Loading...
HomeMy WebLinkAbout02-141RESOLUTION NO. 02-141 RFSOLUTION OF 'THE BOARD OF SUPERVISORS OF BU'I"TE COUNTY AUTHORIZING THE ISSUANCF. OF 2002-2003 TAX AND REVENUE ANTICIPATION NOTES FOR THE BUTTE COUNTY BOARD OF EDUCATION AND CERTAIN SCHOOL DISTRICTS WHEREAS, pursuant to Sections 53850 et se . of the Government Cade of the State of California (the "Act") contained in Article 7.6 thereof; entitled "Temporary Borrowing," county boards of education and school districts orgai~lized and existing under the laws of the State of California are authorized to borrow money by the issuance of notes for any purpose for which the board of education or district, respectively, is authorized to expend moneys, including, but not limited to, current expenses, capital expenditures, and the discharge of any obligation or indebtedness; and WHEREAS, Section 53853 of the Act provides that such notes shall be issued in the name of the catmty board of education or the school district by the board of supervisors of the county (in the case of school districts, the county the superintendent of which has jurisdiction over such district), as soon as possible following the receipt of a resolution of the county board of education or the governing board of the school district requesting the borrowing; and WHEREAS, the Butte County Board of Education (the "Board of Education") has requested this Board (the "county Board") to issue and offer for sale tax and revenue anticipation notes in the name of and on behalf of the Board of Education under and pursuant to the provisions of the Act in an amount not to exceed forty-five million dollars {$45,000,000); and WHEREAS, the Board of Education expects to lend portions of the proceeds of its notes to the Chico Unified School District, the Durham Unified School District, the Gridley Unified School District, the Oroville Union High School District, the Paradise Unified School District, and the Thennalito Union School District (the "Districts"), and the governing board of each of the Districts has requested the County Board to issue a promissory note in the name of the District and to deliver the promissory Hate to the Board of Education to evidence the District's obligation to repay the loan of proceeds from the Board of Education's notes; and WHEREAS, the Board of Education has found and determined that the principal amo~nzt of its notes, when added to the interest payable thereon, does not exceed eighty-five per cent (85%) of the estimated amount of the uncollected taxes, income, revenue, cash receipts and other moneys to be received by the Board of Education for the County School Service Fund of the Office during or allocable to Fiscal Year 2002-2003 and available for the payment of the interest on and principal of the notes, including the amounts to be paid by the Districts pursuant to their promissory notes; and WHEREAS, the governing board of each of the Districts has found and determined that the principal amount of its promissory note, when added to the interest payable thereon, does not 707492.2 [9932.1~J Butte County Board of Supervisors exceed eighty-five per cent {85%) of the estimated amount of the uncollected taxes, income, revenue, cash receipts and other moneys to be received by the District for its general fund during or allocable to Fiscal Year 2002-2003 and available for the payment of the interest on and principal of the promissory notes; NOVV, THEREFORE, the Board of Supervisors of Butte County (the "County") hereby resolves as follows: Section I. Findin s. All of the above recitals are true and correct and the Cou~lty Board hereby so finds and determines. Section 2. Authorization of Issuance of the Notes; Terms Thereof. The County Board hereby determines to issue notes on behalf of the Board of Education in a principal amount not to exceed $45,000,000 under Section 53850 et se of the Act, designated "Butte County Board of Education, Butte County, California, 2002-2003 Tax and Revetlue Anticipation Notes" (the "Notes"). The Notes steal] be dated the date of delivery thereof; shall mature {without option of prior redemption) on such date as shall be specified in the official notice of sale or note purchase agreement for the Notes; and shall bear interest, payable at maturity (if the maturity of the Notes is determined to be one year or earlier from the date of issuance) or payable one year from the date of issuance and at maturity (if the maturity of the Notes is determined to be more than one year from the date of issuance) and computed on a 30-day mont1~1360-day year basis, at the rate or rates determined at the time of sale thereof, but not in excess of six percent {6°l0) per annum. Subject to Section 5 hereof, both the principal of and interest on the Notes shall be payable in lawful money of the United