SR-6H (31)
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" . ~.it 7d33 MAY 26198
f \flnance\admln\stfrpts/llbrary wpd ~ Ii 70< 3 i
City Council Meeting 5-26-98 Santa Monica, California
TO: Mayor and City Council
FROM: City Staff
SUBJECT: Recommendation to Adopt Resolution Authorizing the Refunding of a Portion
of 1990 General Obligation Bonds for the Main Library Improvements Project
and Approval of Documents, Actions and Other Matters Related Thereto
INTRODUCTION
This staff report requests that the City CounCil adopt the attached resolution authorizing
the advance refunding of a portion of the 1990 General Obligation Bonds for the Main
Library Improvements Project (the "1990 Bonds") previously approved by the voters by the
Issuance of up to $3,500,000 of City of Santa MOnica General Obligation Refunding
Bonds, Series 1998 (Main Library Improvements ProJect) (the "Refunding Bonds")
BACKGROUND
FollOWing voter approval, In Apnl1990 the City Issued $4,500,000 of General ObligatIon
Bonds at an average Interest rate of 6 9% to fmance certain library Improvements for the
Santa MOnica PubliC Library Main Branch, including the acquIsition of adJacent real
property for future expansion and parking purposes The annual debt servIce payments
for the 1990 Bonds IS secured by a voter-approved property tax overnde Currently,
$3,920,000 of the Initial $4,500,000 In 1990 Bonds IS outstanding and Interest rates have
dropped to a level where refunding a portion of the 1990 Bonds Will result In savings to the
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City's property owners
DISCUSSION
After analyzing vanous savings opportumtles, the City's bond financial advisor, Public
Resources AdvIsory Group, determined that debt service savings can only be realized on
those 1990 Bonds matunng In the years 2001 through 2010 The attached resolution
authorizes the CIty to proceed with all steps necessary for Issuance of the RefundIng
Bonds The resolution authonzes the Issuance of a maXImum of $3,500,000 aggregate
pnnclpal amount of Refunding Bonds at a maXimum mterest rate of 5% and also provides
approval of all steps necessary to complete the finanCIng, Including the approval of all
necessary documents and certifIcates and related actions
Attached to thiS staff report are copies of the follOWIng documents necessary for Issuance
of the Refunding Bonds
1 A PaYing Agent Agreement, whereIn the PaYing Agent agrees to receive annual
debt service payments from the City, make bond pnnclpal and Interest payments
to the bondholders and to perform associated responsibilities,
2 An Escrow Agreement, wherein the Escrow Agent receives and holds a portIon of
the proceeds of the Refunding Bonds and certain City funds unt,1 July 1, 2000 when
the 1990 Bonds being refunded Will be paid off,
3 A ContinUing Disclosure Agreement, wherein the City agrees to prOVide certain
information annually to deSIgnated national bond Information deposltones,
2
4 A Preliminary OffiCIal Statement to be used In connection with the offenng and sale
of the Refunding Bonds,
5 An Official Notice Inviting Bids to be published In a newspaper of general circulatIon
within the City for use In connectIon with the solicitation of bIds for the Refunding
Bonds, and
6 A NotIce of Intention to Sell to be published In The Bond Buyer or other financIal
publication for use In connection with soliCitation of bids for the Refunding Bonds
The attached resolution approves all of the above documents substantially In the form
presented to thiS meeting, and authorizes execution and delivery of these documents by
specified CIty offICIals and employees It also approves the preparation, execution and
delivery of a Final OffICIal Statement, and the execution and delivery of any additional
documents and the performance of such acts as may be necessary or deSirable to effect
the offenng, sale and Issuance of the Refunding Bonds
BUDGET/FINANCIAL IMPACT
Based on Interest rates currently available It IS estimated that by refunding that portion of
the 1990 Bonds as specified In the Escrow Agreement, the amount paId by City property
taxpayers over the remaining life of the bonds Will be reduced by approximately $162,000
or 2 8% The annual debt service on the Refunding Bonds and the portion of the 1990
Bonds not refunded WIll continue to be fInanced by a reduced property tax overnde.
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To receive and process the Refunding Bonds proceeds, the following budget changes are
necessary
a) establish a revenue budget of $3,500,000 at account number 01-130-224-00000-
0036-1000,
b) appropriate $3,500,000 at account number 01-700-274-00000-5597-00000
RECOMMENDATION
It IS respectfully recommended that the City CounCil adopt the attached resolution
authOriZing the execution and delivery of the variOUs documents necessary for the
refunding of a portIon of the 1990 Bonds and the Issuance of the General Obligation
Refunding Bonds, Series 1998 (Main Library Improvements Project), and approve the
budget changes set forth above
Prepared By Mike Denms, Director of Finance
Marsha Jones Moutrle, City Attorney
Linda A Moxon, Deputy City Attorney
ATTACHMENTS 1 ResolutIon
2 PaYing Agent Agreement
3 Escrow Agreement
4 Continuing Disclosure Agreement
5 Preliminary OffiCial Statement
6 OffiCial Notice InViting Bids
7 Notice of Intention to Sell
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RESOLUTIO~ NO. 9273 (CCS)
(CITY COVN'CIL SERIES)
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
SANTA MONICA ALTHORIZING THE EXECUTIO~ A.:."fD
DELIVERY OF A PAYING AGENT AGREE~lE:'iT, A."l
ESCROW AGREEl\lE:\'T, A NOTICE OF SALE, A NOTICE
OF I~TENTIO~ TO SELL AND A CONTINUING
DISCLOSURE AGREEMENT WITH RESPECT TO THE
ISSUA.J.l\fCE OF GENERAL OBLIGATION REFUNDING
BONDS, SERIES 1998 (l\-lAIN LIBRARY I:\IPROVEl\IENTS
PROJECT) IN Al~ AGGREGATE PRI~CIPAL Al\'IOUNT
OF NOT TO EXCEED S3,500,000, AUTHORIZING THE
DISTRIBUTION OF Ai"l OFFICIAL STATEMENT IN'
CONNECTION THEREWITH AND AL'-HORIZI:"iG THE
EXECUTIOr-i OF NECESSARY DOCUMENTS AND
CERTIFICATES A."iD RELATED ACTIONS
\VHEREAS, the Cny CouncIl (the "CIty CounCIl") of the CIty of Santa :\1omca, (the
"CIty"), has heretofore Issued Its CIty of Santa MOnIca General ObhgatIOn Bonds, Senes 1990
(Mam Library Improvements ProJect) (the "Pnor Bonds") m the ongmal pnnclpal amount of
54,500,000 for purposes of certaIn hbrary Improvements for the Santa ~10mca Pubhc LIbrary
}..lam Branch.
WHEREAS, the Cay CouncIl has deternllned, and does hereby declare, that It is
necessary and deSIrable and that the prudent management of the fiscal affaIrs of the CIty reqUires
that a portIon of the Pnor Bonds now be refunded,
\"'HEREAS, pursuant to ...utIcle 11 of Chapter 3 of Part 1 of DIVlSlon 2 of Tale 5 of the
CahfornIa Government Code, the CIty IS authonzed to Issue refundmg bonds (the "Refundmg
Bonds") to refund a portIon of the Pnor Bonds and to sell Its RefundIng Bonds at pubhc sale or
on a negotlated sale basIS,
\\'lIEREAS, the City CouncIl has determmed that the issuance of the Refundmg Bonds
wIll not cause the total outstandIng bonded mdebtedness of the Cay to exceed the apphcable
statutory debt hnutatlon, and that the Issuance of the RefundIng Bonds does not reqUlre approval
of the quahfied electors of the Cay,
\VHEREAS, the CIty deSires to sohell from undern-nters proposals to purchase the
RefundIng Bonds pubhcly pursuant to a Not1ce of Sale (the "KotIce of Sale") and Notice of
IntentIOn to Sell (the "NotIce of Intentlon to Sell"), each [0 be used m connectIon WIth the
sOhCltatlon of bIds for the Refundmg Bonds,
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\VHEREAS, the City CouncIl proposes to enter mto a Paymg Agent Agreement wIth
V S Bank Trust NatIOnal ASSOCIatIon, as paymg agent (the "Paymg Agent") for the CIty with
respect to the Refundmg Bonds,
\\''HEREAS, the CIty proposes to enter mtD an Escrow Agreement (the HEscrow
Agreement") WIth U S Bank Trust Nahonal ASSOCIatIon. as escrow agent, for the creatIon of an
escrow fund for deposIt of proceeds of sale of the Refundmg Bonds for the purpose of paymg
and redeemmg the Pnor Bonds,
\\'HEREAS, Rule 15c2-12 promulgated under the SecuntIes Exchange Act of 1934
("Rule 15c2-12") reqUIres that m order to be able to purchase or sell the Refundmg Bonds, the
underwnter thereof must have reasonably determmed that the CIty has undertaken m a \"TInen
agreement or contract for the benefit of the holders of the Refimdmg Bonds to prOVide dIsclosure
of certam finanCIal mformatIon and certaIn matenal events on an ongomg basIS,
\VHEREAS, m order to cause such reqUlrement to be satIsfied, the City deSIres to
execute and delIver a Contmuing DIsclosure Agreement (the "Continumg DIsclosure
Agreement") ,
\VHEREAS, the forms of the Kohce of Sale. the NotIce of IntentIOn to Sell, the Paymg
Agent Agreement, the Escrow Agreement, the Contmumg DIsclosure Agreement and the
prehmmary offiCIal statement descnbmg the City of Santa Moruca General ObhgatIon Refundmg
Bonds. Senes 1998 (Mam Library Improvements ProJect) (the ..Prehmmary OffiCial Statement")
have been submItted to the CIty CouncIl and are on file With the CIty Clerk. and the CIty CounCIl
has exammed and approved each document and deSires to authonze the completIon, where
appropnate, and the executlOn of such documents and the consummatlOn of such financmg,
\\'HEREAS, all acts. condItIOns and thmgs requIred by the ConstItutIOn and laws of the
State of Cahforma to eXIst, to have happened and to have been performed precedent to and In
connectIOn WIth the consummatIOn of such financmg authonzed hereby do eXIst, have happened
and have been performed m regular and due tIme, fonn and manner as reqUIred by law, and the
City IS now duly authonzed and empowered. pursuant to each and every reqUIrement of law, to
consummate such financmg for the purpose, 10 the marmer and on the terms herem proVIded,
~OW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE
CITY OF SA..~T A MONICA, as follows
Section 1. All of the above reCItals are true and correct and the CIty CounCIl so finds.
Section 2. The CIty CouncIl hereby authonzes the sale of the General ObhgatIon
Refundmg Bonds of the CIty and the deSIgnatIOn of saId bonds as the "CIty of Santa MOnIca
General ObhgatIOn Refundmg Bonds, Senes 1998 (Mam LIbrary Improvements Project)" (the
"Refundmg Bonds"), proVIded, that (1) the aggregate pnnclpaI amount of the Bonds shall not
exceed $3,500,000, and (n) the true mterest cost of the Bonds shall not exceed 5% Proceeds
from the sale of the Refundmg Bonds are hereby authonzed to be applIed to pay all costs of
refundmg a portIon of the Pnor Bonds as speCIfied III the Escrow Agreement, mcludmg the
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amount of any prermUID reqUlred to be patd to redeem any of the Pnor Bonds and such mterest
and pnncIpal as may be due upon such refundmg, and to pay authonzed costs of Issuance of the
Refundmg Bonds, mcludmg, WIthOut lImItatIOn, the costs of any msurance or other credit
enhancement WIth respect to the Refundmg Bonds The CIty CounCIl hereby further detenmnes
that all Interest or other gam denved from the Investment of proceeds of the Refundmg Bonds
may be applIed to pay such costs of Issuance of the Refundmg Bonds
The RefundIng Bonds shall be dated as of June 1, 1998, or such other date as the DIrector
of Fmance of the CIty (the "DIrector of Fmance") shall determme, and as shall be provIded m the
Paymg Agent Agreement The maxlmwn acceptable mterest rate on the Refundmg Bonds shall
be as permltted by law, payable as descnbed 10 the PaYIng Agent Agreement The Refundmg
Bonds shall mature on July 1 m any of the years from and mCludmg 1998 to and Includmg 2010,
m pnnclpal amounts to be determmed by the DIrector of Fmance The Refundmg Bonds shall be
of the denommatlOn of $5,000 each or any mtegral multIple thereof (provIded that no Refundmg
Bonds shall have pnnclpal matunng on more than one pnncipal matunty date)
Section 3. The Paymg Agent Agreement, m substantIally the form on file WIth the CIty
Clerk. IS hereby approved and authorized and the Mayor of the CIty, or such other member of the
CIty COUllell as the Mayor may deSIgnate, the CIty Manager of the CIty and the Director of
Fmance of the CIty, or such other officer of the CIty as the Mayor may deSIgnate (the
"Authonzed Officers") are each hereby authonzed and dIrected to execute and deliver the PaYIng
Agent Agreement m substantIally saId form, completed wnh such terms as shall be agreed to by,
and wnh such other changes therem as the Authonzed Officer executIng the same may reqUIre or
approve, such approval to be conclUSIvely eVidenced by the executIOn and delIvery thereof
Section 4. The Escrow Agreement, m substantially the fonn on file wah the CIty Clerk,
IS hereby approved and authonzed and the Authonzed Officers are each hereby authonzed and
directed to execute and deltver the Escrow Agreement In substantmlly saId fonn, completed WIth
such terpls as shall be agreed to by, and WIth such other changes therem as the Authonzed
Officer executIng the same may reqUIre or approve, such approval to be conclUSIvely eVidenced
by the executIOn and delIvery thereof
Section 5. The NotIce of Sale, ill substantIally the form on file Wl.th the Cl.ty Clerk, IS
hereby approved and authonzed and the Authonzed Officers are each hereby authonzed and
dIrected, for and m the name of the CIty, to cause the NotIce of Sale, In substantIally the fonn
presented to tlns meetmg, to be publIshed once m the Santa MOnica Dally Breeze (or In such
other newspaper of general CirculatIon Circulating WIthm the City as an Authonzed Officer shall
approve as bemg m the best mterests of the CIty), not less than 10 days pnor to the date set for
the opemng of bIds m the NotIce of Sale, WIth such changes, msertlOTIS and omISSIOns as an
Authonzed Officer may reqUire or approve, such reqUlrement or approval to be conclUSIvely
eVIdenced by such publlshmg of the Notice of Sale.
Section 6. The terms and condItlons of the offenng and sale of the Refundmg Bonds
shall be as speCIfied m the NotIce of Sale Sealed bids for the purchase of the Refundmg Bonds
shall be received by the CIty at the time and place set forth m the NotIce of Sale The Authonzed
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Officers are each hereby authonzed and directed, for and m the name of the CIty, to accept the
lowest bId for the RefundIng Bonds, or to reject all bIds therefor, m accordance WIth the NotIce
of Sale
Section 7. The NotIce of IntentIon to Sell, In substantIally the form on file WIth the CIty
Clerk, IS hereby approved and aumonzed and the Authonzed Officers are each hereby authonzed
and dlTected, for and m the name of the CIty, to cause the NotIce of IntentIOn to Sell, m
substantIally the form presented to tms meetmg, to be publIshed once m The Bond Buyer (or m
such other financml publIcatIOn generally CIrculated throughout the State of CalIfornIa or
reasonably expected to be dIssemmated among prospectIve bIdders for the Refundmg Bonds as
an Authonzed Officer shall approve as bemg m the best mterests of the CIty) at least 15 days
pnor to the date set for the openmg of bIds In the NotIce of Sale, WIth such changes, InSertIOns
and omISSIOns as an Authonzed Officer may reqUIre or approve, such reqUIrement or approval to
be conclusIvely eVIdenced by such pubhsmng of the NotIce of IntentIon to Sell
Section 8. The PrelImmary OffiCIal Statement, m substantIally the form on file WIth the
CIty Clerk, is hereby approved and the use of the PrelImmary OffiCial Statement m connectIOn
WIth the offenng and sale of the Refundmg Bonds IS hereby authonzed and approved The
Authonzed Officers. are each hereby authonzed to certIfy on behalf of the Cny that the
Prehmmary OffiCIal Statement IS deemed final as of ItS date, wlthm the meanmg of Rule 15c2-12
promulgated under the Secuntles Exchange Act of 1934 (except for the omISSIon of certam
pncmg, ratmg and related mformatlon as permitted by Said Rule)
The Authonzed Officers are each hereby authonzed and directed to furnIsh, or cause to
be furrushed, to prospectIve bIdders for the Refundmg Bonds, a reasonable number of copies of
the 1\ otIce of Sale and the PrelImmary Officlal Statement
Section 9. The preparatIOn and delIvery of a final OffiCIal Statement (the "OffiCIal
Statement"), and ItS use m connectlon WIth the offenng and sale of the Refundmg Bonds IS
hereby authonzed and approved The OffiCial Statement shall be In substantIally the form of the
PrelImmary OffiCial Statement WIth such changes, msertIons and omISSIOns as may be approved
by an Authonzed Officer, such approval to be conclUSIvely eVidenced by the executIOn and
delIvery thereof The Authonzed Officers are each hereby authonzed and dIrected to execute the
final OffiCIal Statement and any amendment or supplement thereto. for and III the name of the
CIty
The Authonzed Officers are each hereby authonzed and dIrected to furnIsh or cause to be
furnJshed to the purchaser of the Refundmg Bonds, as many copIes of the Officlal Statement as
saId purchaser shall reqUire, proVIded that no charge shall be Imposed on the first 250 copIes of
the OffiCIal Statement
Section 10. The Refundmg Bonds represent the general obhgatIOn of the CIty The
money for the redemptIon of the Refundmg Bonds and payment of pnncIpal of and mterest on
the Refundmg Bonds shall be raIsed by taxatIon upon all taxable property m the City and
proVISIOn shall be made for the levy and collectIon of such taxes m the manner proVIded by law
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and for such redemptlon and payment out of the fund created for that purpose under the Paymg
Agent Agreement.
The DIrector of Fmance IS hereby authonzed and dIrected to cause a tax to be levIed on
all taxable property of the CIty at a rate whIch shall be m each fiscal year suffiCIent to pay the
mterest on and pnncIpal of the Refundmg Bonds commg due In that fiscal year, and saId taxes
shall be transferred to the Paymg Agent for depOSIt mto the fund created under the Paymg Agent
Agreement at the tImes requIred thereby for payment of the Refundmg Bonds, provIded that at
no Hme m any smgle fiscal year shall a tax be leVIed to pay the pnnclpal of and mterest and
redemptIOn premIUm, If any, on the Refundmg Bonds and the Pnor Bonds, and the Director of
Fmance IS hereby authonzed and directed to cause the levy of the property tax for payment of the
Pnor Bonds to be dIscontInued
Section 11. The Contmumg DIsclosure Agreement III substantIally the form on file WIth
the Cny Clerk and contaImng such covenants of the CIty as shall be necessary to comply WIth the
reqUlrements of SecuntIes and Exchange COfiUTIlSSIOn Rule 15c2-12, IS hereby approved and
authonzed and the Authonzed Officers are each hereby authonzed and dIrected to execute and
dehver an Instrument In substantIally saId form, completed WIth such terms as shall be agreed to
by, and WIth such other changes therem as the Authonzed Officer executIng the same may
reqUlre or approve, such approval to be conclUSIvely eVIdenced by the executIOn and delIvery
thereof
Section 12. The Authonzed Officers and employees of the CIty are hereby authonzed
and dIrected, Jomtly and severally, to do any and all tlungs WhICh they may deem necessary or
adVIsable m order to consummate the transactlons herem authonzed, and otherwIse to carry out,
gIve effect to and comply WIth the terms and mtent of thIS ResolutIon mcludmg, but not hmIted
to. executmg and dehvenng any and all centficates and representatIons. Includmg SIgnature
cenIficates. no-htIgatlOn certIficates, tax certIficates, and certIficates concernmg the OffiCIal
Statement descnbmg the Refundmg Bonds, necessary and deSIrable to accomphsh the
transactIons set forth above
Section 13. All actIons heretofore taken by the officers, employees and agents of the
CIty WIth respect to the transactIOns set fonh above are hereby approved, confirmed and ratIfied
Section 14. The CIty Clerk shall certify to the adoption of thIS ResolutIon and
thenceforth and thereafter the same shall be In full force and effect
APPROVED AS TO FORM.
!lJ
Marsha Jonesr]Moutne, CIty Attorney
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Adopted and approved tlus dayof_1998
Mayor
I hereby certIfy that the foregomg ResolutIon _ (CCS) was duly adopted at a meetmg
of the CIty CounCIl held on the day of _ 1998 by the followmg vote
AYES CouncIl Members
NOES CouncIl Members
ABSTAIN CouncIl Members
ABSENT CouncIl Members
ATTEST
CIty Clerk
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CLERK'S CERTIFICATE
State of Cahforrua )
County of Los Angeles ) 55
CIty of Santa Moruca )
I, Mana Stewart, CIty Clerk of the CIty of Santa Moruca, County of Los Angeles,
Cahforma, hereby certIfy that to the best afmy knowledge and behef, the foregomg LS a full, true
and correct copy of ResolutlOn _ (CCS), WhlCh IS on file m The Cny Clerk's Department. and
that I have carefully compared the same WIth the ongmals
-.:
~ \\Tr~cSS WHEREOF. r have hereunto set my hand and affixed the seal of the CIty
of Santa MOllica, tlus dayof_1998
[SEAL]
Mana Stewart, CIty Clerk
CIty of Santa MOnIca
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AFFIDA VIT OF POSTING OF AGENDA
STATE OF CALIFORNIA )
) 5S
COU~'TY OF LOS .~~GELES )
hereby declares that _he IS a cItIzen of the Umted
States of Amenca. over the age of 18 years. that actmg for the CIty Counctl of the CIty of Santa
MOnIca _he posted on _' 1998 at . Santa MOllIca. CalIfornIa. a
locatIon freely accessIble to members of the publIc, an agenda for the regular meetmg of the City
CouncIl of the CIty of Santa Monica to be held on . 1998, a copy of WhICh IS
attached hereto
Dated _' 1998
I declare under penalty ofpeIJury that the foregomg
IS true and correct.
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Adopted and approved thIs 26th of May, 1998
;;et7 ~
Robert Holbrook, Mayor
I, Mana M Stewart, City Clerk of the CIty of Santa MOnica, do hereby certify that
the foregoing Resolution 9273 (CCS) was duly adopted at a meeting of the Santa
Monica City CounCil held on the 26th of May, 1998 by the follOWing vote
Ayes Councllmembefs Ebner, Femsteln, Genser, Greenberg, Holbrook,
O'Connor, Rosenstem
Noes Councllmembers None
Abstain Councllmembers None
Absent Counctlmembers. None
ATTEST
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Mana M Stewart, City Clerk
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PAYING AGENT AGREEMENT
by and between the
CITY OF SANTA MONICA
County of Los Angeles, California
and
U.S. BANK TRUST NATIONAL ASSOCIATION
as Paying Agent
Dated as of June 1,1998
Relating To
City of Santa Monica General Obligation Refunding Bonds,
Series 1998 (Main Library Improvements Project)
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ARTICLE I
DEFINITIONS
Section 1 01_ Defimtions. .. .. . . . . - .. -I- ... . . . - . . . ... ., . 2
ARTICLE II
THE REFUNDING BONDS
SectIOn 2 01 AuthonzatIon, T enns of Refunding Bonds... . . . - ... 11
SectIOn 2 02 Form of Refundmg Bonds. .. -I- ..... ~ ...... . . . . ..... .... . .. . 12
SectIOn 2 03 ExecutIOn and AuthentIcatIon of Refundmg Bonds . . . . .. . 13
SectIOn 2 04 Book-Entry System.. " .. ..... ....... ~... ... . ..... -+ . - . . I3
SectIon 2 05 DIscontmuation of Book-Entry System, Transfer and Exchange of
Refundmg Bonds . ... ... ... .... ... ....... .... ... ... ...... .... ...... ~ .. 0- ...... ....+. ... 14
SectIOn 2 06 Refundmg Bond RegIster . . ... . . ..... ..... ....... .. .. . ... .... 15
ARTICLE III
ISSUANCE OF THE REFUNDING BONDS
SectIon 3 01 DelIvery of Refunding Bonds . . ...... ... ......... .... . .. . . .. .. 16
SectlOu 3 02 ApplicatIon of Proceeds of Sale of Refunding Bonds . . ... ...... . . .16
ARTICLE IV
REDEMPTION OF THE REFUNDING BONDS
Sectlon 4 01 Terms of RedemptIOn . . .. -1-'" .. .. .. - . . -. .. 17
SectIOn 4 02 NotIce of Redemption. . . . .' .. ...."'. ... ........ 'It. ..... ... ...... ...... .'" 17
SectIOn 4 03 RedemptIOn Fund. . .. . . . .... .... .- . . - . .19
Section 404. Effect of Redemption. - . . . . . . . . - . .... ... .... . . 19
ARTICLE V
COVENANTS OF THE CITY
SectIOn 5 01 Payment of PnncIpal and Interest.. . . .. . . . ....... .... . . .. 21
SectIOn 502. General ObligatIOn. Levy of Tax. ...... ...... ....... ... ~ .. . . . . . .. .... ..21
SectIon 5 03 VahdIty of Refunding Bonds.. .. .......... ... .. +~ 21
SectIon 5 04 Further Assurances... . ... .. - .. ..... . . .. .,. . . ... .... ., . 21
SectIOn 5_05 Tax Covenants... . .. .. .... ... ..... ... . .. . .. .... .. .. 21
SectIOn 5.06. Investment of Funds . .. . . ..... ..... ..... .. . ., .. . ..... .... . . .. 22
ARTICLE VI
THE PAYING AGENT
Section 6 01 Paying Agent, Acceptance, Removal. Resignation ...... ......... .. .. .... ." 23
SectIon 6 02. DutIes of Paymg Agent . .. .. . . +.... ....... ..... ..... ..... ... .. . .. . 23
SectIOn 603. RelIance on Documents, Etc .. .. .. ...... ......... . - .... ..... . ..... ...... . . 23
SectIon 6.04 ReCItals of City.... '" .. . . .. ....... .... ...... ..... ...... .... .. .. .. . .24
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SectIOn 6 05. May Ovm Bonds . . . . .. . . .. . . . . . . 24
SectIon 6 06. Money Held by Paymg Agent. Investment .. . .. .. ~ .. .... .. ...... ... ....0- . .24
SectIOn 6 07. Investments. . .. .... . .. ... . .. ... ... + 24
SectIOn 608 Other TransactIOns. . .. .... ...... '1-. ... . . . . 25
SectIon 6 09 Inte.rpieader ,.,~
. . . . . . . . . .. . . . .. ",,)
SectIon 6 1 0 IndemnIfication ..,-
. . .. . . . . . . .. ",,)
Sectlon 6.11 CompensatIOn .. . . . ...... ..... .. . .. 26
ARTICLE VII
DEFEASA...~CE OF REFUNDING BONDS
Section 7 01 Defeasance ... '" . .. ... ...... .. . ... . ...... ... .. -r. 27
SectIOn 7 02. UnclaImed Momes. . . . .... ..... .... .0- . .. .. 27
ARTICLE VIII
AMENDMENT OF PAYING AGENT AGREEMENT
Section 801. Amendment with O\\ner Consent; Amendment Without OVvl1er Consent ... . 28
SectIOn 8 02 DIsqualIfied Refundmg Bonds . . .... .0- .. .. .... .29
SectIOn 8 03 Endorsement or Replacement of Refundmg Bonds After Amendment __ ... . . 29
SectIon 8 04 Amendment by Mutual Consent . . .. . . . . .. . . . 29
ARTICLE IX
MISCELLANEOUS
SectIOn 9.01 Counterparts. ... . .. . . . " . ....... .. . . . . 30
SectIOn 9 02 Contmumg Disclosure .. .. .. . . . ..30
SectiOn 9 03. Notices. .. . . . .. ..... ...' . . . .. . . . 30
EXHIBIT A FOR.i\.1 OF REFUNDING BOND. .. .... ... .......... .. ........... ........ .... .. ......... .. ..... A-I
.
DOCSL-\] 252081 4
40233- 3-\.1KH-05'I 8i98 II
PAYING AGENT AGREEMENT
THIS PAYING AGENT AGREEMENT, dated as of June 1. 1998, by and between
U S BANK TRUST NATIONAL ASSOCIATION, a natIOnal bankmg assoclatlon organized
and eXlstmg under and by vIrtue of the laws of the {;mted States of Amenca, as paymg agent
(the '.Paymg Agent"), and the CITY OF SANTA MONICA, a charter city duly orgaruzed and
eXlstmg under and by vIrtue of the ConstItutIon and laws of the State of Cahfonua and Its
Charter (the "Clty"),
WIT N E SSE T H:
\VHEREAS, the City Councd of the CIty (the "Cny CouncIlU) has heretofore on
Apnl 10. 1990, Issued the City of Santa Momca General Obhgatlon Bonds. Senes 1990 (MalO
Library Improvements ProJect) (the .'Prior Bonds") III the origmal pnncipal amount of
$4.500,000. pursuant to a resolution adopted by the City CouncIl on February 13, 1990,
WHEREAS, pursuant to Article 11 of Chapter 3 of Part 1 of DiviSIOn 2 of Title 5 of the
Cahforrna Government Code. the CIty IS authorized to Issue refundmg bonds to refund all or a
portIOn of the Pnor Bonds,
~HEREAS, the City CouncIl has determmed. by Its ResolutIOn No QZ1.3(CCS), adopted
on 2~ 1998, that 11 IS necessary and desirable that a portIOn of the Pnor Bonds (the
"Refunded Bonds'") now be refunded, and has authonzed by said resolutIOn the issuance and sale
of llS "elly of Santa MOnIca General Obhgation Refunding Bonds, Senes 1998 (Mam LIbrary
Improvements ProJect)" (herem called the "'Refundmg Bonds"),
WHEREAS, all acts, condltlonS and thmgs reqmred by law to eXIst, to have happened
and to have been performed precedent to and in connectIOn with the executIOn and entenng into
of thIS Paymg Agent Agreement do eXIst, have happened and have been performed in regular and
due time, form and matUler as reqwred by law, and the partIes hereto are now duly authonzed to
execute and enter Illto thIS Paying Agent Agreement,
NOW, THEREFORE, in order to proVIde for the terms and the payment of the
Refundmg Bonds and the performance and observance by the CIty of all the covenants,
agreements and conditIons herem and m the Refunding Bonds contamed, and in conSIderatIOn of
the mutual covenants and agreements contamed herem, and for other valuable conSIderatIOn, the
CIty and the Paymg Agent hereby agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01. Definitions. Unless the context othemlse reqUIres. the terms defined in
thIs SectIon 1 01 shall for all purposes hereof and of any amendment hereof or supplement hereto
and of the Refundmg Bonds and of any certIficate. opmIOn, request or other document mentIOned
herem or therem have the meanmgs defined herem. the followmg definItIOnS to be equally
applIcable to both the singular and plural forms of any of the terms defined herem
"Authonzed CIty RepresentatIve" shall mean the City Manager of the CIty. the DIrector
of Fmance of the CIty. the Mayor of the CIty. or any duly appomted deputy of any of them
"Bonds" shall mean the Refundmg Bonds
"Busmess Day" shall mean any day other than a Saturday. Sunday. legal holIday or other
day on whIch bankmg InstitutIOns m San FranCISCO or Los Angeles. CalIfornia, or New York.
New York. or any state m whIch the pnnclpal corporate trust office of the Paymg Agent IS
located. are authonzed or reqUIred by law to close, or any day on whIch the New York Stock
Exchange IS closed
''CertIficate ofthe CIty" See "Request of the CIty" defined herem
"CIty" shall mean the City of Santa MOnIca. County of Los Angeles, State of CalifornIa,
"Clty COunCIl" shall mean the CIty Council of the CIty
"CIty Manager" shall mean the City Manager of the City
"City Treasurer" shall mean the CIty Treasurer/Revenue Manager of the CIty
"Clerk" shall mean the CIty Clerk of the CIty
"Code" shall mean the Internal Revenue Code of 1986
''ContmUlng DIsclosure Agreement" shall mean that certam Contmumg Disclosure
Agreement by and between the CIty and the Paymg Agent dated as of June L 1998. as ongmally
executed and as it may be amended from tIme to time In accordance WIth the terms thereof
"Costs of Issuance" shall mean all of the following
(I) All expenses inCIdent to the callmg. retmng or paymg of the Refunded
Bonds and to the issuance of the Refunding Bonds, including, but not lImited to, any fees
and charges of the Escrow Agent and the Paymg Agent In connection with the Issuance
of the Refundmg Bonds or m connectIOn ~lth the payment and redemptlOn of the
Refunded Bonds,
DlXSlA 1 252()g 1 4
40233-3-MKH-05'18/98 2
(Ii) Interest upon the Refunded Bonds from the date of sale of the Refunding
Bonds to and including the date of payment and redemptIOn of the Refunded Bonds,
(IiI) Any premIUm reqUIred to be patd on the Refunded Bonds at the Hme of
redemption thereof
"Costs ofIssuance Fund" shall mean the account of that name created pursuant to SectIOn
3 02(a) hereof
"Dated Date" shall mean June 1, 1998
"Debt ServIce Fund" shall mean the "CIty of Santa Momca General ObhgatIOn
Refundmg Bonds, Senes 1998 Debt ServIce Food" created pursuant to SectIon 3 02(a) hereof
"'Escrow Agent'" shall mean D.S Bank Trust NatIonal ASSocIatIOn, ItS successors and
asSIgns.
