The URL can be used to link to this page

R-7977 ~ . . RESOLUTION NO. 7977(CCS) A RESOLUTION OF THE SANTA MONICA CITY COUNCIL AUTHORIZING THE INVITATION OF PROPOSALS FOR THE PURCHASE OF GENERAL OBLIGATION BONDS OF SAID CITY WHEREAS, this city council deems it proper and necessity therefor appears that proposals be invited for the purchase of $4,500,000 principal amount of its General obligation Bonds, Series 1990 (Main Library Improvements Project) and that said Bonds be sold in the manner and at the time and place hereinafter set forth; THE CITY COUNCIL OF THE CITY OF SANTA MONICA DOES RESOLVE AS FOLLOWS: section 1. Sealed proposals for the purchase of the Bonds shall be received by the Director of Finance at the time and place hereinafter set forth in the Notice of Sale. Section 2. The City Clerk is hereby authorized and directed to publish an Official Notice of Sale, substantially in the form annexed hereto, marked "Exhibit A", and hereby approved, by one insertion in the Outlook, a newspaper of general circulation published in the city of Santa Monica, said publication to be at least 10 days prior to the date of receiving proposals stated therein. Section 3. The City Clerk is further authorized and directed to publish a Notice of Intention to Sell Bonds, substantially in the form annexed hereto, marked L96031[LKRl]LKR1 1 ,. . . "Exhibit B", and hereby approved, by one insertion in The Bond Buyer, a financial publication generally circulated throughout california, said publication to be at least 15 days prior to the date of the intended sale stated therein, as required by Section 53692 of the Government Code. section 4. This City Council hereby approves the Official Form of Bid, substantially in the form annexed hereto, marked "Exhibit C", and the Preliminary Official statement, substantially in the form now in the hands of the city Clerk and copies of which have been presented to this City Council, to be furnished to prospective bidders for the Bonds as provided in section 5 hereof. section 5. The City Clerk is authorized and directed to cause to be furnished to prospective bidders, upon their request, a reasonable number of copies of the Resolution of Issuance, Official Notice of Sale, Official Form of Bid and Preliminary Official statement, substantially in the forms hereinabove approved. The City Clerk is further authorized and directed, after any proposal for the purchase of said Bonds has been accepted by the Director of Finance, as provided in Section 6 below, to cause to be furnished to the suceessful bidder, within seven business days following the date of said acceptance, for use in connection with the resale of said Bonds, such numbers of copies of the Official Statement as may be required to comply with the provisions of the Official Notice of Sale. L96031[LKRl]LKR1 2 . . Adopted and approved this 13th day of February, 1990. ~ 11~ Ma r I hereby certify that the foregoing Resolution No. 7977(CCS) was duly adopted by the city council of the city of Santa Monica at a meeting thereof held on February 13, 1990 by the following Council vote: Ayes: Councilmembers: Abdo, Finkel, Genser, Jennings, Katz, Mayor Zane Noes: Councilmembers: None Abstain: Councilmembers: None Absent: Councilmernbers: Reed ATTEST: CA1t&~ AsST. C~. Clerk . . said Offieial statement shall be substantially in the form of the Preliminary Official statement, with such revisions, amendments and completions as shall be approved by the Director of Finance, with the advice of the City Attorney. section 6. The Director of Finance is authorized and directed, for and in the name of the City, to accept the bid of the best responsible bidder, subject to the parameters in the Official Notice of Sale, and following such acceptance to cause to be prepared the Official statement as provided in Section 6 hereof. The authorization and powers delegated to the Director of Finance by this Section 6 to accept sueh bid shall be valid for a period of 90 days from the date of adoption of this Resolution. section 7. 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: ~PA. ~ ' {J "" ROBERT M. MYERS city Attorney Adopted and approved this ____ day of 1990. Mayor L96031[LKR1]LKRl 3 . . EXHIBIT A OFFICIAL NOTICE OF SALE CITY OF SANTA MONICA GENERAL OBLIGATION BONDS SERIES 1990 (MAIN LIBRARY IMPROVEMENTS PROJECT} NOTICE IS HEREBY GIVEN that sealed proposals for the purchase of $4,500,000 par value of the city of Santa Monica General Obligation Bonds, Series 1990 (Main Library Improvements Project) will be received by said City at the place and up to the time specified below. TIME: Tuesday, March 27, 1990 10:00 a.m. PLACE: Office of Morrison & Foerster Board Room, 7th Floor 333 South Grand Avenue Los Angeles, California 90071 MAILED BIDS: Mailed bids should be addressed to: Morrison & Foerster 333 South Grand Avenue 7th Floor Los Angeles, California 90071 Attn: Sydney B. Bennion, Esq. OPENING OF BIDS: The bids will be opened at the time and place shown above and will be presented to the Director of Finance at such time and place. If the purchase of the Bonds is not awarded at the place and time shown above, the City will again offer the Bonds on April 3, 1990 and on each successive Tuesday thereafter at 10:00 a.m. at the offices of Morrison & Foerster as indicated above, until the Bonds are purchased. ISSUE: $4,500,000 designated "City of Santa Monica General Obligation Bonds, Series 1990 (Main Library Improvements project)". The Bonds will be fully registered, will be in the denominations of $5,000 or any integral multiple thereof and will be dated March 1, 1990. A-I . . MATURITIES: The Bonds will mature in consecutive numerical order on July 1 in the amounts for each of the several years as follows: Year Principal Principal Amount Year Amount 5,000 2001 205,000 60,000 2002 230,000 75,000 2003 255,000 85,000 2004 285,000 100,000 2005 315,000 115,000 2006 345,000 130,000 2007 380,000 145,000 2008 420,000 165,000 2009 495,000 185,000 2010 505,000 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 INTEREST: The Bonds shall bear interest from March 1, 1990 at a rate or rates to be fixed upon the sale thereof but not to exceed 12% per annum, payable semiannually on January 1 and July 1, commencing January 1, 1991. PAYMENT: Said Bonds and the interest thereon are payable in lawful money of the United states of America, at the prineipal corporate trust office of Bankers Trust Company of California, National Association, Fiscal Agent for the City, in San Francisco, California. REGISTRATION: The Bonds will be issued only in fully registered form, and may be exchanged for bonds of other authorized denominations of the same maturity only upon the terms set forth in the resolution providing for the issuanee of the bonds (hereinafter referred to as the "Resolution") adopted on February 13, 1990. REDEMPTION: The Bonds maturing on or prior to July 1, 2000 shall not be subject to call or redemption prior to maturity. The Bonds maturing on and after July 1, 2001 may be called before maturity and redeemed at the option of the city on July 1, 2000, or thereafter prior to maturity, from any source of funds, as a whole on any date or in part, in inverse order of maturity and by lot within a maturity, on any interest payment date A-2 . . at a redemption price equal to the principal amount thereof, accrued interest to the date of redemption, plus the following premiums (percentage of par value): Redemption Dates Premiums July 1, 2000 through June 30, 2001 2% July 1, 2001 through June 30, 2002 1 1/2% July 1, 2002 through June 30, 2003 1% July 1, 2003 through June 30, 2004 1/2% July 1, 2004 and thereafter 0 PURPOSE OF ISSUE: The Bonds were authorized by a vote of more than two-thirds of the qualified voters of the city voting at an election to approve the issuance of general obligation bonds for the acquisition and improvement of land for parking and/or additional improvements in connection with the Santa Monica Public Library Main Branch. SECURITY: The Bonds are general obligations of the City of Santa Monica, and the City Council thereof has the power and is obligated to levy ad valorem taxes for the payment of the Bonds and the interest thereon upon all property within said city subject to taxation by said City without limitation of rate or amount. TERMS OF SALE Interest Rate: The maximum rate bid may not exceed 12% per annum payable semiannually. Each rate bid must be a multiple of 1/8 or 1/20 of 1%. No Bond shall bear more. than one interest rate, and all Bonds of the same maturity shall bear the same rate. Each Bond must bear interest at the rate specified in the bid from its date to its fixed maturity date. Award: The Bonds shall be sold for cash only. All bids must be for not less than all of the Bonds hereby offered for sale and each bid shall state that the bidder offers accrued interest to the date of delivery, the purchase price, which shall not be less than par, and the interest rate or rates not to exceed that specified herein, at which the bidder offers to buy the Bonds. Each bidder shall state in its bid the total net interest cost in dollars and the effective net interest rate determined thereby, which shall be considered informative only and not a part of the bid. A-J . . Best Bidder, Bond printing: The Bonds will be awarded to the best responsible bidder or bidders, considering the interest rate or rates specified and the premium offered, if any. The best bid will be determined by deducting the amount of the premium bid (if any) from the total amount of interest which the City would be required to pay from the date of said Bonds to the respective maturity dates thereof at the interest rate or rates specified in the bid, and the award will be made to the bidder or bidders offering the lowest net interest cost to the city. The purchaser must pay accrued interest (computed on a 360-day year basis) from the date of the Bonds to the date of delivery. The eost of printing the Bonds will be borne by the City. In the event two or more bids setting forth identical interest rates and premium, if any, are received, the Director of Finance reserves the right to exercise his own judgment and discretion in making the award and may award the Bonds on a pro rata basis in such denominations as the Director of Finance shall determine. Riqht of Re;ection: all bids and to the any irregularity or The city reserves the right, in its discretion, to reject any and extent not prohibited by law to waive informality in any bid. Prompt Award: The Director of Finance will take action awarding the Bonds or rejecting all bids not later than 24 hours after the time herein provided for the receipt of proposals; provided that the award may be made after the expiration of the specified time if the bidder shall not have given to the city Council notice in writing of the withdrawal of such proposal. Delivery of said bonds will be made to the successful bidder at the offices of Morrison & Forester, 333 S. Grand Avenue, 7th Floor, Los Angeles, California, 90071 or at such other place as may be agreed upon by the successful bidder and the Director of Finance. Place of Delivery and Funds for Payment: Payment for the bonds shall be made in Federal Reserve Bank funds or other funds immediately available to the City in Santa Monica, California. Any expense of providing immediately available funds, whether by transfer of Federal Reserve Bank funds or otherwise, shall be borne by the purchaser. A-4 . . It is expected that the Bonds will be delivered to the successful bidder on or about April 10, 1990. The successful bidder shall have the right, at its option, to cancel the contract of purchase if the city shall fail to execute the Bonds and tender them for delivery within 60 days from the date herein fixed for the receipt of bids, and in such event the successful bidder shall be entitled to the return of the eheck accompanying his bid. The City expects to make such delivery in the form of definitive bonds, but reserves the right to make such delivery in the form of temporary bonds, exchangeable for definitive bonds at no cost to the purchaser. Prompt Delivery; Cancellation for Late Delivery: Form of Bid: Each bid, together with the bid check, must be in a sealed envelope, addressed to the City, with the envelope and bid clearly marked "Proposal for City of Santa Monica General Obligation Bonds, Series 1990 (Main Library Improvements