States of America at the office of the Butte County Treasurer-Tax Collector (the "County Treasurer"), Oroville, California, who has been appointed by the Board of Education as the paying agent for the Notes (the "Paying Agent"). Section 3. Form of the Notes. The Notes shall be issued in registered form, without coupons, in denominations of 55,000, or integral multiples thereof, and shall be substantially in the form and substance set forth in Exhibit A attached hereto and by reference incorporated herein, the blanks in said form to be filled in with appropriate words and figures. Section 4. Execution of the Notes. The County Board hereby authorizes and directs the County Treasurer to cause the blank spaces of the Notes to be filled in as may be appropriate. The County Board further authorizes and directs the County Treasurer to execute the Notes and the Clerk of the County Board to countersign the Notes and affix the seal of the County to the Notes by manual impression thereof or by printing a facsimile thereof. Either of these signatures may be made by facsimile (provided that at least one such signature shall be manual). Section 5. Registration, Transfer and Exchange of Notes. (A) The Notes shall be initially issued and registered in the name of "Cede & Co.," as nominee of The Depository Trust Company, New York, New York (hereinafter, Cede & Co. and The Depository Trust Company are referred to collectively as "The Depository Trust Company") and shall be evidenced by a single Note. Registered ownership of the Notes, or any portion thereof, may not thereafter be transferred except as set forth in Section 5(B). 2 7074922 [9932.10] Butte County Board of Supervisors (B) Registered ownership of the Notes, or any portions thereof, may not be transferred following issuance thereof except: {1) To any successor of The Depository Trust Company, or its nominee, or of any substitute depository designated pursuant to clause (2) of this subsection (B) (a "substitute Depository"); rop vided that any successor of The Depository Trust Company or Substitute Depository shall be qualified under any applicable laws to provide the service proposed to be provided by it; (~) To any Substitute Depository not objected to by the Paying Agent, upon (i) the resignation of The Depository Trust Company or its successor (or any Substitute Depository or its successor) from its functions as depository, or (ii) a determination by the Board of Education to substitute another depository for The Depositary Trust Company (or its successor) because it is no longer able to carry out its functions as depository; rop vided that any such Substitute Depository shall be qualified under any applicable laws to provide the services proposed to be provided by it; or (3) To any person as provided below, upon {1 }the resignation of The Depository Trust Company or its successor (or any Substitute Depository or its successor) from its functions as depository, or (2) a determination by the Board of Education to discontinue using a depository. (C) It1 the case of any transfer pursuant to clause (1) or clause (2) of subsection (B) of this section, upon receipt of all outstanding Notes by the Paying Agent, a single new Note, which the County shall prepare or cause to be prepared, shall be executed and delivered and registered in the name of such successor or such Substitute Depository, or its nominee, as the case may be. In the case of any transfer pursuant to clause (3) of subsection (B} of this section, upon receipt of all outstanding Notes by the Paying Agent, new Notes, which the County shall prepare or cause to be prepared, shall be executed and delivered in such denominations and registered in the names of such persons as are determined by the Paying Agent. (D) The Board of Education and the Paying Agent shall be entitled to treat the person in whose name any Note is registered as the owner thereof for all purposes of this resolution and for purposes of payment of interest on and principal of such Note, notwithstanding any notice to the contrary received by the Board of Education or the Paying Agent; and the Board of Education and the Paying Agent shall not have responsibility for transmittitlg payments to, communicating with, notifying, or otherwise dealing with any beneficial owners of the Notes; and neither the Board of Education nor the Paying Agent shall have any responsibility or obligation, legal or otherwise, to any such beneficial owners or to any other party, including The Depository Trust Company or its successors (or any Substitute Depository or its successor), except to the registered owner of any Notes, and the Paying Agent may rely conclusively on its records as to the identity of the registered owners of the Notes. (E) Notwithstanding any other provisions of this resolution and so