgeted appropriations and any amendments to appropriations
throughout the year. This "appropriated budget" (as defined by GASB Cod. Section 2400.109)
covers City expenditures in all governmental funds, except for debt service and capital
improvement projects carried forward from prior years.
The City Manager is authorized to transfer budgeted amounts between departments. Actual
expenditures may not exceed budgeted appropriations at the fund level. Budget figures used
in the accompanying financial statements are the final adjusted amounts.
3. Formal budgetary integration is employed as a management control device during the year.
Commitments for materials and services, such as purchase orders and contracts, are recorded
as encumbrances to assist in controlling expenditures. Encumbrances at year end carry
forward, and are added to the following year's budgeted appropriations. However,
encumbrances at year end are reported as reservations of fund balance, as allowed by GASB
Cod. Section 1700.129d. Also, unencumbered appropriations lapse at year end.
4. Annual budgets are adopted for the General and Special Revenue Funds on a basis substantially
consistent with generally accepted accounting principles (GAAP). Accordingly, actual
revenues and expenditures can be compared with related budgeted amounts without any
significant reconciling items. Revisions to the originally adopted budget were made during the
year and have been incorporated into budgetary amounts presented within these financial
statements. No budgetary comparisons are presented for the Capital Projects, Debt Service and
Proprietary Funds, as the City is not legally required to adopt budgets for these fund types.
Direct and Overlapping Bonded Debt
The following table contains information on Tustin's direct and overlapping bonded indebtedness as
of June 30, 1996.
B-111
APPENDIX C
FORM OF FINAL OPINION OF BOND COUNSEL
[Letterhead of Jones Hall Hill&White]
[Closing Date]
Countywide Public Financing Authority
20 Civic Center Plaza
Santa Ana,California 92701
OPINION: $27,725,000 Countywide Public Financing Authority 1996 Revenue Bonds
Members of the Authority:
We have acted as bond counsel in connection with the delivery by the Countywide Public
Financing Authority (the "Authority") of $27,725,000 aggregate principal amount of the bonds of the
Authority designated the "Countywide Public Financing Authority 1996 Revenue Bonds" (the
"Bonds"), pursuant to the provisions of Article 4 (commencing with section 6584) of Chapter 5 of
Division 7 of Title 1 of the California Government Code (the "Law"), and pursuant to an indenture of
trust, dated as of July 1, 1996 (the "Indenture"),by and between the Authority and U.S. Trust Company
of California,N.A., as trustee,and a resolution of the governing body of the Authority adopted on June
19, 1996. The Bonds are secured by Revenues as defined in the Indenture, including certain lease
payments made by the Cities of Brea, Buena Park, Fullerton, Garden Grove, Orange, Santa Ana, Seal
Beach, Stanton and Tustin(collectively, the "Members") under separate lease agreements, each dated as
of July 1, 1996 (the "Lease Agreements")by and between the Authority, as lessor,and each Member, as
lessee. We have examined the Law and such certified proceedings and other papers as we deem
necessary to render this opinion.
As to questions of fact material to our opinion, we have relied upon representations of the
Authority and the Members contained in the Indenture, the Lease Agreements and in the certified
proceedings, and upon other certifications furnished to us, without undertaking to verify the same by
independent investigation.
Based upon our examination we are of the opinion,under existing law,that:
1. The Authority is a joint exercise of powers agency and public entity duly organized and
existing under the laws of the State of California,with power to enter into the Indenture,to perform the
agreements on its part contained therein and to issue the Bonds.
2. The Bonds constitute legal,valid and binding special obligations of the Authority enforceable
in accordance with their terms and payable solely from the sources provided therefor in the Indenture.
3. The Indenture has been duly approved by the Authority and constitutes a legal, valid and
binding obligation of the Authority enforceable against the Authority in accordance with its terms.