Project)." Each bid must be unconditional and in accordance with the terms and conditions set forth herein, or permitted herein, and must be submitted on, or in substantial accordance with, the bid form provided by the city. Bid Check: A certified or cashier's check on a responsible bank or trust company in the amount of $100,000, payable to the order of the City, must accompany each proposal as a guaranty that the bidder, if successful, will accept and pay for said bonds in aceordance with the terms of its bid. The check accompanying any accepted proposal shall be applied on the purchase price or, if such proposal is accepted but not performed, unless such failure of performance shall be caused by any act or omission of the. City, shall then be eashed and the proceeds retained by the city. The check accompanying each unaccepted proposal will be returned promptly. No interest will be paid upon the deposit made by any bidder. At any time before the bonds are tendered for delivery, the successful bidder may disaffirm and withdraw the proposal if the interest received by private holders from bonds of the same type and character shall be declared to be no longer excluded from gross income of such holders under present federal income tax laws, either by a ruling of the Internal Revenue service or by a decision of any federal court, or shall be declared taxable or be required to be taken into account computing any federal income taxes (except to the extent presently taken into aceount in calculating book income and current earnings for purposes of Chanqe in Tax Exempt Status: A-5 . . calculating corporate alternative minimum taxable income), by the terms of any federal income tax law enacted subsequent to the date of this notice. The City has duly notified the California Debt Advisory commission of the proposed sale of the Bonds. Payment of all fees to the california Debt Advisory Commission in connection with the execution, sale and delivery of the Bonds shall be the sole responsibility of the successful bidder, and not of the City. California Debt Advisory Commission closinq Papers; Legal Opinion: Each proposal will be understood to be conditioned upon the City furnishing to the purchaser, without charge, payment for and delivery of the bonds, the papers, each dated the date of delivery: concurrently with following closing (a) Leqal Opinion - The opinion of Morrison & Foerster, Los Angeles, California, Bond Counsel, approving the validity of the Bonds and stating that interest on the Bonds is excluded from gross income of the holders under present federal income tax laws, and that such interest is also exempt from personal income taxes of the State of california under present state income tax laws. (A copy of said opinion, certified by the City Clerk by facsimile signature, will be printed on the back of each bond. No charge will be made to the purchaser for such printing or certification.); (b) Nonarbitraqe certificate - A certificate of the city certifying that on the basis of the facts, estimates and circumstances in existence on the date of issue, it is expected that the proceeds of the Bonds will not be used in a manner that would cause the Bonds to be arbitrage bonds; (c) signature and No-Litiqation Certificate - A certificate of the City signed by officers of the City certifying the following: (1) that said officers have signed the Bonds, whether by facsimile or manual signature, and that they were respectively duly authorized to execute the same: and (2) that there is no litigation threatened or pending affecting the validity of the Bonds; (d) Receipt - The receipt of the Director of Finance showing that the purchase price of the Bonds, including interest accrued to the date of delivery thereof, has been received by the City; and A-6 . . (e) Certificate Re official statement - A certificate of the Director of Finance, acting in such person's official and not personal capacity, to the effect that at the time of the sale of the Bonds and at all times subsequent thereto up to and including the time of delivery of the Bonds, the Offieial statement relating to the Bonds did not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. The purchaser must certify to the City the initial offering price to the pUblic (excluding bond houses, brokers and other intermediaries) of each maturity of the Bonds at which a substantial amount of Bonds of that maturity were sold, to enable the City to file required information with the Internal Revenue Service and to compute the yield on the Bonds for federal arbitrage law purposes. Information from Purchaser Official The Preliminary Official Statement dated Statement: March 8, 1990 is in a form "deemed final" by the City for the purpose of Rule 15c2-12 (b) (1) of the Securities and Exchange Commission but is subject to revision, amendment and completion in a final Official statement. The city will furnish to the successful bidder or bidders within seven business days following award of the Bonds as many copies of the Official statement as the bidder or bidders shall request. No charge will be made to the successful bidder for the first 500 copies of the Official statement. Ratinqs: Fating applications have been made to Moody's Investors Service and Standard & Poor's corporation. The outcome of their determinations will be provided as soon as possible. An explanation of such ratings will be furnished upon request. The ratings reflect only the view of such organizations at the time such ratings were given and the City makes no representation as to the appropriateness of the ratings. There is no assurance that such ratings will continue for any given period of time or that they will not be revised downward or withdrawn entirely by said rating agencies, if in the judgment of said rating agencies, circumstances so warrant. Any such downward revision or withdrawal of such ratings may have an adverse effect on the market price of the Bonds. A-7 . . No registration statement relating to the Bonds has been filed with the securities and Exchange Commission under the Securities Act of 1933, as amended, in reliance upon the exemption provided thereunder by section 3(a)(2). The Bonds have not been approved or disapproved by the Securities and Exchange Commission, nor has the Securities and Exchange Commission passed upon the accuracy or adequacy of the Official statement. The Bonds have not been registered or qualified under the securities laws of the State of California in reliance upon various exemptions contained therein; nor have the Bonds been registered or qualified under the securities acts of any other jurisdiction. The City assumes no responsibility for registration or qualification of the Bonds under the securities laws of any jurisdiction in which the Bonds may be sold, assigned, pledged, hypothecated or otherwise transferred. This disclaimer of responsibility for registration or qualification for sale or other disposition of the Bonds shall not be construed as an interpretation of any kind with regard to the availability of any exemption from securities registration or qualification provisions. It is the obligation of the purchaser to register or qualify sale of the Bonds under the securities laws of any jurisdiction which so requires. The City agrees to cooperate, at the purehaser's written request and expense, in registering or qualifying the Bonds, or in obtaining an exemption from registration or qualification in any state where such action is necessary, provided however that the City shall not be required to consent to a general or special consent to service of process in any jurisdiction. Registration and Qualification of Bonds for sale: CUSIP Numbers: It is anticipated that CUSIP numbers will be printed on the Bonds, but neither the failure to print such numbers on any Bond nor error with respect thereto shall constitute cause for failure or refusal by the purchaser thereof to accept delivery of and pay for the Bonds in accordance with the terms of the purchase contract. All expenses of printing CUSIP numbers on the Bonds shall be paid by the city, but the CUSIP Service Bureau charge for the assignment of said numbers shall be paid by the purchaser. A-8 . . Requests for information concerning the City of Santa Monica or additional copies of this Official Notice of Sale, the Official Bid Form and the Preliminary should be addressed to the city's INFORMATION AVAILABLE: Official statement financial advisor: John L. Geesman, Senior Viee President Rauscher pierce Refsnes, Inc. One California Street, suite 2630 San Francisco, California 94111 GIVEN by order of the city couneil of the City of Santa Monical adopted February 13, 1990. City Clerk A-9 - . EXHIBIT B NOTICE OF INTENTION TO SELL BONDS $4,500,000 CITY OF SANTA MONICA GENERAL OBLIGATION BONDS, SERIES 1990 (MAIN LIBRARY IMPROVEMENTS PROJECT) The City of Santa Monica intends to receive sealed bids until 10:00 a.m. (California time) on Tuesday, March 27, 1990 in the offices of Morrison & Foerster, Board Room, 7th Floor, 333 South Grand Avenue, Los Angeles, California 90071, for the above Bonds, consisting of Bonds in the aggregate principal amount of $4,500,000 maturing in varying amounts on July 1 of the years 1991 through 2010, inclusive, all dated March 1, 1990. Copies of the complete Official Notice of Sale and Official Form of Bid, together with copies of the Preliminary Official Statement dated March 8, 1990, in connection with the sale of said Bonds, and the resolution of issuance may be obtained from the City'S financial advisor: John L. Geesman, Senior Vice President, Rauscher pierce Refsnes, Inc., One California street, suite 2630, San Francisco, California 94111. City Clerk Dated: B-1 - - EXHIBIT C Official Form of Bid for the Purchase of $4,500,000 City of Santa Monica General Obligation Bonds, Series 1990 (Main Library Improvements project) March 27, 1990 City of Santa Monica Ladies and Gentlemen: In behalf of a group which we have formed, consisting of the firms hereinafter named, and pursuant to the Official Notice of Sale dated March 8, 1990, we offer to purchase $4,500,000 principal amount, all or none, of the bonds of the City of Santa Monica designated as "City of Santa Monica General Obligation Bonds, Series 1990 (Main Library Improvements Project)", particularly described in said Notice, with interest as set forth in the following schedule, entitled "Schedule of Interest Rates", and to pay therefor the principal amount thereof [plus a premium of $ ] making a total sum of $ plus interest accrued on such bonds to the date of delivery thereof. SCHEDULE OF INTEREST RATES Principal Amount Maturity Date Interest Rate $ 5,000 1991 % 60,000 1992 % 75,000 1993 % 85,000 1994 % 100,000 1995 % 115,000 1996 % 130,000 1997 % 145,000 1998 % 165,000 1999 % 185,000 2000 % 205,000 2001 % 230,000 2002 % 255,000 2003 % 285,000 2004 % 315,000 2005 % 345,000 2006 % 380,000 2007 % 420,000 2008 % 495,000 2009 % 505,000 2010 % C-1 . - Interest cost, in accordance with the above bid, is: Gross Interest Cost Less: Premium NET INTEREST COST EFFECTIVE NET INTEREST RATE $ $ $ % This bid is made subject to all of the terms and conditions of the Official Notice of Sale dated March 8, 1990 and heretofore published, all of which terms and conditions are made a part hereof as fully as though set forth in this bid. This bid is subject to acceptance within twenty- four (24) hours after the expiration of the time for the receipt of bids, as specified in said Notice of Sale. There is enclosed herewith a certified or cashier's check for $100,000 payable to the order of the City of Santa Monica. Upon delivery of the Bonds, said check shall be applied in partial payment of the purchase price of the Bonds if this bid is accepted and the Bonds are awarded to us. We agree to accept delivery of and make payment for the Bonds in immediately available funds at the offices of Morrison & Foerster, Los Angeles, California, not later than 10:30 A.M., P.S.T., on April 10, 1990, or thereafter on the date the Bonds are tendered for delivery, pursuant to the terms set forth in the Official Notice of Sale. We hereby request that copies of the Official Statement be furnished to us in accordance with the Official Notice of Sale.. Very truly yours, By Authorized Representative C-2 - - LIST OF SYNDICATE MEMBERS (Subject to Change prior to Delivery of Bonds) ACCEPTED this 27th day of March, 1990. Director of Finance, city of Santa Monica Return of Good Faith Check is hereby acknowledged: Firm: By: C-3 - ~ BOND YEARS $4,500,000 CITY OF SANTA MONICA GENERAL OBLIGATION BONDS SERIES 1990 (Main Library Improvement Project) Dated: March 1, 1990 Due: As shown below BOND YEARS Cumulative Maturity Date Amount Bond Years Bond Years July 1, 1991 5,000 6.6667 6.66667 July 1, 1992 60,000 140.00000 146.66667 July 1, 1993 75,000 250.00000 396.66667 July 1, 1994 85,000 368.33333 765.00000 July 1, 1995 100,000 533.33333 1,298.33333 July 1, 1996 1l5,000 728.33333 2,026.66667 July 1, 1997 130,000 953.33333 2,980.00000 July 1, 1998 145,000 1,208.33333 4,188.33333 July 1, 1999 165,000 1,540.00000 5,728.33333 July 1, 2000 185,000 1,911. 