"Duector of Fmance" shall mean the DIrector of Fmance of the CIty
"Interest Payment Date" shall mean January 1 or July 1 of each year. as specified in
SectIOn 2.01 hereof
"Law" shall mean Article 11 of Chapter 3 of Part 1 of DIVISIOn 2 of Title 5 of the
CalIfornIa Government Code, and other applIcable law.
"OpmIOn of Counsel" shall mean a \\oTItten oplmon of counsel of recogmzed natIOnal
standmg m the field of law relatmg to mumcIpal bonds. appomted and patd by the City
"O\.\ner' shall mean the person m whose name any Refundmg Bond shall be regIstered
;"Paymg Agent"' shall mean D.S Bank Trust NatIOnal AssocIatlOn, Los Angeles,
CalIfornIa. actmg as paymg agent. regIstrar. and transfer agent \vIth respect to the Refundmg
Bonds. Its successors and assigns and any other corporatIon or assocIation whlCh may at any tIme
be substltuted m 11S place as provided In SectIon 6 01 hereof
"PermItted Investments" means any of the followmg to the extent then permItted by
apphcable law, but only to the extent that the same are acquued at faIr market value'
(1) (a) dlfect obhgatlons (other than an obligation subject to variatIon
in pnncIpal repayment) of the Umted States of Amenca ("Umted States Treasury
OblIgatIons"), (b) obhgatlOns fully and uncondItIonally guaranteed as to tImely
payment of pnncIpal and Interest by the Umted States of America, (c) obhgahons
fully and uncondItionally guaranteed as to tImely payment of pnncIpal and
mterest by any agency or instrumentality of the Vmted States of America when
such obligatIons are backed by the full faith and credit of the Umted States of
America, or (d) eVIdences of ownerslup of proportionate mterests In future
mterest and pnncipal payments on obhgations descnbed above held by a bank or
trust company as custodIan, under WhICh the owner of the mvestment IS the real
DOCSLA I 252081 4
40233.3-"1KH-05iI8/98 3
party in Interest and has the nght to proceed dIrectly and Individually agamst the
obhgor and the underlying government obhgatlOns are not aVaIlable to any person
claimmg through the custodIan or to whom the custodIan may be oblIgated
(collectlvely "united States ObltgatlOns")
(2) obhgatlOns of government-sponsored agencies whIch are not
backed by the full faith and credit of the Umted States of Amenca
(3) unsecured ceruficates of deposIt, tIme deposits. and bankers .
acceptances (havmg matuntles of not more than 180 days) of any bank the short-
term obhgatlons of which are rated "A-l +., or better by S&P and "P-l" or better
by Moody's
(4) money market funds rated "AAm" or "AAm-G" or better by S&P
and "AA" or better bv Moody's
.. .
"Pnnclpal Payment Date" shall mean July 1 of each year specified in SectIOn 2 01 hereof.
"Pnor Bonds" shall mean the "CIty of Santa Monica General ObhgatIOn Bonds, Series
1990, (Mam LIbrary Improvements Project)" Issued III the ongmal pnncipal amount of
$4,500,000. whIch are being refunded through the Issuance of the Refunding Bonds
"Purchaser" shall mean
"Record Date" shall mean the fifteenth day of the month rmmedlately precedmg an
Interest Payment Date. whether or not such day IS a Busmess Day.
"Redemption Date" shall mean the Interest Payment Date on WhiCh the Refundmg Bonds
or any of them are called for redemptIon, as prOVided III Article IV hereof
"RedemptIon Fund" shall mean the fund of that name created pursuant to SectIOn 4.03
hereof
"Refunded Bonds" shall mean the "City of Santa Monica General ObhgatlOn Bonds.
Senes 1990, (Main LIbrary Improvements Project)"" Issued in the ongInal pnnClpal amount of
$4.500.000. whIch are bemg refunded through the Issuance of the Refunding Bonds as speCified
In the Escrow Agreement
"Refunding Bonds" shall mean the CIty of Santa MOnIca General ObligatIOn RefundIng
Bonds, Senes 1998 (Mam Library Improvements Project), Issued pursuant to ArtIcle II hereof.
'-Request of the CIty" or "Certificate of the City" shall mean a wntten request or vmtten
certificate. respectively. authorized and SIgned by an Authonzed CIty Representattve
"Tax CertIficate" shall mean the Tax Certificate concemmg certain matters pertaInmg to
the use of proceeds of the Refunding Bonds, executed and delivered by the City on the date of
Issuance of the Refunding Bonds, mcludmg all exhIbIts attached thereto, as such certificate may
from tIme to time be mollified or supplemented In accordance WIth the terms thereof
DOCSLAl 2520lH ~
40233-3-\1KH-05/18198 4
CITY OF SANTA l\fONICA IS No. 97-017
PLANNING AND COMMUNITY DEVELOPMENT DEPARTMENT
CIty Hall, 1685 Mam Street, Santa MOnica. California 90401-3295
Il'iITIAL STUDY
AND
!\.~IGHBORHOOD IMPACT STATE~fENT
DA TE FILED 12/30/97
ThIs checklIst IS to be completed for all projects which are not exempt from environmental review
under the CalIfornIa EnVironmental QualIty Act (CEQA). The mformatIOn, analysIs and
conclusIOns contaIned In the checklist form the baSIS for decldmg whether an EnVironmental
Impact Report (EIR) or Negahve Declaration (ND) IS to be prepared. AddItIOnally, the checklIst
shall be used to focus an EIR on the effects determmed to be potentIally slgmficant.
I. INTRODUCTION
1. Project Title: Preferential Parking Zone "~'N"
2. Lead Agency Name and Address City Planning Division, Planning and
Community Development Department, 1685 Main Street, Santa Monica, Ca
90401
3 Contact Person and Phone Number' Paul Foley, Associate Planner -- (310) 458-
8341
4. Project Location Pearl Street between Euclid Street and Eleventh Street
S. Project Sponsor' 5 Name and Address. Parking and Traffic Engineering Division,
Planning and Community Development Department, 1685 Main Street, Santa
Monica, CA 90401
6. General Plan DeSignatIOn N/A
7. Zomng N/A
8 DescnptlOn of Project On Pearl Street between Euclid Street and Eleventh
Street, on-street parking restrictiOns to be implemented as follows: No Parking
between the hours of 8:00am to 8:00pm, Monday through Thursday. and
8:00am to 5:00pm Friday, except by permit.
1 eff3
The Refundmg Bonds shall mature on July 1 of each of the years, m the pnncipal
amounts, and beanng interest at the respectIve interest rates, shown below'
Matunty Date Pnnclpal Interest
(July 1) Amount Rate
1999 $ %
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
The pnncIpal and any premIUm of the RefundIllg Bonds shall be payable III lawful money
of the DUlted States of Amenca to the Owner thereof. upon the surrender thereof at the office of
the Paymg Agent m Los Angeles, CalIfornIa or at such other location as the Paymg Agent shall
desIgnate The interest on the Refundmg Bonds shall be payable m lIke la'\.\'ful money to the
person whose name appears on the bond regIstratIOn books of the Paymg Agent as the O\\;ner
thereof as of the close of busmess on the Record Date ImmedIately precedmg such Interest
Payment Date
Payment of the interest on any Refundmg Bond m accordance vmh Section 6 02 shall be
made to the person appeanng on the bond reglstratlon books of the Paymg Agent as the O'\.\'ner
thereof. such Interest to be paId by check or draft maIled by first class mall to such Owner at
such Owner' s address as It appears on such regIstratIon books or at such address as the Ovvner
may have filed with the Paymg Agent for that purpose, or upon wntten request of the O\\ner of
Bonds aggregating not less than $1.000,000 in pnnclpal amount. gIven no later than the close of
busmess on the Record Date nnmedIately precedmg the applIcable Interest Payment Date. by
WIre transfer III lllnnedlately aVaIlable funds to an account mamtamed III the Umted States at
such wue address as such Owner shall specify III Its \-vrinen notIce So long as Cede & Co or Its
regIstered assigns shall be the regIstered owner of any of the Refundmg Bonds. payment shall be
made thereto by Volre transfer as prOVIded III SectIon 2 04( d) hereof
Section 2.02. Form of Refundin2 Bonds. The Refunding Bonds, the PaYlllg Agent's
cenIficate of authentication and regIstratIon, and the fonn of asSIgnment to appear thereon shall
be III substantIally the forms. respectIvely, attached hereto as ExhIbn A, with necessary or
appropnate vanatIons, omISSIOns and insenions as permItted or reqUIred by thIs Paymg Agent
Agreement.
Section 2.03. Execution and Authentication of Refundio2 Bonds. The Refundmg
Bonds shall be Signed by the manual or faCSImile sIgnature of the CIty Manager of the CIty and
DOCSLA I 252081 4
40233-3.\ofKH-05/18/98 6
shall be countersIgned by manual or facsimIle sIgnature of the Clerk The Refundmg Bonds shall
be authenticated by a manual signature of a duly authonzed omcer of the Paymg Agent.
Only such of the RefundIng Bonds as shall bear thereon a certIficate of authentIcation and
regIstratIOn m the form hereinafter reCIted. executed by the Paying Agent, shall be vahd or
oblIgatory for any purpose or entItled to the benefits of tlus PaYIng Agent Agreement. and such
certificate of the Paying Agent shall be conclUSIve eVIdence that the Refundmg Bonds so
authentIcated have been duly authentIcated and delIvered hereunder and are entItled to the
benefits of thIS Paymg Agent Agreement
Section 2.04. Book-Entrv System. (a) The Refunding Bonds shall be initIally Issued
and regIstered as prOVIded in SectIon 201 hereof. Registered ownershIp of the Refundmg Bonds,
or any portIOn thereof. may not thereafter be transferred except
(1) 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
(11) of tills 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;
(11) 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
deposllory or Its successor) from ItS functIOns as depOSItory. or (2) a determmatIon 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. proVlded, that any
such substItute depOSItory shall be qualIfied under any apphcable laws to proVIde the
serVIces proposed to be proVided by It. or
(111) 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 determmatIon by the City to remove The
DepOSItory Trust Company or Its successor (or any substitute depository or ItS successor)
from Its functIons as depository.
(b) In the case of any transfer pursuant to clause (1) or clause (11) of subsectIOn
(a) hereof. upon receIpt of the outstandIng Refundmg Bonds by the Paymg Agent. together with
a Request of the City, a new RefundIng Bond for each matunty shall be executed and delIvered
In the aggregate prinCIpal amount of the Refundmg Bonds then outstandmg. registered m the
name of such successor or such substltute deposItory, or therr nOIDmees, as the case may be, all
as speCIfied In such Request of the CIty In the case of any transfer pursuant to clause (ill) of
subsectIon (a) hereof. upon receIpt of the outstandmg Refundmg Bonds by the Paying Agent
together WIth a Request of the City, new Refundmg Bonds shall be executed and delIvered ill
such denominations numbered in the manner determIned by the Paying Agent and registered ill
the names of such persons as are requested In such Request of the CIty, subject to the lImItatIOns
of Section 201 and the receipt of such a Request of the City. and thereafter, the Refundmg
Bonds shall be transferred pursuant to the proVISIons set forth ill Section 2.05 of this Paymg
DOCSLAl 252081 4
40233-3-\tKH-05i 18/98 7
Agent Agreement, proVlded. that the Paymg Agent shall not be required to delIver such new
Refunding Bonds wItlun a period of fewer than SIxty (60) days
(c) The City and the Paymg Agent shall be entitled to treat the person m
whose name any Bond IS regIstered as the O\.\ner thereof, notwithstanding any notIce to the
contrary receIved by the Paymg Agent or the Cny. and the City and the Paymg Agent shall have
no responsibIlIty for transmlttmg payments to, communicatmg with, notIfymg, or otherWIse
dealmg with any beneficIal owners of the RefundIng Bonds. NeIther the City nor the Paymg
Agent shall have any responSIbIlity or oblIgatIOn. legal or otherwIse, to the beneficIal owners or
to any other party mcludmg The Depository Trust Company or itS successor (or substItute
depository or Its successor). except as the owner of any Refundmg Bonds.
(d) So long as the outstandmg Refundmg Bonds are regIstered m the name of
Cede & Co or Its registered asSIgns, the CIty and the Paymg Agent shall cooperate \\llth Cede &
Co. as sole holder, or its registered asSigns. III effectmg payment of the princIpal of and mterest
on the Refundmg Bonds by arranging for payment III such manner that funds for such payments
are properly IdentIfied and are made llnmediately avaIlable on the date they are due
Section 2.05. Discontinuation of Book-Entry System; Transfer and Exchan2;e of
Refundin~ Bonds,_ In the event that at any tIme the Refundmg Bonds shall no longer be
regIstered III the name of Cede & Co as a result of the operation of SectIon 2 04 hereof. then the
procedures contained m thIS Section 2 05 shall apply
(a) Transfer of Refundmg Bonds. Any Bond may, in accordance with its
terms. be transferred upon the books reqUired to be kept pursuant to the prOVISIons of SectIon
2.06 hereof by the person m whose name It IS regIstered. in person or by the duly authonzed
attorney of such person. upon surrender of such Refundmg Bond to the Paying Agent for
cancellatIon. accompanIed by delIvery ofa duly executed \\iTItten mstrument of transfer m a form
approved by the Paymg Agent
Whenever any Refundmg Bond or Bonds shall be surrendered for transfer, the deSIgnated
CIty offiCIals shall execute (as proVIded in SectIon 203 hereof) and the Paymg Agent shall
authentIcate and delIver a new Refundmg Bond or Bonds of the same series and matunty, for a
lIke aggregate pnncIpal amount The Paymg Agent shall reqUire the payment by the O""ner
requestmg any such transfer of any tax or other governmental charge reqUlred to be pald \\1th
respect to such transfer.
No transfer of Refundmg Bonds shall be reqUIred to be made by the Paymg Agent during
the period from and after any Record Date to and mcludmg the applIcable Interest Payment Date
(b) Exchange of Refunding Bonds. Refunding Bonds may be exchanged at
the office of the Paying Agent in Los Angeles, CalifornIa. or such other place as the Paymg
Agent shall deSIgnate, for a like aggregate prinCIpal amount of Refundmg Bonds of other
authonzed denommatlons of the same matunty. The Paymg Agent shall require the payment by
the Ov.l1er requestmg such exchange of any tax or other governmental charge reqUlred to be paid
WIth respect to such exchange No exchange of Refunding Bonds shall be reqUIred to be made by
DOCSlAI 2520111 4
4023J-3-MKH-05!18198 8
- - ----
the PaYIng Agent dunng the penod from and after any Record Date to and includIng the
apphcable Interest Payment Date
Section 2.06. Refunding Bond Reeister. (a) The Paymg Agent wIll keep or cause to
be kept. at Its pnnclpal corporate trust office. suffiCIent books for the regIstration and transfer of
the Refundmg Bonds. which shall at all times be open to mspectlOn by the Clty. and. upon
presentatIon for such purpose. the Paymg Agent shall, under such reasonable regulatlOns as it
may prescnbe. register or transfer or cause to be registered or transferred. on SaId books,
Refundmg Bonds as herembefore provIded
(b) The PaYIng Agent shall assIgn each Refundmg Bond authenticated and
registered by it a dIstInctIve letter. or number. or letter and number
DOCSL<\] 2520814
40233-3-"1KH-05i 18/98 9
ARTICLE III
ISSUANCE OF THE REFUNDING BONDS
Section 3.01. Delivery of Refundine; Bonds. The Paymg Agent IS hereby authonzed to
authentIcate and dehver the Refundmg Bonds to or upon the written order of the City. pursuant
to the Purchase Contract
Section 3.02. Application of Proceeds of Sale of Refunding Bonds. The City shall
direct the Purchaser, pursuant to the Purchase Contract. to pay the net purchase pnce of the
Refundmg Bonds by wire transfer to the Paymg Agent upon the delivery of and m exchange for
the receipt of the Refunding Bonds. and the Paymg Agent shall deposit or transfer srod sum as
follows
(a) The amount of $ . to V.S Bank Trust NatIOnal ASSOCIatlOn, as
Escrow Agent for the Refunded Bonds. for deposit pursuant to that certam Escrow
Agreement dated as of June 1. 1998. by and between the City and the Escrow Agent. with
respect to the Refunded Bonds,
(b) The amount of $ , for depoSIt in the Costs of Issuance Fund.
which IS hereby created and shall be held by the Paymg Agent on behalf of the CIty,
which amount shall be apphed to pay authonzed Costs of Issuance of the Refundmg
Bonds pursuant to a Request or Requests of the CIty
(e) The amount of S , representmg the accrued interest on the
Refunding Bonds from June 1. 1998. through _' 1998, for depOSIt in the City of
Santa Momca General ObligatIOn Refundmg Bonds. Senes 1998 Debt ServIce Fund,
WhICh IS hereby created and WhICh shall be held by the Paymg Agent hereunder on behalf
of the City
.Any momes remammg m the Costs of Issuance Fund on . 1998. shall be
transferred to the Debt ServIce Fund descnbed above, to be apphed to the payment of mterest
and prmcipal, to the extent of such momes, on the next succeedmg Interest Payment Date
DOCSLAI 2520814
40233- 3-MKH-05118198 10
ARTICLE IV
REDEMPTION OF THE REFUNDING BONDS
(a) Terms of Redemption. Mandatory SInking Fund RedemptIOn. The
Refundmg Bonds matunng on July 1, 20_, upon notIce as heremafter provided, shall also be
subject to mandatory smkmg fund redemptIOn pnor to maturity. 10 part, by lot. on July 1. 20_,
III the amount of the mandatory sInkmg fund payments set forth below. at a redemptlon pnce
equal to the sum of the prmcIpal amount thereof plus accrued mterest thereon to the Redemption
Date. \\lthout premIUm.
Mandatory SInking Fund
Payment Date Mandatory SInkmg Fund
(July 1) Payment Amount
$
*
*~1atunty
Section 4.02. Notice of Redemption. (a) NotIce of any redemptIOn of Refunding
Bonds shall be maIled by the Paying Agent m accordance wIth a \\Titten Request of the CIty
gIven pursuant to SectIOn 4.02( c), postage prep81d. not less than thIrty (30) nor more than SIXty
(60) days pnor to the RedemptIon Date (1) to the respectIve regIstered O\\iners thereof at the
addresses appeanng on the bond regIstratIon books, (11) to the Secuntles Deposltones speCIfied
below, and (ui) to one or more of the Information ServIces specified below. and the CIty shall
also cause such notice to be gIVen as required by the Contmuing DIsclosure Agreement NotIce
of redemptIOn to the Secuntles Deposltones and the InformatIon ServIces shall be gIven by
regIstered mall. Each notIce of redemption shall (a) state the date of such notIce, (b) state the
name of the Refunding Bonds and the date of issue of the Refundmg Bonds; (c) state the
redemptIOn date, (d) state the redemptIOn price, (e) state the dates of maturity of the Refundmg
Bonds to be redeemed. and, ifless than all of the Refundmg Bonds of any such maturIty are to be
redeemed. the distinctIve numbers of the Refundmg Bonds of such matunty to be redeemed. and
In the case of Refunding Bonds redeemed in part only, the respectIve portions of the pnnclpal
amount thereof to be redeemed; (f) state the CUSIP number. If any, of each matunty of
Refunding Bonds to be redeemed, (g) reqUIre that such Refunding Bonds be surrendered by the
owners at the office of the Paymg Agent m Los Angeles, CalIforma, or at any other place or
places designated by the PaYIng Agent, and (h) gIve notIce that further mterest on such
Refundmg Bonds wIll not accrue after the deSIgnated redemption date
F or the purposes of tlus Section, InformatIon ServIces shall mean
DOCSLAI 252081 4
40233-3-MKH-QS/18,'98 11
FmancIal Informatlon. Inc:s
"DaIly Called Bond ServIce."
30 Montgomery Street, 10th Floor
Jersey City, New Jersey 07302
AttentIOn EdItor
Kenny InformatIOn ServIces'
"Called Bond ServIce"
55 Broad Street. 28th Floor
New York, New York 10004
Moody's "MunICIpal and Government""
99 Church Street, 8th Floor
New York. New York 10007-2796
AttentIon' MUnICIpal News Reports
Standard and Poor's "Called Bond Record"
25 Broadway, 3rd Floor
New York. New York 10004
SecuritIes DeposItones shall mean
The Depository Trust Company
711 Stewart Avenue
Garden Cny, New York 11530
Fax-(516) 227-4039 or 4190
MIdwest SecurltIes Trust Company
CapItal Structures - Call Nonficatlon
440 South LaSalle Street
Clncago, IllmOls 60605
Fax-(312) 663-2343
PhIladelplna Depository Trust Company
ReorganIzatIOn DivisIOn
1900 Market Street
PhiladelphIa, PennsylvanIa 19103
Attention Bond Department
Dex-(215) 496-5058
or, In accordance \'llth then-current gwdehnes of the Secuntles and Exchange CommIssIOn, such
other addresses and/or such other services provIdmg mformatIon WIth respect to called bonds
and/or such other securitIes deposItories, or no such servIces or deposItones, as the Cny may
deSIgnate m a Request of the Cny dehvered to the Paymg Agent.
(b) The actual receIpt by any Owner or of any Information ServIce or
SecuntIes Depository of notice of such redemptIon shall not be a condItion precedent to
redemptIOn, and faIlure to receIve such notice or any defect in the notIce matled shall not affect
rxx:SLAl 2520814
40233 -3-\IKH-05/18/98 12
the validIty of the proceedmgs for the redemptJon of such Refunding Bonds or the cessation of
accrual of Interest on the date fixed for redemptIOn.
(c) The notice or notices reqmred for redemptIOn shall be given by the Paying
Agent. upon the \\-TItten Request of the CIty spec1:t}mg all mformatJon reqUIred by SectIOn
4 02(a) to be included In the notIce A certIficatIOn by the Paymg Agent or the Cny that notIce of
call and redemptIon has been gIven to Owners and to the appropnate SecuntIes DeposItones and
Information SerVIces as herem provIded shall be conclusive as agamst all partIes. and no Owner
whose bond is called for redemptIon may object thereto or object to the cessatlon of accrual of
mterest on the RedemptIon Date by any clmm or showmg that said Ov..ner faIled to actually
receIve such notIce of call and redemptIOn
Section 4.03. Redemption Fund. Prior to the tIme the CIty determines to call and
redeem any of the Refundmg Bonds there shall be estabhshed m the treasury of the City or
deposIted WIth the Paymg Agent a redemption fund or account (the ""RedemptIOn Fund") for the
Refundmg Bonds. and pnor to or on the RedemptIOn Date there must be set aSIde m said
RedemptIOn Fund moneys aVailable for the purpose and suffiCIent to redeem, at the premIUms
payable as m SectIon 401(a) provIded. the Refunding Bonds designated in said notice of
redemptIon SaId moneys must be set asIde in saId Redemption Fund. and shall be applIed on or
after the RedemptIon Date, solely for payment of prinCIpal of and premium. if any, on the
Refunding Bonds to be redeemed upon presentatIOn and surrender of such Refundmg Bonds.
Any mterest due on or pnor to the RedemptIOn Date may be paId from the Debt Service Fund
proVIded for herem. or may be paId from the RedemptIOn Fund, as the City shall determine
Section 4.04. Effect of Redemption. (a) When notlce of redemption has been given,
substantIally as proVIded for herem, and when a CertIficate of the CIty shall have been delivered
to the Paymg Agent certIfying that the amount necessary for the payment of pnncIpal of and
premIUm. if any, on the Refundmg Bonds to be redeemed IS set aSIde for such purposes m the
Debt ServIce Fund, as prOVIded for herem. the Refundmg Bonds deSIgnated for redemptIOn shall
become due and payable on the date fixed for redemptIOn thereof. and upon presentation and
surrender of said Refundmg Bonds at the place speCIfied m the notice of redemption, such
Refundmg Bonds shall be redeemed and paid at SaId redemption pnce out of moneys transferred
to the Paymg Agent for the purpose, and the Paymg Agent "'111 pay such redemptIon pnce m
accordance WIth SectIOn 602, and no interest will accrue on such Refundmg Bonds called for
redemptIOn after the RedemptIOn Date speCIfied m such notIce. and the owners of SaId
Refunding Bonds so called for redemption after such redemptIOn date shall look for the payment
of such Refunding Bonds and the premIum thereon only to said RedemptIOn Fund and any
moneys transferred therefrom to the Paymg Agent for such purpose All Refundmg Bonds
redeemed shall be cancelled forthwith by the Paymg Agent and shall not be reIssued
DOCSL>\I 25208] 4
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ARTICLE V
COVENANTS OF THE CITY
Section 5.01. Payment of Principal and Interest. On or before the Busllless Day
]mmedIately pnor to the date any payment ]s due ill respect of the Refundmg Bonds, the CIty
w111 cause momes on depOSIt m the debt service fund created III the treasury of the Cny for the
payment of the Refundlllg Bonds (\V-hICh fund may be the same fund created for the payment of
the Refunded Bonds). or, to the extent necessary, such other momes as shall be la\\fully
avallable for the payment of the Refunding Bonds. to be deposited wIth the Paying Agent
sufficIent to pay the pnncipal and the mterest (and premium. if any) to become due III respect of
all Refundmg Bonds outstanding on such payment date. Vv'hen and as paId m fulL and follmvmg
surrender thereof to the PaYIng Agent. all Refundmg Bonds shall be cancelled by the PaYIng
Agent. and thereafter they shall be destroyed
Section 5.02. General Oblig:ation; Levy of Tax. The Refundlllg Bonds represent a
general oblIgatIOn of the Cny. The money for the payment of pnnc]pal and mterest on the
RefundIng Bonds shall be raIsed by ad valorem taxatIOn W1.thout lImItatIOn as to rate or amount
(except WIth respect to certam personal property which is taxable at lImIted rates) upon all
taxable property m the Cny. and provision shall be made for the levy and collectlOn of such taxes
m the manner provIded by la\..-, and such money shall be deposIted by the Director of Fmance in
the debt servIce fund created m the treasury of the CIty for the payment of the Refundmg Bonds
(whIch fund may be the same fund created for the payment of the Refunded Bonds)
Section 5.03. Validitv of RefundlD&:; Bonds. The recnal contaIned m the Refundmg
Bonds that the same are regularly Issued pursuant to the law shall be conclUSIve eVidence of
theIr valIdIty and of compltance WIth the proVISIons of the Law III their issuance
Section 5.04. Further Assurances. The CIty WIn promptly execute and deliver or cause
to be executed and delIvered all such other and further Instruments, documents or assurances.
and promptly do or cause to be done all such other and further thIngs. as may be necessary or
reasonably reqUIred in order to further and more fully vest In the O\\-ners all nghts, Interest.
powers, benefits. privIleges and advantages conferred or Intended to be conferred upon them by
tills PaYIng Agent Agreement
Section 5.05. Tax Covenants. (a) The Cny covenants that It shall not take any actIOn,
or fail to take any actIOn. If such action or failure to take such actIOn would adversely affect the
exclUSIOn from gross income of the interest payable on the Refundlllg Bonds under SectIon 103
of the Code WIthOut limitIng the generality of the foregomg, the Cny covenants that It wIll
comply \vnh the requIrements of the Tax Certtficate, whIch IS mcorporated herem as If fully set
forth herem ThIS covenant shall sun-'lVe payment III full or defeasance of the Refundmg Bonds
(b) In the event that at any tIme the CIty IS of the opmlOn that for purposes of thIS
SectIOn It is necessary or helpful to restnct or lImIt the YIeld on the mvestment of any monies
held by the Paymg Agent hereunder. the CIty shall so mstruct the Paymg Agent III writmg.
DOCSLAt 252(J81 4
40233.3.\.IKH-05/l8i98 14
(c) NotwIthstandIng any provlSlon of thIS SectIOn, If the City shall obtam an Oplmon
of Counsel that any specIfied action reqUIred under this SectIon IS no longer reqUired or that
some further or dIfferent actIOn is reqUired to maIntaIn the exclUSIOn from federal Income tax of
Interest on the RefundIng Bonds. the City and the Paymg Agent may conclUSIvely rely on such
OpInIOn of Counsel in complYIng wIth the reqUIrements of thIS SectIOn and of the Tax
Certificate, and the covenants hereunder shall be deemed to be modIfied to that extent
Section 5.06. Investment of Funds. Momes In any fund created hereunder and held by
the CIty shall be mvested by or at the direction of the Director of Fmance or the CIty Treasurer In
accordance With the CIty'S Investment policy and pursuant to applIcable law. Momes held by the
Paymg Agent shall be held and Invested pursuant to Section 6 06 hereof
.
DOCSL....l 252081 4
40233.3. \1KH-05/18198 15
ARTICLE VI
THE PAYING AGENT
Section 6.01. Pavin!! A1!:ent; Acceptance; Removal; Resignation. U S Bank Trust
NatIOnal ASSOCIatIon, Los Angeles. Califorma. IS hereby appomted Paymg Agent. and hereby
accepts and agrees to perform the dutIes and obligations of the Paymg Agent, regIstrar and
transfer agent specIfically unposed upon It by thIS Paymg Agent Agreement. and no implIed
dutIes shall be read mto thIs Paymg Agent Agreement against the Paymg Agent
The City may at any Hme remove the Paying Agent and appomt a new Paymg Agent;
proVided that the removal shall not be effectIve until a new Paymg Agent IS appomted
The Paymg Agent may at any tIme reSIgn by gIvmg .written notice to the City of such
reSIgnatIOn. whereupon the CIty shall promptly appomt a successor PaYIng Agent by the
reSIgnatIOn date ResjgnatIOn of the Paymg Agent v.r1ll be effectIve forty-five (45) days after
notIce of the reSIgnatIOn IS given as stated above or upon appointment of a successor Paymg
Agent. whIchever first occurs After recelvmg a notIce of reSIgnatIOn of the Paymg Agent, the
City may appomt a temporary Paymg Agent to replace the reSIgning Paymg Agent untIl the CIty
appoInts a successor Paymg Agent Any such temporary Paying Agent appomted by the CIty
shall lllllnedlately and WIthout further act be superseded by the successor Paymg Agent upon the
appomtment of and acceptance thereof by such successor.
The Paying Agent 15 hereby authonzed to pay and redeem the Refundmg Bonds when
duly presented for payment at maturity, and to cancel all RefundIng Bonds upon payment
thereof The Paymg Agent shall keep accurate records of all funds admmlstered by It and of all
Refunding Bonds paId and dIscharged.
Section 6.02. Duties of Paying Agent. The Paymg Agent hereby agrees, proVlded
suffiCIent lIumedmtely avaIlable funds have been provided to 11 for such purpose by or on behalf
of the CIty. to use the funds deposIted wlth It solely for payment of the pnnclpal of and interest
on the Refundmg Bonds as the same shall become due. and for payment from the Costs of
Issuance Fund of any amounts duly authonzed to be paid therefrom pursuant to a Request of the
City
Section 6.03. Reliance on Documents, Etc. (a) The Paymg Agent may conclUSIvely
rely, as to the truth of the statements and correctness of the OpInIOnS expressed therem, on
certdicates or opinions funushed to the Paymg Agent by the CIty
(b) The Paying Agent shall not be liable for any error of judgment made In good
faIth The Paying Agent shall not be lIable for other than Its negligence or WIllful mIsconduct m
connectIOn with any act or omISSIon hereunder
(c) No proVISIOn of thIS Agreement shall reqUIre the Paymg Agent to expend or risk
Its own funds or otherWIse lUeur any financial liabIlity for performance of any of Its dutIes
hereunder. or m the exercise of any of ItS nghts or powers
DOCSL-\] 152081 4
40233-3-MKH-05118198 16
(d) The Paymg Agent may rely, or be protected III acting or refraInIng from actmg,
upon any resolution. certIficate, statement. mstrument. opmIOn. report. notIce, request. dIrectIOn.
consent. order. bond. note, secunty or other paper or document belIeved by It to be genUIne and
to have been signed or presented by the proper party or partIes. The Paymg Agent need not
examme the ownership of any Refundmg Bond. but IS protected m actmg upon receIpt of
Refundmg Bonds contammg an endorsement or instructIOn of transfer or power oftransfer which
appears on its face to be sIgned by the O\\TIer or agent of the Owner
(e) The Paymg Agent may consult Wlth counsel. and the \\<TItten adVIce of such
counselor any OpmlOn of Counsel shall be full authonzation and protection with respect to any
actIon taken. suffered or omItted by It hereunder m good faIth and relIance thereon
(f) The Paying Agent may exerCIse any of the powers hereunder and perform any
dutIes hereunder either dIrectly or by or through agents or attorneys
Section 6.04. Recitals of City. The recItals contained herem and In the Refundmg
Bonds shall be taken as the statements of the City. and the Paymg Agent assumes no
responsIbIlIty for theIr correctness
Section 6.05. Mav Own Bonds. The Paymg Agent. III Its IndIVIdual or any other
capacIty. may become the owner or pledgee of Refundmg Bonds WIth the same nghts It would
have If It were not the Paying Agent for the Refundmg Bonds
Section 6.06. Money Held by Payine At;!ent: Investment. Money held by the Paying
Agent hereunder shall be segregated from all other funds held by the Paying Agent. The Paymg
Agent shall be under no obhgatIon to pay mterest on any money receIved by It hereunder
Section 6.07. Investments. (a) General i\ny moneys held by the Paying Agent In the
funds and accounts established hereunder shall be mvested by the Paying Agent upon the Wntten
Request of the City III PermItted Investments The Paying Agent may act as pnncIpal or agent In
the acqUlsltion or dIsposition of any such mvestment The PaYIng Agent shall not be lIable or
responsIble for any loss suffered In connectIon WIth any such investment made by It under the
terms of and m accordance WIth thIS SeCtIon The Paymg Agent shall sell or present for
redemptIOn any obligatiOns so purchased whenever It shall be necessary m order to proVIde
moneys to meet any payment of the funds so Illvested, and the Paymg Agent shall not be liable
or responsIble for any losses resulting from any such mvestment sold or presented for
redemptIon
(b) ValuatIOn Investments (except investment agreements) III any fund or account
establtshed hereunder shall be marked to market, exclUSlve of accrued interest, not less often
than annually nor more often than monthly. on or before June 30. Except as othen\rlse provided
In the following sentence. all mvestments of amounts deposited In any fund or account created
by or pursuant to this PaYIng Agreement, or otheI'\\rlSe contaimng gross proceeds of the
Refundmg Bonds (WIthin the meanmg of section 148 of the Code) shall be acqUIred. disposed of,
and valued (as of the date that valuatIon is reqUIred by thIS PaYIng Agreement or the Code) at faIr
market value. Investments In funds or accounts (or portions thereot) that are subject to a YIeld
DOCSL'\ I 252081 4
40233-3.MKH'()5!18198 17
restnctlOn under apphcable prOVISIOns of the Code shall be valued at theIr present value (\\lthm
the meamng of sectlon 148 of the Code).