long as all outstanding Notes are registered in the name of The Depository Trust Company or its registered assigns, the Board of Education and the Paying Agent shall cooperate with The Depository Trust Company, as sole registered owner, and its registered assigns in effecting payment of the interest 3 70"7492.2 [993210] Butte County Board of Supervisors on and principal of the Notes by arranging for payment in such manner that funds for such payments are properly identified and are made available on the date they are due; all in accordance with the Blanket Letter of Representations to The Depository Trust Company, the provisions of which the Paying Agent may rely upon to implement the foregoing procedures notwithstanding any inconsistent provisions herein. (F} In the case of any transfer pursuant to clause (3) of subsection (B) of this section, any Notc may, in accordance with its terms, be transferred or exchanged for a like aggregate principal amount of Notes in authorized denominations, upon the books required to be kept by the Paying Agent pursuant to the provisions hereof, by the person in whose name it is registered, in person or by his duly authorized attorney, upon surrender of such Note for cancellation, and, in the case of a transfer, accompanied by delivery of a written instrument of transfer, duly executed in form approved by the Paying Agent. Whenever any Note shall be sun-endered for transfer or exchange, the County shall execute and the Paying Agent shall deliver a new Note or Notes of authorized denominations for a like aggregate principal amount. The Paying Agent shall require the registered owner requesting such transfer or exchange to pay any tax or other governmental charge required to be paid with respect to such transfer or exchange. (G) The Paying Agent will keep or cause to be kept, at the Paying Agent's office, sufficient boaks for the registration and transfer of the Notes, which shall at all times be open to inspection by the Board of Education. Upon presentation for such purpose, the Paying Agent shall, under such reasonable regulations as the Paying Agent may prescribe, register or transfer or cause to be registered or transferred, on such books, Notes as hereinbefore provided. {H) If any Note shall become mutilated, the County, at the expense of the owner of such Note, shall execute, and the Paying Agent shall thereupon deliver a new Note of like tenor bearing a different number in exchange and substitution for the Note so mutilated, but only upon surrender to the Paying Agent of the Note so mutilated. If any Note shall be lost, destroyed or stolen, evidence of the ownership thereof, and of such loss, destruction or theft maybe submitted to the Board of Education and the Paying Agent and, if such evidence be satisfactory to both. and indemnity satisfactory to them shall be given, the County, at the expense of the owner, shall execute, and the Paying Agent shall thereupon deliver a new Note of like tenor and bearing a different number in lieu of and in substitution for the Note so lost, destroyed or stolen (or, if any such Note shall have matured, instead. of issuing a substitute Note, the Paying Agent may pay the same without surrender thereof). The Paying Agent may require payment by the registered owner of a Note of a sum not exceeding the actual cost of preparing each new Note issued pursuant to this paragraph and of the expenses that may be incurred by the Board of Education, the County and the Paying Agent. Any Note issued under these provisions in lieu of any Note alleged to be lost, destroyed or stolen shall constitute an original additional contractual obligation on the part of the Board of Education whether or not the Note so alleged to be lost, destroyed or stolen shall be at any time enforceable by anyone, and shall be entitled to the benefits of this resolution with all other Notes secured by this resolution. (I) All Notes surrendered for payment or registration of transfer, if surrendered to any person other than the Paying Agent, shall be delivered to the Paying Agent and shall be 4 707492.2 [9932.10] Butte County Board of Supervisors promptly cancelled. The Board of Education may at any time deliver to the Paying Agent for cancellation any Notes previously delivered hereunder that the Board of Education may have acquired in any manner whatsoever, and all Notes so delivered shall promptly be cancelled by the Paying Agent. No Note shall be delivered in lieu of or in exchange for any Notes cancelled as provided herein, except as expressly permitted hereunder. All cancelled Notes held by the Paying Agent shall be disposed of as directed by the Board of Education. Section 6. Authorization of Issuance, Execution, and Delivery of the District Notes. The County Board hereby approves the request of each