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HomeMy WebLinkAboutItem 2b: Adopt Resolution No. 6848 providing for the issuance of General Obligation Refunding Bonds (Police Station) (2).
STAFF REPORT
Development Services Department
DATE: September 18, 2012
TO: Honorable Mayor and City Council
FROM: Hue Quach, Administrative Services Director `'D �•
By: Jerry Schwartz,- Economic Development Manager jg
SUBJECT: RESOLUTION NO. 6848 OF THE CITY COUNCIL PROVIDING FOR
THE ISSUANCE OF GENERAL OBLIGATION REFUNDING BONDS,
SERIES 2012 (POLICE STATION) IN THE PRINCIPAL AMOUNT NOT
TO EXCEED SEVEN MILLION DOLLARS ($7,000,000)
Recommended Action: Adopt
SUMMARY
On May 16, 2001, the City issued $8,000,000 of 30 -year General Obligation Bonds to
fund a portion of the construction of the Police Station (the remainder was funded with
tax allocation bonds). The true interest cost on the bonds was 5.10 %. During a City
Council Study Session on August 7, 2012, the City Council authorized proceeding with
refunding the outstanding remaining principal bond amount of $6,110,000. The bonds
would be called as of February 1, 2013, with the true interest cost of the refunding
estimated to be 3.02 %. The term of the bonds would not be extended by the refunding.
The resolution and documents included with this report are necessary to effectuate the
refunding.
BACKGROUND
At an election of registered voters of the City held on November 2, 1999, more than two -
thirds (2/3) of the votes cast supported the issuance and sale of $8.0 million principal of
General Obligation bonds to finance the majority of the costs of constructing a new
police station facility at its current location in the Civic Center, south of the City Council
Chambers. The remaining costs were funded through the issuance of redevelopment
tax allocation bonds. The General Obligation bonds were issued on May 16, 2001.
As indicated in the proposition before the voters in 2001, the Police Station includes
facilities for emergency operations, police dispatch, 911 communications, detective
bureau, records, police laboratory, jail facility, evidence storage, and other facilities
necessary for effective law enforcement. The Police Station was dedicated on
Resolution No. 6848
September 18, 2012
Page 2 of 5
October 3, 2003. Regular principal and interest payments have been made on the
bonds for the past 11 years.
Because interest rates are extremely low, staff and its financial advisor, Fieldman,
Rolapp & Associates, presented the possibility of refunding these bonds, lowering the
true interest cost from 5.10% to approximately 3.02% while reducing the assessment to
property owners in Arcadia over the remaining life of the bonds. At the August 7 Study
Session, the City Council authorized staff to proceed with the refunding. Resolution No.
6848 provides for the issuance of not to exceed $7.0 million principal amount to refund
the remaining 2001 General Obligation bonds. Other documents that are part of the
refunding process are also included.
DISCUSSION
The $8.0 million General Obligation bond for construction of the Police Station was
issued on May 16, 2001. The bonds were issued based on the approval of more than
2/3 of the votes cast. The true interest cost of the bonds was 5.10 %. Based on current
interest rates being close to historic lows, it is possible to do a current refunding of the
remaining $6.11 million principal amount of bonds, and generate a present value
savings of almost $1.0 million over the remaining life of the bonds. This can be
accomplished because the true interest cost of the refunded bonds is anticipated to be
approximately 3.02 %. This would be considered a current refunding, with the
outstanding bonds to be called in February 2013.
After receiving authorization from the City Council, staff and the consultant team,
headed by Fieldman Rolapp & Associates, have been working on draft documents in
preparation for a competitive sale of the bonds on October 23, 2012. City staff and
Fieldman Rolapp & Associates held a conference call with a representative of Standard
& Poor's on August 27 to discuss the City's financial status and the specifics of the
refunding in an effort to receive a high rating on the refunding. Standard & Poor's gave
the bonds a rating of AA +, with a stable outlook. The high rating enhances the
attractiveness of the bonds in the marketplace, generally allowing them to be sold at
slightly lower interest rates in comparison to the overall market. The City also received
a AA+ rating when it issued the 2011 General Obligation Bonds for the Santa Anita
Avenue Grade Separation.
Through the preliminary work done on the refunding, it was determined that this
issuance can qualify as a Bank Qualified issue. Per Fieldman Rolapp & Associates'
recommendation, it would be in the best interest of the taxpayers to designate the 2012
G.O. bond refunding as "qualified tax - exempt obligations" (i.e. Bank Qualified) for the
purposes of Section 265 (b)(3) of the Internal Revenue Code of 1986. The 2011 Grade
Separation bonds were also "Bank Qualified ".
It should be noted that designating the 2012 G.O. Bonds as Bank Qualified will most
likely prohibit the City, or any of its related entities, from issuing any additional bonded
Resolution No. 6848
September 18, 2012
Page 3 of 5
indebtedness for the balance of 2012, since the exemption states that the issuer of
Bank Qualified debt cannot issue more than $10.0 million in debt during that calendar
year. With the proposed sale date of these bonds in mid - October, there would not be
enough time to issue additional debt in 2012.
Having the 2012 G.O. Bonds as designated as Bank Qualified will allow them to be
purchased by certain institutions, namely bank trust departments, that otherwise would
not purchase tax - exempt securities. The addition of these buyers should enhance
competition for the City's debt and likely produce lower overall borrowing costs for this
transaction.
Bond Documents
There are several documents in the agenda package related to the G.O. Bond issue for
your consideration and approval:
Attachment 1 — Draft Preliminary Official Statement (POS) for the issuance of
approximately $6.11 million in G.O. Bonds. This document was prepared by the
City's Disclosure Counsel, Best Best & Krieger, and reviewed by staff and the
City's bond counsel, Stradling, Yocca, Carlson & Rauth.
The POS is a document that states the major facts about the City, its current
financial and development history, its management system, the bond issue's
purpose, bid, sale, and awards procedures, the procedure to call the outstanding
bonds from 2001, payments of principal and interest, the term of the bonds (still
paid off in 2031; no extension of the term as part of the refunding), registration,
redemption, transfer and exchange of bonds, creation of funds for the accounting
of the bonds, continuing disclosure requirements, tax exempt opinion, and
Constitution and State provisions affecting this bond issue. It also includes the
Continuing Disclosure language that requires the City to notify bondholders of
any occurrence that might involve some risk to the principal or interest payments.
The POS is the basic source of information to the potential. bond buyer and as
such it is essential that the information be accurate and complete.
Attachment 2 — Escrow Agreement Relating to the Defeasance of the City of
Arcadia Bonds. This is an agreement between the City and Bank of New York
Mellon Trust Company, N.A., which acts as the escrow agent for the 2001 Bonds
and will perform in the same capacity for the 2012 Refunding Bonds. The
escrow agreement spells out the timing and process for calling and paying off the
2001 bonds and the rules governing investment of -iunds and other essential
details.
Attachment 3 — Paying Agency Agreement. This is also an agreement between
the City and Bank of New York Mellon Trust Company, N.A. regarding its role as
the paying agent and transfer agent for the 2012 Refunding Bonds.
Resolution No. 6848
September 18, 2012
Page 4of5
Attachment 4 — Resolution No. 6848. This Resolution approves the 2012 G.O.
Bond refunding. The Resolution includes the essential elements November 2,
1999, vote to issue the bonds to construct the Police Station and the $8.0 million
G.O. Bond issue of 2001 to fund a large portion of the project, and the basic
steps necessary to call the remaining 2001 bonds as a current refunding, and to
issue up to $7.0 million to as part of the 2012 G.O. Bond refunding. There is also
a Supplement to Resolution No. 6848 that sets forth the terms that govern the
G.O. Bond refunding, including how the bonds will be denominated ($5,000), bid,
sold, awarded, executed, authenticated, registered, transferred, exchanged, and
redeemed. It also establishes the investment policy (pursuant to federal and
state law) and tax covenants.
Costs and Benefits of G.O. Bond Refunding
The G.O. Bond refunding will reduce the net interest cost from 5.10% in 2001 to
approximately 3.02 %. This will result in a net present value savings of almost $1
million, which will directly benefit the Arcadia tax payers by lowering the amount of their
assessment for the final 19 years of the bond issue.
There are costs involved in this refunding as there are with any bond issue. These
costs have been factored into the calculation of net present value savings referenced
above. While this would be a current refunding, there is a 1 % premium that will be paid
to bondholders to call the bonds in February 2013 as is planned. There are costs
associated with the experienced team that has been assembled to complete the
refunding. The functions and estimated costs are shown in the table below:
Function
Estimated Cost
Bond Counsel
$37,500
City Attorney
7,500
Disclosure Counsel
25,000
Financial Advisor
45,500
Rating Agency
15,000
Paying Agent
2,500
Underwriters Discount
61,100
Printing/Publication/Disclosure/Contingency
17,000
Total
$211,100
Steps to Complete Refunding
Upon approval of the proposed actions, there are a few very important steps remaining
before the bonds close and the process to call the existing bonds proceeds. The
Preliminary Official Statement will be distributed and made available for downloading on
Resolution No. 6848
September 18, 2012
Page 5 of 5
the Fieldman Rolapp & Associates website. The date of the sale is anticipated to be
October 23, 2012, on a competitive bid basis with all electronic bids to be submitted via
Parity, the electronic bidding system. The bonds will close on or around November 6,
2012, and on February 1, 2013, the 2001 G.O. bonds will be redeemed.
CALIFORNIA ENVIRONMENTAL QUALITY ACT (CEQA)
The issuance of the 2012 G.O. Refunding Bonds is not considered a project under
CEQA Section 15378, and thus is not subject to CEQA pursuant to Section 15060
(c)(3).
FISCAL IMPACT
There is no impact on the City or the General Fund from the 2012 G.O. Bond refunding.
The benefit will accrue to the Arcadia taxpayers from the reduction in annual
assessments over the remaining 19 years of the bond issue, which will be paid off in
2031. In present value, that savings is estimated at nearly $1 million, including the cost
associated with the refunding.
RECOMMENDATION
Adopt Resolution No. 6848 providing for the issuance of General Obligation Refunding
Bonds, Series 2012 (Police Station) in the principal amount not to exceed seven million
dollars ($7,000,000).
Approved:
�cLaz�ret�to�
Cit y Manager
Attachment 1 — Preliminary Official Statement
Attachment 2 — Escrow Agreement Relating to the Defeasance of the City of Arcadia
Bonds
Attachment 3 — Paying Agency Agreement
Attachment 4 — Resolution No. 6848
ATTACHEMENT 1
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PRELIMINARY OFFICIAL STATEMENT DATED SEPTEMBER _, 2012 .
NEW ISSUE — BOOK -ENTRY ONLY
RATINGS:
S &P: "AA +"
(See "RATINGS" herein)
In the opinion of Stradling Yocca Carlson & Rauth, a Professional Corporation, Newport Beach, California, Bond
Counsel, under existing laws, regulations, rulings and judicial decisions, and assuming certain representations and
compliance with certain covenants and requirements described herein, interest (and original issue discount) on the
Bonds is excluded from gross income for federal income tax purposes and is not an item of tax preference for
purposes of calculating the federal alternative minimum tax imposed on individuals and corporations. In the further
opinion of Bond Counsel, interest (and original issue discount) on the Bonds is exempt from State of California
personal income taxes. The difference between the issue price of a Bond (the first price at which a substantial
amount of the Bonds of a maturity is to be sold to the public) and the stated redemption price at maturity with respect
to the Bond constitutes original issue discount. See "LEGAL MATTERS" herein.
$6,110,000"
CITY OF ARCADIA
General Obligation Refunding Bonds,
Series 2012 (Police Station Project)
(Bank Qualified)
Dated: Date of Delivery
Due: August I as shown below
The general obligation bonds captioned above (the `Bonds ") are being issued by the City of Arcadia (the "City")
under the provisions of Chapter 4 (commencing with Section 43600) of Division 4 of Title 4 and Articles 9 and 11,
Chapter 3, Part 1 of Division 2 of the California Government Code, pursuant to Resolution No. 6848 and Supplement
to Resolution No. 6848, each adopted by the City Council of the City on September 18, 2012 (as supplemented, the
"Resolution "). The City has appointed The Bank of New York Mellon Trust Company, N.A. (the "Paying Agent ")
to act as paying agent for the Bonds.
The proceeds of the Bonds will be used to refund the City's Series A of 2001 General Obligation Bonds of the City
of Arcadia (Police Station Project) (the "Prior Bonds ") and to pay costs relating to the issuance of the Bonds and the
refunding of the Prior Bonds. Proceeds of the Prior Bonds were used to finance the construction and completion of a
police station in the Arcadia Civic Center and related facilities. See "PLAN OF REFUNDING."
The Bonds are general obligations of the City, payable solely from ad valorem property taxes levied on behalf of the
City and collected by Los Angeles County (the "County"). The City Council is empowered to direct the County, and
the County is obligated to levy ad valorem taxes for the payment of principal of and interest on the Bonds upon all
property subject to taxation by the City, without limitation of rate or amount (except certain personal property which
is taxable at limited rates). See "SECURITY FOR THE BONDS" herein.
The Bonds will be issued in book -entry form only, and will be initially issued and registered in the name of Cede &
Co. as nominee of The Depository Trust Company, New York, New York ( "DTC "). The Bonds are issuable as fully
registered securities in denominations of $5,000 or any integral multiple of $5,000. Purchasers of the Bonds (the
"Beneficial Owners ") will not receive physical certificates representing their interest in the Bonds. See "THE
BONDS" herein and "APPENDIX F —DTC AND THE BOOK -ENTRY ONLY SYSTEM."
Interest nn the Bonds accrues from the date of delivery and is payable semiannually on February ! and August I of
each year, commencing February 1, 2013. Payments of principal of and interest on the Bonds will be paid by the
Paying Agent, to DTC for subsequent disbursement to DTC Participants, which will remit such payments to the
Beneficial Owners of the Bonds. See "THE BONDS — Description of the Bonds" herein.
The Bonds are subject to redemption prior to maturity. See "THE BONDS— Redemption" herein.
* Preliminary, Subject to change.
$6,110,000'
CITY OF ARCADIA
General Obligation Bonds,
Series 2012 (Police Station Project
(Bank Qualified)
MATURITY SCHEDULE"
$ Serial Bonds
CUSIPt Prefix
Maturity Principal Interest
Au ust 1 Amount Rate
Yield
$ – % Term Bonds maturing August 1, 20_; Yield:
$ – % Term Bonds maturing August 1, 20_; Yield:
CUSIP*
Suffix
%— CUSIPI:
%— CUSIP *:
This cover page contains information for general reference only. It is not a summary of this issue. Potential
purchasers of the Bonds are advised to read the entire Official Statement to obtain information essential to making an
informed investment decision.
The Bonds were sold at competitive bid on , 2012 at a true interest cost of % in accordance with
the provisions of the Notice Inviting Proposals for Purchase of Bonds, dated ' 2012. The Bonds
will be offered when, as and if issued and received by the Underwriter subject to the approval of legality by Stradling
Yocca Carlson & Rauth, a Professional Corporation, Newport Beach, California, Bond Counsel. Certain disclosure
matters will be passed upon for the City by Best Best & Krieger LLP, Riverside, California, Disclosure Counsel.
Certain matters will be passed upon for the City by Best Best & Krieger LLP, the City Attorney. It is expected that
the Bonds, in book -entry form, will be available for delivery on or about November _, 2012.
Dated:
2012
Preliminary, subject to change.
Copyright 2011, American Bankers Association. CUSIP® is a registered trademark of the American Bankers Association. CUSIP data
herein is provided by the CUSIP Service Bureau, operated by Standard & Poor's, a division of The McGraw -Hill Companies, Inc. This
data is not intended to create a database and does not serve in any way as a substitute for the CUSIP Services Bureau. CUSIP numbers
have been assigned by an independent company not affiliated with the City and are included solely for the convenience of the holders of
the Bonds. The City is not responsible for the selection or uses of these CUSIP nufnbers, and no representation is made as to their
correctness on the Bonds or as included herein, The CUSIP number for a specific maturity is subject to being changed after the issuance
of the Bonds as a result of various subsequent actions including, but not limited to, a refunding in whole or in part or as a result of the
procurement of secondary market portfolio insurance or other similar enhancement by investors that is applicable to all or a portion of
certain maturities of the Bonds.
GENERAL INFORMATION ABOUT THIS OFFICIAL STATEMENT
Use of Official Statement. This Official Statement is submitted in connection with the sale of the Bonds
referred to herein and may not be reproduced or used, in whole or in part, for any other purpose. This Official
Statement is not a contract between any bond owner and the City or the Underwriter. This Official Statement
and the information contained herein are subject to completion or amendment without notice.
No Offering Except by This Official Statement. No dealer, broker, salesperson or other person has been
authorized by the City or the Underwriter to give any information or to make any representations other than
those contained in this Official Statement and, if given or made, such other information or representation must
not be relied upon as having been authorized by the City or the Underwriter.
No Unlawful Offers or Solicitations. This Official Statement does not constitute an offer to sell or the
solicitation of an offer to buy nor may there be any sale of the Bonds by a person in any jurisdiction in which it
is unlawful for such person to make such an offer, solicitation or sale.
Estimates and Projections. When used in this Official Statement and in any continuing disclosure by
the City, in any press release and in any oral statement made with the approval of an authorized officer of the
City, the words or phrases "will likely result," "are expected to," "will continue," "is anticipated," "estimate,"
"project," "forecast," "expect," "intend" and similar expressions identify "forward looking statements" within
the meaning of the Private Securities Litigation Reform Act of 1995. Such statements are subject to risks and
uncertainties that could cause actual results to differ materially from those contemplated in such forward -
looking statements. Any forecast is subject to such uncertainties. Inevitably, some assumptions used to develop
the forecasts will not be realized and unanticipated events and circumstances may occur. Therefore, there are
likely to be differences between forecasts and actual results, and those differences may be material.
Information in Official Statement. The information set forth in this Official Statement has been
furnished by the City and other sources which are believed to be reliable, but it is not guaranteed as to accuracy
or completeness by the City.
The City maintains a website. Unless specifically indicated otherwise, the information presented on
such website is not incorporated by reference as part of this Official Statement and should not be relied upon in
making investment decisions with respect to the Bonds.
Document Summaries. All summaries of the Resolution or other documents referred to in this Official
Statement are made subject to the provisions of such documents and qualified in their entirety by reference to
such documents, and do not purport to be complete statements of any or all of such provisions.
No Securities Laws Registration. The Bonds have not been registered under the Securities Act of 1933,
as amended, or the Securities Exchange Act of 1934, as amended, in reliance upon exceptions therein for the
issuance and sale of municipal securities. The Bonds have not been registered or qualified under the securities
laws of any state.
Effective Date. This Official Statement speaks only as of its date, and the information and expressions
of opinion contained in this Official Statement are subject to change without notice. Neither the delivery of this
Official Statement nor any sale of the Bonds will, under any circumstances, give rise to any implication that
there has been no change in the affairs of the City, or the other parties described in this Official Statement, or the
condition of the property within the City since the date of this Official Statement.
CITY OF ARCADIA
(Los Angeles County, California)
240 West Huntington Drive
Arcadia, California 91066
CITY COUNCIL MEMBERS
Robert C. Harbicht, Mayor
Mickey Segal, Mayor Pro Tem
Peter Amundson, Council Member
Gary A. Kovacic Council Member
John Wuo, Council Member
CITY CLERK
Gene Glasco
CITY STAFF
Dominic Lazzaretto, City Manager
Jason Kruckeberg, Assistant City Manager /Development Services Director
Hue Quach, Administrative Services Director
P. Shannon Huang, Financial Services Manager /City Treasurer
Jerry Schwartz, Economic Development Manager
SPECIAL SERVICES
Bond Counsel
Stradling Yocca Carlson & Rauth
a Professional Corporation
Newport Beach, California
Disclosure Counsel
Best Best & Krieger LLP
Riverside, California
Financial Advisor
Fieldman, Rolapp & Associates
Irvine, California
Paying Agent, Escrow Agent and Dissemination Agent
The Bank of New York Mellon Trust Company, N.A.
Global Corporate Trust
Los Angeles, California
Verification Agent
Grant Thornton
Minneapolis, Minnesota
TABLE OF CONTENTS
Page
INTRODUCTION................................................................................................................................... ............................... 1
PLANOF FINANCE ............................................................................................................................... ....I.......................... 2
Refundingof Prior Bonds ................................................................................................................ ............................... 2
Sourcesand Uses of Funds .............................................................................................................. ............................... 3
THEBONDS ........................................................................................................................................... ............................... 3
Authorityfor Issuance ..................................................................................................................... ............................... 3
Descriptionof the Bonds ................................................................................................................. ............................... 3
Redemption..................................................................................................................................... ............................... 4
Selectionof Bonds for Redemption ................................................................................................. ............................... 5
Noticeof Redemption ...................................................................................................................... ............................... 5
Effectof Redemption ...................................................................................................................... ...............................
6
Registration, Transfer and Exchange of Bonds ............................................................................... ...............................
6
DebtService .................................................................................................................................... ...............................
6
Creationand Establishment of Funds .............................................................................................. ...............................
6
TaxCovenants ................................................................................................................................. ...............................
8
Amendmentto Resolution ............................................................................................................... ............................... 9
Defeasance....................................................................................................................................... ............................... 9
DEBTSERVICE SCHEDULE .............................................................................................................. ...............................
10
SECURITYFOR THE BONDS ............................................................................................................ ...............................
I 1
AdValorem Taxes ......................................................................................................................... ...............................
I 1
LimitedObligation ........................................................................................................................ ...............................
12
PROPERTYTAXATION ...................................................................................................................... ...............................
12
PropertyTax Collection Procedures .............................................................................................. ...............................
12
Taxation of State- Assessed Utility Property .................................................................................. ...............................
12
AssessedValuation ........................................................................................................................ ...............................
13
TaxRates ....................................................................................................................................... ...............................
15
Tax Levies and Delinquencies on Outstanding City General Obligation Bonds ........................... ...............................
16
MajorTaxpayers ............................................................................................................................ ...............................
16
Directand Overlapping Debt ......................................................................................................... ...............................
17
CONSTITUTIONAL AND STATUTORY PROVISIONS AFFECTING CITY REVENUES AND
APPROPRIATIONS................................................................................................................ ...............................
18
Article XIIIA of the State Constitution ......................................................................................... ...............................
19
Legislation Implementing Article XIIIA ....................................................................................... ...............................
19
Article XIIIB of the State Constitution .......................................................................................... ...............................
19
Articles XIIIC and XIIID of the State Constitution ....................................................................... ...............................
20
Proposition62 ................................................................................................................................ ...............................
21
Proposition1A ................................................................................................................................. .............................21
PossibleFuture Initiatives ............................................................................................................. ...............................
22
LEGALMATTERS ............................................................................................................................... ...............................
22
Approvalof Legal Proceedings ..............................................................................................:...... ...............................
22
Absenceof Material Litigation ...................................................................................................... ...............................
22
TaxMatters .................................................................................................................................... ...............................
22
BANKQUALIFIED .............................................................................................................................. ...............................
24
CONTINUINGDISCLOSURE ............................................................................................................... .............................24
RATINGS.............................................................................................................................................. ...............................
24
FINANCIALADVISOR ....................................................................................................................... ...............................
24
UNDERWRITING................................................................................................................................. ...............................
25
VERIFICATION.................................................................................................................................... ...............................
25
EXECUTION......................................................................................................................................... ...............................
25
APPENDIX A — GENERAL DEMOGRAPHIC AND ECONOMIC INFORMATION REGARDING
THE CITY OF ARCADIA AND LOS ANGELES COUNTY ................................................................ ............................A -1
APPENDIX B — CITY OF ARCADIA COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR
THE YEAR ENDED JUNE 30, 2011 ................................................................................................... ............................... B -1
APPENDIX C — PROPOSED FORM OF OPINION OF BOND COUNSEL ...................................... ............................... C -1
APPENDIX D — FORM OF CONTINUING DISCLOSURE CERTIFICATE .................................... ............................... D -1
APPENDIX E — DTC AND THE BOOK -ENTRY ONLY SYSTEM .................................................. ............................... E -1
CITY OF ARCADIA LOCATION MAP
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$6,110,000`
CITY OF ARCADIA
General Obligation Refunding Bonds,
Series 2012 (Police Station Project)
(Bank Qualified)
The purpose of this Official Statement, which includes the cover page and attached appendices, is to set
forth certain information concerning the sale and delivery of the bonds captioned above (the "Bonds ") by the
City of Arcadia (the "City"). All capitalized terms used in this Official Statement, unless noted otherwise, have
the meanings set forth in the Resolution (as defined below).
INTRODUCTION
This Introduction is not a summary of this Official Statement. It is only a brief description of and guide
to, and is qualified by, more complete and detailed information contained in the entire Official Statement and
the documents summarized or described herein. A full review should be made of the entire Official Statement.
The offering of Bonds to potential investors is made only by means of the entire Official Statement.
The City. The City is located in Los Angeles County (the "County "), about 20 miles northeast of Los
Angeles. The City is a chartered city incorporated in 1903 with a Council - Manager form of government made
up of five City Council Members elected to four -year overlapping terms. The City encompasses an area of
approximately 11.2 square miles and has a population of 56,546 as of January 1, 2012. The City provides police
protection, fire protection, animal control, emergency medical aid, building safety regulation and inspection,
street lighting, water and sewer service, refuse collection, land use planning, and zoning, maintenance and
improvement of street and related structures, traffic safety maintenance and improvement and recreational and
cultural programs for citizen participation.
See APPENDIX A— GENERAL DEMOGRAPHIC AND ECONOMIC INFORMATION
REGARDING THE CITY OF ARCADIA AND LOS ANGELES COUNTY and APPENDIX B— CITY OF
ARCADIA COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED JUNE 30, 2011,
for certain demographic, statistical and financial information regarding the City.
Authority for Issuance. The Bonds are being issued under the provisions of Chapter 4 (commencing
with Section 43600) of Division 4 of Title 4 and Articles 9 and 11, Chapter 3, Part 1 of Division 2 of the
California Government Code (the "Law" and the "Bond Law ", respectively) and Resolution No. 6848 and
Supplement to Resolution No. 6848, dated as of November 1, 2012, each adopted by the City Council of the
City (the "City Council ") on September 18, 2012 (as supplemented, the "Resolution "). See "THE BONDS —
Authority for Issuance." The City has appointed The Bank of New York Mellon Trust Company, N.A. (the
"Paying Agent ") to act as paying agent for the Bonds.
Purpose for Issuance. The proceeds of the Bonds will be used to refund the City's Series A of 2001
General Obligation Bonds of the City of Arcadia (Police Station Project) (the "Prior Bonds ") and to pay costs
relating to the issuance of the Bonds and refunding of the Prior Bonds. Pursuant to the provisions of the Law, as
amended, the Prior Bonds were authorized at an election of the registered voters of the City held on November
2, 1999, at which more than two- thirds of the persons voting on the proposition voted to authorize the issuance
and sale of not to exceed $8,000,000 principal amount of general obligation bonds to finance the construction
and completion of a police station in the Arcadia Civic Center, including facilities for emergency operations,
police dispatch and 911 emergency communications, detective bureau, records, police laboratory, jail facility,
evidence storage and other related words, property or structures (the "Project "). See "PLAN OF FINANCE —
Refunding of Prior Bonds."
Preliminary, subject to change.
Security and Sources of Payment for the Bonds. The Bonds are general obligations of the City payable
solely from ad valorem property taxes levied and collected by the County. The City Council is empowered to
direct the County and the County is obligated to annually levy ad valorem taxes for the payment of the Bonds
and the interest thereon upon all property within the City subject to taxation by the City, without limitation of
rate or amount (except with respect to certain personal property which is taxable at limited rates). See
"SECURITY FOR THE BONDS."
Payment and Registration of the Bonds. The Bonds will be dated their date of original issuance and
delivery (the "Dated Date ") and will be issued as fully registered bonds, without coupons, in the denominations
of $5,000 or any integral multiple of $5,000, registered in the name of Cede & Co. as nominee of The
Depository Trust Company, New York, New York ( "DTC "), and will be available under the book -entry system
maintained by DTC, only through brokers and dealers who are or act through DTC Participants as described
below. Beneficial Owners will not be entitled to receive physical delivery of the Bonds. See "THE BONDS"
and APPENDIX E—DTC AND THE BOOK -ENTRY ONLY SYSTEM.
Interest on the Bonds accrues from the Dated Date and is payable semiannually on February 1 and
August 1 of each year, commencing February 1, 2013. See "THE BONDS— Description of the Bonds."
Early Redemption. The Bonds are subject to optional and mandatory sinking fund redemption prior to
their maturity as described in "THE BONDS — Redemption."
Other Information. This Official Statement speaks only as of its date, and the information contained
herein is subject to change. Copies of documents referred to in this Official Statement and information
concerning the Bonds are available from the City of Arcadia City Clerk, 240 West Huntington Drive, Arcadia,
California 91066, (626) 574 -5400. The City may impose a charge for copying, mailing and handling.
PLAN OF FINANCE
Refunding of Prior Bonds
Pursuant to the Law, as amended, the Prior Bonds were authorized at an election of the registered voters
of the City held on November 2, 1999, at which more than two- thirds of the persons voting on the proposition
voted to authorize the issuance and sale of not to exceed $8,000,000 principal amount of general obligation
bonds to finance the construction and completion of the Project. The Prior Bonds were issued in the principal
amount of $8,000,000 pursuant to provisions of the Law, Resolution No. 6218 adopted by the City Council on
April 3, 2001, and that certain Supplement to Resolution No. 6218 dated as of June 1, 2001. All of the proceeds
of the Prior Bonds were spent on the Project.
A portion of the proceeds of the Bonds will be deposited with the Bank of New York Mellon Trust
Company, N.A., as escrow agent (the "Escrow Agent ") under an Escrow Agreement, dated as of November 1,
2012 ( "the Escrow Agreement ") by and between the City and the Escrow Agent. The amount deposited under
the Escrow Agreement will be held by the Escrow Agent and will be in an amount sufficient, together with
investment earnings thereon, to pay the principal, redemption premium (if any) and interest on the Prior Bonds
to the redemption date of February 1, 2013. Upon such deposit, all obligations of the City with respect to the
Prior Bonds will cease, except for the City's obligation to pay the principal redemption premium, if any, and
interest on the Prior Bonds from such funds deposited with the Escrow Agent.
Upon delivery of the Bonds, Grant Thornton, Minneapolis, Minnesota, acting as verification agent, will
deliver a report verifying the mathematical accuracy of certain computations conceming (i) the adequacy of the
maturing principal of and interest earned on the Defeasance Obligations, together with the cash to be
concurrently deposited under the Escrow Agreement, to pay all of the principal and interest due with respect to
the Refunded Bonds and to defease and prepay all the outstanding Prior Bonds in full on February 1, 2013, and
(ii) the yield on the Defeasance Obligations and the Bonds considered by Bond Counsel in its determination that
interest on the Bonds is excluded from gross income for federal income tax purposes.
Sources and Uses of Funds
The estimated sources and uses of funds with respect to the Bonds will be applied as follows:
Sources of Funds
Principal Amount of Bonds $
Plus net original offering Premium _
Total Sources $
Uses of Funds
Deposit to Escrow Fund $
Deposit for Costs of Issuance
Underwriter's Discount _
Total Uses $
(1) Includes Bond Counsel and Disclosure Counsel fees, financial advisor fees, rating fees, printing expenses and other
costs of issuance with respect to the Bonds.
THE BONDS
Authority for Issuance
The Bonds are issued under the provisions of the Bond Law and the Resolution. The Bond Law
authorizes the City to issue general obligation bonds to refund all or a portion of outstanding bonds previously
issued by the City if the total net interest cost to maturity on the refunding bonds plus the principal amount of
the refunding bonds does not exceed the total net interest cost to maturity of the outstanding bonds plus the
principal amount of the outstanding bonds to be refunded.
Description of the Bonds
Paying Agent. The Bank of New York Mellon Trust Company, N.A., located in Los Angeles,
California, will act as the registrar, transfer agent, and paying agent for the Bonds (the "Paying Agent ").
Book -Entry Form. The Bonds will be issued in book -entry form only, and will be initially issued and
registered in the name of Cede & Co. as nominee of The Depository Trust Company, New York, New York
( "DTC "). Purchasers of the Bonds (the `Beneficial Owners ") will not receive physical certificates representing
their interest in the Bonds. Payments of principal of and interest on the Bonds will be paid by the Paying Agent
to DTC for subsequent disbursement to DTC Participants which will remit such payments to the Beneficial
Owners of the Bonds.
As long as DTC's book -entry method is used for the Bonds, the Paying Agent will send any notice of
prepayment or other notices to owners only to DTC. Any failure of DTC to advise any DTC Participant, or of
any DTC Participant to notify any Beneficial Owner, of any such notice and its content or effect will not affect
the validity or sufficiency of the proceedings relating to the prepayment of the Bonds called for prepayment or
of any other action premised on sv h notice.
The Paying Agent, the City, and the Underwriter of the Bonds have no responsibility or liability for any
aspects of the records relating to or payments made on account of beneficial ownership, or for maintaining,
supervising or reviewing any records relating to beneficial ownership, of interests in the Bonds.