66667 7,640.00000 July 1, 2001 205,000 2,323.33333 9,963.33333 July 1, 2002 230,000 2,836.66667 12,800.00000 July 1, 2003 255,000 3,400.00000 16,200.00000 July 1, 2004 285,000 4,085.00000 20,285.00000 July 1, 2005 315,000 4,830.00000 25,115.00000 July 1, 2006 345,000 5,635.00000 30,750.00000 July 1, 2007 380,000 6,586,66667 37,336.66667 July 1, 2008 420,000 7,700.00000 45,036.66667 July 1, 2009 495,000 9,570.00000 54,606.66667 July 1, 2010 505,000 10,268.33333 64,875.00000 AVERAGE MATURITY - 14.41667 YEARS C-4 . . THE CITY OF SANTA MONICA CALIFORNIA PRELIMINARY OFFICIAL STATEMENT DATED: March 8, 1990 $4,500,000 GENERAL OBLIGATION BONDS, SERIES 1990 (MAIN LIBRARY IMPROVEMENTS PROJECT) Selling: 10:00 a.m. P.S.T. Tuesday, March 27,1990 Los Angeles, California ~ RAUSCHER rlERCE REF5NES.INC. ~ . PRELIMINARY OFFICIAL STATEMENT DATED March 8, 1990 NEW ISSUE RATINGS. Moody's Standard & Poor's In the opmlOn of Momson & Foerster, Los Angeles, Californza, Bond Counsel, under e:asrmg law and assummg contmumg complzance with certam covenants m the documents relating to the Bonds and certam proVISIOns of the Internal Revenue Code of 1986, as amended, as descnbed herem, mterest on the Bonds IS not mcludable m the gross mcome of the owners thereof for federal mcome tax purposes. Interest on the Bonds may be mcluded m the calculation of certam taxes, however, mcludmg the alternatIve mInimum tax on corporatIOns. See "TAX EXEMPTION" herem for a descnptlOn of certam proVISIOns of the 1986 Code that may affect the tax treatment of mterest on the Bonds for certain Bondholders Interest on the Bonds WIll be exempt from the State of CalifornIa personal Income taxes See "TAX EXEMPTION" herem $4,500,000 CITY OF SANTA MONICA GENERAL OBLIGATION BONDS, SERIES 1990 (Main Library Improvements Project) Dated: March 1, 1990 Due. July 1, as shown below The General OblIgation Bonds, Senes 1990 (the "Bonds") have been authonzed by electIOn. (See "mE BONDS . Authonty For Issuance" herem). The Bonds wIll be Issued only as fully registered bonds Without coupons 10 the pnnclpal amount of $5.000 or any mtegral multIple Thereof Interest on the Bonds Will be payable on January 1. 1991, and semiannually thereafter on July 1 and January 1 of each year. The pnnclpal of the Bonds IS payable at the pnnclpal corporate trust office of Bankers Trust Company of Callforma, NatIOnal ASSOCIation, San FranCISco. CalIfornra. Fiscal Agent for the Bonds. The Bonds are general oblIgatlons of the City of Sanra MonlCa and the City Council of Santa MOnica IS empowered and IS oblIgated to levy ad valorem taxes, Without lImitations of rate or amount, upon all property subject to taxation by the City for the payment of IOterest on and pnnclpal of the bonds Proceeds of the Bonds wlll be used for the acqUlsltlOn and Improvement of the property adjacent to the Santa MOnica PublIc Library MalO Branch and pOSSible future expansIOn of the MalO Library faCIlity The Bonds are subject to optlonal redemptIOn pnor to their stated matunttes, m whole or m part, on and after July I, 2000, as descnbed herem MATURITY SCHEDULE Maturity Principal Interest Price or Maturity PrinCipal Interest Price or (July 1) Amount Rate Yield (Julv 1) Amount Rate Yield 1991 $ % % 2001 $ % % 1992 2002 1993 2003 1994 2004 1995 2005 1996 2006 1997 2007 1998 2008 1999 2009 2000 2010 ~ . The Bonds will be offered when. as and If rssued and received by the purchasers, subject to the approval of legalrry by A[omson & Foerster, Los Angeles, CalIfornw, Bond Counsel It rs expected that the Bonds En defimtIVe fonn ~Hll be avazlable for delrvel}' In Los Angeles, Calrfornra, on or abol/t Apnl10, 1990 SALE DATE AND TIME I\larch 27, 1990 (Tuesday) at 10:00 A.l\I.. p.s T. . . ThIs PrelimInary OfflClal Statement IS m a form "deemed tmal" by the City of Santa MOnIca for purposes of SEe rule 15c2-12(b)(1) but IS subject to reVISion, amendment and completIOn m a Fmal OffiCIal Statement. This OffICial Statement does not constItute an ofterIng of any secunty other than the ongmal offerIng of the Bonds of the City Identlfled on the cover hereof. No dealer, broker. salesperson or other person has been authonzed by the City to gIVe any mformatlon or to make any representatIOns other than as contamed m thiS OffiCial Statement, and If given or made. such other mformatJon or representatIOn not so authorIzed should not be relled upon as haVIng been gIVen or authorIZed by the City. The Issuance and sale of the Bonds have not been regIstered under the Federal SecuntJes Act of 1933 or the Securities Exchange Act of 1934, both as amended, In relIance upon exemptJons provIded thereunder by SectlOn 3(a)2 and 3(a)12, respectively, for the Issuance and sale of mUnIcIpal securities TIns OffiCial Statement does not comtltute an offer to sell or a soliCItatIon of an offer to buy In any state m wluch such offer or solicitatIon IS not authonzed or In whICh the person makmg such offer or solICItatIon IS not qualified to do so or to any person to whom It IS unlawful to make such offer or solICItation Statements contamed m thIS OffiCial Statement whIch mvolve estImates. forecasts or matters of opmlOn. whether or not expressly so descnbed herem. are Intended solely as such and are not to be construed as a representatIOn of facts The mformatlOn and expressions of OpmlOn herem are subject to change Wlthout notIce. and neither the delIvery of thiS OffiCIal Statement nor any sale made hereunder shall, under any circumstances. gIVe nse to any ImpliCatiOn that There has been no change m the affairs of the City SInce (he date hereof Rauscher Pierce Refsnes. Inc, IS the FmanClal AdVISor to the CIty Rauscher PIerce Refsnes, Ine. WlII receIVe compensatIOn from the City contmgent upon the sale and dellvery of the Bonds . . CITY OF SAL"ITA MONICA City Councd Denms T. Zane, Mayor DaVId B. Fmkel. Mayor Pro Tempore WIlliam H Jenmngs Judy Abdo Herbert Katz Ken Genser ChrIStme E Reed City Manager John Jahh Director of Finance Charles M DennIs Director of Commnmty and Economic De\'elolIlTICnt Margaret A Curran City Attorney Robert M Myers Deputy City Attorney Lmda A Moxon City Treasurer Ralph E Bursey City Clerk ClarICe Johnsen Bond Counsel MORRISON & FOERSTER Los Angeles. Cahforma Financial Advisor RAUSCHER PIERCE REFSNES, INC San FrancIsco. Cahforma Fiscal Agent Bankers Trust Company of Cahforma, National AssocIatIOn San FrancIsco. Cahforma . . TABLE OF CONTENTS Page INTRODUCTORYSTATEMEKT THE BONDS Authonty for Issuance Purpose of Issue Secunty and Source of Payment DescnptlOn of the Bonds Fiscal Agent . RedemptIOn Notice of RedemptIOn DISpositIOn of Bond Proceeds Investment of Moneys In Funds Estimated Debt SeMce ReqUIrements . CONSnnJTIONALAND STATUTORY PROVISIONS AFFECTING CITY REVENUES AND APPROPRIATIONS Article XIII A of the CalIforma Constitution ArtIcle XIII B of the Cahforma Constitution ASSESSED VALUATIONS. TAX RATES AND TAX DELL.'\QUENCIES Assessed and Estimated Actual Value of Taxable Property Pnnclpal Property Tal;.l'ayers Ad Valorem Property Tax Collection Procedures Assessed Valuation Assessed ValuatIOns. Tax Rates, Serured LeVles. Collections. Delmquencles lHE CIlY OF SANTA MONICA Government and AdmmIs[ratlon Accountmg Pohcles Budgetary Process Transportation Economy. . Population . Self-Supportmg Operations Employment Retirement System Labor Relations Self-Insurance. Retail Sales BUlldmg Permit ACtlVlty Bank DeposItS . Long-Term Debt Legal Debt Margm Assessed Value, Debt Lmnt and Ratio of Bonded Debt Direct and Overlappmg Debt Lease - Purchase OblIgatIOns City Fmances TAX EXEMPTION LEGALIlY FOR INVESTME!\! LEGAL OPINION. . . . ABSENCE OF MATERIAL LmGA TION RATINGS MISCELLANEOUS APPENDICES . A. Fmanclal Statements B. Form of OpmlOn of Bond Counsel . . INTRODUCTORY STATEMENT TJus Official Statement pro'il1des certaIn Information concernIng the sale and delIvery of the Cny of Santa MOnica. CalIforma General OblIgation Bonds. Senes 1990. (Main Library Improvement ProJect) (the "Bonds") wluch are to be executed and delivered by the Clt'j of Santa MOnica (the "City") In the aggregate pnnclpal amount of S4,50Q.OGO THE BONDS Authority for Issuance The $4,500.000 aggregate pnnclpal amount of rhe Bonds was aurhonzed In an election held on November 4, 1988 by a favorable vote of more than two-tlurds of all the voters votIng on the propositIOn The Bonds are Issued under provIsIOns of the Government Code of the State of CalIforma. the City Charter. a Resolution of the City Council adopted . 1990, and pursuant to the election mentioned above Purpose of Issue The Bonds are bemg executed and delIvered for the purpose of tmancmg the cost of acquIsitIOn and Improvement of the property adjacent the Santa Momca Pubhc Library Mam Branch and pOSSible furore expanslOn of the Mam Library faCIlIty (the "ProJect") Security and Source of Pa)'I1lent The Bonds are general oblIgatlOI'~ of the City The City Council of the City of Santa Momca IS empowered and obhgated to levy ad valorem taxes for the payment of said Bonds and the Interest thereon upon all property wlthm the City subject to taxatIon by the City (except certaIn personal property wluch IS taxable at limned rates) Without lImItation of rate or amount At tlIe optIOn of the City CouncIl. other funds of the City wluch are not restncted by law to speCifiC uses may be used to meet debt setVIce on the Bonds In accordance \vlth the ResolutIOn relatIng to the Bonds. the City Council IS reqUIred to fL>:, levy and collect annually until all of the Bonds are paid or until there IS a sum In the treasury of the City set apart for that purpose "ufhclent to meet all sums conung due for pnnclpal and mterest on saId bonds, a tax suffICIent to pay the annual Interest on the pnnclpal of said bonds as the same becomes due Such tax w]ll be m addition to all other taxes leVIed for City purposes, WIll be collected at the same time and m the same manner as other ad valorem taxes of the CIty are collected and ]S permitted to be used only for the payment of saId bonds and the mterest thereon Description of the Bonds The Bonds wtll be sold. executed and dehvered In the aggregate pnnclpal amount of $4.500,000 The Bonds Will be Issued as fully registered bonds m the denomInation of $5.000 or any Integral multiple thereof. 1 . . The Bonds Vvlll be dated March 1. 1990. and vall bear mterest at the rates shown on the cover hereof payable each Januarv 1 and July 1. commencmg January 1. 1991 Each Bond shall bear mterest from the Interest payment date next precedmg the date of authenticatIon thereof unless II ]S authentICated durmg the peflod from the 16th day of the month next precedmg any mterest payment date to the mterest payment date, mclus]ve. m which event II shall bear mterest from such mterest payment ddte, or unless II IS authenticated on or before December 15, 1990, m whIch event It shall bear mterest from Ivlarch 1. 