District to issue a promissory note on its behalf under the Act in a principal amount not to exceed, respectively, $15,000,000 for the Chico Unified School District, $2,000,000 for the Durham Unified School District, $3,000,000 for the Gridley Unified School District, $3,000,000 for the Oroville Union High School District, $7,500,000 for the Paradise Unified School District, and $2,000,000 for the Thermalito Union School District. Each promissory note shall be dated its date of delivery; shall mature (without option of prior redemption) on the same date as the Notes, and shall bear interest from its date, payable at the same times as interest on the Notes, computed on a 30-day monthJ360-day year basis, at the same rate as the Notes. The County Board hereby authorizes and directs the County Treasurer to cause the blank spaces of the District promissory notes to be filled in as may he appropriate. The County Board further authorizes and directs the County Treasurer to execute the District promissory notes and the Clerk of the County Board to countersign them and affix the seal of the County thereto by manual impression thereof or by printing a facsimile thereof. Either of these signatures may be made by facsimile (provided that at least one such signature shall be manual). The County Board further authorizes and directs the County Treasurer to deliver the District promissory notes to the Board of Education concurrently with the delivery of the Notes to the purchaser thereof. Section 7. Deposit of Note Proceeds. The moneys so borrowed shall be deposited in the Treasury of the County in a proceeds fund, to be called the "Butte County Board of Education Tax and Revenue Anticipation Notes Proceeds Fund," to the credit of the Board of Education and subsequently portions thereof will be credited upon delivery of the District promissory notes to the respective general funds of the Districts in the amount of the respective loans requested from the Board of Education. Proceeds so credited my be withdrawn, used or expended by the Board of Education for any purpose for which it is authorized to invest or expend funds from the County School Service Fund and by the Districts for any purpose for which they are authorized to invest or expend fiords from their general funds, including, but not limited to current expenses, capital expenditures or the discharge of any obligation of indebtedness of, respectively, the Board of Education or the Butte County Office of Education (the "Office") or the District. Until used or expended, the moneys maybe invested in investment securities by the County Treasurer directly, or through an investment agreement, in investments as permitted by applicable California law, and meeting Standard & Poor's criteria for investments, or other investments approved by Standard & Poor's including, but not limited to, investment in the Local Agency Investment Fund maintained by the Treasurer of the State of California. Section 8. No Arbitrage. The County hereby covenants that it will make no use of the proceeds of the Notes that would cause the Notes to be "arbitrage bonds" under Section 148 of the Code; and, to that end, so long as any of the Notes are outstanding, the County, and all of 5 707442.2 [9932.10] Butte County Board of Supervisors its officers having custody or control of such proceeds, shall comply with all requirements of (a) said section, including restrictions on the use and investment of proceeds of the Notes and the rebate of a portion of investment earnings on certain amounts, including proceeds of the Notes, if required, to the Federal government, and (b) of the Income Tax Regulations of the United States Treasury promulgated thereunder ar any predecessor provisions, to the extent that such regulations are, at the time, applicable and in effect, so that the Notes will not be "arbitrage bonds." To the extent that monies invested or held by the County are subject to arbitrage rebate, neither the County or any officer or employee of the County shall assume hereunder or under the provisions of any rebate or tax certificate any duty or obligation to make the actual calculations of arbitrage rebate liability of the Board of Education or any District, or to pay any such rebate or any penalties in regard thereto if the Board of Education or any District miscalculates or fails to pay or cause such rebate or such penalties to be paid. Section 9. Payment of Notes. (A} Source of Payment. The principal amount of the Notes, together with the interest thereon, shall be payable from taxes, income, revenue, cash receipts, and other moneys that are received by the Board of Education during fiscal year 2002-2003 and that are available for the payment of current expenses and other obligations of the Board of Education or the Office. The Notes