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CITY COUNCIL AGENDA ITEM NO. 13


Meeting Date: July 24, 2007

Subject/Title: Adopt a Resolution Determining Assessments Remaining Unpaid in Randy Way Sewer Line Assessment District and Adopt a Resolution Authorizing Issuance, Sale and Delivery of Bonds in Randy Way Sewer Line Assessment District, Approving the Form of a Preliminary Official Statement and the Form of a Bond Purchase Contract, and Authorizing and Directing Related Actions.

Prepared By: Debra Galey, Management Analyst

Submitted By: Bailey Grewal, Director of Public Works/City Engineer


RECOMMENDATION
Adopt a Resolution Determining Assessments Remaining Unpaid in Randy Way Sewer Line Assessment District and Adopt a Resolution Authorizing Issuance, Sale and Delivery of Bonds in Randy Way Sewer Line Assessment District, Approving the Form of a Preliminary Official Statement and the Form of a Bond Purchase Contract, and Authorizing and Directing Related Actions.

PREVIOUS ACTION
On May 9, 2006, City Council directed the City Engineer to proceed with Assessment District financing for funding the construction of sewer utilities to service the Randy Way neighborhood and include potential legal expenses as a part of the Assessment District funding.

On February 27, 2007, by Resolution Nos. 2007-34, 2007-35 and 2007-36, City Council initiated the Randy Way Sewer Line Assessment District and set the public hearing for April 24, 2007.
On April 24, 2007 by Resolution No. 2007-90, City Council approved the Final Engineer’s Report, Levying Assessments and Ordering Improvements in Randy Way Sewer Line Assessment District.

BACKGROUND
There are currently residents in the Randy Way neighborhood with septic systems in need of repair/upgrade and/or the desire to expand their residence over their current septic system capacity. Throughout the last year, the residents have met with City staff regarding their interest in sewer utility main line construction to serve their neighborhood. Since these utilities are not master planned and would serve only their neighborhood, the residents were informed that the associated construction would be their financial obligation. Through execution of a written interest letter, the majority of the neighborhood has requested the City form an Assessment District for the purpose of financing the sewer line construction.

Assessment District financing has been a common practice in the City for many years, with developers and the City working together to fund infrastructure. Through an Assessment District, financing for the construction cost of public infrastructure is accomplished through the sale of municipal bonds with a payback on the benefiting property’s tax bill over a thirty year bond term. Since the utilities specifically benefit the parcel of land, the assessment payback stays with the property itself, rather than with the property owner. In the case of the Randy Way neighborhood, the sewer line construction cost, in addition to district formation costs, are spread equally over the 34 parcels that will each have the ability to connect to, and be serviced from, this sewer line. Upon district formation and availability of funds, Pulte Homes who is developing the adjacent parcel, will construct the sewer line in conjunction with their project improvements as required by their Conditions of Approval (“COA”).

At the April 24 public hearing, 29 of 34 property owners (85%) submitted a yes vote for the formation of the District and levy of assessment. Following the hearing, a 30 day cash payment period commenced in which any of the property owners were provided the opportunity to pay the assessment amount in cash, rather than be included in the bond sale. At the end of the 30 day period, a portion of the assessment, $82,422 was paid in cash, leaving the remaining $840,924 to be included in the bond financing. Tonight’s action approves the amount of remaining assessment to be included in the bond sale and authorizes issuance of the bonds.

FISCAL IMPACT
All costs incurred for district formation and annual administration are included as a part of the Assessment District financing paid by the benefiting properties.

Attachments:
Resolutions - 2
Form of Preliminary Official Statement
Form of Bond Purchase Contract


RESOLUTION NO.


A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF BRENTWOOD
DETERMINING ASSESSMENTS REMAINING UNPAID IN RANDY WAY SEWER LINE ASSESSMENT DISTRICT.


WHEREAS, the Treasurer of the City of Brentwood (the "Treasurer") has filed with the City Clerk a Paid and Unpaid List of Assessments (the “Paid and Unpaid List”) with respect to the Randy Way Sewer Line Assessment District (the “Assessment District”), a copy of which is attached to this resolution as Exhibit A and by this reference incorporated herein, certifying the cash payments received by her from the property owners at the end of the 30-day cash payment period and the assessments remaining unpaid in the Assessment District; and
WHEREAS, this City Council wishes to confirm the amount of the unpaid assessments as listed in the Paid and Unpaid List and to ratify an amount not to exceed said unpaid assessments as the principal amount of limited obligation improvement bonds to be authorized and issued in these proceedings upon the security of said unpaid assessments;
NOW, THEREFORE THE CITY COUNCIL OF THE CITY OF BRENTWOOD HEREBY FINDS, DETERMINES AND RESOLVES as follows:
SECTION 1. ASSESSMENTS UNPAID. This Council hereby finds and determines that, as set forth in the attached Paid and Unpaid List, and there being no information to the contrary, the amount of assessments remaining unpaid in the Assessment is the amount set forth in said Paid and Unpaid List, and by separate resolution, this Council will this same date authorize the issuance of limited obligation improvement bonds of the City in a principal amount not to exceed the amount of the unpaid assessments, rounded down, if necessary, to the nearest $5,000.
SECTION 2. TRANSMITTAL TO COUNTY AUDITOR. The City Clerk is hereby directed to transmit a copy of this resolution to the County Auditor of the County of Contra Costa, and said County Auditor is requested to proceed in accordance with Section 8682 of the California Streets and Highways Code in the collection of installments of these assessments and the interest thereon on the secured property tax assessment roll of the County, commencing with the 2007-2008 tax roll.
PASSED APPROVED AND ADOPTED by the City Council of the City of Brentwood at a regular meeting held on the 24th day of July 2007 by the following vote:


EXHIBIT A

PAID AND UNPAID LIST
OF ASSESSMENTS IN
RANDY WAY SEWER LINE ASSESSMENT DISTRICT
CITY OF BRENTWOOD, CONTRA COSTA COUNTY, CALIFORNIA
I HEREBY CERTIFY that the attached list of Paid and Unpaid Assessments correctly reflects (1) all amounts received by me on account of assessments in the Randy Way Sewer Line Assessment District, City of Brentwood, Contra Costa County, California, after the assessments became due and payable and (2) all amounts remaining unpaid on each of the assessments in the Randy Way Sewer Line Assessment District.
Executed at Brentwood, California, on June 12, 2007.
PAMELA EHLER, Treasurer, City of Brentwood,
Contra Costa County, California








PAID AND UNPAID LIST
OF ASSESSMENTS IN
RANDY WAY SEWER LINE ASSESSMENT DISTRICT
CITY OF BRENTWOOD, CONTRA COSTA COUNTY, CALIFORNIA
ASSESSMENT NO. ASSESSMENT AMOUNT CASH
PAID AMOUNT CREDITED UNPAID
BALANCE
1 $27,411.76 $ 0.00 $ 0.00 $27,411.76
2 27,411.76 0.00 0.00 27,411.76
3 27,411.76 0.00 0.00 27,411.76
4 27,411.76 0.00 0.00 27,411.76
5 27,411.76 0.00 0.00 27,411.76
6 27,411.76 0.00 0.00 27,411.76
7 27,411.76 0.00 0.00 27,411.76
8 27,411.76 8,000.00 8,839.78 18,571.98
9 27,411.76 0.00 0.00 27,411.76
10 27,411.76 0.00 0.00 27,411.76
11 27,411.76 0.00 0.00 27,411.76
12 27,411.76 0.00 0.00 27,411.76
13 27,411.76 0.00 0.00 27,411.76
14 27,411.76 0.00 0.00 27,411.76
15 27,411.76 0.00 0.00 27,411.76
16 27,411.76 0.00 0.00 27,411.76
17 27,411.76 0.00 0.00 27,411.76
18 27,411.76 0.00 0.00 27,411.76
19 27,411.76 24,807.64 27,411.76 0.00
20 27,411.76 24,807.64 27,411.76 0.00
21 27,411.76 0.00 0.00 27,411.76
22 27,411.76 0.00 0.00 27,411.76
23 27,411.76 0.00 0.00 27,411.76
24 27,411.76 0.00 0.00 27,411.76
25 27,411.76 24,807.64 27,411.76 0.00
26 27,411.76 0.00 0.00 27,411.76
27 27,411.76 0.00 0.00 27,411.76
28 27,411.76 0.00 0.00 27,411.76
29 27,411.76 0.00 0.00 27,411.76
30 27,411.76 0.00 0.00 27,411.76
31 27,411.76 0.00 0.00 27,411.76
32 27,411.76 0.00 0.00 27,411.76
33 27,411.76 0.00 0.00 27,411.76
34 27,411.76 0.00 0.00 27,411.76
$931,999.84 $82,422.92 $91,075.06 $840,924.78

CLERK’S CERTIFICATE


I, Margaret Wimberly, City Clerk of the City of Brentwood, do hereby certify as follows:

The foregoing resolution is a full, true and correct copy of a resolution duly adopted at a special meeting of the City Council of said City duly held at the regular meeting place thereof on the 24th day of July, 2007, of which meeting all of the members of said City Council had due notice and at which a majority thereof were present; and that at said meeting said resolution was adopted by the following vote:

AYES:
NOES:
ABSENT:
ABSTAINED:

An agenda of said meeting was posted at least 72 hours before said meeting at City Hall, 150 City Park Way, Brentwood, California 94513, a location freely accessible to members of the public, and a brief description of said resolution appeared on said agenda.

I have carefully compared the foregoing with the original minutes of said meeting on file and of record in my office, and the foregoing is a full, true and correct copy of the original resolution adopted at said meeting and entered in said minutes.

Said resolution has not been amended, modified or rescinded since the date of its adoption and the same is now in full force and effect.

Dated: _______________, 2007



City Clerk of the City of Brentwood
RESOLUTION NO.


A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF BRENTWOOD AUTHORIZING ISSUANCE, SALE AND DELIVERY OF BONDS IN RANDY WAY SEWER LINE ASSESSMENT DISTRICT, APPROVING THE FORM OF A PRELIMINARY OFFICIAL STATEMENT AND THE FORM OF A BOND PURCHASE CONTRACT, AND AUTHORIZING AND DIRECTING RELATED ACTIONS.