1990 The Bonds will mature on July 1 m the years and m the pnnopal amounts shown below Schedule of Maturities Year (July 1) 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Principal I\latllnn~ S Year (Jnly 1) 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Principal Matunng $ Fiscal Agent The pnnClpal of the Bonds Will be payable upon presentation and surrender thereof at the pnnclpal corporate trust office ot Bankers Trust Company of CalIforma, :-.rational ASSOCIation. Los Angeles, Callforma. as rhe bond regIstrar and fiscal agent (the "FIscal Agent") Interesr on the Bonds WIll be payable by check maIled to Ihe reglsrered owner thereof, at the address shown on the registratIOn books mamtamed by the FIscal Agent, as of the close of busmess of the Fiscal Agent on the 15th day of the month precedmg the mterest payment date. Successor Fiscal Agent If the fIscal Agent ]S replaced by the Clly, the new FISCal Agent shall accept the prevIOus FIscal Agent's records and act m the same capacity as the prevlous Flscal Agent Any successor Flscal Agent selected by the CIty shall be a bank or trust company havmg an offICe m the City of Los Angeles or San Franc]sco and havmg a combmed capital and surplus of at least $50,000,000. In the event that the Fiscal Agent or any successor becomes mcapable of actmg as such the City shall appomt a subsmure FIscal Agent Future Registration The Bonds may be transferred, regIstered and aSSIgned only on the reg]stratlOn books of the fiscal Agent, and such regIstratIon and transfer shall be Wlthout expense or setvlce charge to the holder. except for any tax or other governmental charges reqUIred to be pmd wIth respect to such regIstration and transfer Any Bond or Bonds shall be surrendered for reg]stratlon of transfer at the pnnclpal corporate trust office of the Fiscal Agent, whereupon the City shall execute. and the FIscal 2 . . Agent shall authentICate and deliver, a new fully registered Bond or Bonds of the same matunty or matuntIes, of authonzed denommatlon or denommanons and for the aggregate pnnclpal amount of such Bond or Bonds then remammg outstandmg to the transferee m e'Cchange therefor The Fiscal Agent shall not be requIred to regIster the transfer of any Bond (a) dunng a penod begmmng at the opemng of busmess ten days before the day of the maIlmg of a notIce of redemptIOn of less than all of the outstandmg Bonds and endmg at the close of busmess on the day of such matlmg, or ~b) theretofore selected for redemptIOn Redemption The Bonds matunng on or pnor to July 1, 2000 shall not be subject to call and redemptIon pnor to matunty. The Bonds matunng on and after July 1. 2001 may be called before matunty and redeemed at the option of the City, from any source of funds. as a whole on any date. or m part. on any mterest payment date pnor to matunty, on or after July 1. 2000 m mverse order of matunty and by lot Wltlun a matunty, at a redemption pnce for each redeemed Bond equal to the pnnclpal amount thereof, accrued mterest to the date of redemptIOn, plus the followmg premIum (percentage of pnnclpal amount) If redeemed at the follo\'o1ng tImes: RedemptIon Date RedemptIOn Pnce July 1.2000 through June 30, 2001 102 0% July 1,2001 through June 30, 2002 101.5% July 1,2002 through June 30, 2003 1010% July 1,2003 through June 30, 2004 1005% July I, 2004 and thereafter 1000% Notice of Redemption Notice of redemption shall be given by first class mall. postage prepaId, not less than 30 nor more than 60 days pnor to the redemption date. to the respective registered owners of any Bonds deSignated for redemptIon at theIr addresses appeanng on the bond regIstration books of the FIscal Agent Each notice of redemptIOn shall state the redemptIon date. the place or places of redemption, and. If less than all of such Bonds. the dlstmctlve numbers of the Bonds to be redeemed and, m the case of Bonds to be redeemed m part only. the respective portions of the pnnclpal amount thereof to be redeemed. and shall also state that on said date there Will become due and payable on each of s3ld Bonds the redemption pnce thereof or of saId specIfied portion of the pnnclpal together WIth mterest accrued thereon to the redemptIon date, and that from and after such redemptIOn date Illterest thereon shall cease to accrue, ane! shall requITe that such Bonds be surrendered In additIOn to the foregomg notIce. further notIce of redempl10n shall be gIven by the FIscal Agent as set out below, but no defect m any such further notIce nor any failure to gIve all or any portion of such further notIce shall III any manner affect the vahdlty of the proceedmgs for redemption or the cessatIon of accrual of mterest on the Bonds as of the date fDeed for redemptIOn. 3 . . Each nonce of redemption shall contam the IOformanon requHed m the precedmg two paragraphs for notice of redempllon plus (I) the date of Issuance of the Bonds as ongmally Issued, (u) the rate of mterest borne by each Bond bemg redeemed. and (Ill) any other descnptlve mformatlOn needed to accurately IdentIfy the Bonds bemg redeemed Each nonce of redemptIOn shall be ,ent at least trurty-five (35) days before the redemptIOn date by registered or certified mall or overnight delivery service to the four registered secuntles depOSitorIes listed below and to any other regIStered secuntIes deposltones then In the busmess of holdmg substantial amounrs of obligatIOns of the same type as the Bonds and to one or more of the natIOnal mformatlOn services listed below that dlssemmate notices of redemption of obligatIOns such as the Bonds. The Registered Securities Deposltones mclude The DepOSItory Trust Company, 711 Stewart Avenue, Garden City, New York 11530. Telecopy (516) 227-4039 or -4190, Midwest SecuntIes Trust Company, Capnal Structures-Cali NotificatIOn, 440 South LaSalle Street, Crucago, IllinOiS 60605, Telecopy (312) 663-2343, PaClflc Secunnes DepOSitory Trust Company, PaCIfIc and Company, POBox 7041, San FranCISCO. Cahforma 94120. Telecopy (415) 393-4128, Plnladelplna DepOSitory Trust Company. Reorgamzailon DlvlSlon. 1900 :Viarket Street. Phlladelplna. Pennsylvama 19103, AttentIon Bond Department, Telecopy (215) 496-5514 The Nanonal InformatIon Serv'!Ces mclude Fmanclal Information Inc's FInancial Dally, Called Bond SerVice, 30 Montgomery Street. Jersey CIty, New Jersey 07302. InteractIve Data CorporatIOn's Bond Service, 22 Cortland Street. New York, New York 10007, Kenny InformatIOn Service's Called Bond Semce, 65 Broadway, 16th Floor, New York, New York 10006, Moody's Mumclpal and Governmenr. 99 Church Street. New York. New York 10004, Standard & Poor's Called Bond Record, 25 Broadway. New York. New York 10004 Disposition of Bond Proceeds The "Oty of Santa Momca General ObligatIOn Bonds, Senes 1990 (Mam Library Improvements ProJect), Bond Fund" and the "CIty of Santa Momca General Obligation Bonds, Senes 1990 (Mam LIbrary Improvements POflect), Project Fund" shall be held and mamtamed by the Fiscal Agent. The proceeds of the Bonds shall be receIved by the Fiscal Agent and deposited as follows (a) m the Bond Fund, a sum equal to the accrued mterest and premIUm. If any, received upon the sale of the Bonds (b) m the Project Fund. the remamder of the proceeds Moneys In the Bond Fund and Project Fund Will be mvested as deSCribed m the follOWing sectIOn. "Investment of Moneys m Funds." Interest earmngs and profIts resulting from such mvestments shall be retamed m the Bond Fund and Project Fund respeclively Investment of Moneys in Funds Moneys m the Bond Fund or the Project Fund held by the Fiscal Agent shall be mvested by the Fiscal Agent In any of the folJowmg mvestments (each, a "Permitted Investment"), as directed by the DIrector of Fmance of the City: (I) any of the followmg oblIgatIOns Issued or guaranteed by the Umted States of Amenca (a) dIrect general obligations of the Umted States of Amenca and obilgal1ons the payment of pnnclpal of and Interest on which are directly or mdlIectty guaranteed by the Umted States of Amenca. mcludmg, Without limitation. such of the foregomg winch are commonly referred to as "strIpped" oblIgatIOns and coupons. or (b) mortgage-backed bonds or pass-through obhgatlons Issued and the 4 . . pnnClpal and mterest of whICh IS guarameed as to the full and nmely payment by the Federal i\atlOnal Mortgage AssoclatJon or the Federal Home Loan Mortgage Corporanon, (II) any of the followmg obligations of federal agencies not guaranteed by the Cmted States of Amenca (a) debentures Issued bv the Federal Housmg Admmlstratlon, (b) participation certificates or semor debt oblIgations of the Federal Home Loan Mortgage Corporation or Farm Credit Banks (consisting of Federal Land Banks. Federal IntermedIaTe Credit Banks or Bank for Cooperanves), (e) bonds or debemures of the Federal Home Loan Bank Board established under said act and stocks, bonds. debentures. partiCipations and other oblIgatIons of or Issued by the Federal NatIonal Mortgage ASSOCiation, the Government National Student Loan Marketing ASSOCIation, the Government NatIOnal Mortgage Assoclanon and the Federal Home Loan Mortgage CorporatIon, and bonds, notes or other oblIganons Issued or assumed by the International Bank for Reconstruction and Development. (Ill) interest-bearing demand or tIme depOSits (mcludlng certificates of depOSit) In fedeTal or State of CalIforma chartered banks or Sa\1ngs and loan aSSOCiations (mcludmg the Fiscal Agent) provlded that (a) m the case of a savings and loan aSSOClanon, such demand or nme deposits at all times shall be fully msured by the Federal DepOSit Insurance CorporatIOn. or the unsecured obligatIOns of such saVings and loan assoCIation shall be rated m one of the top two ratings categones by a Ratmg Agency (defmed below), and (b) m the case of a bank, such demand or tIme depOSits shall be fully msured by the Federal DepOSit Insurance Corporanon, or the unsecured long term obligatIOns of such bank (or the unsecured obligatIOns of the parent bank holding company of whICh such bank IS the lead bank) shall be rated 10 one of the top two ratmg categones by a Ratmg Agency, (IV) bankers accepTances endorsed and guaranteed by any commerCial bank, prO\'lded that (a) the unsecured oblIganons of such bank shall be rated m one of the top two rating categones by a Ratmg Agency or such bank shall be the lead bank of a banking holdmg company whose unsecured obligatIOns are rated m one of the top two ratmg categones by a Rating Agency and (b) the most recent reported combmed capital, surplus and undiVided profits of such bank shall be not less than $100 millIon, (v) obllganons the mterest on whICh l~ excluded from gros, Income for purposes of federal Income ta.xatlOn under Secnon 103 or the Code and which are rated m the one of the top t\vo ratlng categorIes by a Rating Agency, (\'J) money market funds whICh 10vest solely In obhganons deSCrIbed In the precedmg clause (v) of tlus defmItlon, or money market funds whIch are rated m the highest rat10g category by both Rating AgenCies, or (Vll) commercIal paper of "pnme" quality of the hIghest rankmg or of the hIghest letter and numencal rating as pro,;nded for by a Rating Agency, of lssumg corporatlons that are orgamzed and operatmg Wltlun the Umted States and haVing total assets m excess of fIve hundred millIon dollars ($500.000,000) and haVing an "AA" or lugher ratmg for the Issuer's debentures, other than commerCial paper, as prOVIded for by a Rating Agency. and proVided that purchases of eligIble commercIal paper may not exceed 180 days matumy nor represent more than 10 percent of the oursrandmg paper of an ISSUing corporatIOn For purposes of the above definItIon, "Ratmg Agency" means Moody's Investors ServICe or Standard and Poor's Corporation or any successor to either of such entities 5 . . ESTIMATED DEBT SERVICE REQUIREIVIENTS The followmg table shows the estImated semI-annual debt ser;1ce payments \,1rh respect to the Bonds. PAYMENT DATES January 1, 1991 July 1. 1991 January 1, 1992 July 1. 1992 January 1, 1993 July 1, 1993 January 1, 1994 July 1. 1994 January 1, 1995 July 1, 1995 January 1, 1996 July 1, 1996 January 1, 1997 July 1, 1997 January 1. 1998 July 1, 1998 January 1. 1999 July 1, 1999 January 1. 2000 July 1. 2000 January 1,2001 July 1.2001 January 1.2002 July 1.2002 January 1. 2003 July 1, 2003 January 1,2004 July 1,2004 January 1.2005 July 1, 2005 January 1. 2006 July 1,2006 January 1.2007 July 1, 2007 January 1.2008 July I, 2008 January 1. 2009 July 1. 