In the event that either (i) DTC determines not to continue to act as securities depository for the Bonds,
or (ii) the City determines to terminate DTC as a securities depository for the Bonds, then the City will
3
discontinue the book entry system with DTC. If the City fails to identify another securities depository to replace
DTC, then the Bonds shall no longer be required to be registered in the registration books maintained by the
Paying Agent in the name of DTC, but shall be registered in whatever name or names the owners transferring or
exchanging Bonds shall designate, in accordance with the provisions of the Resolution.
See APPENDIX E —DTC AND THE BOOK -ENTRY ONLY SYSTEM.
Payment of Principal and Interest. The Bonds will be dated their Dated Date, will bear interest from
their Dated Date, payable semiannually on February 1 and August 1 (each, and "Interest Payment Date "),
commencing February 1, 2013, and will mature on August 1 in each of the designated years and in the principal
amounts shown on the cover of this Official Statement. Interest will be calculated on the basis of a 360 -day year
composed of twelve 30 -day months.
Each Bond shall bear interest from the Interest Payment Date next preceding the date of authentication
with respect to which interest has been paid or provided for (unless (i) the date of authentication is prior to the
first Regular Record Date, in which event from the Dated Date, (ii) the date of authentication is after a Regular
Record Date and before the following Interest Payment Date, in which event it shall bear interest from such
Interest Payment Date, or (iii) it is authenticated as of an Interest Payment Date, in which event it shall bear
interest from such date) until the principal thereof shall have been paid.
The Bonds will be in fully registered form, without coupons, in the denominations of $5,000 or any
integral multiple thereof, provided that no Bond will have principal maturing on more than one principal
maturity date.
Interest on each Bond shall be paid by the Paying Agent by check mailed by first class mail, postage
prepaid, on the Interest Payment Date to the owner as his or her name and address appear on the register kept by
the Paying Agent at the close of business on the applicable Record Date. At the request of any owner of at least
$1,000,000 in aggregate principal amount of Bonds, interest on the Bonds will be paid by wire transfer in
immediately available funds if such request is made at least fifteen days before the Record Date for such
payment, any such designation to remain in effect until withdrawn. Principal of the Bonds is payable in lawful
money of the United States of America at the principal office of the Paying Agent in Los Angeles, California.
Denominations and Maturity. The Bonds will be issued in the denomination of $5,000 each or any
integral multiple of $5,000. The Bonds mature August 1 in the years and in the amounts set forth on the cover
page of this Official Statement. See the maturity schedule on the cover page hereof and "DEBT SERVICE
SCHEDULE" below.
Redemption"
Optional Redemption. Bonds maturing on or after August 1, 20 —, are subject, at the option of the City,
to redemption prior to their stated maturities in whole or in part on any date commencing August 1, 20_,
selected among maturities, if in part, as nearly as practicable on a pro -rata basis, and by lot within a maturity, at
the following redemption prices, expressed as a percentage of the principal amount thereof, together with
accrued interest to the date fixed for redemption, without premium.
Mandatory Sinking Fund Redemption. The Bonds maturing on August 1, 20 —, and August 1, 20_ are
subject to mandatory sinking fund redemption, in part by lot, prior to their stated maturity, on each August 1 on
and after August 1, 20 —, and August 1, 20_, respectively, at a redemption price equal to 100% of the principal
amount thereof called for redemption, without premium, plus accrued interest thereon to the date of redemption
in the aggregate respective principal amounts set forth in the following table:
Preliminary, subject to change.
4
Term Bond Maturing August 1, 20_
Redemption Date Principal Amount of
Au ust 1 Bonds to be Redeemed
Term Bond Maturity August 1, 20_
Redemption Date Principal Amount of
Au ust 1 Bonds to be Redeemed
Selection of Bonds for Redemption
If less than all of the Bonds outstanding are to be redeemed, the portion of any Bond of a denomination
of more than $5,000 to be redeemed shall be in the principal amount of $5,000 or an integral multiple thereof,
and, in selecting portions of such Bond for redemption, the Paying Agent shall treat each such Bond as
representing that number of Bonds of $5,000 denominations which is obtained by dividing the principal amount
of such Bond to be redeemed in part by $5,000. The Paying Agent shall promptly notify the City in writing of
the Bonds, or portions thereof, selected for redemption.
Notice of Redemption
The Paying Agent shall provide written notice to Bond Owners of all Bonds to be redeemed by first
class mail within sixty (60) days, but in no event later than thirty (30) days prior to the date of such redemption.
The date on which the Bonds which are called for redemption are to be presented for redemption shall be
referred to as the "redemption date ". The notice of redemption shall (a) state the redemption date; (b) state the
redemption price; (c) state the dates of maturity of the Bonds and, if less than all of any such maturity is called
for redemption the distinctive numbers of the Bonds of such maturity to be redeemed, and in the case of Bonds
redeemed in part only, the respective portions of the principal amount thereof, to be redeemed; (d) state the
CUSIP number, if any, of each Bond to be redeemed; (e) give notice that further interest on such Bonds will not
accrue after the designated redemption date; and (f) any other descriptive information regarding the Bonds
needed to identify accurately the Bonds being redeemed. The actual receipt by the Owner of notice of such
redemption shall not be a condition precedent to redemption, and failure to receive such notice shall not affect
the validity of the proceedings for the redemption of such Bonds or the cessation of interest on the date fixed for
redemption.
At least 25 days before the redemption date, notice shall also be given to DTC and in accordance with
then current guidelines of the Securities and Exchange Commission, to any other firm or service regularly
providing information with respect to the redemption of Bonds designated to the Paying Agent by the City.
With respect to the optional redemption of Bonds, at the direction of the City filed with the Paying
Agent, the notice of such redemption shall state that such redemption is conditioned upon the receipt by the
Paying Agent on or before the date fixed for such redemption of sufficient funds for such purpose from any
issue of refunding bonds. In the event that sufficient funds shall not have been deposited with the raying Agent
on or before the date fixed for redemption, the Paying Agent shall promptly notify the Owners of the Bonds by
telephone, facsimile transmission or other form of telecommunications, promptly confirmed in writing; and
thereupon such redemption and the notice thereof shall be deemed to be canceled and rescinded.
Effect of Redemption
When notice of redemption has been given, and when the amount necessary for the redemption of the
Bonds called for redemption (principal and premium, if any) is set aside for that purpose in the Debt Service
Fund created under the Resolution, the Bonds designated for redemption shall become due and payable on the
date fixed for redemption thereof, and upon presentation and surrender of said Bonds at the place specified in
the notice of redemption, such Bonds shall be redeemed and paid at said redemption price out of said Debt
Service Fund, and no interest will accrue on such Bonds called for redemption after the redemption date
specified in such notice and the owners of the Bonds so called for redemption after such redemption date shall
look only to the funds held for such purpose in the Debt Service Fund (or held for such specific purpose in the
Bond Fund held by the Paying Agent). All Bonds redeemed shall be cancelled forthwith by the Paying Agent
and shall not be reissued. The City shall establish a separate account in the Debt Service Fund to hold funds
available for payment of called bonds after the redemption date.
Registration, Transfer and Exchange of Bonds
The Paying Agent shall keep or cause to be kept sufficient books for the registration and transfer of the
Bonds (the "Bond Register"), which shall at all times be open to inspection by the City upon reasonable notice;
and, upon presentation for such purpose, the Paying Agent shall, under such reasonable regulations as it may
prescribe, register or transfer or cause to be registered or transferred, on said books, the Bonds.
In the event that the book entry system as described above is no longer used with respect to the Bonds,
the following provisions will govern the registration, transfer, and exchange of the Bonds.
Any Bond may, in accordance with its terms, be transferred, upon the registration books required to be
kept by the Paying Agent, by the person in whose name it is registered, in person or by his duly authorized
attorney, upon surrender of such fully registered Bond for cancellation, accompanied by delivery of a written
instrument of transfer in a form approved by the Paying Agent, duly executed.
Whenever any Bond or Bonds shall be surrendered for transfer, the Paying Agent shall authenticate and
deliver a new Bond or Bonds of the same series and maturity, for the like aggregate principal amount of Bond or
Bonds surrendered.
Bonds may be exchanged at the principal corporate trust office of the Paying Agent in Los Angeles,
California, for a like aggregate principal amount of Bonds of other authorized denominations of the same series
and maturity.
The person, firm or corporation requesting the transfer or exchange shall pay any costs or charges in
connection with the transfer or exchange as are established by the Paying Agent, in addition to paying any tax or
governmental charge that may be imposed in connection with the transfer or exchange. The Paying Agent shall
not be required, however, to register a transfer or make an exchange of any Bond (i) during the 15 days before
the selection of Bonds for redemption, or (ii) if such Bond has been called for redemption in whole or in part.
Debt Service
Pursuant to the Resolution, the Administrative Services Director will transfer available monies from the
Debt Service Fund (as defined herein) to the Paying Agent in amounts sufficient and at such time as are
necessary to promptly pay principal and interest on the Bonds as such shall become due.
Creation and Establishment of Funds
Costs of Issuance Fund. A portion of the proceeds of the sale of the Bonds shall be transferred to the
Paying Agent for deposit into the Costs of Issuance Fund and used to pay Costs of Issuance.
6
Escrow Fund. The remaining proceeds of the sale of the Bonds shall be forthwith transferred to the
Escrow Agent for deposit in the Escrow Fund under the Escrow Agreement and used to redeem the Prior Bonds
on February 1, 2013.
Debt Service Fund. All moneys derived from such taxes and all other moneys allocated and designated
for payment of said Bonds and the interest thereon shall be placed in a fund of the City and designated "City of
Arcadia (Series 2012 General Obligation Refunding Bonds (Police Station Project)) Debt Service Fund" (the
"Debt Service Fund ") (and accounts therein to the extent created pursuant to the Resolution), shall be kept
separate and apart from all other funds of the City (and are irrevocably pledged for the payment of the Bonds in
accordance with the purpose and intent of the Resolution), and until all of said Bonds and all interest thereon
have been fully paid (or defeased) the moneys in said fund shall be used for no other purpose than the payment
of said Bonds and the interest thereon; provided, however, that when all of the principal and interest on all of the
Bonds have been paid, any balance of money then remaining in said funds shall be transferred to the general
fund of the City. Interest earned on the investment of monies in the Debt Service Fund shall be retained in the
Debt Service Fund and used by the City to pay principal and interest on the Bonds when due.
Bond Fund. The City shall transfer available monies from the Debt Service Fund to the Paying Agent in
amounts sufficient and at such time as are necessary to promptly pay principal (including mandatory sinking
fund payments), interest and redemption premium, if any, on the Bonds as such shall become due; and the
Paying Agent shall establish a fund designated the "City of Arcadia (Series 2012 General Obligation Refunding
Bonds (Police Station Project)) Bond Fund" (the "Bond Fund ") for such purpose and shall make payments to the
Bond Owners of principal (including mandatory sinking fund payments), interest and redemption premium, if
any, on the Bonds as such shall become due; provided that, in the event of any deficiencies, moneys on deposit
in the Bond Fund shall be applied first to the payment of interest and then to the payment of principal and, in all
such cases, ratably and without preference among all maturities.
Rebate Fund. The City shall calculate rebatable arbitrage for the Bonds and shall pay required amounts
to the United States Government pursuant to the Internal Revenue Code of 1986, as amended (the "Code ").
Investment of Funds. Moneys in the Debt Service Fund and in the Bond Fund shall be invested only in
Authorized Investments which will by their terns mature, or in the case of an Investment Agreement are
available for withdrawal without penalty, on such dates so as to ensure the payment of principal of, premium, if
any, and interest on the Bonds as the same becomes due.
The City and the Paying Agent, at the direction of the City, shall sell at the best price obtainable, or
present for redemption, any obligations so purchased whenever it may be necessary to do so in order to provide
moneys to meet any payment of transfer to such funds and accounts or from such funds and accounts. For the
purpose of determining at any given time the balance in any such funds, any such investments constituting a part
of such funds and accounts shall be valued at their market value.
Pursuant to the Resolution, Authorized Investments means any investments permitted by law to be made
with any moneys belonging to or in custody of the City and by any policy guidelines adopted by the City.
Currently, the City is authorized by the Resolution to invest in the following (subject to any limitations in the
City's Investment Policy (as amended from time to time, the "Investment Policy "), as it may exist from time to
time):
1. Generally approved qualifying investment instruments:
a. Obligations of the U.S. Government, its agencies, and instrumentalities.
b. Certificates of deposit with banks and savings and loans doing business in the State of
California.
C. Prime Banker's Acceptances.
VA
d. Prime Commercial Paper.
e. Repurchase Agreements and Money Market Funds whose underlying collateral consists
of the foregoing.
f. Los Angeles County's Investment Pool for local agencies, which includes the purchase
of Reverse Repurchase Agreements.
g. Pools and other investment structures incorporating investments listed in a. through e.
Generally approved qualifying investment instruments for City funds, as further limited by the
investment policy:
a. United States Treasury Bills, Bonds, and Notes, or those for which the full faith and
credit of the United States are pledged for payment of principal and interest.
b. Obligations issued b� the United States Government Agencies such as the Government
National Mortgage Association (GNMA), Federal Farm Credit Bank System (FFCB),
the Federal Home Loan Bank Board (FHLB), the Federal Home Loan Mortgage
Corporation (FHLMC), the Federal National Mortgage Association (FNMA), and the
Student Loan Marketing Association (SLMA).
C. Bills of exchange or time drafts drawn on and accepted by a commercial bank otherwise
known as banker's acceptances. Purchases of banker's acceptances may not exceed
180 days to maturity.
d. Commercial paper ranked PI by Moody's Investor Services and Al by Standard and
Poor's, and issued by a domestic corporation having assets in excess of $500 million
and having an A or better rating on its long -term debentures as provided by Moody's or
Standard and Poor's.
e. Local Agency Investment Fund. The City may invest in the Local Agency Investment
Fund (LAIF) established by the State Treasurer for the benefit of local agencies up to
the maximum amount permitted by State law.
f. Money market funds rated in the highest category of Moody's or Standard and Poor's,
or administered by a domestic bank with long -term debt rated in one of the top two
categories of Moody's or Standard and Poor's.
Pursuant to the City's Investment Policy, the concentration, maturity and type of investments is further
restricted. The investments are directed by the City Treasurer or other City officials to whom such function is
delegated, in accordance with the procedures set forth in the investment policy. The City's Investment Policy is
subject to change by the City from time to time.
Tax Covenants
In order to preserve the exclusion from gross income for federal income tax purposes of interest due
with respect to the Bonds, the City covenants to comply with all applicable requirements of the Code, together
with any amendments thereto or regulations promulgated thereunder necessary to preserve such exclusion. See
"LEGAL MATTERS — Tax Matters" herein.
Amendment to Resolution
The Resolution may be modified or amended at any time by a supplemental resolution adopted by the
City with the written consent of Owners owning at least 60% in aggregate principal amount of the outstanding
Bonds under the circumstances set forth in the Resolution; provided, however, that no such modification or
amendment shall, without the express consent of the Owner of each Bond affected, reduce the principal amount
of any Bond, reduce the interest rate payable thereon, advance the earliest redemption date thereof, extend its
maturity or the times for paying interest thereon or change the monetary medium in which principal and interest
is payable, nor shall any modification or amendment reduce the percentage of consents required for amendment
or modification. In addition, amendments to the Resolution may be made without the consent of the owners to
add to the covenants and agreements of the City, to cure any ambiguity or defect or to amend or supplement the
Resolution in any other respect, provided such supplemental resolution does not adversely affect the interests of
the Owners.
Defeasance
The Bonds may be defeased in whole or in part prior to maturity by irrevocably depositing with the City
(or an entity designated by the City to act as escrow agent with respect thereto):
(a) An amount of cash which together with amounts then on deposit in the Debt Service Fund, is
sufficient, without reinvestment, to pay and discharge all or part of the Bonds outstanding
(including all principal, interest and premium, if any) at or before their stated maturity date; or
(b) Federal Securities (as hereinafter defined) not subject to call, together with cash, if required, in
such amount as will, without reinvestment, in the opinion of an independent certified public
accountant, together with interest to accrue thereon and moneys then on deposit in the Debt
Service Fund together with the interest to accrue thereon, be fully sufficient to pay and
discharge all of the corresponding Bonds (including all principal and interest and premium, if
any) to be defeased at or before their stated maturity date.
In such event, notwithstanding that any of the Bonds shall not have been surrendered for payment, all
obligations of the City with respect to all said outstanding Bonds shall cease and terminate, except only the
obligation of the City to pay or cause to be paid from funds deposited pursuant to paragraphs (a) or (b) above, to
the owners of said Bonds not so surrendered and paid all sums due with respect thereto; provided that the City
shall have received an opinion of bond counsel for said Bonds, that said Bonds have been defeased.
For purposes of defeasance of the Bonds, "Federal Securities" shall mean direct or indirect noncallable
obligations of, or noncallable, nonrepayable obligations unconditionally guaranteed as to full and timely
payment of principal and interest by, the United States of America, but excluding investments in mutual funds
or unit investment trusts.
Z
DEBT SERVICE SCHEDULE
The following table shows the semi - annual debt service schedule with respect to the Bonds (assuming
no optional redemptions).
Period
Endin¢
02/01/2013
08/01/2013
02/01/2014
08/01/2014
02/01/2015
08/01/2015
02/01/2016
08/01/2016
02/01/2017
08/01/2017
02/01/2018
08/01/2018
02/01/2019
08/01/2019
02/01/2020
08/01/2020
02/01/2021
08/01/2021
02/01/2022
08/01/2022
02/01/2023
08/01/2023
02/01/2024
08/01/2024
02/01/2025
08/01/2025
02/01/2026
08/01/2026
02/01/2027
08/01/2027
02/01/2028
08/01/2028
02/01/2029
08/01/2029
02/01/2030
08/01/2030
02/01/2031
08/01/2031
Totals
Principal Interest Annual
Payment* Payment Debt Service
Includes mandatory sinking fund payments.
10
SECURITY FOR THE BONDS
Ad Valorem Taxes
Bonds Payable from Ad Valorem Property Taxes. The Bonds are general obligations of the City,
payable solely from ad valorem property taxes levied and collected pursuant to the Authorization. The City has
the power, is obligated and has covenanted to direct the County to levy ad valorem taxes upon all property
within the City subject to taxation without limitation of rate or amount (except certain personal property which
is taxable at limited rates) for the payment of the Bonds and the interest thereon. All such taxes for the payment
of principal and interest on such Bonds shall be established, levied and collected as provided in the provisions of
Chapter 4 (commencing with Section 43600) of Division 4 of Title 4 of the California Government Code. The
first such levy for the Bonds will occur in Fiscal Year 2012 -13.
Levy and Collection. Each year, the City Council, so far as is practicable, shall fix such rate for a tax to
be levied in the City as will result in revenues which will pay the interest on the Bonds, and provide a sinking or
other fund for the payment of the principal of the Bonds as such principal may become due. The City Council
shall determine the fiscal year for all of the amounts above set forth, and shall fix the rate of tax to be levied
which will raise the amounts of money required by the City for such purposes, and as required by the provisions
of the law, the City Council shall certify to the County Auditor of the County of Los Angeles (the "Auditor ") the
rate so fixed. The City shall furnish to the Auditor a statement in writing containing the following: (a) an
estimate of the minimum amount of money required to be raised by taxation during the fiscal year for the
payment of the principal of and interest on the Bonds, as will become due before the proceeds of a tax levied at
the next general tax levy will be available; and (b) any other items required by the provisions of the Law. The
Auditor shall compute and enter in the County assessment roll the respective sums to be paid as a City tax on the
property within the City using the property subject to the tax.
Information regarding assessed valuation of taxable property in the City is set forth below under "TAX
BASE FOR REPAYMENT OF BONDS ".
The City will levy and the County will collect such ad valorem taxes in such amounts and at such times
as is necessary to ensure the timely payment of debt service. Such taxes, when collected, will be deposited into
the "City of Arcadia (Series 2012 General Obligation Refunding Bonds (Police Station Project)) Debt Service
Fund" (the "Debt Service Fund ") which is held by the City separate and apart from all other funds of the City
and which is irrevocably pledged for the payment of principal of and interest on the Bonds when due.
City property taxes are assessed and collected by the County in the same manner and at the same time,
and in the same installments as other ad valorem taxes on real property, and will have the same priority, become
delinquent at the same times and in the same proportionate amounts, and bear the same proportionate penalties
and interest after delinquency, as do the other ad valorem taxes on real property.
Annual Tax Rates. The amount of the annual ad valorem tax levied by the County to repay the Bonds
will be determined by the relationship between the assessed valuation of taxable property in the City and the
amount of debt service due on the Bonds. Fluctuations in the annual debt service on the Bonds and the assessed
value of taxable property in the City may cause the annual tax rate to fluctuate.
Economic and other factors beyond the City's control, such as economic recession, deflation of land
values, a relocation out of the City or financial difficulty or bankruptcy by one or more major property
taxpayers, or the complete or partial destruction of taxable property caused by, among other eventualities,
earthquake, flood or other natural disaster, could cause a reduction in the assessed value within the City and
necessitate a corresponding increase in the annual tax rate.
11
Limited Obligation
The Bonds are payable solely from the proceeds of an ad valorem tax levied by the City, and collected
by the County, for the payment of principal and interest on the Bonds. Although the County is obligated to levy
and collect the ad valorem tax for the payment of the Bonds, the Bonds are not a debt of the County.
PROPERTY TAXATION
Property Tax Collection Procedures
In California, property which is subject to ad valorem taxes is classified as "secured" or "unsecured."
The "secured roll" is that part of the assessment roll containing state assessed public utilities' property and
property, the taxes on which are a lien on real property sufficient, in the opinion of the county assessor, to secure
payment of the taxes. A tax levied on unsecured property does not become a lien against such unsecured
property, but may become a lien on certain other property owned by the taxpayer. Every tax which becomes a
lien on secured property has priority over all other liens arising pursuant to State law on such secured property,
regardless of the time of the creation of the other liens. Secured and unsecured property are entered separately
on the assessment roll maintained by the county assessor. The method of collecting delinquent taxes is
substantially different for the two classifications of property.
Property taxes on the secured roll are due in two installments, on November 1 and February I of each
fiscal year. If unpaid, such taxes become delinquent after December 10 and April 10, respectively, and a 10%
penalty attaches to any delinquent payment. In addition, property on the secured roll with respect to which taxes
are delinquent is declared tax defaulted on or about June 30 of the fiscal year. Such property may thereafter be
redeemed by payment of the delinquent taxes and a delinquency penalty, plus a redemption penalty of 1 -1/2%
per month to the time of redemption. If taxes are unpaid for a period of five years or more, the property is
subject to sale by the County.
Property taxes are levied for each fiscal year on taxable real and personal property situated in the taxing
jurisdiction as of the preceding January 1. A bill enacted in 1983, SB813 (Statutes of 1983, Chapter 498),
however, provided for the supplemental assessment and taxation of property as of the occurrence of a change of
ownership or completion of new construction. Thus, this legislation eliminated delays in the realization of
increased property taxes from new assessments. As amended, SB813 provided increased revenue to taxing
jurisdictions to the extent that supplemental assessments of new construction or changes of ownership occur
subsequent to the January 1 lien date and result in increased assessed value.
Property taxes on the unsecured roll are due on the January 1 lien date and become delinquent, if unpaid
on the following August 31. A 10% penalty is also attached to delinquent taxes in respect of property on the
unsecured roll, and further, an additional penalty of 1 -1/2% per month accrues with respect to such taxes
beginning the first day of the third month following the delinquency date. The taxing authority has four ways of
collecting unsecured personal property taxes: (1) a civil action against the taxpayer; (2) filing a certificate in the
office of the county clerk specifying certain facts in order to obtain a judgment lien on certain property of the
taxpayer; (3) filing a certificate of delinquency for record in the county recorder's office, in order to obtain a lien
on certain property of the taxpayer; and (4) seizure and sale of personal property, improvements or possessory
interests belonging or assessed to the assessee. The exclusive means of enforcing the payment of delinquent
taxes in respect of property on the secured roll is the sale of the property securing the taxes for the amount of
taxes which are delinquent.
Taxation of State - Assessed Utility Property
The State Constitution provides that most classes of property owned or used by regulated utilities be
assessed by the State Board of Equalization ( "SBE ") and taxed locally. property valued by the SBE as an
operating unit in a primary function of the utility taxpayer is known as "unitary property," a concept designed to
permit assessment of the utility as a going concern rather than assessment of each individual element of real and
12
personal property owned by the utility taxpayer. State- assessed unitary and "operating nonunitary" property
(which excludes nommitary property of regulated railways) is allocated to the counties based on the situs of the
various components of the unitary property. Except for unitary property of regulated railways and certain other
excepted property, all unitary and operating nonunitary property is taxed at special county -wide rates and tax
proceeds are distributed to taxing jurisdictions according to statutory formulae generally based on the
distribution of taxes in the prior year.
Assessed Valuation
Assessed Valuation History. The table below shows a five -year history of the City's assessed valuation.
TABLE 1
CITY OF ARCADIA
Assessed Valuations of Taxable Property
Fiscal Years 2007 -08 to 2011 -12
Source: California Municipal Statistics, Inc.
Assessed Valuation by Land Use. The following table shows the land use of parcels in the City,
according to assessed valuation. As shown, the majority of land in the City is used for residential purposes.
13
Total Before
Fiscal
Redevelopment
Year
Local Secured
Utili
Unsecured
Increment
2007 -08
$8,928,185,181
$0
$176,741,897
$9,104,927,078
2008 -09
9,476,065,354
0
194,154,570
9,670,219,924
2009 -10
9,692,304,609
0
194,734,357
9,887,038,966
2010 -11
10,109,348,638
0
212,196,911
10,321,545,549
2011 -12
10,406,778,429
0
203,553,191
10,610,331,620
Source: California Municipal Statistics, Inc.
Assessed Valuation by Land Use. The following table shows the land use of parcels in the City,
according to assessed valuation. As shown, the majority of land in the City is used for residential purposes.
13
TABLE 2
CITY OF ARCADIA
Assessed Valuation and Parcels by Land Use
Fiscal Year 2011 -12
Non - Residential:
Commercial/Office
Vacant Commercial
Industrial
Vacant Industrial
Recreational
Government/Social/Institutional
Miscellaneous _.
Subtotal Non - Residential
Residential:
Single Family Residence
Condominium/Townhouse
4 Residential Units
5+ Residential Units /Apartments
Vacant Residential
Subtotal Residential
Total
2011 -12
Assessed
% of
No. of
% of
Valuation
Total
Parcels
Total
$1,182,374,677
11.36%
604
3.66%
59,180,013
0.57
61
0.37
194,039,166
1.86
202
1.22
19,266,487
0.19
60
0.36
194,107,146
1.87
9
0.05
37,388,310
0.36
186
1.13
90,568
0.00
4
0.02
$1,686,446,367
16.21%
1,126
6.82%
$6,760,860,981
64.97%
11,019
66.78%
1,116,515,225
10.73
3,022
18.32
252,119,517
2.42
551
3.34
385,721,136
3.71
311
1.88
205,115,203
1.97
471
2.85
$8,720,332,062
83.79%
15,374
93.18%
$10,406,778,429 100.00% 16,500 100.00%
(1) Local Secured Assessed Valuation; excluding tax - exempt property.
Source: California Municipal Statistics, Inc.
Assessed Valuation of Single Family Residential Parcels. The following table shows a break down of
the assessed valuations of Single Family Residential parcels in the City, according to assessed valuation.
14
TABLE 3
CITY OF ARCADIA
Per Parcel 2011 -12 Assessed Valuation
of Single Family Homes
(1) Improved single family residential parcels. Excludes condominiums and parcels with multiple family units.
Source; California Municipal Statistics, Inc.
Tax Rates
The table below summarizes the total ad valorem tax rates levied by all taxing entities in Tax Rate Area
6 -001 for each $100 of assessed valuation during the fiscal years 2007 -08 through 2011 -12. Such rates do not
reflect any levy related to the Bonds.
15
No. of
2011 -12
Average
Median
Parcels
Assessed Valuation
Assessed Valuation Assessed Valuation
Single Family Residential
11,019
$6,760,860,981
$613,564
$512,735
2011 -12
No. of
% of
Cumulative
Total
% of
Cumulative
Assessed Valuation
Parcels(i)
Total
% of Total
Valuation
Total
% of Total
$0-$99,999
883
8.013%
8.013%
$69,898,720
1.034%
1.034%
$100,000 - $199,999
1,403
12.733
20.746
196,963,550
2.913
3.947
$200,000 - $299,999
816
7.405
28.151
203,869,554
3.015
6.963
$300,000 - $399,999
1,047
9.502
37.653
367,841,078
5.441
12.403
$400,000 - $499,999
1,212
19:999
48.652
545,462,922
8.068
20.471
$500,000 - $599,999
1,057
9.593
58.245
578,666,480
8.559
29.030
$600,000 - $699,999
861
7.814
66.059
559,716,975
8.279
37.309
$700,000 - $799,999
882
8.004
74.063
659,650,229
9.757
47.066
$800,000 - $899,999
693
6.289
80.352
586,372,524
8.673
55.739
$900,000 - $999,999
487
4.420
84.772
461,361,919
6.824
62.563
$1,000,000 - $1,099,999
338
3.067
87.839
353,811,297
5.233
67.796
$1,100,000 - $1,199,999
258
2.341
90.181
295,527,868
4.371
72.167
$1,200,000 - $1,299,999
191
1.733
91.914
237,838,886
3.518
75.685
$1,300,000 - $1,399,999
156
1.416
93.330
209,652,332
3.101
78.786
$1,400,000 - $1.,499,999
130
1.180
94.509
188,012,317
2.781
81.567
$1,500,000 - $1,599,999
96
0.871
95.381
148,574,541
2.198
83.765
$1,600,000 - $1,699,999
90
0.817
96.197
148,267,523
2.193
85.958
$1,700,000 - $1,799,999
60
0.545
96.742
104,937,627
1.552
87.510
$1,800,000 - $1,899,999
58
0.526
97.268
107,262,461
1.587
89.096
$1,900,000 - $1,999,999
47
0.427
97.695
91,717,445
1.357
90.453
$2,000,000 and greater
254
2.305
100.000
645,454,733
9.547
100.000
Total
11,019
100.000%
$6,760,860,981
100.000%
(1) Improved single family residential parcels. Excludes condominiums and parcels with multiple family units.
Source; California Municipal Statistics, Inc.
Tax Rates
The table below summarizes the total ad valorem tax rates levied by all taxing entities in Tax Rate Area
6 -001 for each $100 of assessed valuation during the fiscal years 2007 -08 through 2011 -12. Such rates do not
reflect any levy related to the Bonds.
15
TABLE 4
CITY OF ARCADIA
Summary of Ad Valorem Tax Rates
$1 per $100 of Assessed Valuation
Fiscal Years 2007 -08 to 2011 -12
(Tax Rate Area 6 -001)
Ad Valorem Tax
2007 -08
2008 -09
2009 -10
2010 -11
2011 -12
General Tax Rate
1.000000
1.000000
1.000000
1.000000
1.000000
City of Arcadia
.005107
.005490
.005304
.005000
.004985
Arcadia Unified School District
.080858
.079107
.075606
.074561
.076915
Pasadena Area Community College District
.019720
.017417
.023002
.019864
.019556
Metropolitan Water District
.004500
.004300
.004300
.003700
.003700
Total Tax Rate
1.110185
1.106314
1.108212
1.103125
1.105156
Source: California Municipal Statistics, Inc.
Tax Levies and Delinquencies on Outstanding City General Obligation Bonds
The following table is a five year summary of property tax levies to pay debt service on outstanding
City general obligation debt, delinquency amounts and delinquency rates.
TABLE 5
CITY OF ARCADIA
Total Property Tax Levies, Collections and Delinquencies
to Pay City General Obligation Debt Service
(As of June 30)
2006 -07 through 2010 -I1
(1) Bond debt service levy only.
Source: California Municipal Statistics, Inc.
Major Taxpayers
The following table shows the largest taxpayers in the City as determined by their secured assessed
valuations in 2010-11:
16
Amount
Fiscal
Secured
Delinquent
% Delinquent
Year
Tax Charee
June 30
June 30
2006 -07
$438,113.06
$6,361.76
1.45%
2007 -08
452,315.71
7,346.44
1.62
2008 -09
515,148.21
11,816.86
2.29
2009 -10
510,011.85
5,730.52
1.12
2010 -11
498,898.90
4,402.49
0.88
(1) Bond debt service levy only.
Source: California Municipal Statistics, Inc.
Major Taxpayers
The following table shows the largest taxpayers in the City as determined by their secured assessed
valuations in 2010-11:
16
TABLE 6
CITY OF ARCADIA
Largest 2010 -11 Local Secured Taxpayers
Total City -Wide Taxable Assessed Value for FY 2011 -12 is $10, 610,331,620
(1) Estimated total tax revenue is a calculation of total City share of direct rate times assessed value.
Source: City of Arcadia Comprehensive Annual Financial Report June 30, 2011.
Direct and Overlapping Debt
Set forth below is a direct and overlapping debt report (the "Debt Report") prepared by California
Municipal Statistics, Inc. and effective as of August 1, 2012. The Debt Report is included for general
information purposes only. The City has not reviewed the Debt Report for completeness or accuracy and makes
no representation in connection therewith.
The Debt Report generally includes long -term obligations sold in the public credit markets by public
agencies whose boundaries overlap the boundaries of the City in whole or in part. Such long -term obligations
generally are not payable from revenues of the City (except as indicated) nor are they necessarily obligations
secured by land within the City. In many cases, long -term obligations issued by a public agency are payable
only from the general fund or other revenues of such public agency.