(c) Earnmgs Any mterest or profits on mvestments held in any of the funds or
accounts estabhshed hereunder shall be retamed in the fund or account m whIch such Investment
is held
Section 6.08. Other Transactions. The Paymg Agent may engage m or be mterested
m any financIal or other transactIOn \\lth the CIty.
Section 6.09. Interpleader. The Paymg Agent may seek adjudIcatIOn of any adverse
clmm. demand, or controversy over its person as well as funds on depOSIt. m a court of
competent JurisdictIOn The Paying Agent has the nght to file an action m mterpleader m any
court of competent jUnSdICnon to determme the nghts of any person clmmmg any mterest herem
Section 6.10. Indemnification. The CIty shall mdemmfy the Paying Agent. Its officers,
dIrectors. employees. and agents ("'Indemmfied PartIes'") for. and hold them harmless agamst.
any loss. cost. claim. liability or expense ariSIng out of or m connection with the Paymg Agent's
acceptance or admimstratIOn of the Paymg Agent's duties hereunder or under the Refundmg
Bonds (except any loss. lIabilIty or expense as may be adjusted by a court of competent
JunsdIctlOn to be attnbutable to the Paymg Agent's neghgence or willful mIsconduct). mcIudmg
WIthout lImItation the cost and expense (mcludmg Its counsel fees and dIsbursements, mcIudmg
the allocated costs and disbursements of internal counsel) of defending itself agamst any claim or
lIabilIty (except such actIOn as may be brought agamst the Paymg Agent by the CIty) m
connectlOn WIth the exerCIse or performance of any of Its powers or dutIes under thIS Paymg
Agent Agreement The provisions of thIS SectIOn 6 09 shall SUnflVe ternunatIOn of thIS Paymg
Agent Agreement and shall contmue for the benefit of any Paymg Agent after Its resIgnatIon as
Paymg Agent hereunder
Section 6.11. Compensation. As compensatIOn for the Paying Agent" s servIces. the
CIty hereby agrees to payor cause to be pmd to the Paymg Agent the fees set forth m a separate
agreement between the Paymg Agent and the Cuy provldmg therefor
DOCSLA] 252081 4
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ARTICLE VII
DEFEASA1~CE OF REFUNDING BONDS
Section 7.01. Defeasance. (a) If at any hme the CIty shall pay or cause to be paId or
there shall otherwise be paid to the O\\-ners of all outstandmg Refunding Bonds all of the
pnnclpaL mterest and premiUm, If any. represented thereby. at the times and m the manner
provided herem and in the Refundmg Bonds or as othernllse provided by law. then such Ov,ners
shall cease to be entnled to the obligatiOn of the City as proVided In SectiOn 502 hereof. and
such obhgatiOn and all agreements and covenants of the City to such Ov,.ners hereunder and
under the Refundmg Bonds shall thereupon be satIsfied and discharged and shall termmate
except only as provIded in subsectiOn 7 0 I (b). provIded. hOlvever, that the prOVlSlons of SectiOn
7 02 hereof shall apply in all events.
(b) Any outstandmg Refunding Bonds shall be deemed to have been paId withm the
meanmg of and WIth the effect expressed m this Section 7 01 If there shall be on depoSIt With the
DIrector of Finance or set asIde for the purpose with a trustee or escrow agent. mcludmg the
Paymg Agent, momes m an amount suffiCIent (together WIth interest thereon) to pay the
prmcipal amount thereof plus any accrued mterest thereon. payable on theIr respective pnncipal
matunty dates The Ov,.ners of such Refundmg Bonds shall be entItled to the pnncIpal and
mterest represented by such Refunding Bonds. and the CIty shall remain lIable for such
payments. but only out of such momes on depOSIt for such payment and momes transferred to the
Paymg Agent for such purpose
Section 7.02. Unclaimed Monies. Any money deposited WIth or otherwise held by the
Paymg Agent for the payment of the pnnclpal or mterest on any RefundIng Bond and remaInIng
unclaImed for two years after the stated matunty of such Refundmg Bond v,.lll be paId by the
Paymg Agent to the City. upon receipt of a written Request of the City. and the CIty and the
Paying Agent hereby agree that the registered Ov,.ner of such Refunding Bond shall thereafter
look only to the Cny for payment thereof. and that allliabIhty of the Paymg Agent WIth respect
to such momes shall thereupon cease
DOCSLA I 252081 4
40233 -3-MKH-05f18198 19
ARTICLE VIII
AMENDMENT OF PAYING AGENT AGREEMENT
Section 8.01. Amendment with Owner Consent; Amendment Without Owner
Consent. (a) ThIS Paymg Agent Agreement and the nghts and obligations of the CIty and of
the O\\oners may be amended at any tIme upon the wTitten consents of the Owners of a majorIty
m aggregate pnncIpal amount of the Refunding Bonds then outstandIng, exclUSIve of Refundmg
Bonds dIsqualified as proVIded in SectIOn 8 02. filed with the Paymg Agent, prOVIded that if
such amendment wllL by Its terms, not take effect so long as any RefundIng Bonds remam
outstandmg, the consent of the O'WTIers of such RefundIng Bonds shall not be reqUIred and such
Refunding Bonds shall not be deemed to be outstandIng for the purpose of any calculatIOn of
Refundmg Bonds outstandmg under this Section.
No such amendment shall (1) extend the matunty of or reduce the mterest rate on or
amount of interest on or pnnclpal of or redemptIOn premium, If any. on any Refundmg Bond
WIthout the express wTitten consent of the O\\ner of such Refundmg Bond, or (2) reduce the
percentage of Refundmg Bonds reqUIred for the wntten consent to any such amendment, or (3)
modIfy any nghts or obligatIOns of the Paying Agent or the CIty WithOut their prIor written
assent thereto, respecllvely It shall not be necessary for the consent ofthe O'Wners to approve the
partIcular form of any amendment to thIS Paymg Agent Agreement, but it shall be sufficient If
such consent shall approve the substance thereof Promptly after the execullon by the CIty and
the Paymg Agent of any amendment to thIS Paymg Agent Agreement pursuant to this subsectIOn
(a) the Paymg Agent shall mall a notIce on behalf of the CIty. settmg forth in general terms the
substance of such amendment to the Owners at the addresses sho\\TI on the regIstratIOn books
mamtamed by the Paymg Agent. Any faIlure to gIVe such notIce. or any defect therem, shall not,
however, m any way ImpaIr or affect the validity of any such amendment.
(b) ThIS Paymg Agent Agreement and the nghts and obligatIOns of the City and of
the Owners may also be amended at any tIme without the consent of any Owners for any purpose
that WIll not matenally adversely affect the Interests of the Owners, includIng (without
limltatIon) for anyone or more of the followmg purposes
(i) to add to the agreements and covenants required herem to be performed by
the CIty other agreements and covenants thereafter to be performed by the City. or to
surrender any right or power reserved herem to or conferred herem on the City,
(ii) to make such provlSlons for the purpose of curing any ambigUIty or of
correctmg, cunng or supplementing any defectIve proVISIon contaIned herem or in regard
to questIOns ansing hereunder which the CIty may deem desirable or necessary
Any amendment pursuant to thIS paragraph shall not, for purposes oftlus paragraph, matenally
adversely affect the mterest of the Owners so long as (1) all Refundmg Bonds are msured by a
pobcy of muruclpal bond insurance, (2) each Issuer of such an msurance policy shall have gIven
Its written consent to such amendment. and (3) each such msurer shall at the tIme of such consent
be rated In the hIghest Ratmg Category by Standard & Poor's and Moody's Investors ServIce
DOCSLAI 25208i 4
40233.3-\1KH-05i 18/98 20
Section 8.02. Disqualified Refundin~ Bonds. RefundIng Bonds owned or held by or
for the account of the City shall not be deemed outstanding for the purpose of any consent or
other action or any calculatIOn of outstandmg Refunding Bonds provIded m this ArtIcle. and
shall not be entitled to consent to or take any other action provIded in thIS Article
Section 8.03. Endorsement or Replacement of Refundine Bonds After Amendment.
After the effectIve date of any acl10n taken as hereInabove proVIded. the CIty may determme that
the Refundmg Bonds may bear a notatlon by endorsement in form approved by the CIty as to
such acl1on. and in that case upon demand of the O\\ner of any outstanding Refunding Bonds
and presentatlOn of hIS Refundmg Bond for such purpose at the office of the Paymg Agent a
SUitable notatlOn as to such actIOn shall be made on such RefundIng Bond. If the CIty shall so
detenmne. new Refundmg Bonds so modified as, In the OpInIOn of the CIty, shall be necessary to
conform to such action shall be prepared and executed. and In that case upon demand of the
Owner of any outstandmg Refundmg Bond a new Refundmg Bond or Refundmg Bonds shall be
exchanged at the office of the Paying Agent WIthout cost to each Owner for its Refunding Bond
or Refundmg Bonds then outstandmg upon surrender of such outstandmg Refundmg Bonds
Section 8.04. Amendment bv Mutual Consent. The provlSIons of thIS ArtIcle shall not
prevent any O\\ner from accepting any amendment as to the partIcular Refundmg Bonds held by
such Owner. prOVided that due notatlOn thereof IS made on such Refunding Bonds
DOCSLAl 252081 4
40233-3-MKH-05/18/98 21
ARTICLE IX
MISCELLANEOUS
Section 9.01. Counterparts. ThIS Paying Agent Agreement may be sIgned m several
counterparts. each of wluch \.\'111 constitute an ongmal, but all of whIch shall constItute one and
the same Instrument.
Section 9.02. Continuine Disclosure. The CIty hereby covenants and agrees that it wIll
comply Wlth and carry out all of the prOVIsions of the Contmumg DIsclosure Agreement
Notwlthstanding any other prOVIsion of thIS Indenture. failure of the CIty to comply \\-ith the
Continumg Disclosure Agreement shall not be consIdered an Event of Default hereunder.
proVIded, however, that the Trustee may (and. at the written dIrectIon of any Purchaser or the
O\\-ners of at least 25% aggregate prinCIpal amount of Bonds. shall) or any Owner or beneficial
owner of the Bonds may. take such actions as may be necessary and appropnate to compel
performance, mcludmg seeking mandate or specific performance by court order.
Section 9.03. Notices. All notIces and commUnIcatIons hereunder shall be in v..ntmg
and shall be deemed to be duly gIven If received or sent by first class malL as follows
If to the CIty
CIty of Santa MOnIca
1717 Fourth Street, Suite 250
Santa MOnIca. CalIfornIa 90401
Attn: DIrector of Fmance
If to the Paymg Agent
US. Bank Trust NatIonal AssociatIOn
550 South Hope Street. SUite 500
Los Angeles, California 90071
Attn: Corporate Trust Department
DOCSL....I 252081 4
40233-3-\.fKH-051I 8f98 22
IN WITNESS WHEREOF, the partIes hereto have caused this Paymg Agent Agreement
to be duly executed by their officers duly authonzed as ofthe date first written above
CITY OF SANTA MONICA
By
Authorized Officer
ATTEST
By
CIty Clerk
APPROVED AS TO FORM:
By
Marsha Jones Moutrie. CIty Attorney
.
U.S. BANK TRUST NATIONAL
ASSOCIATION, as Paying Agent
By
Authonzed Officer
ATTEST
By
Authonzed Officer
J:)(XSLAI 2520814
40233-3-\.fKH-05/18/98 23
EXHIBIT A
FORM. OF REFUNDING BOND
R- $
UNITED STATES OF A1\1ERICA
STATE OF CALIFORNIA
COUNTY OF LOS A.~GELES
CITY OF SANTA MONICA
GENERAL OBLIGA nON REFUNDING BONDS, SERIES 1998
(MAIN LIBRARY IMPROVEMENTS PROJECT)
Interest Rate Maturity Date Dated as of CUSIP NO
% July 1. June 1, 1998
Reglstered Ovmer CEDE & CO.
PrmcIpal Amount DOLLARS
The CIty of Santa MOnlca, County of Los Angeles. State of Cahforma (herem called the
"City"). acknowledges Itself indebted to and promises to pay to the registered owner IdentIfied
above or registered assIgns, on the matunty date set forth above the principal sum specIfied
above m lawful money of the United States of Amenca, and to pay mterest thereon in like lawful
money from the mterest payment date next precedmg the date of authentication of this bond
(unless thIS bond IS authentIcated as of the day dunng the penod from the sixteenth (l6th) day of
the month next precedmg any interest payment date to such mterest payment date, mclusIve. m
which event It shall bear interest from such interest payment date, or unless this bond IS
authentIcated on or before 15, 1998. in whIch event it shall bear mterest from
June 1, 1998) until payment of such prinCIpal sum. at the mterest rate per annum stated above.
payable on July 1, 1998, and semIannually thereafter on January 1 and July 1 m each year The
pnncipal hereof IS payable to the registered O\'vner hereof upon the surrender hereof at the office
of US Bank Trust National ASSOCIatIOn (herem called the "Paymg Agent"), the paymg
agent/regIstrar and transfer agent of the City, m Los Angeles, California_ The mterest hereon is
payable to the person whose name appears on the bond reglstratlOn books of the Paymg Agent as
the registered owner hereof as of the close of business on the fifteenth (15th) day of the month
Immediately preceding an mterest payment date (the "Record Daten). whether or not such day IS
a business day, such mterest to be paid by check maIled by first class mail. postage prepaId, to
such regIstered o\\ner at the owner' s address as 11 appears on such registrauon books. or upon
""Titlen request of the o\\'ner of Refundmg Bonds (hereinafter defined) aggregatmg not less than
$1.000.000 m princIpal amount, given no later than Record Date immedIately precedmg the
apphcable interest payment date, by wire transfer m nnmedlately aVaIlable funds to an account
rxx:Sl>\1 252081 4
40233.3-MKH-OSi 18198 A-I
mamtamed In the Umted States at such vnre address as such O\\ner shall specify In its \"ntten
notice
TIlls bond is one of a duly authorized issue of bonds of lIke tenor (except for such
vanatIOns, If any, as may be reqUIred to designate varying senes, numbers, denommatIOns,
interest rates. matuntIes and redemptIon provisIOns), amountmg m the aggregate to $ ,
deSIgnated as "CIty of Santa Monica General OblIgatIon Refundmg Bonds. Senes 1998 (Mam
LIbrary Improvements ProJect)"' (the "Refundmg Bonds"), Issued for the purpose of refunding
and redeemmg certaIn outstandmg general oblIgatIOn bonds of the CIty The Refundmg Bonds
were authonzed by a resolutIon approved by the City CouncIl of the City (the "Cay CouncIr') on
June _, 1998, and are Issued and sold pursuant to a Paying Agent Agreement (the "Paymg
Agent AgreemenC), dated as of June 1, 1998, between the CIty and the Paymg Agent. The
Refundmg Bonds are Issued and sold by the CIty pursuant to and III strIct conformIty ""lth the
provIsIons of the Paying Agent Agreement and of the ConstitutIOn and laws of CalIfornia,
specIfically under the authooty of ArtIcle 11 of Chapter 3 of Part I of Division 2 of Title 5 of the
Government Code of the State ofCahforma
The Refundmg Bonds are issuable as fully registered bonds \\1thout coupons in the
denommation of $5.000 or any integral multiple thereof, provlded that no bond shall have
pnncIpal maturing on more than one pnncIpal matunty date Subject to the limItatIOns and
condItIons and upon payment of the charges, If any, as provided in the Paymg Agent Agreement.
RefundIng Bonds may be exchanged for a lIke aggregate principal amount of Refunding Bonds
of the same matunty of other authorized denommatIons.
ThIS Refunding Bond IS transferable by the registered O\\TIer hereof. III person or by
attorney duly authonzed m wntmg. at saId office of the PaYIng Agent. but only m the manner,
subject to the limitations and upon payment of the charges provIded in the Paymg Agent
Agreement. and upon surrender and cancellatIOn of this Refundmg Bond Upon such transfer. a
new Refundmg Bond or Refundmg Bonds of authonzed denommation or denommations for the
same matunty and same aggregate pnnclpal amount wIll be Issued to the transferee in exchange
herefot.
The CIty and the Paymg Agent may treat the regIstered O\\TIer hereof as the absolute
O\\TIer hereof for all purposes, and the City and the Paying Agent shall not be affected by any
notIce to the contrary.
[Refunding Bonds maturing on July 1, . upon notIce as heremafter proVIded, shall be
subject to mandatory sinking fund redemption pnor to matunty, In part on July 1 m each year. on
and after July I, , by lot. at a redemptIon poce equal to the sum of the pnncipal amount
thereof plus accrued interest thereon to the redemptIon date, without premIUm]
Notice of redemption shall be given by mall not less than thirty (30) nor more than SIxty
(60) days poor to the redemptIon date to the regIstered owner hereof. but neIther failure to mall
such notIce nor any defect in the notice so mailed shall affect the sufficiency of the proceedmgs
for redemption.
DOCSU.] 25208] 4
40233-3-\.fKH-05'l8198 A-2
If this Refundmg Bond IS called for redemptIOn and payment IS duly provided therefor.
mterest shall cease to accrue hereon from and after the date fixed for redemption.
The City Councd hereby certIfies and declares that the total amount of indebtedness of
the CIty. includmg the amount of thIS Refunding Bond, IS Wltlun the lImit provIded by law. that
all acts, condItions and things reqUired by law to be done or performed precedent to and in the
Issuance of thIS Refundmg Bond have been done and perfonned m stnct confonmty with the
laws authorizmg the Issuance of thIS Refundmg Bond, that this Refundmg Bond IS m the form
prescnbed by order of this CIty Council duly made and entered on Its mmutes, and the money for
the payment of the pnncIpal of thIS Refundmg Bond, premIUm, If any. and the payment of
mterest hereon. shall be raised by taxation upon the taxable property of said CIty.
ThIS Refundmg Bond shall not be entItled to any benefit under the Paying Agent
Agreement, or become valid or obhgatory for any purpose, unuI the certIficate of authentication
and regIstration hereon endorsed shall have been sIgned by the Paymg Agent_
OOCSLA 1 252081 4
40233-3-MKH-Q5/I8I98 A-3
IN WITNESS WHEREOF the Cay CouncIl of the City of Santa Monica has caused thIs
Bond to be signed by facsrmlle sIgnature of the CIty Manager of the City and to be countersIgned
by the facsimile signature of the City Clerk.
CITY OF SANTA MONICA
City Manager
City Clerk
ThIS IS one of the Refundmg Bonds descnbed In the wnhm-mentloned Paying Agent
Agreement and authentIcated and regIstered on ,1998
U.S. BANK TRUST NATIONAL
ASSOCIATION, as Paymg AgentlRegistrar
and Transfer Agent
By
Authorized Officer
[FORM OF DTC LEGEND]
Unless this certIficate IS presented by an authorized representatIve of The DepOSItory
Trust Company, a New York corporatIOn C"DTC"), to Issuer or its agent for registratiOn of
transfer, exchange, or payment, and any certificate Issued IS regIstered In the name of Cede &
Co or in such other name as IS requested by an authonzed representative of DTC (and any
payment IS made to Cede & Co or to such other enmy as IS requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE. OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the
regIstered o~ner hereof, Cede & Co , has an interest herem
DOCSlA \ 25208\ 4
40233-3-MKH-OS/18198 A-4
{FORM OF ASSIGNMENT]
For value receIved the undersIgned do(es) hereby selL assign and transfer unto
the wIthm-mentloned regIstered bond and hereby urevocably
constitute(s) and appomt(s) attorney. to transfer the same on the books
of the Paymg AgentJRegIstrar and Transfer Agent wIth full power ofsuhstltution In the premIses
Dated.
SIgnature Guarantee
Notice SIgnature must be guaranteed by an ehgible guarantor institution
DOCSLAI 252081 4
40233-3-MKH-05/18198 A-5
ESCROW AGREEMENT
by and between the
CITY OF SANTA MONICA
County of Los Angeles, California
and
U.S. BANK TRUST NATIONAL ASSOCIATION,
as Escrow Agent
Dated as of June 1, 1998
Relating To
City of Santa Monica General Obligation Refunding Bonds,
Series 1998 (Main Library Improvements Project)
DOCSU. t 252099 3
40233-3-MKH-05il8198
~-
ESCROW AGREEMENT
THIS ESCROW AGREEMENT (the "Escrow Agreement"). dated as of June 1. 1998.
by and between the CITY OF SANTA MONICA. a charter CIty duly organIzed and eXIsting
under and by vIrtue of the ConstItutIon and laws of the State of CalIfornIa and Its Charter (the
"CIty') and U S BANK TRUST NATIONAL ASSOCIATION, a natIOnal bankmg association
duly organIzed and eXIstmg under and by vIrtue of the laws of the Umted States of Amenca and
havmg a corporate trust office m Los Angeles. CalifornIa. and being qualIfied to accept and
adlmmster the trust hereby created, as escrow agent (the <'Escrow Agenf') and as fiscal agent
under the Fiscal Agent Agreement, dated as of Apnl 10. 1990 (the "Pnor FIscal Agent
AgreemenC), by and between the Cny and Itself, as FIscal Agent (the "Pnor fiscal Agent").
WITNESSETH:
WHEREAS, the City has heretofore on Apnl 10. 1990, issued the CIty of Santa Momca
General OblIgatIon Bonds. Senes 1990 (Mam LIbrary Improvements Project) (the "Pnor
Bonds") m the ongmal pnncIpal amount of $4.500,000, pursuant to a resolutIOn adopted by the
CIty CounCIl (the "CouncIl") of the CIty on February 13, 1990 (the "Pnor ResolutIOn");
WHEREAS, pursuant to ArtIcle 11 of Chapter 3 of Part 1 of DIvIsIOn 2 of TItle 5 of the
CalIfornIa Government Code. the CIty IS authonzed to Issue refundmg bonds to refund all or a
portIOn of the Pnor Bonds;
WHEREAS, the councIl has detenmned, by Its ResolutIOn No (CCS), adopted on
June _' 1998 (the "ResolutIOnU) that It ]s necessary and deslfable that a portIOn of the Pnor
Bonds now be refunded, and has authonzed by s81d ResolutIon the Issuance and sale of Its "Clty
of Santa Momca General ObhgatIon Refundmg Bonds, Senes 1998 (Mam Library Improvements
Project)" (herem called the "Refunding Bonds'"), the payment of whIch IS provIded m the Paying
Agent Agreement (the "PaYIng Agent Agreement") dated as of June 1. 1998. by and benveen the
City and US. Bank Trust NatIonal ASSOCIatIOn. as Paying Agent (the "Paymg AgenC),
WHEREAS, m order to Implement the foregomg and other purposes, the City has duly
executed and delIvered $ aggregate pnnclpal amount of its Refunding Bonds under
and pursuant to a Paymg Agent Agreement dated as of June 1. 1998, by and between the CIty
and US Bank Trust National AssociatIOn. as PaYIng Agent (the "Paymg Agent Agreement").
WHEREAS, the City has taken actIon to cause to be delIvered to the Escrow Agent. for
depOSIt m the Escrow Fund heremafter referred to, certam cash and non-callable United States
Treasury oblIgations (the "Escrow SecuritIes") listed on Schedule I attached hereto and made a
part hereof. m an aggregate pnncIpal amount whIch, together WIth other money depOSIted
therein, WIll be suffiCIent, as certIfied by Ernst & Young LLP, a natIOnally recogmzed firm of
mdependent certified publIc accountants, to prOVIde for the redemptIOn of a portIOn of the
outstandmg Pnor Bonds, as descnbed m Schedule II attached hereto, aggregating In pnnclpal
amount to $ (the .'Refunded Bonds"), on July 1,2002,
DOCSLA] 252099 3
40233-3- \IKH-05i] 8/98
WHEREAS, the provisIOns of the Pnor ResolutIOn and the ResolutlOn are Incorporated
herem by reference as if set forth herem m fulL
NOW, THEREFORE, the City and the Escrow Agent hereby agree as follows
Section 1. Establishment and Maintenance of Escrow Fund. Upon receIpt by the
Escrow Agent of a WIre transfer m the amount of $ from ,
undernTIter of the Refundmg Bonds, and pursuant to Section 3 02 of the Paymg Agent
Agreement and SectIOn 2 hereof. CIty hereby requests the Escrow Agent to, and the Escrow
Agent hereby agrees to, depOSIt $ m cash mto the Escrow Fund, and to transfer
$ by wue transfer to . constnutmg the purchase pnce of the
Escrow SecUrItIes descnbed m Schedule I hereto
The Escrow Agent agrees to establish and mamtam the Escrow Fund (the "Escrow Fund")
until the Refunded Bonds have been pmd and redeemed as provIded herem and. except as proVIded
m SectIOns 2 and 3 hereof, to hold the Escrow Secunties lIsted on Schedule I attached hereto and
the money (whether constltutmg the Irntial depoSIt in the Escrow Fund or constItuting receIpts on
the Escrow SeCUrIties) in the Escrow Fund at aU times as a separate trust account wholly segregated
from all other secuntIes. mvestments or money held by It, and all secunttes and money m the
Escro\',,' Fund are hereby Irrevocably pledged. subject to the proVIsIons of SectIOns 2 and 3 hereof.
to secure the payment and redemption of the Refunded Bonds as prOVIded herein. prOVIded. that
any money held III the Escrow Fund that is not used for such payment and redemptIon of the
Refunded Bonds shall be repaid to the City free from the trust created by tlus Escrow Agreement
Section 2. Investment of Money in the Escrow Fund. The Escrow Secuntles mltially
deposIted In the Escrow Fund are certam non-callable United States Treasury Obligations \\;lth
Interest rates speCified m the attached Schedule L or cash If amounts of mterest on or
repayments of pnncipal of the Escrow Secunttes are received by the Escrow Agent In excess
amounts or prIor to the date on whIch such receipts are to be applied pursuant to Section 4 to the
payment and redemptiOn of the Refunded Bonds. the Escrow Agent shall. upon the vmtten
request of the CIty received at least two (2) busmess days III advance. mvest such receipts until
the next interest or pnncIpal payment of the Refunded Bonds m other non-callable oblIgatiOns of.
or oblIgatiOns guaranteed directly or mdirectly by. the Umted States of Amenca, or secuntIes or
other Instruments eVidencing ownershIp mterests m such oblIgatIOns or m specified portions of
the mterest on or prinCIpal of such obhgations, ,,\lIth a quoted YIeld to matunty no greater than
% or, if such remvestment is not feasible, shall retmn such funds urunvested If the
City directs such investment or remvestment to be made In Umted States Treasury Secunttes-
State and Local Government Series, the Cay shall, at 11S cost. cause to be prepared and delivered
all subscnptlOn forms necessary therefor to enable the Escrow Agent to order such secunties not
less than fifteen (15) calendar days pnor to the date of makIng such investment Any receIpts on
mvestments made pursuant to thIS sectIon m excess of the cost of such Investments that are not
needed for the payment and redemptIOn of the Refunded Bonds as proVIded herem shall be
repaId to the CIty free from the trust created by tlus Escrow Agreement. The Escrow Agent shall
not be liable or responsIble for any loss resultmg from any investment made pursuant to thiS
sectiOn and m full compliance WIth the prOVISions hereof.
DOCSL '" I 252099 3
40233-3-\.1KH-051! 8/98 2
Section 3. Substitution of Securities in the Escrow Fund. Upon telephomc request
(confirmed m wntmg) or ""TItlen request of the Cny, and after receIvmg from the City an
unqualIfied opmion of a natIOnally recogmzed bond counsel that such substItution w1l1 not cause
the Refunding Bonds to be "arbItrage bonds" as defined m SectiOn 148 of the Internal Revenue
Code of 1986. as amended, and the regulations of the Umted States Department of the Treasury
Issued thereunder. and will not result in the breach of any covenant of the Clty contamed In the
Pnor ResolutIOn, the ResolutIOn. or m the Paymg Agent Agreement, and after receIvmg from the
CIty a "vritten report of a natiOnally recogmzed firm of Independent certified publIc accountants
to the effect that the substItute securities w1l1 mature m such pnncipal amounts and earn mterest
m such amounts and at such tImes so that sufficient money will be aVaIlable to prOVIde for the
payment and redemptIOn of the Refunded Bonds pursuant to Section 4, the Escrow Agent shall
selL redeem Dr otherwise dIspose of any secunties m the Escrow Fund If, but only If, there are
substItuted therefor, from the proceeds of such secunties, other non-callable oblIgatIOns of. or
oblIgatiOns guaranteed directly or indueedy by. the Umted States of America, or secuntIes or
other mstruments eVidencmg o""nerslup mterests in such obligatIons or in speCIfied portiOns of
the mterest on or pnncIpal of such oblIganons. Any proceeds of the sale, redemptIOn or other
dlsposltlon of such secuntles In the Escrow Fund not needed for the foregomg SUbStItutiOn
purpose shall be repaid to the CIty free from the trust created by this Escrow Agreement The
Escrow Agent shall not be lIable or responSIble for any loss resultmg from any mvestment made
pursuant to thiS sectIon and III full complIance WIth the provlSlons hereof
Section 4. Pavment from the Escrow Fund. The Escrow Agent IS hereby mevocably
mstructed to, and the Escrow Agent hereby agrees to, collect and deposlt m the Escrow Fund the
mterest on and pnnclpal of all Escrow Secunties held m the Escrow Fund promptly as such
mterest and pnncIpal become due and to use such mterest and pnnclpal, together WIth any other
money and the mterest and prmcIpal of any other securities deposlted m the Escrow Fund, to
redeem the Refunded Bonds on July 1, 2000 at a redemptiOn pnce equal to 102% of the
Refunded Bonds matunng on July L 2003 and thereafter, as descnbed m Schedule II attached
hereto. at the tImes and places and in the manner and WIth notiCe given to o\'\lners of the
Refunded Bonds as speCIfied III the Pnor Resolution. and to pay all pnncipal and mterest due on
the Refunded Bonds pnor to their redemptIOn
Section 5. Deficiencies in the Escrow Fund, If at any time It shall appear to the Escrow
Agent that the money m the Escrow Fund. mcludmg the anticIpated proceeds of the Escrow
SecuntIes, will not be sufficient to make all payments reqUIred by SectIOn 4 hereof. the Escrow
Agent shall notify the CIty m wTltmg as soon as reasonably practIcable of such fact, statmg the
amount of such defiCIency and the reason therefor, and the CIty shall use Its best efforts to obtam
and deposit with the Escrow Agent for deposlt in the Escrow Fund, from any legally avmlable
moneys, such additional money as may be required to proVIde for the makmg of all such
payments. and the Escrow Agent shall m no event or manner be responSIble for the failure of the
City to make any such deposl1.
Section 6. Compensation and Indemnification of the Escrow Ae:ent.
(a) The City shall pay the Escrow Agent fees for its services hereunder and
shall reImburse the Escrow Agent for Its out-of-pocket expenses (includmg but not lImIted to the
DOCSL~I 2520993
40233-3-MKH-05!18I98 -.
-'
fees and expenses, If any, of Its counselor accountants) incurred by the Escrow Agent In
connectiOn with these servIces. all as previously agreed upon by the CIty and the Escrow Agent.
provided. that these fees and expenses shall In no event be deducted from the Escrow Fund
(b) The CIty agrees to mdemmfy the Escrow Agent, its agents and Its officers
or employees for. and hold the Escrow Agent, Its agents and Its officers or employees harmless
from and agamst. any and all lJablhtles, obhgatIOns, losses. damages. penaltIes. actIOns.