WHEREAS, on February 27, 2007, the City Council of the City of Brentwood (the “City”) adopted its resolution of intention to order improvements in Randy Way Sewer Line Assessment District, City of Brentwood, Contra Costa County, California (the “Assessment District”), under the provisions of the Municipal Improvement Act of 1913 (the "Act"), and proceedings taken under the Act led, on April 24, 2007, to the levy of special assessments by the Council against parcels of land within the Assessment District, which assessments have been recorded in the office of the County Recorder of the County of Contra Costa, and have thereby become a lien on each parcel assessed; and
WHEREAS, the period within which property owners could pay their assessments in cash, without interest, has expired, and a certificate re assessments remaining unpaid has filed with the City Clerk; and
WHEREAS, the City Council has determined, by separate resolution adopted this same date, the amount of unpaid assessments, as certified by the Treasurer of the City, in order to establish the final principal amount of bonds to be issued;
WHEREAS, in connection with the proposed issuance, sale and delivery of the City of Brentwood Limited Obligation Improvement Bonds, Randy Way Sewer Line Assessment District (the “Bonds”), the City has retained Orrick, Herrington & Sutcliffe LLP as Disclosure Counsel (“Disclosure Counsel”) to assist the City in the preparation of a Preliminary Official Statement for use and distribution by RBC Captial Markets, as Underwriter of the Bonds (the “Underwriter”) in connection with issuance, sale and distribution of the Bonds to the public; and
WHEREAS, Disclosure Counsel has filed with the City Clerk a form of Preliminary Official Statement (the “Preliminary Official Statement”), and this City Council hereby finds and determines that it is in the public interest and for the public benefit that the Preliminary Official Statement be approved; and
WHEREAS, Disclosure Counsel has also prepared and filed with the City Clerk a form of Bond Purchase Contract to be entered into between the City and the Underwriter with respect to the sale of the Bonds by the City to the Underwriter.
NOW, THEREFORE THE CITY COUNCIL OF THE CITY OF BRENTWOOD HEREBY FINDS, DETERMINES AND RESOLVES as follows:
SECTION 1. DEFINITIONS. Unless the context otherwise requires, the terms defined in this Section 1 shall, for all purposes of this Resolution, have the meanings herein specified and shall be equally applicable to both the singular and plural forms of any of the terms herein defined.
"Act" means the Municipal Improvement Act of 1913, Sections 10000 and following of the California Streets and Highways Code.
“Arbitrage Rebate Fund” means the fund by that name established and maintained by the Finance Director pursuant to Section 6.5 of this Resolution.
"Bank" means U.S. Bank National Association, or its duly appointed and acting successor as paying agent, registrar and transfer agent for the Bonds.
"Bond" or "Bonds" means the City of Brentwood Limited Obligation Improvement Bonds of Randy Way Sewer Line Assessment District, issued pursuant to the Bond Act and this Resolution, in substantially the form provided in Exhibit A hereto.
"Bond Act" means the Improvement Bond Act of 1915, Sections 8500 and following of the California Streets and Highways Code.
"Bond Counsel" means Orrick, Herrington & Sutcliffe LLP, San Francisco, California, serving as Bond Counsel to the City with respect to the Bonds.
"Bond Date" means the dated date of the Bonds, which shall be the date of delivery thereof.
"City" means the City of Brentwood, Contra Costa County, California.
"Closing Date" means the date of delivery of the Bonds to the Underwriter.
"Code" means the Internal Revenue Code of 1986, as amended.
"Continuing Disclosure Certificate" means the continuing disclosure certificate of the City, dated the Closing Date, and containing the matters required to assist the Underwriter in complying with S.E.C. Rule 15c2-12(b)(5).
"Council" or "City Council" means the legislative body of the City of Brentwood.
"Finance Director" means the Director of Finance and Information Systems of the City.
"Improvement Fund" means the fund by that name established and maintained by the Finance Director pursuant to Section 6.1 of this Resolution.
"Interest Payment Date" means March 2 and September 2 of each year, commencing on either (a) March 2, 2008, or (b) such later date as shall be mutually agreed upon between the Finance Director and the Underwriter upon execution of the bond purchase contract.
“Investment Earnings Fund” means the fund by that name established and maintained by the Finance Director pursuant to Section 6.4 of this Resolution.
"Paying Agent" means the Bank.
"Redemption Fund" means the fund by that name established and maintained by the Finance Director pursuant to Section 6.2 of this Resolution.