17
2011 -12
Estimated
Assessed
Total Tax
% of
Property Owner
Valuation
Revenue(l)
Total
1.
Santa Anita Fashion Park LLC
$282,124,222
$386,172
2.66%
2.
Santa Anita Land Holdings
172,534,868
236,166
1.63
3.
Baldwin Arcadia Center LP
85,887,000
117,562
0.81
4.
Santa Anita Fashion Park LLC
69,562,586
95,217
0.66
5.
Safeway Inc.
25,806,690
35,324
0.24
6.
Marriott Residence Inn II Limited
29,771,400
40,751
0.28
7.
Arcadia Hotel Venture Limited Partnership
25,785,064
35,295
0.24
8.
Apple Six Hospitality Inc.
20,486,990
28,043
0.20
9.
Arcadia Gateway Centre Delaware Partnership
18,866,767
25,825
0.18
10.
Pecos Properties LP
18,461,419
25,270
0.17
TOTAL
$749,287,006
$1,025,625
7.07%
Total City -Wide Taxable Assessed Value for FY 2011 -12 is $10, 610,331,620
(1) Estimated total tax revenue is a calculation of total City share of direct rate times assessed value.
Source: City of Arcadia Comprehensive Annual Financial Report June 30, 2011.
Direct and Overlapping Debt
Set forth below is a direct and overlapping debt report (the "Debt Report") prepared by California
Municipal Statistics, Inc. and effective as of August 1, 2012. The Debt Report is included for general
information purposes only. The City has not reviewed the Debt Report for completeness or accuracy and makes
no representation in connection therewith.
The Debt Report generally includes long -term obligations sold in the public credit markets by public
agencies whose boundaries overlap the boundaries of the City in whole or in part. Such long -term obligations
generally are not payable from revenues of the City (except as indicated) nor are they necessarily obligations
secured by land within the City. In many cases, long -term obligations issued by a public agency are payable
only from the general fund or other revenues of such public agency.
17
TABLE 7
CITY OF ARCADIA
STATEMENT OF DIRECT AND OVERLAPPING BONDED DEBT
(As of August 1, 2012)
2011 -12 Assessed Valuation: $10,610,331,620
Redevelopment Incremental Valuation: 448,742,424
Adjusted Assessed Valuation: $10,161,589,196
DIRECT AND OVERLAPPING TAX AND ASSESSMENT DEBT:
% Applicable
Debt 8/1/12
Los Angeles County Flood Control District
1.123%
$ 417,700
Metropolitan Water District
0.563
1,106,548
Citrus Community College District
0.205
162,781
Pasadena Area Community College District
17.445
18,196,071
Rio Hondo Community College District
0.660
1,106,346
Arcadia Unified School District
96.180
162,236,225
Monrovia Unified School District
0.863
603,475
Pasadena Unified School District
0.020
78,117
Temple City Unified School District -
8.718
1,497,911
El Monte Union High School District
2.417
3,707,665
El Monte School District
4.728
5,148,540
City of Arcadia
100.
14,135,000 (1)
Los Angeles County Regional Park and Open Space Assessment District
1.095
1.869.439
TOTAL DIRECT AND OVERLAPPING TAX AND ASSESSMENT DEBT
$210,265,818
OVERLAPPING GENERAL FUND DEBT:
Los Angeles County General Fund Obligations
1.095%
$16,141,644
Los Angeles County Superintendent of Schools Certificates of Participation
1.095
113,631
Pasadena Area Community College District Certificates of Participation
17.445
213,701
Other School District General Fund Obligations
Various
139,208
Los Angeles County Sanitation District No. 15 Authority
23.646
7,387,881
Los Angeles County Sanitation District No. 22 Authority
0.186
29.615
TOTAL GROSS OVERLAPPING GENERAL FUND DEBT
$24,025,680
Less: Los Angeles County General Fund Obligations supported by landfill revenues
182.845
TOTAL NET OVERLAPPING GENERAL FUND DEBT
$23,842,835
GROSS COMBINED TOTAL DEBT $234,291,498 (2)
NET COMBINED TOTAL DEBT $234,108,653
(1) Excludes issue to be sold.
(2) Excludes tax and revenue anticipation notes, revenue, mortgage revenue and tax allocation bonds and non - bonded capital lease
obligations.
Ratios to 2011 -12 Assessed Valuation:
Direct Debt ($14,135, 000) ........................... ............................... ..........................0.13%
Total Direct and Overlapping Tax and Assessment Debt ....... ............................... 1.98%
Ratios to Adjusted Assessed Valuation:
GrossCombined Total Debt ................................................... ............................... 2.31%
NetCombined Total Debt ....................................................... ............................... 2.30%
STATE SCHOOL BUILDING AID REPAYABLE AS OF 6/30/12: $0
Source: California Municipal Statistics, Inc.
CONSTITUTIONAL AND STATUTORY PROVISIONS
AFFECTING CITY REVENUES AND APPROPRIATIONS
Principal of and interest on the Bonds are payable from the proceeds of an ad valorem tax levied by the
City for the payment thereof. See "The Bonds — Security for the Bonds" above. Articles XIIIA, XIIIB, XIIIC
18
and XIIID of the State Constitution, Propositions 62, 111, and 218 and IA, and certain other provisions of law
discussed below are included in this section to describe the potential effect of these Constitutional and statutory
measures on the ability of the City to levy taxes and spend tax proceeds for operating and other purposes, and it
should not be inferred from the inclusion of such materials that these laws impose any limitation on the ability
of the City to levy taxes for payment of the Bonds. The tax levied by the City for payment of the Bonds was
approved by the City's voters in compliance with Article XIIIA and all applicable laws.
Article XIIIA of the State Constitution
On June 6, 1978, California voters approved Proposition 13, which added Article XIIIA to the State
Constitution. Article XIIIA, as amended, limits the amount of any ad valorem tax on real property to one percent
of the full cash value thereof, except that additional ad valorem taxes may be levied to pay debt service (i) on
indebtedness approved by the voters prior to July 1, 1978, (ii) on bonded indebtedness approved by a two- thirds
vote on or after July 1, 1978, for the acquisition or improvement of real property or (iii) bonded indebtedness
incurred by a school district, community college district or county office of education for the construction,
reconstruction, rehabilitation or replacement- of school facilities, including the furnishing and equipping of
school facilities or the acquisition or lease of real property for school facilities, approved by 55 percent of the
voters voting on the proposition. Article XIIIA 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." This full cash value may be increased at a rate not to exceed two percent per year to account for
inflation.
Article XIIIA has subsequently been amended to permit reduction of the "full cash value" base in the
event of declining property values caused by damage, destruction or other factors, to provide that there would be
no increase in the "full cash value" base in the event of reconstruction of property damaged or destroyed in a
disaster, and in other minor or technical ways.
Legislation Implementing Article XIIIA
Legislation has been enacted and amended a number of times since 1978 to implement Article XIIIA.
Under current law, local agencies are no longer permitted to levy directly any property tax (except to pay voter -
approved indebtedness). The one percent property tax is automatically levied by the County and distributed
according to a formula among taxing agencies. The formula apportions the tax roughly in proportion to the
relative shares of taxes levied prior to 1989.
Increases of assessed valuation resulting from reappraisals of property due to new construction, change
in ownership or from the two percent annual adjustment are allocated among the various jurisdictions in the
"taxing area" based upon their respective "situs." Any such allocation made to a local agency continues as part
of its allocation in future years.
All taxable property is shown at full market value on the tax rolls. Consequently, the tax rate is
expressed as $1 per $100 of taxable value. All taxable property value included in this Official Statement is
shown at 100 percent of market value (unless noted differently) and all tax rates reflect the $1 per $100 of
taxable value.
Article XM of the State Constitution
In addition to the limits Article XIIIA imposes on property taxes that may be collected by local
governments, certain other revenues of the State and most local governments are subject to an annual
"appropriations limit" imposed by Article XIIIB which effectively limits the amount of such revenues those
entities are permitted to spend. Article XIIIB, approved by the voters in June 1979, was modified substantially
by Proposition 111 in 1990. The appropriations limit of each government entity applies to "proceeds of taxes,"
which consist of tax revenues, State subventions and certain other funds, including proceeds from regulatory
19
licenses, user charges or other fees to the extent that such proceeds exceed "the cost reasonably borne by such
entity in providing the regulation, product or service." "Proceeds of taxes" excludes tax refunds and some
benefit payments such as unemployment insurance. No limit is imposed on the appropriation of funds which are
not "proceeds of taxes," such as reasonable user charges or fees, and certain other non -tax funds. Article XIIIB
also does not limit appropriation of local revenues to pay debt service on Bonds existing or authorized by
January 1, 1979, or subsequently authorized by the voters, appropriations required to comply with mandates of
courts or the federal government, appropriations for qualified capital outlay projects, and appropriation by the
State of revenues derived from any increase in gasoline taxes and motor vehicle weight fees above January 1,
1990, levels. The appropriations limit may also be exceeded in case of emergency; however, the appropriations
limit for the next three years following such emergency appropriation must be reduced to the extent by which it
was exceeded, unless the emergency arises from civil disturbance or natural disaster declared by the Governor,
and the expenditure is approved by two- thirds of the legislative body of the local government.
The State and each local government entity has its own appropriations limit. Each year, the limit is
adjusted to allow for changes, if any, in the cost of living, the population of the jurisdiction, and any transfer to
or from another government entity of financial responsibility for providing services. Proposition 11 -1 requires
that each agency's actual appropriations be tested against its limit every two years.
If the aggregate "proceeds of taxes" for the preceding two -year period exceeds the aggregate limit, the
excess must be returned to the agency's taxpayers through tax rate or fee reductions over the following two
years.
The City has never exceeded its appropriations limit.
Articles XMC and Xl® of the State Constitution
On November 5, 1996, the voters of the State approved Proposition 218, known as the "Right to Vote
on Taxes Act." Proposition 218 adds Articles XIIIC and MID to the California Constitution and contains a
number of interrelated provisions affecting the ability of the City to levy and collect both existing and future
taxes, assessments, fees and charges. The interpretation and application of Proposition 218 will ultimately be
determined by the courts with respect to a number of the matters discussed below, and it is not possible at this
time to predict with certainty the outcome of such determination.
Article XIIIC requires that all new local taxes be submitted to the electorate before they become
effective. Taxes for general governmental purposes of the City require a majority vote and taxes for specific
purposes, even if deposited in the City's General Fund, require a two- thirds vote. The voter approval
requirements of Proposition 218 reduce the flexibility of the City to raise revenues for the General Fund, and no
assurance can be given that the City will be able to impose, extend or increase such taxes in the future to meet
increased expenditure needs.
Article XIIID also adds several provisions making it generally more difficult for local agencies to levy
and maintain property- related fees, charges, and assessments for municipal services and programs. These
provisions include, among other things, (i) a prohibition against assessments which exceed the reasonable cost
of the proportional special benefit conferred on a parcel, (ii) a requirement that assessments must confer a
"special benefit," as defined in Article XIIID, over and above any general benefits conferred, (iii) a majority
protest procedure for assessments which involves the mailing of notice and a ballot to the record owner of each
affected parcel, a public hearing and the tabulation of ballots weighted according to the proportional financial
obligation of the affected party, and (iv) a prohibition against fees and charges which are used for general
governmental services, including police, fire or library services, where the service is available to the public at
large in substantially the same manner as it is to property owners. If the City is unable to continue to collect
these revenues, the services and programs funded with these revenues would have to be curtailed and/or the
City's General Fund might have to be used to support them. The City is unable to predict whether or not in the
future it will be able to continue all existing services and programs funded by the fees, charges and assessments
20
in light of Proposition 218 or, if these services and programs are continued, which amounts (if any) would be
used from the City's General Fund to continue to support these activities.
Article XIIIC also removes limitations on the initiative power in matters of reducing or repealing local
taxes, assessments, fees or charges. No assurance can be given that the voters of the City will not, in the future,
approve an initiative or initiatives which reduce or repeal local taxes, assessments, fees or charges currently
comprising a substantial part of the City's General Fund.
Proposition 62
Proposition 62 was adopted by the voters at the November 4, 1986, general election and (a) requires that
any new or higher taxes for general governmental purposes imposed by local governmental entities such as the
City be approved by a two- thirds vote of the governmental entity's legislative body and by a majority vote of the
voters of the governmental entity voting in an election on the tax, (b) requires that any special tax (defined as
taxes levied for other than general governmental purposes) imposed by a local governmental entity be approved
by a two- thirds vote of the voters of the govenmental entity voting in an election on the tax, (c) restricts the use
of revenues from a special tax to the purposes or for the service for which the special tax was imposed, (d)
prohibits the imposition of ad valorem taxes on real property by local governmental entities except as permitted
by Article XIIIA, (e) prohibits the imposition of transaction taxes and sales taxes on the sale of real property by
local governmental entities, and (f) requires that any tax imposed by a local governmental entity on or after
August 1, 1985, be ratified by a majority vote of the voters voting in an election on the tax within two years of
the adoption of the initiative or be terminated by November 15, 1988.
California appellate court cases have overturned the provisions of Proposition 62 pertaining to the
imposition of taxes for general government purposes. However, the California Supreme Court upheld
Proposition 62 in its decision on August 28, 1995, in Fresno CoupU Transportation Authority v. Guarding. This
decision reaffirmed the constitutionality of Proposition 62. Certain matters regarding Proposition 62 were not
addressed in the Supreme Court's decision, such as what remedies exist for taxpayers subject to a tax not in
compliance with Proposition 62, and whether the decision applies to charter cities. The City has not experienced
any substantive adverse financial impact as a result of the passage of this initiative.
Proposition IA
Proposition IA, proposed by the Legislature in connection with the State's Fiscal Year 2004 -05 Budget,
approved by the voters in November 2004 and generally effective in Fiscal Year 2006 -07, provides that the State
may not reduce any local sales tax rate, limit existing local government authority to levy a sales tax rate or
change the allocation of local sales tax revenues, subject to certain exceptions. Proposition IA generally
prohibits the State from shifting to schools or community colleges any share of property tax revenues allocated
to local governments for any fiscal year, as set forth under the laws in effect as of November 3, 2004. Any
change in the allocation of property tax revenues among local governments within a county must be approved
by two- thirds of both houses of the Legislature. Proposition I provides, however, that beginning in fiscal year
2008 -09, the State may shift to schools and community colleges up to 8% of local government property tax
revenues, which amount must be repaid, with interest, within three years, if the Governor proclaims that the shift
is needed due to a severe state financial hardship, the shift is approved by two- thirds of both houses and certain
other conditions are met. The State may also approve voluntary exchanges of local sales tax and property tax
revenues among local governments within a county. Proposition IA also provides that if the State reduces the
motor vehicle license fee rate currently in effect, 0.65 percent of vehicle value, the State must provide local
governments with equal replacement revenues. Further, Proposition IA requires the State, beginning July 1,
2005, to suspend State mandates affecting cities, counties and special districts, excepting mandates relating to
employee rights, schools or community colleges, in any year that the,State does not fully reimburse local
governments for their costs to comply with such mandates. '
Proposition lA may result in increased and more stable City revenues. The magnitude of such increase
and stability is unknown and would depend on future actions by the State. However, Proposition 1 A could also
21
result in decreased resources being available for State programs. This reduction, in turn, could affect actions
taken by the State to resolve budget difficulties. Such actions could include increasing State taxes, decreasing
spending on other State programs or other action, some of which could be adverse to the City.
Possible Future Initiatives
Articles XIIIA, XIIIB, XIIIC and XIIID and Propositions 62, 111, 218 and IA were each adopted as
measures that qualified for the ballot pursuant to the State's initiative process. From time to time other initiative
measures could be adopted, further affecting revenues of the City or the City's ability to expend revenues. The
nature and impact of these measures cannot be anticipated by the City.
LEGAL MATTERS
Approval of Legal Proceedings
The legality of the sale, execution and delivery of the Bonds is subject to the approval of Stradling
Yocca Carlson & Rauth, a Professional Corporation, Newport Beach, California, acting as Bond Counsel. A
proposed form of such legal opinion is attached hereto as Appendix C. Best Best & Krieger LLP, Riverside,
California, is acting as disclosure counsel to the City in connection with the issuance of the Bonds. Certain
matters will be passed upon for the City by Best Best & Krieger LLP, as City Attorney.
Payment of the fees and expenses of Stradling Yocca Carlson & Rauth, a Professional Corporation and
of Best Best & Krieger LLP are contingent upon issuance of the Bonds.
Absence of Material Litigation
No litigation is pending or threatened concerning the validity of the Bonds, and a certificate to that
effect will be furnished to the purchasers at the time of the original delivery of the Bonds. The City is not aware
of any litigation pending or threatened questioning the political existence of the City or contesting the City's
ability to receive ad valorem taxes or to collect other revenues or contesting the City's ability to issue and repay
the Bonds.
Tax Matters
In the opinion of Stradling Yocca Carlson & Rauth, a Professional Corporation, Newport Beach,
California, Bond Counsel, under existing statutes, regulations, rulings and judicial decisions, interest on the
Bonds is excluded from gross income for federal income tax purposes, and is not an item of tax preference for
purposes of calculating the federal alternative minimum tax imposed on individuals and corporations. In the
further opinion of Bond Counsel, interest on the Bonds is exempt from State of California personal income tax.
Bond Counsel notes that, with respect to corporations, interest on the Bonds may be included as an adjustment
in the calculation of alternative minimum taxable income which may affect the alternative minimum tax liability
of such corporations.
The difference between the issue price of a Bond (the first price at which a substantial amount of the
Bonds of the same series and maturity is to be sold to the public) and the stated redemption price at maturity
with respect to such Bond constitutes original issue discount. Original issue discount accrues under a constant
yield method, and original issue discount will accrue to the owner of the Bond before receipt of cash attributable
to such excludable income (with respect to the Bonds). The amount of original issue discount deemed received
by the owner of a Bond will increase the owner's basis in the Bond. In the opinion of Bond Counsel original
issue discount that accrues to the owner of a Bond is excluded from the gross income of such owner for federal
income tax purposes, is not an item of tax preference for purposes of dhe federal alternative minimum tax
imposed on individuals and corporations, and is exempt from State of California personal income tax.
22
Bond Counsel's opinion as to the exclusion from gross income for federal income tax purposes of
interest (and original issue discount) on the Bonds is based upon certain representations of fact and certifications
made by the City and others and is subject to the condition that the City complies with all requirements of the
Internal Revenue Code of 1986, as amended (the "Code "), that must be satisfied subsequent to issuance of the
Bonds to assure that interest (and original issue discount) on the Bonds will not become includable in gross
income for federal income tax purposes. Failure to comply with such requirements of the Code might cause
interest (and original issue discount) on the Bonds to be included in gross income for federal income tax
purposes retroactive to the date of issuance of the Bonds. The City has covenanted to comply with all such
requirements applicable to each, respectively.
The amount by which a Bond Owner's original basis for determining loss on sale or exchange in the
applicable Bond (generally, the purchase price) exceeds the amount payable on maturity (or on an earlier call
date) constitutes amortizable Bond premium, which must be amortized under Section 171 of the Code; such
amortizable Bond premium reduces the Bond Owner's basis in the applicable Bond (and the amount of tax -
exempt interest received with respect to the Bonds), and is not deductible for federal income tax purposes. The
basis reduction as a result of the amortizatid"f Bond premium may result in a Bond Owner realizing a taxable
gain when a Bond is sold by the Owner for an amount equal to or less (under certain circumstances) than the
original cost of the Bond to the Owner. Purchasers of the Bonds should consult their own tax advisors as to the
treatment, computation and collateral consequences of amortizable Bond premium.
Bond Counsel's opinions may be affected by actions taken (or not taken) or events occurring (or not
occurring) after the date hereof. Bond Counsel has not undertaken to determine, or to inform any person,
whether any such actions or events are taken or do occur. The Resolution and the Tax Certificate permit certain
actions to be taken or to be omitted if a favorable opinion of Bond Counsel is provided with respect thereto.
Bond Counsel expresses no opinion as to the effect on the exclusion from gross income for federal income tax
purposes of interest (and original issue discount) due with respect to any Bond if any such action is taken or
omitted based upon the advice of counsel other than Stradling Yocca Carlson & Rauth, a Professional
Corporation.
The Internal Revenue Service (the "IRS ") has initiated an expanded program for the auditing of tax -
exempt bond issues, including both random and targeted audits. It is possible that the Bonds will be selected for
audit by the IRS. It is also possible that the market value of the Bonds might be affected as a result of such an
audit of the Bonds (or by an audit of similar securities). No assurance can be given that in the course of an
audit, as a result of an audit, or otherwise, Congress or the IRS might not change the Code (or interpretation
thereof) subsequent to the issuance of the Bonds to the extent that it adversely affects the exclusion from gross
income of interest on the Bonds or their market value.
It is possible that, subsequent to the issuance of the Bonds, there might be federal, state or local
statutory changes (or judicial or regulatory interpretations of federal, state or local law) that affect the federal,
state or local tax treatment of the Bonds or the market value of the Bonds. Recently, proposed legislative
changes have been introduced in Congress, which, if enacted, could result in additional federal income or state
tax being imposed on owners of tax- exempt state or local obligations, such as the Bonds. The introduction or
enactment of any of such changes could adversely affect the market value or liquidity of the Bonds. No
assurance can be given that, subsequent to the issuance of the Bonds, such changes (or other changes) will not
be introduced or enacted or interpretations will not occur. Before purchasing any of the Bonds, all potential
purchasers should consult their tax advisors regarding possible statutory changes or judicial or regulatory
changes or interpretations, and their collateral tax consequences relating to the Bonds.
Although Bond Counsel has rendered an opinion that the interest (and original issue discount) on the
Bonds is excluded from gross income for federal income tax purposes, provided that the City continues to
comply with certain requirements of the Code, the ownership of the Bondg and the accrual or receipt of interest
(and original issue discount) with respect to the Bonds may otherwise affect the tax liability of certain persons.
Bond Counsel expresses no opinion regarding any such tax consequences. Accordingly, before purchasing any
23
of the Bonds, all potential purchasers should consult their tax advisors with respect to collateral tax
consequences with respect to the Bonds.
Should the interest (and original issue discount) on the Bonds become includable in gross income for
federal income tax purposes, the Bonds are not subject to early redemption as a result of such occurrence and
will remain outstanding until maturity or until otherwise redeemed in accordance with the Resolution.
The form of Bond Counsel's proposed opinion with respect to the Bonds is attached hereto in
Appendix C.
BANK QUALIFIED
The City has designated the Bonds "qualified tax exempt obligations" within the meaning of
Section 265(b)(3) of the code, and, in the case of certain financial institutions (within the meaning of Section
265(b)(3) of the Code), a deduction is allowed for 80% of that portion of such financial institutions' interest
expense allocable to interest on the Bonds. _-
CONTINUING DISCLOSURE
The City will covenant for the benefit of owners of the Bonds to provide certain financial information
and operating data relating to the City by not later than nine months after the end of the City's fiscal year (which
date would be the March 31 following the current end of the City's fiscal year on June 30), commencing
March 31, 2013, with the report for the 2011 -12 fiscal year (the "Annual Report "), and to provide notices of the
occurrence of certain enumerated events, if material. The specific nature of the information to be contained in
the Annual Report or the notices of material events is summarized in APPENDIX D —FORM OF
CONTINUING DISCLOSURE CERTIFICATE, attached to this Official Statement. These covenants have been
made in order to assist the Underwriter (as defined below) in complying with Securities Exchange Commission
Rule 15c2- 12(b)(5) (the "Rule ").
While the City and the now dissolved Arcadia Redevelopment Agency have made all annual flings
associated with previous disclosure obligations under the Rule, each has also fled composite continuing
disclosure statements to correct or to supplement previously fled annual reports and to provide notice of
municipal bond insurance downgrades that should have been made earlier. Such supplemental information
included certain financial and operating data not previously contained in the earlier annual flings. As of the
date of this Official Statement both the City and the Agency are in compliance with their respective obligations
under the Rule.
RATINGS
Standard & Poor's Ratings Services, A Division of the McGraw -Hill Companies ( "Standard & Poor's "),
has assigned its municipal bond rating of "AA + ", to the Bonds.
Such rating reflects only the views of Standard & Poor's and an explanation of the significance of such
rating may be obtained from Standard & Poor's. There is no assurance that such rating will continue for any
given period of time or that such rating will not be revised downward or withdrawn entirely by such
organization, if in its judgment circumstances so warrant. Any such downward revision or withdrawal of such
rating may have an adverse effect on the market price of the Bonds.
FINANCIAL ADVISOR
The City has retained Fieldman, Rolapp & Associates, of Irvine, 'California, as financial advisor (the
"Financial Advisor ") in connection with the issuance of the Bonds. The Financial Advisor is not obligated to
undertake, and has not undertaken to make, an independent verification or assume responsibility for the
accuracy, completeness, or fairness of the information contained in this Official Statement.
24
The Financial Advisor is an independent advisory firm and is not engaged in the business of
underwriting, trading or distributing municipal or other public securities.
UNDERWRITING
Under the terms of a competitive bid held on , 2012, . (the "Underwriter ")
has agreed to purchase the Bonds at a price of $ (which is equal to the aggregate principal amount
of the Bonds of $ , plus a net original issue premium of , less an Underwriter's
discount of $ The Underwriter will purchase all of the Bonds if any are purchased, the obligation to
make such purchase being subject to certain terms and conditions set forth in the "Official Notice of Sale,"
including the approval of certain legal matters by counsel and certain other conditions.
The Underwriter intends to offer the Bonds to the public at the offering prices set forth on the cover
page of this Official Statement. The Underwriter may offer and sell to certain dealers and others at a price lower
than the offering prices stated on the cover page hereof. The offering price may be changed from time to time by
the Underwriter.
VERIFICATION
Grant Thornton, Minneapolis, Minnesota, a firm of independent certified public accountants, will verify
the accuracy of the mathematical computations of the adequacy of the amounts held under the Escrow
Agreement by the Escrow Agent, together with investment earnings thereon, to provide for the refunding and
defeasance of the Prior Bonds.
EXECUTION
The execution of this Official Statement and its delivery have been approved by the City Council.
CITY OF ARCADIA
am
25
City Manager
APPENDIX A
GENERAL DEMOGRAPHIC INFORMATION REGARDING
THE CITY OF ARCADIA AND LOS ANGELES COUNTY
Information contained in herein is presented as general background data. The Bonds are payable solely
from the ad valorem taxes of the City of Arcadia. The County of Los Angeles and the State of California have
no obligation to make any payments with respect to the Bonds. See "SECURITY FOR THE BONDS" herein for
a description of the security for the Bonds.
General
The City is located approximately 20 miles northeast of Los Angeles and consists of approximately 11.2
square miles. Located in Los Angeles County, the City is a chartered city incorporated in 1903.
The City provides police protection, -fire protection, emergency medical aid, building safety
and inspection, street lighting, water and sewer service, refuse collection, land use planning, and zoning,
recreational and community services, maintenance and improvement of streets and related structures, traffic
safety maintenance and improvement and library and cultural programs for citizen participation.
City Council
The City is governed by a five- member City Council, all serving four -year terms. Each year the City
Council elects from its membership a Mayor to serve as its presiding officer for a one year term. The City
Council serves as the legislative and policy making body of the City. The City Council establishes policy;
adopts all ordinances and resolutions of the City; reviews and adopts the annual operating budget and five- year
capital improvement program; and maintains communications with citizens and other government agencies to
provide and obtain information necessary for the operation of the City.
Table A -1
CITY OF ARCADIA
City Council
Name
Robert C. Harbicht
Mickey Segal
Peter Amundson
Gary A. Kovacic
John Wuo
Source: City of Arcadia.
City Manager and Administrative Personnel
Position
Mayor
Mayor Pro Tern
Council Member
Council Member
Council Member
Term Exaires
April 2014
April 2014
April 2014
April 2016
April 2016
The City Council employs a City Manager to carry out its policies, to serve as executive officer of the
City and to supervise the work of other City administrators. The names and backgrounds of the City Manager
and some senior administrative staff are set forth below.
Dominic Lazzaretto Cijy Manager Dominic Lazzaretto has served as the Arcadia City Manager since
March 2012. He has worked more than 18 years in local government. Mr. Lazzaretto's previous work experience
includes over five years as the City Manager of the City of La Palma, before which he served as La Palma's
Assistant City Manager and Community Development Director. While id La Palma, Mr. Lazzaretto was the
Chair of the City Manager's Committee on the California Joint Powers Insurance Authority, and held a position
on the Orange County Fire Authority's City Manager's Budget and Finance Committee. Mr. Lazzaretto has also
A -1
worked for A.C. Lazzaretto & Associates, a consulting firm specializing in redevelopment, economic
development and general municipal management. During his time with the firm, Mr. Lazzaretto worked with
cities of all sizes throughout California on projects with values up to $150 million. His educational background
includes a Masters Degree in Public Administration from Cal State Long Beach and a Bachelor of Science
Degree from Penn State University.
Jason Kruckeberg, AICP, Assistant City Manager/Development Services Director has been with the
City since April 2006. Mr. Kruckeberg has over 15 years of experience in local government in Oregon and
California, having served as Planning Director for the City of Canby, Oregon, Senior Planner for the City of
Pasadena, California, and Community Development Administrator for Arcadia, prior to his current position.
Mr. Kruckeberg has a Bachelor of Arts Degree from the University of California at Santa Cruz and a Masters
Degree in Community and Regional Planning from the University of Oregon.
Hue Ouach, Administrative Services Director has been with the City since July 2008. Mr. Quach has
over 18 years of experience in local government, having served as Director of Finance for the City of Norwalk
and Assistant Finance Director for the City - -ef Bellflower. Mr. Quach has a Bachelor of Science -Degree in
Finance and a Masters Degree in Public Administration, both from California State University, Los Angeles.
Employee Relations
The City currently employs 291 full -time and approximately 14 (excluding seasonal) part-time
employees. 250 of such employees are represented by five formal labor organizations as shown below. The City
has 51 executive and managerial employees who are not represented by any formal bargaining unit.
Table A -2
CITY OF ARCADIA
Employee Relations
Labor Organization
Arcadia Police Officers Association
Arcadia Police Civilian Employee Association
Arcadia Firefighter's Association
Arcadia Public Works Employees Association
Confidential /Supervisory /Professional
Arcadia City Employees Association
Source: City of Arcadia.
Long -Term Debt
Number of Employees Contract Expiration Date
61
June 30, 2014
23
June 30, 2014
48
June 30, 2014
44
June 30, 2014
51
June 30, 2014
78
June 30, 2014
The following is a summary of long -term debt transactions of the governmental activities for the year
ended June 30, 2011:
A -2
Table A -3
CITY OF ARCADIA
Long -Term Debt Transactions
City of Arcadia
Long -Term Debt
Classification
Balance
Balance
Due Within Due More
July 1. 2010
Addition
Deletion
June 30, 2011
One Year Than One Year
Bonds payable:
2001 A General Obligation Bonds` $6,900,000
($175,000)
$6,725,000
$185,000 $6,540,000
2011 General Obligation Bonds
$8,000,000
8,000,000
- 8,000,000
Subtotal for Bonds Payable(') 22,015,000
27,830,000
(8,010,000)
41,835,000
1,445,000 40,390,000
Claims and judgments payable 6,300,339
3,009,703
(2,941,277)
6,368,765
2,321,777 4,046,988
Compensated absences 2,178,279
1,582,478
(1,546,829)
2,213,928
1,546,829 667,099
GASB 45 830,548
929,049
(523,345)
1,236,252
1,236.252
Total $31,324,166
$33,351,230
($13,021,451)
$51,653,945
$5,313,606 $46,340,339
`Being refunded with proceeds of the Bonds
--
m Because of the dissolution of redevelopment agencies in California, tax allocation bonds of the former
Arcadia Redevelopment
Agency are not included in this table.
Source: City of Arcadia
Typically, the General Fund has been used to liquidate
the liability for compensated absences and
claims and judgments payable.
In May 2011, the City issued Series 2011 General Obligation Bonds in the amount of $8,000,000. The
bonds were authorized at an election of the registered voters of the City. The purpose of the bonds was to
finance a portion of the cost of constructing, installing, acquiring and improving a grade separation at the
intersection of Santa Anita Avenue and the proposed Foothill Extension of the Metropolitan Transit Authority
Gold Line. The amount of bonds outstanding at June 30, 2011 totals $8,000,000.
No Default
The City has never defaulted in the payment of principal or interest on any of its loans, bonds, notes or
other debt obligations or on any of its lease obligations.
Pension Plan
The City contributes to the California Public Employees' Retirement System (PERS), an agent multiple -
employer public employee defined benefit pension plan. PERS provides retirement and disability benefits,
annual cost -of- living adjustments, and death benefits to plan members and beneficiaries. PERS acts as a
common investment and administrative agent for participating public entities within the State of California.
Benefit provisions and all other requirements are established by State statute and City ordinance. Copies of
PERS' annual financial report may be obtained from its executive office at 400 "P" Street, Sacramento,
California 95814.
Participants are required to contribute 8% for miscellaneous employees and 9% for safety employees of
their annual covered salary. The City is required to contribute at an actuarially determined rate; the current rate
is 19.633% for miscellaneous employees, and 35.076% for safety employees, of annual covered payroll for year
ended June 20, 2013. The contribution requirements of plan members and the City are established and may be
amended by PERS.