Judgments. suns. dooms. costs, expenses and dIsbursements of any kmd or nature whatsoever
(mc1udmg, wIthout hrnttation, reasonable fees and dIsbursements of counsel or accountants for
the Escrow Agent) that may be Imposed on. incurred by. or asserted agamst the Escrow Agent or
such other party at any tIme by reason of Its performance of Escrow Agent" s services. m any
transactiOn arIsing out of thIS Escrow Agreement or any of the transactiOns contemplated herem.
unless due to the neglIgence or \vIllful mIsconduct of the particular indemmfied party.
Section 7. Functions ofthe Escrow Ae:ent.
(a) The Escrow Agent undertakes to perform only such dutIes as are expressly
and speCifically set forth m thIS Escrow Agreement and no ImplIed duties or obhgatIOns shall be
read mto thIS Escrmv Agreement agamst the Escrow Agent
(b) The Escrow Agent may conclUSIvely rely. as to the truth of the statements
and the correctness of the opmIOns expressed therein. and shall be protected and mdemmfied as
stated m thIS Escrow Agreement. in actmg, or reframmg from acting, upon any ~ntten notIce,
Instructlon. request. certIficate. document. report or opmlOn furnIshed to the Escrow Agent and
reasonably beheved by the Escrow Agent to have been SIgned or presented by the proper party.
and it need not lllvestIgate any fact or matter stated in such notice, mstrucbon. request,
ceruticate, document. report or opinion
(c) The Escrow Agent shall not have any habIlIty hereunder except to the
extent of Its o\\-'U neglIgence or W'1l1ful misconduct In no event shall the Escrow Agent be lIable
for any specIal, mdlrect or consequentIal damages. even If partIes know of the possibIlIty of such
damages The Escrow Agent shall have no duty or responSIbIlity under thIS Escrow Agreement
in the case of any default m the performance of covenants or agreements contamed m the Pnor
ResolutIOn or the ResolutlOn or in the case of the receIpt of any wntten demand WIth respect to
such default. The Escrow Agent IS not reqUIred to resolve conflIctmg demands to money or
property in ItS posseSSIOn under thIS Escrow Agreement.
(d) The Escrow Agent may consult With counsel of its o~n chOIce (which
may be counsel to the City) and the opmIOn of such counsel shall be full and complete
authonzatlOn to take or suffer In good faIth any actIOn In accordance WIth such opInIOn of
counsel
(e) The Escrow Agent shall not be responSIble for any of the recitals or
representations contamed herem. In the PrIor ResolutIOn, in the ResolutIon. or m the Paymg
Agent Agreement
DOCSL~I .252099 3
40233 -J-MKH-05i 18i98 4
(f) The Escrow Agent shall not be lIable for the accuracy of the calculatIOns
as to the sufficiency of the Escrow Secuntles and moneys to make the payments of mterest on
and pnncipal of the Refunded Bonds
(g) The Escrow Agent shall not be liable for any actIon or ormssIOn of the
Cay under this Escrow Agreement, the Pnor ResolutIOn. the Resolution. the Paying Agent
Agreement or otherwise.
(h) Whenever In the admInIstratIOn of the trust of this Escrow Agreement the
Escrow Agent shall deem It necessary or deSirable that a matter be proved or establIshed pnor to
takmg or suffenng any actIOn hereunder. such matter (unless other eVidence in respect thereof be
herem specifically prescnbed) may. In the absence of neghgence or \\'111ful misconduct on the
part of the Escrow Agent. be deemed to be conclUSively proved and establIshed by a certificate of
an authonzed representative of the City, and such certificate shall, In the absence of neglIgence
or wIllful misconduct on the part of the Escrow Agent. be full warrant to the Escrow Agent for
any actIOn taken or suffered by It under the proviSIOns of thiS Escrow Agreement upon the faith
thereof.
(1) The Escrow Agent may at any time reSign by glvmg \\oTltten notIce to the
Cay of such reSIgnatIon, whereupon the Cny shall promptly appomt a successor Escrow Agent
by the resignation date ReSignation of the Escrow Agent will be effective SIXty (60) days after
notice of the resignatIOn is given as stated above or upon appomtment of a successor Escrow
Agent. whIchever first occurs. If the CIty does not appoint a successor Escrow Agent by the
reSIgnatIOn effective date. the reslgmng Escrow Agent may petitIOn any court of competent
junsdictlon for the appomtment of a successor Escrow Agent (or may depOSit with the court the
Escrow SecuntJes and money or other property held by It in trust under thIS Escrow Agreement).
winch court may thereupon, after such notlce, If any. as a may deem proper and prescnbe and as
may be reqUIred by law. appoint a successor Escrow Agent After recelvmg a notIce of
reSIgnatIOn of an Escrow Agent, the City may appomt a temporary Escrow Agent to replace the
resIgmng Escrow Agent until the CIty appomts a successor Escrow Agent. Any such temporary
Escrow Agent appomted by the Cny shallllnmedmtely and WIthout further act be superseded by
the successor Escrow Agent upon the appointment of and acceptance thereof by such successor
(l) The CIty may m 1tS sole and absolute discretion remove the Escrow Agent
at any tIme If at any tIme the Escrow Agent shall become Incapable of actmg. or shall be
adjudged a bankrupt or msolvent, or a receiver of the Escrow Agent or Its property shall be
appomted. or any public officer shall take control or charge of the Escrow Agent or of Its
property or affarrs for the purpose of rehabilItatlOU. conservation or liqmdatIon, in each case by
glvmg \.\ntten notice of such removal to the Escrow Agent, and thereupon shall appomt a
successor Escrow Agent by an mstrument in wTltmg.
(k) The Escrow Agent WIll proVide the City, withm thirty (30) days after each
payment of mterest on or pnncipal of the Refunded Bonds, with statements of the Escrow Fund
mamtamed hereunder
(1) Any company mto winch the Escrow Agent may be merged or converted
or \\'1th which It may be consolIdated. or any company resultmg from any merger, converSIOn or
O<X:SL4..1 2520993
40233-3-MKH-05118198 5
-
consolIdation to which it shall be a party, or any company to whIch the Escrow Agent may sell or
transfer all or substantIally all of its corporate trust business. shall be the successor to the Escrow
Agent and vested WIth all of the tItle to the Escrow Fund and all of the trusts, powers. discretIOn.
Inunumties. privIleges and all other matters as was Its predecessor. WIthout the executIon or
filIng of any paper or further act. anythmg herem to the contrary not\,;'1thstandmg
(m) The Escrow Agent (and Its affilIates) may act as pnncipal, agent. sponsor.
depOSItory or adVIsor \\<'1th respect to the holdmg and makmg of any mvestments provIded herem.
Section 8. Notices. All notices and communIcatIons hereunder shall be m vmtmg and
shall be deemed to be duly given If receIved or sent by fIrst class mall, as follows:
If to the CIty
City of Santa MOnIca
1717 Fourth Street. SUite 250
Santa MOnIca. Caltforma 90401
Attn DIrector of Finance
If to the Escrow Agent:
US Bank Trust NatIOnal ASSOCiatIOn
550 South Hope Street, SUite 500
Los Angeles. Cahfomm 90071
Attn Corporate Trust Department
Section 9. Severability. If any sectIOn. paragraph. sentence, clause or proVISIOn of thIS
Escro\" Agreement shall for any reason be held to be lllval1d or unenforceable, the lllvahdlty or
unenforceabihty of such sectIOn, paragraph. sentence. clause or provislOn shall not affect any of
the remaming prOVISIOns of this Escrow Agreement
Section 10. Execution. TIns Escrow Agreement may be executed In any number of
counterparts. each of wlnch shall be deemed to be an OrigInal, but all together shall constitute but
one and the same agreement
DOCSLAl 252()99 3
40233-3-MKH-05iI8i98 6
IN WITNESS WHEREOF. the City and the Escrow Agent have caused tlus Escrow
Agreement to be executed each on Its behalf as of the day and year first above written
CITY OF SANT A ~IONICA
By.
Authonzed Officer
ATTEST.
By
City Clerk
APPROVED AS TO FORM
By'
Marsha Jones Moutne, City Attorney
U.S. BANK TRUST NATIONAL
ASSOCIATION, as Paying Agent
By:
Authorized Officer
ATTEST
By.
Authonzed Officer
OOCSL -\ 1 252099 3
~0233-3-\1KH-05i 18198 7
SCHEDULE I
INITIAL ESCROW DEPOSITS
CASH
SECURITIES
Matunty Coupon
Descnptlon Date Rate Pnnclpal
DOCSLAI 252099 3
40233- 3-\.ui.H.OStI8198 1-1
SCHEDULE II
REFU~'"DED PRIOR BONDS
Matunty Date Pnnclpal Interest
July 1 Amonnt Rate
2003 $260,000 6%%
2004 285.000 680%
2005 315.000 680%
2006 350.000 690%
2007 385.000 6.90%
2008 420,000 690%
2009 460.000 6.90%
2010 505,000 600%
.
DOCSLAI 252099 3
40233-3-MKH-05/18198 II-I
CONTINUING DISCLOSURE AGRREMENT
by and among
CITY OF SANTA MONICA
and
u.s. BANK TRUST NATIONAL ASSOCIATION,
as Paying Agent
Dated as of June 1, 1998
Relating to
City of Santa l\lonica General Obligation Refunding Bonds,
Series 1998 (Main Library Improvements Project)
DOCSLA 1 252845 4
40233-3-\-IKH-05!19/98
CONTINUING DISCLOSURE AGREEMENT
THIS CONTINUING DISCLOSURE AGREEMENT (thIS "DIsclosure Agreement")
dated as of June 1, 1998, IS by and between the CITY OF SANTA MONICA, a charter CIty duly
orgamzed and eXlstmg under and by vIrtue of the ConstItutIon and laws of the State of CalIfornIa
and ItS Charter (the "CIty"), and US BANK TRUST NATIONAL ASSOCIATION, a natIOnal
banlang assoClatIOn organIzed and eXlstmg under and by VIrtue of the laws of the Umted States
of Amenca, m Its capaCIty as PaYIng Agent (the "Paymg Agent");
\VITNESSETH:
\VHEREAS, pursuant to a resolutIon adopted by the CIty CouncIl on June _, 1998 (the
"ResolutIOn") and In accordance WIth the Paymg Agent Agreement, dated as of June 1, 1998, by
and bet\veen the CIty of Santa MOnIca and the Paymg Agent (the "Paymg Agent Agreement"),
the CIty has Issued lts CIty of Santa MOllIca General OblIgatIon Refundmg Bonds, Senes 1998
(Mam LIbrary Improvements Project) (the "Senes 1998 Bonds"). m the aggregate pnncIpal
amount of S , and
\VHEREAS, thIS DIsclosure Agreement IS bemg executed and delIvered by the CIty and
the Paymg Agent for the benefit of the Owners and beneficIal owners of the Senes 1998 Bonds
and m order to aSSIst the undervvnter of the Senes 1998 Bonds III complYIng WIth SecuntIes and
Exchange COITnmSSIOn Rule 15 c212(b)( 5),
NO\V, THEREFORE, for and III consIderatIOn of the mutual promIses and covenants
herem contamed, the partIes hereto agree as follows
Section 1. Definitions. CapItal1zed undefined terms used herem shall have the meanmgs
ascnbed thereto in the Paymg Agent Agreement In addItlon, the following capItalIzed terms
shall have the followmg meanmgs
"Annual Report" means any Annual Repon provIded by the CIty pursuant to, and as
descnbed In, SectIOns 2 and 3 hereof
"Disclosure RepresentatIve" means the DIrector of Fmance of the CIty or his or her
deSIgnee, or such other person as the CIty shall deSIgnate m wntmg to the Paymg Agent from
hme to tIme
"DIssemmatIOn Agent" means, ImtIally the CIty, or any successor DIssemmatIon Agent
deSIgnated III wntmg by the CIty and WhICh has filed WIth the Paymg Agent a wntten acceptance
of such deSIgnatIon
"Federal Secuntles Laws" means all Federal SecuntIes Laws, mcludmg, WIthout
lImItatIOn, the SecuntIes Act of 1933, as amended, the Secuntles Exchange Act of 1934, as
amended, all rules and regulatIOns promulgated thereunder and all admmIstratlVe and case law
mterpretatIons thereof
DOCSL~l 2528454
40233-3-MKH-05fI 9/98
"Listed Events" means any of the events lIsted m SectIon 4(a) hereof
"NatIOnal ReposItory" means any NatIOnally RecognIzed MUnICIpal SecillltIes
InformatIon RepOSItory for purposes of the Rule.
"OfficIal Statement" means the OfficIal Statement, dated , 1998, relatmg
to the Senes 1998 Bonds.
"PartIcIpatmg Underwnter" means any of the Ongmal Purchasers of the Series 1998
Bonds reqUired to comply with the Rule m connectlOn with offenng of the Series 1998 Bonds
"Repository" means each NatIOnal RepOSItory and each State RepOSItory
"Rule" means Rule 15c212(b)(5) adopted by the SecuntIes and Exchange COnllmSSIOn
under the SecuntIes Exchange Act of 1934, as the same may be amended from tIme to tIme
"State RepOSItory" means any publIc or pnvate repOSItory or entIty deSIgnated by the
State of Cahfomla as a state repOSitory for the purpose of the Rule and recognIzed as such by the
SecuntIes and Exchange CommIssIOn As of the date of thIS DIsclosure Agreement, there IS no
State RepOSItory
Section 2. Provision of Annual Re!lorts. (a) The CIty shall, or shall cause the
DlssemmatIOn Agent, If any, to, prOVIde to each RepOSItory an Annual Report WhICh IS
conSIstent WIth the reqUIrements of SectIOn 3 hereof, not later than eIght months after the end of
the CIty'S fiscal year (whIch currently l.'ilould be March 1) (the "Annual Report Date"),
commencIng WIth the report for the 1997-98 fiscal year The Annual Report may be submItted as
a smgle document or as separate documents compnsmg a package, and may Include by reference
other mformatIOn as proVIded m SectIOn 3 hereof; prOVided, however, 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 avmlable by that date
If the CIty'S fiscal year changes, It shall gIve notIce of such change ill the same manner as for a
LIsted Event under Section 4(f) hereof
(b) Not later than 15 busmess days pnor to the date speCIfied m subsectIOn (a) for
provIdmg the Annual Report to Reposltones, the CIty shall proVIde the Annual Report to the
DIssemmatIon Agent, If any, and the Paymg Agent (lfthe PaYIng Agent 15 not the DISSemmatlon
Agent) If by such date, the Paymg Agent has not receIved a copy of the Annual Report, the
Paymg Agent shall contact the CIty and the DIssemmatIOn Agent, If any, to detenmne If the CIty
IS ill compliance WIth the first sentence 0 f thIS subsectIon (b)
(c) If the Paymg Agent IS unable to venfy that an Annual Report has been prOVIded to
Reposltones by the date reqUired m subsectIOn (a), the Paying Agent shall send a notIce to the
MunICIpal SecuntIes Rulemakmg Board and the appropriate State Repository, If any, m
substantIally the form attached as ExhIbit A
(d) The DIssemmatIOn Agent shall
DO(SLAI 252845 4
40233-3-MKH-OSfI9/98 2
----
(1) determine each year pnor to the date for provldmg the Annual Report the
name and address of each National RepOSItory and each State RepOSItory, If any,
(n) prOVIde any Annual Report receIved by it to each RepOSItory, as prOVided
herem, and
(m) file a report wIth the City (if the DissemmatIon Agent IS not the CIty) and
the PaYIng Agent (if the DISSemInatIon Agent IS not the Paymg Agent) certifYIng that the
Annual Report has been prOVIded pursuant to thIS Disclosure Agreement, statmg the date
it was prOVIded and listmg all the Reposltones to which It was proVided
Section 3. Content of Annual ReDorts. The CIty'S ..o\nnual Report shall contarn or
Incorporate by reference the followmg:
(a) AudIted financial statements prepared In accordance WIth generally
accepted accountmg pnnciples as promulgated to apply to governmental entItles from
tIme to tIme by the Governmental Accountmg Standards Board If the City's audtted
financial statements are not aVaIlable by the tIme the Annual Report is reqUIred to be filed
pursuant to SectIOn 2(a) hereof, the Annual Report shall contam unaudited financIal
statements m a format Similar to that used for the City'S audIted finanCIal statements, and
the audited financIal statements shall be filed III the same manner as the Annual Report
when they become avaIlable
(b) The followmg mformatIon, to the extent not Included m the audIted
financIal statement of the CIty, providmg financIal and operatIng data substantIally
SImIlar to that prOVIded m the correspondmg tables and charts III the OffiCIal Statement
(A) the adopted budget of the City for the then current fiscal year. (B) a statement of
outstandmg debt of the Crty, (C) mformatIOn regardmg total assessed valuatiOn of taxable
propertIes wlthm the City, If and to the extent proVIded to the City by the County, (D)
mformatIOn regardmg secured tax charges and delInquencies on taxable propertIes wIthm
the CIty, If and to the extent prOVIded to the CIty by the County, (E) a summary of the
City's current FIScal Year Investments, mcludmg types and amounts of mvestments,
returns on mvestments, average YIeld of Illvestments and market value of mvestments
(c) In addItIOn to any of the mformatIOn expressly reqUIred to be prOVIded
under paragraphs (a) and (b) of thIS Section, the City shall prOVIde such further
InfOrmatIOn, If any, as may be necessary to make the speCifically reqUIred statements, m
the lIght of the CIrcumstances under WhICh they are made, not mIsleadmg
Any or all of the Items hsted above may be Included by speCific reference to other
documents, mcludmg offiCIal statements of debt Issues of the CIty or related pubbc entIues,
whIch have been submItted to each of the Reposltones or the SecuntIes and Exchange
CommIssIOn If the document mcluded by reference is a final offiCIal statement, It must be
aVaIlable from the MuniCIpal SecuntIes Rulemakmg Board The City shall clearly Idenhfy each
such other document so mcluded by reference
DOCSL~1 2528454
40233-3- \fKH..ff5/19f98 3
Section 4. Re!>orting Of Significant Events. (a) Pursuant to the provlSlons of this
SectIOn, the City shall gIve, or cause to be gIven. notIce of the occurrence of any of the followmg
events With respect to the Bonds, If matenal
(I) Pnnclpal and Interest payment delInquencies.
(n) Nonpayment related defaults
(m) Unscheduled draws on debt service reserves reflecting financial
difficulties
(IV) Unscheduled draws on credit enhancements reflectmg finanCial
difficulties
(v) SubstituTIon of credit or lIqUIdity providers, or their failure to perform
(VI) Adverse tax opmIOns or events affectmg the tax-exempt status of the
secunty
(vu) Modlficallons to nghts of secunty holders
(vm) Contmgent or unscheduled bond calls
(IX) Defeasances
(x) Release, substItutIOn, or sale of property secunng repayment of the
secuntIes
(Xl) Ratmg changes
(b) The Paymg Agent shall, promptly after obtammg actual knowledge of the
occurrence of any of the Listed Events, contact the Disclosure Representative, mform such
person of the event, and request that the City promptly notIfY the DlssemmatlOn Agent, If any, III
wntmg whether or not to report the event pursuant to subsectIOn (f)
(c) \Vhenever the City obtams kno\vledge of the occurrence of a LIsted Event,
whether because of a notIce from the Paymg Agent pursuant to subsectIOn (b) or otherWIse, the
CIty shall as soon as possible determme If such event would be matenal under applIcable Federal
SecuntIes Laws
(d) If the CIty detenmnes that knowledge of the occurrence of a Listed Event would
be matenal under apphcable Federal Secunbes Laws, the CIty shall promptly nOTIfy the
DIssemmatIon Agent, If any, m wntmg Such notice shall instruct the DlssemmatlOn Agent to
report the occurrence pursuant to subsectIon (f)
(e) If m response to a request under subsectIon (b), the CIty detemunes that the Listed
Event would not be matenal under applIcable Federal Secuntles Laws, the CIty shall so notIfy
DO~SLAl 252845 4
40233-]-l\-IKH-OSf19:98 4
the DlssemmatlOn Agent m wntmg and mstruct the Dlssemmatlon Agent not to report the
occurrence pursuant to subsection (t).
(t) If the Dlssemmatlon Agent has been mstructed by the CIty to report the
occurrence of a Listed Event, the DIssemmatIOn Agent shall file a notIce of such occurrence with
the MUnIcipal SecnntIes Rulemakmg Board and each State ReposItory. Notwlthstandmg the
foregomg, notice of Listed Events descnbed In subsectIOns (a)(vm) and (IX) need not be gIven
under thIS subsectIOn any earher than the notlce (If any) of the underlymg event IS gIven to
holders of affected Bonds pursuant to the Paymg Agent Agreement
(g) NeIther the Paymg Agent nor the Dlssemmatlon Agent shall have any
responslblhty hereunder to detenmne the matenahty of any LIsted Event.
Section 5. Termination of Reporting Obligation. The CIty'S oblIgatlons under thIS
DIsclosure Agreement shall tenmnate upon the legal defeasance, pnor redemptIOn or payment III
full of all of the Bonds If such terminatlon occurs pnor to the final matunty of the Bonds, the
City shall gIve notIce of such termmation III the same manner as for a LIsted Event under SectIon
4(f) hereof.
Section 6. Dissemination Agent. The City may, from tIme to tIme, appomt or engage a
DISSemmatlon Agent to aSSIst it in carrymg out Its oblIgatIOns under this DIsclosure Agreement,
and may discharge any such DIssemmatIOn Agent, WIth or Without appomtmg a successor
DIssemmatIon Agent The Dlsseminatlon Agent may resign by provIdmg 30 days wnUen notIce
to the CIty The DIssemmatIOn Agent shall not be responsIble for the content of any report or
notIce prepared by the CIty. The DlssemmatlOn Agent shall have no duty to prepare any
mformatIon or report, nor shall the DIssemmatlOn Agent be responsIble for filmg any report not
provIded to It by the City ill a tunely manner and m a form sUItable for filmg
Section 7. Amendment: Waiver. Notwlthstandmg any other proVIsIOn of thIS
DIsclosure Agreement, the CIty and the Paymg Agent may amend thIS DIsclosure Agreement
(and the Paymg Agent shall agree to any amendment so requested by the Crty so long as such
amendment does not adversely affect the nghts or obhgatIOns of the Paymg Agent), and any
provIsIon of thIS DIsclosure Agreement may be waived, provlded that the followmg condltIons
are satIsfied
(a) lEthe amendment or Waiver relates to SectIOns 2(a), 3 or 4(a) hereof It may
only be made m connectlOn \v1th a change m CIrcumstances that anses from a change m
legal reqUIrements, change m law, or change m the IdentIty, nature, or status of an
oblIgated person WIth respect to the Bonds, or type of bus mess conducted.
(b) the undertakmgs herem, as proposed to be amended or wan'ed, would, m
the opmlOn of natIOnally recognIzed bond counsel, have complIed WIth the reqUIrements
ofthe Rule at the tIme of the pnmary offenng of the Bonds, after takmg mto account any
amendments or mterpretatlOns of the Rule, as well as any change m CIrcumstances, and
(c) the proposed amendment or Walver (1) IS approved by holders of the Bonds
m the manner prOVided m the Paymg Agent Agreement for amendments to the Paymg
DOCSLA I 252845 4
40133-3- \fKH-051J 9/98 5
Agent Agreement WIth the consent of holders, or (11) does not, In the OpInIOn of the
PaYIng Agent or natIOnally recogmzed bond counsel, matena1ly ImpaIr the mterests of
holders
(d) If the annual finanCIal mformatIon or operatIng data to be provIded In the
Annual Report IS amended pursuant to the prOVlSlons hereof, the first annual finanCIal
infOrmatIOn contaimng 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 operatmg data or finanCIal mformatIOn bemg provIded
If an amendment IS made to the undertakIng specifymg the accountIng pnnclples to be
followed m prepanng finanCial statements, the annual financIal InfOrmatIOn for the year In which
the change IS made shall present a companson between the financIal statements or mformatIOn
prepared on the baSiS of the new accountmg pnnciples and those prepared on the basiS of the
former accountmg pnnclples The companson shall mclude a qualItatIve dIScussion of the
dIfferences m the accountmg pnnciples and the Impact of the change in the accountmg pnnclples
on the presentatIon of the finanCIal statements or mformatIon, m order to prOVIde mformatIOn to
mvestors to enable them to evaluate the abIlIty of the CIty to meet Its oblIgatIons To the extent
reasonably feasible. the companson shall be quantItatIve A notIce of the change In the
accountmg pnnclples shall be sent to the Reposltones III the same manner as for a LIsted Event
under SectIOn 4(f) hereof
Section 8. Additional Information. Nothmg In thiS Disclosure Agreement shall be
deemed to prevent the Crty from drssemmatmg any other mformatIOn, usmg the means of
dIssemmatIOn set forth m thIS DIsclosure Agreement or any other means of commUnICatIOn, or
mcludmg any other mformatIOn m any Annual Report or notIce of occurrence of a LIsted Event,
m addltlon to that whIch is reqUIred by thIS DIsclosure Agreement If the CIty chooses to mclude
any mformatIOn m any Annual Report or notIce of occurrence of a Listed Event m addItIOn to
that wluch IS speCIfically reqUIred by thIS DIsclosure Agreement, the CIty shall have no
oblIgatIOn under thiS DIsclosure Agreement to update such mformatlOn or mclude It m any future
Annual Report or notIce of occurrence of a LIsted Event
Section 9. Default. In the event of a failure of the City or the Paymg Agent to comply
wIth any provlSlon of thIS DIsclosure Agreement, the Paymg Agent may (and, at the \vntten
dIrectIon of any Partlclpatmg Underwnter or the holders of at least 25% aggregate pnnclpal
amount ofOutstandmg Senes 1998 Bonds, shall), or any holder or benefiCIal owner of the Senes
1998 Bonds may, take such actions as may be necessary and appropnate, mdudmg seekmg
mandate or speCIfic performance by court order, to cause the CIty or Paymg Agent, as the case
may be, to comply WIth Its oblIgatIOns under thIS DIsclosure Agreement A default under thIS
DIsclosure Agreement shall not be deemed an Event of Default under the PaYIng Agent
Agreement, and the sole remedy under tlus DIsclosure Agreement in the event of any failure of
the CIty or the Paymg Agent to comply WIth thIS DIsclosure Agreement shall be an actIOn to
compel performance
Section 10. Duties. Immunities and Liabilities of Paying Agent and Dissemination
Agent. Article VIII ofthe Paymg Agent Agreement is hereby made applicable to thIS Disclosure
Agreement as If thIS DIsclosure Agreement '\vere (solely for thIS purpose) contamed III the Paying
DOCSL-\l 2528454
40233.3. \IKH-05/19198 6
Agent Agreement, and the Paymg Agent and the Dlssemmation Agent shall be entItled to the
protectIOns, lnmtatlOns from lIabIlIty and indemrutIes afforded the Paymg Agent thereunder The
PaYIng Agent and the DisSemInatIOn Agent shall have only such dutIes hereunder as are
specifically set forth III thIS DIsclosure Agreement The DIssemmatIon Agent shall be paid
compensatIOn by the CIty for Its semces proVIded hereunder In accordance WIth Its schedule of
fees, as agreed to by the City from tlme to tIme, and shall be reimbursed for all reasonable
expenses, legal fees and advances made or Incurred by It In the performance of Its dutIes
hereunder NeIther the DIssemmatIOn Agent nor the Paymg Agent shall have any duty or
oblIgatIOn to review any mformatIOn provided to It hereunder
Section 11. Beneficiaries. ThIS DIsclosure Agreement shall mure solely to the benefit of
the City, the Paymg Agent, the DlssemmatIOn Agent. the PartIclpatmg Underwnters and holders
and benefiCial owners from tIme to tlme of the Senes 1998 Bonds, and shall create no nghts ill
any other person or entIty
Section 12. CounterDarts. ThIS DIsclosure Agreement may be executed In several
counterparts, each of whIch shall be an ongmal and all of WhICh shall constItute but one and the
same Instrument
DOCSl.\.l !528454
41l233-3-MKH-05fI9f98 7
IN WITNESS WHEREOF, the parties hereto have executed thIs Disclosure Agreement as
of the date first above wntten
CITY SA.~TA MOI\IJCA
By
Authonzed Officer
ATTEST
By'
City Clerk
APPROVED AS TO FORlV1
By
Marsha Jones Moutne, City Attorney
U.S. BANK TRUST NATIONAL
ASSOCIATION, as Paying Agent
By'
Authonzed Officer
ATTEST
By
Authonzed Officer
DOCSLI\.1.25284S 4
40233-3-I\1KH-05f19/98 8
EXHIBIT A
NOTICE TO MUNICIPAL SECURITIES RULEMAKING BOARD
OF FAILURE TO FILE ANNUAL REPORT
Name ofIssuer. City of Santa MOllica
Name of Bond Issue City of Santa MOllica General Obhgahon Refundmg Bonds, Senes 1998
(1vfam LIbrary Improvements Project)
Date ofIssuance , 1998
NOTICE IS HEREBY GIVEN that the CIty of Santa Moruca General OblIgatIOn
Refundmg Bonds, Senes 1998 (Mam L1brary Improvements Project) (the "CIty") has not provIded
an Annual Report WIth respect to the above-named Bonds as reqUIred by SectIon 9 02 of the Paymg
Agent Agreement, dated as of June 1, 1998, by and benveen the City and
, as Paymg Agent The City antICIpates that the Annual Report wIll be
filed by
Dated
US BAi"-'K TRUST NATIONAL
ASSOCIATION, as PaYIng Agent, on behalf
of the CIty of Santa Moruca General
ObligatIOn Refundmg Bonds, Senes 1998
(Mam Library Improvements Project)
cc City of Santa Moruca
A-I
PREU}UJ"Ii .\RY OFFlCI.\L ST A TEMEi\ T D.\ TED -' 11)98
This Prehmmar): Official Slatement and Ihe mfonnallon contamed herem are sublect 10 completIOn or amendment. Cnder no circumstances shall thiS
Prehmmar~" OfficllIl Statement constUute an offer to sell orthe sohcltatlon of an offer to buy, nor shall there be any sale ofthese securities 10 any JurlSdlt:lioD
In which such offer, sohcltatlOn or sale would be unlawful
'\EW ISSFE-FrLL BOOK-E~TRY RA TI'iGS
\-toody's "_"
Fitch .. "
(See "Ratmgs" herem)
In the opinIOn of Orrick. Herrington & Sutcliffe Los 4ngeles, Californra Bond Counsel, based IIpon an analvsls of exISting laws regulations rulmgs and
court decISIons and assummg. among other matters compliance with certam covenants, Imerest on the Bonds IS I!.J:cluded from gross mCome for .federal mcome lax
flllrposes under SeclJOn 1 ()3 of the Imernal Revenue Cooe of ) 986 and IS e:xempt from SIOle of California personal Income Ul:res in Jhe junher opinIOn of Bond
Counsel. InlereSI on the Bonds IS not a specific preference Ilem for purposes of the federal IndiVidual or corporale alternallve mmlmum taxes. although Bond Counsel
obsen'es Ihat such Inlerest IS mcluded In adJusled currem eammgs when calculating corporate alternal/ve minimum taxah/e mcome Bond Counsel e'(presses no
opmlOn regardmg aflV other lax consequences related to the ownership or dispoSItIon oj. or lite accrual or receipt of Interest on, lite Bonds See Tax ".farters . herem
$ .
CITY OF SANTA MONICA
GENERAL OBLIGATION REFL'NDING BONDS, SERIES 1998
(Main Library Improvements Project)
Dated June _' 1998 Due Ju]y I. as shmm below
The CIty of Santa "loDlca General Obhgatlon Refundmg Bonds Senes 1998 (\-tam Library Improvements ProJect}{the' Bonds") are bemg Issued to refund
and defease a portIOn of the outstandmg City of Sanm \toOlca General ObhgatJon Bonds, Senes 1990 (Mam LIbrary Improvements Project) (the" Pnor Bonds"')
whIch financed me acquIsition and Improvement ofpropeny adjacent to the Santa \.loOlca Pubhc LIbrary Mam Branch and expanSIOn of the ~1aJn Library Faclhly. as
aumonzed m the bond proposlllOn submitted at a general e]ectlOn of the regIstered voters of the City held on NO\'ember 8. 1988 See 'The Bonds - Purpose ofIssue"
herem The Bonds Will be Issued m fully regIstered fonn In denommatlons of S5.000 or any mtegral multiple thereof The Bonds shall bear mleresl at the respective
rates per annum sel forth below Interest on the Bonds IS payable on January 1 and Ju]y I of each year. commenCing January I 1999 See The Bonds" herem
The Bonds \\111 be Issued m book-entry form only and. when dehvered WIll be regIstered m the name of Cede & Co as nommee of The DeposItory Trust
Company. '\ew York. '\ew York (" DTe) DTC will act as secunues depoSitor:' for the Bonds Purchasers of the Bonds will not receIVe ceruficates representmg their
mterests In the Bonds bemg purchased Payment of pnnc~pal of the Bonds at matunty or pnor redemption, mterest and premmm. If any. ""Ill be payable by l: S Bank
Trust \:allonal ASSOCiation, as Paymg "-gem and Bond Registrar. to DTe. and such payments "'111 be remitted by DTe to the partICipants m DTC for subsequent
dIsbursement to the DeneficJaI o\\ners of the Bonds See ".The Bonds - Book Entry System' herem
The Bonds are subject to redemption pnor 10 matunty, as described herem under "The Bonds - RedempllOn" herem.