"Special Reserve Fund" means the fund by that name established and maintained by the Finance Director pursuant to Section 6.3 of this Resolution.
"Tax Certificate" means the Tax Certificate to be prepared by Bond Counsel and executed on the Closing Date by the Finance Director, including the reoffering yield certificate of the Underwriter attached thereto.
"Underwriter" means RBC Capital Markets, San Francisco, California.
SECTION 2. ISSUANCE OF BONDS. The Council hereby authorizes the issuance of the Bonds under the provisions of the Bond Act to represent unpaid assessments in the amount of not to exceed the unpaid assessments, rounded down, if necessary, to the nearest $5,000. Each Bond shall be designated, "City of Brentwood, Limited Obligation Improvement Bond, Randy Way Sewer Line Assessment District." The Bonds shall be dated their date of delivery and shall be issued in denominations of $5,000 or integral multiples thereof. Bonds shall mature in principal amounts, shall bear interest at the rates, and shall consist of serial bonds, term bonds, or any combination thereof, all as set forth in the bond purchase contract to be submitted by the Underwriter and approved by the Finance Director; provided that the term bonds, if any, shall mature on September 2, of the last year of maturity of the Bonds, and shall be subject to scheduled mandatory redemption, without premium, in advance of maturity, as specified by Section 8 below and by the bond purchase contract.
SECTION 3. APPOINTMENT OF PAYING AGENT, REGISTRAR AND TRANSFER AGENT. The Council hereby appoints the Bank as paying agent, registrar and transfer agent for the Bonds in accordance with a separate agreement to be entered into between the City and the Bank.
SECTION 4. FORM AND EXECUTION. Bonds shall be issued as fully registered bonds substantially in the form set forth as Exhibit A to this Resolution. The Bonds shall be signed by the Finance Director and City Clerk of the City of Brentwood, and the seal of the City shall be affixed. Both signatures and seal may be reproduced on the Bonds by facsimile, but upon its registration or reregistration each Bond shall be authenticated by the manual signature of the authorized representative of the Bank.
The Bank shall assign to each Bond authenticated and registered by it a distinctive letter, or number, or letter and number, and shall maintain a record thereof which shall be available to the City for inspection.
SECTION 5. BOOK-ENTRY BONDS. The Bonds when issued shall be initially registered in the name of "Cede & Co.," as nominee of The Depository Trust Company, New York, New York, and shall be initially issued as one Bond for each of the maturities of the Bonds.
The Depository Trust Company is hereby appointed depository for the Bonds and registered ownership of the Bonds, or any portion thereof, may not thereafter be transferred except:
(i) To any successor of Cede & Co., as nominee of The Depository Trust Company, or its nominee, or to any substitute depository designated pursuant to clause (ii) of this section (a "substitute depository"); provided, that any successor of Cede & Co., as nominee of The Depository Trust Company or substitute depository, shall be qualified under any applicable laws to provide the services proposed to be provided by it;
(ii) To any substitute depository not objected to by the City, upon (1) the resignation of The Depository Trust Company or its successor (or any substitute depository or its successor) from its functions as depository, or (2) a determination by the City to substitute another depository for The Depository Trust Company (or its successor) because The Depository Trust Company or its successor (or any substitute depository or its successor) is no longer able to carry out its functions as depository; provided, that any such substitute depository shall be qualified under any applicable laws to provide the services proposed to be provided by it; or
(iii) To any person as provided below, upon (1) the resignation of The Depository Trust Company or its successor (or substitute depository or its successor) from its functions as depository, or (2) a determination by the City to remove The Depository Trust Company or its successor (or any substitute depository or its successor) from its functions as depository.
In the case of any transfer pursuant to clause (i) or clause (ii) above, upon receipt of the outstanding Bonds by the Paying Agent, together with a written request of the City, a new Bond for each maturity shall be executed and delivered in the aggregate principal amount of the Bonds then outstanding, registered in the name of such successor or such substitute depository, or their nominees, as the case may be, all as specified in such written request of the City. In the case of any transfer pursuant to clause (iii) above, upon receipt of the outstanding Bonds by the Paying Agent together with a written request of the City, new Bonds shall be executed and delivered in such denominations numbered in the manner determined by the Paying Agent and registered in the names of such persons as are requested in such written request of the City, subject to the limitations of this Section 5 and the receipt of such a written request of the City, and thereafter, the Bonds shall be transferred pursuant to the provisions set forth in this Resolution; provided, that the Paying Agent shall not be required to deliver such new Bonds within a period of less than sixty (60) days.
So long as the outstanding Bonds are registered in the name of Cede & Co. or its registered assigns, the City and the Paying Agent shall cooperate with Cede & Co., as sole holder, or its registered assigns, in effecting payment of the principal of and interest on the Bonds by arranging for payment in such manner that funds for such payments are properly identified and are made immediately available on the date they are due.
SECTION 6. ESTABLISHMENT OF SPECIAL FUNDS. For administering the proceeds of the sale of bonds, the payments from property owners on account of assessments levied, and the payment of interest and principal on the Bonds, there shall be established and maintained five funds to be known as the Improvement Fund, the Redemption Fund, the Special Reserve Fund, the Investment Earnings Fund and the Arbitrage Rebate Fund, respectively, for Randy Way Sewer Line Assessment District.
SECTION 6.1. IMPROVEMENT FUND. The Improvement Fund shall be established and maintained by the Finance Director. Except as provided in Sections 6.2 and 6.3, proceeds of sale of the Bonds, together with all amounts paid by property owners on the assessments before bond issuance, if any, and the contributions from other public funds, if any, shall be deposited in the Improvement Fund. Disbursements from the Improvement Fund shall be made by the Finance Director in accordance with the budget of estimated costs and expenses set forth in Exhibit B of the Final Engineer's Report, heretofore approved by the Council on April 24, 2007, which report and budget are subject to modification by the Council from time to time as prescribed by the Act. The costs of issuance of the Bonds shall be paid out of the Improvement Fund.
Proceeds of investment of the Improvement Fund shall be deposited in the Investment Earnings Fund, to be established, maintained and administered in accordance with the provisions of Section 6.4 of this Resolution.
SECTION 6.2. REDEMPTION FUND. The Redemption Fund shall be established and maintained by the Finance Director. All payments of principal and interest installments on the assessments, together with penalties, if any, and all amounts received on account of lien pay-offs shall be deposited in the Redemption Fund, which shall be a trust fund for the benefit of the bondholders. Monies for payment of the Bonds at maturity, or at redemption before maturity, and all interest on the Bonds shall be disbursed to the Bank from the Redemption Fund.
Proceeds of investment of the Redemption Fund shall be retained in the Redemption Fund, which shall at all times be administered in conformity with the limitations and requirements specified in the Tax Certificate so as to establish and retain the status of a "Bona Fide Debt Service Fund" (as said term is defined in the Code) for said Redemption Fund, thereby exempting the Redemption Fund from arbitrage and rebate requirements otherwise imposed by the Code and the regulations adopted pursuant thereto.
SECTION 6.3. SPECIAL RESERVE FUND. The Special Reserve Fund shall be established and maintained by the Finance Director. There shall be deposited into the Special Reserve Fund on the Closing Date an amount equal to the least of (1) ten percent (10%) of the proceeds of the Bond issue, (2) maximum annual debt service on the Bonds, or (3) one hundred twenty-five percent (125%) of average annual debt service on the Bonds, which shall constitute the “Initial Reserve Requirement.” That amount, less any amounts transferred to the Redemption Fund pursuant to Section 8884 of the Streets and Highways Code, shall constitute the "Reserve Requirement" for the Bonds from time to time.
A. During the term of the Bonds, the amount in the Special Reserve Fund shall be available for transfer into the Redemption Fund in accordance with Sections 8808 and 8883 of the Streets and Highways Code. The amount so advanced shall be reimbursed to the Special Reserve Fund from the proceeds of reinstatement of delinquencies or sale of the parcel or parcels for which payment of delinquent assessment installments was made from the Special Reserve Fund.
B. If any assessment is prepaid before final maturity of the Bonds, the amount of principal which the assessee is required to prepay shall be reduced by an amount which is in the same ratio to the original amount of the Special Reserve Fund as the original amount of the prepaid assessment bears to the total amount of unpaid assessments originally securing the Bonds. This reduction in the amount of principal prepaid shall be balanced by a transfer from the Special Reserve Fund to the Redemption Fund in the same amount.
C. The amount maintained in the Special Reserve Fund shall never exceed the Reserve Requirement. Proceeds of investment of the Special Reserve Fund shall be deposited in the Investment Earnings Fund to be established, maintained and administered in accordance with the provisions of Section 6.4 of this Resolution.
D. When the amount in the Special Reserve Fund equals or exceeds the amount required to retire the remaining unmatured Bonds (whether by advance retirement or otherwise), the amount of the Special Reserve Fund shall be transferred to the Redemption Fund, and the remaining installments of principal and interest not yet due from assessed property owners shall be cancelled without payment.
SECTION 6.4. INVESTMENT EARNINGS FUND. The Investment Earnings Fund shall be established and maintained by the Finance Director. Proceeds of the investment of amounts in the Improvement Fund and the Special Reserve Fund will be deposited in the Investment Earnings Fund. As of June 30 of each year during the term of the Bonds, the Finance Director shall determine or cause to be determined whether any portion of investment earnings must be rebated to the United States pursuant to Section 148 of the Code and regulations adopted thereunder. The Finance Director is authorized to retain independent attorneys, accountants and other consultants to assist in complying with arbitrage and rebate requirements and restrictions imposed by the Code and regulations adopted thereunder.
Any amounts required to be rebated will be transferred to the Arbitrage Rebate Fund, and the balance, if any, remaining following such transfer to the Arbitrage Rebate Fund, will be transferred as follows:
(a) To the extent that the balance in the Special Reserve Fund is less than the Reserve Requirement, a transfer will be made from the Investment Earnings Fund to the Special Reserve Fund.
(b) The remaining balance in the Investment Earnings Fund, if any, will be transferred to the Improvement Fund until the authorized improvements are completed and the Improvement Fund is closed; thereafter the balance in the Investment Earnings Fund will be transferred to the Redemption Fund to be used, in the discretion of the Finance Director, as a credit upon the annual installments of assessment or for the advance retirement of Bonds.
SECTION 6.5. ARBITRAGE REBATE FUND. The Arbitrage Rebate Fund shall be established and maintained by the Finance Director. Amounts in the Arbitrage Rebate Fund shall be invested in the same manner as amounts in the other funds and shall be held in trust for rebate to the United States at the times required by Section 148 of the Code and regulations adopted thereunder.
SECTION 6.6. RETURN OF UNCLAIMED FUNDS. Other provisions of this Resolution to the contrary notwithstanding, the Bank shall return to the City any funds held by it hereunder not later than thirty (30) days before those funds would escheat to the State of California under any law now or hereafter enacted.
SECTION 7. PAYMENT ON BONDS. The principal and redemption premium, if any, on the Bonds shall be payable at the office of the Bank in St. Paul, Minnesota, upon presentation and surrender of such Bonds to the Bank by the registered owners thereof on their maturity dates or on redemption prior to maturity. Interest shall be paid by check mailed by first class mail, postage prepaid, to the registered owner of each Bond at the owner's address appearing on the register maintained by the Bank, as registrar, on the 15th day of the month preceding the date of payment.
Upon the payment and cancellation of any Bond, the Bond shall be destroyed, and the Bank shall furnish the City a certificate of destruction.
SECTION 8. ADVANCE RETIREMENT OF BONDS. Any Bond or any portion thereof in the amount of $5,000 or any integral multiple thereof outstanding, may be redeemed and paid in advance of maturity upon the second day of March or September in any year by giving at least 30 days' notice by registered or certified mail or by personal service to the registered owner thereof at such owner's address as it appears on the registration books of the Bank and by paying principal and accrued interest, together with a redemption premium (calculated as a percentage of the par value of Bonds being redeemed) as follows for the respective March 2 or September 2 redemption dates:
Redemption Dates
(March 2 or September 2) Redemption Premium
March 2, 2008 through September 2, 2017 3.0%
March 2, 2018 and September 2, 2018 2.0%
March 2, 2019 and September 2, 2019 1.0%
March 2, 2020 and thereafter 0.0%