For the current fiscal year, the City's annual pension cost of $7,141,567 for PERS was equal to the
City's required and actual contributions. The required contribution was determined as part of the June 30, 2010,
actuarial valuation using the entry age normal actuarial cost method. The actuarial assumptions included (a)
7.75% investment rate of return (net of administrative expenses), (b) projected salary increases ranging from
A -3
3.525% to 14.45% for miscellaneous employees and from 3.525% to 13.15% for safety employees depending on
age, service, and type of employment, and (c) 3.25% per year cost -of- living adjustments. Both (a) and (b)
included an inflation component of 3.00 %. The actuarial value of PERS assets was determined using techniques
that smooth the effects of short-term volatility in the market value of investments over a three -year period.
PERS' unfunded actuarial accrued liability (or surplus) is being amortized as a level percentage of projected
payroll on a closed basis. The average remaining amortization period at June 30, 2010, was 22 years for
miscellaneous and 31 years for safety employees for prior and current service unfunded liability.
Funding Status as of the Most Recent Actuarial Date
The City contributes to the California Public Employees' Retirement System (Ca1PERS), as an agent
multiple — employer public employee defined benefit pension plan. The amounts reflected herein represent the
City's portion as reported by CalPERS. The following is the most recent information available.
Safety Plan
Miscellaneous Plan
(A)
(B)
(C)
(D)
(E)
(F)
Unfunded
Actuarial
Unfunded
Liability as
Entry Age
Actuarial
Percentage of
Actuarial
Actuarial
Actuarial
Accrued
Funded
Covered
Valuation
Asset
Accrued
Liability
Ratio
Covered
Payroll
Date
Value
Liability
(B-A)
(A/B)
payroll
(M
6/30/10
$126,618,518
$164,546,720
$37,928,202
76.9%
$12,347,110
307.2%
Miscellaneous Plan
Postemployment Health Care Benefits
The City provides certain health insurance benefits, in accordance with the fringe benefits resolution, to
retired employees. An eligible retiree is a Management or City employee who retires on a service retirement and
has 125 days of accumulated sick leave at the date of retirement. Such payment shall cease by the employee's
sixty -fifth (65) birthday. If the retired employee has other group medical coverage available to them, then this
other group insurance shall be primary and the City's health insurance plan shall function as a secondary
coinsurance. An employee who has fewer than 125 days of accumulated sick leave at the date of retirement may
become eligible for coverage by paying the City an amount equal to the employee's daily pay rate at the time of
retirement times the number of days needed to meet the 125 days of accumulated sick leave requirement with
the following restrictions. The requirement varies slightly among different employee groups.
A -4
(A)
(B)
(C)
(D)
(E)
(F)
Unfunded
Actuarial
Unfunded
Liability as
Entry Age
Actuarial
Percentage of
Actuarial
Actuarial
Actuarial
Accrued
Funded
Covered
Valuation
Asset
Accrued
Liability
Ratio
Covered
Payroll
Date
Value
Liability
(B-A)
LA/133)
paroll_
(C/E)
6/30/10
$84,290,451
103,138,122
18,847,671
81.7%
$12,245,019
153.9%
Postemployment Health Care Benefits
The City provides certain health insurance benefits, in accordance with the fringe benefits resolution, to
retired employees. An eligible retiree is a Management or City employee who retires on a service retirement and
has 125 days of accumulated sick leave at the date of retirement. Such payment shall cease by the employee's
sixty -fifth (65) birthday. If the retired employee has other group medical coverage available to them, then this
other group insurance shall be primary and the City's health insurance plan shall function as a secondary
coinsurance. An employee who has fewer than 125 days of accumulated sick leave at the date of retirement may
become eligible for coverage by paying the City an amount equal to the employee's daily pay rate at the time of
retirement times the number of days needed to meet the 125 days of accumulated sick leave requirement with
the following restrictions. The requirement varies slightly among different employee groups.
A -4
and
1. The employee must have reached age 55;
2. The employee must have worked full -time continuously for the City for a minimum of 15 years;
3. The employee would be limited to purchasing a maximum of 60 days (480 hours) of sick leave.
The City also provides a $10,000 group term life insurance plan to management employees who retire
after July 1, 1979, but who were hired into a management classification prior to September 21, 1982, in
accordance with the controlling provisions of the plan. The City recognizes the cost of providing these benefits
by recording the insurance premiums when expenditures occur. The plans are advance funded. There are 18
active plan participants. Contributions of $0 were paid for fiscal year ended June 30, 2012. The plan does not
apply to employees hired after 1982.
The required contribution of the City is based on a pay -as- you -go financing requirement. For fiscal year
2012, the City contributed $610,995 to the pbn. The City anticipates that its contribution for fiscal -year 2012
will be $724,950.
The City's annual Other Postemployment Benefit (OPEB) cost (expense) is calculated base on the
Annual Required Contribution of the Employer (ARC), an amount actuarially determined in accordance with the
parameters of GASB Statement 45. The ARC represents a level of funding that, if paid on an ongoing basis, is
projected to cover normal cost each year and amortize any unfunded actuarial liabilities (or funding excesses)
over a period not to exceed thirty years.
As of July 1, 2011, the most recent actuarial valuation date, the plan was zero percent funded. The
Actuarial Accrued Liability for benefits was $10,220,703, and the actuarial value of assets was $0, resulting in
an UAAL of $10,220,703. The covered payroll (annual payroll of active employees covered by the plan) was
$34,805,991 and the ratio of UAAL to the covered payroll was 29 %.
Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and
assumptions about the probability of occurrence of events far into the future. Examples include assumptions
about future employment, mortality, and the healthcare cost trend. Amounts determined regarding the funded
status of the plan and the annual required contributions of the employer are subject to continual revision as
actual results are compared with past expectations and new estimates are made about the future.
Impact of State Budget
The State of California is experiencing significant financial and budgetary stress. State budgets are
affected by national and state economic conditions and other factors over which the City has no control. The
State's financial condition and budget policies affect communities and local public agencies throughout
California. To the extent that the State budget process results in reduced revenues to the City, the City will be
required to make adjustments to its budget.
The complete 2012 -13 State Budget is available from the California Department of Finance website at
www.dof.ca.gov. An impartial analysis of the budget is posted by the Office of the Legislative Analyst at
www.lao.ca.gov. The City can take no responsibility for the continued accuracy of these internet addresses or
for the accuracy, completeness or timeliness of information posted there, and such information is not
incorporated herein by such reference. The City cannot predict what actions will be taken in future years by the
State Legislature and the Governor to address the State's current or future budget deficits. Future State budgets
will be affected by national and state economic conditions and other factors over which the City has no control.
To the extent that the State budget process results in reduced revenues to the City, the City will be required to
make adjustments to its budget.
A -5
Insurance
The City retains a level of risk for both general liability and worker's compensation.
The City is self - insured for the first $500,000 on each general liability claim against the City. The
insurance coverage in excess of the self - insured amount is provided by California Insurance Pool Authority
(CIPA), a public entity risk pool currently operating as a common risk management and insurance program for
12 California cities. Effective July 1, 2006, the City became a member of the CIPA. The City pays an annual
premium to the pool for its excess general liability insurance coverage. The agreement for formation of the
CIPA provides that the pool will be self- sustaining through member premiums. The City continues to use
commercial companies for all other risks of loss, including property insurance, auto physical damage insurance
and special events insurance.
As a member of CIPA, any losses in excess of the City's self - insured amount up to $2,000,000 are
shared by all participating members. Costs of covered claims above $2,000,000 to $40,000,000 per occurrence
are currently paid by reinsurance acquired by-CIPA.
The City has had a self - insured workers' compensation program for a number of years. For the 2009-
20 10 fiscal year, the self - insured retention was $750,000. Beginning July 1, 2006, the insurance in excess of the
self - insured amount is provided by California Insurance Pool Authority (CIPA). As a member of CIPA, all
participating members share any losses in excess of the City's self - insured amount up to $3,000,000. Costs
covered claims above $3,000,000 to 50,000,000 per occurrence are currently paid by reinsurance acquired by
CIPA.
The City Investment Fund
Pursuant to the City's Investment Policy (the "Investment Policy "), the City's Treasurer is responsible
for investing the cash balances in all City Funds in accordance with the California Government Code, Sections
53600 et seq. and 53635 et seq. The Investment Policy does not include long term debt reserve funds and
deferred compensation funds, which are exceptions covered by other more specific Government Code sections
and the legal documents unique to each debt transaction. The City adopted its Investment Policy in order to
establish the investment scope, objectives, delegation of authority, standards of prudence, reporting
requirements, internal controls, eligible investments and transactions, diversification requirements, risk
tolerance, and safekeeping and custodial procedures for the investment of the funds of the City. All City funds
will be invested in accordance with this Investment Policy and with applicable sections of the California
Government Code. The Investment Policy states that the principal investment objectives of the City are as
follows:
Preservation of capital and protection of investment principal.
2. Maintenance of sufficient liquidity to meet anticipated cash flows.
Attainment of a market rate of return.
4. Diversification to avoid incurring unreasonable market risks.
5. Compliance with the City's Municipai Code and with all applicable City resolutions, California
statutes and Federal regulations.
Under the Investment Policy, the City Treasurer and other individuals assigned to manage the
investment portfolio, acting within the intent and scope of the investment policy and other written procedures,
and exercising due diligence, shall be relieved of personal responsibility and liability for an individual
investment's credit risk or market price changes, provided material deviations from expectations are reported in
a timely manner and appropriate action is taken to control any adverse developments.
A -6
As of April 1, 2012, the City's investments were as follows:
Table A-4
CITY OF ARCADIA
Investment Report
For the Month Ending March 31, 2012
Period Remaining
to Maturity
Amount
Percent of Total
Less than 1 Year
$55,819,685.84
55%
Between 1 and 2 Years
19,579,879.50
19%
Between 2 and 5 Years
26,864245.01
26%
Total Investments
$102,263,810.35
100%
Portfolio Comaosition
Amount
Percent of Total
Federal Home Loan Bank
$7,168,030.00
7%
Federal Farm Credit Bank
4,998,455.00
5%
Federal National Mortgage Association
21,958,502.50
21%
Federal Home Loan Mortgage Corporation
17,125,030.00
17%
Treasury
6,095,000.01
6%
Municipal Bonds
1,800,000.00
2%
Total Agencies
$59,145,017.51
58%
Certificates of Deposit
$800,000.00
1%
State Local Agency Investment Fund
34,161,873.55
33%
Corporate Issues
5,064,939.96
5%
Other Investment
3,091,979.33
3%
Total Investments
$102,263,810.35
100%
(1) Table A -4 contains all of the City's cash investments, including moneys that are restricted for various purposes other
than general operation.
Community Service Facilities
The City has a 30,000 square foot Community Center and patio area in active use by the entire
community. The City has a five person staff specifically dedicated to the seniors in Arcadia in addition to the
five full -time and numerous part-time Recreation and Community Services staff who operate numerous family,
senior, youth group athletic programs and operate the City's twenty parks. Located in the Civic Center complex
are the City Hall, which houses the City administrative, financial, legal and community development offices, the
nearby Police Station, City Council Chambers, and Civic Center soccer field. The 36,000 square foot City
Library houses over 130,000 books, as well as videos, books on tape and a children's section. The Library has a
large community room for functions. There is an active Community Coordinating Council composed of all the
civic, social, philanthropic, service, school, religious, welfare and community organizations. These activities are
held in many of the same facilities as named above, as well as at the Women's Club, Assistance League
building, Masonic Temple, and the Los Angeles County Arcadia Regional Park buildings. There are
approximately 27 churches in Arcadia whose halls and assembly rooms are often used for community events. In
addition to the regional Westfield Santa Anita Mall, the City has three other major community facilities. The
privately owned world famous Santa Anita Race Track sponsors numerous civic and community events in its
clubhouse and grandstand areas and in the adjacent parking lot. The Los Angeles County Arboretum also has
numerous flower and horticulture events, as well as cultural and historical'presentations on its grounds. The Los
Angeles County Park has community events in its open areas, playfields, buildings and event areas.
A -7
Healthcare
The 450 -bed and 640 medical staffed Arcadia Methodist Hospital is located immediately west of the
City Hall on City -owned property, which is leased to them for $1 per year. The Hospital provides
comprehensive acute care such as medical, surgical, prenatal, pediatrics, oncology, intensive, neonatal and adult
care, and serves as the "anchor" for numerous physicians, surgeons, clinics, and healthcare service providers
operating, in the Arcadia area. Methodist Hospital opened its new $140 million tower in September 2011. The
tower has six floors, and 155,000 square feet, and was built to address the needs of emergency and critical care
services. The tower includes the new state -of -the -art Hollfelder Emergency Care Center, with 26 beds on the
first floor, along with an 18 bed observation unit for short stay patients. The upper floors include 140 beds,
including 20 for critical care patients. The upper floors will serve patients with cardiac, respiratory, or
neurological issues, and stroke recovery.
Education
The schools within the City are go -ymed by Arcadia Unified School District. There are eleven (11)
schools - 6 elementary, 3 middle, 1 high and I alternative learning center
The City is in the Pasadena City College District, but students also attend Citrus, Mount San Antonio
and Rio Hondo Community Colleges.
In the vicinity of Arcadia there are several nationally recognized universities - California Institute of
Technology, Pasadena; the Claremont Colleges, Claremont; the University of California at Los Angeles; the
University of Southern California, Los Angeles. Located within reasonable driving distance of the City are also
California Polytechnic, Pomona; University of La Verne; and Occidental College.
Utilities
The City is served by:
Water - City of Arcadia Public Works Services Department
Sanitary Sewer - Los Angeles County Sanitation District
Storm/Flood Drainage - Los Angeles Public Works Department
Electric - Southern California Edison
Gas - Southern California Gas Company
Phone – SBC and Verizon
Cable – Time Warner Cable
Transportation
Auto/Truck. The City is bisected east; west by the Interstate 210 (Foothill) Freeway which links autos
and trucks to the Interstate 605 (San Gabriel) Freeway and then to the Interstate 10 (San Bernardino), California
71 (Chino Valley), and California 60 (Pomona) Freeways. To the west Interstate 210 links to the Interstate 5
(Golden State), US 101 (Hollywood), the California 134 (Ventura), and Interstate 405 (San Diego) Freeways.
The City has three major north/south arterials — Santa Anita Avenue, Baldwin Avenue, and in the
extreme southeast part of the City, Peck Road/Myrtle Avenue. A short distance to the west is Rosemead
Boulevard, a major State Highway (Route 19). The City has five major east/west arterials - Foothill Boulevard,
Colorado Boulevard, Huntington Drive, Duarte Road, and Live Oak Avenue (Arrow Highway)/Las Tunas
Drive.
Rail. The Gold Line Construction Authority is scheduled to construct the Gold Line from Pasadena's
Sierra Madre Boulevard, immediately west of Arcadia to Azusa. The Gold Line Construction Authority is
A -8
currently under construction on the extension, which will include a station in Arcadia at the Northwest corner of
1 st Avenue and Santa Clara. The City is actively planning for land use improvements around the station.
Two Miles south of the southern border of the City on Santa Anita Avenue in El Monte, is the MTA
Metrolink Rail Station, the commuter train linking downtown Los Angeles to the suburbs and ultimately to
Amtrak and the rest of the country.
Bus. The City is served by two major bus carriers — Foothill Transit and the MTA. Passengers can
travel throughout the County on these carriers. The City has its own demand bus /van system, Arcadia Transit,
which is one the most successful of its kind in the County.
Air. The City is served by three international airports — Los Angeles International, 25 miles to the
southwest; Ontario International, 25 miles to the east; and Orange County, 40 miles to the southeast. Two
regional airports also service Arcadia — Burbank/Pasadena/Glendale 20 miles to the west, and Long Beach, 30
miles to the south. The El Monte Airport, 5 miles from downtown Arcadia south on Santa Anita Avenue, is a
local airport for small planes and helicopters_–
Shipping. Sea — The Ports of Los Angeles and Long Beach, collectively the third largest port in the
world, and the largest in the United States, are 35 miles to the south.
Shipping. Trucking — The industrial areas to the south and east of the City are major distribution and
warehousing centers, including the cities of El Monte, Industry, Irwindale, Ontario, Fontana, Rancho
Cucamonga.
Climate and Topography
The City enjoys a Mediterranean climate with temperatures ranging from an average low of 42 degrees
Fahrenheit in the winter to an average high of 92 degrees Fahrenheit in the summer. The City receives an
average of 16 inches of rain annually.
The City slopes gradually upwards to the San Gabriel Mountains to the north with the extreme north end
of the City and Wilderness Park area being semi - mountainous.
There are two major flood channels bisecting the City in a north/south direction, the Arcadia Wash
which runs through the Race Track, then through the center of the City into Temple City, and the Santa Anita
Wash which drains the mountains to the north (Santa Anita Dam area) and runs through the downtown and
along the eastern edge of the City into El Monte. Both drain into the Whittier Narrows area and then into the San
Gabriel River.
Earthquake Fault Zones
The City is approximately 35 miles from the San Andreas Fault which runs southeast to northwest from
the Palm Springs area, San Bernardino, and through Palmdale, directly north of Arcadia.
The Sierra Madre Fault runs in an east/west direction across the northern semi - mountainous section of
the City.
The Raymond Hill Fault runs in a generally east/west direction from Monrovia through Foothill Middle
School, the Santa Anita Race Track, and the Arboretum.
Flood Areas
The City has four inundation areas.
A -9
Santa Anita Dam — This area includes the entire east part of the City east of the Arcadia Wash and into
Monrovia.
Sierra Madre Dam — This area includes the northern extreme of the City to the 210 Wash and overlaps
the Santa Anita Dam area.
Sawpit Dam — This area includes the extreme eastern edge of the City east of the Arcadia Wash south
of Duarte Road and running south of Live Oak Avenue.
Morris S. Jones Reservoir — This area includes the northwest area of the City extending from the 210
Freeway to the Santa Anita Race Track.
Fire Hazard Area
The northern extension of the City is semi - mountainous terrain. There is an extreme fire hazard zone
north and east (Monrovia) of the City, a narrow high fire hazard zone along the northern edge of the City
extension, and a low fire hazard zone south of the mountains and extending almost to Foothill Boulevard.
No Default
The City has never defaulted in the payment of principal or interest on any of its loans, bonds, notes or
other debt obligations or on any of its lease obligations.
Population
The population of the City as of January 1, 2012, was 56,546 according to the State Department of
Finance. A historical summary of the City's population is shown below.
Table A -5
CITY OF ARCADIA
Population
Year Population
2003
55,420
2004
55,694
2005
55,923
2006
55,932
2007
56,015
2008
56,079
2009
56,337
2010
56,719
2011
56,548
2012
56,546
Note: Population data is dated as of January 1 for each respective year except for 2000 which is dated as of April 1.
Source: California Department of Finance, Demographic Research Unit.
Commerce
The number of establishments selling merchandise subject to sales tax and the valuation of taxable
transactions is presented in the following table.
A -10
Table A -6
CITY OF ARCADIA
Taxable Sale
Taxable Transactions
(in thousands of dollars)
2005 2006 2007 2008 2009 2010
Retail stores $ 700,257 $ 717,906 $ 736,693 $ 712,158 $ 665,894 $ 680,040
All other outlets 826,456 844,541 856,724 823,933 752,635 761,875
Total 526.713 $1,562,442 $1193.417 $.11 1 $1,418,522 1 441 915
Source: California State Board of Equalization.
Employment and Industry
The City is a part of the Los Angeles County Primary Statistical labor market area. The distribution of
employment is this area is as follows:
Civilian Labor Force
Civilian Employment
Civilian Unemployment
Civilian Unemployment Rate
Agriculture
Mining and Logging
Construction
Manufacturing
Transportation, Warehousing &
Utilities
Wholesale Trade
Retail Trade
Finance & Insurance
Real Estate
Government
Total, All Industry
Table A -7
LOS ANGELES COUNTY MSA
Labor Force and Industry Employment
(Data Not Adjusted for Seasonality)
Annual Averages 2007 -2011
2007
2008
2009
2010
2011
4,872,500
4,934,800
4,904,300
4,910,500
4,924,400
4,625,600
4,565,500
4,335,200
4,291,400
4,318,900
246,900
369,300
569,000
619,100
605,500
5.1%
7.5%
11.6%
12.6%
12.3%
7,500
6,900
6,200
6,200
5,500
4,400
4,400
4,100
4,100
4,000
157,600
145,200
117,300
104,500
103,500
449,200
434,500
389,200
373,200
365,400
165,600
163,100
151,200
150,600
149,900
227,000
223,700
204,500
203,300
207,200
426,000
416,500
387,000
386,000
390,900
163,300
153,900
142,300
137,800
137,500
55,300
54,300
52,200
51,800
52,300
595,700
603,700
595,800
579.600
565,200
4,129,600
4,077,600
3,830,300
3,779,300
3,799,600
Note: Employment is reported by place of work: it does not include persons involved in labor - management disputes.
Figures are rounded to the nearest hundred. Columns may not add to totals due to rounding.
Source: California Employment Development Department.
Employment
The ten largest private employers in the City as of June 30, 2011 are, shown in the following table.
A -11
Table A -8
CITY OF ARCADIA
Major Private Employers
Source: City of Arcadia Annual Comprehensive Financial Report for Fiscal Year 2010 -11.
The following is a table of the twenty -five largest employers in the County of Los Angeles.
Table A -9
COUNTY OF LOS ANGELES
Major Employers
Employer
AHMC Healthcare Inc
All Nations Church
American Honda Motor Co Inc
Calif Institute of Technology
California State - Northridge
Cedars -Sinai Medical Ctr
Century Plaza Towers
Contractor State License Ctr
FX NETWORKS LLC
Kaiser Foundation Hospital
LAC & USC MEDICAL CTR
Long Beach City Hall
Long Beach Memorial Med Ctr
Los Angeles County Sheriff
Los Angeles Police Dept
Nestle USA
Pomona Valley Hospital Med Ctr
Pro Parts
Providence Health -San Fernando
Providence Health- Southern Ca
Santa Monica College
Sony Pictures Entertainment
UCLA
UCLA Health System
Walt Disney Co
Description
Hospitals
Churches
Automobile & Truck Brokers (Whls)
Schools- Universities & Colleges Academic
Schools - Universities & Colleges Academic
Hospitals
Office Buildings & Parks
Schools- Business & Vocational
Television -Cable & CATV
Hospitals
Hospitals
City Government - Executive Offices
Hospitals
Sheriff
Police Departments
Food Products & Manufacturers
Hospitals
Automobile Parts & Supplies - Retail -New
Health Services
Health Services
Schools- Universities & Colleges Academic
Motion Picture Producers & Studios
Schools- Universities & Colleges Academic
Schools- Universities & Colleges Academic
Motion Picture Producers & Studios
Source: California Employment Development Department
A -12
Percentage
of Total City
Emplover
Employees
Rank
Employment
Vons Companies Inc.
459
1
3.35%
Emergency Groups Office
300
2
2.19%
Macy's West
294
3
2.15%
Worley Parsons Group, Inc.
277
4
2.02%
Nordstrom Inc.
274
5
2.00%
JC Penney Corp. Inc.
272
6
1.99%
M W H Americas, Inc.
184
7
1.34%
The Cheesecake Factory
168
8
1.23%
24 Hours Fitness #906
164
9
1.20%
Healthcare Partners Medical
-- " 161
10
1.18%
Total
2,553
18.66%
Source: City of Arcadia Annual Comprehensive Financial Report for Fiscal Year 2010 -11.
The following is a table of the twenty -five largest employers in the County of Los Angeles.
Table A -9
COUNTY OF LOS ANGELES
Major Employers
Employer
AHMC Healthcare Inc
All Nations Church
American Honda Motor Co Inc
Calif Institute of Technology
California State - Northridge
Cedars -Sinai Medical Ctr
Century Plaza Towers
Contractor State License Ctr
FX NETWORKS LLC
Kaiser Foundation Hospital
LAC & USC MEDICAL CTR
Long Beach City Hall
Long Beach Memorial Med Ctr
Los Angeles County Sheriff
Los Angeles Police Dept
Nestle USA
Pomona Valley Hospital Med Ctr
Pro Parts
Providence Health -San Fernando
Providence Health- Southern Ca
Santa Monica College
Sony Pictures Entertainment
UCLA
UCLA Health System
Walt Disney Co
Description
Hospitals
Churches
Automobile & Truck Brokers (Whls)
Schools- Universities & Colleges Academic
Schools - Universities & Colleges Academic
Hospitals
Office Buildings & Parks
Schools- Business & Vocational
Television -Cable & CATV
Hospitals
Hospitals
City Government - Executive Offices
Hospitals
Sheriff
Police Departments
Food Products & Manufacturers
Hospitals
Automobile Parts & Supplies - Retail -New
Health Services
Health Services
Schools- Universities & Colleges Academic
Motion Picture Producers & Studios
Schools- Universities & Colleges Academic
Schools- Universities & Colleges Academic
Motion Picture Producers & Studios
Source: California Employment Development Department
A -12
The following table summarizes the labor force, employment and unemployment figures over the past
five years for the City of Arcadia, the County of Los Angeles, the State of California, and the nation as a whole.
Table A -10
CITY OF ARCADIA
County of Los Angeles, State of California, and United States
Average Annual
Civilian Labor Force, Employment and Unemployment
Unemployment
Year and Area Labor Force Employment Unemployment (Z) Rate (3)
2007
Arcadia
28,400
27,600
800
2.8%
Los Angeles County
4,827,508
4,625,600
246,900
5.1%
California
17,970,800
17,011,000
959,800
5.3%
United States
153,124,0000
146,047,000
7,078,000
4.6%
2008
Arcadia
28,400
27,200
1,200
4.2%
Los Angeles County
4,934,800
4,565,500
369,300
7.5%
California
18,251,600
16,938,300
1,313,200
7.2%
United States
154,287,000
145,362,000
8,924,000
5.8%
2009
Arcadia
27,700
25,800
1,800
6.7%
Los Angeles County
4,903,300
4,335,200
569,000
11.6%
California
18,250,200
16,163,900
2,086,200
11.4%
United States
154,142,000
139,877,000
14,265,000
9.3%
2010
Arcadia
27,600
25,600
2,000
7.3%
Los Angeles County
4,910,500
4,291,400
619,100
12.6%
California
18,316,400
16,051,500
2,264,900
12.4%
United States
N/A
N/A
N/A
N/A
2011
Arcadia
27,700
25,700
2,000
7.1%
Los Angeles County
4,924,400
4,318,900
605,600
12.3%
California
18,384,900
16,226,600
2,158,300
11.7%
United States
N/A
N/A
N/A
N/A
(1) Includes persons involved in labor - management trade disputes.
(2) Includes all persons without jobs who are actively seeking work.
(3) The unemployment rate is computed from unrounded data: therefore, it may differ from rates computed from rounded
figures in this table.
Source: California Employment Development Department, based on March 2000 benchmark and U.S. Department of
Labor, Bureau of Labor Statistics.
Home Prices
The following table shows the median home prices for select cities within Los Angeles County and
throughout Los Angeles County in June 2011 and in June 2012, together with the percentage of increase or
decrease with respect to such prices.
A -13
Table A -11
CITY OF ARCADIA
Homes Sold(')
County /City /Area
2010
2011
% of Change
Arcadia
$720,500
$750,000
4.09%
El Monte
305,000
280,500
-8.03%
Monrovia
444,000
402,500
-9.35%
Pasadena
505,000
500,000
-0.99%
Sierra Madre
685,000
639,000
-6.72%
Temple City
530,000
510,000
-3.77%
Los Angeles County
335,000
315,000
-5.97%
") Reporting resale single family residences and condos as well as new homes.
Source: DataQuick California Home Sale Price Medians by County and City, 2012.
Construction Activity
The following table is a five -year summary of the valuation of building permits issued by the City:
Table A -12
CITY OF ARCADIA
Building Permit Activity Summary: Units and Valuations
Source: 2007 -2009 - Construction Industry Research Board; 2010 and 2011 — City of Arcadia, Development Services
Department.
A -14
2007
2008
2009
2010
2011
Residential
Single- Family
$45,976,979
$31,492,732
$33,670,778
$41,379,611
$66,008,261
Multifamily
960,499
14,432,685
1,726,624
2,580,150
10,159,175
Alt. & Additions
17,178,002
13,970,680
10,713,807
12,449,951
10,147,172
Total
$64,115,480
$59,896,097
$46,111,009
$56,409,712
$86,314,608
Non - Residential
New Commercial
$5,576,128
$29,553,561
0
$2,086,981
$6,862,179
New Industrial
1,505,861
0
0
0
0
Other
3,315,702
2,259,710
1,834,576
2,689,597
3,753,407
Alt. & Additions
8,698,987
10,521,514
26,313,910
4,297,183
12,808,944
Total
$19,096,678
$42,334,785
$28,148,486
$9,073,761
$23,424,530
Total All Building
$83,212,158
$102,230,882
$74,259,495
$65,483,473
$109,739,138
Dwelling Units:
Single family
78
51
48
49
58
Multiple family
6
82
7
17
9
Total
84
133
55
66
67
Source: 2007 -2009 - Construction Industry Research Board; 2010 and 2011 — City of Arcadia, Development Services
Department.
A -14
APPENDIX B
CITY OF ARCADIA
COMPREHENSIVE ANNUAL FINANCIAL REPORT
FOR THE YEAR ENDED JUNE 30, 2011
I:
APPENDIX C
PROPOSED FORM OF OPINION OF BOND COUNSEL
November _, 2012
City Council
City of Arcadia
Arcadia, California
Re, $ City of Arcadia General Obligation Refunding Bonds, Series 2012 (Police
Station Project)
Members of the City Council:
We have acted as bond counsel for the City of Arcadia (the "City") in connection with the authorization
and issuance of the above - referenced bonds (the "Bonds "). The Bonds are authorized pursuant to Chapter 4
(commencing with Section 43600) of Division 4 of Title 4 and Articles 9 and 11, Chapter 3, Part 1 of Division 2
of the Government Code of the State of California (collectively, the "Act ") and Resolution No. of
the City adopted on September 18, 2012, together with that certain Supplement to Resolution No.
dated as of November 1, 2012 executed in connection therewith (collectively, the "Resolution "). Capitalized
terms used herein and not defined shall have the meanings given such terms in the Resolution.
In such connection, we have examined originals or copies identified to our satisfaction as being true
copies of the Resolution and certain other documents and records of the City. As to questions of fact material to
our opinion, we have relied upon certifications of officers of the City, the initial purchasers of the Bonds and
others which have been furnished to us, but we have not undertaken to verify the accuracy thereof through
independent investigation.
Based upon and subject to the foregoing, and in reliance thereon, we are of the following opinions:
1. The Bonds have been duly and validly authorized and constitute legal, valid and binding
obligations of the City enforceable in accordance with their terms and the terms of the Resolution, except as the
same may be limited by bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium or other
laws relating to or affecting generally the enforcement of creditors' rights, by equitable principles, by the
exercise of judicial discretion in appropriate cases and by limitations on legal remedies against public agencies
in the State of California. The Bonds are obligations of the City but are not a debt of the City, the State of
California or any other political subdivision thereof within the meaning of any constitutional or statutory
limitation.
2. The Resolution has been duly adopted by the City Council of the City and constitutes a legal,
valid and binding obligation of the City. The Resolution is enforceable in accordance with its terms except as
the same may be limited by bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium or other
laws relating to or affecting generally the enforcement of creditors' rights, by equitable principles, by the
exercise of judicial discretion in appropriate cases and by limitations on legal remedies against public agencies
in the State of California, provided, however, we express no opinion as to the enforceability of provisions of the
Resolution as to indemnification, penalty, contribution, choice of law, choice of forum or waiver contained
therein.
3. The Bonds are secured by the proceeds of ad valorem taxes levied upon all property subject to
such taxes in the City which taxes are unlimited as to rate or amount (except as to certain personal property
which is taxable at limited rates) for payment of the Bonds and the interest thereon.
C -1
4. Under existing statutes, regulations, rulings and judicial decisions, interest on the Bonds is
excluded from gross income for federal income tax purposes and is not an item of tax preference for purposes of
calculating the federal alternative minimum tax imposed on individuals and corporations; however, it should be
noted that, with respect to corporations, such interest may be included as an adjustment in the calculation of
alternative minimum taxable income, which may affect the alternative minimum tax liability of corporations.
Interest on the Bonds is exempt from State of California personal income tax.
6. The difference between the issue price of a Bond (the first price at which a substantial amount
of the Bonds of a maturity is to be sold to the public) and the stated redemption price at maturity with respect to
such Bonds constitutes original issue discount. Original issue discount accrues under a constant yield method,
and original issue discount will accrue to a Bondowner before receipt of cash attributable to such excludable
income. The amount of original issue discount deemed received by a Bondowner will increase the Bondowner's
basis in the applicable Bond. Original issue discount that accrues to the Bondowner is excluded from the gross
income of such owner for federal income tax purposes, is not an item of tax preference for purposes of the
federal alternative minimum tax imposed _gin individuals and corporations, and is exempt from State of
California personal income tax.