Appendix C
Page 1
wAPPPENDIX D
FINANCIAL GUARANTY INSURANCE POLICY
MBIA Insurance Corporation
Armonk,New York 10504
Policy No.[NUMBER]
MBIA Insurance Corporation (the "Insuremt"), in consideration of the payment of the premium and subject to the terms of this policy, hereby
unconditionally and irrevocably guarantees to any owner,as hereinafter defined,of the following described obligations,the full and complete payment
required to be made by or on behalf of the Issuer to[PAYING AGENT/IRUSIFE]or its successor(the'Paying Agent")of an amount equal to(i)the
principal of(either at the stated maturity or by any advancement of maturity pursuant to a
Obligations(as that term is defined below)as suchmandatory-(except
that fund payment)o and interest eler on,do thef
the due date of such payments shall become due but shall not be so paid(except in the event of any acceleration of
Principal by reason of mandatory or optional redemption or acceleration resulting from default or otherwise, any
advancement ofmat city pursuant to a mandatory sinking fund payment,the payments guaranteed hereby shall be made in suchother than c
times as such payments of principal would have been due had there not beanamounts and at such
which is subsequently recovered flan any owner pursuant to a final' anys mp and uri the ion that
p of any such payment
avSdable preference to such owner within meaningthe judgment by a court w. amountjurisdiction redion that s claim
(i) .n an
of any applicable unts," "Obligations"
�., The" mean teC4fQ1 to in clauses n and()of the
pteoedmgsautatceshall besefea.odUohaertntxtllectiveiyas the"InnredAmamts." ^Ob' "hgations shall mean:
[LEGAL N MEOFLSSUE]
Upon receipt oftelephonicatelegraphicnotice,such notice subsequently confirmed in
writing notice by registered aartifiedman,by the.Insurer fomtheero try the acemtintoed fanI, s rupon edA ount of forWic
is than due,that such required payment has not beengAgentamytxeofsuc payObligment
within
payment business Insured
of such nonpayment,whichever is later,will make�the offimdson the duec datewith St Paymenta Bank
andnn one sm day aftA, New o ,
New York,or its successor,sufficient for the funds,man account t with State Street due. Trust Company,NA,in New York,
payment of any such Insured Amounts which are then due. Upon f such
Obligations or presentment of such other proof of ownership of the Obligations,together with'any appropriate instruments of assignment to and=render oevidence
'ssignmmem of the Insured Amounts due on the Obligations as are paid by the Insurer,and appropriate instturnetts to effect the
.er as agent for such owners ofthe Obligations in any legal proceeding related to payment of Insured Amounts on the Obligations,appointment of the
being in a font satisfactory to State Street Bank and Trust Company,NA,State Street Bank and Trustras urse to s,such ihtowners,
s,
a the
p e t of the Insured Amounts due on such Obligations,less any amount held Company,paing Agent for payment of such
witnrtspecttoanyndli ly tnaBablethaefor Ihispolicy does not icume against loss of any prgxiyrmartptensitmtwhichmayatanytimebe payable
�..
Alused
herein
Issuer,or any,designeethe tam
of thew Issuer"shall
mean the registatd owner of any Obligation as indicated in the bootee maintained by the Paying Agent,the
�o e tarn owner shall not include the Issuer or any party whose agreanem with the Issuerconstitutes the underlying security for the Oblig
Any service of process on the Insurer may be made to the Insurer at its offices located at 113 King Street,Armonk,New York 10504 and such service
of process shall be valid and binding.
This policy is non-cancellable for any reason. The premhmm on this policy is not refundable for any reason including the payment prior to maturity of
the Obligations.
In the
e event
tUmswe Ince sty nsurer were on,
legitAssociati any
y claims arising under a policy of financial guaranty insurance are excluded from coverage by the
the California Insurance Code. 1mua51martttoAuticle 142(commencing with Section 1063)ofChapter I of Part 2ofDivision I of
IN WITNESS WHEREOF,the Insurer has caused this policy to be executed in facsimile on its behalf by its duly authorized officers,this[DAY]day of
[MONTH;YEAR].