The Bonds are general obligations of the ell)' of Santa MOnica and the C'I)' CounCil of Santa MODIca IS empowered and IS obltgated to levy ad valorem
taxes WIthout limitatIons ot rate or amount upon all property subject to taxation by the elly for the payment of the pnnclpal of and mterest on the Bonds The Bonds
"'ere authonzed by a general electIon of the regIstered volers of the Clly held on November 8. 1988 al which more than two-thm)s of me persons voung on the
propoSItIOn voted to authonze the Issuance and sale of not more than S4 500.000 of general obligatIOn bonds of the elly for the acquISItIon and Improvement 0 f land
for parkmg and/or addluonallmprovements lD connectlon With the Santa MOnica Ltbr3l) Mam Branch
M 0\ TllRITY SCHEDl"LE*
$- Serial Bonds
1\lalunl)" Prmclpal Inlerest Yield or \falurny Pnnclpal Interest YIeld Or
(Jul~' I) ~ Rate Pnce (July I) Amount Rate Pnce
1999 $ % o.~ 2005 S % oio
2000 2006
200l 2007
2002 2008
2003 2009
2004 2010
$ % Term Bonds due - I. 20_ - YIeld or Pnce _0/0
$ % Term Bonds due - 1.20 - . YIeld or Pnce _0"'0
THIS COVER PAGE CONTAINS CERTAIN NFOR.\1ATIO'IJ FOR QUICK REFERENCE O~LY IT IS 'aT -\ SUMMARY OF THIS ISSl'E
INVESTORS ....n.:ST READ TIIE ENTIRE OFFICIAL STATE~E~T TO OBTAD-l rsFOR.\II....nON ESSENTIAL TO THE M....KlNG OF ...."l" NFOR..\.tED
I"iVESHIDIT DECISION
The Bonds l>1/I be offered when. as and if Issued to and received bv the Cnden.:1'Iler subject to approWl/ as to their legalm' bv Orrick. Herrmgton &
SutcitJJe. Los Angeles CalIforma. Bond Counsel. and cerram other condwons Cerram legal matters Will be passed upon by OrrIck, Herrmgton & SUlclIjfe. Los
4ngeles, Califorma as DIsclosure C oUTIsel to lhe CIty PubliC Resources 4dwsory Group has served as jinancIQI atn'lSOr to the CUI! m connectIOn wIlh the Issuance of
lhe Bonds It IS antIc/paled that lhe Bonds, m book-ent11l form WIll be aWlllable for delivery through the fOCI/tiles of DTC m Yew York. Yew lork on or about June _'
/998
Dated June , ]998
. Prelimmary, subject to change
DOCSLA.1251917.3
40233-J-\IKH-05I18J98
No dealer, broker, salesperson or other person has been authonzed by the eny to provIde
any mformatIon or to make any representatIons other than as contamed herem and, If gIven or
made, such other mformatlon or representation must not be rehed upon as havmg been
authorized by the City llus Official Statement does not constItute an offer to sell or the
sohcnation of an offer to buy nor shall there be any sale of the Bonds by a person m any
JunsdIction In whIch it IS unlawful for such person to make such an offer. solICItatIOn or sale
ThIS OffiCIal Statement IS not to be construed as a contract w1th the purchasers of the
Bonds. Statements contamed m thIS OffiCIal Statement whIch Involve estImates, forecasts or
matters of Op1ilIOn. whether or not expressly described herein. are mtended solely as such and are
not to be construed as a representatlOn of facts.
The mformatIon set forth herem has been obtamed from official sources whIch are
belIeved to be relIable but It IS not guaranteed as to accuracy or completeness The mformatIon
and expreSSIOn of OpInIOn herein are subject to change \\-1thout notice and neIther dehvery of thIS
Official Statement nor any sale made herennder shall, nnder any CIrcumstances, create any
ImplIcatIOn that there has been no change m the affaIrs of the CIty smce the date hereof
Although certam mformation set forth in this OffiCIal Statement has been provided by the
County of Los Angeles. the County of Los Angeles has not approved thIS OffiCIal Statement and
IS not responsIble for the accuracy or completeness of the statements contamed III thIS OffiCIal
Statement.
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITER MAY
OVERALLOT OR EFFECT TRANSACTIONS \VHICH STABILIZE OR MAINTAIN THE
MARKET PRICE OF THE BONDS OFFERED HEREBY AT A LEVEL ABOVE THAT
\\tlIICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET SUCH STABILIZING.
IF COMMENCED. MAYBE DISCONTINUED AT AL'\fY TIME
.
DOCSL-%.I 251917.3
40233-J-'tKH-OS/18198
CITY OF SAl~T A MONICA
(County of Los Angeles, California)
City Council
Robert T. Holbrook. Mayor
Pam O'Connor, Afayor Pro Tempore
Ruth Ebner
MIchael F einstem
Ken Genser
Asha Greenberg
Paul Rosenstem
City Manager
John Jalili
Director of Finance
Charles M Dennis
Director of Resource Management
Jeff Mathieu
City Attorney
Marsha Jones Moutne
Deputy City Attorney
Linda Moxon
City Treasurer
Ralph Bursey
City Clerk
Mana M Stewart
City Librarian
Wmona Allard
SPECIAL SERVICES
Bond Counsel Financial Advisor
Omck. Hemngton & Sutchffe LLP Public Resources AdvIsory Group
Los Angeles. Callforma Los Angeles, California
Paying Agent
US Bank Trust National Association
Los Angeles. Califorma
DOCSL.\1 251917.3
40233-3- '.{Jrn-OS/18llJ8
T ABLE OF CONTENTS
Pa2e
INTRODUCTION. . ........ ...... ...... ....... .. . ... .... . . . .. . .. . 1
Authonty for Issuance .. .... ..... . . . . .. ... .. ....... ...... .... . ... .... ... . 1
Secunty and Sources of Payment .. ...10. . . ...... .. ...... .... . . ..... .. . . 2
The CIty. .... .. . . . . .. . . .. . ..._ 0- . . .2
Terms of the Bonds . . . . . . . . .... ..... . . . . 2
Tax Matters ..... .... .. . . . . . .' . ... .... ..... 2
Continumg DIsclosure . ... .. .... . . . . .... ........ ..... ..... . .. 2
Other InformatIon . . .. ...... . . . ..... ...... .. . ... ... ...... .... 3
THE BONDS . . . . ... ... .... 0- ..... .... ..... ..... ... .... "''''"1- .. . .. ... 3
DescriptIOn ofthe Bonds .... ...... ...... 0- . . . . .. . . . .. ... 3
Authonty for Issuance ... ... . .. .... ..... .... .. 0- . . ..... ...... ....0- .... ..... . . .. 3
Purpose ofIssue ....
. . ... .. ... ~ ..... .. 0- . . -'
Redemption .. . . ...... .-.... . . . . -..O' ..... . . .....0- ...... ..... .. 0- ..4
Book- Entry System... ........................... ................................................. ... . ... ................ 4
Discontmuance of Book-Entry System. . . ........ .... .... ... . . . .. .6
Defeasance .. . .. . . . ..... ....0- .0-. .. . . 8
PLAN OF REFUNDING.. .' . .. . . . .. ...... .... .... .. . .. .8
ESTIMATED SOURCES A."\"D USES OF FUNDS ..... ... 0- . .. .9
DEBT SERVICE SCHEDULE . '" . . ....... ..... ...... ....... .. . ... 10
SECURITY AND SOURCES OF PAYMENT. . . . . .... .. 0- . . 10
General .. ..... 0- . .. . . . . ... .. ..... ... .. . . .......... ......... ... . . . .10
Covenants of the City .. . . . . .. . . . . .... ...... . . 10
Amendments . . . . . . . . . . h . . .. . 11
Assessed ValuatlOns . ... . . .. . . . . . . .. 12
(1) Total Assessed Value IS compnse of Net Secured Assessed Value of
$8,774,321.572 plus Net Unsecured Value of5613.327.854. Source
MunICIpal Resource Consultants . . .... 0- .. .... .. .... ..... 13
Ad Valorem Property TaxatIOn and CollectIOn. . . . ....... ....... . . . ... .. 13
Tax Rates . ...... ... . .. . . . . .. .. .. ..... 0- ... .... .. .. . .14
Tax LeVIes and Collections. ... ........ ... ... .... ... 0- . .. ...... ... .. 0- . ..15
Debt Obligations, Estimated Direct and Overlapping Bonded Debt. . . .. . .. 16
THE CITY OF SANTA MONICA.. . .. .... ... ...... .....0- . . . .. . . .. .. .16
Introduction .. .. .......... ..... .. ... ......+.. 0- . ...... .... ...... .... .... .t_... ..... ...0- 16
General... . ...... .. ..... ..... . . .... ........... .. .. .... .. t_ .. . .. 17
Government and Admul1stratIOn . .... ........ . . ... . .. ........ ....... ,.. . . 17
Accounting PoliCies and Fmanclal Reportmg. ..... ...... ....... ...... ........ .. .... ...... ......... ... 17
Budgetary Process. . . .. ....... ..... .. ....... ... .. ..' .... -+.... ..... ...... 18
Year 2000 Task Force. ..... . ... ....... ...- .. ....... .... ...... ....... ..... ...... . .... ....... .... to .. 18
Investment of CIty Funds... . .. ... ... ..... .. .... ..... ....... .......... .. . .... 18
Leading Employers . ...__ ..... ..-..... ... . .... ....r -...... ..... . . ,. ..... ..20
Labor RelatIons ...... .... ~ .... .. . ... ..... .. ... .. -to.. ............ ..... ..... . .. ...... ... ... .> 21
Industry and Employment..... .. ..... ......- ........... .... ....... ....... _...0-... ........ ... ... ........ ..22
Labor Force ComposItIon ... . . . ........ ...... . . ... ....... .... ....... ........ .. ..... .. . .25
DOCSLAI:25t917.3
~023J.J-\-tKH-OS/] 8/'J8 I
-~
TABLE OF CONTENTS
Pa~e
Outstandmg Debt ... .... ... ..... -I- .. ... ........ .... ..... . .. .... .. ............. . .26
General Fund Revenues and ExpendItures. ..... .... ...... ...... ... . . .. .. .26
Impact of State Budget ActIons on the CIty . ... .... ....... .... .....o. .o. 28
LIMITATIONS ON TAXES AND APPROPRIATIONS ...... .... .... ... . . .. 28
ArtIcle XIIIA .. .. ...... ... .. .. ..... ...... .. .. ....... .. . . . . 28
l\rtlcle XIIII3. .. .... ... .. . . .. ..... .... . . .... .o. . . ..29
ProposItion 46 .... .... .. .. . .. ... .. .. .. . . ... .. .... .. .... .. 30
PropositIon 218... .. ...... .. . . .. . .. ..... 0- ., . . .. . .. .. 30
Future InmatIves . . .. . . ... .. ~ ....... ...... ..... .. ... .... .. .... .. .... .... . 31
Umtary Property.... .. .... ... ..... ... ..... . ., .. . .. .... .31
TAX yIA TTERS ... ... ... .... ..... .. ... ..... .. ...... .... .... .. ... "" . ..... .. ... ...... 31
FINANCIAL STATEMENTS .... ....... . . . . . .... ..... .. .. .... .. 32
ABSENCE OF LITIGATION .. ..... .. . . " .... .... .. . . . .. . . . . ..,. .. 33
RA TINOS . . .. .. .... ... .. .. . . . . . ... ...... . . ...... .. I- .... ... . 33
CERTAIN LEGAL MA TIERS . . . . ... ... ... "" .. . . . 33
CONTINUING DISCLOSURE . .. ... .. ...... .... .... .. .... . . .. .. 33
ADDITIONAL INFO&.\1ATlON ... .. . . . .. .. . ... . 34
APPENDIX A CITY AUDITED FINANCIAL STATEME}JTS. .. . .... .....o. . A-I
APPE~DIX B FORM OF OPINION OF BOND COUNSEL. . . . .. .' . .. B-1
APPENDIX C FORM OF CONTINUING DISCLOSURE AGREEMENT . . . '" . C-l
DOCSU.I 251917.3
402J3-J-~1KH-OS/18198 11
OFFICIAL STATEMENT
S .
CITY OF SANTA MONICA
GENERAL OBLIGATION REFUNDING BONDS, SERIES 1998
(Main Library Improvements Project)
INTRODUCTION
ThIs mtroductlOn IS not a summary of thIs Officzal Statement It IS only a brzef deSCrlptlOn
of and gUlde to. and IS qualified by, more complete and detmled InformatIOn contained In the
entire Officwf Statement. mcludmg the cover page and appendIces hereto. and the documents
descnbed herem All statements contamed m thIs mtroductiOn are qualified m their entIrety by
reference to the entIre Officwl Statement References to. and summarzes of prOViSiOns of the
ConsmutlOn and lall'S of the State of Califorma and any documents referred to herem do not
purport to be complete and such references are qualified m their enurety by reference to the
complete prOVlSlons
This Official Statement. whIch mcludes the cover page and a~pendlces hereto, IS
proVIded to furmsh mformatIOn in connection \vlth the sale of $ aggregate pnncIpal
amount of City Of Santa MOnIca General ObhgatIon Refundmg Bonds. Senes 1998 (Mam
LIbrary Improvements Project) (the "Bonds") The Bonds are bemg issued to refund a portion of
the outstandmg CIty of Santa MOnIca General OblIgatIOn Bonds, Senes 1990 (Mam LIbrary
Improvements Project) (the "Pnor Bonds") whIch financed the acqUlSItlOn and Improvement of
property adjacent to the Santa Monica Pubhc Library Main Branch and expanSIOn of the Mam
LIbrary FaCilIty. as authonzed in the bond propOSItIOn submItted at the ElectIOn. See "The Bonds
- Purpose of Issue" herem
Authority for Issuance
The Bonds were authorized III the City of Santa MOnIca (the "City") bond propOSItIOn
submmed at a general election of the registered voters of the CIty held on November 8, 1988 (the
"ElectIon") at whIch more than two-thIrds of the persons votmg on the proposItion voted to
authonze the Issuance and sale of not more than $4.500.000 of general obhgatIon bonds of the
CIty for the acquisition and nnprovement of land for parkmg and/or addItIOnal improvements m
connection WIth the Santa MOnIca LIbrary Mam Branch. as more fully descnbed below. The
Bonds are general obhgation bonds of the City and are being Issued under prOVISIons of TItle I,
DIVISIOn 1. Part 10, Chapter 2 of the State of CalIfornia EducatIOn Code (the "Acf'),
commencing with SectIon 15100, as amended. and ArtIcle XIIIA of the CalIfornIa ConstitutIOn
and pursuant to Resolution No _ (CCS) adopted by the City CouncIl on June _' 1998 (the
"ResolutIOn"). In connectIon with the Bonds, the City has entered into a Paymg Agent
Agreement (the "Paymg Agent Agreement'") dated as of June 1, 1998, by and between the City
and US Bank Trust Nal10nal ASSOCIatIOn, as Paymg Agent (the "Paying AgenC) CapitalIzed
. Prehmmary. subject to change
DOCSL4.1251917.3
40233.3- '\fKH.05/18/98
terms used herem and not defined herem shall have the meaning set forth m the Paymg Agent
Agreement
Security and Sources of Payment
The Bonds are general oblIgatIOns of the Cny of Santa Momca and the CIty CounCIl of
Santa YIonica IS empowered and IS obligated to levy ad valorem ta.xes. \\lthout lImltatlons of rate
or amount (except certam personal property \VhlCh IS taxable at lImIted rates), upon all property
subject to taxatIOn by the Cny for the payment of the princIpal of and Interest on the Bonds See
'"The Bonds:' "Secunty and Sources ofPaymenC and "Cny of Santa MOllIca "
The City
The City IS situated on the western sIde of Los Angeles County. bordered by the CIty of
Los Angeles on three sIdes and by the Pacific Ocean to the west. The City encompasses an area
slightly greater than eight square mIles and has an estImated populatIon of 92.578 persons,
makmg It the 18th largest CIty in Los Angeles County The total assessed valuation of real
property m the City for the fiscal year ended June 30, 1997 is $9.062,944,507. See "The City of
Santa Momca - General"' and <'- Assessed ValuatIon ,.
Terms of the Bonds
The Bonds will be Issued m book-entry form only and, when delivered, \\111 be regIstered
m the name of Cede & Co, as nommee of The DepOSItory Trust Company, New York. ~ew
York ('"DTC"). and \\ill be aVaIlable to purchasers of the Bonds ("BenefiCIal O\\lners") under the
book-entry system mamtamed by DTe. only through brokers and dealers who are or act through
DTC partICipants as descnbed herem The Bonds are Issuable m denominatIOns of$5,000 or any
mtegral multIple thereof BenefiCIal O\\<ners Purchasers of the Bonds 'Ao111 not receive certIficates
representmg thelf mterests m the Bonds bemg purchased Payment of pnnclpal of the Bonds at
matunty or pnor redemptIOn. Interest and premiUm. If any, \\111 be payable by US Bank Trust
NatIOnal ASSOCiatIOn. mcludmg its successors or assIgns, If any, (the "Paymg Agent" and the
"Bond Registrar"), and such payments WIll be remItted by DTe to the partiCIpants m DTC for
subsequent dIsbursement to the benefiCIal OVol'11ers of the Bonds Interest on the Bonds is payable
on January 1 and July 1 of each year. commencmg January 1, 1999 See "The Bonds - Book
Entry System" herem.
The Bonds are subject to redemptIon pnor to maturIty as described herein under "The
Bonds - RedemptIon .,
Tax Matters
See Appendix B for the form of opmlOn that Bond Counsel proposes to delIver m
connectIOn wnh issuance and sale of the Bonds For a dISCUSSIon of such opmIOn and certaIn
other tax consequences mcident to the ov..nershlp of Bonds, see "Tax Matters" herein
Continuing Disclosure
The CIty has agreed to provide. or cause to be provided, to each natIonally recogmzed
mumclpal secuntles mformatlOn repository and any public or private repOSItory or entIty
DOCSLo\l 251917.3
40233-3- \tKH-05/18~8 2
designated by the State as a state reposItory for purposes of Rule 15c2-12(b)( 5) adopted by the
SecuntIes and Exchange ComnllsslOn certam armual financIal information and operatmg data
and. in a timely manner. notice of certam matenal events. These covenants have been made m
order to assist the Undern-nter m complying wnh SEC Rule 15c2-12(b)(5) See "ContInuing
DIsclosure" herem.
Other Information
ThIS OffiCIal Statement speaks only as of Its date. and the mformatlOn contamed herem IS
subject to change CopIes of the ResolutIon, the Paying Agent Agreement and other documents
and mformatIon are avaIlable. upon request. and upon payment to the CIty of a charge for
copymg. mmhng and handhng. from the CIty Clerk at the eny of Santa Momca. 1685 Main
Street. Santa MOnIca. CalIfornIa 90401
THE BONDS
Description of the Bonds
The Bonds Will be issued III fully regIstered form only and. when Issued. \vill be
registered m the name of Cede & Co . as nommee of DIC DTC WIll act as secuntles depOSItory
of the Bonds O\\ollership mterests In the Bonds may be purchased book-entry form Payment of
pnnclpal of. or mterest on, the Bonds at matunty or pnor redemptIOn. and premIUm, If any. IS
payable m la\\wl money of the Umted States of Amenca by the Paymg Agent to DTC. See "The
Bonds - Book-Entry System ..
The Bonds \\111 be dated as of June 1, 1998 and WIll be Issued only as fully regIstered
bonds m denommations of $5,000 and any mtegral multIple thereof The Bonds shall bear
Interest from then Dated Date to their respective matunty dates. payable commencmg on July 1,
1998. and semmrmually thereafter on January 1 and July 1 of each year The Bonds wIll mature
on July 1 m each of the years, and in the pnnclpal amounts. set forth on the cover page of thIS
OffiCIal Statement
Authority for Issuance
The Bonds are Issued under the proViSiOns of the Act, ArtIcle XIIIA of the CalIfornIa
ConstItutiOn and pursuant to the Resolution and the Paymg Agent Agreement. The Cny receIved
authonzatiOn at an electIon on November 8, 1988, by bond propOSItiOn submitted at a general
electIOn of the registered voters of the City held on November 8. 1988 (the "'ElectlOn") at which
more than two-thIrds of the persons votmg on the prOpOSItiOn voted to authonze the Issuance and
sale of not more than $4,500,000 of general obligatiOn bonds of the City for the acqUISItIon and
Improvement of land for parkmg and/or additIonal improvements in connection with the Santa
Monica LIbrary Main Branch
Purpose of Issue
Net proceeds of the Bonds wIll be used to refund a portion of the outstandmg City of
Santa Monica General Obligation Bonds, Series 1990 (Main Library Improvements ProJect) (the
"'Pnor Bonds") WhICh financed the acqUIsitIOn and improvement of property adjacent to the
DOCSL-\t 251917.3
40233-3- \lKH-OS/18IlJ8 ..
.)
Santa Monica Public LIbrary Mam Branch and expansIOn of the Mam LIbrary Facihty. as
authonzed in the City bond propOSItIOn submItted at the ElectIon
Redemption
A1andatory Smlang Fund RedemptIOn The Bonds ffiatunng on July 1. 20_ are subject
to mandatory smkmg fund redemption pnor to their stated maturay, In part. by lot. on July 1,
20_. In the amount of the mandatory smkmg fund payments set forth below. at a redemption
pnce equal to the sum of the pnnclpal amount thereof plus accrued mterest thereon to the
RedemptIon Date, without premlUm.
Year
(July 1) PrinCIpal Amount
20 $
--
20
--
20
- --
20 --
-
20_ (matunty) --
Notlce of RedemptIOn Notice of any redemptIOn of Bonds shall be mailed by the Paymg
Agent m accordance with a ",'fitten Request of the CIty, postage prepaId. not less than thIrty (30)
nor more than sixty (60) days pnor to the RedemptIon Date. Each notice of redemptIOn shall (a)
state the date of such notIce; (b) state the name of the Bonds and the date of issue of the Bonds.
(c) state the redemptlon date. (d) state the redemptIOn pnce, (e) state the dates of maturIty of the
Bonds to be redeemed. and, If less than all of the Bonds of any such matnnty are to be redeemed.
the dlstmctlve numbers of the Bonds of such matnnty to be redeemed. and m the case of Bonds
redeemed m part only. the respectIve portIOns ofthe pnnclpal amount thereof to be redeemed, ({)
state the CUSIP number. If any, of each matunty of Bonds to be redeemed: (g) reqUIre that such
Bonds be surrendered by the o\'mers at the office of the Paymg Agent m Los Angeles. CalIfornIa.
or at any other place or places deSIgnated by the Paymg Agent, and (h) gIve notice that further
mterest on such Bonds will not accrue after the deSIgnated redemptIon date.
The actual receipt by any Owner or of any InformatIon Service or SecuntIes Depository
of notIce of such redemptIOn shall not be a condition precedent to redemptIOn. and faIlure to
receIve such notlce or any defect In the notIce mailed shall not affect the validity of the
proceedings for the redemptIOn of such Bonds or the cessatIOn of accrual of mterest on the date
fixed for redemption. A certificatlon by the Paymg Agent or the City that notice of call and
redemptIon has been given to O\\<ners and to the appropriate Secnntles Deposltones and
InformatIOn Services as provided m the Paymg Agent Agreement shall be conclUSIve as agaInst
all parties, and no Owner whose bond IS called for redemptIOn may object thereto or object to the
cessatIOn of accrual of interest on the RedemptIOn Date by any claIm or showing that S3.J.d O""ner
failed to actually receIve such notice of call and redemption
Book-Entry System
DTC will act as secuntles depoSItory for the Bonds The Bonds WIll be issued as fully-
registered secunties regIstered m the name of Cede & Co.. DTC s partnershIp nominee. One
DOCSL.\i"251917.3
40233-3-MKH-OSlI8198 4
fully registered Bond will be Issued for each of the matuntIes of the Bonds, in the aggregate
princIpal amount of each such maturIty, and WIll be deposited wIth DTC.
DTC IS a hmlted.purpose trust company organIzed under the New York Bankmg Law. a
"bankmg orgaruzation" withm the meamng of the New York Bankmg Law. a member of the
Federal Reserve System, a "clearIng corporatIOn" wIthm the meanmg of the New York Umfonn
Commercial Code, and a "cleanng agency" regIstered pursuant to the provIsIons of SectIOn 17A
of the SecuntIes Exchange Act of 1934 DTC holds secuntIes that ItS partICIpants
("PartIcIpants") depOSIt WIth DTe. DTC also facilItates the settlement among PartICIpants of
secuntles transactIons. such as transfers and pledges. In deposIted secuntles through electrOnIc
computenzed book-entry changes in PartiCIpants' accounts, thereby elimmatmg the need for
phYSIcal movement of secuntIes certIficates. "DIrect PartIcIpants" mclude secuntles brokers and
dealers, banks, trust comparues, cleanng corporatIOns. and certain other orgamzatIOns DTC 15
o\\'l1ed by a number of its DIrect PartiCIpants and by the New York Stock Exchange. Inc. the
Amencan Stock Exchange. Inc. and the NatIOnal ASSOCIatIOn of SecuritIes Dealers, Inc. Access
to the DIC system IS also avaIlable to others such as secuntIes brokers and dealers, banks. and
trust compames that clear through or maintaIn a custodIal relatIonshIp WIth a Direct PartIcipant.
eIther directly or mdlrectly ("IndIrect PartICIpants") The Rules applicable to DTC and ItS
PartIcipants are on file \\'1th the Secunties and Exchange COnUTIlSSIOn
Purchases of Bonds under the DTe system must be made by or through DIrect
PartICIpants. whIch WIll receive a credIt for the Bonds on DTC's records. The ov.nershIp mterest
of each actual purchaser of each Bond C'BeneficIaI Owner'-) IS m turn to be recorded on the
DIrect and IndIrect PartiCIpants' records Beneficial Owners will not receIve \\<Tltten confirmatlon
from DTC of theIr purchase. but BenefiCIal O\\l1erS are expected to receIve "vntten confirmatIOns
proVldmg detaIls of the transaction, as well as penodlc statements of theIr holdings, from the
DIrect or IndIrect PartICIpant through whIch the BenefiCIal O\\'l1er entered mto the transactIOn
Transfers of o\\l1ershlp interests m the Bonds are to be accomphshed by entrIes made on the
books of PartIcipants acting on behalf of BenefiCIal Ow-ners. BenefiCIal O"\oners WIll not receIve
phYSICal dehvery of the Bonds. except III the event that use of the book-entry system for the
Bonds IS dIscontinued
To facIlitate subsequent transfers. all Bonds depOSIted by PartICIpants WIth DTC are
regIstered in the name of DTC's partnershIp nommee. Cede & Co. The deposIt of Bonds WIth
DTC and then regIstratIOn in the name of Cede & Co effect no change m benefiCIal O\vnership
DTC has no knowledge of the actual BenefiCial Owners of the Bonds, DTCs records reflect
only the identity of the DIrect PartiCIpants to whose accounts such Bonds are credIted. whIch
mayor may not be the Beneficial OWllers. The PartICIpants WIll remaIn responSIble for keepmg
account of theIr holdings on behalf of theIr customers.
Conveyance of notIces and other commumcations by DTC to DIrect PartIcipants. by
Direct PartiCIpants to IndIrect PartIcipants, and by DIrect PartiCipants and IndIrect PartICIpants to
Beneficial Owners \\111 be governed by arrangements among them, subject to any statutory or
regulatory requirements as may be m effect from time to tIme
NeIther DTC nor Cede & Co \\0111 consent or vote with respect to Bonds Under ItS usual
procedures, DTC WIll maIl an omnibus proxy to the City as soon as possible after the applIcable
DOCSL"-1 251917.3
40233-3- 'IKH-OSlI 8I'J8 5
------- --- ----
Record Date The omnibus proxy assIgns Cede & Co 's consentmg or voting rights to those
DIrect ParticIpants to whose accounts the Bonds are credned on the record date (identIfied m a
hstmg attached to the omnIbus proxy)
Payments ofpnncipal of. and interest on. the Bonds at matunty or pnor redemptIOn, and
redemptIon premiUm. If any, on the Bonds will be made to DIC Ole's practIce IS to credIt
DIrect PartIcIpants" accounts on payable date m accordance wnh theIr respectlve holdmgs shown
on DTCs records unless DTC has reason to believe that It will not receIve payment on payable
date Payments by PartICIpants to BenefiCial O\\;ners will be governed by standmg mstructIOns
and customary praCl1ces. as is the case wIth secuntles held for the accounts of customers III
bearer form or regIstered m "street name;" and WIll be the responsIbIlIty of such PartICIpant and
not of DTC, the Cny or the Paymg Agent. subject to any statutory or regulatory reqUIrements as
may be In effect from Hme to tIme. Payment of pnncIpal of, and mterest on, the Bonds at
matunty or pnor redemption. and redemptIOn premIUm. if any. to DIC IS the responSIbilIty of
the Paymg Agent. dIsbursement of such payments to Direct PartICIpants shall be the
responSIbIlIty of DTC, and dIsbursement of such payments to the Beneficial O""ners shall be the
responslblhty of DIrect and Indirect PartiCIpants
DTe may discontmue providing Its servIces as secuntles depOSItory WIth respect to the
Bonds at any l1me by glvmg reasonable notIce to the City and the Paying Agent. Under such
clfcumstances. In the event that a successor securitIes depOSItory is not obtamed, phYSIcal Bonds
are reqUIred to be pnnted and delIvered Further. the CIty may deCIde to dlscontmue use of the
system of book-entry transfers through DIC (or a successor secuntIes deposnory) In that event.
phYSIcal Bonds will be printed and delIvered
The foregomg descnptlon concemmg DTC and DTes book-entry system IS based solely
on mfonnatlOn proVIded by DIe. whIch the Cay belIeves to be relIable, but the CIty takes no
responsiblhty for the accuracy thereof and no representatIOn IS made herem as to the accuracy or
completeness of such mformation.
BENEFICIAL OWNERS WILL NOT RECEIVE PHYSICAL DELIVERY OF
BONDS AND WILL NOT BE RECOGNIZED BY THE PAYING AGENT AS OWNERS
THEREOF UNDER THE TER\1S OF THE PAYING AGENT AGREEMENT, AND
BE~EFICIAL OWNERS WILL BE PERMITTED TO EXERCISE THE RIGHTS OF
O\VNERS ONLY INDIRECTLY THROUGH DTC AND THE PARTICIPANTS.
THE CITY WILL HAVE NO RESPONSIBILITY OR OBLIGATION TO SUCH
DTC P ARTICIP ANTS OR THE PERSONS FOR WHOM THEY ACT AS NOMINEES
WITH RESPECT TO THE PAYMENTS TO DTC P ARTICIP ANTS OR THE INDIRECT
P ARTICIP ANTS OR THE BENEFICIAL OWNERS.
Discontinuance of Book-Entry System
If the CIty determines that It IS in the best interest of the benefiCIal owners that they be
able to obtam Bonds and dehvers a wntten certIficate to DTC to that effect, DTC shall notIfy the
PartICIpants of the avaIlabIlIty through DTC of Bonds In such event the CIty shall issue, transfer
and exchange Bonds as requested by DTC and any other o\\ners m appropnate amounts. DTC
may deterrmne to dIscontinue prOVIding as services WIth respect to the Bonds at any tIme by
DOCSLAI 251917.3
40233-3- \HOI-05/1SI98 6
gIving notIce to the CIty and dischargmg Its responsIbilItIes wIth respect thereto under applIcable
law Under such CIrcumstances (If there IS no successor secuntIes deposItory) the CIty shall be
obligated to delIver Bonds as described m the Resolution Vvnenever DTC requests the City to do
so, the CIty will cooperate wIth DTC m takmg appropnate actIon after reasonable notIce to (a)
make available one or more separate Bonds eVidencmg the Bonds to any DTC PartiCIpant having
Bonds credIted to 11s DTC account or (b) arrange for another secuntIes depOSItory to maIntam
custody of certIficates eVIdenCIng the Bonds
In the event that the book-entry system descnbed above IS no longer used WIth respect to
the Bonds. payment, regIstratIon, transfer and exchange WIth respect to the Bonds wlll be
proVIded as follows
The pnnclpal of. and Interest on, the Bonds at matunty or pnor redemptIon. or premIUm.