7. The amount by which a Bond owner's original basis for determining loss on sale or exchange in
the applicable Bond (generally the purchase price) exceeds the amount payable on maturity (or on an earlier call
date) constitutes amortizable Bond premium which must be amortized under Section 171 of the Code; such
amortizable Bond premium reduces the Bond owner's basis in the applicable Bond (and the amount of tax -
exempt interest received), and is not deductible for federal income tax purposes. The basis reduction as a result
of the amortization of Bond premium may result in a Bond owner realizing a taxable gain when a Bond is sold
by the owner for an amount equal to or less (under certain circumstances) than the original cost of the Bond to
the owner. Purchasers of the Bonds should consult their own tax advisors as to the treatment, computation and
collateral consequences of amortizable Bond premium.
The opinions expressed herein as to the exclusion from gross income for federal income tax purposes of
interest on the Bonds is subject to the condition that the City complies with all requirements of the Internal
Revenue Code of 1986, as amended (the "Code "), that must be satisfied subsequent to the issuance of the Bonds
to assure that such interest will not become includable in gross income for federal income tax purposes. Failure
to comply with such requirements of the Code might cause interest on the Bonds to be included in gross income
for federal income tax purposes retroactive to the date of issuance of the Bonds. The City has covenanted to
comply with all such requirements. Except as expressly stated herein, we express no opinion as to any tax
consequences related to the Bonds.
Certain agreements, requirements and procedures contained or referred to in the Resolution and the Tax
Certificate executed by the City with respect to the Bonds may be changed and certain actions may be taken or
omitted, under the circumstances and subject to the terms and conditions set forth in such documents. We
express no opinion as to the effect on the exclusion from gross income for federal income tax purposes of the
interest on the Bonds if any such change occurs or action is taken or omitted upon advice or approval of bond
counsel other than Stradling Yocca Carlson & Rauth, a Professional Corporation.
We are admitted to the practice of law only in the State of California and our opinion is limited to
matters governed by the laws of the State of California and federal law. We assume no responsibility with
respect to the applicability or the effect of the laws of any other jurisdiction and express no opinion as to the
enforceability of the choice of law provisions contained in the Resolution.
The opinions expressed herein and the exclusion of interest on the Bonds from gross income for federal
income tax purposes may be affected by actions taken (or not taken) or events occurring (or not occurring) after
the date hereof. Our engagement as Bond Counsel terminates upon the issuance of the Bonds and we have not
undertaken to determine, or to inform any person, whether any such actions or events are taken (or not taken) or
do occur (or do not occur).
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The opinions expressed herein are based upon our analysis and interpretation of existing laws,
regulations, rulings and judicial decisions and cover certain matters not directly addressed by such authorities.
We express no opinion herein as to the accuracy, completeness or sufficiency of the Official Statement
relating to the Bonds or other offering material relating to the Bonds and expressly disclaim any duty to advise
the purchaser or owners of the Bonds with respect to matters contained in the Official Statement.
Respectfully submitted,
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APPENDIX D
FORM OF CONTINUING DISCLOSURE CERTIFICATE
This Continuing Disclosure Certificate (the "Disclosure Certificate ") is executed and delivered by the
City of Arcadia (the "City ") in connection with the issuance of City of Arcadia General Obligation Refunding
Bonds, Series 2012 (Police Station Project) (Bank Qualified) (the "Bonds "). The Bonds are being issued
pursuant to a Resolution of the City dated , 2012 (the "Resolution "). The City covenants and
agrees as follows:
SECTION 1. Purpose of the Disclosure Certificate. This Disclosure Certificate is being executed and
delivered by the City for the benefit of the Holders and Beneficial Owners of the Bonds and in order to assist the
Participating Underwriter in complying with S.E.C. Rule 15c2- 12(b)(5).
SECTION 2. Definitions. In addition to the definitions set forth in the Resolution, which apply to
any capitalized term used in this Disclosure-Certificate unless otherwise defined in this Section, the following
capitalized terms shall have the following meanings:
"Annual Report" shall mean any Annual Report provided by the City pursuant to, and as described in,
Sections 3 and 4 of this Disclosure Certificate.
"Beneficial Owner" shall mean any person which (a) has the power, directly or indirectly, to vote or
consent with respect to, or to dispose of ownership of, any Bonds (including persons holding Bonds through
nominees, depositories or other intermediaries), or (b) is treated as the owner of any Bonds for federal income
tax purposes.
"Dissemination Agent" shall mean initially The Bank of New York Mellon Trust Company, N.A., or
any successor Dissemination Agent designated in writing by the City and which has filed with the City a written
acceptance of such designation.
"Holders" shall mean registered owners of the Bonds.
"Listed Events" shall mean any of the events listed in Section 5(a) of this Disclosure Certificate.
"Participating Underwriter" shall mean or any of the original underwriters of the
Bonds required to comply with the Rule in connection with offering of the Bonds.
"Repository" shall mean the Municipal Securities Rulemaking Board's Electronic Municipal Market
Access System for municipal securities disclosures, maintained on the Internet at http: / /emma.msrb.orgl, or any
other repository of disclosure information that may be designated by the Securities and Exchange Commission
as such for purposes of the Rule in the future.
"Rule" shall mean Rule 15c2- 12(b)(5) adopted by the Securities and Exchange Commission under the
Securities Exchange Act of 1934, as the same may be amended from time to time.
"State" shall mean the State of California.
SECTION 3. Provision of Annual Reports.
(a) The City shall, or shall cause the Dissemination Agent to, not later than nine months after the
end of the City's fiscal year (presently ending June 30), commencing with the report for the 2011 -12 Fiscal
Year, provide to the Participating Underwriter and the Repository an Annual Report which is consistent with the
requirements of Section 4 of this Disclosure Certificate. The Annual Report may be submitted as a single
document or as separate documents comprising a package, and may cross - reference other information as
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provided in Section 4 of this Disclosure Certificate; provided that the audited financial statements of the City
may be submitted separately from the balance of the Annual Report and later than the date required above for
the filing of the Annual Report if they are not available by that date. If the City's fiscal year changes, it shall
give notice of such change in the same manner as for a Listed Event under Section 5(f).
(b) Not later than 30 days (nor more than 60 days) prior to said date the Dissemination Agent shall
give notice to the City that the Annual Report shall be required to be filed in accordance with the terms of this
Disclosure Certificate. Not later than 15 Business Days prior to said date, the City shall provide the Annual
Report in a format suitable for reporting to the Repository to the Dissemination Agent (if other than the City). If
the City is unable to provide to the Repository an Annual Report by the date required in subsection (a), the City
shall send a notice to the Repository in substantially the form attached as Exhibit A with a copy to the
Dissemination Agent. The Dissemination Agent shall not be required to file a Notice to the Repository of
Failure to File an Annual Report.
(c) Upon being provided with the Annual, Report, the Dissemination Agent shall file a report with
the City stating it has filed the Annual Report in accordance with its obligations hereunder, stating the date it
was provided and listing the Repository to which it was provided.
SECTION 4. Content and Form of Annual Reports.
(a) The City's Annual Report shall contain or include by reference the following:
1. The audited financial statements of the City for the prior fiscal year, prepared in
accordance with generally accepted accounting principles as promulgated to apply to governmental
entities from time to time by the Governmental Accounting Standards Board. If the City's audited
financial statements are not available by the time the Annual Report is required to be filed pursuant to
Section 3(a), the Annual Report shall contain unaudited financial statements in a format similar to the
financial statements contained in the final Official Statement, and the audited financial statements shall
be filed in the same manner as the Annual Report when they become available.
2. Material financial information and operating data with respect to the City of the type
included in the Official Statement in the following categories (to the extent not included in the City's
audited financial statements):
Summary financial information on revenues, expenditures and fund balances for the City's
general fund reflecting adopted budget for the current fiscal year, annual assessed values, top
taxpayers and overlapping debt.
Any or all of the items listed above may be included by specific reference to other documents, including
official statements of debt issues of the City or related public entities, which have been submitted to the
Repository or the Securities and Exchange Commission. If the document included by reference is a final official
statement, it must be available from the Municipal Securities Rulemaking Board. The City shall clearly identify
each such other document so included by reference.
(b) The Annual Report shall be filed in an electronic format accompanied by identifying
information prescribed by the Municipal Securities Rulemaking Board.
SECTION 5. Reporting of Significant Events.
(a) Pursuant to the provisions of this Section 5, the City shall give, or cause to be given, notice of
the occurrence of any of the following events with respect to the Bonds, not more than ten (10) Business Days
after the event:
1. principal and interest payment delinquencies;
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2. unscheduled draws on debt service reserves reflecting financial difficulties;
3. unscheduled draws on credit enhancements reflecting financial difficulties;
4. substitution of credit or liquidity providers, or their failure to perform;
5. adverse tax opinions or the issuance by the Internal Revenue Service of proposed or
final determinations of taxability, Notices of Proposed Issue (IRS Form 5701 -TEB) or
other material notices or determinations with respect to the tax status of the Bonds;
6. defeasances;
7. tender offers;
8. bankruptcy, insolvency, receivership or similar proceedings; and
9. ratings changes.
(b) Pursuant to the provisions of this Section 5, the City shall give, or cause to be given, notice of
the occurrence of any of the following events with respect to the Bonds, if material:
mergers, consolidations, acquisitions, the sale of all or substantially all of the assets of
the obligated persons or their termination;
2. appointment of a successor or additional trustee or the change of the name of a trustee;
3. non payment related defaults;
4. modifications to the rights of Bondholders;
notices of prepayment; and
6. release, substitution or sale of property securing repayment of the Bonds.
(c) Whenever the City obtains knowledge of the occurrence of a Listed Event the City shall as soon
as possible determine if such event would be material under applicable federal securities laws.
(c) If the City determines that knowledge of the occurrence of a Listed Event under Subsection (b)
would be material under applicable federal securities laws, the City shall promptly file a notice of such
occurrence with the Repository or provide notice of such reportable event to the Dissemination Agent in format
suitable for filing with the Repository. The Dissemination Agent shall have no duty to independently prepare or
file any report of Listed Events. The Dissemination Agent may conclusively rely on the City's determination of
materiality pursuant to Section 5(c).
SECTION 6. Termination of Reporting Obligation. The City's obligations under this Disclosure
Certificate shall terminate upon the legal defeasance, prior redemption or payment in full of all of the Bonds. If
such termination occurs prior to the final maturity of the Bonds, the City shall give notice of such termination in
the same manner as for a Listed Event under Section 5(a).
SECTION 7. Dissemination Agent. The City may, from time to time, appoint or engage a
Dissemination Agent to assist it in carrying out its obligations under this Disclosure Certificate, and may
discharge any such Dissemination Agent, with or without appointing a successor Dissemination Agent. The
Dissemination Agent may resign upon 15 days written notice to the City. Upon such resignation, the City shall
act as its own Dissemination Agent until it appoints a successor. The Dissemination Agent shall not be
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responsible in any manner for the content of any notice or report prepared by the City pursuant to this
Disclosure Certificate and shall not be responsible to verify the accuracy, completeness or materiality of any
continuing disclosure information provided by the City. The fact that the Dissemination Agent or any affiliate
thereof may have any fiduciary or banking relationship with the City shall not be construed to mean that the
Dissemination Agent has actual knowledge of any event or condition except as may be provided by written
notice from the City. The City shall compensate the Dissemination Agent for its fees and expenses hereunder as
agreed by the parties. Any entity succeeding to all or substantially all of the Dissemination Agent's corporate
trust business shall be the successor Dissemination Agent without the execution or filing of any paper or further
act.
SECTION 8. Amendment: Waiver. Notwithstanding any other provision of this Disclosure
Certificate, the City may amend this Disclosure Certificate, and any provision of this Disclosure Certificate may
be waived, provided that the following conditions are satisfied:
(a) If the amendment or waiver relates to the provisions of Sections 3(a), 4, 5(a) or 5(b), it may
only be made in connection with a change -in circumstances that arises from a change in legal requirements,
change in law, or change in the identity, nature or status of an obligated person with respect to the Bonds, or the
type of business conducted;
(b) The undertaking, as amended or taking into account such waiver, would, in the opinion of
nationally recognized bond counsel, have complied with the requirements of the Rule at the time of the original
issuance of the Bonds, after taking into account any amendments or interpretations of the Rule, as well as any
change in circumstances;
(c) The amendment or waiver does not, in the opinion of nationally recognized bond counsel,
materially impair the interests of the Holders or Beneficial Owners of the Bonds; and
(d) No rights, protections or duties of the Dissemination Agent hereunder shall be amended without
its written consent thereto.
In the event of any amendment or waiver of a provision of this Disclosure Certificate, the City shall
describe such amendment in the next Annual Report, and shall include, as applicable, a narrative explanation of
the reason for the amendment or waiver and its impact on the type (or in the case of a change of accounting
principles, on the presentation) of financial information or operating data being presented by the City. In
addition, if the amendment relates to the accounting principles to be followed in preparing financial statements,
(i) notice of such change shall be given in the same manner as for a Listed Event under Section 5(a), and (ii) the
Annual Report for the year in which the change is made should present a comparison (in narrative form and
also, if feasible, in quantitative form) between the financial statements as prepared on the basis of the new
accounting principles and those prepared on the basis of the former accounting principles.
SECTION 9. Additional Information. Nothing in this Disclosure Certificate shall be deemed to
prevent the City from disseminating any other information, using the means of dissemination set forth in this
Disclosure Certificate or any other means of communication, or including any other information in any Annual
Report or notice of occurrence of a Listed Event, in addition to that which is required by this Disclosure
Certificate. If the City chooses to include any information in any Annual Report or notice of occurrence of a
Listed Event in addition to that which is specifically required by this Disclosure Certificate, the City shall have
no obligation under this Certificate to update such information or include it in any future Annual Report or
notice of occurrence of a Listed Event.
SECTION 10. Default. In the event of a failure of the City to comply with any provision of this
Disclosure Certificate any Holder or Beneficial Owner of the Bonds may take such actions as may be necessary
and appropriate, including seeking mandate or specific performance by court order, to cause the City to comply
with its obligations under this Disclosure Certificate. A default under this Disclosure Certificate shall not be
deemed an event of default under the Resolution, and the sole remedy under this Disclosure Certificate in the
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event of any failure of the City to comply with this Disclosure Certificate shall be an action to compel
performance.
SECTION 11. Duties, Immunities and Liabilities of Dissemination Agent. The Dissemination Agent
shall have only such duties as are specifically set forth in this Disclosure Certificate. The Dissemination Agent
acts hereunder solely for the benefit of the City; this Disclosure Certificate shall confer no duties on the
Dissemination Agent to the Participating Underwriters, the Holders and the Beneficial Owners. The City agrees
to indemnify and save the Dissemination Agent, its officers, directors, employees and agents, harmless against
any loss, expense and liabilities which it may incur arising out of or in the exercise or performance of its powers
and duties hereunder, including the costs and expenses (including attorneys fees and expenses) of defending
against any claim of liability, but excluding liabilities due to the Dissemination Agent's gross negligence or
willful misconduct. The obligations of the City under this Section shall survive resignation or removal of the
Dissemination Agent and payment of the Bonds. The Dissemination Agent shall have no liability for the failure
to report any event or any financial information as to which the City has not provided an information report in
format suitable for filing with the Repository. The Dissemination Agent shall not be required to monitor or
enforce the City's duty to comply with its continuing disclosure requirements hereunder. The Dissemination
Agent shall have the same rights and protections hereunder as afforded to it under the Paying Agent Agreement
dated as of , 2012, between the City and the Dissemination Agent, as paying agent.
SECTION 12. Beneficiaries. This Disclosure Certificate shall inure solely to the benefit of the City,
the Dissemination Agent, the Participating Underwriters and Holders and Beneficial Owners from time to time
of the Bonds, and shall create no rights in any other person or entity.
SECTION 13. Governing Law. This Disclosure Certificate shall be governed by the laws of the State
of California.
Dated: , 2012 CITY OF ARCADIA
[APPROVED AS TO FORM:
[City Attorney]
[ACCEPTED:
THE BANK OF NEW YORK MELLON
TRUST COMPANY, N.A.,
as Dissemination Agent
By:
Its:
Authorized Officer]
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By:
Its:
[City Manager]
EXHIBIT A
NOTICE TO REPOSITORY OF FAILURE TO FILE ANNUAL REPORT
Name of Issuer: City of Arcadia, California
Name of Bond Issue: City of Arcadia General Obligation Bonds, Series 2012 (Police Station Project) (Bank
Qualified)
Date of Issuance: , 2012
NOTICE IS HEREBY GIVEN that the City has not provided an Annual Report with respect to the
above -named Bonds as required by the Continuing Disclosure Certificate relating to the Bonds. The City
anticipates that the Annual Report will be filed by
Dated:
CITY OF ARCADIA
By [form only, no signature reguiredl
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APPENDIX E
DTC AND THE BOOK -ENTRY ONLY SYSTEM
The following description of the procedures and record keeping with respect to beneficial ownership
interests in the Bonds, payment of principal, redemption premium, if any, and interest with respect to the Bonds
to DTC, its Participants or Beneficial Owners, confirmation and transfers of beneficial ownership interests in the
Bonds and other related transactions by and between DTC, its Participants and the Beneficial Owners is based
solely on the understanding of the City of such procedures and record keeping from information provided by
DTC. Accordingly, no representations can be made concerning these matters and neither DTC, its Participants
nor the Beneficial Owners should rely on the foregoing information with respect to such matters, but should
instead confirm the same with DTC or its Participants, as the case may be. The City, the Paying Agent and the
Underwriter understand that the current "Rules" applicable to DTC are on file with the Securities and Exchange
Commission and that the current "Procedures" of DTC to be followed in dealing with Participants are on file
with DTC.
The Depository Trust Company ( "DTC "), New York, NY, will act as securities depository for the
Bonds. The Bonds will be issued as fully- registered securities registered in the name of Cede & Co. (DTC's
partnership nominee) or such other name as may be requested by an authorized representative of DTC. One
fully- registered Bond certificate will be issued for each maturity of the Bonds, each in the aggregate principal
amount of such maturity, and will be deposited with DTC.
DTC, the world's largest depository, is a limited - purpose trust company organized under the New York
Banking Law, a "banking organization" within the meaning of the New York Banking Law, a member of the
Federal Reserve System, a "clearing corporation" within the meaning of the New York Uniform Commercial
Code, and a "clearing agency" registered pursuant to the provisions of Section 17A of the Securities Exchange
Act of 1934. DTC holds and provides asset servicing for over 3.5 million issues of U.S. and non -U.S. equity
issues, corporate and municipal debt issues, and money market instruments (from over 100 countries) that
DTC's participants ( "Direct Participants ") deposit with DTC. DTC also facilitates the post -trade settlement
among Direct Participants of sales and other securities transactions in deposited securities, through electronic
computerized book -entry transfers and pledges between Direct Participants' accounts. This eliminates the need
for physical movement of securities certificates. Direct Participants include both U.S. and non -U.S. securities
brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is a
wholly -owned subsidiary of The Depository Trust & Clearing Corporation ( "DTCC "). DTCC is the holding
company for DTC, National Securities Clearing Corporation and Fixed Income Clearing Corporation, all of
which are registered clearing agencies. DTCC is owned by users of its regulated subsidiaries. Access to the DTC
system is also available to others such as both U.S. and non -U.S. securities brokers and dealers, banks, trust
companies, and clearing corporations that clear through or maintain a custodial relationship with a Direct
Participant, either directly or indirectly ( "Indirect Participants "). DTC has Standard & Poor's highest rating:
AAA. The DTC Rules applicable to its Participants are on file with the Securities and Exchange Commission.
More information about DTC can be found at www.dtcc.com and www.dtc.org.
Purchases of the Bonds under the DTC system must be made by or through Direct Participants, which
will receive a credit for the Bonds on DTC's records. The ownership interest of each actual purchaser of each
Bond (`Beneficial Owner ") is in turn to be recorded on the Direct and Indirect Participants' records. Beneficial
Owners will not receive written confirmation from DTC of their purchase. Beneficial Owners are, however,
expected to receive written confirmations providing details of the transaction, as well as periodic statements of
their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the
transaction. Transfers of ownership interests in the Bonds are to be accomplished by entries made on the books
of Direct and Indirect Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive
certificates representing their ownership interests in the Bonds, except in the event that use of the book -entry
system for the Bonds is discontinued.
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To facilitate subsequent transfers, all Bonds deposited by Direct Participants with DTC are registered in
the name of DTC's partnership nominee, Cede & Co., or such other name as may be requested by an authorized
representative of DTC. The deposit of the Bonds with DTC and their registration in the name of Cede & Co. or
such other DTC nominee do not effect any change in beneficial ownership. DTC has no knowledge of the actual
Beneficial Owners of the Bonds; DTC's records reflect only the identity of the Direct Participants to whose
accounts such Bonds are credited, which may or may not be the Beneficial Owners. The Direct and Indirect
Participants will remain responsible for keeping account of their holdings on behalf of their customers.
Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants
to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be
governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect
from time to time. Beneficial Owners of the Bonds may wish to take certain steps to augment the transmission to
them of notices of significant events with respect to the Bonds, such as redemptions, tenders, defaults, and
proposed amendments to the Trust Agreement. For example, Beneficial Owners of the Bonds may wish to
ascertain that the nominee holding the Bonds for their benefit has agreed to obtain and transmit notices to
Beneficial Owners. In the alternative, Beneficial Owners may wish to provide their names and addresses to the
registrar and request that copies of notices be provided directly to them.
Redemption notices shall be sent to DTC, if less than all of the Bonds within a maturity are being
redeemed. DTC's practice is to determine by lot the amount of the interest of each Direct Participant in each
issue to be redeemed.
Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to the
Bonds unless authorized by a Direct Participant in accordance with DTC's MMI Procedures. Under its usual
procedures, DTC mails an Omnibus Proxy to the Issuer as soon as possible after the record date. The Omnibus
Proxy assigns Cede & Co.'s consenting or voting rights to those Direct Participants to whose accounts the
Bonds are credited on the record date (identified in a listing attached to the Omnibus Proxy).
Payments of principal of, premium, if any, and interest on the Bonds will be made to Cede & Co., or
such other nominee as may be requested by an authorized representative of DTC. DTC's practice is to credit
Direct Participants' accounts upon DTC's receipt of funds and corresponding detail information from the City or
the Paying Agent, on payable date in accordance with their respective holdings shown on DTC's records.
Payments by Participants to Beneficial Owners will be governed by standing instructions and customary
practices, as is the case with securities held for the accounts of customers in bearer form or registered in "street
name," and will be the responsibility of such Participant and not of DTC, the Paying Agent or the City, subject
to any statutory or regulatory requirements as may be in effect from time to time. Payments of principal of,
premium, if any, and interest on the Bonds by Cede & Co (or such other nominee as may be requested by an
authorized representative of DTC) is the responsibility of the City or the Paying Agent, disbursement of such
payments to Direct Participants will be the responsibility of DTC, and disbursement of such payments to the
Beneficial Owners will be the responsibility of Direct and Indirect Participants.
DTC may discontinue providing its services as depository with respect to the Bonds at any time by
giving reasonable notice to the City or the Paying Agent. Under such circumstances, in the event that a
successor depository is not obtained, Bond certificates are required to be printed and delivered.
The City may decide to discontinue use of the system of book -entry transfers through DTC (or a
successor securities depository). In that event, Bond certificates will be printed and delivered.
The foregoing information concerning DTC and DTC's book -entry system has been provided by DTC,
and neither the City nor the Paying Agent takes any responsibility for the accuracy thereof.
NEITHER THE CITY NOR THE PAYING AGENT WILL HAVE ANY RESPONSIBILITY OR
OBLIGATION TO DTC PARTICIPANTS, INDIRECT PARTICIPANTS OR BENEFICIAL OWNERS WITH
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RESPECT TO THE PAYMENTS OR THE PROVIDING OF NOTICE TO DTC PARTICIPANTS, INDIRECT
PARTICIPANTS OR BENEFICIAL OWNERS OR THE SELECTION OF BONDS FOR REDEMPTION.
Neither the City nor the Paying Agent can give any assurances that DTC, DTC Participants, Indirect
Participants or others will distribute payments of principal of, premium, if any, and interest on the Bonds paid to
DTC or its nominee, as the registered Owner, or any redemption or other notice, to the Beneficial Owners or that
they will do so on a timely basis or that DTC will serve and act in a manner described in this Official Statement.
In the event that the book -entry system is discontinued as described above, the requirements of the
Resolution will apply.
The City and the Paying Agent cannot and do not give any assurances that DTC, the Participants or
others will distribute payments of principal, interest or premium, if any, evidenced by the Bonds paid to DTC or
its nominee as the registered owner, or will distribute any redemption notices or other notices, to the Beneficial
Owners, or that they will do so on a timely basis or will serve and act in the manner described in this Official
Statement. Neither the City nor the Paying_Agent are responsible or liable for the failure of DTC or any
Participant to make any payment or give any notice to a Beneficial Owner with respect to the Bonds or an error
or delay relating thereto.
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ATTACHEMENT 2
ESCROW AGREEMENT
RELATING TO THE DEFEASANCE OF
CITY OF ARCADIA
General Obligation Refunding Bonds, Series 2012 (Police Station Project)
THIS ESCROW AGREEMENT, dated as of November 1, 2012, by and between the City of
Arcadia (the "City"), and The Bank of New York Mellon Trust Company, N.A., acting in its capacity
as escrow agent (the "Escrow Agent ") pursuant to this Escrow Agreement (the "Agreement ");
WITNESSETH:
WHEREAS, pursuant to the provisions of Resolution No. 6218 and that certain Supplement to
Resolution No. 6218 dated as of June 1, 2001 (the "Refunded Bonds Resolution "), the City previously
issued its $8,000,000 City of Arcadia_ Series A of 2001 General Obligation Bonds (Police Station
Project) currently outstanding in the principal amount of $[6,350,000] (the "Refunded Bonds "). The
Bank of New York Mellon Trust Company, N.A., is acting as Paying Agent for the Refunded Bonds
(in this capacity, "Paying Agent ");
WHEREAS, the City did, pursuant to a resolution adopted by the City Council of the City on
September 18, 2012 (together with the Supplement thereto dated as of November 1, 2012
(collectively, the "Resolution "), determine that it is in the City's best interest to issue its General
Obligation Refunding Bonds, Series 2012 (Police Station Project) (the "Bonds ") to provide proceeds
to refund all of the outstanding Refunded Bonds; and
WHEREAS, in order to accomplish such refinancing it is necessary and desirable for the City
to secure payment of debt service on the Refunded Bonds to redeem and retire the Refunded Bonds;
and
WHEREAS, the City will provide funds necessary to secure payment of debt service on the
Refunded Bonds through February 1, 2013 and redeem and retire the Refunded Bonds on such date
by authorizing the preparation and issuance of the Bonds, to be issued on [Closing Date]; and
WHEREAS, the City has determined that it is in its best interests and desirable for the Bonds
to be issued and for a portion of the proceeds of the Bonds to be applied to the advance refunding of
the Refunded Bonds in accordance with the terms of this Agreement; and
NOW, THEREFORE, in consideration of the mutual covenants and agreements herein
contained, the City and the Escrow Agent agree as follows:
SECTION 1. Deposit of Moneys.
(a) As used herein, the term "Investment Securities" means the Investment
Securities set forth in Schedule A hereto. The City hereby deposits with the Escrow Agent
$ (representing $ proceeds of the Bonds [and
$ from tax receipts allocated to the City]), to be held in irrevocable escrow by the
Escrow Agent separate and apart from other funds of the City and the Escrow Agent in a fund hereby
created and established and to be known as the "Escrow Fund" and to be applied solely as provided
in this Agreement. Such moneys are at least equal to an amount sufficient to purchase the principal
amount of Investment Securities set forth in Schedule A hereto, which, together with all interest due
DOCSOC/1575470v5/024217 -0005
or to become due on such Investment Securities, and $ to be held as cash, will be sufficient:
(i) to pay the interest and principal due on the Refunded Bonds on each scheduled payment date
through and including February 1, 2013, and (ii) to redeem the Refunded Bonds maturing on or after
August 1, 2013 at a redemption price equal to the principal amount thereof, plus a premium of 1% of
the principal amount thereof, on February 1, 2013, the first optional redemption date for such bonds.
(b) The Escrow Agent hereby acknowledges receipt of the written opinion of
Grant Thornton, certified public accountants, dated [Closing Date] relating to the Investment
Securities (the "Verification Report"), and the opinion of Stradling Yocca Carlson & Rauth, a
Professional Corporation, dated [Closing Date], and relating to this Agreement.
(c) Notwithstanding any provision in the legal documents pertaining to the
Refunding Bonds, the City hereby directs the Escrow Agent to redeem the Refunded Bonds on
February 1, 2013 at a redemption price equal to the principal amount to be redeemed, plus a premium
of 1 %.
SECTION 2. Use and Investment of Moneys. The Escrow Agent acknowledges receipt of
the moneys described in Section 1 and agrees:
(a) immediately to invest $ of the moneys described in
Section 1(a) hereof in the Investment Securities set forth in Schedule A hereto and to deposit all of
such Investment Securities in the Escrow Fund and to hold $ uninvested as cash; and
(b) to make the payments required under Section 3(a) hereof at the times set forth
in Section 3(a) hereof.
SECTION 3. Payment of Refunded Bonds.
(a) Payment. As the principal of the Investment Securities set forth in
Schedule A hereof and the investment income and earnings thereon are paid, the Escrow Agent shall
transfer from the Escrow Fund to the paying agent for the Refunded Bonds (the "Paying Agent ")
amounts sufficient to pay interest and principal on the Refunded Bonds due on and prior to February
1, 2013, and to redeem on February 1, 2013 the outstanding principal of the remaining outstanding
Refunded Bonds maturing on and after February 1, 2013, plus a premium of 1% of the principal
amount thereof.
Such transfers shall constitute the respective payments of the interest on the Refunded
Bonds and redemption price due from the City.
(b) Unclaimed Moneys. Any moneys which remain unclaimed for two years
after the date such moneys have become due and payable hereunder shall be repaid by the Escrow
Agent to the City and deposited by the City in the Debt Service Fund relating to the Bonds. Any
moneys remaining in the Escrow Fund established hereunder after February 1, 2013 (aside from
unclaimed monies of the Refunded Bonds) that are in excess of the amount needed to pay owners of
the Refunded Bonds payments of principal and interest and redemption premium, if any, with respect
to the Refunded Bonds or to pay any amounts owed to the Escrow Agent shall be immediately
transferred by the Escrow Agent to the City and deposited by the City in the Debt Service Fund
relating to the Bonds.
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DOCSOC/1575470v5/024217 -0005
(c) Priority of PayMents. The holders of the Refunded Bonds shall have a first
lien on the moneys and Investment Securities in the Escrow Fund which are allowable and sufficient
to pay the Refunded Bonds until such moneys and Investment Securities are used and applied as
provided in this Agreement, as verified by the Verification Report. Any cash or securities held in the
Escrow Fund are irrevocably pledged only to the holders of the Refunded Bonds.
(d) Termination of Obligation. Upon deposit of the moneys set forth in Section 1
hereof with the Escrow Agent pursuant to the provisions of Section 1 hereof and the simultaneous
purchase of the Investment Securities as provided in Section 2 hereof, all obligations of the City with
respect to the Refunded Bonds shall cease and terminate, except only the obligation to make
payments therefor from the moneys provided for hereunder.
SECTION 4. Performance of Duties. The Escrow Agent agrees to perform the duties set
forth herein.
SECTION 5. Reinvestment. Upon written direction of the City, the Escrow Agent may
reinvest any uninvested amounts held as cash under this Agreement in noncallable nonprepayable
obligations which are direct obligations issued by the United States Treasury or obligations which are
unconditionally guaranteed as to full and timely payment by the United States of America provided
(i) the amounts of and dates on which the anticipated transfers from the Escrow Fund to the Paying
Agent for the payment of the principal of, redemption price of, and interest on the Refunded Bonds
will not be diminished or postponed thereby, (ii) the Escrow Agent shall receive the unqualified
opinion of nationally recognized municipal bond counsel to the effect that such reinvestment will not
adversely affect the exclusion from gross income for federal income tax purposes of interest on the
Bonds or the Refunded Bonds, (iii) the Escrow Agent shall receive from a firm of independent
certified public accountants a certification that, immediately after such reinvestment, the principal of
and interest on obligations in the Escrow Fund will, together with other cash on deposit in the
Escrow Fund available for such purposes, be sufficient without reinvestment to pay, when due, the
principal or redemption price of and interest on the Refunded Bonds; and (iv) the Escrow Agent shall
receive an opinion of nationally recognized bond counsel that such reinvestment is permissible under
this Agreement.
SECTION 6. Indemni . The City hereby assumes liability for, and hereby agrees (whether
or not any of the transactions contemplated hereby are consummated) to indemnify, protect, save and
keep harmless the Escrow Agent and its respective successors, assigns, agents, employees and
servants, from and against any and all liabilities, obligations, losses, damages, penalties, claims,
actions, suits, costs, expenses and disbursements (including reasonable legal fees and disbursements)
of whatsoever kind and nature which may be imposed on, incurred by, or asserted against, the
Escrow Agent at any time (whether or not also indemnified against the same by the City or any other
person under any other agreement or instrument, but without double indemnity) in any way relating
to or arising out of the execution, delivery and performance of its Agreement, the establishment
hereunder of the Escrow Fund, the acceptance of the funds and securities deposited therein, the
purchase of the Investment Securities, the retention of the Investment Securities or the proceeds
thereof and any payment, transfer or other application of moneys or securities by the Escrow Agent
in accordance with the provisions of this Agreement; provided, however, that the City shall not be
required to indemnify the Escrow Agent against the Escrow Agent's own negligence or willful
misconduct or the negligent or willful misconduct of the Escrow Agent's respective successors,
assigns, agents and employees or the breach by the Escrow Agent 6f the terms of this Agreement. In
no event shall the City or the Escrow Agent be liable to any person by reason of the transactions
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DOCSOC/1575470v5/024217 -0005
contemplated hereby other than to each other as set forth in this section. The indemnities contained
in this section shall survive the termination of this Agreement.