The foregoing schedule of redemption premiums shall be subject to modification by mutual consent of the Finance Director and the Underwriter.
In addition to redemption in advance of maturity in accordance with the foregoing, the term Bonds, if any, shall be subject to partial mandatory advance redemption, by lot, without premium, on each September 2 on and after the September 2 specified in the bond purchase contract in accordance with the schedule set forth in said bond purchase contract.
SECTION 9. REREGISTRATION. Any Bond may be registered to a new owner by completing the assignment certificate on the reverse of the Bond and delivering the Bond to the registrar, and upon payment by the person requesting such reregistration of any tax or other governmental charge required to be paid with respect to such reregistration. Upon reregistration, any Bond may be replaced by one or more Bonds of the same maturity and aggregate amount in denominations of $5,000 or any integral multiple thereof.
SECTION 10. COVENANTS. In the event of a default in the payment of any Bond or any installment of interest thereon, bondholders shall have the remedies set forth in the Bond Act. In addition, the Council makes the following covenants, which shall constitute a contract with the bondholders:
SECTION 10.1. COLLECTION OF INSTALLMENTS. Annually, and in accordance with the provisions of the Bond Act and the Final Engineer's Report, the City shall establish the amount to be posted to the secured property tax roll of Contra Costa County on account of each parcel for which the assessment remains unpaid, and the City shall transmit to the Contra Costa County Auditor a list or record of such installment amounts, together with the corresponding assessment number and assessor's tax number, in such format as the County Auditor shall reasonably require and not later than such date as the County Auditor shall reasonably establish, for collection on such secured property tax roll and remittance to the City, as provided by the Bond Act.