MBIA Insurance Corporation
PreaQp
Attest: e A
Assistant Secretary fr i/'A
STD-R-CA.6 C
495
D-1
APPENDIX E
FORM OF AUTHORITY CONTINUING DISCLOSURE CERTIFICATE
This CONTINUING DISCLOSURE CERTIFICATE (the "Disclosure Certificate") is executed and
delivered by the COUNTYWIDE PUBLIC FINANCING AUTHORITY (the "Authority") in connection
with the issuance of$27,725,000 aggregate principal amount of Countywide Public Financing Authority
1996 Revenue Bonds (the "Bonds"). The Bonds are being issued pursuant to an indenture of trust, dated
as of July 1, 1996 (the "Indenture"), by and between the Authority and U.S. Trust Company of
California,N.A.,as trustee(the"Trustee"). The Authority covenants and agrees as follows:
Section 1. Purpose of the Disclosure Certificate.This Disclosure Certificate is being executed and
delivered by the Authority for the benefit of the holders and beneficial owners of the Bonds and in
order to assist the Participating Underwriters in complying with S.E.C. Rule 15c2-12(b)(5).
Section 2. Definitions. In addition to the definitions set forth in the Trust Agreement, which
apply to any capitalized term used in this Disclosure Certificate unless otherwise defined in this Section
2, the following capitalized terms shall have the following meanings:
"Annual Report" shall mean any Annual Report provided by the Authority pursuant to, and as
described in,Sections 3 and 4 of this Disclosure Certificate.
"Dissemination Agent" shall mean U.S. Trust Company of California, N.A., or any successor
Dissemination Agent designated in writing by the Authority and which has filed with the Authority
and the Trustee a written acceptance of such designation.
"Listed Events"shall mean any of the events listed in Section 5(a) of this Disclosure Certificate.
"National Repository" shall mean any Nationally Recognized Municipal Securities Information
Repository for purposes of the Rule.
"Participating Underwriter" shall mean any of the original underwriters of the Bonds required to
comply with the Rule in connection with offering of the Bonds.
"Repository"shall mean each National Repository and each State Repository.
"Rule" shall mean Rule 15c2-12(b)(5) adopted by the Securities and Exchange Commission
under the Securities Exchange Act of 1934, as the same may be amended from time to time.
"State Repository" shall mean any public or private repository or entity designated by the State
of California as a state repository for the purpose of the Rule and recognized as such by the Securities
and Exchange Commission. As of the date of this Disclosure Certificate,there is no State Repository.
Section 3. Provision of Annual Reports.
(a) The Authority shall, or upon written direction shall cause the Dissemination Agent to, not
later than six months after the end of the Authority's fiscal year (currently June 30), commencing with
the report for the 1996 fiscal year,provide to each Repository an Annual Report which is consistent with
the requirements of Section 4 of this Disclosure Certificate with a copy to the Trustee. Not later than
fifteen (15) Business Days prior to said date, the Authority shall provide the Annual Report to the
Dissemination Agent (if other than the Authority). The Annual Report may be submitted as a single
document or as separate documents comprising a package, and may include by reference other
information as provided in Section 4 of this Disclosure Certificate. If the Authority's fiscal year changes,
it shall give notice of such change in the same manner as for a Listed Event under Section 5(c). The
Authority shall provide a written certification with each Annual Report furnished to the Dissemination
Agent and the Trustee to the effect that such Annual Report constitutes the Annual Report required to
be furnished by the Authority hereunder.
Appendix E
Page 1
all of the Bonds. If such termination occurs prior to the final maturity of the Bonds, the Authority shall
give notice of such termination in the same manner as for a Listed Event under Section 5(c).
Section 7. Dissemination Agent. The Authority may, from time to time, appoint or engage a
Dissemination Agent to assist it in carrying out its obligations under this Disclosure Certificate,and may
discharge any such Dissemination Agent,with or without appointing a successor Dissemination Agent.