2009 January I, 2010 July 1.2010 PRINCIPAL INTERESI TOTAL DEBT SERVICE $ $ $ 6 . . CONSTITUTIONAL AND STATUTORY PROVISIONS AFFECTING CITY REVENUES AND APPROPRIATIONS Article XIII A of the California Constitution SectIOn l(a) of Article XIi. A ot the Cahforma ConstitutIOn hmlts the maxImum ad valorem td){ on real property to one percent of full cash value (as defined m SectIOn 2). to be collected by the counties and apportioned accordmg to law SectIOn l(b) proVIdes that the one percent hmltatlOn does not apply to ad valorem taxes to pay mterest or redemption charges on (1) mdebtedness approved by the voters pnor to July 1, 1978, or (2) any bonded mdebtedness for the acqUIsItIon or Improvement of real property approved on or after July I, 1978, by two-thirds of the votes cast by the voters votIng on the proposItIon SectIon 2 of Article XIII A defines "full cash 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 of real property when purchased. newly constructed, or a change In ownershIp has occurred after the 1975 assessment." The full cash value may be adjusted annually to reflect mflatlon at a rate not to exceed two percent per year, or reduction In the consumer pnce Index or comparable data for the area under taxIng Junsdlctlon or reduced In the event of declInIng property value caused by substanlJal damage, destruction or other factors LegislatIon enacted by the CalIforma LegIslature to Implement ArtIcle XIII A prOVIdes that nOf\\1thstandIng any other law, local agenCies may not levy any ad valorem property tax except to pay debt service on Indebtedness approved by the voters as descnbed above Such legislatIOn further prOVides thar each county WIll levy the m3XImum tax permItted by ArtIcle XIII A of $400 per $100 of assessed valuatJon (based on the tradItIonal practIce of USIng 25 percent of full cash value as the assessed value for tax purposes) BegInmng WIth the 1981/82 fiscal year, assessors In Cahforma no longer record property values on the tax rolls at the assessed value of 25 percent of market value and now record them at full market value. Consequently, the tax of $4 per $100 of assessed value IS now expressed as $1 per $100 of taxable value. In the general elections of 1986 and 1988, the voters of the State approved vanous measures whIch further amended Arbele XIII A One such amendment generally prOVIdes that the purchase or transfer of (I) real property between spouses or (n) the prIncIpal reSIdence and the first $1.000.000 of the full cash value of other real property between parents and children, do not constItute a "purchase" or "change of ownershIp" tnggenng reassessment under Arncle XIII A ThIs amendment WIll reduce the property tax revenues of the CIty Other amendments permitted the LegIslature to allow persons over 55 who sell theIr reSIdence on or after November 5. 1986 and buy or bUIld another of equal or lesser value WIthIn two years m the same county to tranSfer the old reSidence's assessed value to the new reSidence. and permItted the legislature to authonze each county under certam CIrcumstances to adopt an ordmance makmg such transfers of assessed value applIcable to SItuatIOns m wluch the replacement dwelhng purchased or constructed after NO\'ember 8. 1988. IS located WItlun that county and the ongmal property IS located In another county WithIn CalIforma The County of Los Angeles has not adopted the ordInance regardIng reSIdences replaCIng dwellIngs In other counties. Article XIII B of the California Constitution ArtIcle XIII B hmlts the annual appropnatIons of the State and any CIty, county. CIty and county. school dIStrIct. authonty or other political subdiVISIOn of the State at the level of appropflatJOns for the pnor fiscal year. as adjusted for changes In the cost of hvmg, population and selVlces for whIch fiscal responslblhty IS slufted to or from the governmental entIty. The "base year" for establIslung such appropna+:on limit IS the 1978179 fiscal year and the lImIt IS adjusted annually to reflect changes m population, consumer pnces and certam Increases or decreases In the cost of seMces proVIded by these pubhc agenCIes. 7 . . Appropnatlons of an entity of local government subject to Arncle XIII B melude general authonzatlons to expend dunng a fiscal year the proceeds of taxes levled by or for that entity and the proceeds of State subventIOns. "'{elusIVe of certam State subventIOns, refunds of taxes, and benefit payments from renrement. unemployment msurance and disabIlity msurance funds "Proceeds of taxes" mcludes. but ]S not hmlted to, all tax revenues. most State subventIOns and the proceeds to the local government entity from (1) regulatory hcenses, user charges, and user fees to the extent that such proceeds exceed the costs reasonably borne by such entity and (11) the mvestment of tax revenues Artlele XIII B mdudes a reqUIrement that If a local government entity's revenues In any year exceed the amount permitted to be spent. the excess must be returned by reViSIng tax rates or fee schedules over the subsequent two years. Article xm B does not hmlt the appropnatlOn of moneys to pay debt servlce on Indebtedness eXlstmg or authonzed as of January 1, 1979, or for bonded Indebtedness. such as the Senes 1990 Bonds, approved thereafter by a vote of the electors of the ]ssulng entity at an electIOn held for that purpose ASSESSED VALUATIONS, TAX RATES AND TAX DELINQUENCIES The follOWing table pro\1des a ten year record of assessed valuation wnhm the CIty CITY OF SANTA MONICA Assessed and Estimated Actual Value of Secured Taxable Property Ten Years Ended June 30,1989(1) Ratio of Net Assessed Real Personal Value To Property Property Net Estimated Estimated Year Ended Assessed Assessed Less Assessed Actual Actual June 30. Value(2) Value Exemption Value Value Value 1980 $ 602,327,940 $ 8.647,015 $ 25,762,565 $ 585.212.390 $ 2.443,899,820 2395% 1981 723,905,335 8.401,285 43,815.555 688.491.065 2.929,226.480 2350 1982 3,428,981,935 35.622,694 187,675,205 3.276,929.424 3,464,604,629 94.58 1983 3,841,808,288 37,927,082 192,102,928 3,687,632.442 3,879.735,370 95.05 1984 4,191,897,510 39,273,429 191.613,862 4,039.557.077 4.231.170,939 95.47 1985 4,517,075.819 34,201,588 206.987,948 4,344.289,459 4.551.277,407 95.45 1986 4,821,159,165 36.609.509 199.779,249 4,657.989,425 4.857,768,674 95.89 1987 5.150,951.540 29,461.199 176.487,753 5,003,924,986 5.180.412,739 96.59 1988 5,691,805.036 28,458,409 223.545,720 5,496,717,725 5.720.263,445 9609 1989 5,903.433,208 34.965,698 264.561.185 5,673,837.721 5,938,398,906 95.54 (1) Effective the year ended June 30. 1982. assessed values are stated as 100% full cash value rather than 25% as m pnor years. (2) Consists ofland. Improvements and pubhc utlhtles. Excludes net unsecured property. Source: CIty of Santa MOnica ComprehenSIve Annual Fmanccal Report, Year Ended June 30, 1989. 8 . . Shown below are the major property taxpayers located wlthm the City, thelr current assessed value and theIr relatIve proportIon of the City's total assessed value Taxoaver MaguIre Thomas Partners St John's HospItal Barclay-CurCI Investment Company Santa MOnIca Place ASSOCIates 100 Wllslure Assoclates Lutheran HospItal SocIety PrudentIal Insurance Company ConnectIcut General LIfe Indl1lldualTaxpayer IndlVIdual Taxpayer Total City Assessed Value CITY OF SANTA MONICA Pnnclpal Property Taxpayers June 30, 1989 Type of Business CommetCIal Real Estatei Land Developmg HospJtal CommercIal Rentals Real Estate Investment Real Estate Development Hospital Insurance LIfe Insurance CommerCJa\fResldentJaI Rentals CornrnerclallResldentJal Rentals Source: County of Los Angeles Auditor-Controller/Tax DIVISIOn Ad Valorem Property Tax Collection Procedures 1988-89 Percentage Assessed Total Assessed Valuation Valuation $ 98.166,852 1.63% 92,172.670 1.53% 74.697.560 124% 72.097,174 1.20% 67,495,949 1.12% 65.001(.665 108% 58,425,458 .97% 42,925.230 .71% 33,153.925 .55% 30,01(9,408 50% $ 634.232,891 10.53% $6,025,429,091 Taxes are leVIed for each fiscal year on taxable real and personal property whIch IS situated m the City as of the precedmg March 1 For assessment and collectIon purposes. property IS claSSIfied either as "secured" or "unsecured," and IS listed accordmgly on separate parts of the assessment roll. The "secured roll" IS that part of the assessment roll contammg State-assessed property, the taxes on 9 . . winch are a hen on real property sufficIent. In the opmlOn of the Los Angeles County Assessor. to secure payment of the taxes. Other Property ]s assessed on the "unsecured roll" A tax leVIed on unsecured property does not become a hen agamst the unsecured property, but may become a hen on certam other property owned by the taxpayer. Every tax winch becomes a hen on secured property has pnonty over all other hens on the secured property, regardless of the tIme of the creatIOn of other hens Secured and unsecured property are entered separately on the assessment roll mamtamed by the county assessor The method of collectIng dehnquent taxes IS substantIally dIfferent for the two classIficatIons of property. The exclUSIve means of enforcmg the payment of dehnquent taxes WIth respect to property on the secured roll IS the sale of the property securmg the taxes to the State for the amount of taxes winch are dehnquent The taxIng authonty has four ways of collectmg unsecured personal property taxes. (1) InItiatIng a CIVIl action agamst the taxpayer, (2) filmg a certIficate m the office of the county clerk speclfymg certam facts m order to obtam a Judgment hen on certam property of the taxpayer. (3) fihng a certificate of dehnquency for recordatIon m the county recorder's office to obtaIn a hen on certam property of the taxpayer. and (4) selzmg and sellmg personal property, Improvements or possessory Interests belongmg or assessed to the assessee. Commencmg m 1982, a 10 percent penalty IS added to dehnquent taxes whIch have been leVIed WIth respect to property on the secured roll In addItiOn. property on the secured roll on whIch taxes are delmquent IS sold to the Stclte on or about June 30 of the fIscal year Such property may thereafter be redeemed by payment of the dehnquent taxes and a delmquency penalty, plus a redemptIOn penalty of 1 1/2 percent per month to the time of redempnon If taxes are unpaId for a penod of five years or more, the property IS deeded to the Stare and then ]S subject to sale by the county tax collector A ten percent penalty also apphes to delmquent taxes on property on the unsecured roll, and further. an addItIonal penalty of 1 112 percent per montJ.j accrues WIth respect to such taxes begmmng the fIrst day of the third month followmg the dehnquency date. The valuatIon of property IS determmed as of March 1 of each year Taxes are payable m two Installments, the first due on November 1 and the second due on February 1 Such taxes are conSidered dehnquent If not paId by the December 10 and Apnl 10 Immedlarely follOWIng theIr respectIve due dates Taxes on unsecured property are due March 1 and become dehnquent August 31 and such taxes are leVIed at the pnor year's seCUred tax rate It has been the City's expenence that approXImately three quarters of ItS unsecured tax revenues are received by late October, approXImately half of the secured tax revenues are receIVed In early February, and the remaInder of secured and unsecured revenues are receIVed by the end of August. A bIll enacted In 1983, SB 813 (Statutes of 1983. Chapter 498). prOVides for the supplemental assessment and taxatIOn of property as of the occurrence of a change of ownershIp or completIOn of new constructIOn. PreVIously. statutes enabled the assessment of such changes only as of the March 1 tax hen date next follOWing the change and thus delayed the realIzanon of Increased property taxes from the new assessments for up to 14 months Assessed Valuation The valuation of property In the City IS estabhshed by the Los Angeles County Assessor. except for public utlhty property whIch IS assessed by the State Board of Equahzatlon Assessed valuations are reported at 100% of the full value of the property, as defined In Article XIII A of the Cahfomm ConstItution Pnor to 1981/82, assessed valuations were reported at 25% of the full value of the property. 