SECTION 10.2. FORECLOSURE OF LIENS. No later than October 1 in any year, the City shall file an action in the Superior Court to foreclose the lien on each delinquent assessment if (1) the sum of uncured assessment delinquencies for the preceding fiscal year exceeds five percent (5%) of the assessment installments posted to the tax roll for that fiscal year, and (2) the amount of the Special Reserve Fund is less than the Reserve Requirement.
SECTION 10.3. ARBITRAGE. During the term of the Bonds, the City will make no use of bond proceeds which, if such use had been reasonably expected at the date the Bonds are issued, could have caused the Bonds to be "arbitrage bonds" within the meaning of Section 148 of the Code and the regulations adopted thereunder, and further shall rebate to the United States any amounts required to be rebated on account of arbitrage in accordance with the provisions of the Code and those regulations.
SECTION 10.4. MAINTENANCE OF TAX EXEMPTION. The City will adhere to the restrictions and comply with the requirements set forth in the Tax Certificate and will otherwise take all reasonable actions required to maintain the status of interest on the Bonds as excludable from gross income for federal income tax purposes and as exempt from the State of California personal income taxes. Without limiting the generality of the foregoing, the City further covenants that, prior to making any change to or taking or omitting to take any action with respect to any of the agreements, requirements or procedures contained or referred to in this Resolution, the Tax Certificate or other relevant documents pertaining to the Bonds, the City shall do either of the following: (1) obtain a subsequent opinion of Orrick, Herrington & Sutcliffe LLP (“Bond Counsel”) that such change, action or omission will not adversely affect the exclusion from gross income for federal income tax purposes of interest on the Bonds or (2) obtain an opinion of alternative nationally recognized bond counsel to the effect originally delivered by Bond Counsel that, notwithstanding such change, action or omission, interest on the Bonds is excluded from gross income for federal income tax purposes.
SECTION 10.5. CONTINUING DISCLOSURE. The City hereby covenants and agrees that it will comply with and carry out all of the provisions of the Continuing Disclosure Certificate of the City. In the event of failure of the City to comply with the Continuing Disclosure Certificate of the City, the Underwriter and any Bondholder 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 obligation under this Section 10.5 and under the Continuing Disclosure Certificate of the City.
SECTION 11 APPROVAL OF PRELIMINARY OFFICIAL STATEMENT. This City Council hereby approves the Preliminary Official Statement as to form and substance, and in connection therewith, hereby finds, determines and declares (1) that the facts contained in the Preliminary Official Statement as presented on the date hereof are true and correct in all material respects and (2) that the Preliminary Official Statement neither contains any untrue statement of a material fact nor omits to state any material fact necessary to make any statement therein not misleading in light of the circumstances under which it was made. The Preliminary Official Statement shall be deemed “nearly final” for purposes of compliance with U.S. Securities and Exchange Commission Rule 15c(2)-12, and the Director of Finance and Information Systems of the City (the “Finance Director”) is hereby authorized, upon request of the Underwriter, to execute and deliver a certificate respecting such finality along with the Preliminary Official Statement.