If any. WIll be payable III la~ful money of the Umted States of Amenca upon presentatIon and
surrender of the Bonds at the pnncipal corporate trust office of the PaYIng Agent The pnncipal
of. and Interest on. the Bonds at matunty or pnor redemptIon. or premIUm, If any. \\111 be paId by
the Paymg Agent. by check mailed to the person whose name appears on the regIstratIon books
of the PaYIng Agent as the registered o\\<ner. and to that person's address appeanng on the
regIstration books as of the close of busmess on the 15th day of the month next preceding the
Bond Payment Date, or, upon the wntten request of an o\\'TIer of at least $1.000,000 m pnncipal
amount of Bonds receIved at least thIrty days pnor to a Bond Payment Date, by wire transfer In
IInmedlately avallable funds to an account deSIgnated by such o\\<TIer
Any of the Bonds may be transferred upon the Bond Register kept by the Paymg Agent
for such purposes. by the person In whose name such Bond is regIstered. In person or by hIS or
her duly authonzed attorney, upon surrender of such Bond for cancellatIOn. accompanIed by
delIvery of a vmtten mstrument of transfer, executed in a form approved by the Paymg Agent.
duly executed
The Bonds may also be exchanged at the prinCIpal corporate trust office of the Paymg
Agent In Los Angeles. CalifornIa, for a lIke aggregate pnnclpal amount of Bonds of the same
matunty and Interest rate of any authonzed denominatIons. The PaYIng Agent may require the
owner requestmg such exchange to pay any tax or other governmental charge reqUIred to be paId
WIth respect to such exchange, plus such addItIOnal reasonable charge as may be necessary to
cover customary expenses incurred and fees charged by the Paymg Agent WIth respect to such
exchange.
In the event that any Bond is lost, destroyed, stolen or mutIlated, the City WIll cause a
new Bond to be issued whIch IS SImIlar to the ongmal Any replacement bonds \\<111 be Issued
upon reasonable terms and condItIons. mcludmg the payment of costs and the postmg of a surety
bond.
No transfer of Refundmg Bonds shall be required to be made by the Paying Agent dunng
the penod from and after the fifteenth day of the month lITnnedlately precedmg an Interest
Payment Date, whether or not such day IS a Busmess Day (the "Record Date"), to and mcluding
the applicable Interest Payment Date.
DOCSLAl 2519I7J
4023J-3-\lKH-05/I8/98 7
Defeasance
If at any time the CIty shall payor cause to be paId or there shan otherwIse be paId to the
O\\.ners of all outstandmg Bonds all of the pnnclpal. mterest and premium, If any, represented
thereby. at the l1mes and in the manner provided herem and in the Bonds or as otherwIse
proVIded by law. then such Owners shall cease to be entitled to the obligatlon of the CIty as
proVIded m the Paymg Agent Agreement, and such obligatIOn and all agreements and covenants
of the Cay to such O\\ners hereunder and under the Bonds shall thereupon be satIsfied and
dIscharged and shall term mate except only as proVIded ill the paragraph Immediately below
Any outstandmg Bonds shall be deemed to have been paid within the meanmg of and
WIth the effect expressed m the Paymg Agent Agreement If there shall be on depOSit wIth the
DIrector of Fmance or set aside for the purpose with a trustee or escrow agent, mcluding the
Paymg Agent, momes m an amount suffiCient (together WIth mterest thereon) to pay the
pnnclpal amount thereof plus any accrued mterest thereon, payable on theIr respectIve pnnclpal
matunty dates. The O\\ners of such Bonds shall be entItled to the prmclpal and mterest
represented by such Bonds. and the CIty shall remain lIable for such payments. but only out of
such momes on depOSIt for such payment and momes transferred to the Paymg Agent for such
purpose
Any money deposlted v\<lth or otherwIse held by the Paymg Agent for the payment of the
prmcipal or mterest on any Refundmg Bond and remammg unclaimed for two years after the
stated ffiatunty of such Refundmg Bond WIll be paId by the Paymg Agent to the CIty, upon
receipt of a \\Tltten Request of the CIty. and the City and the Paymg Agent hereby agree that the
registered O\\rner of such Refundmg Bond shall thereafter look only to the CIty for payment
thereof
PLAN OF REFUNDING
The proceeds from the sale of the Bonds WIll be used to refund a portIOn of the
outstandmg Pnor Bonds, as descnbed below. aggregatmg In prmcIpal amount to $
(the "Refunded Bonds"), on July I, 2002 The proceeds from the sale of the Bonds. [together
with certain other moneys of the City], WIll be deposited with D.S Bank Trust National
AssociatIon, (the "Escrow Agent"') pursuant to the Paymg Agent Agreement and an Escrow
Agreement (the "Escrow Agreement"'), dated as of June I, 1998, by and between the CIty. and
the Escrow Agent. Such amounts held under the Escrow Agreement, together \Vlth certain other
avaIlable moneys, including certam funds currently held pursuant to and under the resolutIOns
under which the Pnor Bonds were Issued. "vIll be held in escrow and Invested m dIrect
obligatIOns of the Umted State of Amenca (the "Escrow SecuritIes"). the pnnclpal of and mterest
on whIch Will be used to redeem the Refunded Bonds on July 1, 2000 at a redemptlon price equal
to 102% of the Refunded Bonds matunng on July 1,2003 and thereafter. as descnbed below, at
the times and places and m the manner and with notice gIven to o\\ners of the Refunded Bonds
as speCIfied m the pnor resolutIOn: and to pay all pnncIpal and interest due on the Refunded
Bonds pnor to theIr redempnon.
DOCSL.\I :2S1917.3
40233-3- \-IKH-OSllSJ9ll 8
Mamnty Date Pnnclpal Interest CUSIP
Julv 1 Amount Rate Nos
2003 $260.000 6. 7 5~/o
2004 285.000 6.80%
2005 315.000 680%
2006 350.000 690%
2007 385,000 690%
2008 420,000 6.90%
2009 460,000 690%
2010 505.000 600%
The Escrow SecuntIes and other momes held under the Escrow Agreement are pledged to
the payment of the Refunded Bonds NeIther the princIpal of the Escrow Secunties nor the
Interest thereon wIll be avaIlable for the payment of the Bonds.
ESTIMATED SOURCES AND USES OF FUNDS
The estImated sources and uses of fund (exclUSIve of accrued mterest) are as follows
Sources.
Par Amount of Bonds $ --
[Amounts held under the Pnor Bond's
ResolutIOn]
Premium
--
Total Sources: $ --
li ses
DeposIt to Escrow Fund S --
Costs ofIssuance (I) --
Total Uses. $
--
tl) Includes legal fees, inItial fees of the Paymg Agent, finanCIal adVISOry fees and other costs of
Issuance
DOCSLo\.l 2S1917.3
40233-3- \tKH-0S/18198 9
DEBT SERVICE SCHEDULE
Fiscal Year Principal Interest Prior Bonds Annual Total
1998-99 $ % S S
1999-00
2000-01
2001-02
2002-03
2003-04
2004-05
2005-06
2006-07
2007-08
2008-09
2009-10
SECURITY AND SOURCES OF PAYMENT
General
The Bonds are general obligations of the CIty. The Bonds are not oblIgatIOns of the
County of Los Angeles. the State of Cahforma or any of Its other POhtlCal SUbdwlslons The
Bonds are payable from ad valorem taxes in accordance wIth the Election and pursuant to the
provISIons of the Act. and ArtIcle XIIIA of the CalIforma ConstitutIOn and pursuant to the CIty
ResolutIon and the Paymg Agent Agreement. The CIty Counctl of Santa Momca IS empowered
and IS oblIgated to levy ad valorem taxes. wnhout limItatIons of rate or amount (except certam
personal property whIch IS taxable at lImIted rates), upon all property subject to taxatIon by the
CIty for the payment of the pnnclpal of and mterest on the Bonds See "CIty of Santa MOnIca -
Ad Valorem Property Taxation and CollectIOn" and "LimItatIOn on Taxes and AppropnatIons. ..
mc1udmg "- PrOpOSItIOn 218 ,. Such taxes. when collected, wIll be placed m a debt servIce fund
created m the treasury of the CIty for the payment of the Bonds (WhICh fund may be the same
fund created for the payment of the Prior Bonds). For further mformation regardmg the CIty's
tax base, ta.x rates. overlapping debt and other matters concemmg taxatIOn. see "CIty of Santa
MOnIca" herem.
Covenants of the City
Payment of PrinCIpal and Interest On or before the Busmess Day ImmedIately pnor to
the date any payment is due In respect of the Bonds. the CIty "vIll cause momes on depOSIt In the
debt service fund created m the treasury of the CIty for the payment of the Bonds (which fund
may be the same fimd created for the payment of the Pnor Bonds). or, to the extent necessary,
such other momes as shall be lawfully avaIlable for the payment of the Bonds, to be depOSIted
w1th the Paying Agent sufficient to pay the pnnclpal and the interest (and premIUm, ]f any) to
become due in respect of all Bonds outstandmg on such payment date. When and as paId in full,
and follov.ing surrender thereof to the Paymg Agent. all Bonds shall be cancelled by the Paymg
Agent. and thereafter they shall be destroyed.
DOCSL-\I 251917.3
40233--3-MKH-OS/18,t)8 10
General Oblz!{atlOn. Lew of Tax The Bonds represent a general obhgal1on of the City
The money for the payment of principal and mterest on the Bonds shall be raIsed by ad valorem
taxatlOn v,'1thout limItatlOn as to rate or amount (except WIth respect to certam personal property
whIch IS taxable at hmlted rates) upon all taxable propeny m the CIty. and provIsion shall be
made for the levy and collectIon of such taxes in the manner provIded by law, and such money
shall be deposited by the DIrector of Fmance III the debt servIce fund created m the treasury of
the CIty for the payment of the Bonds (whIch fund may be the same fund created for the payment
of the Pnor Bonds)
Further Assurances The City wIll promptly execute and delIver or cause to be executed
and delIvered all such other and further mstruments, documents or assurances. and promptly do
or cause to be done all such other and further thmgs. as may be necessary or reasonably reqUIred
in order to further and more fully vest m the Owners all nghts. mterest. powers. benefits.
pnvIleges and advantages conferred or mtended to be conferred upon them by the Paymg Agent
Agreement
Tax Covenants. The CIty covenants that 11 shall not take any acl1on. or faIl to take any
actlOn. If such actlOn or failure to take such actIon would adversely affect the excluslOn from
gross mcome of the mterest payable on the Bonds under SectIon 103 of the Code. Without
limltmg the generalIty of the foregomg, the CIty covenants that It wIll comply WIth the
reqUIrements of the Tax CertIficate. ThIS covenant shall surVIVe payment in full or defeasance of
the Bonds
Amendments
The Paymg Agent Agreement and the rights and oblIgatlOns of the Cny and of the
O\vners may be amended at any tIme upon the \\ontten consents of the Owners of a maJonty m
aggregate pnncIpal amount of the Bonds then outstandmg, exclUSIve of Bonds dIsqualIfied
pursuant to the Paymg Agent Agreement. prowded that If such amendment wIll, by Its terms, not
take effect so long as any Bonds remain outstandmg. the consent of the O\'oners of such Bonds
shall not be required and such Bonds shall not be deemed to be outstanding for the purpose of
any calculatlOn of Bonds outstanding under the Indenture
No such amendment shall (1) extend the maturity of or reduce the mterest rate on or
amount of mterest on or pnnclpal of or redemption premIUm, If any. on any Refundmg Bond
WIthout the express written consent of the O\vner of such Refundmg Bond. or (2) reduce the
percentage of Bonds reqUIred for the \\onnen consent to any such amendment, or (3) modIfy any
nghts or obligations of the Paying Agent or the CIty WIthout theIr pnor wnrten assent thereto.
respectIvely. It shall not be necessary for the consent of the O\\'ners to approve the partIcular
form of any amendment to the Paying Agent Agreement. but It shall be suffiCIent If such consent
shall approve the substance thereof
The Paymg Agent Agreement and the nghts and obligatIons of the City and of the
O\\llers may also be amended at any tIme WIthout the consent of any Owners for any purpose
that \\111 not matenally adversely affect the mterests of the Owners, includmg (\\o'1thout
lImItation) for anyone or more of the followmg purposes (1) to add to the agreements and
covenants reqUired herem to be performed by the CIty other agreements and covenants thereafter
DOCSl.\I:251917.3
40233-3- 'IKH-05/18198 11
to be performed by the CIty. or to surrender any nght or power reserved under the Paying Agent
Agreement to or conferred under the Paying Agent Agreement on the CIty; or (2) to make such
provisions for the purpose of curing any ambIguity or of correctmg, cunng or supplementmg any
defectlve provIsIon contamed under the Paymg Agent Agreement or in regard to questlons
ansmg hereunder whIch the City may deem desirable or necessary Any amendment pursuant to
thIS paragraph shall not, for purposes of thIS paragraph. matenally adversely affect the Interest of
the Owners so long as all Bonds are msured by a polIcy of mUnIcIpal bond msurance. each issuer
of such an msurance polIcy shall have gIven Its wTitten consent to such amendment. and each
such msurer shall at the time of such consent be rated In the hIghest Ratmg Category by Moody" s
Investors Servlce and FItch Investors ServIce, Inc
Assessed Valuations
The City uses the facIlIties and servIces of the County for the assessment and collectlOn
of taxes CIty taxes are collected at the same tIme and on the same tax rolls as are the County.
Cny and speCIal dlstnct taxes Assessed valuatIOns are the same for both CIty and County taxing
purposes
The followmg table sets forth a ten-year summary of the Clty's assessed valuation before
deductIOn of the homeowners' and business inventory exemptIons.
CITY OF SANTA MONICA
Ten-Year Summary of Assessed Valuation
Real Property
Year Ended Assessed Personal Less Total Assessed
June 30 ValuelH Property [umpllons(l) Secured "'iet Secured Gross ValuatIOns
1988 $5.691.805.036 $28.458.409 $223.545.720 $5.496.717 725 S5.720 263.445 $5.863.412.829
1989 5.903.433.208 34 965.698 264.561 185 5.673.837.721 5.938.398.906 6.025.429.091
1990 6.602.103.732 25479.638 259597.012 6.367.986.358 6.627.583.370 6,745.845.999
1991 7.467.039.080 36.138.300 190.755.506 7312.421.874 7.503.177.380 7.738.588.927
1992 8.363.870.903 62.010.757 320 026.701 8.105.854.959 8.425.881.660 8.559.890.659
1993 9.036.119.694 64.846.669 340.632.216 8.760.334.147 9.100.966.363 9.238.032.676
\994 9.247.20\.916 '14.027.674 363.440.667 &.957.7&&.923 9.32\.229.590 9.473 923.2&6
]995 9.443.144.933 72.296.906 405.723.516 9.109.718.323 9.515.441.839 9.633573.633
1996 9.067.638.413 65.802.080 426349.915 8.707.090 578 9 133.440.493 9.265572 055
]997 9.062.944.607 51,375.296 339.998,231 8.774.321.572 9.114.319.803 9.387.649.426
(1) Consists ofland, lffiprovemems and publIc utllltles Excludes net unsecured property
(2) Includes homeowner exemptIon
Source County of Los Angeles Auditor-Controller
DOCSL.\J '251917.3
-40233-3- '\fKH-05/18198 . 12
The ten largest locally secured taxpayers m the City are lIsted below
CITY OF SA.~T A MONICA
Principal Property Taxpayers
(as of June 30, 1997)
1996-97
Assessed %of
Taxpaver !Tvpe of Business ValuatIon' I) Total
Water Garden Associates/Real Estate Development $216.600,662 231%
\1agUlre Thomas Partners/CommerCIal Real Estate - Land Development 212.341,264 226
Santa MOnica Place AssocIates/Real Estate Investment 95.334.850 1 02
Barclay-CurcI Investment Company/Commercial Rentals 85,340.443 091
Sisters ofChantyiProperty Management 67.060.679 071
The Gillette Company/Corporation 47,199.826 050
Santa MOOlca Hotel AssoclatesiHotel 45,340.909 048
100 WIIshlTe Associates/Real Estate Development 42,716.422 046
Santa MOOlca HSR L TD Partners/Real Estate Development-Hotel 39,679.000 042
Teie Tac ASSoclatesr1nvestment BUilders 37,360,000 040
-
T oral pnnclpal property taxpayers assessed value $888,974,055 9 470/0
Total City assessed value S9.387.649,926 100 00%
(I) Total Assessed Value IS compnse of Net Secured Assessed Value of$8.774.321.572 plus Net
Unsecured Value of$613.327.854
Source MUOIcIpal Resource Consultants
Ad Valorem Property Taxation and Collection
Taxes are leVIed for each fiscal year on taxable real and personal property whIch IS
situated m the County as of the precedmg January 1 However. upon a change m o\\nersmp of
real property or completIon of new constructIon, State law permIts an accelerated recogmtIOn
and taxatIOn of mcreases in real property assessed valuatIon (kno'wn as a "floating lIen date")
For assessment and collection purposes. propeny IS clasSIfied either as '"secured" or "unsecured"
and IS lIsted accordmgly on separate parts of the assessment roll The "secured roll" 1S that part of
the assessment roll contammg State and County assessed property secured by a hen wluch IS
suffiCient, m the OpInIOn of the assessor. to secure payment of the taxes Other property IS
assessed on the "unsecured rolL"
The County leVIes a one percent property tax on behalf of all taxmg agenCIes m the
Countv The taxes collected are allocated on the baSIS of a formula established bv State law
. .
enacted In 1979 Under thIS formula the County and all other taxmg entIties receIve a base year
allocatIOn plus an allocatIOn on the basis of "situs" growth m assessed value (new constructIon.
change of o\\nersrup, mflatIon) prorated among the JurisdIctIons whIch serve the tax rate areas
wlthm WhICh the grow1h occurs Tax rate areas are specifically defined geographIC areas whIch
were developed to permIt the levymg of taxes for less than countY-WIde or less than CItY-WIde
speCIal and school dIstrIcts In addItion, the County levies and collects addItional approved
property taxes and assessments on behalf of any taxing agency "VI thIn the County
DOCSL.\1 251917.3
40233-3-MKH-05I181')8 13
Property taxes on the secured roll are due III two mstallments, on November 1 and
February 1 If unpaId, such taxes become delInquent after December 10 and Apnl 10,
respectIvely, and a ten percent penalty attaches to any dehnquent payment In addItIOn. property
on the secured roll with respect to which taxes are delinquent IS declared tax-defaulted on or
about June 30 Such property may thereafter be redeemed by payment of the delInquent taxes and
the delinquency penalty, plus costs and redemptIon penalty of one and one-half percent per
month to the time of redemption If taxes are unpaId for a penod of five years or more, the tax-
defaulted property IS subject to sale by the Treasurer and Tax Collector of the County of Los
Angeles (the "Treasurer"}
Property taxes on the unsecured roll are assessed as of the January 1 hen date and become
dehnquent, If unpmd. on August 31 A ten percent penalty attaches to delmquent taxes on
property on the unsecured roll and an addItIOnal penalty of one and one-half percent per month
begms to accrue on November I The taxmg authonty has four ways of collectmg delInquent
unsecured personal property taxes: (1) a CIVIl actIOn agamst the taxpayer. (2) filmg a certificate
m the office of the County Clerk specIfymg certmn facts m order to obtain a Judgment hen on
certam property of the taxpayer, (3) filIng a certIficate of delinquency for recordatIon 10 the
County Recorder's office m order to obtain a lIen on certalll property of the taxpayer; and (4)
seIzure and sale of personal property. Improvements or possessory interests belongmg or
assessed to the taxpayer
Tax Rates
As prevIOusly noted and dIscussed below under "ConstItutIonal LimItatIOns Affectmg
CIty Revenues - PropOSItIOn 13," the Cahfomla Constitutlon lImns any ad valorem tax on real
property to one percent of the full cash value of such property. begmnmg m 1978-1979:
however, thIS hmltatlon IS not applIcable to ad valorem taxes or special assessments to pay the
Interest and redemptIOn charges on any mdebtedness mcurred to finance the acqUISItIOn or
Improvement of real property approved by two-thuds of the voters. mcludmg the ad valorem
taxes approved m the ElectIOn for payment of the Bonds
A summary of the tax rates levied in the CIty durmg the penod 1987-88 through 1996-97
appears 10 the following tabulatIOn.
DOCSLAI.251917.3
40233-3- "IKH-05/18llJ8 14
City of Santa Monica
Property Tax Rates - All Direct and Overlapping Governments
Year Miscellaneous
Ended City of Santa County of Los Special
June 30. MOnIca Angeles School DistrIcts Districts Total
1988 $000 $100 SO 01 $003 SI04
1989 000 100 001 002 I 03
1990 000 100 001 002 103
1991 o OJ 100 001 002 104
1992 001 100 001 001 103
1993 (1) 100 001 001 102
1994 (q , 00 oos 001 106
1995 (1) 100 005 001 J 06
1996 (I) 100 005 o OJ 106
1997 001 100 005 o OJ 107
(1) For Fiscal Year 1992-93 through 1995-96. CIty of Santa MOnIca property tax overnde for Library General
Obligatlon Bonds was less than $0 01, but was levled
Source County of Los Angeles AudItor-Controller
Tax Levies and Collections
Cay taxes are collected on the same bIll as County taxes Secured taXes are payable m
two mstallments on November 1 and February 1 and become delInquent on December 10 and
Apnl 10, respectIvely Unsecured taxes are assessed as of January 1
The follovang tabulatIOn shows the secured taxes levied by the Cay dunng the past five
fiscal years. together with the total amounts and percentages of taxes uncollected as of June 30 of
each fiscal year.
The valuation of property in the CIty is estabhshed by the Los Angeles County Assessor,
except for publIc utIlity property \vhich is assessed by the State Board of EqualIzatIOn Assessed
valuatIOns are reported at 100% of the full value of the property. as defined ill ArtIcle XIIIA of
the CalIfornIa ConstItutIOn The CalIfornIa State LegIslature adopted two types of State-
reImbursed exemptIOns begmmng in the tax year 1969-70 The first currently exempts 100% of
the full value of business inventories from taxation. The second exemptlon currently provIdes a
creda of $7,000 of the full value of an owner-occupIed dwelling for whIch application has been
made to the County Assessor
DOCSL~I:2S1917.3
'*0233-3- \Uill-OS/18/98 15
City of Santa Monica
Assessed Valuations, Property Tax Rates, Secured Levies
and Collections aDd Delinquencies
For the Ten Years Ended June 30,1997
Outstandmg
Delinquent
Property Tax Taxes as
Rates Per Outstanding Percent of Total
Year Ended Total Assessed $100 Assessed Total Secured Delinquent Secured Tax
June 30 V aluatlonll J ValuatIOn Tax Levv T axes(lj Levy(2)
1988 S5.863,412,829 $104 $8.173.076 $433,711 53%
1989 6.025,429.091 I 03 9.044.682 595,775 66
1990 6.745.845.999 1 03 10.205.146 828.090 8 1
1991 7.738,588.927 104 11,902.300 892.673 75
1992 8.559.690.659 1 03 12.956.523 804.600 62
1993 9.238.032,876 102 13,036.247 849.963 65
1994 9.473.923.286 106 11,627.196 869.341 75
1995 9.633.573.633 106 11,387.683 733.166 64
1996 9,265,572,055 106 12,066.921 692.554 57
1997 9.387.649.426 1 07 12,243.953 644,358 53
(I) ConsIsts of real property. secured and unsecured property, publIc utlhtles. less total exemptions
(2) The data presented represents the Clty'S proportionate allocation of County-wIde totals and]s not based on the
actual amount of taxes uncollected wlthm the City
Source County of Los Angeles AudItor-Controller
Debt Obligations; Estimated Direct and Overlapping Bonded Debt
Upon delIvery of the Bonds. the CIty's general oblIgatIOn mdebtedness represented by
the Bonds WIll be $ or _% of Its total 1997-98 assessed valuatIOn The followmg table
IS a statement of the City's dIrect and estImated overlappmg bonded debt as of April 30, 1998
CITY OF SANTA MONICA
ESTIMATED DIRECT AND OVERLAPPING BONDED DEBT
[to be inserted]
Source CalIfornIa MUniCIpal StatIstIcs, Inc
THE CITY OF SANTA MONICA
Introduction
The economIc and demographIc mformatIOn proVIded below has been collected from
sources which the City deems to be relIable and the most readIly aVaIlable This informatIon IS
DOCSL.\1 251917.3
402JJ-3-MKH-05/18198 16
provIded for mformational purposes only The Bonds are general oblIgatIOns of the CIty of Santa
MOllIca only and are not oblIgatlons ofthe County of Los Angeles or the State ofCalifornla.
General
The CIty of Santa Monica IS SItuated on the western side of Los Angeles County,
bordered by the CIty of Los Angeles on three SIdes and by the PacIfic Ocean to the west The
CIty encompasses an area slightly greater than eIght square mIles and has an estImated
populatIOn of 92.578 persons. makmg It the 18th largest CIty III Los Angeles County
The Santa Monica Freeway passes through the approximate center ofthe CIty on an east-
west course and provIdes dIrect connectIOn WIth dm,vJltoVvTI Los Angeles, apprOXImately 16 mIles
to the east About SIX mIles southeast of the City IS Los Angeles InternatIOnal AIrport. which IS
easily acceSSIble vIa the San Diego Freeway, about one mIle beyond the eastern border of Santa
MOnIca on a north-south course
The clImate is generally mIld with an average mean temperature of about 62 degrees (F).
Extremes range from an average mimmum temperature of S6 degrees (F) to an average hIgh of
68 degrees (F) RaInfall has averaged about 14 mches ElevatIOn ranges from sea level to 400
feet above sea level
Government and Administration
The City of Santa MOllIca was incorporated III 1886 and adopted Its City Charter m 1945
In 1947 a councIl-manager form of government was establIshed followIllg a vote of the City's
residents and approval by the CalifornIa Legislature. The City Council consists of seven
members WIth overlappmg terms of four years. Elections are held every two years. at WhICh tIme
three CouncIl members or four CouncIl members are elected After each electIOn, CounCIl
members select one oftheu group to act as Mayor, who then preSIdes over CouncIl meetmgs
The CIty CouncIl appoInts a CIty Manager. CIty Attorney and CIty Clerk The CIty
Manager IS responSIble for supervlSlng day-to-day operal1ons of the CIty and for carrymg out
pohcles set by the CouncIl
Accounting Policies and Financial Reporting
The City's accountmg records are orgamzed and operated on a "fund" baSIS. whIch IS the
basIC fiscal and accountmg entlty In governmental accountmg. The three broad fund categones
mclude governmental, propnetary and fidUCIary funds The operatIOns of the dIfferent funds are
accounted for WIth separate sets of self-balancmg accounts with assets. liabIlIl1es. fund balance
or eqUlty, and revenues and expenses. The basIS of accountIng for all funds is more fully
explamed m the Notes to the CIty of Santa MOllIca Combmed FInanCIal Statements contamed 10
AppendIX A.
The Government Fmance Officers ASSOCIatIon has awarded Its Certificate of
Aclnevement for Excellence 10 FInancial Reportmg to the CIty for the past 13 years The
CalIfornIa Society of MuniCIpal Finance Officers has awarded Its Outstanding Fmanclal
Reportmg Award to the CIty for 12 of the past 13 years.
DOCSL>\.1 251917.3
40233-3- \IKH-05/18/l)8 17
Budgetary Process
During May of each year, the C1ty Manager subm1ts to the Cay CouncIl a proposed
operatmg and capItal Improvements budget tor the fiscal year commencmg the followmg July 1.
The operatmg and capital improvements budget mcludes proposed expendItures and expenses
and the means of financmg them PublIc heaflngs are conducted by the CIty CouncIl to obtam
CItizen comments, and pnor to June 30. the budget IS adopted through passage of appropnate
resolutIOns.
Year 2000 Task Force
The CIty has establIshed a Year 2000 Task Force to ensure that all computer software,
hardware and electrOnIc systems relIed upon for its operatIons are year 2000 compliant The
Task Force has prepared a detmled mventory of all systems to be revIewed and has assIgned
responslbIhty to City Departments and vendors for ensunng year 2000 complIance Funding for
this effort has been obtamed The CIty IS replacmg many of Its key software systems. mcludmg
ItS finanCIal management system, payroll system. busmess licensmg system and water utIlIty
bllhng system, W1th new systems that are year 2000 compl1ant. The C1ty w111 also be purchasing
new computer hardware to run many of the new software programs. The Cny expects that all
systems relIed upon for CIty operatIons WIll be year 2000 complIant before January 1. 2000
Investment of City Funds
The CIty may Invest moneys not nnmedlately reqUlred for operatIOns m a manner
conSIstent With the CIty's Investment Polley (the "Investment Policy")
The Investment Polzcy The Investment Policy, ongIllally adopted III 1985 and last
revised III February 1998, applies to all cash and financial investments of those City funds
speCIfied III the Investment Policy The Investment Polley IS reviewed annually by the City's
Investment CommIttee and submItted annually to the CIty Counctl Amendments may only be
made WIth the approval ofa maJonty of the City's Investment ComrTIlttee. \vhlch is composed of
the Clty's DIrector of Fmance, the CIty Treasurer/Revenue Manager (the "CIty Treasurer") and a
representative from the CIty Manager's Office The Investment CommIttee meets at least once
each calendar quarter to revIew and evaluate prevIOUS mvestment actlVlty and yield. to reVIew
the current status of all funds held by the City, to dISCUSS antIcipated cash requIrements and
investment actiVIty for the next quarter. and to recommend investment strategy to the CIty
Treasurer The Investment CommIttee also meets at least annually WIth the Clty"S outSIde
audItors to review accounting controls and to deSign audIt procedures to Identrfy non-complIance
WIth the Investment Policy.
The Investment Policy establIshes three objectives for CIty mvestment.
(1) Satetv of pnnclpal The overall value of City funds shall not be
dimInIshed III the process of securing and investmg those funds or over the duratIOn of
the investments
DOCSLAI'2Si917.3
oW23J-J- \tKH-05/18198 18
(2) LIquidity of funds Funds shall be made avaIlable to meet all antIcIpated
City oblIgal1ons and a prudent reserve shall be kept to meet unantlclpated cash
requirements.
(3) Return on mvestment Earn the optImum mterest mcome from CIty funds
commensurate with the objectives of safety and avaIlabIlIty ofprmclpal mvested
Specific Investment RestnctlOns The Investment Policy mandates "prudent'. Investment
In those mstruments specifically authonzed by State law and establIshes additIOnal
dIVersificatIOn gUldelmes wIth respect to mstruments, maturity. and deposIt mstnutlOns All
mvestments are marked to market annually It is the CIty Treasurer's polIcy to hold mvestments
to matunty and he does not antIcipate any event In the future that would reqUlre sellIng
mvestments pnor to matunty The Investment PolIcy restncts the average weIghted matunty of
all pooled CIty mvestments to a maximum of 547 days The Investment PolIcy does not permIt
investment of the City'S non-pool secnntIes" eIther in denvatIves or reverse repurchase
agreements. nor does It permIt leveraging of the Clty'S mvestment portfolIo.
Although the Investment PolIcy can only be amended \vlth approval of the Investment
Comrruttee, there IS no assurance that State law and/or the Investment PolIcy \\illl not be
amended m the future to allow for mvestments that are currently prohIbited. or that the stated
ObjectIves of the CIty WIth respect to mvestments wIll not change
The JIonthly Report SectlOn 711 of the City Charter delegates Investment authonty to
the CIty Treasurer. The Investment Policy reqUIres the CIty Treasurer to (I) keep a record of all
investment transactiOns. (11) submIt a report at the end of the CIty's FIscal Year to the Director of
Fmance detaIlmg the status of the Clty's mvestments. and (111) make monthly reports to the
Investment CommIttee and the CIty Manager detaIlmg and summarIzIng all transactIOns and
statmg the present status of CIty mvestments (the "Monthly Report'") The Monthly Report dated
Apn130. 1998 mdlcates that 55% of the Clty's mvestment portfolIo ($158.343,975) was Invested
m Federal Agency secuntIes. 38% ($109,886.719) was mvested in intermedIate term, coupon-
beanng Umted States Treasury securities, 6% ($18.285.864) was mvested m the Local Agency
Investment Fund (LAIF) and 1% ($4,168,223) was mvested m money market funds, As of Apnl
30. 1998. the City Treasurer reports that the YIeld of the CIty's mvestment portfolio was 5 77%
and the book value was 999% of its market value (excludmg accrued interest). For the first ten
months of the 1997.98 fiscal year, the City Treasurer reports that the average annual yield of the
City's investment portfobo was 5.88% and the average weighted matnnty was 275 days
DOCSL.\I 2S1917.3
'*0233-3- '\urn-OS/I8198 19
Population
The followmg table sets forth populatlon data for the City of Santa Monica.
Population
Year
(as of Januarv 1) Population
1993 88.600
1994 89.809
1995 89.985
1996 90,262
1997 91,405
1998 92,578
Source State ofCahfOlnIa Department of Fmance
Leading Employers
The table below sets forth a lIst of pnnclpal employers In the CIty of Santa MOnIca.