The initial Dissemination Agent shall be U.S. Trust Company of California, N.A.. Any Dissemination
Agent may resign by providing thirty days'written notice to the Authority and the Trustee.
Section 8. Amendment; Waiver. Notwithstanding any other provision of this Disclosure
Certificate, the Authority may amend this Disclosure Certificate, and any provision of this Disclosure
Certificate may be waived,provided that the following conditions are satisfied:
(a) if the amendment or waiver relates to the provisions of Sections 3(a),4 or 5(a),it may only be
made in connection with a change in circumstances that arises from a change in legal requirements,
change in law, or change in the identity, nature, or status of an obligated person with respect to the
Bonds,or type of business conducted;
(b) the undertakings herein, as proposed to be amended or waived, would, in the opinion of
nationally recognized bond counsel,have complied with the requirements of the Rule at the time of the
primary offering of the Bonds, after taking into account any amendments or interpretations of the Rule,
as well as any change in circumstances; and
(c) the proposed amendment or waiver either (i) is approved by holders of the Bonds in the
manner provided in the Indenture for amendments to the Indenture with the consent of holders, or (ii)
does not, in the opinion of nationally recognized bond counsel, materially impair the interests of the
holders or beneficial owners of the Bonds.
If the annual financial information or operating data to be provided in the Annual Report is
amended pursuant to the provisions hereof, the first annual financial information filed pursuant hereto
containing the amended operating data or financial information shall explain, in narrative form, the
reasons for the amendment and the impact of the change in the type of operating data or financial
information being provided.
Section 9. Additional Information. Nothing in this Disclosure Certificate shall be deemed to
prevent the Authority from disseminating any other information,using the means of dissemination set
forth in this Disclosure Certificate or any other means of communication, or including any other
information in any Annual Report or notice of occurrence of a Listed Event, in addition to that which is
required by this Disclosure Certificate. If the Authority chooses to include any information in any
Annual Report or notice of occurrence of a Listed Event in addition to that which is specifically required
by this Disclosure Certificate,the Authority shall have no obligation under this Disclosure Certificate to
update such information or include it in any future Annual Report or notice of occurrence of a Listed
Event.
Section 10. Default. In the event of a failure of the Authority to comply with any provision of
this Disclosure Certificate the Trustee, at the written direction of any Participating Underwriter or the
holders of at least 25% aggregate principal amount of Outstanding Bonds, shall,but only to the extent
moneys or other indemnity, satisfactory to the Trustee, has been furnished to the Trustee to hold it
harmless from any loss, costs, liability or expense, including fees and expenses of its attorneys and any
additional fees of the Trustee, or any holder or beneficial owner of the Bonds may,take such actions as
may be necessary and appropriate, including seeking mandate or specific performance by court order,
to cause the Authority to comply with its obligations under this Disclosure Certificate. A default under
this Disclosure Certificate shall not be deemed an Event of Default under the Trust Agreement, and the
sole remedy under this Disclosure Certificate in the event of any failure of the Authority to comply with
this Disclosure Certificate shall be an action to compel performance.