10 . . The California State Legislature adopted two types of State-reimbursed exemptions beginning In the tax year 1969/1970. The first currently exempts 100% of the full value of busmess Inventones from taxation The second exemptlo" currently prov1des a credit of $7.000 of the full value of an owner-occupied dwelhng for whIch apphcatlon has been made to the County Assessor CIIT OF SANTA MONICA Assessed Valuations, Tax Rates, Secured Levies and Collections and Delinquencies Ten Years Ended June 30,1989. Tax Rates Year(l) Total (Per $100 City Uncollected Ended Assessed Assessed Valuation) Secured Current Percent June 30 Valuation(2) Total Tax Levv Levv (3) Delinauent(3) 1980 $ 653,717,000 $436 $2,998,286 $124,108 41% 1981 735,093,000 4.30 3,689,342 167,698 45 1982 3,495.381,000 1.07 4,475.494 262.088 59 1983 3,950.330,000 106 5,182.774 324,661 63 1984 4,318.545,000 106 5,705.064 395,903 6.9 1985 4,645.203,000 1.05 6.413.485 454.587 71 1986 4,966.788,000 1.05 6.804,226 475.162 70 1987 5.351.764,000 1.04 7,392.846 509.819 6.9 1988 5.863,413,000 104 8,173.076 433.711 5.3 1989 6,025,429,000 103 9,044,682 595,775 6.6 (1) EffectIve the year ended June 30, 1982, assessed values ate stated as 100% of full cash value rather than 25% as In prevlOus years. (2) ConsIsts of real property, secured and unsecured personal property, publIC unhtles, less total exemptIons (3) The data presented represents the City's proportlOnare allocation of County-Wide totals and IS not based on the actual amount of taxes uncollected wlthm the City Source. City of Santa Afomca ComprehenSIve Annual FinanCIal Report, Year Ended June 30, 1989 THE CIIT OF SANTA MONICA 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 Santa Moruca encompasses an area shghtly greater than eight square miles and has an estimated current population of 96,500 persons. whIch makes ]t the eighth largest Clty In Los Angeles County The chmate ]s generally mIld WIth an average annual mean temperature of about 62 degrees (F) Extremes range from an average minImum temperature of 56 degrees (F) to an average hIgh of 68 degrees (F) Annual ramfall has avelaged about 14 mches ElevatIOn ranges from sea level to 400 feet above sea level. 11 . . Government and Administration The CIty of Santa Momca was mcorporated m 1886 and adopted Its CIty Charter In 1945 In 1947 a CouncIl-Manager form of government was establIshed followmg a vote of the CIty's reSIdents and approval by the CalIfornIa LegIslature The City CounCIl consists of seven members WIth overlappIng terms of four years. ElectIOns are held every two years, at whu..h lime three or four CounCil members are elected After each eleCllon, CounCil members select one of theIT group to act as Mayor, who then presides over Council meetmgs. The Cay Council appomts, at Its pleasure, a City Manager who serves as Cluef Executive Officer and IS responsible for supeTVlsmg day-to-day operatIOns of the CIty and for carrymg out poliCIes set by the Council. DUrIng fiscal year 1988-89, the City began operatmg ItS "PublIc E1ectromc Network" (PEN) system. PEN enables the City's reSidents to "talk" to elected offiCials and Cay workers VIa theIr home-based personal computers ThIs new two-way computer commUnIcation system allows reSIdents who have personal computers WIth modems to access the CIty library's mam card catalog, send electromc messages to City staff to lodge complamts or ask for Information, read City CounCIl agendas and staff reports, access a WIde range of mformatlon published by the CIty, and conduct pubhc electromc "conferences" on selected Issues. PEN has enhanced the ability of reSidents to partiCipate 10 thelf local government Further, dunng the last fiscal year, the City began usmg Its own cable teleVISIon channel to broadcast CIty CouncIl meetmgs and a WIde range of City-created pubhc mformatlOn programs about the CIty. ItS people. and government operatIOns. LIsted below are bnef bIOgraphIes of the Mayor. CIty Council members, CIty Manager, Dlfector of Fmance and Dlfector of the Department of Commumty and EconomIC Development Denms Zane. Mayor of the Clf} of Santa Momc;!. was elected to the CIty Council 10 1981 and re-elected 10 1984 and 1988. Mr. Zane was selected to serve as Mayor m December. 1988 for a two- year term. DaVId Fmkel. Mayor Pro Tempore of the City of Santa Momca, was elected to the City CouncIl 10 1986 Mr. Fmkel was appOinted to the Rent Control Board m 1981, elected for one term In 1983 and served untIl 1986 Mr Fmkells an attorney at law Judv Abdo. Councd Member of the City of Santa Momca. was elected to the City CounCil m 1988. Ms. Abdo served on the Pier ReconstructIon Corporation Board from 1984 to 1988 Ken Genser. Councd Member of the CIty of Santa Momca. was elected to the City Councd m 1988. Mr. Genser served on the CIty Planmng Commission from 1983 to 1986 Wilham )enmn~s. Councd Member of the City of Santa Momca, was elected to the CIty CouncIl 10 1979 and re-elected m 1983 and 1986 He served as Mayor Pro Tempore from 1984 to 1986 Mr. Jenmngs IS an attorney at law. Herb Katz. Council Member of the City of Santa Momca, was elected to the City CounCil m 1984 and re-elected m 1988. He served as Mayor Pro Tempore from 1986 to 1988 12 . . Chnstme E Reed. Council Member of the City of Santa MonICa. was elected to the City Council m 1975, re-elected m 1979, 1983 and 1986 Ms Reed served as Mayor Pro Tempore from 1979 to 1981 and selVed as Mayor from 1984 to 1986. John Jahh. City Manager of the City of Santa MOnIca was appomted City Manager In 1984 Pnor to Jus apyvli1tment, Mr. Jahh selVed as the City's ASSistant Manager for five years From 1974 to 1979 Mr JahlI selVed as the City's CommunIty Development Director Mr Jaldl has a Bachelor's Degree from Colgate Umverslty and a Master's Degree from the Umverslty of Oklahoma Charles M. Denms has been the DIrector of Fmance SInce May, 1983 Pwnously. for three years, Mr. Denms was DIrector of FInanCIal Studies for a prIvare consultmg firm and for tlmteen years held varIOUS financml management pOSItIOns With Los Angeles County Mr. Denms has a BA degree In Pohtlcal SCience and Mastc.s m PublIc AdminIstratIOn from UCLA and has completed all requirements. except dISsertatIOn, for a PhD m Public AdnumstratlOn from USC PellllV Curran has been the Director of the Department of Commumty and EconomIC Development for the past five years She had preViously been workmg In the City Manager's office for two years PrIor to JOInIng the City of Santa Momca, Ms. Currran was the Director of the Cahforma offices of Western SUN. a Department of Energy RegIOnal Agency Ms Curran has a Master's degree from UCLA m Urban PlannIng ACCAlunting Policies and FinancIal Reportmg The City'S accountmg records are organIzed and operated on a "fund" baSIS, which IS the baSIC fiscal and accountmg entity m governmental accountmg. The three broad fund categorIes Include Governmental Funds, Propnetary Funds and FidUCiary Funds The operatIons of each fund are accounted for With a separate set of self-balanCIng accounts that compnse ItS assets. lIabilIttes, fund balance/equity, and revenues and expenditures/expenses The baSIS of accountmg for all funds IS more fully explained In the notes to the combIned financml statements contaIned m AppendIX A. For the fifth straIght year, the Califorma SocIety of MUnICIpal Fmance officers awarded Its OutstandIng FInancial Reportmg award and the Government FInance OffICers Assoc13tlOn awarded a CertIficate of AchIevement for ExceU"nce In Fmanclal Reporting to the City for ItS comprehenSive annual financial report for the fiscal Year Ended June 30.1988. Budgetary Process Dunng May of each year. the CIty Manager submits to the Crty CouncIl a proposed operatmg budget for the fiscal year commencmg the followmg July 1 The operatmg budget mcludes proposed expenditures and expenses and the means of financmg them Public heanngs are conducted by the City CouncIl to obtam taxpayer comments, and pnor to June 30, the budget IS adopted through passage of appropnate resolutIOns. 13 . . Transportation The Santa MOnIca Freeway passes through the approXimate center Df the City Dn an east-west course and proVIdes duect CDnnectlOn wnh dDwntown LDs Angeles. approximately 16 mIles to the east About slX miles southeast of the City IS Los Angeles InternatIonal AirpOrt, which IS easily accessible VIa the San DIego Freeway. about One rnde ueyond the eastern border of Santa MOnIca on a north- south course. Dunng the Fall of 1989, the City purchased property to encourage and facIlitate the pOSSible future extensIOn of a light nul commuter Ime from downtown Los Angeles to the City The properly could be used as a raIl station and/or SWItChIng statIOn RegIOnal transportatIon authontles are currently consldenng such an extension Economy The City of Santa MOnIca IS a center Df electronIc. engmeermg, research and allied Industnes. Among ItS largest manufactunng employers are Paper Mate ManufacturIng, LDuverDrape, Inc. and PIOneer MagnetIcs. Santa MOTIlca llospltal, St John's Hospital and PenncDrp Fmanclal Incorporated are the largest non-manufacturmg employers m Santa MOfllca. ApproXimately 4,400 new enterpnses took out busmess licenses dunng the flscai year In order to partICipate III the almost $40 bIllIOn City economy Dunng fiscal year 1988-89. Ihe CIty essentially completed Its $12.6 mdhon renovatIon of the Third Street Mall whJCh ]S now called the Thud Street Promenade. The renovatlOn mcluded addmg 300 parkIng spaces to adjacent parkmg structures and completely remodeling the Third Street area to enhance use by shoppers and those seekmg mght tIme entertaInment at several new mOVIe complexes. restaurants, theaters and other pubhc-servmg facilitIes. TIus renovatIon IS not only expected to mcrease City revenues. but IS also expected to further enhance Santa Momca as a deSIrable reSidentIal and commerCial location III the regIon In addition, dUTlng the fiscal year. a newly constructed 350-room horel opened m the Diy's beachfront area In fiscal year 1989-90, two addItIOnal hotels with a total of 449 addItIOnal rooms are also scheduled to open In the same general area Population The follOWIng chart mdICates the growth III populatIOn of the CIty slIIce 1985 CITY OF SANTA MONICA Population For Years 1985-1989 Vear (as of Januarv 1) PopulatIOn 1985 1986 1987 1988 1989 93,095 94.060 96,100 97.212 96.461 Source: State Department of Fmance 14 . . Self-Supporting Operations Santa Momca operates an airport, bus hne, cemetery and pier and provides Its residents with water and wastewater service. A portIOn of the net Income from these enterprIses IS transferred annually to the General Fund to pay for admmlstratlve support services proVIded by General Fund departments The Santa MOnIca mrport IS a 215-acre general aVlallon airport, located at the southeastern corner of the City. It IS the base of approXimately 550 aircraft. SIgnIficant revenue IS received through several major leaseholds. The City rents an average of 150 to 200 of Its own mrcraft tle- down spaces, and also receIVes commiSSIOns on fuel sold at the airport In 1989, the City'S 125 buses carned over 18.0 mIlhon revenue passengers, wlule travelmg 38 mIllIon mIles. The system prOVIdes excellent coverage (a bus route operates wlllun a quarter-mile of almost every reSIdent) and low cost (regular fares are $ 50 With discount fares avaIlable for the elderly. handicapped and students through the purchase of tokens) The Cny's TransportatIOn Department has also sponsored charter and excursIOn programs.. The Woodlawn Cemetery and M?usoleum was purchased by the City In 1976 and IS operated as a self-supportmg enterpnse competitIVe With comparable pnvate facIlltles. It IS located m the south central portIOn of the City. The Santa MODIca Pier IS a Los Angeles County and City of Santa MODIca landmark bUilt at the turn of the century. It currently contmns vanous restaurants. amusement and other retaIl estabhshments Its restorallon and reconstrUCflon are the objects of a multi-mIllion dollar rejuvenation project, the first phase of which IS undelWay The Pier's famous 190Q-vmtage carousel, winch has been deSignated a natlonal hlstoncal landmark, has been completely restored and a new entry-way to the Pier contammg a chddren's park, additIOnal deck space and retall space has been constructed The reconstructIOn wIll be completed m early 1990 The Water Department of Santa Momca IS operated as a self-supporting enterpnse. About 50% of the City's water IS supplIed by ns own wells, stored mover 16 acres of well fields and reservOir grounds on City-owned property mSlde and outSide the City lImns The remammg 50% of the water IS purchased from the MetropolItan Water DistrIct of Southern Caltforma The City's automated system delIvers over 15 mIllion gallons per day to 16.000 water accounrs. at a cost of less than $ 22 per ton The City'S own water chemist supefVIses over 1.700 separate water quality and safety tests per year ill State-lIcensed laboratones, to ensure lugh standards are met before delIvermg the water to the customer's tap. Employment Santa Momca's locatIOn In Los Angeles County. the second largest metropolttan area III the Umted States, proVIdes access to vaned employment opportumtles for ItS Citizens. many of whom work outSide the City. The followmg table summanzes lustoncal employment of non-agncultural wage and salary workers m Los Angeles County SInce 1985 The figures presented are annual averages, based on a calendar year, estimated by the Cahforma Employment Development Department 15 Agnculture MmIng Construction Manufactunng TransportatIon & Pubhc UtIlItIes Wholesale & Retail Trade FInance, Insurance & Real Estate ServIces Government Total * . . LOS ANGELES COUNTY Estimated Average Annual Employment Wage and Salary Workers (000 omitted) Forecast 1985 1986 1987 1988 1989 108 110 11.3 121 12.1 124 105 95 98 98 120.9 130.7 1437 1484 1559 8871 8914 905.9 9043 9106 2009 202.7 2044 2043 2063 8949 9102 9209 9515 9722 2609 2736 2861 2860 2960 9707 1.001.7 1,0543 1,0982 1.1366 4772 4874 4949 5074 5099 3.835 8 3,9192 4,0311 4,1219 4,2094 * Totals may not add due to Independem roundIng Source: CallfomlO Employment Development Department The follOWIng chart proVIdes a companson, for the years mdlcared. of rhe unemployment rates In the City of Santa Momca, the City of Los Angeles, the Counry of Los Angeles, the State of Callforma and the Umted States. Annual Average Unemployment Rates (percentage) Calendar City of City of County of State of United Year Santa Monica los An~eles Los An~eles CalifornIa States 1984 57 8.8 79 78 75 1985 51 7.9 70 72 72 1986 48 75 67 67 70 1987 42 66 59 58 62 1988 3.5 55 49 53 55 Source: State of CallfomlO, Employment Development Department 16 . . The major employers wlthm the City and the number of persons employed by each company are shown below CITY OF SANTA l\IONICA Major Employers (as of June 30. 