City of Santa Monica
Principal Employers
(as of June 30, 1997)
Compan:v Number of Emplovees
City of Santa MODIca t ,650
Samt John's HospItal Medical Center 1.500
Santa Momca College 1,320
The Rand Corporatlon 970
Santa Momca-Mahbu Umfied School District 950
Metro Goldwyn Mayer, Inc 710
Santa Momca Hospital Medical Center 700
Lear AStroOlCS Corporation 690
The Gillette Company StatIOnery 680
SpeCIalty LaboratOries, Ine 660
Total jobs prOVIded by pnnclpal employers 9,830
Total Jobs m Santa Momca 63,252
Prmclpal Employers As Percent Of Total Jobs 155%
Source Most recent voluntary reportmg of employment levels to the City of Santa Momca by mdlVldual
organlzatlOns Total Jobs IS prOVided by the State ofCahfomla Employment Development Department
DOCSLA1:2S1917.3
40233-3- 'UOI-05/18I<J8 20
Los Angeles County MSA Estimated Average Employment
Wage and Salary Workers
For Calendar Years 1993-1997
1993 1994 1995 19% 1997
t\gnculture 9.200 8.500 8.000 7.200 7000
:Vhnmg 7,500 6.700 5.900 5.700 5.700
Construct/on 98.100 105.100 109,800 107.500 110.000
\.1.anufacrunng 66() 200 641.500 638.400 644.700 663.400
TransportatIOn and PublIc UtilitIes 199.600 201.600 202.600 204. "'00 210.200
Wholesale &. RetaIl Trade 821.800 821.500 835.800 S40.700 858.400
F mance. Insurance & Real Estate 250.000 237.100 222.100 217.200 219.500
Ser.lces 1.139.000 1.154.800 1.1 96 200 1 234,900 1.267.300
Government 531.400 533.700 535700 533.000 537800
Tota() 3.716.900 3.710.400 3.754 500 3.795.800 3 S79.200
ill Totals may not add due to roundmg
Source State of Call forma Emplo)ment Development Department
Unemployment Rates
For Calendar Years 1992 -1997
(unaudited)
CIty of City of County of State of
Year Santa Monica L{)s AnKeles Los An2eles CalIfornia United States
1992 63% 10.9% 96% 91% 74%
1993 64 109 97 92 68
1994 62 106 94 86 6 1
1995 52 89 79 78 56
1996 54 93 82 72 54
1997 45 78 68 63 49
Source State of California Employment Development Department
Labor Relations
The CIty has adopted a procedure by WhICh Its employees meet and confer WIth the eny
on all negotIable matters under the Meyers-Mlhas-Bro~n Act.
Of the 1,536 permanent CIty employees. most are represented by one of eleven UnIons.
mcIudmg 633 by the Municipal Employees ASSOCIatIOn. 195 by the Santa MOllIca Poltce
Officers ASSOCIatIon, 169 by the Umted TransportatlOn Umon, and 104 by the AdrrllmstratlVe
Team ASSOCIates.
All City employees are covered by eXlstmg multlple- or smgle-year contracts
DOCSL4.I 2519l"'.3
40233-3- '-IKH-OS/I8I98 21
Industry and Employment
The Santa MOnIca busmess communIty is comprised of a diverse collectIOn of busInesses
rangmg from traditional retaIlers to cuttmg edge mformauon hIghway provIders Tourism.
restaurants and retail augment the large serVice busmess sector Mainstay firms hke Rand
CorporatIon. Saint John's and UCLA-Santa MOnIca HospItals. GIllette Papermate, and the
automobile salesrooms occupy a more tradItlonal rnche as large mstitutIOnal property o\\oners,
sales tax producers, and employers. Major entertamment and multImedIa/software mdustry firms
lIke Sony MUSIC, MGM. Apple. Todd-AO StudIOS, DIgItal MagIC. Symantec-Peter Norton.
Candle and MTV lead a parade of over 200 ill-tech, multimedia. and related entertamment firms
of aU sizes These compallIes relocate to Santa MOnIca and West Los Angeles because they
appreclate the qualIty of lIfe and because there is a grOWIng cntical mass of support firms and
other SimIlar firms in the area.
Santa MOllIca mvests heavily m Its pedestnan-onented commercIal dlstncts, mcludIng
such natIOnally-recognized venues as the Third Street Promenade. Santa MOllIca Place shoppmg
mall. the Santa MOllIca PIer, Mam Street and Montana A venue ThIS investment has paId off In a
healthy tourism mdustry and a strong retaIl base. led by Santa MOnIca Place and the Third Street
Promenade, whIch each generate over $1 3 million m sales tax per year to Santa Mornca.
Tounsm spending alone totals approxImately $650 mIlhon per year III the City 1997 occupancy
rates m Santa Momca's hotels averaged 82%. a very healthy figure consldenng recent Increases
In average room rates. whIch currently exceed [an average of] $152 per mght Local hotels
generate over $14 mIlhon annually in hotel occupancy tax The three largest economIC segments
producmg taxable goods in the CIty are Restaurants, 16% New Auto Sales. 15% and
MIscellaneous RetaIl. 13%.
Santa MOllIca contInues to attract significant new economIc development. as the
Arboretum project begins constructIOn of two office projects totalmg 328.000 square feet of
office space and a thud reSIdentIal project which WIll add 351 housing urnts to the City's base of
hOUSIng and office [space]. A 140,000 square foot upscale hotel under constructIOn next to
Loews Hotel will add 175 rooms to the 2,875 presently m place. but is not expected to decrease
occupancy. as Santa Monica continues to be a favored 10catlOn for Southern Cahforma pomts of
mterest. Includmg the new Getty Center m nearby Brentwood.
Over 63,000 persons are employed m Santa MOllIca and are paId a total of $25 billIon m
salanes as of 1996 This figure does not mclude a very substantial number of self-employed
persons or contract workers, estImated at 15% of total employment Unemployment In Santa
Monica remams low, at 4.5%. Office vacancy rate IS stable at 10 8%, favorable when compared
to a 13.5% rate for the general West Los Angeles market
One cntlcal feature of Santa Momca's econOlTIlC development strategy IS to invest
heaVIly in ItS beaches, Pier. parks, schools, polIce and fire serVIces. cultural affaIrs and CIvic
mfrastructure ThiS focus on "qualIty of lIfe" issues has created a wonderful environment m the
Southern CalifornIa regIOn in whIch to lIve. work and VIsit. The resultmg environment has, III
turn. attracted a stable. dynamic busmess base and an exceptionally strong local economy
DOCSL.\I 2S1917.3
40233-J-MKH-OSlt 8/98 22
The followmg tables summanze employment and wage informatIOn and taxable
transactions \\"lthin the CIty
1996 Employment and Payroll
By Major Industry Division
City of Santa Monica
%of Average %of
Major Industry Total Annual % of Total Total Average
DIVIsion Firms FIrms Emplovment Employment Annual Pavroll Salanes Payroll
Agriculture. Forestry,
Flshmg and Mmmg 47 08% 385 06% $ 9360,063 04% $24.312
Construction 207 34 ],487 24 58.830.73 ] 24 39.563
Manufacturmg
Durable and Non-
Durable Goods 193 32 4.159 66 166.]81.327 67 39,957
Utilities and
T ransponanon 113 I 9 1.379 22 56.87 L035 23 41.241
Wholesale Trade 263 44 2.589 4 I 87.509.133 35 33.800
Retail Trade 1,053 175 ] 4.295 226 267.656.873 108 18.724
Fmance. Insurance,
Real Estate 612 102 5.024 79 260.363.527 ]05 51,824
Services 3.420 568 28,782 455 1.379.714,476 558 47,937
Non-classified 99 ] 6 313 05 12,790.533 05 40,864
Local Government 15 02 4.839 77 ] 72.0] 6.004 70 35.548
Total Employment 6.022 63.252 $2,471.293.702
Source
DOCSLAI 251917.3
40233.3- \.lKH-05l1 8/98 23
City of Santa Monica
Taxable Transactions by Type of Business
for Calendar Years 1992 through 1996
(in Thousands of Dollars)
Business 1992 1993 1994 1995 1991;i
Apparel Stores $115,314 5116.980 $119,417 $122.4 15 $125.821
General Merchandise 99.166 99.13 3 103.007 104.099 113,767
Drug Stores 30.382 28.770 27.346 25.620 28.124
Food Stores 59,014 48.918 47,451 50.739 58.794
Packaged LIquor Stores 10.731 9.901 10.387 10529 10.345
EatIng/DrInkIng Places 208.600 205.821 213,990 223,749 236.466
Home Furn & Appliances 46,756 45,438 47,371 50.358 57.718
Bldg Mat & Farm Imp) 44.819 44,437 51.800 47.261 49.687
Auto Dlrs & Auto Suppl 221.961 230.685 246.938 269,935 275,349
Service StatIons 46.427 43,369 40.907 43.504 47.544
Other RetaIl Stores 190.196 199,797 215.599 250.667 283.637
RetaIl Stores Total 1.073.366 1.073.249 1.124.213 1.198,876 1.287,252
All Other Outlets 295,806 306,067 315,288 379,334 389,712
TOTAL ALL OUTLETS 1,369,172 1.379,316 1.439.501 1.578.210 1,676,964
Source State Board of EqualizatIOn
DOCSLAI 251917.3
4023J-3-\IKH-05/18I98 24
Construction and Commercial Activity
The tables below set forth the buildmg constructIOn valuatlons. trade outlets and personal
mcome III the CIty of Santa MOnIca
CITY OF SANTA MONICA
Building Construction
Residential
Year Ended Commercial Construction Number of Construction
June 30, Number ofUnits(1) Value Units(2) Value
1988 89 $118.435,248 355 $52.455,894
1989 6 164.826.385 429 66,788.196
1990 1 102.038,181 390 75.091.352
1991 0 103.658.465 260 45.927.273
1992 6 64,135.407 369 51.461.244
1993 0 35.457.335 145 30.485.3 5 7")
199413 ) 0 23.519.638 59 \ 7.425.282
1995H) ., 26.990.] 15 40 19.8]4,478
.J
I 996(5) 8 30.4] 5.222 ] 79 28.796,176
] 997(6) 14 32.632,266 ] 16 30.962,726
(1) Represents the number of new commercIal bUlldmgs
(2) Represents the number of new dwellmg units
(3) Does not mclude $35.577.258 III earthquake related permIts
(4) Does not mclude 547.729.804 In earthquake related permits
(5) Does not mclude 533,073,621 III earthquake relared permits
(6) Does not Include 518,749,731 In earthquake related permits
(7) Source DeclslOn Research SCiences, Inc
Source Santa Monica Plannmg and Community Development Department
Labor Force Composition
The table below sets forth a summary companson of 1990 mdustnal sectors by
employment between Los Angeles County and the CIty of Santa Monica.
DOCSLo\I 251917.3
402J3-3-\IKH-OS/18198 25
1990 Industrial Sectors by Employment
Workforce Sector Percentage of Workforce
CIty of Santa MOnIca Los Angeles Count\'
ConstructIon 3% 4%
Manufactunng 9 19
T ransportatlOn 2 5
Trade - Wholesale 4 7
Trade - RetaIl 21 16
F mance 10 7
ServIces 48 36
Government 4 6
Source US Census
Outstanding Debt
As of _ _' 1998. the City has lease payment obligatIOns (evidencmg pnnclpal and
mterest) relatmg to $3.740.000 outstandmg aggregate pnnclpal amount of certIficates of
partICipatIOn WIth a final matunty of July 1, 2007. 512.845.000 outstandmg aggregate principal
amount of lease revenue bonds \N1th a final maturity m . 20_ and additIonal capital
lease obhgatlOns of approxImately S The CIty IS current on each of these oblIgatIOns
Followmg the refundmg of the Refunded Bonds, S aggregate principal amount of Pnor
Bonds vo111 remam outstandmg.
General Fund Revenues and Expenditures
The table which follows presents a detaIled statement of revenues and expendItures of the
City General Fund dunng the fiscal years ended June 30, 1995, June 30, 1996 and June 3D. 1997,
as reported in the City's financial statements The CIty'S revenues and expendItures estImated for
the year ended June 30. 1998 and proposed budget for the 1998-99 fiscal year are also sho\\'TI
DOCSL-\I 251917.3
40233-3- 'IKH-05f18198 26
CITY OF SA.,."iTA MONICA
Statements ofIncome and Expenditures
and Changes in Fund Balances
1994-95 to 1998-99
1995 1996 1997 1998 1999
Fiscal Year Ended June 30. 1997 ( '\udited) (Audited) ( '\.udned) (Estimated ( Proposed
actual Budget)
revenues)
Revenues.. Transfers and Other Financing Sources
Property Taxes $ 13.310.346 $ 1HOO 695 $ 13.892.252 $ 14.687.619 $ 15.226.538
Sales and other taxes 56.025.596 61.043.108 66.238.904 71.037.081 74969.879
Licenses and penmts 18.967.962 20.026.197 22.280 895 25.0 I 6.662 26.017.135
Fmes and torfelts 7362.718 7.803.342 7670.742 7.640.000 7.985.000
Cse ofmone)' and property 7.450.532 8.454.385 8.515541 8.427.406 9.747.836
Intergovernmental 265.586 433.612 29L152 423.090 228.300
Charges for services 8.235.807 8.417.528 7.576.711 8.310.833 8.579.812
Other 7.791.807 2.095.282 4.620.508 3.410.956 9.007.586
Operating transfers In 5.375.443 5.060.036 5.937.804 7 168.083 6.819.929
Subtotal $124.785.797 5127.134.185 $137.024.509 146.121.730 158.582.015
ExpendItures and Transfers
Public safety 37.685.808 39.922 840 41.818.978 43.749.809 43.963.218
Retirement - salanes 7.763 124 7.168.965 6.503 114 4.955.253 7.970.443
Cultural. recreatIon and library serVlces 16519.582 1 7 838.73 1 20.286074 21.777.712 22.038.096
General se....lces 9.623.124 10.065.392 8.918343 1 0.37 1.794 10.811.002
General government 10.673,769 10.989.181 11.890.921 12677.872 13.452.1 10
HOUSing and commumty development 6.263.972 6608.512 7 100 672 8.093.916 6.936.349
\-hscellaneous 13.586.990 ILl15876 11.601.307 16.901 ]81 18883.331
Capital Improvement projects · 8.410.281 5.970.556 8314.195 20.082 554 17.999.408
Operating transfers out 2.308.849 2.853.362 3.069.318 2 579.884 3.869 173
Subtotal $112.835.499 $112.533.415 5119.502.922 5141.189.975 $145.923 130
Excess of Revenues over Expenditures $11.950298 14.600.770 17.521.587 4.931.755 12658885
fund Balance. Beginning of Year 77.104.494 89.931 644 104.648.73 I ]20.298.972 125230.727
Other fmancmg Sources
Issuance of capital lease 957.195 188.931 - .
Value of land transferred from Parking
'\uthonty . - 390.000 -
Equity Fund Transfers (To) Funds (80.343) (462.614) (l 871.346) - -
Fund Balance. End of Year ConsIsting of
Rese....es and deSIgnatIOns 75.598.000 89.982.109 105398.972 110.730.727 121.232.858
Cnrese...'ed and unobltgated 14.333.644 14.666.622 14.900.000 14 500.000 16,656.754
Total Fund Balance $89.931.644 $1 04.648.731 $120,298.972 $125230.727 $137889.612
* Excludes S6.892,750 m elP's financed from other sources for fiscal year endmg June 30. 1998 and $5.244.393 III eIP's
financed from other sources for fiscal year endmg June 30. 1999
Source CIty of Santa \1OOlca
DOCSL4.l'251917.3
40233-3- '\fKH-05fI8/98 27
Impact of State Budget Actions on the City
[TO BE REVISED AND UPDATED]
The Governor's proposed budget for fiscal year 1998-99 mcludes a proposal to repeal the
State's VehIcle LIcense Fee ("'VLP"). A portIon of the State VLF IS allocated to CountIes and
citIes on the basIS of relatlve populatIon \\lthm the State The City's receIved $3.502.336 m
fiscal year 1996-97 from the VLF. The Governor' s budget proposes to replace the CIty' s lost
VLF revenue \Hth a hIgher local allocatIOn of the State sales tax Detmls of the proposal are not
completely avmlable at this tIme The eny has responded to the loss of revenues from State
actions taken to balance prior State Budgets through imposItlon of new taxes and expanSIOn of
eXlsting taxes Due to the relatIvely sman amount of the Cny's General Fund budget accounted
for by the VLF (2.6%) this proposal IS not expected to have a slgmficant Impact on the Clly's
budget for fiscal year 1998-99.
LIMITATIONS ON TAXES AND APPROPRIATIONS
Article XIIIA
On June 6. 1978. CalIfornIa voters approved an amendment (commonly known as both
PropOSItIOn 13 and the Jarvls-Gann ImtIative) to the CalIfornIa ConstItution. ThIS amendment.
which added ArtIcle XIIIA to the CalIfornIa ConstItutIOn. among other thmgs affects the
valuatIon of real property for the purpose of taxation III that It defines the full cash property value
to mean "the county assessor's valuatIon of real property as shown on the 1975/76 tax bIll under
'full cash value: or thereafter. the appraIsed value ofreal property ne\vly constructed. or when a
change III o\\'nershlp has occurred after the 1975 assessment" The full cash value may be
adjusted annually to reflect inflation at a rate not to exceed 2% per year. or a reductIOn III the
consumer pnce mdex or comparable local data at a rate not to exceed 2% per year, or reduced in
the event of declmmg property value caused by damage, destructlon or other factors mcludmg a
general economIC downturn The amendment further lIrmts the amount of any ad valorem tax on
real property to one percent of the full cash value except that addItional taxes may be leVIed to
pay debt servIce on mdebtedness approved by the voters pnor to July 1, 1978, and bonded
mdebtedness for the acqulSltlOn or Improvement of real property approved on or after July 1.
1978 by two-thirds of the votes cast by the voters votmg on the propoSItIon.
LegislatIOn enacted by the CalifornIa LegIslature to Implement Article XIIIA prOVIdes
that all taxable property is sho\\'TI at full assessed value as described above In conformIty WIth
thIS procedure, all taxable property value mcluded m this OffiCIal Statement (except as noted) IS
shown at 100% of assessed value and all general tax rates reflect the $1 per $100 of taxable
value. Tax rates for voter approved bonded indebtedness and penSIOn habll1ty are also appl1ed to
100% of assessed value.
Future assessed valuatIOn growth allowed under Article XIIIA (new construction. change
of o\\'nership. 2% annual value gro\\i1h) wIll be allocated on the basis of "SItus" among the
JUflsdIC110nS that serve the tax rate area withm which the growth occurs Local agencies and
school districts \\i111 share the growth of "base" revenue from the tax rate area. Each year's
grow1h allocatIon becomes part of each agency's allocatIon the followmg year The City IS
unable to predIct the nature or magmtude of future revenue sources which may be prOVIded by
DOCSL.\I:2SI917.3
402J3-3-MKH-OSI18198 28
the State of CalIfornia (the "State") to replace lost property tax revenues }\rtlcle )(IIIJ\
effectIvely prohIbIts the levymg of any other ad valorem property tax above the one percent limIt
except for taxes to support mdebtedness approved by the voters as descnbed above
Article XIIIB
On November 6. 1979, CalIfornia voters approved ProposItiOn 4. the so-called Gann
ImtIatlve, whIch added ArtIcle XIIIB to the CalIforrua COnStItutIon In June 1990. ArtIcle XIUB
was amended by the voters through theIr approval of ProposItiOn III ArtIcle XIIIB of the
CalIfornia ConstItutiOn limIts the annual appropnatlOns of the State and any CIty. county. school
dIstnct. authonty or other polItIcal subdiVISIOn of the State to the level of appropnations for the
pnor fiscal year. as adjusted annually for changes m the cost of lIvmg, populatIOn and servIces
rendered by the governmental entIty. The "base year" for establIshing such appropnatlOn lImn IS
the 1978-79 fiscal year. Increases III appropnatIons by a governmental entIty are also permItted
(I) If finanCIal responSIbilIty for provldmg services IS transferred to the governmental entity, or
(Ii) for emergencies so long as the appropnatIons hmlts for the three years follov,lng the
emergency are reduced to prevent any aggregate mcrease above the ConstItutIOnal lImIt
Decreases are required where responsibility for providing services IS transferred from the
government entIty
AppropnatIons subject to ArtIcle XIIIB mclude generally any authonzatIOn to expend
durmg the fiscal year the proceeds of taxes leVIed by the State or other entIty of local
government, exclUSIve of certam State subventions. refunds of taxes, benefit payments from
retIrement. unemployment msurance and dIsabIlIty msurance funds AppropriatIOns subject to
hmltatlOn pursuant to Article XIIIB do not mclude debt servIce on mdebtedness eXlstmg or
legally authonzed as of January 1. 1979. on bonded mdebtedness thereafter approved accordmg
to law by a vote of the electors of the ISSUIng entIty voting m an electIOn for such purpose.
appropnal1ons reqUIred to comply wllh mandates of courts or the Federal government.
appropnatIons for qualified capnal out lay projects. and appropriatIons by the State of revenues
derived from any mcrease m gasolIne taxes and motor vehIcle weIght fees above January 1. 1990
levels "Proceeds of taxes .. mclude, but are not lImIted to. all tax revenues and the proceeds to
any entIty of government from (I) regulatory licenses. user charges. and user fees to the extent
such proceeds exceed the cost of provldmg the servIce or regulation, (11) the mvestrnent of tax
revenues and (Ill) certain State subventIOns receIved by local governments ArtIcle ){III~
mcludes a requIrement that if an entIty's revenues m any year exceed the amount permItted to be
spent. the excess would have to be returned by revlsmg tax rates or fee schedules over the
subsequent two fiscal years.
}\s amended in June 1990, the appropnations limIt for the CIty m each year IS based on
the hmIt for the prior year. adjusted annually for changes m the costs of hvmg and changes m
populal1on, and adjusted, where applicable. for transfer of finanCIal responSIbilIty of proVIdmg
services to or from another umt of government. The change in the cost of lIving IS, at the Clty's
optIOn. eIther (I) the percentage change in CalIfornIa per capIta personal mcome, or (ll) the
percentage change m the local assessment roll for the junsdictIOn due to the addItIon of
nonreSIdential new constructiOn
DOCSL-\I 251917.3
4023J-J-\.lKH-OS/18198 29
As amended by ProposItion 111, the appropnatlOns limIt IS tested over consecutIve two-
year penods Any excess of the aggregate "proceeds of taxes ., receIved by the County over such
two-year period above the combined appropnations hmIts for those two years IS to be returned to
taxpayers by reductIOns m tax fates or fee schedules over the subsequent t\\iO years.
Article XIIIB permits any government entIty to change the appropnatlOns hmlt by vote of
the electorate In conforrmty with statutory and ConstItutiOnal votmg reqmrements, but any such
voter-approved change can only be effectIve for a maximum of four years
Proposition 46
On June 3. 1986. CalIfornIa voters approved ProposttIon 46, \vrnch added an addItIOnal
exemption to the one percent tax hmltation Imposed by ArtIcle XIIIA Under thIS amendment to
ArtIcle XIIIA. local governments and school distncts may Increase the property tax rate above
one percent for the period necessary to retue new general obhgation bonds. If two-thIrds of those
votlng m a local electIOn approve the Issuance of such bonds and the money raIsed through the
sale of the bonds IS used exclusIvely to purchase or Improve real property
Proposition 218
An lnItlatlve measure commonly referred to as the "RIght to Vote on Taxes Act""
("ProspOSItiOn 218'') was approved by the voters of the State of CalIfornIa at the November 5,
1996 general electIOn ProSposltlon 218 added ArtIcle XIIIC ("'ArtIcle XIIIC') and ArtIcle XIIID
to the CalIfornia ConstItutIon. Accordmg to the 'TItle and Summary" of the ProspositlOn 218
prepared by the CalIfornIa Attorney GeneraL the ProspositlOn 218 lImits "the authonty of local
governments to Impose taxes and property-related assessments. fees and charges" The
proVIsIons of Prosposltlon 218 have not yet been mterpreted by the courts. although a number of
laWSUIts have been filed requestmg the courts to mterpret vanous aspects of Prosposltlon 218.
Among other thmgs, Sectlon 3 of ArtIcle XIII states that ., the IIDtlative power shall not
be prohIbIted or otherwise lImIted in matters of reducmg or repeahng any local tax. assessment.
fee or charge" The Act provides for a procedure. whIch mcludes notIce, heanng. protest and
votIng reqUIrements to alter the rate and method of apportIOnment of an eXlstmg speCIal tax.
However, the Act prohIbIts a legislative body from adoptIng any resolutIon to reduce the rate of
any special tax or termInate the levy of any special tax pledged to repay any debt incurred
pursuant to the Act unless such legIslatIve body determInes that the reductlon or ternllnatIon of
the speCIal tax would not mterfere WIth the tlmely retIrement of that debt On July 1, 1997, a bIll
was SIgned mto law by the Governor of the State enactmg Government Code SectIOn 5854,
WhICh states that:
Section 3 of Article XIIC of the CalIfornia ConstItution, as adopted
at the November 5, 1996. general electIon. shall not be construed
to mean that any owner or benefiCial owner of a mumclpal
security. purchased before or after that date, assumes the risk of. or
m any way consents to. any action by initiatIve measure that
constitutes an impaIrment of contractual rights protected by
Sectlon 10 of ArtIcle I of the UnIted States ConstItutIOn
DOCSLA1 251917.3
"0233-3- \IKH-05/18198 30
Accordmgly. although the matter IS not free from doubt. 11 IS hkely that ProsposltIOn 218
has not conferred on the voters the power to repeal or reduce the ad valorem tax if such reductIon
would mterfere WIth the tImely retlrement of the Bonds.
It may be possIble. however, for voters or the CIty to reduce the ad valorem tax in a
manner ""hlch does not mterfere wIth the tImely repayment of the Bonds. but whIch does reduce
the maxImum amount of ad valorem tax that may be levIed m any year below the eXlstmg levels
Therefore. no assurance can be given \\-'lm respect to the levy of ad valorem tax for
Admimstratlve Expenses. Furthermore, no assurance can be gIven ""lth respect to the future levy
of the ad valorem tax m amounts greater than the amount necessary for the tImely retIrement of
the Bonds
The interpretatIon and applIcation of ProsposltIOn 218 will ultImately be determmed by
the courts wIth respect to a number of the matters dIscussed above. and It IS not possIble at thIS
tIme to predIct wnh certamty the outcome of such determmatIon or the tImelIness of any remedy
afforded by the courts See "SPECIAL RISK CONSIDERATIONS - LimItatIOns on Remedies."
Future Initiatives
ArtIcle XIIIA. ArtIcle XIIIB and PropOSltlOnS 98, 187, and 218 were each adopted as
measures that qualIfied for the ballot pursuant to the State's InItiatIve process From time to tIme
other Imtlatlve measures could be adopted, further affectmg PartIcipants' revenues or theIr
abIlIty to expend revenues
Unitary Proper!}'
Cahfonua State Assembly Blll 454 (Chapter 921. Statutes of 1987). amendmg SectIOn
100 of the CalIfornIa Revenue and TaxatIOn Code, prOVIdes that revenues denved from most
utilIty property (e g, Plpelmes in more than one county. regulated railways. and telephone,
electncal and gas utIlIty compames) assessed by the State Board of EqualizatIOn (referred to In
the statute as "Umtary Property"). commencmg '\\'1th the 1988-89 FIscal Year. WIll be based on a
umform rate withm each county and allocated as follows. (1) each JurisdictIOn ""111 receIve up to
102 percent of its pnor year State-assessed revenues; and (2) if countY-\\lde revenues generated
from Umtary Property are less that the prevIOUS year's revenues or greater than 102% of the
prevIOus year's revenues. each JurIsdIctIOn wIll share the burden of the shortfall or excess
revenues by a speCIfied formula Tills provision applIes to all Unitary Property except railroads.
whose valuatIon will continue to be allocated to mdlvldual tax rate areas
The proviSIOns of Assembly BIB 454 do not constItute an elImmatlon of the assessment
of any State-assessed properties nor a reVl5lon of the methods of assessmg utllmes by the State
Board of EqualizatIon Generally, Assembly Bill 454 allows valuatlon gro\\>th or declIne of
Umtary Property to be shared by aIljunsdlctlOns in a county.
TAX MATTERS
In the opmIOn of Omck, Herrington & SutclIffe LLP, Los Angeles, Cahfornia, Bond
Counsel, subject, however to the qualIficatIOns set forth below, under eXIstmg law. the interest
on the Bonds is excluded from gross mcome for federal mcome tax purposes and such interest IS
DOCSLAI 251917.3
40233-3- '\IKH-05/18IlJ8 31
not an Item of tax preference for purposes of the federal alternative mmimum tax imposed on
mdlvlduals and corporatIons. provzded however, that, for the purpose of computmg the
alternatIve mmimum tax Imposed on corporatlons (as defined for federal mcome tax purposes).
such mterest IS taken mto account m determming certam mcome and earmngs
The oplmons set forth m the preceding paragraph are subject to the condItIon that the
CIty comply WIth all requIrements of the Internal Revenue Code of 1986 (the "Code") that must
be satIsfied subsequent to the Issuance of the Bonds m order that such Interest be. or contmue to
be, excluded from gross mcome for federal mcome tax purposes The CIty has covenanted to
comply with each such requIrement. FaIlure to comply WIth certam of such reqUIrements may
cause the mclusIOn of such mterest m gross income for federal mcome tax purposes to be
retroactIve to the date of issuance of the Bonds
In the further opmIOn of Bond Counsel, mterest on the Bonds is exempt from CalIfornia
personal mcome taxes
Ov.ners of the Bonds should also be aware that the ovmersrnp or dlspoSltlOn of. or the
accrual or receIpt of Interest on. the Bonds may have federal or state tax consequences other than
as descnbed above Bond Counsel expresses no opmIOn regardmg any federal or state tax
consequences arIsmg Wl1h respect to the Bonds other than as expressly descnbed above
VERIFICATION
Ernst & Young LLP. independent certified publIc accountants, \\>111 verifY from the
mformatIOn prOVIded to them the mathematIcal accuracy as of the date of the closmg on the
Bonds of (a) computatIOns relatmg to the adequacy of the Escrow Secunties and the Interest
thereon to pay when due the scheduled payments of pnncIpal of. mterest. redemption prIce.
mterest due to and to become due on the Refunded Bonds on and pnor to the speCIfied
redemptIOn date thereof and (b) the computatIOns of actuarIal YIelds of the Bonds and of
investments under the escrow agreement for the Refunded Bonds whIch were relted upon by the
Bond Counsel m reachmg Its conclusIOn that the mterest on the Bonds IS excluded from gross
income for federal tax purposes
FINANCIAL STATEMENTS
The City's financial statements for the fiscal year ended June 30. 1997. Included m
AppendIx A hereto, have been audited by KMPG Peat Marwlck LLP. mdependent audItors. as
stated In theIr report appeanng in AppendiX A hereto KMPG Peat MarwICk LLP has not
consented to the inclusion of ItS report as Appendix A and has not undertaken to update Its report
or to take any actIOn mtended or likely to elICIt informatIOn concermng the accuracy.
completeness or faIrness of the statements made In thIS OffiCIal Statement. and no opmIOn IS
expressed by KMPG Peat MarwIck LLP WIth respect to any event subsequent to its report dated
June 30. 1997 In some mstances. the CIty'S unaudited (estImated/actual) finanCIal mformation
for the year endmg June 30, 1998 IS presented \Vlthin thIS OffiCIal Statement in advance of the
release of the City" s audited finanCIal statements for such year The CIty expects its audIted
finanCIal statements for the year ending June 30. 1998 to be available III December 1998.
DOCSL.\I 2S1917.3
40233-J-"'IKH.OSlI8/98 32
ABSENCE OF LITIGATION
There is no action, SUIt or proceedmg kno\\-TI to be pendmg or threatened either
restrammg or enjoimng the execution of delIvery of the Bonds, or m any way contestmg or
affectmg the valIdIty of the foregoing or any proceedmgs of the CIty taken \\-1th respect to any of
the foregomg
RATINGS
Moody's Investor ServIce ("Moody's") and Fitch Investors ServIce, Inc ("FItch") have
assIgned the Bonds the ratmgs set forth on the cover of thIs OffiCIal Statement Certain
mformatlOn was supplIed by the City for consideratIOn in evaluatmg the Bonds Such ratIngs
reflect only the VIews of such ratmg agencIes. and an explanation of the slgmficance of the
ratmgs may be obtamed by contactmg FItch Investors ServIce, Inc , One State Street Plaza. New
York, NY 10004. telephone ( ) and Moody's Investor ServIce, 99 Church Street, New
York. NY 10007, telephone (212) 553-0300 There IS no assurance that such ratmgs wIll
contmue for any given penod of tIme or that It \\olll not be reVIsed dO\\oTIward or withdrawn
entirely by such rating agencies If, in Its Judgment. circumstances so warrant Any such
downward reVIsion or withdrawal of such ratIng may have an adverse effect on the market price
of the Bonds.
CERT AIN LEGAL MATTERS
Certain legal matters InCIdent to the authonzatlOn. Issuance, sale and delIvery by the CIty
of the Bonds and WIth regard to the tax status of Interest thereon under existIng laws are subject
to the approving opmIOn of Omck. Hemngton & Sutcliffe. Los Angeles. CalIfornIa, Bond
Counsel, and certain other condItIons Certam legal matters wIll be passed upon by Orrick.