Section 11. Duties. Immunities and Liabilities of Dissemination Agent. The Dissemination
Agent and the Trustee shall have only such duties as are specifically set forth in this Disclosure
Appendix E
Page 3
EXHIBIT A
NOTICE TO MUNICIPAL SECURITIES RULEMAKING BOARD AND EACH
STATE REPOSITORY OF FAILURE TO FILE ANNUAL REPORT
Name of Issuer: Countywide Public Financing Authority
Name of Issue: $27,725,000 Countywide Public Financing Authority 1996 Revenue Bonds
Date of Issuance: [Closing Date]
NOTICE IS HEREBY GIVEN that the Issuer has not provided an Annual Report with respect to
the above-named Bonds as required by Section 6.09 of that certain indenture, dated as of July 1, 1996,
by and between the Issuer and U.S. Trust Company of California, N.A., as trustee. The Issuer
anticipates that the Annual Report will be filed by
Dated:
COUNTYWIDE PUBLIC FINANCING
AUTHORITY
By
Title
cc:Trustee
APPENDIX F
FORM OF MEMBER CONTINUING DISCLOSURE CERTIFICATE
[Each Member will execute a Continuing Disclosure Certificate substantially identical to the form below]
This CONTINUING DISCLOSURE CERTIFICATE (the "Disclosure Certificate") is executed and
delivered by the CITY OF (the "City") in connection with the issuance of $27,725,000
aggregate principal amount of Countywide Public Financing Authority 1996 Revenue Bonds (the
"Bonds"). The Bonds are being issued pursuant to an indenture of trust, dated as of July 1, 1996 (the
"Indenture"), by and between the Countywide Public Financing Authority (the "Authority") and U.S.
Trust Company of California,N.A., as trustee (the"Trustee").The City covenants and agrees as follows:
Section 1. Purpose of the Disclosure Certificate.This Disclosure Certificate is being executed and
delivered by the City for the benefit of the holders and beneficial owners of the Bonds and in order to
assist the Participating Underwriters in complying with S.E.C. Rule 15c2-12(b)(5).
Section 2. Definitions. In addition to the definitions set forth in the Trust Agreement, which
apply to any capitalized term used in this Disclosure Certificate unless otherwise defined in this Section
2, the following capitalized terms shall have the following meanings:
"Annual Report" shall mean any Annual Report provided by the City pursuant to, and as
described in,Sections 3 and 4 of this Disclosure Certificate.
"Dissemination Agent" shall mean U.S. Trust Company of California, N.A., or any successor
Dissemination Agent designated in writing by the City and which has filed with the City and the
Trustee a written acceptance of such designation.
"Lease Agreement" shall mean that certain Lease Agreement, dated as of July 1, 1996, by and
between the Authority and the City.
"National Repository" shall mean any Nationally Recognized Municipal Securities Information
Repository for purposes of the Rule.
"Participating Underwriter" shall mean any of the original underwriters of the Bonds required to
comply with the Rule in connection with offering of the Bonds.
"Repository"shall mean each National Repository and each State Repository.
"Rule" shall mean Rule 15c2-12(b)(5) adopted by the Securities and Exchange Commission
under the Securities Exchange Act of 1934, as the same may be amended from time to time.
"State Repository" shall mean any public or private repository or entity designated by the State
of California as a state repository for the purpose of the Rule and recognized as such by the Securities
and Exchange Commission.As of the date of this Disclosure Certificate,there is no State Repository.
Section 3. Provision of Annual Reports.
(a) The City shall, or upon written direction shall cause the Dissemination Agent to, not later
than six months after the end of the City's fiscal year (currently June 30), commencing with the report
for the 1996 fiscal year, provide to each Repository an Annual Report which is consistent with the
requirements of Section 4 of this Disclosure Certificate with a copy to the Trustee. Not later than fifteen
(15) Business Days prior to said date, the City shall provide the Annual Report to the Dissemination
Agent (if other than the City). The Annual Report may be submitted as a single document or as
separate documents comprising a package, and may include by reference other information as provided
in Section 4 of this Disclosure Certificate; provided that the audited financial statements of the City may
be submitted separately from the balance of the Annual Report, and later than the date required above
for the filing of the Annual Report if not available by that date. If the City's fiscal year changes, it shall
Appendix F
Page 1
The initial Dissemination Agent shall be U.S. Trust Company of California, N.A.. Any Dissemination
Agent may resign by providing thirty days'written notice to the City and the Trustee.