SECTION 7. Responsibilities of the Escrow Agent. The Escrow Agent and its respective
successors, assigns, agents and servants shall not be held to any personal liability whatsoever, in tort,
contract or otherwise, in connection with the execution and delivery of this Agreement, the
establishment of the Escrow Fund, the acceptance of the moneys or securities deposited therein, the
purchase of the Investment Securities, the retention of the Investment Securities or the proceeds
thereof, the sufficiency of the Investment Securities to accomplish the refunding and defeasance of
the Refunded Bonds or any payment, transfer or other application of moneys or obligations by the
Escrow Agent in accordance with the provisions of this Agreement or by reason of any non - negligent
act, non - negligent omission or non - negligent error of the Escrow Agent made in good faith in the
conduct of its duties. The recitals of fact contained in the "whereas" clauses herein shall be taken as
the statements of the City and the Escrow Agent assumes no responsibility for the correctness
thereof. The Escrow Agent makes'-no representation as to the sufficiency of the Investment
Securities to accomplish the refunding and defeasance of the Refunded Bonds or to the validity of
this Agreement as to the City and, except as otherwise provided herein, the Escrow Agent shall incur
no liability with respect thereto. The Escrow Agent shall not be liable in connection with the
performance of its duties under this Agreement except for its own negligence, willful misconduct or
default, and the duties and obligations of the Escrow Agent shall be determined by the express
provisions of this Agreement. The Escrow Agent may consult with counsel, who may or may not be
counsel to the City, and in reliance upon the written opinion of such counsel shall have full and
complete authorization and protection with respect to any action taken, suffered or omitted by it in
good faith in accordance therewith. Whenever the Escrow Agent shall deem it necessary or desirable
that a matter be proved or established prior to taking, suffering, or omitting any action under this
Agreement, such matter may be deemed to be conclusively established by a certificate signed by an
authorized officer of the City.
SECTION 8. Substitution of Investment Securities. At the written request of the City and
upon compliance with the conditions hereinafter set forth, the Escrow Agent shall have the power to
sell, transfer, request the redemption or otherwise dispose of some or all of the Investment Securities
in the Escrow Fund and to substitute noncallable nonprepayable obligations (the "Substitute
Investment Securities ") constituting direct obligations issued by the United States Treasury or
obligations which are unconditionally guaranteed as to full and timely payment by the United States
of America. The foregoing may be effected only if. (i) the substitution of Substitute Investment
Securities for the Investment Securities (or Substitute Investment Securities) occurs simultaneously;
(ii) the amounts of and dates on which the anticipated transfers from the Escrow Fund to the Paying
Agent for the payment of the principal of and/or redemption price of and/or interest on the Refunded
Bonds will not be diminished or postponed thereby; (iii) the Escrow Agent shall receive the
unqualified opinion of nationally recognized municipal bond counsel to the effect that such
disposition and substitution would not adversely affect the exclusion from gross income for federal
income tax purposes of interest on the Refunded Bonds or the Bonds, and that the conditions of this
Section 8 as to the disposition and substitution have been satisfied and that the substitution is
permitted by this Agreement; and (iv) the Escrow Agent shall receive from a firm of independent
certified public accountants a certification that, immediately after such transaction, the principal of
and interest on the Substitute Investment Securities in the Escrow Fund will, together with other cash
on deposit in the Escrow Fund available for such purpose, be sufficient without reinvestment to pay,
when due, the principal or redemption price of and interest on the Refunded Bonds. Any cash from
the sale of Investment Securities (including U.S. Treasury Securities) received from the disposition
4
DOCSOC/1575470v5/024217 -0005
and substitution of Substitute Investment Securities pursuant to this Section 8 to the extent such cash
will not be required, in accordance with this Agreement, and as demonstrated in the certification
described in (iv) above, at any time for the payment when due of the principal or redemption price of
or interest on the Refunded Bonds shall be paid to the City as received by the Escrow Agent free and
clear of any trust, lien, pledge or assignment securing such Bonds or otherwise existing under this
Agreement. Any other substitution of securities in the Escrow Fund not described in the previous
sentence must satisfy the requirements of this Section 8. In no event shall the Escrow Agent invest
or reinvest moneys held under this Agreement in mutual funds or unit investment trusts.
SECTION 9. Irrevocable Instructions as to Notice. The Escrow Agent hereby
acknowledges that upon the funding of the Escrow Fund as provided in this Agreement, the receipt of
the opinions described in Section 1(b) of this Agreement and the giving of irrevocable instructions to
provide notice as provided in the Irrevocable Instructions and Request to Paying Agent and Escrow
Agent attached hereto as Schedule B (constituting all of the conditions precedent to the defeasance of
the Refunded Bonds), the Refunded -Bonds shall be paid in accordance with the terms of the
Refunded Bonds and all obligations of the City with respect to the Refunded Bonds shall cease and
terminate.
SECTION 10. Amendments. This Agreement is made for the benefit of the City and the
holders from time to time of the Refunded Bonds and it shall not be repealed, revoked, altered or
amended without the written consent of all such holders, the Escrow Agent and the City; provided,
however, but only after the receipt by the Escrow Agent of an opinion of nationally recognized bond
counsel that the exclusion from gross income of interest on the Bonds and the Refunded Bonds will
not be adversely affected for federal income tax purposes, that the City and the Escrow Agent may,
without the consent of, or notice to, such holders, amend this Agreement or enter into such
agreements supplemental to this Agreement as shall not adversely affect the rights of such holders
and as shall not be inconsistent with the terms and provisions of this Agreement for any one or more
of the following purposes: (i) to cure any ambiguity or formal defect or omission in this Agreement;
(ii) to grant to, or confer upon, the Escrow Agent for the benefit of the holders of the Refunded
Bonds any additional rights, remedies, powers or authority that may lawfully be granted to, or
conferred upon, such holders or the Escrow Agent; and (iii) to include under this Agreement
additional funds, securities or properties. The Escrow Agent shall be entitled to rely conclusively
upon an unqualified opinion of nationally recognized municipal bond attorneys with respect to
compliance with this Section 10, including the extent, if any, to which any change, modification,
addition or elimination affects the rights of the holders of the Refunded Bonds or that any instrument
executed hereunder complies with the conditions and provisions of this Section 10. In the event of
any conflict with respect to the provisions of this Agreement, this Agreement shall prevail and be
binding.
SECTION 11. Term. This Agreement shall commence upon its execution and delivery and
shall terminate on the later to occur of either (i) the date upon which the Refunded Bonds have been
paid in accordance with this Agreement or (ii) the date upon which no unclaimed moneys remain on
deposit with the Escrow Agent pursuant to Section 3(b) of this Agreement.
SECTION 12. Compensation. The Escrow Agent shall receive its reasonable fees and
expenses as previously agreed to; provided, however, that under no circumstances shall the Escrow
Agent be entitled to any lien nor will it assert a lien whatsoever on any moneys or obligations in the
Escrow Fund for the payment of fees and expenses for services rendered by the Escrow Agent under
this Agreement.
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DOCSOC/1575470v5/024217 -0005
SECTION 13. Resignation or Removal of Escrow Agent.
(a) The Escrow Agent may resign by giving notice in writing to the City, a copy
of which shall be sent to DTC. The Escrow Agent may be removed (1) by (i) filing with the City an
instrument or instruments executed by the holders of at least 51 % in aggregate principal amount of
the Refunded Bonds then remaining unpaid, (ii) sending notice at least 60 days prior to the effective
date of said removal to DTC, and (iii) the delivery of a copy of the instruments filed with the City to
the Escrow Agent or (2) by a court of competent jurisdiction for failure to act in accordance with the
provisions of this Agreement upon application by the City or the holders of 5% in aggregate principal
amount of the Refunded Bonds then remaining unpaid.
(b) If the position of Escrow Agent becomes vacant due to resignation or removal
of the Escrow Agent or any other reason, a successor Escrow Agent may be appointed by the City.
The holders of a majority in principal amount of the Refunded Bonds then remaining unpaid may, by
an instrument or instruments filed with the City, appoint a successor Escrow Agent who shall
supersede any Escrow Agent theretofore appointed by the City. If no successor Escrow Agent is
appointed by the City or the holders of such Refunded Bonds then remaining unpaid, within 45 days
after any such resignation or removal, the holder of any such Refunded Bond or any retiring Escrow
Agent may apply to a court of competent jurisdiction for the appointment of a successor Escrow
Agent. The responsibilities of the Escrow Agent under this Escrow Agreement will not be
discharged until a new Escrow Agent is appointed and until the cash and investments held under this
Escrow Agreement are transferred to the new Escrow Agent.
SECTION 14. Severabilitv. If any one or more of the covenants or agreements provided in
this Agreement on the part of the City or the Escrow Agent to be performed should be determined by
a court of competent jurisdiction to be contrary to law, such covenants or agreements shall be null
and void and shall be deemed separate from the remaining covenants and agreements herein
contained and shall in no way affect the validity of the remaining provisions of this Agreement.
SECTION 15. Counterparts. This Agreement may be executed in several counterparts, all or
any of which shall be regarded for all purposes as one original and shall constitute and be but one and
the same instrument.
SECTION 16. Governing Law. This Agreement shall be construed under the laws of the
State of California.
SECTION 17. Holidays. If the date for making any payment or the last date for performance
of any act or the exercising of any right, as provided in this Agreement, shall be a legal holiday or a
day on which banking institutions in the city in which is located the principal office of the Escrow
Agent are authorized by law to remain closed, such payment may be made or act performed or right
exercised on the next succeeding day not a legal holiday or a day on which such banking institutions
are authorized by law to remain closed, with the same force and effect as if done on the nominal date
provided in this Agreement, and no interest shall accrue for the period after such nominal date.
SECTION 18. AssiLmment. This Agreement shall not be assigned by the Escrow Agent or
any successor thereto without the prior written consent of the City.
SECTION 19. Standard & Poor's. Fitch and Moody's. The City agrees to provide Fitch,
Inc., One State Street Plaza, New York, New York 10004, Moody's Investors Service, 7 World
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DOCSOC/1575470v5/024217 -0005
Trade Center at 250 Greenwich Street, New York, New York 10007, and Standard & Poor's Ratings
Services, 55 Water Street, New York, New York 10041 prior notice of each amendment entered into
pursuant to Section 10 hereof and a copy of such proposed amendment, and to forward a copy (as
soon as possible) of (i) each amendment hereto entered into pursuant to Section 10 hereof, and (ii)
any action relating to severability or contemplated by Section 14 hereof.
SECTION 20. Reorganization of Escrow Agent. Notwithstanding anything to the contrary
contained in this Agreement, any company into which the Escrow Agent may be merged or
converted or with which it may be consolidated or any company resulting from any merger,
conversion or consolidation to which the Escrow Agent is a party, or any company to which the
Escrow Agent may sell or transfer all or substantially all of its corporate trust business shall be the
successor to the Escrow Agent without execution or filing of any paper or any paper or further act, if
such company is eligible to serve as Escrow Agent.
[REMAINDER OF PAGE INTENTIONALLYLEFT BLANK.J
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DOCSOC/1575470v5/024217 -0005
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by
their duly authorized officers as of the day and year first above written.
APPROVED AS TO FORM:
City Attorney
CITY OF ARCADIA
City Manager
THE BANK OF NEW YORK MELLON TRUST
COMPANY, N.A., as Escrow Agent
Authorized Officer
S -1
DOCSOC/1575470v5/024217 -0005
SCHEDULE A
INVESTMENT SECURITIES
Type of Investment Principal Coupon Rate Maturity Date
SLGS
A -1
DOC SOC/ 15 75470v5/024217 -0005
02/01/13
SCHEDULE B
IRREVOCABLE INSTRUCTIONS AND REQUEST TO
ESCROW AGENT
[Closing Date]
The Bank ofNew York Mellon Trust Company, N.A.
400 South Hope Street, Suite 400
Los Angeles, CA 90071
$8,000,000
CITY OF ARCADIA
Series A of 2001 General Obligation Bonds (Police Station Project)
Ladies and Gentlemen:
As Escrow Agent and Paying Agent with respect to the Refunded Bonds as defined in that
certain Escrow Agreement, dated as of November 1, 2012, between the City of Arcadia and The Bank
of New York Mellon Trust Company, N.A. (the "Escrow Agreement"), you are hereby notified of the
irrevocable election of the City of Arcadia: to pay the interest and principal on such Refunded Bonds
due on and prior to February 1, 2013, and to redeem on February 1, 2013 the outstanding principal of
such Refunded Bonds maturing on or after August 1, 2013 at a price of the principal amount thereof to
be so redeemed, together with a premium of one percent (1 %) of the principal amount thereof.
You are hereby irrevocably instructed to provide, as provided in the Supplement to Resolution
No. 6218 dated as of June 1, 2001, notice of redemption of such principal amounts of said Refunded
Bonds as are scheduled to be redeemed prior to maturity to the extent such Refunded Bonds have not
been otherwise redeemed or purchased by the Escrow Agent prior to said dates. Such notice shall be
in the form annexed hereto as Exhibit X.
You are also hereby irrevocably instructed to file a notice of defeasance of the Refunded
Bonds with the Nationally Recognized Municipal Securities Information Repositories ( "NRMSIR ")
that are listed by the U.S. Securities and Exchange Commission. NRMSIR is located at
www.see.gov /info /municipal /nrmsir.
B -1
DOCSOC/ 1575470v5/024217-0005
You are hereby further irrevocably instructed to provide, as soon as practicable, notice to the holders
of such Refunded Bonds (in the form annexed hereto as Exhibit Y) that the deposit of investment
securities and moneys has been made with you as such Escrow Agent and that you have received a
verification report verifying that the projected withdrawals from such escrow have been calculated to
be adequate to pay the principal or redemption price of and the interest on said Refunded Bonds
outstanding as such become due or are subject to redemption.
CITY OF ARCADIA
By:
City Manager
Receipt acknowledged and
consented to:
THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.,
as Escrow Agent
an
Authorized Signatory
B -2
DOCSOC/ 1575470v5/024217 -0005
EXHIBIT X
NOTICE OF REDEMPTION OF
$8,000,000
CITY OF ARCADIA
Series A of 2001 General Obligation Bonds (Police Station Project)
Year
Au st 1
Principal Amount
2013
$200,000
2014
210,000
2015
225,000
2016
235;000
2017
245,000
2018
260,000
2019
275,000
2020
290,000
2021
305,000
2022
320,000
2023
335,000
2024
355,000
2025
375,000
2026
395,000
2027
415,000
2028
440,000
2029
465,000
2030
490,000
2031
515,000
Interest Rate CUSIP
4.625%
4.700
4.850
5.000
5.000
5.000
5.000
5.000
5.100
5.100
5.125
5.125
5.125
5.125
5.125
5.125
5.125
5.125
5.125
Notice is hereby given to the holders of the outstanding $8,000,000 City of Arcadia Series A of
2001 General Obligation Bonds (Police Station Project) maturing on and after August 1, 2013
(the "Refunded Bonds "), that such Refunded Bonds have been called for redemption prior to maturity
on February 1, 2013 in accordance with their terms at a redemption price equal to the principal amount
thereof, plus a premium of 1% of the principal amount thereof, together with accrued interest evidenced
thereby to February 1, 2013. The source of the funds to be used for such redemption is the principal of
and interest on investment securities heretofore deposited with The Bank of New York Mellon Trust
Company, N.A., as Escrow Agent, together with moneys, if any, heretofore deposited with the Escrow
Agent.
Interest on the Refunded Bonds and the redemption price shall become due and payable on
February 1, 2013 and after February 1, 2013 interest on such Refunded Bonds shall cease to accrue and
be payable.
X -1
DOCS00 l 575470v5/024217 -0005
Owners of the Refunded Bonds will receive payment of the redemption price and accrued
interest to which they are entitled upon presentation and surrender thereof at the principal corporate
trust office of The Bank of New York Mellon Trust Company, N.A., Los Angeles, California.
Dated this _ day of 2012.
CITY OF ARCADIA
THE BANK OF NEW YORK MELLON TRUST
COMPANY, N.A.,
as Escrow Agent
X -2
DOCSOC/1575470v5/024217 -0005
W.4l11•71�i�
NOTICE OF REFUNDING OF
$8,000,000
CITY OF ARCADIA
Series A of 2001 General Obligation Bonds (Police Station Project)
CUSIP
Notice is hereby given to the holders of the outstanding bonds maturing on and after February
1, 2013 designated City of Arcadia, Series A of 2001 General Obligation Bonds (Police Station Project)
(the "Refunded Bonds ") (i) that there has been deposited with The Bank of New York Mellon Trust
Company, N.A., as Escrow Agent, moneys and investment securities as permitted by the Escrow
Agreement, dated as of November 1, 2012, between City of Arcadia and The Bank of New York
Mellon Trust Company, N.A., as Escrow Agent (the "Agreement "), the principal of and the interest on
which when due will provide moneys which, together with such other moneys deposited with the
Escrow Agent, shall be sufficient and available (a) to pay on and prior to February 1, 2013 the interest
with respect to the Refunded Bonds scheduled to be paid on and prior to February 1, 2013 and (b) to
redeem on February 1, 2013 the Refunded Bonds maturing on or after August 1, 2013 at a redemption
price (expressed as a percentage of the principal amount of the Refunded Bonds to be prepaid) equal to
101 %; (ii) that the Escrow Agent has been irrevocably instructed to prepay on February 1, 2013 such
Refunded Bonds; and (iii) that the Refunded Bonds are deemed to be paid in accordance with Section
16 of the Agreement.
Dated this day _ of, 2012.
CITY OF ARCADIA
THE BANK OF NEW YORK MELLON TRUST
COMPANY, N.A., as Escrow Agent
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DOCSOC/ 1575470v5/024217 -0005
ATTACHEMENT 3
PAYING AGENCY AGREEMENT
This Paying Agency Agreement (the "Agreement'), entered into as of the day of
November, 2012 by and between City of Arcadia (the "Issuer ") and The Bank of New York
Mellon Trust Company, N.A., a national banking association with its corporate trust office on Los
Angeles, California (the "Paying Agent'),
KY7VESSETH.-
WHEREAS, by a Supplement to Resolution No. dated as of November
1, 2012 (the "Authorization ") the Issuer authorized the issuance of its Bonds as described in Exhibit
A attached hereto (the "Bonds" ) and
WHEREAS, said Authorization authorized the Issuer to enter into an agreement of
appointment with a Bond Registrar/Transfer Agent and Paying Agent to service such Bonds.
NOW, THEREFORE, the Issuer and the Paying Agent agree as follows:
Section 1. Appointment and Acceptance. The Issuer hereby appoints The Bank of
New York Mellon Trust Company, N.A. as Bond Registrar/Transfer Agent and Paying Agent for the
Bonds pursuant to the Authorization and the Paying Agent accepts such appointment, acknowledging
the duties, obligations and responsibilities of the Paying Agent as set forth pursuant to the
Authorization.
Section 2. Documents to be Filed with the Paying Agent. The following documents
shall be filed with the Paying Agent in connection with its appointment:
(i) a copy of the Authorization;
(ii) if not printed on the Bonds, an Opinion of Bond Counsel stating that (a) the Bonds
are valid and legally binding obligations of the Issuer, payable in accordance with their terms and
(b) the interest on such Bonds is not included in gross income for federal income tax purposes;
(iii) a specimen certificate in the form approved by the Issuer; and
(iv) such other instruments and certificates as the Paying Agent may reasonably request.
Section 3. Registration, Authentication and Delivery of Initial Bonds. If the Bonds
are to be newly issued, the Issuer will, or will cause its underwriter to:
(i) deliver to the Paying Agent, not later than five (5) business days prior to the required
delivery date, written notice setting forth the maturity date, principal amount and interest rate borne
by the Bonds; and
(ii) notify the Paying Agent, not later than three (3) business days prior to the required
delivery date, of the name(s) in which Bonds are to be registered, the mailing addresses of the
respective registered holders and their respective taxpayer identification numbers, and the quantity,
denominations, interest rates, maturity dates and CUSIP numbers of the certificates to be issued to
each registered holder.
DOCSOC /1575501 v5 /024217 -0005
The Paying Agent shall inscribe the Bonds as directed in Section 3(ii) above, authenticate the
initial Bonds and deliver same in accordance with the written directions of the Issuer or its
underwriter. If delivered before the Closing, such initial Bonds shall remain subject to the control of
the Paying Agent, as agent for the Issuer, until released by the Paying Agent.
Section 4. Transfer or Exchange of Certificates. The Paying Agent is authorized,
empowered and directed to inscribe, to countersign or authenticate as registrar, and to record and
deliver new certificates for Bonds of the Issuer pursuant to requests for transfer and cancellation of
other certificates theretofore outstanding, or to replace lost, destroyed, stolen or mutilated
certificates, as provided in Section 6 hereof.
If the transfer and/or exchange of the Bond certificate shall have been documented in the
manner authorized or required by law, and if the rules and regulations of the Issuer and of the Paying
Agent, governing the transfer and registration of the Bonds shall have been met, then the Paying
Agent shall cancel such certificate` being transferred and/or exchanged and shall inscribe,
authenticate, record and deliver a new certificate for the Bonds so transferred or exchanged. In the
transfer of Bond certificates, the Paying Agent may require a guarantee of signature by an eligible
guarantor institution participating in a Securities Transfer Association recognized signature guarantee
program.
The Paying Agent shall incur no liability for the refusal in good faith to make transfers which
it, in its judgment, deems improper or unauthorized. The Paying Agent may, in effecting transfers,
rely upon the Uniform Commercial Code of the State of California and/or the rules of the Stock
Transfer Association,
Section 5. Bond Certificates. The Issuer will furnish to the Paying Agent a sufficient
supply of blank Bond certificate and, from time to time, will replenish such supply upon request of
the Paying Agent. Such blank Bond certificates shall be signed by officers of the Issuer, authorized
by the Issuer to sign Bond certificate, and shall bear the seal of the Issuer or shall bear, to the extent
permitted by law, the facsimile signature of each such officer and a facsimiles of the seal. If an
officer of the Issuer, whose signature appears on any Bond certificate, ceases to be an officer of the
Issuer before delivery of said Bond certificate, such signature nevertheless shall be valid and
sufficient for all purposes, the same as if such officer of the Issuer had remained in office until such
delivery and the Paying Agent may inscribe, authenticate, and deliver such certificate as being that of
the Issuer whose signature properly shall have been inscribed on such Bond certificate prior to its
issuance.
Section 6. Records of Certificates; Lost or Destroyed Certificates. The Paying Agent
may open and keep such books and other records, including a Bond Register, as shall be required for,
or convenient in, the performance of its duties.
Upon receiving instructions from the Issuer and indemnity satisfactory to the Paying Agent
and the Issuer, the Paying Agent may inscribe, authenticate and deliver, to the persons entitled
thereto, new certificates in place of certificates represented to have been lost, stolen or destroyed and
likewise may issue a new certificate in exchange for, and upon surrender of, an identifiable mutilated
certificate.
Section 7. Payments of Interest and Principal. The,Paying Agent shall act as Paying
Agent for the Bonds and in such capacity it shall:
2
DOCSOC /1575501 v5/024217 -0005
(i) with funds provided by Issuer, pay the interest upon the Bonds by mailing checks to
the persons entitled to receive such interest, as determined by the registry of the Issuer maintained by
the Paying Agent, provided that Issuer shall have deposited with the Paying Agent, on or before the
day upon which interest checks are to be mailed, sufficient funds to cover payment of such interest;
(ii) with funds provided by Issuer, pay the principal amount (including premium, if any)
of the Bonds to the registered holders of such Bonds, upon the maturity date or earlier redemption
date upon which the principal is to become payable and upon delivery to the Paying Agent of a Bond
certificate with respect to which such principal payment shall have become payable, provided that the
Issuer shall have deposited with the Paying Agent, on or before the payment date, sufficient funds to
pay the aggregate principal amount (including premium, if any) due on all Bonds so payable;
(iii) if a Bondholder shall report to the Paying Agent that any check so mailed for the
payment of interest or principal has been lost and that the proceeds thereof, have not been received
and if the check has not been paid` then, upon execution of an indemnity agreement, in form
satisfactory to the Paying Agent and the Issuer, stop payment upon such check, and issue and deliver
to such Bondholder a new check for like amount; provided, however, that it may, at its discretion,
defer the issuance of the new check for a reasonable period of time;
(iv) record the fact of payment and cancel Bonds surrendered to it for payment, coincident
with such payment being made to the person thereto entitled; and
(v) have no liability for interest on any funds received by it; any unclaimed funds
remaining in the possession of the Paying Agent for payment of the Bonds will be escheated in
accordance with applicable law and the Paying Agent's policies and procedures.
The Paying Agent shall hold funds in accounts to be established by the Paying Agent under
the Authorization. The Paying Agent shall have no obligation to invest and reinvest any cash held by
it hereunder in the absence of timely and specific written investment direction from the Issuer. In no
event shall the Paying Agent be liable for the selection of investments or for investment losses
incurred thereon. The Paying Agent may purchase or sell to itself or any affiliate, as principal or
agent, investments authorized by the Issuer in writing. The Paying Agent may rely on the investment
directions of the Issuer as to both the suitability and legality of the directed investments. The Issuer
acknowledges that regulations of the Comptroller of the Currency grant the Issuer the right to receive
brokerage confirmations of the security transactions as they occur, at no additional cost. To the
extent permitted by law, the Issuer specifically waives compliance with 12 C.F.R. 12 and hereby
notifies the Paying Agent that no brokerage confirmations need be sent relating to the security
transactions as they occur.
Section 8. Redemption Prior to Stated Maturity. If the Bonds are subject to
redemption prior to their stated maturity date(s), the Paying Agent shall be governed by the
redemption provisions set forth in the Authorization or as stated in the provisions as set forth on the
bond form. The Paying Agent shall not be required to transfer any Bond, or portion thereof, that has
been called fur redemption. Payment of the principal amount (including premium, if any) of any
Bond, or portion thereof, called for redemption shall be made by check payable to the registered
owner, only upon presentation of the Bond, at the designated corporate trust office of the Paying
Agent on or after the redemption date. Where the entire principal amount of the Bond has not been
called for redemption, a new Bond of the same series, maturity and interest rate in the amount of the
unredeemed portion will be issued to the registered holder or its assignee. Whether or not promptly
3
DOCSOC/1575501 v5/024217 -0005
submitted for redemption, interest on any Bond, or portion thereof, called for redemption shall cease
to accrue on and after the redemption date provided that sufficient moneys therefor are on deposit
with the Paying Agent.
Section 9. Compensation; Indemnification. The Issuer agrees to pay the Paying Agent
fees as set forth in Exhibit B attached hereto and made a part hereof, and, if applicable, to reimburse
Paying Agent for its out -of- pocket expenses (including without limitation attorneys'; fees and
expenses). The Issuer assumes full responsibility and, to the extent permitted by law, will indemnify
the Paying Agent and its officers, directors, agents and employees and save it and them harmless
from and against any and all actions or suits, whether groundless or otherwise, and from and against
any and all losses, liabilities, costs and expenses (including attorneys' fees and expenses) arising out
of the agency relationship created by this Agreement, unless such losses, liabilities, costs and
expenses shall have been finally adjudicated to have resulted from the bad faith or gross negligence
of the Paying Agent, and such indemnification shall survive the Paying Agent's resignation or
removal, or the termination of this Agreement.
Section 10. Instructions From the Issuer and Opinion From Counsel. At any time the
Paying Agent may apply to any duly authorized representative of the Issuer for instructions, and shall
have the right, but not the obligation, to consult with counsel of choice at the reasonable expense of
the Issuer and shall not be liable for action taken or omitted to be taken either in accordance with
such instruction or such advice of counsel, or in accordance with any opinion of counsel to the Issuer
addressed to the Paying Agent.
Section 11. Concerning the Paying Agent. The Paying Agent shall have only those
duties as are specifically provided herein, which shall be deemed purely ministerial in nature, and
shall have the right to perform any of its duties hereunder through agents, attorneys, custodians or
nominees. The Paying Agent shall not be answerable for other than its gross negligence or willful
misconduct. The Paying Agent shall have no responsibility for the form of inscription of ownership
upon any Bond certificate which has been made in accordance with directions of the Issuer, the
Issuer's underwriter, a broker or a holder of a Bond. The Paying Agent shall be protected in acting
upon any paper or document believed by it to be genuine and to have been signed by the proper
person or persons and shall not be held to have notice of any change of authority of any person, until
receipt of written notice thereof from the Issuer. The Paying Agent shall also be protected in
recognizing Bond certificates which it reasonably believes to bear the proper manual or facsimile
signatures on behalf of the Issuer. The Paying Agent shall have the right, but not the obligation, to
consult with counsel of choice and shall not be liable for action taken or omitted to be taken by
Paying Agent either in accordance with the advice of such counsel or in accordance with any opinion
of counsel to the Issuer addressed and delivered to the Paying Agent. The Paying Agent shall not be
under any obligation to prosecute any action or suit in respect of the agency relationship which, in its
sole judgment, may involve it in expense or liability. In any action or suit the Issuer shall, as often as
requested, reimburse the Paying Agent for any expense or liability growing out of such action or suit
by or against the Paying Agent in its agency capacity; provided, however, that no such
reimbursement shall be made for any expense or liability arising as a result of Paying Agent's gross
negligence or willful misconduct. No provision of this Agreement shall require the Paying Agent to
risk or expend its own funds.
The Paying Agent shall not be responsible or liable for any failure or delay in the
performance of its obligation under this Agreement arising out of cif caused, directly or indirectly, by
circumstances beyond its reasonable control, including, without limitation, acts of God; earthquakes;
4
DOCSOC /1575501 v5/024217 -0005
fire; flood; wars; terrorism; military disturbances; sabotage; epidemic; riots; interruptions; loss or
malfunctions of utilities, computer (hardware or software) or communications services; accidents;
labor disputes; acts of civil or military authority or governmental action; it being understood that
Paying Agent shall use commercially reasonable efforts which are consistent with accepted practices
in the banking industry to resume performance as soon as reasonably practicable under the
circumstances.
Anything in this Agreement to the contrary notwithstanding, in no event shall the Paying
Agent be liable for special, punitive, indirect or consequential loss or damage of any kind whatsoever
(including but not limited to lost profits), even if the Paying Agent has been advised of the likelihood
of such loss or damage and regardless of the form of action.
The Paying Agent agrees to accept and act upon instructions or directions pursuant to this
Agreement sent by unsecured e-mail, facsimile transmission or other similar unsecured electronic
methods, provided, however, that the Issuer shall provide to the Paying Agent an incumbency
certificate listing designated persons authorized to provide such instructions, which incumbency
certificate shall be amended whenever a person is to be added or deleted from the listing. If the
Issuer elects to give the Paying Agent e-mail or facsimile instructions (or instructions by a similar
electronic method) and the Paying Agent in its discretion elects to act upon such instructions, the
Paying Agent's understanding of such instructions shall be deemed controlling. The Paying Agent
shall not be liable for any losses, costs or expenses arising directly or indirectly from the Paying
Agent's reliance upon and compliance with such instructions notwithstanding such instructions
conflict or are inconsistent with a subsequent written instruction. The Issuer agrees to assume all
risks arising out of the use of such electronic methods to submit instructions and directions to the
Paying Agent, including without limitation the risk of the Paying Agent acting on unauthorized
instructions, and the risk or interception and misuse by third parties.
Any banking association or corporation into which the Paying Agent may be merged,
converted or with which the Paying Agent may be consolidated, or any corporation resulting from
any merger, conversion or consolidation to which the Paying Agent shall be a party, or any banking
association or corporation to which all or substantially all of the corporate trust business of the
Paying Agent shall be transferred, shall succeed to all the Paying Agent's rights, obligations and
immunities hereunder without the execution or filing of any paper or any further act on the part of the
parties hereto, anything herein to the contrary notwithstanding.
Section 12. Notices. Until changed by notice in writing, communications between the
parties shall be delivered to:
If to Issuer: City of Arcadia
240 West Huntington Drive
Arcadia, CA 91066
Attn: Administrative Services Director
If to the Paying Agent: The Bank of New York Mehun Trust Company, N.A.
400 South Hope Street, Suite 400
Los Angeles, CA 90071
Attn: Corporate Trust
DOCSOC/ 1575501 v5 /024217 -0005
Section 13. Destruction of Instruments, Records and Papers. The Paying Agent may
retain in its files records, instruments, and papers maintained by it in relation to its agency as long as
the Paying Agent shall consider that such retention is necessary. The Paying Agent shall destroy or
dispose of canceled Bonds in accordance with its customary procedures, unless contrary instructions
are received from the Issuer.