1989) <;ompany Number of Employees St. John's Hospital Santa MOnIca Hospital City of Santa Momca Penncorp Fmanclal Incorporated Rand CorporatIOn Lear Astromcs CorporatIon Paper Mate Manufactunng LouverDrape, Inc. PIOneer MagnetIcs Amencan ApplIance Manutactunng CorporatIon 2,124 1,475 1.250 1.000 958 900 821 740 560 546 Source' Santa MOnica Chamber of Commerce Retirement System Employees of the City are partIcIpants m CalIforma's PublIc Employees' RetlTement System (PERS) under provlSlons of a contract between that system and the Cny The City has partICIpated In PERS SInce July, 1944. ContnbutlOns to PERS are made by both employees and the CIty. The City's cost vanes accordmg to whether the employee IS classIfIed III the "Safety" (police. fire. etc) or "MIscellaneous" (all other) category As of July 1, 1988. Santa MonICa wIll contnbute an amount equal to 21186% of the 1988/89 annual payroll for Safety category employees and 9.381% of the 1988/89 annual payroll for MIscellaneous employees These contnbutlons by the City mclude amounts necessary to fund PERS costs for current benefits and to fully amortize vanous unfunded lIabilIties totallmg $14,621,394 not later than the year 2001 Safety memberslups account for an estimated $9,505.100 of the total unfunded bablhty Labor Relations The CIty has adopted a procedu,e by wluch Its employees meet and confer with the CIty on all negotIable matters under the Meyer-MllIas-Brown Act Of the 1.297 permanent CIty employees. most are represented by one of mne umons, mcludmg 158 by the CLOCEA Umon, 384 by the Mumclpal Employees ASSOCiatIOn. 135 by the TransportatIOn Umon, 156 by the Santa Momca PolIce Officers ASSOCiatIon and 98 by the Sama Momca Fuefighters ASSOCIation. There are currently vanous multi-year contracts 10 effect through June 1992, WIth renewal dates staggered over tlus penod The City has not expenenced mterruptlon III CIty servIces due to lahor dIsputes. 17 . . Self-Insurance The City Utlhzes Internal sefVlce funds for Its self-msurance programs. Four separate funds are maIntaIned, proVidIng for the follovnng Insurance coverages' general hablhty, automobile hablltty, bus operations ltablhty and workers' compensatIOn The City has obtained excess hablltty coverage through the Authonty for Callforma Cines E'(cess Liability (ACCEL), a JOint powers authonty of medium sIZe Cahforma mumclpalltles ACCEL pools for Vlrmally every catastrophic loss Incurred by Its members. thereby ehmInatlng the need for commerCial excess 11l,Urance protection. The following are the self-Insurance retentions and Insurance coverages for each self-Insurance fund Self-Insurance Fund General LlabIhty Automobtle Liability Bus OperatIOns Liability Workers' CompensatIOn Self-Insurance Retention (SIR) $1,000,000 1,000,000 100.000 500,000 Excess Coverage (Amonnt Over SIR) S 9.000,000 9.000,000 900,000' 10.000.000 · Additional excess coverage up to $10 mllhon proVIded by ACCEL Source: City of Santa MOnica ComprehenSive Annual Fmanclal Repon, Year Ended June 30, 1989 Retail Sales Retatl sales for the City In 1988 Increased 47% over the 1987 level Between 1984 and 1988, Santa Momca expenenced an average annual growth In taxable sales of 59% The followmg table Illustrates ~he growth of taxable transactions In the City by type of bUSiness. CITY OF SANTA MONICA Taxable Transactions by Type of Busmess For Calendar Years 1984 Through 1938 (in Millions of Dollars) 1984 1985 1986 1987 1988 Apparel Stores $ 583 $ 605 S 705 $ 85.1 $ 829 General Merchandise 1()9 8 112.1 1100 1135 109.9 Drug Stores 20.3 21.6 233 207 224 Food Stores 350 35.1 363 397 417 Packaged Liquor Stores 130 135 117 95 9.2 EatIng & Dnnkmg Places 1461 1540 1610 1731 1757 Home Fum & Appltances 396 413 423 453 539 Bldg Mat & Farm Impl 458 490 483 474 573 Auto Dlrs. & Auto Suppl 245.0 275.7 2878 2665 278.8 SefVlce Stattons 433 442 383 446 41.9 Other Retatl Stores 1144 1305 1449 1641 171.0 Retilll Stores Total $ 870 6 $ 9375 $ 9744 S 1,009 5 $1.044.7 All Other Outlets 1984 2337 ~ 2544 278.1 TOTAL ALL OUTLETS $1.0690 $1.171 2 $1.192 8 $1,263 Q $1.322.8 Source. California State Board af EqualIZatIOn 18 . Building Permit ActiVity . The followmg table shows the number and value of buildmg permits Issued In (he City between 1984 and 1988 The totals have been compIled on an annual baSIS CITY OF SAt~TA MONICA New Building Permit Valuation Calendar Years 1984 . 1988 (in thousands of dollars) Year 1984(1) 1985(1) 1986(2) Residential New Smgle dwellmg $1,440 $5,338 $8.865 New Multi dwelhng 959 20,928 6.894 Additions. alterations 8,009 10,894 12.083 Total Residential IGA08 37.160 27.842 Non-Residential New Commercial 6,215 41.090 79,050 New Indusmal 250 1.267 -0- Other 20.763 674 1,110 Additions. alteratIOns 21,840 14,227 15.197 Total Non-ReSidential 49,068 57.258 95.357 TOTAL VALUATION $59,476 $.94,418 $123,199 Number of New Dwelling Umts Smgle dwellmg 7 25 39 Multi dwelling 16 244 112 Total Urnts ~ 269 151 Source: (1) Secunty PacIfic National Bank, "CalifornIa ConstructiOn Trends" (2) Secunty Pacrfic CO/pOrallOn, "CalIfornia's Bulldmg Permit Act/vtl}''' (3) EconomIc SCiences CO/poraelon, 'Callfomia BUlldmg Permit Activity" Bank Deposits 1987(3) 1988(3) $13,300 $12.702 22,517 35.392 17,290 13,505 53,107 61.599 24,534 94,617 -0- -0- 2,156 1,611 21,594 31,524 48,284 127,752 $101,391 $189.351 65 68 273 387 338 455 The followmg table shows the amount of bank deposits ID the City for the last five fiscal years CITY OF SANTA MONICA Bank Deposits (in thonsands of dollars) Year Ended June 30 1985 1986 1987 1988 1989 Total Bank DelJoslts $1,142.474 1,079,143 1,139.226 1,245,021 1,288,866 19 Source: City of Santa MOnica Comprehensive Annual Fmanclal Report, Year Ended June 30. 1989. Long- Term Debt . . As of June 30. 1989, the combmed total outstandmg long term debt of the CIty was approXImately $38,775.000, all of whIch IS self-supported from revenues The CIty's long-term debt IS proVIded on the followmg table: Type of Issue CIty of Santa MOnica Redevelopment Agency (1988 Refundmg & Refinancmg Bonds - Ocean Park) T1urd Street Mall CertIficates of PartJClpatlon AIrport Faclhtles Certificates of PartiCIpatIOn Redevelopment Agency Revenue Bonds CIlY OF SA."ITA l\1Ol\'ICo\. Schedule of Long-Term Debt' Fiscal Year Ended June 30,1989 Long-Term Long'Term Long-Term Amount Debt Out- Debt Debt Out- Date Years Rates of standing as ~Iatured standing as of of of Original of June 30, During of June 30, Issue J\Iaturity Interest Issue 1988 Fiscal Year 1989 4121/88 1989-2019 52- $8,775.000 $8,775.000 825% $8,775.000 -0- 8/19/86 1988-2016 7 874% 12.965,000 12,965,000 120,000 12,845,000 10/22/85 1988-2007 911% 4,625,000 4,625,000 100,000 4,525,000 12/1/78 1987-2008 625- 14,470,000 12.920.000 290.000 12,630.000 775% S39,285.000 $510.000 $38,775,000 · Excludes 1966 ParlGng Authorn:y Bonds escrowed to matumy Source. CIty at Santa Montca ComprehensIve Annual Fmanclal Report, Year Ended June 30. 1989 20 . . CITY OF SANTA MONICA ComputatIOn of Legal Debt l\-largm June 30. 1989 Net assessed value Plus exempt property S5,760.867.906 264,561,185 Total assessed value $6.025.429.091 Debt hmlt.lO percent of total assessed value(l) $ 602,542.909 Amount of debt apphcable to debt hmlt Total bonded debt $21,405.000(2) Less: Assets 10 debt servIce funds aVailable for payment of pnnclpal $ 2,055,452 Total amount of debt applicable to debt hmlt I> 19.349.548 Legal debt margm $ 533.193.361 (1) Per SectIon 607 of the CIty Chaner, bonded mdebtedness of the City may not exceed 10% of total assessed valuatIOn of property wlthm the CIty, exclUSIve of any mdebtedness Incurred for the purpose of water supply or sewers or storm drams (2) Includes Revenue Bonds and Tax AllocatIon Refund10giRetlnancmg Bonds for Redevelopment Agency Source. City of Santa MOnica Comprehl'n 51Ve Anl!JIal Financial Repol7, Year Ended June 30, 1989 CITY OF SANTA MONICA Assessed Value, Debt Limit and Ratio of Bonded Debt to Assessed Value Per CapIta'" Ten Years Ended June 30,1989 Year Ended June 30 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 Estimated Total Assessed Legal Debt PoplllatlOn(1) Value ($000)(3) Limit (4) 88,314(2) 52,614,868 S261,486,852 88,500 2,940,372 294,037,372 89,500 3,495,380 349,538,064 91,900 3,950,330 395,032,982 93,100 4,318,545 431,854,515 93,095 4,645,203 464,520,340 94,060 4,%6,788 496,678,766 96,100 5,351,764 535,176,355 97,212 5,863,413 586.341,283 96,461 6,025,429 602,542.909 Applicable Gross Bonded Debt (5) $19,675,000 19,400,000 18,935,000 18,445.000 17,925.000 23,075,000 22,495,000 18.890,000 21,695.000 21,405,000 RatIO of Bonded Legal Bonded Debt Debt Debt to Assessed Margm(6) Value 5244,465.429 "5 275.832,077 66 331.797,769 54 378.259,451 47 415.593.046 42 444.150.949 50 476.532.389 45 520.382.496 35 568.564,087 37 583.193,361 36 Per Capita S22278 21921 211 56 20071 192 53 24787 239 16 196 57 22317 22190 The CIty does not have any pnor General ObllgatlOn bonded debt (1) All estImates are per State Department of Fmance. (2) 1980 Census. (3) For comparatIve purposes, all assessed values are stated at 100% of full market value (4) Calculated as set forth m the CIty'S Charter (5) Includes Revenue Bonds and Tax AllocatIOn RefundmgiRefmancmg Bonds for Redevelopment Agency (6) Total Assessed Value less Applicable Gross Bonded Debt plus debt servIce momes avaIlable. Source' CIty of Santa MOnIca ComprehenSive Annual Fmanczal Report, Year Ended June 30, 1989 21 . Direct and Overlapping Debt e. DIrect and overlappmg bonded mdebtedness IS shown In the followmg table complied by Callforma Mumclpal StatIstIcs. Inc.. of San FrancIsco. CalIfornia. CITY OF SANTA MONICA Statement of Direct and Overlappmg Debt 1988-89 Assessed Valuanon $5.895.159,599 (after deducllng S195,954.620 redevelopment tax allocallon Increment and addmg $65.685,128 homeowner exemptIOns) % ApplIcable Debt 6;30/89 Los Angeles County Los Angeles County BUlldmg Authontles Los Angeles County Flood Control Dlstnct Los Angeles County Flood Control Dlstnct Cerl1ficates of ParticIpatIOn MetropolItan Water DIstnct Santa MOnica Community College Dlstnct CertIficates of ParticIpatIOn Los Angeles Unified School Dlsrnct CertIficates of PartIcipatIOn Los Angeles Umfied School Dlstnct CIty of Santa Momca Certificates of PartICIpatIOn CIty of Santa Momca Redevelopment Agency 1978 Issue 1898 1898 1983 1,718,165 28.562,641 3,534,698 1983 1067 926.458 7,777,256 70 939 11,236,738 0001 0003 671 1,077 17.370.000(1) 100000 100 000 12.630.000 $83,757,704(2) Total DIrect and Overlappmg Bonded Debt (1) Excludes 1966 Parkmg Authonty Bonds escrowed to malumy (2) Includes certIficates of partICIpation. Excludes tax allocation bonds and non-bonded capItal lease oblIgatIons Ratios to Assessed ValuatIon Direct Debt (30,000,000) Total Debt 51% 142% Share of Authonzed and Unsold Bonds; Metropohtan Water Dlstnct Los Angeles Flood Control DistrIct $533.500 $365.864 State School Butldlug AId To Payable as of 6/30/89 $ 574 Source: California Mumerpal Stalls/les, Inc. 22 . Lease-Purchase Obligations . The CIty has eIght lease-purchase oblIgations outstandIng All currently outstandIng lease- purchase obhgatJons Will be paId wHhm SIX years These short rerm obligations were Incurred for the lease-purchase of the followmg Hems. the City Hall telephone system, an aerial ladder fire truck, two tnple combInatIOn fire trucks. computer equipment and two Kodak Ectapnm machInes. The total pnnclpal amount outstandIng for the lease-purchases IS $939,385 City Finances The follOWing selected finanCIal information proVldes a bnef overvIew of certaIn InformatIOn concemmg the finances of the CIty and IS qualIfied m liS entirety by the most recent audIted combIned finanCIal statements of the CIty. winch are Included as AppendIX A hereto See "APPENDIX A - COMBINED FINANQAL STA1EMENTS." 