This City Council hereby authorizes the making of corrections to or additions to the Preliminary Official Statement by supplement or amendment thereto or by appropriate insertions into the Preliminary Official Statement.

The Underwriter is authorized to distribute the Preliminary Official Statement in connection with its offering of the Bonds to the public, leading to the sale of the Bonds to the Underwriter, as evidenced by execution of the Bond Purchase Contract.

SECTION 12. EXECUTION AND DISTRIBUTION OF OFFICIAL STATEMENT AUTHORIZED. This City Council hereby authorizes the Finance Director to execute the Official Statement to be substantially derived from the Preliminary Official Statement. The Underwriter is authorized to distribute the Official Statement in connection with its offering or reoffering of the Bonds to the public.

This City Council hereby authorizes the preparation of an Official Statement to be substantially derived from the Preliminary Official Statement.

SECTION 13. BOND PURCHASE CONTRACT APPROVED. The proposed Bond Purchase Contract is hereby approved as to form and substance, and once Schedule I thereto has been completed to the satisfaction of the Finance Director, the Finance Director is hereby authorized to execute the same. The Finance Director is further authorized to approve changes and modifications to said Bond Purchase Contract prior to execution, which approval shall be conclusively demonstrated by execution thereof by the Finance Director; provided that (1) the principal amount of the Bonds shall not exceed $840,924.78, (2) the true interest cost with respect to the Bonds shall not exceed six percent (6.0%), and (3) the maximum term of any maturity shall not extend beyond the year 2037.

SECTION 14. AUTHORIZATION FOR RELATED ACTIONS. The officers of the City are hereby authorized and directed, jointly and severally, to do any and all things and to execute and deliver any and all documents which they may deem necessary or advisable in order to carry out, give effect to and comply with the terms and intent of this resolution. Such actions heretofore taken by such officers are hereby ratified, confirmed and approved.

SECTION 15. This resolution shall take effect immediately upon its passage.

PASSED APPROVED AND ADOPTED by the City Council of the City of Brentwood at a regular meeting held on the 24th day of July 2007 by the following vote:


EXHIBIT A
United States of America
State of California
County of Contra Costa

REGISTERED REGISTERED
Number $___________

CITY OF BRENTWOOD
LIMITED OBLIGATION IMPROVEMENT BOND
RANDY WAY SEWER LINE ASSESSMENT DISTRICT

INTEREST RATE MATURITY DATE BOND DATE CUSIP NUMBER
___% September 2, 20__ _______, 2007

REGISTERED OWNER: CEDE & CO.
PRINCIPAL SUM: DOLLARS

Under and by virtue of the Improvement Bond Act of 1915, Division 10 (commencing with Section 8500), of the Streets and Highways Code, (the "Act"), the City of Brentwood, County of Contra Costa, State of California, (the "City"), will, out of the redemption fund for the payment of the Bonds issued upon the unpaid portion of assessments made for the acquisition, work and improvements more fully described in proceedings taken pursuant to Resolution of Intention No. 2007-35, adopted by the Council of the City of Brentwood on February 27, 2007, pay to the registered owner stated above or registered assigns, on the maturity date stated above, the principal sum stated above, in lawful money of the United States of America and in like manner will pay interest from the interest payment date next preceding the date on which this Bond is authenticated, unless this Bond is authenticated and registered as of an interest payment date, in which event it shall bear interest from such interest payment date, or unless this Bond is authenticated and registered prior to February 16, 2008, in which event it shall bear interest from its date, until payment of such principal sum shall have been discharged, at the rate per annum stated above, payable semiannually on March 2 and September 2 in each year commencing on March 2, 2008. Both the principal hereof and redemption premium, if any, hereon are payable at the office of U.S. Bank National Association, as Paying Agent, Registrar and Transfer Agent, in St. Paul, Minnesota (the "Bank"), or at such other place as designated by the Bank, and the interest hereon is payable by check mailed by first class mail, postage prepaid, on each interest payment date to the owner hereof at the owner's address as it appears on the registration books of the Bank, or at such address as may have been filed with the Bank for that purpose, as of the fifteenth day of the month preceding each interest payment date.
This Bond will continue to bear interest after maturity at the rate above stated, provided, it is presented at maturity and payment thereof is refused upon the sole ground that there are not sufficient moneys in said redemption fund with which to pay same. If it is not presented at maturity, interest thereon will run until maturity.
This Bond shall not be entitled to any benefit under the Act or the Resolution Authorizing Issuance of Bonds (the "Resolution of Issuance"), or become valid or obligatory for any purpose, until the certificate of authentication and registration hereon endorsed shall have been dated and signed by the Bank.
[Except for the term Bonds maturing in the year 20__,] each Bond is one of several annual series of Bonds of like date, tenor and effect, but differing in amounts, maturities and interest rates, issued by the City of Brentwood under the Act and the Resolution of Issuance, for the purpose of providing means for paying for the improvements described in said proceedings, and is secured by the moneys in said redemption fund and by the unpaid portion of said assessments made for the payment of said improvements, and, including principal and interest, is payable exclusively out of said fund.
This Bond or any portion of it in the amount of $5,000 or any integral multiple thereof, may be redeemed and paid in advance of maturity upon the second day of March or September in any year by giving at least 30 days' notice by registered or certified mail to the registered owner hereof at such owner's address as it appears on the registration books of the Bank and by paying the principal and accrued interest, together with a redemption premium (calculated as a percentage of the par value of the Bonds being redeemed) as follows for the respective March 2 and September 2 redemption dates:
Redemption Dates
(March 2 or September 2) Redemption Premium
March 2, 2008 through September 2, 2017 3.0%
March 2, 2018 and September 2, 2018 2.0%
March 2, 2019 and September 2, 2019 1.0%
March 2, 2020 and thereafter 0.0%