Section 14. Resignation or Removal of Paying Agent. Any time, other than on a day
during the forty-five (45) day period preceding any periodic payment date for Issuer's Bonds, the
Paying Agent may resign by giving at least forty-five (45) days' prior written notice to Issuer; and
the Paying Agent's agency shall be terminated and its duties shall cease upon expiration of such
forty-five (45) days or such lesser period of time as shall be mutually agreeable to Paying Agent and
Issuer. At any time, following at least forty-five (45) days' prior notice (or such lesser period of time
as shall be mutually agreeable to the Paying Agent and the Issuer) the Paying Agent may be removed
from its agency. Such notice shall be in the form of a certified copy of a resolution adopted by the
Issuer and evidencing its resolve to "so remove; such removal shall become effective upon the
expiration of the forty -five (45) day or agreed lesser time period, and upon payment to the Paying
Agent of all amounts payable to it in connection with its agency. In such event, the Paying Agent
shall deliver to the Issuer, or to the Issuer's designated representative, all Bonds and cash belonging
to the Issuer and, at the Issuer's expense, shall furnish to the Issuer, or to the Issuer's designated
representative, reasonably detailed information regarding the status of the Issuer's outstanding Bonds
and copies of other pertinent records then in the Paying Agent's possession, reasonably requested by
the Issuer.
Section 15. Effectiveness and Term. If the Bonds already are outstanding as of the date
of the execution and delivery of this Agreement, this Agreement is effective as of the date hereof and
shall continue until terminated.
If the Bonds are to be newly issued, then this Agreement shall become effective as of the date
that the Bonds are delivered to the original purchaser(s) thereof, and shall continue until terminated.
If said Bonds are not delivered to original purchaser(s), this Agreement shall be null, void and of no
effect.
This Agreement shall remain in effect and the agency established by the Agreement shall
continue until (i) terminated by mutual agreement of Issuer and Paying Agent, (ii) the resignation or
removal of Paying Agent pursuant to Section 14 hereof, or (iii) after all Bonds have been retired by
payment or otherwise, or funds have been deposited for their retirement, and any remaining funds
have either been returned to the Issuer or escheated to the State.
Section 16. Conflicts Between Documents. In the event of any conflict between any
provision of this Agreement and the Authorization, the terms of the Authorization shall govern.
Section 17. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of California.
6
DOCSOC /1575501 v5/024217 -0005
IN WITNESS WHEREOF, the parties hereto have caused these presents to be signed by their
duly authorized officers as of the date first above written.
CITY OF ARCADIA
LIM
City Manager
THE BANK OF NEW YORK MELLON TRUST
COMPANY, N.A.
DOCSOC /1575501 v5 /024217 -0005
Authorized Officer
r: 5_
DESCRIPTION OF BONDS
$[Bond Amount] CITY OF ARCADIA GENERAL OBLIGATION REFUNDING BONDS SERIES
2012 (POLICE STATION PROJECT)
A -1
DOCS OC/ 1575501 v5 /024217 -0005
EXHIBIT B
FEE SCHEDULE
Registrar, Transfer Agent and Paying Agent For Fully Registered Tax Exempt Bond
B -1
DOCSOC/1 57550 1 v5/024217 -0005
ATTACHEMENT 4
RESOLUTION NO. 6848
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
ARCADIA, CALIFORNIA, PROVIDING FOR THE ISSUANCE OF
ITS GENERAL OBLIGATION REFUNDING BONDS, SERIES 2012
(POLICE STATION PROJECT) IN THE PRINCIPAL AMOUNT
NOT TO EXCEED SEVEN MILLION DOLLARS ($7,000,000)
WHEREAS, pursuant to the provisions of Chapter 4 of Division 4 of Title 4 of the
California Government Code (Sections 43600 et se q.), as amended (the "Law "), and
pursuant to Ordinance No. 2111 adopted by the City Council of the City of Arcadia on
August 3, 1999 (the "Ordinance ") and Resolution No. 6131 adopted by the City Council
of the City on August 3, 1999, a special election was duly and regularly held on the 2nd
day of November, 1999, in that territory included within the boundaries of the City (the
"Election ") at which Election there was submitted to the qualified voters of said City the
following:
and;
PROPOSITION: Shall the City of Arcadia incur a bonded
indebtedness in the principal amount of $8,000,000 for the
construction and completion of the following municipal
improvement, to wit: police station in the Arcadia Civic Center,
including facilities for emergency operations, police dispatch and
911 emergency communications, detective - bureau, records,
police laboratory, jail facility, evidence storage and other works,
property or structures for efficient, effective law enforcement
necessary for said City Police Station?
WHEREAS, two- thirds or more of the votes cast at the Election were in favor of
and assented to the incurring of such indebtedness, and all the requirements of the
Constitution and laws of the State of California have been complied with in the holding
of the Election; and
WHEREAS, the City previously issued pursuant to the authorization of the
Election and the Law $8,000,000 original principal and denominational amount of City
of Arcadia Series A of 2001 General Obligation Bonds (Police Station Project) (the
"Prior Bonds ") payable from the levy of an ad valorem tax against the taxable property
in the City; and
WHEREAS, pursuant to Section 53550 of the Government Code of the State of
California, the City is authorized to issue refunding bonds to refund all or a portion of the
Prior Bonds (the `Refunded Bonds "); and
WHEREAS, in accordance with the Election, the Ordinance, the Law and
Articles 9 and 11, Chapter 3, Part 1 of Division 2 of the California Government Code
(commencing with Sections 53550 and 53580, respectively) (the "Bond Law "), the City
now desires to issue approximately $7,000,000 in refunding bonds to refinance the
Refunded Bonds; and
WHEREAS, it is found and determined by this City Council that the best interests
of the City would be served by proceeding according to the provisions of the Law and
the Bond Law to issue the General Obligation Refunding Bonds, Series 2012 (Police
Station Project) (the "Bonds ") to refund the Refunded Bonds; and
WHEREAS, the City Council has determined that The Bank of New York Mellon
Trust Company, N.A. (the "Paying Agent ") shall act as the initial paying agent and
registrar for the Bonds subsequent to the adoption of this Resolution; and
WHEREAS, in order to effect the issuance of the Bonds, the City Council desires
to approve the form of a preliminary official statement for the Bonds and to approve the
form of and authorize the execution and delivery of a Continuing Disclosure Certificate
2
with respect to the Bonds, the forms of which are on file with the City Clerk and
presented at this meeting; and
WHEREAS, in order to provide for the prepayment and defeasance of the
Refunded Bonds, the City Council desires to approve the form of and authorize the
execution and delivery of an Escrow Agreement by and between the Paying Agent,
acting as escrow agent with respect to the Refunded Bonds, the form of which is on file
with the City Clerk and presented at this meeting; and
WHEREAS, this City Council deems it proper and necessary that the Bonds shall
be sold only following competitive bid therefor, and that bids be invited for the Bonds in
the amount of not to exceed $7,000,000, and that if bids are satisfactory, said Bonds be
sold in the manner and at the time and place hereinafter set forth.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF ARCADIA,
CALIFORNIA, DOES HEREBY FIND, DETERMINE AND RESOLVES AS FOLLOWS:
SECTION 1. Each of the above recitals is true and correct.
SECTION 2. The issuance of the Bonds in a principal amount not to exceed
$7,000,000 is hereby approved and such Bonds shall mature on the dates and pay
interest at the rates set forth in and all other provisions of the Bonds shall be governed
by the terms and conditions of a Supplement to this Resolution to be executed by the
Mayor of the City, the City Manager, the Administrative Services Director, or their
written designee (each an "Authorized Officer" and collectively, the "Authorized
Officers "), which Supplement to Resolution is hereby approved in substantially the form
attached hereto as Exhibit "A" (the "Supplement to Resolution "), together with such
additions thereto and changes therein as Bond Counsel and the Authorized Officers
3
deem necessary. Approval of such changes shall be conclusively evidenced by the
execution and delivery of the Supplement to Resolution by an Authorized Officer. The
covenants set forth in the Supplement to Resolution are hereby approved, shall be
deemed covenants of the City Council and shall be complied with by the City and its
officers. The Supplement to Resolution shall constitute a contract between the City and
the Owners of the Bonds.
SECTION 3. The preliminary official statement (the "Preliminary Official
Statement ") presented to this City Council is approved in substantially the form
presented. The City Manager is authorized to make such changes in and additions to
the Preliminary Official Statement prior to mailing as may be approved by the City
Manager or the Administrative Services Director, or their written designees; and each of
the City Manager, the Administrative Services Director and their written designees is
hereby authorized and directed to deem such form, as modified, 'final," except for
information relating to the offering prices, interest rates, selling compensation, rating
and other terms of the Bonds depending on such matters. The execution of the official
statement by the Mayor or the City Manager and the printing and distribution thereof (in
both preliminary and final forms) in connection with the sale of the Bonds, with such
changes as are approved or required as set forth above, are hereby authorized and
approved.
SECTION 4. The form of the Continuing Disclosure Certificate to be executed by
the City (the "Continuing Disclosure Certificate "), presented to this City Council is
approved in substantially the form presented. Each of the Authorized Officers is hereby
authorized and directed, for and in the name and on behalf of the City, to execute the
4
Continuing Disclosure Certificate in substantially said form, with such changes therein
as such Authorized Officers executing such document may require or approve, such
approval to be conclusively evidenced by the execution and delivery thereof.
SECTION 5. Bids for the purchase of the Bonds in the amount of not to exceed
$7,000,000 shall be received by electronic means, through Parity, administered by i-
Deal LLC or other Internet -based providers, up to the hour of 10:00 a.m. on Tuesday,
October 23, 2012, or such other date and time as is selected by the City Manager, or
his written designee, and, if determined to be in the best interests of the City by the City
Manager, or his written designee, at such later date as specified pursuant to the Notice
Inviting Proposal for Purchase of Bonds (together with attached, the "Notice Inviting
Bids ") Bid Form presented to this meeting and on file with the City Clerk, thereafter until
a bid is accepted.
The City Clerk is hereby authorized and directed to cause to be published a
notice of intention to sell Bonds in the form presented to this meeting and on file with the
City Clerk (the "Notice of Intention ") in the Arcadia Weekly and in The Bond Buyer, each
of which is a newspaper of general circulation, circulated within the State, said
publication to be at least fifteen (15) days prior to the date of opening bids stated in the
Notice of Bond Sale.
The City Clerk or Fieldman Rolapp & Associates is hereby authorized and
directed to cause to be furnished to prospective bidders copies of the Notice Inviting
Bids, and the Preliminary Official Statement; but the failure, ir whole or in part, to
comply with this paragraph shall not in any manner affect the validity of the sale of the
E
Bonds. The Notice Inviting Bids shall be substantially in the form presented to this City
Council.
On any date on which bids are duly received, the City Manager or the
Administrative Services Director is hereby authorized and directed to award the Bonds
to the best bidder at a price of par or better, provided the true interest cost to the City
shall not exceed five percent (5.00 %); provided she or he may, in her or his discretion,
reject all bids.
SECTION 6. The form of the Escrow Agreement to be executed by the City
presented to this City Council is approved in substantially the form presented. Each of
the Authorized Officers is hereby authorized and directed, for and in the name and on
behalf of the City, to execute the Escrow Agreement in substantially said form, with
such changes therein as such Authorized Officers executing such document may
require or approve, such approval to be conclusively evidenced by the execution and
delivery thereof.
SECTION 7. The City hereby determines that the Bonds are qualified tax-
exempt obligations pursuant to Section 265(b) of the Code and finds that the reasonably
anticipated amount of qualified tax - exempt obligations which will be issued by the City
and all of its subordinate entities during the 2012 calendar year will not exceed
$10,000,000.
SECTION 8. The Authorized Officers are each hereby authorized and directed,
jointly and severally, to do any and all things and to execute and deliver any and all
documents which each may deem necessary or advisable in order to consummate the
sale, execution and delivery of the Bonds and the refinanpi,ng of the Refunded Bonds
6
and otherwise to carry out, give effect to and comply with the terms and intent of this
Resolution and the Supplement to Resolution thereto, the Bonds, the Continuing
Disclosure Certificate, the Escrow Agreement, the Notice Inviting Bids, the Preliminary
Official Statement, and the Official Statement. Such actions heretofore taken by such
officers or designees are hereby ratified, confirmed and approved.
SECTION 9. The City Clerk shall certify to the adoption of this Resolution.
Passed, approved and adopted this day of , 2012.
ATTEST:
City Clerk
APPROVED AS TO FORM:
f
Stephen P. Deitsch
City Attorney
7
Mayor of the City of Arcadia
EXHIBIT "A"
FORM OF SUPPLEMENT TO RESOLUTION
A -1
SUPPLEMENT TO RESOLUTION NO.
GOVERNING TERMS OF THE $[Bond Amount] CITY OF
ARCADIA GENERAL OBLIGATION REFUNDING BONDS,.
SERIES 2012 (POLICE STATION PROJECT)
DATED AS OF NOVEMBER 1, 2012
DOCSOC/ 1575510v5/024217 -0005
SUPPLEMENT TO RESOLUTION NO.
THIS SUPPLEMENT TO RESOLUTION NO. executed as of this 151 day of
November, 2012 governs the terms of the City of Arcadia General Obligation Refunding Bonds,
Series 2012 (Police Station Project).
RECITALS.
WHEREAS, pursuant to the provisions of the City Charter of the City and Chapter 4 of
Division 4 of Title 4 of the California Government Code (Sections 43600 et seq.), as amended (the
"Law "), and pursuant to Ordinance No. 2111 adopted by the City Council of the City of Arcadia on
August 3, 1999 (the "Ordinance ") and Resolution No. 6131 adopted by the City Council of the City
on August 3, 1999, a special election was duly and regularly held on the 2nd day of November 1999,
in that territory included within the boundaries of the City (the `Election ") at which Election there
was submitted to the qualified voters of said city the following:
PROPOSITION: Shall the City of Arcadia incur a bonded
indebtedness in the principal amount of $8,000,000 for the
construction and completion of the following municipal improvement,
to wit: police station in the Arcadia Civic Center, including facilities
for emergency operations, police dispatch and 911 emergency
communications, detective bureau, records, police laboratory, jail
facility, evidence storage and other works, property or structures for
efficient, effective law enforcement necessary for said City Police
Station?
;and
WHEREAS, two- thirds or more of the votes cast at the Election were in favor of and
assented to the incurring of such indebtedness for the stated purpose (the "Project "), and all the
requirements of the Constitution and laws of the State of California have been complied with in the
holding of the Election; and
DOCSOC/ 1575510v5/024217 -0005
WHEREAS, the City previously issued pursuant to the authorization of the Election and the
Law $8,000,000 original principal and denominational amount of City of Arcadia Series A of 2001
General Obligation Bonds (Police Station Project) (the "Prior Bonds ") payable from the levy of an ad
valorem tax against the taxable property in the City; and
WHEREAS, pursuant to Section 53550 of the Government Code of the State of California,
the City is authorized to issue refunding bonds to refund all or a portion of the Prior Bonds (the
"Refunded Bonds "); and
WHEREAS, in accordance with the Election, the Ordinance, the Law and Articles 9 and 11,
Chapter 3, Part 1 of Division 2 of the California Government Code (commencing with
Sections 53550 and 53580, respectively) (the "Bond Law "), the City now desires to issue $[Bond
Amount] in refunding bonds to refinance the Refunded Bonds; and
WHEREAS, it is found and determined by this City Council that the best interests of the City
would be served by proceeding according to the provisions of the Law and the Bond Law to issue the
General Obligation Refunding Bonds, Series 2012 (Police Station Project) (the "Bonds ") to refund
the Refunded Bonds; and
WHEREAS, the City Council has determined that The Bank of New York Mellon Trust
Company, N.A. (the "Paying Agent ") shall act as the initial paying agent and registrar for the Bonds
subsequent to the adoption of this Resolution; and
WHEREAS, it is found and determined by this City Council that the best interests of the City
would be served by proceeding with the authorization of the issuance of General Obligation
Refunding Bonds of the City according to the provisions of the Bond Law for the purpose of
refinancing the construction and acquisition of the Project approved by the voters;
2
DOCS OC/ 1575510v5/024217 -0005
NOW, THEREFORE, in order to establish the terms and conditions upon and subject to
which the General Obligation Refunding Bonds, Series 2012 (Police Station Project) (the "Series
2012 Bonds" or the `Bonds ") are to be issued, the City Council does hereby covenant and agree, for
the benefit of the Owners of the Series 2012 Bonds, as follows:
SECTION 1. Definitions. Unless the context clearly otherwise requires the following terms
or as defined in the recitals hereof shall have the respective meanings ascribed to them in this
Section 1:
Administrative Services Director. The term "Administrative Services Director"
means the person responsible for the financial affairs of the City, appointed by the City Manager
from time to time; as of the date of this Resolution, such person is the Administrative Services
Director of the City.
Auditor. The term "Auditor" means the County Auditor - Controller of the County of
Los Angeles, California, being the Auditor - Controller of such County.
Authorized Investments. The term "Authorized Investments" means-any investment
permitted by law to be made with any moneys belonging to or in the custody of the City and by any
policy guidelines promulgated by the City; including:
1. Generally approved qualifying investment instruments:
a. Obligations of the U.S. Government, its agencies, and
instrumentalities.
b. Certificates of deposit with banks and savings and loans doing
business in the State of California.
C. Prime Banker's Acceptances.
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d. Prime Commercial Paper.
e. Repurchase Agreements and Money Market Funds whose underlying
collateral consists of the foregoing.
f. Los Angeles County's Investment Pool for local agencies, which
includes the purchase of Reverse Repurchase Agreements.
g. Pools and other investment structures incorporating investments listed
in a through e.
2. Generally approved qualifying investment instruments for City funds, as
further limited by the investment policy:
a. United States Treasury Bills, Bonds, and Notes, or those for which the
full faith and credit of the United States are pledged for payment of
principal and interest.
b. Obligations issued by the United States Government Agencies such as
the Government National Mortgage Association (GNMA), Federal
Farm Credit Bank System (FFCB), the Federal Home Loan Bank
Board (FHLB), the Federal Home Loan Mortgage Corporation
(FHLMC), the Federal National Mortgage Association (FNMA), and
the Student Loan Marketing Association (SLMA).
C. Bills of exchange or time drafts drawn on and accepted by a
commercial bank otherwise known as banker's acceptances.
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Purchases of banker's acceptances may not exceed 180 days to
maturity.
d. Commercial paper ranked P1 by Moody's Investor Services and Al
by Standard and Poor's, and issued by a domestic corporation having
assets in excess of $500 million and having an A or better rating on its
long -term debentures as provided by Moody's or Standard and Poor's.
e. Local Agency Investment Fund. The City may invest in the Local
Agency Investment Fund (LAIF) established by the State Treasurer
for the benefit of local agencies up to the maximum amount permitted
by State law.
f. Money market funds rated in the highest category of Moody's or
Standard and Poor's, or administered by a domestic bank with long-
term debt rated in one of the top two categories of Moody's or
Standard and Poor's.
Authorized Representative of the City. The term "Authorized Representative of the
City" means the Mayor, the City Manager, the Administrative Services Director or any other person
or persons designated by any of them in a written certificate or by the City Council of the City and
authorized to act on behalf of the City by a written certificate signed on behalf of the City by the
Mayor of the City and containing the specimen signature of each such person.
Bond Counsel. The term "Bond Counsel" means an attorney or firm of attorneys of
whose opinions are nationally accepted in matters pertaining to the tax- exempt status of interest on
bonds issued by states and their political subdivisions.
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Bonds or Series 2012 Bonds. The term "Bonds" or "Series 2012 Bonds" means the
$[Bond Amount] City of Arcadia General Obligation Refunding Bonds, Series 2012 (Police Station
Project).
Closing Date. The term "Closing Date" is the date the bonds are delivered to the
initial purchaser thereof.
Code. The term "Code" means the Internal Revenue Code of 1986, as amended, and
any regulations, rulings, judicial decisions, and notices, announcements, and other releases of the
United States Treasury Department or Internal Revenue Service interpreting and construing it.
Computation Year. The term "Computation Year" means, with respect to the Bonds,
the period beginning on the Delivery Date and ending on August 1, 2013 and each 12 -month period
ending on August 1 thereafter until there are no longer any Bonds outstanding, or such other
computation year as may be established pursuant to the Tax Certificate.
Costs of Issuance. The term "Costs of Issuance" means all of the costs authorized to
be paid from the proceeds of the Refunding Bonds set forth in Section 53550(e) and (f) and Section
53587 of the Government Code, including, but not limited to, all printing and document preparation
expenses in connection with this Resolution, the Bonds and the Official Statement pertaining to the
Bonds and any and all other agreements, instruments, certificates or other documents prepared in
connection therewith; financial advisory fees; bond counsel fees; underwriter's fees; rating agency
fees; auditor's fees; CUSIP service bureau charges; legal fees and expenses of counsel with respect to
the financing; the initial fees and expenses of the Paying Agent; other fees for professional consulting
services, fees for credit enhancement relating to the Bonds, if any; and other fees and expenses
incurred in connection with the issuance of the Bonds, to the extent such fees and expenses are
approved by the City.
Costs of Issuance Fund. The term "Costs of Issuance Fund" means the fund of that
name established under the Bond Law and Section 11 hereof.
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Debt Service Fund. The term "Debt Service Fund" means the fund of that name
established under the Law and Section 13 hereof.
Depository. The term "Depository" means (a) initially, DTC, and (b) any other
Securities Depository acting as Depository under this Indenture.
Depository System Participant. The term "Depository System Participant" means
any participant in the Depository's book -entry system.
DTC. The term "DTC" means The Depository Trust Company, New York, New
York, and its successors and assigns.
Escrow Agreement. The term "Escrow Agreement" means the Escrow Agreement
relating to the Refunded Bonds by and between the City and The Bank of New York Mellon Trust
Company, N.A., or any other successor thereto, as escrow agent.
Federal Securities. Means direct or indirect noncallable obligations of, or
noncallable, nonrepayable obligations unconditionally guaranteed as to full and timely payment of
principal and interest by, the United States of America, but excluding investments in mutual funds or
unit investment trusts.
Interest Payment Date. The term "Interest Payment Date" means each August 1 and
February 1, commencing February 1, 2013.
Owner. The term "Owners" or "Bond Owner" or any similar term, when used with
respect to the Bonds, means any person in whose name a Bond is registered in the books of
registration maintained by the Paying Agent.
Participants. The term "Participants" means those broker - dealers, banks and other
financial institutions from time to time for which DTC holds Bonds as securities depository.
Paying Agent. The term "Paying Agent" means that entity so designated from time to
time by the City Council of the City to serve as, paying agent, transfer agent and registrar for the
Bonds. The initial Paying Agent shall be The Bank of New York Mellon Trust Company, N.A.
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Rebate Regulations. The term "Rebate Regulations" means the Treasury Regulations
issued under Section 148(f) of the Code.
Record Date. The term "Record Date" shall mean the fifteenth day of the month
preceding an Interest Payment Date.
Resolution. The term "this Resolution" shall mean, collectively, Resolution
No. of the City Council, together with this Supplement to Resolution.
Tax Certificate. The term "Tax Certificate" shall mean that certain certificate of such
name executed by the City on the Closing Date to establish certain facts and expectations and which
contains certain covenants relevant to compliance with the Code.
Treasurer. The term "Treasurer" means the City Treasurer of the City.
SECTION 2. Authorization to Issue. Bonds of the City in the sum of $[Bond Amount]
shall be issued for the purpose of refunding the Refunded Bonds, which were issued for the purpose
stated in the proposition set out in the recitals hereof. Said Bonds are further issued pursuant to the
provisions of the Law and the Bond Law. Said Bonds shall be designated the "City of Arcadia
General Obligation Refunding Bonds, Series 2012 (Police Station Project)." The Series 2012 Bonds
shall be issued in the form of fully registered bonds in the denomination of $5,000 each or any whole
multiple thereof and shall mature on the dates and in the amounts, and shall bear interest at the rates,
per annum, for each of the years as follows:
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Year
(August 1 Principal Amount Interest Rate
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024 -
2025
2026
2027
2028
2029
2030
2031
The Bonds shall bear interest at the rates set forth above, from the Closing Date, payable on
February 1, 2013 and thereafter semiannually on each August 1 and February 1. Each Bond shall
bear interest until its principal sum has been paid; provided, however, that if funds are available for
the payment thereof on such Bond's applicable maturity date in full accordance with the terms of this
Resolution, such Bond shall then cease to bear interest. Interest on the Bonds shall be calculated on
the basis of a 360 -day year comprised of twelve 30 -day months.
The Bonds shall be numbered No. 1 and sequentially upwards and shall be dated the Closing
Date, except that Bonds issued upon exchanges and transfers of other Bonds shall be dated so that no
gain or loss of interest shall result from the exchange or transfer. Interest on each Bond shall be paid
by the Paying Agent by check mailed by first class mail, postage prepaid, on the Interest Payment
Date to the Owner as his/her name and address appear on the register kept by the Paying Agent at the
close of business on the applicable Record Date. At the request of any owner of at least $1,000,000
in aggregate principal amount of Bonds, interest on the Bonds 'will be paid by wire transfer in
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immediately available funds if such request is made at least fifteen days before the Record Date for
such payment, any such designation to remain in effect until withdrawn. Each Bond shall bear
interest from the Interest Payment Date next preceding the date of authentication with respect to
which interest has been paid or provided for (unless (i) the date of authentication is prior to the first
Record Date, in which event from the Closing Date, (ii) the date of authentication is after a Record
Date and before the following Interest Payment Date, in which event it shall bear interest from such
Interest Payment Date, or (iii) it is authenticated as of an Interest Payment Date, in which event it
shall bear interest from such date) until the principal hereof shall have been paid.
0
of proceeds of the Bonds (comprising $[Bond Amount]-00 aggregate
principal amount, plus /minus $
in net original issue premium/discount, less
$ of underwriter's discount) shall be disbursed, as follows:
to the Costs of Issuance Fund to be
applied to pay Costs of Issuance in
accordance with Section 11
to the Escrow Fund established pursuant
to the Escrow Agreement for the
defeasance and prepayment of the
Refunded Bonds
TOTAL
The amount designated above for transfer to the Escrow Fund is hereby.determined to be that
amount necessary to purchase the Federal Securities sufficient to refund the Refunded Bonds.
SECTION 3. Place of Payment. The Bonds shall be payable in lawful money of the United
States of America and principal of the Bonds shall be payable upon surrender thereof at the principal
corporate trust office of the Paying Agent in Los Angeles, California.
SECTION 4. Paying Agent. The initial Paying Agent for the Bonds shall be The Bank of
New York Mellon Trust Company, N.A. The Paying Agent 'may at any time resign and be
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DOCSOC/ 1575510v5/024217 -0005
discharged of the duties and obligations created by this Resolution by giving at least 60 days' written
notice to the City. The Paying Agent may be removed at any time by an instrument filed with such
Paying Agent and signed by the City. A successor Paying Agent shall be appointed by the City and
shall be a bank or trust company organized under the laws of any state of the United States, a
national banking association or any other financial institution, having capital stock and surplus
aggregating at least $75,000,000 and doing business in the State and willing and able to accept the
office on reasonable and customary terms and authorized by law to perform all the duties imposed
upon it by this Resolution. Such Paying Agent shall signify the acceptance of its duties and
obligations hereunder by executing and delivering to the City a written acceptance thereof.
Resignation or removal of the Paying Agent shall be effective upon appointment and acceptance of a
successor Paying Agent.
In the event of the resignation or removal of the Paying Agent, such Paying Agent shall pay
over, assign and deliver any moneys held by it as Paying Agent to its successor, or, if there is no
successor, to the Administrative Services Director. In the event that for any reason there shall be a
vacancy in the office of the Paying Agent, the Administrative Services Director shall act as such
Paying Agent. The City shall cause the new Paying Agent appointed to replace any resigned or
removed Paying Agent to mail notice of its appointment and the address of its principal office to all
registered Owners.
SECTION 5. Form of Bonds. The Bonds shall be substantially in the form attached hereto
as Exhibit "A." Such form is hereby approved and adopted as the form of the Bonds and of the
redemption, exchange, registration and assignment provisions pertaining to them, with necessary or
appropriate variations, omissions, and insertions, as permitted or required by this Resolution.
Any Bonds issued pursuant to this Resolution may be initially issued in temporary form
exchangeable for definitive Bonds when the same are ready for delivery. The temporary Bonds may
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be printed, lithographed or typewritten, shall be of such denominations as may be determined by the
City, shall be in fully registered form and may contain references to any of the provisions of this
Resolution as may be appropriate. Every temporary Bond shall be executed by the City and be
authenticated by the Paying Agent upon the same conditions and in substantially the same form and
manner as the definitive fully registered bonds. If the City issues temporary Bonds, it will execute
and furnish definitive Bonds without delay, and, thereupon, the temporary Bonds shall be
surrendered for cancellation at the principal office of the Paying Agent in Los Angeles, California, or
at such other place in California as the City may approve. The Paying Agent shall deliver in
exchange for the surrendered temporary Bonds an equal aggregate principal amount of definitive
Bonds of authorized denominations of this same issue. Until exchanged, the temporary Bonds shall
be entitled to the same benefits under this Resolution as definitive Bonds of this same issue.
SECTION 6. Execution and Authentication of the Bonds. The Bonds shall be signed on
behalf of the City by its Mayor and by its Treasurer by facsimile signatures and by its City Clerk, or
authorized Deputy City Clerk, by facsimile signature. The foregoing officers are hereby authorized
and directed to sign the Bonds in accordance with this Section 6. If any City officer whose facsimile
signature appears on the Bonds ceases to be an officer before delivery of the Bonds, his or her
signature is as effective as if he or she had remained in office.
The Paying Agent shall authenticate the Bonds on registration and/or exchange to effectuate
the registration and exchange provisions set forth in Section 7 below; and only those Bonds that have
endorsed on them a certificate of authentication, substantially in the form set forth in the form of
Bond, duly executed by the Paying Agent, shall be entitled to any rights, benefits or security under
this Resolution. No Bond shall be valid or obligatory for any purpose unless and until the certificate
of authentication thereon has been duly executed by the Paying Agent. The certificate of the Paying
Agent upon any Bond shall be conclusive and the only evidence required that the Bond has been duly
authenticated and delivered under this Resolution. The Paying Agent's certificate of authentication
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DOCSOC/ 1575510v5/024217 -0005
on any Bond shall be deemed to have been duly executed if signed by an authorized officer of the
Paying Agent, but it shall not be necessary that the same officer sign the certificate of authentication
on all of the Bonds that may be issued hereunder.
SECTION 7. Registration, Transfers and Exchanges. Any Bond may, in accordance with
its terms, be transferred, upon the registration books required to be kept by the Paying Agent, by the
person in whose name it is registered, in person or by his duly authorized attorney, upon surrender of
such fully registered Bond for cancellation, accompanied by delivery of a written instrument of
transfer in a form approved by the Paying Agent, duly executed.
Whenever any Bond or Bonds shall be surrendered for transfer, the Paying Agent shall
authenticate and deliver a new Bond or Bonds of the same series and maturity, for the like aggregate
principal amount of Bond or Bonds surrendered.
Bonds may be exchanged at the principal corporate trust office of the Paying Agent in Los
Angeles, California, for a like aggregate principal amount of Bonds of other authorized
denominations of the same series and maturity.
The person, firm or corporation requesting the transfer or exchange shall. pay any costs or
charges in connection with the transfer or exchange as are established by the Paying Agent, in
addition to paying any tax or governmental charge that may be imposed in connection with the
transfer or exchange. The Paying Agent shall not be required, however, to register a transfer or make
an exchange of any Bond (i) during the 15 days before the selection of Bonds for redemption, or
(ii) if such Bond has been called for redemption in whole or in part.
SECTION 8. Registration Books. The Paying Agent will keep at its principal corporate
trust office in Los Angeles, California, or at such other place as the City may approve, sufficient
books for the registration and transfer of the Bonds. The books shall at all times be open to
inspection by the City; and, upon presentation for such purpose, the Paying Agent shall under such
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reasonable regulations as it may prescribe, register or transfer, or cause to be registered or
transferred, on the register, the Bonds as hereinbefore provided.
SECTION 9. Book -Entry Only System. DTC shall act as the initial Depository for the
Bonds. One Bond for each maturity of the Bonds shall be initially executed, authenticated, and
delivered as set forth herein with a separate fully registered certificate (in print or typewritten form).
Upon initial execution, authentication, and delivery, the ownership of the Bonds shall be registered in
the Bond Register kept by the Paying Agent for the Bonds in the name of Cede & Co., as nominee of
DTC or such nominee as DTC shall appoint in writing.
The representatives of the City and the Paying Agent are hereby authorized to take any and
all actions as may be necessary and not inconsistent with this Resolution to qualify the Bonds for the
Depository's book -entry system, including the execution of the Depository's required representation
letter.
With respect to Bonds registered in the Bond Register in the name of Cede & Co., as
nominee of DTC, neither the City nor the Paying Agent shall have any responsibility or obligation to
any broker - dealer, bank, or other financial institution for which DTC holds Bonds as Depository
from time to time (the "DTC Participants ") or to any person for which a DTC Participant acquires an
interest in the Bonds (the `Beneficial Owners "). Without limiting the immediately preceding
sentence, neither the City nor the Paying Agent shall have any responsibility or obligation with
respect to (i) the accuracy of the records of DTC, Cede & Co., or any DTC Participant with respect to
any ownership interest in the Bonds, (ii) the delivery to any DTC Participant, any Beneficial Owner,
or any other person, other than DTC, of any notice with respect to the Bonds, including any notice of
redemption, (iii) the selection by the Depository of the beneficial interests in the Bonds to be
redeemed in the event the City elects to redeem the Bonds in part, (iv) the payment to any DTC
Participant, any Beneficial Owner, or any other person, other than DTC, of any amount with respect
to the principal of or interest on the Bonds, or (v) any consent given or other action taken by the
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DOCSOC/ 1575510v5/024217 -0005
Depository as Owner of the Bonds; except that so long as any Bond is registered in the name of
Cede & Co., as nominee of DTC, anyone representing themselves to be the Beneficial Owner of
$1,000,000 or more in aggregate principal amount of Bonds who has filed a written request with the
Paying Agent to receive notices, containing such Beneficial Owner's name and address, shall be
provided with all notices relating to such Bonds by the Paying Agent.