shall be a general obligation of the Board of Education, and, to the extent the Notes are not paid from the Pledged Revenues defined below, the Notes shall be paid with interest thereon from any other moneys of the Board of Education lawfully available therefor, as provided herein and by law. (B) Pledged Revenues, The Notes shall be secured by a pledge of and first lien and charge against the first unrestricted revenues to be received by the County on behalf of the Board of Education in such months and in such amounts as shall be determined by the Butte County Superintendent of Schools (the "Superintendent") or the Superintendent's designee, prior to the date of the sale of the Notes, to be sufficient to pay the principal of and interest on the Notes at maturity (such pledged amounts being hereinafter called the "Pledged Revenues"). The term "unrestricted revenues" shall mean taxes, income, revenue, cash receipts, and other money of the Board of Education as provided in Section 53$56 of the Act, which are intended as receipts for the County School Service Fund, including, but not limited to, those amounts paid by the Districts under the District promissory notes, and which are generally available for the payment of current expenses and other obligations of the Board of Education. (C} Deposit of Pledged Revenues in Repayment Fund. The Pledged Revenues shall be deposited in the County Teasury in a special fund designated as the "Butte County Board of Education Tax and Revenue Anticipation Notes Repayment Fund" (herein called the "Repayment Fund") and applied as directed in this Resolution. Any moneys placed in the Repayment Fund shall be for the benefit of the holders of the Notes, and, until the Notes and all interest t1lereon are paid or until provision has been made for the payment of the Notes at maturity with interest to maturity, the moneys in the Repayment Fund shall be applied only for the purposes for which the Repayment Fund is created. 6 ?07492.2 [9932.10] Butte County Baard of Supervisors (D) Disbursement and Investment of Moneys in Repayment Fund. From the date this Resolution takes effect, all Pledged Revenues shall, when received, be deposited in the Repayment Fund to be held, invested and accounted for as provided herein. After such date as the amount of Pledged Revenues deposited in the Repayment Fund shall be sufficient to pay in full the principal of and interest on the Notes, when due, any moneys in excess of such amount remaining in or accruing to the Repayment Fund shall be transferred to the County School Service Fund upon the request of the Board of Education. On the maturity date of the Notes, the moneys in the Repayment Fund shall be used, to the extent necessary, to pay the principal of and interest on the Notes. Moneys in the Repayment Fund shall be invested in investment securities by the County Treasurer, or such other appropriate investment officer of the County, directly, or through an investment agreement, in investments as permitted by applicable California taw, as it is now in effect and as it may be amended, modified or supplemented from time to tune, and the proceeds of any such investments shall, as received, be deposited in the Repayment Fund and shall be part of the Pledged Revenues. Investments must meet Standard & Poor's Ratings Services' criteria for investments, or other investments approved by Standard & Poor's Ratings Services including, but not limited to, investment in the Local Agency Investment Fund maintained by the Treasurer of the State of California. Moneys so invested, and the earnings thereon, shall be accounted for as Pledged Revenues, to be withdrawn solely for deposit in the Repayment Fund and used, to the extent necessary, to pay the principal of and interest on the Notes. Sufficient money for the payment of principal and interest for the maturing Notes must be placed into the Repayment Fund in the County Treasury at least one business day prior to the maturity of the Notes- Section 10. Sale of the Notes. The Notes will be sold either at a negotiated sale to an undet~vriter or underwriters pursuant to a note purchase agreement upon such terms and conditions as are acceptable to the Board of Education and consistent herewith or by competitive bid and awarded as set forth in an official notice of sale. The County Treasurer, or the County Treasurer's designee, is hereby authorized to decide between negotiated or competitive sale in conjunction with advice from the Board of Education's financial advisor. The Board of Education's financial advisor, the Cow~ty Treasurer, and the Superintendent are hereby authorized to prepare a note purchase agreement (the "Note Purchase Agreement"} or an official notice of sale (the "Official Notice of Sale") consistent with this Resolution and to determine the