Hemngton & SutclIffe. Los Angeles, CalIfornIa as DIsclosure Counsel to the Clly
CONTINUING DISCLOSURE
The City has covenanted for the benefit of the O\\fners of the Bonds to proVide annually
certaIn finanCIal mformatIOn and operatmg data relatmg to the Bonds and the elly (the "CIty
Annual Report"'). and to proVIde notices of the occurrence of certain enumerated events. If
matenal For a complete lIstmg of items of informatIOn whIch will be provided m each Annual
Report, see "'APPENDIX C - Form of Continuing DIsclosure Agreement." Such mformatIOn is to
be proVIded by the City not later than eIght (8) months after the end of the CIty'S fiscal year
(whIch currently would be March I), commencmg Vvlth the report forthe 1997-1998 FIscal Year
The Annual Report \\flU be filed by the City \\olth each NatIOnally Recogmzed MUnICIpal
Secuntles Information Repository and with each State Reposltory, If any. These covenants have
been made m order to assist the Undef\\<TIter m complymg with SecuritIes and Exchange
COITUTIlSSIOn Ru1e 15c2-12(b)(5). The CIty has never fooled to comply in all material respects
with any preVIOUS undertakings with regard to SaId Rule to proVIde annual reports or notIces of
matenal events.
The City's obligations under the Contmumg DIsclosure Agreement shall termInate upon
a legal defeasance. prior redemptIon or payment In full of all of the Bonds The proviSIOns of the
DIsclosure Agreement are Intended to be for the benefit of the owners of the Bonds and
DOCSL.\1 251917.3
402JJ-3-MKH-05I18198 .....,
.)J
beneficIal owners of the Bonds and m order to asSIst the particlpatmg Undemnters m complymg
v.'1th S E.C Rule 15c2-12(b)(5) and shall be enforceable by the o\\'ners of Bonds, provided that
any enforcement actlon by any such person shall be limIted to a nght to obtam specIfic
enforcement of the City's obligatIons under the DIsclosure Agreement and any faIlure by the
CIty to comply with the provisIons thereof shall not be an event of default under the ResolutIOn.
ADDITIONAL INFORL'\1A TION
References are made herem to certam documents and reports whIch are bnef summanes
thereof winch do not purport to be complete or defimtlve and reference IS made to such
documents and reports for full and complete statements of the contents thereof CopIes of the
Resolution. the Paymg Agent Agreement and other documents are available, upon request. and
upon payment to the City of a charge for copying. maIlIng and handling, from the City Clerk at
the CIty of Santa MOnICa, 1685 MaIn Street, Santa MOllica, CalifornIa 90401
Any statements m thIS OffiCIal Statement involving matters of opmIOn. whether or not
expressly so stated. are mtended as such and not as representations of fact This OffiCIal
Statement is not to be construed as a contract or agreement between the City and the purchasers
or owners of any of the Bonds.
The executlOn and delIvery of this OffiCIal Statement has been duly authonzed by the
Cltv
-'
CITY OF SANTA MONICA
By
DOCSLAl 251917.3
40233-J-~I~-05l18198 34
APPENDIX A
CITY AUDITED FINANCIAL STATEMENTS
DOCSU.I :251'JI 7.3
402J3-J-1\tKH-05/18198 A-I
APPENDIX B
FORI\1 OF OPINION OF BOND COUNSEL
DOCSU.I 2S1917.3
402J3-3-MKH-05l18198 B-1
1997/98 SIDEWALK REPAIR
SITU~ I SIJ~WALK SW_DWY DVN CURB PKY ESTIMATED'
;..(')DRFSS t sa FT} {sa FT, (SQ FT, (UN FT) ISQ FT: COST
1938 19TH ST 125 30 0 0 o $ 450 55
1944 19TH ST 125 0 0 0 o $ 343 75
1964 19TH ST 75 25 0 0 o $ 295 25
222 20TH ST 50 0 0 0 0 S 13750
301 20TH ST 425 0 0 0 0 $ 1.16875
402 20TH ST 325 50 80 12 0 $ 1,451 35
722 20TH ST 250 0 0 0 0 $ 68750
817 20TH ST 180 0 0 0 0 $ 49500
848 20TH ST 125 25 0 0 0 $ 432 75
953 20TH ST 100 0 0 0 0 $ 27500
1030 20TH ST 100 75 20 6 0 $ 660 60
1060 20TH ST 100 0 0 56 200 $ 1.011 40
1130 20TH ST 125 0 0 6 20 $ 420 55
502 21ST ST 75 0 0 0 0 $ 206 25
702 21ST ST 200 75 150 20 0 $ 1.50900
938 21ST ST 150 0 0 0 0 $ 412 50
1038 21ST ST 75 0 0 0 0 $ 206 25
1753 21ST ST 150 0 0 0 20 $ 425 70
2018 21ST ST 100 0 0 0 0 $ 27500
2221 21ST ST 175 25 0 0 0 $ 570 25
2247 21 ST ST 150 50 0 0 0 $ 590 50
2253 21ST ST 100 25 10 0 0 $ 399 60
2326 21ST ST 275 0 0 0 0 $ 75625
2345 21ST ST 175 50 0 0 0 $ 65925
241121STST 125 25 0 0 0 $ 432 75
2421 21ST ST 175 0 0 0 0 $ 481 25
2445 21ST ST 175 0 0 0 0 $ 481 25
2525 21 ST ST 70 0 0 10 0 $ 271 50
2702 21 ST ST 200 0 0 0 0 $ 550 00
215 22ND ST 125 0 0 0 0 $ 343 75
823 22ND ST 0 0 0 0 10 $ 1470
911 22ND ST 100 0 30 12 0 $ 476 60
1102 22N 0 ST 85 0 0 0 0 $ 233 75
1119 22ND ST 100 0 0 0 10 $ 289 70
1201 22ND ST 50 0 0 0 40 $ 188 90
1257 22ND ST 56 0 0 0 0 $ 154 00
1303 22ND ST 50 0 0 0 0 $ 132 50
1702 22ND ST 275 0 0 0 60 $ 813 35
2219 22ND ST 150 25 0 0 o $ 501 50
2268 22ND ST 150 0 0 0 o $ 412 50
2272 22ND ST 150 0 0 0 o $ 412 50
302 23RD ST 125 0 0 0 o $ 343 75
370 23RD ST 0 0 0 0 20 S 2940
630 23RD ST 60 0 0 0 o $ 165 00
Page 4
OI'UCIAL NOTICE INVITING BIDS
$2~OO.oOO*
The City of Santa Monica
General Obligation Refunding Bonds, Series 1998
(Main Library Improvements Project)
(Book-Entry-Only)
NOTICE IS HEREBY GIVEN that sealed b](ls will be received by The City of Santa Montca, Cahforma (the
"City") for the purchase of all but not less than all of Its $2,500,000* aggregate pnnclpal amount of General OblIgatIOn
Refimdmg Bonds, Senes 1998 (the "Bonds") The bids Will be receIved at the place md up to the tune specIfied below
(unless postponed as descnbed herem)
Date Thursday, June 11, 1998
1000 am, PDST
Place Omck, Hemngton & SutclIffe, LLP
777 South Figueroa Street, SUIte 3200
Los Angeles, CA 90017
AttentIOn
Mailed Bids Matled bIds should be sent to
the above address
c/o Charles M Denms
F acsumle BIds BIdders may telefax therr proposal pnor to the tIme for receipt of
proposals set forth above T elefa.xed proposals must be on the
offiCIal form of BId Form and receIved pnor to the tune of sale
T eJefaxes should be transnutted to the attention of at
(213) 612-2499 The CIty wl11 not accept responsIbIlIty for
maccurate bills subrmtted through teJefax, mcludmg garbled
transrmsslons, or the mablhly of the bIdder to access the telefax
number pnor to the mdlCated sale tIme See "Wanungs
Regardmg Facs1IIDle BIds'. below
All bIds must be clearly marked, "Proposal for The CIty of Santa Momca General OblIgatIon Refimdmg Bonds, Senes
1998" See InStructIOns under ftForm of Bid" below
OPENING OF BIDS: The bIds ~1.11 be opened at the tIme and place sho\...n and w1l1 be presented to a duly
authonzed officer of the CIty, who \\111, on behalf of the CIty, determme and accept the best bId for the Bonds, subject to
the CIty'S nght to reject any and all bids as set forth below
THE ISSUE: $2,500,000* aggregate pnnCJpal amount of The CIty of Santa Moruca General Obhgahon
Refundmg Bonds, Senes 1998, ill denommatlOTIS of $5,000 or m mtegral multiples thereof, and dated June 1, 1998
PURPOSE OF TIlE ISSUE: The proceeds of the Bonds \\'111 be used to refund a portIon up to $3,420,000 of
the currently outstandmg City of Santa Moruca General OblIgatIon Bonds, Senes 1990 (the "Refunded Bonds") and pay
the costs of Issumg the Bonds
AUTHORIZING DOCUMENTS: The Refunded Bonds were authonzed ill the CIty bond propOSItiOn
subrmtted at a general election of the regtstered voters of the CIty held on November 8, 1988 at whIch more than two-
* Prellmmary, subject to change
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thrrds of the persons votmg on the propositIOn voted to authonze the Issuance and sale of not more than $4,500,000 of
general obhgatlon bonds of the CIty The Bonds are general obhgatlOns of the Clly and are bemg Issued under
prOVISIons of htle ], DIVISion 1, Part 10, Chapter 2 of the State of Cahforrua Educatlon Code, CQrnrnencmg \"'Ith SectIon
15100, as amended, and ArtIcle XlllA of the Cahforma ConstItutIon and pursuant to a resolutIon adopted by the CIty
CounCIl on May 26, 1998 (the "ResoluhonW) In connechon WIth the Bonds, the CIty has entered mto a Paymg Agent
Agreement (the "Paymg Agent AgreementW) dated as of June 1, 1998, by and betv.een the CIty and U S Bank Trust
NatIonal Assoclahon, as Paymg Agent (the "Paymg Agent")
SECURITY AND SOURCES OF PAYMENT: The Bonds Will be general obhgatLons of the CIty and the
CIty CounCil of the City IS empowered and IS obhgated to levy ad valorem taxes, \\1thOUt lumtahons of rate or amount,
upon all property subject to taxatIon by the City for the payment of the pnnclpal of and mterest on the Bonds
B,dders are referred to the Prehmmary Officzal Statement for defimtlOns of tenns and for further
partlculars, mcludmgfurther mfonnatlOn regardmg the elly and the Bonds
PRINCIPAL AMORTIZATION: The aggregate pnnclpal amount of Bonds VillI be subject to amortIZatlOn
either through senal matunhes or smkmg fimd redemptIons or a combmatIon thereof Pnnclpal wtll be amortlzed on an
annual basIS conunencmg on July 1, m years 1999 through 201 0 and m the amounts set forth below
Maturih' Principal Amount Maturifl' Principal Amount
1999 2005
2000 2006
2001 2007
2002 2008
2003 2009
2004 2010
SERIAL BONDS AND/OR TERM BONDS: BIdders may proVide that all the Bonds be Issued as senal
bonds or that any two or more consecuhve annual pnnclpal amounts may be combmed mto one or more term bonds
PRINCIPAL AND INTEREST PAYMENTS: Ihe Bonds will be dated June 1, 1998 and \nll bear mterest
from that date Interest on the Bonds Will be payable senu-annually on July I and January 1, begmmng July I, 1998
(each an "Interest Pa}ment Date'') PnnClpal and premIUm (If any) of the Bonds wIll be payable upon surrender thereof
at matunty or upon earher redemphon to the registered o\\ner of each Bond, whIch \vIll rmtIally be The DepOSItOry Irust
Company, New York, New York ("DIC") or lts nOmInee Pa)-ment of pnncIpal and mterest to DIC shall be the
respoDSlblhty of the City or the Paymg Agent, disbursements of such payments to drrect partIcipants of DIC shall be the
responslblhty ofDIC, and dIsbursements of such payments to the benefiCIal owners shall be the responslbtllty ofDIC's
drrect partJ.CIPants and mdrrect partiCIpants The City and the Pa}1Rg Agent \\'111 not have any responslblhty or obhgatIon
\\1th respect to the accuracy of any records mamtamed by DIe, Its drrect partiCIpants or mdrrect partICipants or any
pa}ment made by DIC, Its drrect partICipants or mdrrect partiCIpants of any amoWlt WIth respect to the pnnclpal,
prermum (If any) or mterest due on the Bond
OPTIONAL REDEMPTION: THE BONDS ARE NOT SUBJECT TO OPTIONAL REDEMPTION
PRIOR TO MATURITY.
MANDATORY SINKING FUND REDEMPTION: If the successful bIdder deSIgnates pnncIpal amounts
to be combmed mto one or more term bonds, each such term bond shall be subject to mandatory smkmg fund
redemptIon commencmg on Jilly 1 of the first year which has been combmed to form such term bonds and contmumg on
June 1 ill each year thereafter untIl the stated matunty date of that term bond The amount redeemed ill any year shall be
equal to the pnnclpal amount for such year set forth ill the BId Form as adjusted ill accordance \nth the proVlSlOns
descnbed above under the captIon "Adjustment of Prmclpal Amounts and AmortIZatIon Schedule" Bonds to be
redeemed m any year by mandatory smkmg fund redemphon shall be redeemed at par and shall be selected by lot from
among the Bonds then subject to redemptIon The City, at Its opbon, may credit agamst any mandatory smkmg fund
redemptIon payment term bonds of the matunty then subject to redempnon, wlnch have been purchased and canceled by
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the CIty or have been redeemed and not theretofore apphed as a credit agamst any mandatory smkmg fund redempuon
payment
NOTICE OF REDEMPTION: Notlce of redemptIon shall be glVen at least 30 days and not more than 45
days before the redemption date Such notice shall be gIVen by the Paymg Agent by matI So long as the Bonds are m
book-entJy form only, such notlces will be giVen only to DIC or Its nonnnee
TERMS OF SALE
FORM OF BID: All bids must be for not less than all of the Bonds hereby offered for sale and for not less
than 98 50% of the par value thereof and accrued mterest to the date of dehvery Each bld, together With such bIdder' 5
good faIth depOSIt (see "BID DEPOSIT" herem) must be addressed to The City of Santa Momca, and endorsed
"Proposal for The City of Santa Maruca General Obhgatton Bonds, Senes 1998" Each bid mUst be m accordance WIth
the tenus and conmtions set forth m tlus notice
WARNINGS REGARDING FACSIMILE BIDS: B](15 sublTIltted by faCSlIlllle transrmsslon are deemed
late and w11l not be evaluated unless, at preCisely the tune mdlcated above for sublTIlsslon of buls, the enttre bid fann has
been fully ejected from the receJ.vmg facsmnle machme at the place of the bid opemng, and the mterest rates, total
purchase pnce, and name and sIgnature of the bIdder are clearly readable by that tune Neither the CIty, the City's
Fmanclal AdVIsor nor the CIty'S Bond Counsel WIll accept responSibIlity for, and the buWer expressly assumes the nsk
of, any mcomplete, Illegtble or lUltnnely bId subnutted by such bidder by faCS1TIllle tranSlTIlSSIOn, mcludmg by reason of
mechamcal fmlme, engaged telephone or te1ecommurucatlons Imes at the place of bid operung, or any other cause for
rejection ansmg out of any bidder's election to deliver Its bid by means other than hand dehvery No attempt will be
made pnor to the deadlme for operung bids to mfonn any bidder that Its bid was mcomplete, IllegIble or not received
INTEREST RATE: The ma.XlIIlUm rate bId may not exceed 9% per annum Each rate bid must be m
multiples of one-elghth (118) or one-twenheth (1/20) of one percent (1 o/~) No Bond shall bear more than one mterest
rate and aU Bonds of the same matunty shall bear the same mterest rate Each Bond must bear lllterest at the rate
spectfied m the Bid Form from Its dated date to Its matunty date
AD.JUSTMENT OF PRINCIPAL AMOUNTS AND AMORTIZATION SCHEDULE The pnnclpal
amounts to be set forth m the Bid F arm reflect certam estunates of the City and Its F manclal AdVISor WIth respect to the
lIkely mterest rates of the wmnmg bId and the prem.Iumfdlscount coniatned m the WIIllllIlg bId After selectmg the
WUlIllllg bid, the amortIZation schedule may be adjusted as necessary m the detenmnation of the City'S F mancml AdVisor
m $5,000 mcrements to reflect the actual mterest rates and any prennumldlscount m the wmrung bid and to create a level
annual debt service savmgs for the Refimded Bonds Such adjustments ~111 not change the aggregate pnnclpal amoWlt
of the Senes 1998 Bonds to be Issued from the amount set forth m the BId Form by more than 10% or change the
pnnclpal amount due on such Senes 1998 Bonds m any year by more than $[500,000] The dollar amount bId for the
Senes J 998 Bonds by the wmrnng bIdder WIU be adjusted, tf apphcabJe, to reflect any such adjustment m the
amorhzation schedule The adjusted bid pnce WIll reflect changes m the dollar amolUlt of the undernnter's discount and
ongmal Issue dlscolUlt/prennum, If any, but will not change the per bond unden~nter's dISCOunt (net of msurance
prennwn, tf any) proVIded m the bid Any such adjustment Will be commumcated to the WIIlI1111g bidder Wlthm 27 hours
after the operung of the bIds
Changes m the amortIzation schedule made as descnbed above Will not affect the detennmahon of the wlllnmg
bidder or give the wmllmg bidder any nght to reject the Senes 1998 Bonds
AWARD, DELIVERY AND PAYMENT: If sattsfactory bids are receiVed., the Bonds WIn be awarded to
the htghest responsIble bIdder not later than 27 hours after the tune estabhshed for the receipt of bIds The htghest
bidder shall be the bIdder subnuttmg the best pnce for the Bonds, whtch best pnce shall be that resultmg m the lowest
true mterest cost, as determmed for the City by Its DIrector of Fmance, whose detenmnatton shall be bmdmg and [mal
absent marnfest error In case of he buts, the awardmg buider WIll be detennmed by lot The true mterest cost shall be
computed by doublmg the sennannual mterest rate (compounded serruannually) necessary to WSCOW1t the debt serVIce
payments from their respecttve payment dates to the date of the Bonds and to the pnce bId (mcludmg any premIUm), not
mcludmg mterest accrued to the date of dehvery For the purposes of caIculatmg the true mterest cost, the pnnclpal
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amOlmt of bonds designated by the bidder for mandatory srnkmg fund redemptIOn as part of a tenn bond, If any, shall be
treated as a senal matW1ty m each year In the event two or more bids offer the same lowest true mterest cost, the City
reserves the nght to exercise Its O\\-n dIscretiOn and Judgment m makmg the award In the event no legal bids are
received. or the CIty rejects all bids, the City may take bIds on the next succeedmg Tuesday at 9 00 a m Los Angeles
tIme at the same locatIon until the Bonds are awarded
It IS expected that the Bonds Will be delIvered to the successful bidder or bidders on or about [June xl, 1998
Bonds Will be delIvered m New York, New York for depOSit WIth DTC The successful bidder shall pay for the Bonds
on the date of delIvery m Los Angeles m munedlately avallable federal funds Any expenses for provldmg federal funds
shall be borne by the successful bldder Pa~ment on the delIvery date shall be made m an amount equal to the pnce bid
for the Bonds. wlnch shall not be less than 100% of par, plus accrued mterest from June I, 1998 to the date of dehvery,
less the amount of the good f31th depOSit
CALIFORNIA DEBT AND INVESTMENT ADVISORY COMMISSION: The successful bidders Will
be reqUITed to pay any fees due to the CalIforma Debt and Investment AdVISory ComnnsslOn rCDIAC") under
Cahforma law CDIAC will mVOlce the successful bidders after the delIvery of the Bonds
DTC FEE: All fees due DTC shall be paid by the successful bidder or bidders
RIGHT TO REJECT BIDS: The City reserves the nght, m Its dtscrebon, to reject any and all bids and to the
ex1ent penmtted by law to waive any lITcgulanty or Informality In any bId
BID DEPOSIT: Each bidder must proVIde With Its bid a certified or caslner's check payable m same day or
next day funds {dra\\on on a responSible bank havmg an office m Los Angeles. CalIfOrnIa] m the amount of $50,000
("Bid DepOSit Amount") payable to the order of "The City of Santa MOllIca", or a financIal surety bond ("Surety Bond")
m the amount of the Bid DeposIt Amount ISSUed by an msurance company rated AAA by Standard & Poor's Corporation
and hcensed to Issue such a bond m the State of Cahforrua, nammg the CIty as the benefiCiary and ldentrfymg the bidder
whose depOSit IS guaranteed by the Surety Bond If the successful bIdder has proVIded a Surety Bond, such bidder shall
\'\'lfe transfer to the City the amount of the Bid DeposIt Amount m munedlate1y available federal funds not later than
1200 noon (Los Angeles Tnne) on the busmess day next succeedmg the day of acceptance of the proposal which
amount shall be depOSited m a fund held by the City under the tenns of the Resolution and apphed to the purchase pnce
of the Bonds In the event the City has not received such federal funds Wire transfer by the tune stated, the City may
draw upon the Surety Bond to satIsfy the successful bIdder's depOSit reqUIrements The check accompanymg any
accepted proposal shall be cashed and depOSited m a fund held by the CIty and applied to the purchase pnce of the
Bonds at the tune of delivery of the Bonds If after the award of the Bonds, the successful bIdder falls to complete the
purchase on the tenns stated m Its proposal, unless such failure of performance shall be caused by any act or omiSSion of
the CIty, any amount recetved from such bidder by the City, whether by p81d check or pursuant to the Surety Bond
procedure set forth above, shall be retaIned by the City as stipulated liqUidated damages Any check accompanymg an
unaccepted proposal WIll be returned promptly No mterest Will be paid by the City upon the depOSit made by any
bidder
For bids subnntted by facsmnle transnnsslOn, the BId DepoSit Amount must be receIVed by the City no later
than the tIme mdlcated above for subnnsslon of bids The subnnsslon of the depOSit may proceed the subnnsslOn of the
bid
LIST OF MEMBERS OF ACCOUNT: Bidders are requested to list on the Bid Form the names of the
members of the accOlmt on whose behalf the bId IS made The apparent wmrung bidder wIll be requrred to ven(y such
hst or to prOVide an updated 11st by facsumle pnor to award of the Bonds
STATEMENT OF TRUE INTEREST COST: Each bidder IS requested, but not reqUIred, to state ill Its Bid
F arm the true mterest cost of Its bid to the City, winch shall be conSIdered as mformatIve only and neither conclUSive nor
bmdmg on either the bidder or the City
INSURANCE: The successful bidder may purchase muruclpal bond msurance, rf avaIlable, for some or all of
the Bonds However, the dehvery of the Bonds shall not be condltloned upon the ISSuance of any such msurance
Payment of any msurance prenuum and satisfaction of any cOlllhtIons to the Issuance of a muruclpal bond msurance
.4.
policy, mcludmg payment for any legal OpInIOn to be dehvered to any msurer, shall be the sole responslblhty of the
bulder The City IS under no obligatIon to enter mto any addlttonal agreements with respect to the pro\'1slon of any such
msurance FAILURE OF THE INSURANCE PROVIDER TO ISSUE ITS POLICY SIW..L NOT JUSTIFY
FAll..URE OR REFUSAL BY THE SUCCESSFUL BIDDER TO ACCEPT DELIVERY OF, OR PAY FOR, THE
BONDS
CUSIP NUMBERS: It IS antIcipated that CUSIP numbers Will be pnnted on the Bonds, but the City Wlll
assume no obligatIon for the asSIgnment or pnntmg of such numbers on the Bonds or for the correctness of such
numbers, and neIther the faIlure to pnnt such numbers on any Bond nor any error WIth respect thereto shall constItute
cause for a faIlure or refusal by the purchasers thereof to accept deltvery of and make payment for the Bonds The cost
for the asSIgnment of CUSIP numbers to the Bonds ~'111 be the responsibIlity of the successful bidder
REOJ.J..t;RING PRICE: The successful bidder wIll, Wlthm one hour after bemg notIfied of the award of the
Bonds, adVise the CIty'S Fmanclal AdVIsor of the Illitlal pubhc offenng pnces of the Bonds The successful bIdder w1ll
also be rcqwrcd, pnor to delIvery of the Bonds, to furmsh to the CIty a certUicate acceptable to Bond Counsel, stalIng
the amount of the l1lltlal olIenng pnce to the pubhc (excIudmg bond houses and brokers) at wh.tch a substanttal portIOn
(at least 10%) of the Bonds of each matunty were sold and that there was a bonafide pubhc olIenng made of each
matunty The CerttfiC8te shall state that It IS made on the best knowledge, mformatIon and behef of the successful bIdder
after appropnate mvestlgabon
CWSING DOCUMENTS AND LEGAL OPINION: Each proposal \Iidl be understood to be condluoned
upon the CIty fitmtshmg to each successful bIdder, Without charge, concurrently WIth pa}1llent for and dehvery of the
Bonds, the foIIowmg closmg documents, each dated the date of such delIvery
(a) The oplll1on of Bond Counsel approvmg the vahdIty of the Bonds and statmg that based upon an analySiS of
eXlstmg laws, regulatIOns, rulmgs and court deciSions and assummg, among other matters, comphance WIth certaIn
covenants, mterest on the Bonds IS excluded from gross mcome for federal mcome tax purposes under SectIon 103 of
the Internal Revenue Code of 1986 and is exempt from State of Cahfol1l1a personal mcome taxes
(b) A certIficate of an appropnate offiCial of the City that on the basiS of facts, estnnates and crrcumstances m
eXIstence on the date of Issue, It IS not expected that the proceeds of the Bonds wIll be used ill a manner that would cause
the Bonds to be arbItrage bonds WithIn the meanmg of Secbon 148 of the Internal Revenue Code of 1986, as amended,
(c) The oplllion of the City Attorney of the City of Santa Momca, actmg on behalf of the CIty solely m hIs
offiCIal capacity and not personally, that there IS no httgatton threatened or pendmg afIectmg the vahdtty of the Bonds,
and WIth respect to certam other matters,
(d) A certtficate of an appropnate offiCial of the CIty acbng on behalf of the CIty solely m Ius or her offiCial
capacity and not personally, that as of the date of the OffiCIal Statement pertammg to the Bonds and at all hmes
subsequent thereto up to and mcludmg the tune of delIvery of the Bonds to the IllitIal purchasers thereof, such OffiCial
Statement together WIth any amendments thereto dtd not contatll any untrue statement of matenal fact or omIt to state a
matenal fact necessary to make the statements therem, m hght of the clfcumstances under which they were made, not
nusleadmg,
(e) A certIficate of appropnate officers of the CIty showmg that they have SIgned the Bonds, whether by
facsumle or manual SIgnature, and that they were duly authonzed respectively to execute the same, and statmg that they
were aware of any lmgatlon threatened or pendmg affecung the vahdny of the Bonds,
(f) A recetpt of the Paymg Agent showmg that the purchase pnce of the Bonds, mcludmg mterest, If any,
accrued to the date of dehvery thereof. has been receIved by the Paymg Agent, and
(g) A Contmwng DIsclosure Agreement of the City, descnbed under the captIon "Contmumg Disclosure"
below
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CONTINUING DISCLOSURE: In order to asSIst bIdders m complymg With the Rule, the City will
undertake, pursuant to the Resolution and a Contmumg Disclosure Agreement, to proVIde certaIn annual fmanclal
mfonnatlOn, and notIces of the OCCWTence of certam events, 1f matenal A descnptIon of tIns undertakmg IS set forth m
the Prehmmary OffiCial Statement and wIll be set forth ill the final Ofticial Statement
OFFICIAL STATEMENT The Prelmunary Official Statement IS ill a form deemed final by the CIty Withm
the mearung of the SEC Rule 15c2-12 promulgated under the Secunties and Exchange Act of 1934 (the WRule")
although subject to reVIsion, amendment and completion on confornnty wLth such Rule The City WIll provIde the
successful bidder such reasonable number of pnnted copIes of the fmal OfficLal Statement as such bIdder may request no
later than seven busmess days after the day the sale of the Bonds is awarded Up to _ copies of the final OffiCial
Statement wLll be furntshed Without cost to the successful bIdder and further copLes, 1f desired, Will be made available at
the successful bidder's expense
The City undertakes that for a penod of (a) twenty-five (25) days follow1llg the end of the "undenmtmg penod"
as defined ill the "Rule" or (b) runety days after the date of the dehvery of the Bonds, It wIll (1) appnse the successful
bidder of all matenal developments, 1f any, occurnng "'1th respect to the CIty after dehvery of the Bonds and (11) 1f
requested by the successful bIdder, prepare a supplement to the fmal OffiCial Statement With respect to any matenal
event The CIty wIll presume, unless notmed m \.mtmg by the successful bidder, the end of the underwntmg penod WIll
occur on the date of the dehvery of the Bonds By makIng a bid on the Bonds. the successful bIdder agrees (I) to
dlssemmate to all members of the undernntmg S}ndlcate, 1f any, copIes of the fmal OffiCIal Statement, mcludmg any
supplements prepared by the City, and WIth a NatIonally Recogrnzed Mumcipal Secunty Information RepOSitory (as
contemplated by the Rule) and (11) to take any and all other actIOns necessary to comply "'1th the apphcable rules of the
SecuntIes and Exchange COmmISSiOn and rules goverrung the offenng, sale and dehvery of the Bonds on all purchasers,
mcludmg the requIrements of dehvery of the final OffiCial Statement
ADDITIONAL INFORMATION: CopIes of the Authonzmg Resolution, thts OffiCial NotIce Im1tmg Bids,
the Bid Fonn and Prelmunary OffiCIal Statement wIll be funushed to any potential bidder upon request made to the
CIty'S Fmanclal AdVIsor at Pubhc Resources Ad\1sory Group, 3550 WdshIre Blvd, SUIte 1630, Los Angeles,
Cahforma 900] 0, (213) 380-9344
RIGHT TO MODIFY OR AMEND: The City reserves the nght to modIfy or amend tlus OffiCial NotIce
Im'ltmg Bids mcludmg, but not llllllted to the nght to adjust and change the aggregate pnncipal amount of the Bonds
bemg offered, however, such notmcations or amendments shall be made not later than 48 hours pnor to the bId opemng
and conunWllcated through Mumfacts News Senlce and by facslllllle transnussion to any quahfied bidder timely
requestmg such nottce
Dated ,1998
Is/CHARLES Ai DEA'NIS
Fmance DIrector and Controller
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~
NOTICE OF INTENTION TO SELL
Not to Exceed S3,500,000
CITY OF SAl\'T A .'\JONICA
GENERAL OBLIGATION REFUNDI:"iG BONDS, SERIES 1998
(:\-lain Library Improvements Project)
NOTICE IS HEREBY GWEN that the CIty CouncIl of the CIty of Santa ~omca (the
"CIty"), State of CalIfornIa, mtends to offer for publIc sale on Thursday,
June 11, 1998,
at the hour of 1000 am PacIfic Standard tIme. at the offices of Bond Counsel, Omck,
Hemngton & SutclIffe LLP, 777 South FIgueroa Street, Sune 3200, Los Angeles. CalIfornIa
90017, Attentlon Charles M DennIs, Fmance DIrector & Controller, not to exceed 53,500,000
pnnclpal amount of Its General OblIgatIOn Refundmg Bonds, Senes 1998 (MaIn LIbrary
Improvements ProJect) (the "Bonds") Please note that faCSImIle bIds WIll be accepted as set
forth III the OffiCIal NotIce Invllmg BIds The City reserves the nght to postpone to a later date
and/or other tIme saId publIc sale or to change the pnnclpal amount by announcmg such
postponement or change on Thomson :MunICIpal News ("Mumfacts") no later than 48 hours pnor
to the bid opemng If no legal bId or bids are receIved for the Bonds on June 11, 1998 (or such
other date as IS established by Mumfacts) at the tIme and place specIfied, bIds WIll be receIved
for the Bonds at the same place and at such tIme as shall be deSIgnated by Mumfacts As an
accommodatIOn to bidders. telephomc or fax notIce of the postponement of the sale tIme and/or
date wIll be gIven to any bIdder requestmg such notIce from PublIc Resources AdVISory Group,
the CIty's Fmanclal AdVIsor, 3550 WIlshIre Boulevard. SUIte 1630, Los Angeles, CalIfornIa
90071, Telephone (213) 380-9344, FaCSImile (213) 380-9348 FaIlure of any bIdder to receIve
such Mumfacts, telephomc or fax notIce shall not affect the legal1ty of the sale
~OTICE IS HEREBY FURTHER GIVEN that the Bonds WIll be offered for publIc sale
subject to the terms and conmtIons of the OffiCIal NotIce Invttmg BIds for the Bonds and copIes
of saId OffiCial Notlce Invltmg BIds and the OffiCIal Statement relatmg to the Bonds wIll be
furnIshed upon request to Pubhc Resources AdVISOry Group, the CIty'S FmanClal AdVIsor, 3550
WIlshIre Boulevard, SUIte 1630, Los Angeles, CalIfornia 90071, Telephone (213) 380-9344,
FaCSImIle (213) 380-9348
/s/ Charles 1\1. Dennis
Finance Director & Controller
Department of Finance, City of Santa Monica
1717 4th Street, Suite 250
Santa l\-fonica, California 90401
Dated May ,1998
DOCSLAl 255081 ]
40233-3. \.lKH'()5!18'98
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