Section 7. Amendment; Waiver. Notwithstanding any other provision of this Disclosure
Certificate, the City may amend this Disclosure Certificate, and any provision of this Disclosure
Certificate may be waived,provided that the following conditions are satisfied:
(a) if the amendment or waiver relates to the provisions of Sections 3(a) or 4, it may only be
made in connection with a change in circumstances that arises from a change in legal requirements,
change in law, or change in the identity, nature, or status of an obligated person with respect to the
Bonds,or type of business conducted;
(b) the undertakings herein, as proposed to be amended or waived, would, in the opinion of
nationally recognized bond counsel, have complied with the requirements of the Rule at the time of the
primary offering of the Bonds, after taking into account any amendments or interpretations of the Rule,
as well as any change in circumstances;and
(c) the proposed amendment or waiver either (i) is approved by holders of the Bonds in the
manner provided in the Indenture for amendments to the Indenture with the consent of holders,or (ii)
does not, in the opinion of nationally recognized bond counsel, materially impair the interests of the
holders or beneficial owners of the Bonds.
If the annual financial information or operating data to be provided in the Annual Report is
amended pursuant to the provisions hereof, the first annual financial information filed pursuant hereto
containing the amended operating data or financial information shall explain, in narrative form, the
reasons for the amendment and the impact of the change in the type of operating data or financial
information being provided.
If an amendment is made to the undertaking specifying the accounting principles to be followed
in preparing financial statements, the annual financial information for the year in which the change is
made shall present a comparison between the financial statements or information prepared on the basis
of the new accounting principles and those prepared on the basis of the former accounting principles.
The comparison shall include a qualitative discussion of the differences in the accounting principles and
the impact of the change in the accounting principles on the presentation of the financial information, in
order to provide information to investors to enable them to evaluate the ability of the City to meet its
obligations. To the extent reasonably feasible, the comparison shall be quantitative. A notice of the
change in the accounting principles shall be sent to the Municipal Securities Rulemaking Board and
each State Repository with a copy to the Trustee.
Section 8. Additional Information. Nothing in this Disclosure Certificate shall be deemed to
prevent the City from disseminating any other information,using the means of dissemination set forth
in this Disclosure Certificate or any other means of communication, or including any other information
in any Annual Report or notice of occurrence of a Listed Event, in addition to that which is required by
this Disclosure Certificate. If the City chooses to include any information in any Annual Report or notice
of occurrence of a Listed Event in addition to that which is specifically required by this Disclosure
Certificate,the City shall have no obligation under this Disclosure Certificate to update such information
or include it in any future Annual Report or notice of occurrence of a Listed Event.
Section 9. Default. In the event of a failure of the City to comply with any provision of this
Disclosure Certificate the Trustee, at the written direction of any Participating Underwriter or the
holders of at least 25% aggregate principal amount of Outstanding Bonds, shall,but only to the extent
moneys or other indemnity, satisfactory to the Trustee, has been furnished to the Trustee to hold it
harmless from any loss,costs, liability or expense, including fees and expenses of its attorneys and any
additional fees of the Trustee, or any holder or beneficial owner of the Bonds may,take such actions as
may be necessary and appropriate, including seeking mandate or specific performance by court order,
to cause the City to comply with its obligations under this Disclosure Certificate. A default under this
Disclosure Certificate shall not be deemed an Event of Default under the Trust Agreement, and the sole
Appendix F
Page 3
EXHIBIT A
NOTICE TO MUNICIPAL SECURITIES RULEMAKING BOARD AND EACH
STATE REPOSITORY OF FAILURE TO FILE ANNUAL REPORT
Name of Issuer: Countywide Public Financing Authority
Name of Issue: $27,725,000 Countywide Public Financing Authority 1996 Revenue Bonds
Date of Issuance: [Closing Date]
NOTICE IS HEREBY GIVEN that the City of (the "City") has not provided an
Annual Report with respect to the above-named Bonds as required by Section 5.11 of that certain lease
agreement, dated as of July 1, 1996,by and between the Issuer and the City. The City anticipates that
the Annual Report will be filed by
Dated:
CITY OF
By
Title
cc: Trustee
i