In addition to redemption in advance of maturity in accordance with the foregoing, the term Bonds maturing on September 2, 20__, are subject to partial mandatory advance redemption, by lot, without premium, on each September 2 on and after September 2, 20__, in accordance with the following schedule and in the following principal amounts:
Year
(September 2) Principal Amount
20__ $
20__
20__ (maturity)

This Bond is transferable by the registered owner hereof, in person or by the owner's attorney duly authorized in writing, at said office of the Bank, subject to the terms and conditions provided in the Resolution of Issuance, including the payment of certain charges, if any, upon surrender and cancellation of this Bond. Upon such transfer, a new registered Bond or Bonds, of any authorized denomination or denominations, of the same maturity, for the same aggregate principal amount, will be issued to the transferee in exchange therefor.
Bonds shall be registered only in the name of an individual (including joint owners), a corporation, a partnership or a trust.
The Bank shall not be required to make such exchange or registration of transfer of Bonds during the period commencing with the fifteenth (15th) day of the month preceding any interest payment date and ending on said interest payment date.
The City will not obligate itself to advance available funds from the City treasury to cure any deficiency which may occur in the bond redemption fund. A determination not to obligate itself shall not prevent the City from, in its sole discretion, so advancing funds.
The City and the Bank may treat the registered owner hereof as the absolute owner for all purposes, and the City and the Bank shall not be affected by any notice to the contrary.
IN WITNESS WHEREOF, said City of Brentwood has caused this Bond to be signed manually or in facsimile by the Director of Finance and Information Systems of said City and by its City Clerk, and has caused its corporate seal to be reproduced in facsimile hereon all as of the _______ day of _______, 2007.
CITY OF BRENTWOOD


City Clerk Director of Finance and Information
Systems

CERTIFICATE OF AUTHENTICATION AND REGISTRATION
This is one of the Bonds described in the within mentioned Resolution of Issuance, which has been authenticated and registered on ______________.

U.S. BANK NATIONAL ASSOCIATION
as paying agent, registrar and transfer agent

By
Authorized Signatory

[Form of Assignment]
ASSIGNMENT
For value received the undersigned do(es) hereby sell, assign and transfer unto the within Bond and do(es) hereby irrevocably constitute and appoint attorney to transfer the same on the register of the Paying Agent, with full power of substitution in the premises.
Date:
SIGNATURE GUARANTEED:
NOTE: The signature(s) to this Assignment must correspond with the name(s) as written on the face of the within Bond in every particular, without alteration or enlargement or any change whatsoever. The signature(s) must be guaranteed by an eligible guarantor institution.
Social Security Number, Taxpayer Identification Number or other Identifying Number of Assignee:

CLERK’S CERTIFICATE

I, Margaret Wimberly, City Clerk of the City of Brentwood, do hereby certify as follows:

The foregoing resolution is a full, true and correct copy of a resolution duly adopted at a special meeting of the City Council of said City duly held at the regular meeting place thereof on the 24th day of July, 2007, of which meeting all of the members of said City Council had due notice and at which a majority thereof were present; and that at said meeting said resolution was adopted by the following vote:

AYES:
NOES:
ABSENT:
ABSTAINED:

An agenda of said meeting was posted at least 72 hours before said meeting at City Hall, 150 City Park Way, Brentwood, California 94513, a location freely accessible to members of the public, and a brief description of said resolution appeared on said agenda.

I have carefully compared the foregoing with the original minutes of said meeting on file and of record in my office, and the foregoing is a full, true and correct copy of the original resolution adopted at said meeting and entered in said minutes.

Said resolution has not been amended, modified or rescinded since the date of its adoption and the same is now in full force and effect.

Dated: _______________, 2007

City Clerk of the City of Brentwood
 

City Administration
City of Brentwood City Council
150 City Park Way
Brentwood, CA 94513
(925) 516-5440
Fax (925) 516-5441
E-mail allcouncil@brentwoodca.gov