term of the Notes up to a term of thirteen (13) months. If the sale is negotiated, the Superintendent, or the Superintendent's designee, and the County Treasurer, and each of them individually, is authorized to negotiate the terms of the sale consistent with this Resolution and to execute and deliver the Note Purchase Agreement to the underwriter or underwriters. If the sale is by competitive bid, the Superintendent, or the Superintendent's designee, is hereby directed to execute and to distribute the Official Notice of Sale and to publish any notice of sale required by law. The County Treasurer, or the County Treasurer's designee, is hereby authorized and directed to open the bids at the time and place specified in the Official Notice of Sale. The County Treasurer, or the County Treasurer's designee, is hereby authorized and directed to receive and record the receipt of all bids made pursuant to the Official Notice of Sale, to cause the bids to be examined for compliance with the Official Notice of Sale, to cause 7 707492.2 [9932.10] Butte County Board of Supervisors computations to be made as to which bidder has bid the lowest tnie interest cost, as provided in the Official Notice of Sale, to announce the bidder of the lowest true interest cost, to award the sale to that bidder, and to notify the Board of Education and the County Board of the foregoing in accordance with this Resolution. Section l 1. Paying Agent. The County Board hereby authorizes and directs the County Treasurer, who has been appointed to act as the Paying Agent by the Board of Education, to receive the payments of principal and interest made by the Board of Education on the Notes, to hold, allocate, use, and apply said payments and to perform such other duties and powers of the Paying Agent as are prescribed in this Resolution. Section 12. Delivery of Notes. The proper officers of the County shall cause the Notes to be delivered to the purchaser thereof when the County Treasurer has received confirmation of receipt of the proceeds. Section 13. Further Actions Authorized. The County Treasurer and other appropriate officers of the County are filrther authorized and directed to make, execute and deliver to the purchaser or purchasers of the Notes {a} a certificate in the form customarily required by purchasers of bonds of public agencies generally, certifying to the genuineness and the execution of the Notes, and (b) a receipt in similar forth evidencing the payment of the purchase price of the Notes which receipt shall be conclusive evidence that said purchase price of the Notes has been paid and has been received on behalf of the Board of Education. Any purchaser or subsequent taker or holder of the Notes is hereby authorized to rely upon and shall be justified in relying upon any such certificate or receipt with respect to the Notes. Such officers and any other officers of the Board of Education or the Office or of the County are hereby authorized to execute any and al] other documents required to consummate the sale and delivery of the Notes. Section 14. Limited Liability, Notwithstanding anything to the contrary contained herein, in the Notes, or in any other document mentioned herein, neither the County Board nor the County or its officers, employees, and agents (including, but not limited to the County Treasurer) shall have any liability hereunder or by reason hereof or in connection with the transactions contemplated hereby, and the Notes sha11 be payable solely from the moneys of the Office available therefor as set forth in Section 9 hereof. Without in any way limiting the immediately preceding sentence, nothing in this Resolution or in any other document related to issuance of the Notes shall be deemed to impose any fiduciary responsibility on the County, the County Board or the County's officers (including the County Treasurer and County Auditor- Contraller}, employees and agents with regard to the issuance of the Notes or payment thereof other than that otherwise imposed by law. 8 707442.2 [9932.10] Butte County Board of Supervisors PASSED AND ADOPTED by the Board of Supervisors of Butte County on August 27, 2002, by the following vote: AYES: Supervisors Beeler, Dolan, Houx, Yamaguchi and Chair Jos.assen NOES: None ABSENT: None ,~iai an of the Board of Supervisors, County of Butte ATTEST: Paul clntosh, Cler of the Board of Supervisors Bu e County, California 9 707492.2 [9932.10] Butte County Board of Supervisors Exhibit A FORlb1 OF TAX AND REVENUE ANTICIPATION NOTE BUTTE COUNTY BOARD OF FDUCATION BUTTE COUNTY, CALIFORNIA 2002-2003 TAX AND REVENUE ANTICIPATION NOTE [NTEREST RATE: MA"fUR11'Y DATE: ISSUE DATE: CUSIP: October , 2003 October , 2002 124081 REGISTERED OWNER: CEDE & CO. PRINCIPAL SUM: DOLLARS The BUTTE COUNTY BOARD OF EDUCATION, Butte County, State of