Except as set forth above, the Paying Agent may treat as and deem DTC to be the absolute
Owner of each Bond for which DTC is acting as Depository for the purpose of payment of the
principal of and interest on such Bonds, for the purpose of giving notices of prepayment and other
matters with respect to such Bonds, for the purpose of registering transfers with respect to such
Bonds, and for all purposes whatsoever. The Paying Agent shall pay all principal of and interest on
the Bonds only to or upon the order of the Owners as shown on the Bond Register, and all such
payments shall be valid and effective to fully satisfy and discharge all obligations with respect to the
principal of and interest on the Bonds to the extent of the sums or sums so paid.
Upon delivery by DTC to the Paying Agent of written notice to the effect that DTC has
determined to substitute a new nominee in place of Cede & Co., and subject to the transfer provisions
hereof, references to "Cede & Co." in this Section 9 shall refer to such new nominee of DTC.
DTC may determine to discontinue providing its services with respect to the Bonds at any
time by giving written notice to the Paying Agent during any time that the Bonds are Outstanding,
and discharging its responsibilities with respect thereto under applicable law. The City may
terminate the services of DTC with respect to the Bonds if it determines that DTC is unable to
discharge its responsibilities with respect to the Bonds or that continuation of the system of book -
entry transfers through DTC is not in the best interest of the Beneficial Owners, and the City shall
mail notice of such termination to the Paying Agent.
Upon the termination of the services of DTC, as provided in, the previous paragraph, and if no
substitute Depository willing to undertake the functions hereunder can be found which is willing and
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DOCSOC/ 1575510v5/024217 -0005
able to undertake such functions upon reasonable or customary terms, or if the City determines that it
is in the best interest of the Beneficial Owners of the Bonds that they be able to obtain certificated
Bonds, the Bonds shall no longer be restricted to being registered in the Bond Register of the Paying
Agent in the name of Cede & Co., as nominee of DTC, but may be registered in whatever name or
names the Owners shall designate at that time, in accordance with Section 7.
SECTION 10. Redemption.
(a) Optional Redemption. The Bonds maturing on or after August 1, are
subject, at the option of the City, to redemption prior to their stated maturities in whole or in part on
any date commencing August 1, , selected among maturities, if in part as nearly as practicable
on a pro -rata basis, and by lot within a maturity, at a redemption price equal to the principal amount
thereof, together with accrued interest to the date fixed for redemption, without premium.
(b) Mandatory Sinking Fund Redemption. (1) The Bonds maturing on August 1,
are subject to mandatory sinking fund redemption, in part by lot, prior to their stated
maturity, on each August 1 on and after August 1, , at a redemption price equal to 100% of the
principal amount thereof called for redemption, without premium, plus accrued interest thereon to the
date of redemption in the aggregate respective principal amounts set forth in the following table:
Principal Amount
Redemption Date of Bonds to be
(August 1) Redeemed
(maturity)
(2) The Bonds maturing on August 1, , are subject to mandatory sinking fund
redemption, in part by lot, prior to their stated maturity, on each August 1 on and after August 1,
at a redemption price equal to 100% of the principal amount thereof called for redemption,
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DOCSOC/ 1575510v5/024217 -0005
without premium, plus accrued interest thereon to the date of redemption in the aggregate respective
principal amounts set forth in the following table:
Principal Amount
Redemption Date of 20 Bonds to be
(August l) Redeemed
(maturity)
(c) Selection of Bonds for Redemption. If less than all of the Bonds outstanding
are to be redeemed, the portion of any Bond of a denomination of more than $5,000 to be redeemed
shall be in the principal amount of $5,000 or an integral multiple thereof, and, in selecting portions of
such Bond for redemption, the Paying Agent shall treat each such Bond as representing that number
of Bonds of $5,000 denominations which is obtained by dividing the principal amount of such Bond
to be redeemed in part by $5,000. The Paying Agent shall promptly notify the City in writing of the
Bonds, or portions thereof, selected for redemption.
(d) Notice of Redemption. The Paying Agent shall further provide written notice
to Bond Owners of all Bonds to be redeemed pursuant to this section by first class mail within sixty
(60) days, but in no event later than thirty (30) days prior to the date of such redemption. The date on
which the Bonds which are called for redemption are to be presented for redemption is herein
sometimes called the "redemption date." The notice of redemption shall (a) state the redemption
date; (b) state the redemption price; (c) state the dates of maturity of the Bonds and, if less than all of
any such maturity is called for redemption the distinctive numbers of the Bonds of such maturity to
be redeemed, and in the case of Bonds redeemed in part only, the respective portions of the principal
amount thereof, to be redeemed; (d) state the CUSIP number, if any, of each Bond to be redeemed;
(e) subject to subsection (e) give notice that further interest on such Bonds will not accrue after the
designated redemption date; and (f) any other descriptive information regarding the Bonds needed to
identify accurately the Bonds being redeemed. The actual receipt by the Owner of notice of such
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redemption shall not be a condition precedent to redemption, and failure to receive such notice shall
not affect the validity of the proceedings for the redemption of such Bonds or the cessation of interest
on the date fixed for redemption.
At least twenty -five (25) days before the redemption date, notice shall also be
given by (i) registered or certified mail, postage prepaid, (ii) confirmed facsimile transmission or
(iii) overnight delivery service, to The Depository Trust Company, 711 Stewart Avenue, Garden
City, New York 11530, Facsimile transmission: (516) 227-4039,(516) 227 -4190 and in accordance
with then current guidelines of the Securities and Exchange Commission, to any other firm or service
regularly providing information with respect to the redemption of Bonds designated to the Paying
Agent by the City.
(e) Conditional Notice of Optional Redemption of Bonds. With respect to the
optional redemption of Bonds pursuant to the foregoing subsection (a), at the direction of the City
filed with the Paying Agent, the notice of such redemption shall state that such redemption is
conditioned upon the receipt by the Paying Agent on or before the date fixed for such redemption of
sufficient funds for such purpose from any issue of refunding bonds. In the event that sufficient
funds shall not have been deposited with the Paying Agent on or before the date fixed for
redemption, the Paying Agent shall promptly notify the Owners of the Bonds by telephone, facsimile
transmission or other form of telecommunication, promptly confirmed in writing; and thereupon such
redemption and the notice thereof shall be deemed to be canceled and rescinded.
(f) Effect of Redemption. When notice of redemption has been given,
substantially as provided for herein, and when the amount necessary for the redemption of the Bonds
called for redemption (principal and premium, if any) is set aside for that purpose in the Debt Service
Fund, as provided for herein, the Bonds designated for redemption shall become due and payable on
the date fixed for redemption thereof, and upon presentation and surrender of said Bonds at the place
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specified in the notice of redemption, such Bonds shall be redeemed and paid at said redemption
price out of said Debt Service Fund, and no interest will accrue on such Bonds called for redemption
after the redemption date specified in such notice and the owners of the Bonds so called for
redemption after such redemption date shall look only to the funds held for such purpose in the Debt
Service Fund (or held for such specific purpose in the Bond Fund held by the Paying Agent). All
Bonds redeemed shall be cancelled forthwith by the Paying Agent and shall not be reissued. The
City shall establish a separate account in the Debt Service Fund to hold funds available for payment
of called bonds after the redemption date.
(g) mandatory sinking fund redemption prior to maturity.
SECTION 11. Costs of Issuance Fund. The proceeds of the sale of the Bonds identified in
Section 2 for deposit into the Costs of Issuance Fund shall be deposited with the Paying Agent to the
credit of; and the Paying Agent shall establish a fund designated the "City of Arcadia Series 2012
General Obligation Refunding Bonds Costs of Issuance Fund," (the "Costs of Issuance Fund "), and
the moneys in said fund shall be applied exclusively to pay Costs of Issuance in accordance with the
Bond Law, except as otherwise provided in the provisions of the Bond Law. If, upon completion of
the payment of all Costs of Issuance from the Costs of Issuance Fund as designated in a written
certificate signed by an Authorized Representative from the City, amounts remain therein, the Paying
Agent shall transfer such amounts to the Debt Service Fund. At such time that no amounts remain on
deposit in the Costs of Issuance Fund, the Paying Agent shall close the Costs of Issuance Fund.
SECTION 12. Rebate Fund. The City shall establish the Series 2012 General Obligation
Refunding Bonds (Police Station Project) Rebate Fund (the "Rebate Fund "). All money at any time
deposited in the Rebate Fund shall be held by the City in trust for payment to the United States
Treasury. All amounts on deposit in the Rebate Fund shall be governed by this Section and the Tax
Certificate, unless the City obtains an opinion of Bond Counsel that the exclusion from gross income
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DOCSOC/ 1575510v5/024217 -0005
of interest on the Bonds shall not be adversely affected for federal income tax purposes if such
requirements are not satisfied.
(a) Annual Computation. Within 55 days of the end of each Computation Year
with respect to the Bonds, the City shall calculate or cause to be calculated the amount of rebatable
arbitrage, in accordance with Section 148(f)(2) of the Code and Section 1.148 -3 of the Rebate
Regulations (taking into account any applicable exceptions with respect to the computation of the
rebatable arbitrage, described, if applicable, in the Tax Certificate (e.g., the temporary investments
exceptions of Section 148(f)(4)(B) and (C) of the Code), and taking into account whether the 1 -1/2%
Penalty has been elected), for this purpose treating the last day of the applicable Computation Year as
a computation date, within the meaning of Section 1.148 -1(b) of the Rebate Regulations (the
"Rebatable Arbitrage "). The City shall obtain expert advice as to the amount of the Rebatable
Arbitrage to comply with this Section.
(b) Annual Transfer. Within 55 days of the end of each applicable Computation
Year with respect to the Bonds, an amount shall be transferred by the City to be deposited to the
Rebate Fund from any legally available funds, including the other funds and accounts established
herein, so that the balance in the Rebate Fund shall equal the amount of Rebatable Arbitrage so
calculated in accordance with clause (i) of this Subsection (a). In the event that immediately
following the transfer required by the previous sentence, the amount then on deposit to the credit of
the Rebate Fund exceeds the amount required to be on deposit therein, the Administrative Services
Director shall withdraw the excess from the Rebate Fund and then credit the excess to the Debt
Service Fund.
(c) Payment to the Treasury. The City shall pay to the United States Treasury,
out of amounts in the Rebate Fund:
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(1) Not later than 60 days after the end of (A) the fifth
Computation Year with respect to the Bonds, and (B) each applicable fifth
Computation Year thereafter, an amount equal to at least 90% of the
Rebatable Arbitrage calculated as of the end of such Computation Year; and
(2) Not later than 60 days after the payment of all the Bonds, an
amount equal to 100% of the Rebatable Arbitrage calculated as of the end of
such applicable Computation Year, and any income attributable to the
Rebatable Arbitrage, computed in accordance with Section 148(f) of the
Code.
In the event that, prior to the time of any payment required to be made from the Rebate Fund,
the amount in the Rebate Fund is not sufficient to make such payment when such payment is due, the
City shall calculate or cause to be calculated the amount of such deficiency and deposit an amount
received from any legally available source, including the other funds and accounts established herein,
equal to such deficiency in the Rebate Fund prior to the time such payment is due. Each payment
required to be made pursuant to this Subsection (1) shall be made to the Internal Revenue Service
Center, Ogden, Utah 84201 on or before the date on which such payment is due, and shall be
accompanied by Internal Revenue Service Form 8038 -T prepared by the City, or shall be made in
such other manner as provided under the Code.
(d) Disposition of Unexpended Funds. Any funds remaining in the Rebate Fund
after redemption and payment of the Bonds and the payments described in Subsection (1), may be
utilized in any lawful manner by the City.
(e) Survival of Defeasance. Notwithstanding anything in this Section or the
Resolution to the contrary, the obligation to comply with the requirements of this Section shall
survive the defeasance of the Bonds.
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SECTION 13. Security /Debt Service Fund. The City Council, so far as is practicable, shall
fix such rate or rates for a tax to be levied in the City as will result in revenues which will pay the
interest on the Bonds, and provide a sinking or other fund for the payment of the principal of the
Bonds as such principal may become due. The City Council shall determine the fiscal year for all of
the amounts above set forth, and shall fix the rate or rate of tax to be levied which will raise the
amounts of money required by the City for such purposes, and as required by the provisions of the
Law, the City Council shall certify to the County Auditor- Controller of the County of Los Angeles
(the "Auditor ") the rate or rates so fixed and shall furnish to the Auditor a statement in writing
containing the following: (a) an estimate of the minimum amount of money required to be raised by
taxation during the fiscal year for the payment of the principal of and interest on the Bonds, as will
become due before the proceeds of a tax levied at the next general tax levy will *be available; (b) an
estimate of the minimum amount of money required to be raised by taxation during the fiscal year for
all other purposes of the City; and (c) any other items required by the provisions of the Law. The
Auditor shall compute and enter in the county assessment roll the respective sums to be paid as a
City tax on the property within the City using the rate or rates of levy as fixed by the City Council
and the assessed value as found on the assessment roll for the property subject to the tax.
It shall be the duty of all county officers charged with the duty of collecting taxes to collect
such tax in time, form and manner as county taxes are collected and when collected to pay the same
to the City.
All such taxes for the payment of principal and interest on the Bonds shall be established,
levied and collected as provided in the provisions of the Law.
All moneys derived from such taxes and all other moneys allocated and designated for
payment of said Bonds and the interest thereon shall be placed in a fund of the City and designated
"City of Arcadia Series 2012 General Obligation Refunding Bonds (Police Station Project) Debt
Service Fund" (the "Debt Service Fund "), (and accounts therein to the extent created pursuant to
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Section 10 or 16 hereof) shall be kept separate and apart from all other funds of the City (and are
hereby irrevocably pledged for the payment of the Bonds in accordance with the purpose and intent
of this Resolution), and until all of said Bonds and all interest thereon have been fully paid (or
defeased) the moneys in said fund shall be used for no other purpose than the payment of said Bonds
and the interest thereon; provided, however, that when all of the principal and interest on all of the
Bonds have been paid, any balance of money then remaining in said funds shall be transferred to the
general fund of the City. Interest earned on the investment of monies in the Debt Service Fund shall
be retained in the Debt Service Fund and used by the City to pay principal and interest on the Bonds
when due.
The Administrative Services Director shall transfer available monies from the Debt Service
Fund to the Paying Agent in amounts sufficient and at such time as are necessary to promptly pay
principal (including mandatory sinking fund payments), interest and redemption premium, if any, on
the Bonds as such shall become due; and the Paying Agent shall establish a fund designated the "City
of Arcadia Series 2012 General Obligation Refunding Bonds (Police Station Project) Bond Fund"
(the "Bond Fund ") for such purpose and shall make payments to the Bond Owners of principal
(including mandatory sinking fund payments), interest and redemption premium, if any, on the
Bonds as such shall become due; provided that, in the event of any deficiencies, moneys on deposit
in the Bond Fund shall be applied first to the payment of interest and then to the payment of principal
and, in all such cases, ratably and without preference among all maturities.
SECTION 14. Investments.
(a) Moneys in the Costs of Issuance Fund shall be invested in Authorized
Investments which will by their terms mature, or in the case of an investment agreement are available
without penalty, as close as practicable to the date the City estimates the moneys represented by the
particular investment will be needed for withdrawal from the Costs of Issuance Fund. Earnings on
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DOCSOC/ 1575510v5/024217 -0005
investments of monies in the Costs of Issuance Fund shall be retained therein and applied in
accordance with authorized uses thereof and applicable law.
(b) Moneys in the Debt Service Fund and the Bond Fund shall be invested only
in Authorized Investments which will by their terms mature, or in the case of an investment
agreement are available for withdrawal without penalty, on such dates so as to ensure the payment of
principal of, premium, if any, and interest on the Bonds as the same become due. The Paying Agent
shall be under no obligation to invest moneys in the Bond Fund except on the written instruction of
the Administrative Services Director. Investment earnings, if any, in the Bond Fund in excess of
amounts held for the benefit of Owners shall be returned to the City for deposit in the Debt Service
Fund.
In the event that an Authorized Representative of the City does not so direct the Paying
Agent, the Paying Agent shall invest moneys in the Bond Fund in the Authorized Investments
described in paragraph 2(f) of the definition contained herein and as set forth in the letter of
authorization and directions executed by the City and delivered to the Paying Agent. If no
investment directions are provided, such amount shall be held in cash, uninvested.
The City and the Paying Agent, at the direction of the City, shall sell at the best price
obtainable, or present for redemption, any obligations so purchased whenever it may be necessary to
do so in order to provide moneys to meet any payment or transfer to such funds and accounts or from
such funds and accounts. For the purpose of determining at any given time the balance in any such
funds, any such investments constituting a part of such funds and accounts shall be valued at their
market value. Notwithstanding anything herein to the contrary, the Paying Agent shall not be
responsible for any loss from investments, sales or transfers undertaken in accordance with the
provisions of this Resolution.
SECTION 15. Tax Covenants. The City hereby covenant$ and agrees with the owners of the
Bonds to take no action or refrain from taking any action which, in the opinion of Bond Counsel,
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would result in the interest received by the Owners being includable in gross income for federal
income tax purposes. In order to preserve the exclusion from gross income of interest on the Bonds
for federal income tax purpose, the City covenants to comply with all applicable requirements of the
Code, and any Regulations which are necessary to preserve such exclusion from gross income and
specifically covenants, without limiting the generality of the foregoing, that:
(a) Private Activity. The City will take no action or refrain from taking any
action or make any use of the proceeds of the Bonds issued on a tax- exempt basis or of any other
monies or property which would cause the Bonds issued on a tax- exempt basis to be "private activity
bonds" within the meaning of Section 141 of the Code;
(b) Arbitrage. The City will make no use of the proceeds of the Bonds issued on
a tax- exempt basis or of any other amounts or property, regardless of the source, or take any action or
refrain from taking any action which will cause the Bonds issued on a tax- exempt basis to be
"arbitrage bonds" within the meaning of Section 148 of the Code;
(c) Federal Guaranty. The City will make no use of the proceeds of the Bonds
issued on a tax - exempt basis or take or omit to take any action that would cause -the Bonds issued on
a tax- exempt basis to be "federally guaranteed" within the meaning of Section 149(b) of the Code;
(d) Information Reporting. The City will take or cause to be taken all necessary
action to comply with the informational reporting requirement of Section 149(e) of the Code;
(e) Hedge Bonds. The City will make no use of the proceeds of the Bonds issued
on a tax- exempt basis or any other amounts or property, regardless of the source, or take any action
or refrain from taking any action that would cause the Bonds issued on a tax - exempt basis to be
considered "hedge bonds" within the meaning of Section 14 9(g) 2.f the Code unless the City takes all
necessary action to assure compliance with the requirements of Section 149(g) of the Code to
maintain the exclusion from gross income of interest on the Bonds, issued on a tax- exempt basis for
federal income tax purposes;
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(fl Miscellaneous. The City will take no action or refrain from taking any action
inconsistent with its expectations stated in that certain Tax Certificate executed by the City in
connection with each issuance of Bonds issued on a tax - exempt basis and will comply with the
covenants and requirements stated therein and incorporated by reference herein;
(g) Small Issuer Exemption From Bank Nondeductability Restriction. The City
hereby designates the Bonds for purposes of paragraph (3) of Section 265(b) of the Code and
represents that not more than $10,000,000 aggregate principal amount of obligations the interest on
which is excludable (under Section 103(a) of the Code) from gross income for federal income tax
purposes (excluding (i) private activity bonds, as defined in Section 141 of the Code, except qualified
501(c)(3) bonds as defined in Section 145 of the Code and (ii) current refunding obligations to the
extent the amount of the refunding obligation does not exceed the outstanding amount of the
refunded obligation), including the Bonds, has been or will be issued by the City, including all
subordinate entities of the City, during the calendar year 2012.
(h) Subsequent Opinions. If the City obtains a subsequent opinion of Bond
Counsel other than Stradling Yocca Carlson & Rauth, a Professional Corporation ( "SYCR" ), where
such opinion is required in connection with a change or amendment to this Resolution or the
procedures set forth in the Tax Certificate, it will obtain an opinion substantially to the effect
originally delivered by SYCR that interest on the Bonds is excluded from gross income for federal
income tax purposes.
SECTION 16. Defeasance. The Bonds may be defeased in whole or in part prior to maturity
by irrevocably depositing with the City in a separate account of the Debt Service Fund to be held
separate and apart from all other funds of the City, and which is irrevocably pledged to the Bonds so
defeased (or an entity designated by the Administrative Services Director to act as escrow agent with
respect thereto):
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(a) An amount of cash which together with amounts then on deposit in the Debt
Service Fund, is sufficient, without reinvestment, to pay and discharge all or part of the Bonds
outstanding (including all principal, interest and premium, if any) at or before their stated maturity
date; or
(b) Federal Securities not subject to call, together with cash, if required, in such
amount as will, without reinvestment, in the opinion of an independent certified public accountant,
together with interest to accrue thereon and moneys then on deposit in the Debt Service Fund
together with the interest to accrue thereon, be fully sufficient to pay and discharge all of the
corresponding Bonds (including all principal and interest and premium, if any) to be defeased at or
before their stated maturity date.
In such event, notwithstanding that any of the Bonds shall not have been surrendered for
payment, all obligations of the City with respect to all said outstanding Bonds shall cease and
terminate, except only the obligation of the City to pay or cause to be paid from funds deposited
pursuant to paragraphs (a) or (b) of this Section, to the owners of said Bonds not so surrendered and
paid all sums due with respect thereto; provided that the City shall have received an opinion of bond
counsel for said Bonds, that said Bonds have been defeased.
SECTION 17. Supplemental Resolutions.
(a) This Resolution, and the rights and obligations of the City and of the Owners
of the Bonds issued hereunder, may be modified or amended at any time by a supplemental
resolution adopted by the City with the written consent of Owners owning at least 60% in aggregate
principal amount of the outstanding Bonds, exclusive of Bonds, if any, owned by the City; provided,
however, that no such modification or amendment shall, without the express consent of the Owner of
each Bond affected, reduce the principal amount of any Bond, }educe the interest rate payable
thereon, advance the earliest redemption date thereof, extend its maturity or the times for paying
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interest thereon or change the monetary medium in which principal and interest is payable, nor shall
any modification or amendment reduce the percentage of consents required for amendment or
modification. No such supplemental resolution shall change or modify any of the rights or
obligations of any Paying Agent without its written assent thereto. Notwithstanding anything herein
to the contrary, no such consent shall be required if the Owners are not directly and adversely
affected by such amendment or modification.
(b) This Resolution, and the rights and obligations of the City and of the Owners
of the Bonds issued hereunder, may be modified or amended at any time by a supplemental
resolution adopted by the City without the written consent of the Owners;
(i) To add to the covenants and agreements of the City in this Resolution,
other covenants and agreements to be observed by the City which are not contrary to or inconsistent
with this Resolution as theretofore in effect;
(ii) To add to the limitations and restrictions in this Resolution, other
limitations and restrictions to be observed by the City which are not contrary to or inconsistent with
this Resolution as theretofore in effect;
(iii) To confirm as further assurance any pledge under, and the subjection
to any lien or pledge created or to be created by, this Resolution, of any moneys, securities or funds,
or to establish any additional funds or accounts to be held under this Resolution;
(iv) To cure any ambiguity, supply any omission, or cure or correct any
defect or inconsistent provision in this Resolution; or
(v) To amend or supplement this Resolution in any other respect,
provided such supplemental resolution does not adversely affect the interests of the Owners.
(c) Any act done pursuant to a modification or amendment so consented to shall
be binding upon the Owners of all the Bonds and shall not be deemed an infringement of any of the
provisions of this Resolution, whatever the character of such act may be, and may be done and
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performed as fully and freely as if expressly permitted by the terms of this Resolution, and after
consent relating to such specified matters has been given, no Owner shall have any right or interest to
object to such action or in any manner to question the propriety thereof or to enjoin or restrain the
City or any officer or agent of the City from taking any action pursuant thereto.
SECTION 18. Resolution to Constitute Contract. In consideration of the purchase and
acceptance of any and all of the Bonds authorized to be issued hereunder by those who shall own the
same from time to time, this Resolution shall be deemed to be and shall constitute a contract by and
between the City and the Owners from time to time of the Bonds; and the pledge made in this
Resolution shall be for the equal benefit, protection and security of the Owners of any and all of the
Bonds, all of which, regardless of the time or times of their issuance or maturity, shall be of equal
rank without preference, priority or distinction of any of the Bonds over any other thereof.
SECTION 19. Continuing Disclosure. The City hereby covenants and agrees that it will
comply with and carry out all of its obligations under its Continuing Disclosure Certificate to be
executed and delivered by the City in connection with the issuance of the Bonds. Notwithstanding
any other provision of this Resolution, failure of the City to comply with the Continuing Disclosure
Certificate shall not be considered an event of default under this Resolution; however, any Owner or
Beneficial Owner may take such actions as may be necessary and appropriate, including seeking
mandate or specific performance by court order, to cause the City to comply with its obligations
under this Section 19. For purposes of this Section, `Beneficial Owner" means any person which has
or shares the power, directly or indirectly, to make investment decisions concerning ownership of
any Bonds (including persons holding Bonds through nominees, depositories or other
intermediaries).
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SIGNED AND APPROVED as of November 1, 2012.
[SEAL]
ATTEST:
City Clerk
APPROVED AS TO FORM:
CITY OF ARCADIA
By:
Its: Mayor
City Attorney
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II:
UNLESS THIS BOND IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY (AS DEFINED IN THE SUPPLEMENT TO RESOLUTION NO -J
TO THE PAYING AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR
PAYMENT, AND ANY BOND ISSUED IS REGISTERED IN THE NAME OF CEDE & CO.
OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY (AND ANY PAYMENT IS MADE TO CEDE &
CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY), ANY TRANSFER, PLEDGE OR OTHER
USE HEREOF FOR VAL UE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL
INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREW.
UNITED STATES OF AMERICA
STATE OF CALIFORNIA
COUNTY OF LOS ANGELES
CITY OF ARCADIA
GENERAL OBLIGATION REFUNDING BONDS
SERIES 2012 (POLICE STATION PROJECT)
INTEREST RATE MATURITY DATE DATED DATE CUSIP NO.
% August 1,
REGISTERED OWNER: CEDE & CO.
PRINCIPAL AMOUNT: AND NO /100 DOLLARS
THE CITY OF ARCADIA, a charter city situated in the County of Los Angeles, State of
California (the "City"), duly organized and existing under and by virtue of the Constitution and laws
of the State of California, hereby acknowledges its indebtedness and promises to pay to the registered
owner named above or registered assigns (the "Registered Owner "), the Principal Amount stated
above on the Maturity Date stated above, and to pay such registered owner by check mailed by first
class mail, postage prepaid, thereto at its address as it appears on the register kept by the Paying
Agent at the close of business on the fifteenth day of the month preceding the Interest Payment Date
(as hereinafter defined) (the "Record Date "), or, at the request of an owner of in'excess of $1,000,000
aggregate principal amount of bonds, by wire transfer, interest on such principal amount on each
August 1 and February 1, commencing February 1, 2013 (each, an "Interest Payment Date ") next
preceding the date of authentication (unless (i) the date of authentication is prior to the first Record
Date in which event from the Dated Date shown above, (ii) the date of authentication is after a
Record Date and before the following Interest Payment Date in which event it shall bear interest
from such Interest Payment Date, or (iii) it is authenticated as of an Interest Payment Date, in which
event it shall bear interest from such date until the Principal Amoupt hereof shall have been paid or
provided for in accordance with Resolution No. adopted by the City Council of the
City on September 18, 2012, as supplemented by Supplement to Resolution No. , dated
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as of November 1, 2012, executed in connection therewith (as supplemented, the "Resolution"), at
the interest rate stated above, payable on each Interest Payment Date. Principal and any premium
upon the redemption prior to the maturity of all or part hereof are payable at the principal corporate
trust office of The Bank of New York Mellon Trust Company, N.A., Paying Agent for the Bonds (the
"Paying Agent "), in Los Angeles, California. All such amounts are payable in lawful money of the
United States of America.
Capitalized terms used herein and not defined shall have the meanings given such terms in
the Resolution.
The principal of and interest on the Bonds shall be paid from taxes levied for the payment
thereof as set forth in the Resolution, which taxes shall be levied exclusively upon the taxable
property in the City.
This Bond is issued in fully - registered form. It may be exchanged for a like aggregate
principal amount of bonds of other authorized denominations of the same series and maturity, all as
more fully set forth in the Resolution. This Bond is transferable by the Registered Owner hereof, in
person or by its attorney duly authorized in writing, at the designated corporate trust office of the
Paying Agent, but only in the manner, subject to the limitations and upon payment of the charges
provided in the Resolution, upon surrender and cancellation of this Bond. Upon such transfer a new
registered Bond of authorized denomination or denominations for the same aggregate principal
amount of the same series and maturity will be issued to the transferee in exchange therefor.
Bonds maturing on or after August 1, are subject, at the option of the City, to
redemption prior to their stated maturities in whole or in part on any date commencing August 1,
selected among maturities, if in part, as nearly as practicable on a pro -rata basis, and by lot
within a maturity, at redemption price, equal to the principal amount thereof, together with accrued
interest to the date fixed for redemption, without premium.
In addition, the Bonds maturing on August 1, and August 1, are subject to
mandatory sinking fund redemption prior to maturity commencing on August 1, and August 1,
respectively, and each August 1 thereafter prior to maturity from sinking fund payments in
the amounts set forth in the Resolution at a redemption price equal to 100% of the principal amount
thereof called for redemption, without premium, plus accrued interest thereon to the date of
redemption.
Notice of redemption with respect to the Bonds to be redeemed shall be mailed to the
Registered Owners thereof not less than 30 nor more than 60 days prior to the redemption date by
first class mail, postage prepaid, to the addresses set forth in the registration books. Neither a failure
of the Registered Owner hereof to receive such notice nor any defect therein will affect the validity
of the proceedings for redemption. All Bonds or portions thereof so called for redemption will cease
to accrue interest on the specified redemption date; provided that funds for the redemption are on
deposit with the Paying Agent on the redemption date. Thereafter, the Registered Owners of such
Bonds shall have no rights except to receive payment of the redemption price upon the surrender of
the Bonds.
The City and the Paying Agent may treat the Registered Owner hereof as the absolute owner
hereof for all purposes, and the City and the Paying Agent shall riot be affected by any notice to the
contrary.
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DOCSOC/1575510v5/024217 -0005
This Bond shall not be entitled to any benefit under the Resolution, or become valid or
obligatory for any purpose, until the certificate of authentication hereon endorsed shall have been
signed by the Paying Agent.
The rights and obligations of the City and of the registered owners of the Bonds may be
amended at any time, and in certain cases without notice to or consent of the registered owners, to the
extent and upon the terms provided in the Resolution.
It is hereby recited, certified and declared that the total amount of indebtedness of the City,
including the amount of this Bond, is within the limit provided by law and that any and all acts,
conditions and things required to exist, to happen and to be performed precedent to and in the
issuance of this Bond exist, have happened and have been performed in due time, form and manner
as required by the Constitution and laws of the State of California.
IN WITNESS WHEREOF, THE CITY OF ARCADIA has caused this Bond to be signed by
the Mayor and the City Treasurer of said City, and countersigned by the City Clerk of said City, by
their facsimile signatures.
CITY OF ARCADIA
By:
Its: Mayor
By:
Its: City Treasurer
COUNTERSIGNED:
City Clerk of the City of Arcadia
[FORM OF CERTIFICATE OF AUTHENTICATION]
This is one of the fully registered Bonds described in the within - mentioned Resolution.
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Date of Authentication: THE BANK OF NEW YORK MELLON TRUST
COMPANY, N.A., as Paying Agent
By:
Its:
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DOC S OC/ 157551 O v5 /024217 -0005
Authorized Signatory
[FORM OF LEGAL OPINION]
The following is a true copy of the opinion rendered by Stradling Yocca Carlson & Rauth, a
Professional Corporation, in connection with the issuance of, and dated as of the date of the original
delivery of, the Bonds. A signed copy is on file in my office.
City Clerk of the City of Arcadia
[FORM OF ASSIGNMENT]
For value received, the undersigned do(es) hereby sell, assign and transfer unto
(Name, Address and Tax Identification or Social Security Number of Assignee)
the within Bond and do(es) hereby irrevocably constitute(s) and appoint(s)
attorney, to transfer the same on the registration books of the Paying Agent with full power of
substitution in the premises.
Dated:
Signature Guarantee:
Notice: Signature(s) must be guaranteed by a Notice: The signature on this assignment must
qualified guarantor. correspond with the name(s) as written on the
face of the within Bond in every particular
without alteration or enlargement or any change
whatsoever.
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