23 . . CITY OF SANTA MONICA General Fund Summary of Revenues and ExpendItures Fiscal Years Ended June 30 1985 1986 1987 1988 1989 Revenues and Transfers Property Taxes $ 7.49'\,992 $ 7.902,611 $ 8,734.659 $10,169,810 $10,065,614 Other Local Taxes 23.852.780 25,423,021 27,360,929 31,807.809 36,891,458 LIcenses and PermIts 6.897,655 9.567,243 8,526.880 10,556,095 14,537,850 FInes, ForfeItures & PenaltIes 3,875.686 4,517.833 4,467.071 4,897,045 4,390,446 Interest and Rents 3,729.332 4.393,066 6,244,243 5,285.650 4,905,008 Revenues from Other AgenCIes 188.851 158,604 157,481 231,750 110,791 Charges for Current SeIVlces 5,910,501 4.719,241 4.773.682 6,198,038 7.015,282 Other Revenue 418,370 2.112.602 13,285,128(1) 723,782 2.054.627 Transfers from Other Funds 723,531 627,371 505,708 507.087 1,253.624 Subtotal $53,092,698 $59,421,592 S74.055,781 $70.377.066 $81.224.700 ExpendItures and Transfers. Pubhc Safety $15,030,547 $16.360.322 $18.307,452 $19.944.931 $22.785.164 Health, Welfare and RetIrement 5,998,928 6.981.670 7.197.076 6,884.867 6.973.272 Parks, RecreatIOn and Culture 6,085,021 6.547,202 7,470.191 8.654,578 12,093.213 General SeIVlces 7,145.639 6.203,195 7,002.881 8,161,476 8,835.380 General Government 7,684,992 11.068,672(2) 12.090,770(2) 13.336.578(2) 23.518,274(2) MIscellaneous 5,66/j.932 5,516,013 7,642,013 8,693,578 8.220.929 Transfers to Other Funds 256.531 319,612 3,762,433 1,247.391 1.260.994 Subtotal $47,870,590 $52,996,686 $63.472.816 $66.923,399 $83.687.226 Excess (DeficIency) Revenues Over ExpendItures S 5,222.108 $ 6.424,906 SIO,582.965 S 3.453,667 $(2,462,526) EqUIty Fund Transfers From (To) Funds (200) 207,886 2.033.532 Fund Balances and ReselVes $21.168.550 $27,801,342 $40,417,839 $43,871.506 $41,408.980 (1) Includes $12,714,613 from sale of Mall CertIficates of Participation August 1. 1986 (2) Includes Housmg and Commumty Development related expenditures Source.' CIty of Santa MOnica Fmance Department 24 . . . CITY OF SANTA I\WNICA Summary of Selected Euterprise Funds Revenues am] Expenses Fiscal Years Ending June 30 1985 1986 1987 1988 1989 AIrport: Gross Revenues $ 1,301,060 $ 2,311.985 $ 4,208,512 $ 2,684,144 $ 1.246,737 OperatIng and Mamtenance Expense 1,227,051 1,688.297 1,489,604 1,622,315 1,875,101 Deprecl3tIon 40.085 45.196 64,186 99,812 92.658 Transfers (In) Out 555,444 Net Income (Loss) $ 33,924 S 578.492 $ 2,654.722 S 406.573 $ (721,022) CapItal Outlay $ 43,838 $ 413.304 $ 5,258.383 S 4,874.772 $ 612.805 MUnICIpal Bus Lme: Gross Revenue 11,534,651 11.821,892 12,376.197 12,893,101 13,147,827 Operatmg and Mamtenance Expense 11,534.651 11.821,892 12,376,197 12,893.101 13,147.827 DepreCl3tIon 2.148.259 1.929,350 2,968,830 2,979,562 3.255.743 Net Income (Loss) $(2,148,259) $(1.929.350) $(2.968.830) $(2,979,562) $(3.255.743) CapItal Outlay $ 6,659.921 $11,858,768 S 75.870 $(1,684,477) $ 3.545,728 Cemetery: Gross Revenue 564,731 526.735 513,011 407,660 449,180 Operatmg and Mamtenance Expense 416,745 489,671 678,928 518,147 517,810 DepreCIatIon 5,537 6,513 11.903 19,814 24,331 Transfers (In) Out (914,941) (49,274) (385,755) (240.173) (200,630) Net Income (Loss) $ 1.057.390 $ 79,825 $ 207,935 $ 109.872 $ 107,669 CaPItal Outlay $ 78.895 $ 102,520 $ 25,427 S 51,311 $ 213,278 Water: Gross Revenue 7.855,372 8,356,625 8,457.181 8,071,946 7,862,651 Operatmg and Mamtenance Expense 5.905,015 5,843,742 7,361.662 7.277,702 7,103,898 DeprecIatIon 478,212 524,167 530.003 550,599 550,525 Transfers (In) Out Net Income (Loss) $ 1,472,145 $ 1,988,716 S 565,516 $ 243,645 $ 208,228 CapItal Outlay $ 1,330,732 $ 1.142,882 S 1.654.127 $ 944,427 $ 2.303,677 Santa MOnIca PIer: Gross Revenue 1.127,041 1.302.190 2.160.864 2.072,802 4,779.841 Operatmg and Mamtenance Expense 1,476,924 2.340,193 1.923,114 1,593,007 2,135.773 DepreCIatIOn 86,317 95.551 169,644 191,086 214.441 Transfers (In) Out Net Income (Loss) $ (436,200) $(1.133.554) $ 68,106 $ 288,709 $ 2.429,627 CapItal Outlay $ 474,890 $ 1,672,442 $1,097,650 $ 2.736,968 S 3,484,174 Wastewater: Gross Revenue 2.365,325 2.650,683 3,361,882 4,672,064 5,432,581 Operatmg and Mamtenance Expense 994,097 1.389,822 2,049,223 3.781,941 4,125,258 Deprecl3tIon 261,428 414,294 259,937 348,556 366,468 Transfers (In) Out Net Income (Loss) $ 1.109.800 $ 846.567 $ 1,052.722 $ 541,567 $ 940.855 CapItal Outlay $ 1.644,314 $1.009.622 $ 3.826,332 $2,422.507 $ 289,577 Source' CIty of Santa MOnica Fmance Department 25 . . . CITY OF SANTA MONICA ~neral Fund Balance Sheet Fiscal Years Ending June 30 .\ssets 1985 1986 1987 1988 1989 Cash and mvestments $ 19.268,112 $ 23.274.905 S 22.619.304 $ 23.483.222 $ 25,688.632 Receivables (nct, where appltcable, of allowance for uncollectIbles) Accounts 249,033 321,471 317,938 208.432 342.635 Notes 220,000 670,000 500,000 Accrued Interest 51.812 40,237 58,873 85.031 121.527 Property taxes 570.150 399.277 258,392 816,427 352,894 Inventory 469,445 450.047 448,758 612,769 681.381 Due from other governmental umts 332.372 518,142 PrepaId expenses 6.098 2.148 6,973 7,751 Advances to other funds 11,784.928 14,585.814 16.686.343 19,487,627 24,057,505 Restncted assets 61,101 12,288,177 19.330.414 23.939.817 TOTAL ASSETS $ 32.619,578 $ 39.805.000 $ 53.010.157 $ (}4.549.037 $ 75,692,142 Liabilities and Fund Balance LiabilIties Accounts payable and accrued expenses $ 3,440,746 S 3,058.491 $ 2.985,564 $ 4.166,867 $ 4,905,009 Contracts payable (retamed percentage) 166,341 227,757 43,170 121,929 840,262 Deferred revenue 7,843,941 8.704,475 9.546.694 16.325.204 28.422,398 Payable from restncted assets. deposits 12,935 16,890 63,531 115.493 TOTAL LIABILITIES $ 11.451.028 $ 12.003.658 $ 12.592,318 $ 20.677.531 $ ~4,2~~,162 Fund balance: Reserved for: Mall Improvements 10.483.763 10.903,223 4,466,87() Inventory 469,445 450,047 448,758 612,769 681.381 Advances to other funds 3.940,987 5.881,339 8,859,791 11,499,726 15,188.996 Encumbrances (GANNed) :.904,503 879,163 838.503 1.153,327 1,876.203 Capltallmprovernents (GANNed) 3.333,047 3.118,744 3,118.744 3.118.744 948.279 Cash lIqUIdIty (GANNed) 3,546,996 3,546,996 3,546,996 3,546,996 3,546.996 CIVIC area development (GANNed) 283.750 603,643 986.953 1.160.868 Pico neIghborhood (GANNed) 180.000 180,000 180,000 Mall assessment dlstnct (GANNed) 588,066 648,553 Pier re!'.toratlon 2.015,367 Prepaid expen!'.es 6,098 2.148 6,973 7,751 Unreserved (GANNed). 7,967,474 13.459.155 12,337,641 11,274,729 10,867,716 TOTAL FUND BALANCE 21.168.550 27,801,342 40,417,839 ~.3,871.506 41,408,980 TOTAL LIABIUTIES AND FUND BALANCE $ 32.619.578 $ 39.805.000 $ 53.010.157 $ 64,549,037 $ 75.692.142 26 . . TAX EXEMPTION . The opinIon of MorrISon & Foerster. Bond Counsel. based on eXlsung statutes. regulatIOns. rulmgs, and JudIcial decIsIOns. and assummg contmuIng compliance b)' the City with cerram covenants In the documents pertamIng to the Bonds and reqUIrements of the Internal Revenue Code of 1986, as amended regardIng the use. expendlmre, and Investment of Bond proceeds. that Interest on the Bonds IS excluded from gross mcome for federal Income tax purposes and IS exempt from State of CalIforma personal mcome taxes WIll be provided dL rh", ume of ongmal delIvery of the Bonds The Internal Revenue Code of 1986, as amended (the "Code") Imposes vanous restnctlons. condItions and reqUIrements relatmg to the exclUSIOn from gross Income tor federal tax purposes of Interest on oblIgatIOns such as the Bonds. The Cny has covenanted to comply With certam restnctJons deSlgned to assure that Interest on the Bonds WII! not be Included m federal gross mcome FaUure to comply With these covenants may result In ITIterest on the Bonds bemg mduded m federal gross Income retroactIvely to the date of Issuance of the Bonds Bond Counsel has not undertaken to determme (or to mform any person) whether any actIons taken (or not taken) or events occurrIng (or not occurnng) after the date of Issuance of the Bonds may affect the tax status of mterest on the Bonds Bond Counsel's opinIOn Will further state that mterest on the Bonds will not be treated as an Item of tax preference In calculatIng alternatIve mmlmum taxable Income of IndiVIduals and corporatJons; however, mterest on the Bonds WIll be mcluded as an adjustment In the ca1culatJon of a corporatJon's alternatIve mInImum taxable Income and may therefore affect such corporatIOn's alternatIve mmunum tax and en"1ronmental tax lIabilitIes OwnershIp of tax-exempt obligations may result In collatera! mcome tax consequences to certam taxpayers, Indudmg, WIthout lImitatIOn, finanCIal mstltutlOns. property and casualty msurance compames, certaIn foreIgn corporations dOing bUSiness In the Umted Sates, certam S CorporatIOns WIth excess passIve mcome, indiVIdual recipients of SOCIal Secunty or Railroad Retirement benefits and taxpayers that may be deemed to have mcurred or continued Indebtedness to purchase or carry tax-exempt oblIgatIOns Bond Counsel expresses no opInIon regarding such collateral federal Income tax consequences and, accordingly, prospeCtIve purchasers of the Bonds should consult theIr tax adVIsors as to apphcabllIty of any such collateral consequences LEGALITY FOR INVESTMENT The Bonds are legal Investment In Cahforma for all trust funds and for the funds of all Insurance compames, commerCial banks. trust compames and state school funds The Bonds are eligible as secunty for depOSits of publiC moneys In Cahfornla. LEGAL OPINION The legal opinIon of Mormon ::. Foerster, Bond Counsel. approving the validity of the Bonds, substantIally In the form of AppendIX B hereto, WIll be made available to purchasers at the tIme of angtnal dehvery of the Bonds. and a copy thereof WIll be pnnted on each Bond. Certain legal matters WIll be passed upon for the City by Its counsel. ABSENCE OF MATERIAL LITIGATION The City IS not aware of any lItIgatIon whIch IS pendIng or threatened concernIng the vahdlty of the Bonds. Furthermore. the City IS not aware of any lItigatIOn pending or threatened questlOmng the pohtJcal CXIstence of the CIty or contestIng the CIty's ability to adopt the ResolutIOn, execute and delIver the Bonds or to carry out any of the other transactJons contemplated by the Resolution 27 . . RATINGS , . Moody's Investor Semce. Inc and Standard & Poor's CorporatIon have given the Bonds the ratmgs set forth on the cover page hereof Such ratmgs reneet only the vIews of such orgamzatlons and an explanation of the sIgmficance of such ratmgs may be obtaIned from Moody's Investor Semce. Inc. and Standard & Poor's CorporatIon There IS no assurance that such ratmgs \';111 contmue for any gIVen penod of time or that such ratmgs \~11l not be w,1sed downward or WIthdrawn entirely by such orgamzatIons. If m their Judgment CIrWlll,lances so warrant Any such downward reViSion or WIthdrawal of such ratmgs may have an adverse effect on the market pnce of the Bonds. MISCELLANEOUS Insofar as any statements made m tlus OffiCial Statement Involve matters of oplmon or of estImates, whether or not expressly stated, they are set forth as such and not as representations of fact. No representation IS made that any of the statements wIll be realized Neither tlus OffiCial Statement nor any statement wluch may have been made verbally or In wrIting IS to be construed as a contract WIth the owners of the Bonds Dunng the mItial offeflng pefloct for the Bonds, copies of the Resolullon may be obtamed, upon wrItten request, from the City After delIvery of the Bonds, copIes ot the ResolutIon may be obtaIned from the Fiscal Agent The execution and delIvery of thIS OffiCIal Statement have been duly authonzed by the CIty The Cay of Santa Momca By 28