California {the "Board of Education"), acknowledges itself indebted, and promises to pay, to the Registered Owner stated above, or registered assigns (the "Owner"), on the Maturity Date stated above, the Principal Sum stated above, in lawful money of the United States of America, and to pay interest thereon from the Issue Date stated above in like ]awful money at the rate per annum stated above, on the Maturity Date stated above, calculated on the basis of 360-day year comprising twelve 30-day months. The Principal Sum and interest thereon is payable to the Owner upon presentation hereof at the principal office of the Butte Calmty Treasurer-Tax Collector, Oroville, California, It is hereby certified, recited and declared that this Note is one of an authorized issue of notes in the aggregate principal amount of Dollars ($ ), all of like tenor, issued pursuant to the provisions of a resolution of the Board of Supervisors (the "Board of Supervisors") of Butte County {the "County"} duly passed and adopted on August 27, ?002 {the "Resolution"), and pursuant to Article 7.6 (commencing with section 53850) of Chapter 4, Part 1, Division 2, Title 5, of the California Government Code, and that all conditions, things and acts required to exist, happen and be performed precedent to and in the issuance of this Note exist, have happened and have been performed in regular and due time, form and manner as required by law, and that this Note, together with all other indebtedness and obligations of the Board of Education, does not exceed any limit prescribed by the Constitution or statutes of the State of California, The principal amount of the Notes, together with the interest thereon, shall be payable from taxes, revenue and other moneys that are received by the County on behalf of the Board of Education for the Repayment Fund of the Board of Education (as defined in the Resolution) far the Fiscal Year 200?-2003. As security for the payment of the principal of and interest on the Notes, the Board of Education 11as pledged the first "unrestricted moneys," as hereinafter defined (a) in an amount equal to percent (°fo) of the principal amount of the Notes from the unrestricted revenues received by the County on behalf of the Board of Education in the month of 2003; an amount equal. to percent (_%) of the principal amount A-1 707492.2 [9932.10] Butte County F3oard of Supervisors of the Notes from the unrestricted revenues received by the County on behalf of the Board of Education in the month of 2003; an amount equal to percent (%) of the principal amount of the Notes from the unrestricted revenues received by the County on behalf of t1~c Board of Education in the month of 2003, and an amount equal to _ percent (°lo) of the principal amoul7t of the Notes plus an amount sufficient to pay interest on the Notes from the unrestricted revenues received by the County on behalf of the Board of Education in the month of 2003 {such pledged amounts being hereinafter called the "Pledged Revenues"). The principal of the Notes and the interest thereon shall constitute a first lien and charge thereon and shall be paid from the Pledged Revenues. To the extent not so paid from the Pledged Revenues, the Notes shall be paid from any other moneys of the Board of Education lawfully available therefor. The term "unrestricted moneys" shall mean taxes, income, revenue, cash receipts, and other moneys intended as receipts for the Butte County School Service Fund and that are generally available for the payment of current expenses and other obligations of the Board of Education. The Notes are issuable as fiilly registered notes, without coupons, in denominations of 55,000 each or any integral multiple thereof. Subject to the limitations and conditions as provided in the Resolution, Notes may be exchanged for a like aggregate principal amount of Notes of other authorized denominations and of the same maturity. The Notes are not subject to redemption prior to maturity- This Note is transferable by the Owner hereof, but only under the circut7lstances, in the manner and subject to the limitations provided in the Resolution. Upon registration of such transfer a new Note or Notes, of authorized denomination or denominations, for the same aggregate principal amount and of the same maturity will be issued to the transferee in exchange for this Note. The Board of Supervisors may treat the Owner hereof as the absolute owner hereof for all purposes and the Board of Supervisors shall not he affected by any notice to the contrary. Unless this Note is presented by an authorized representative of The Depository Trust Company to the issuer or its agent far registration of transfer, exchange or payment, and any Note issued is registered in the name of Cede & Co. or such other name as requested by an authorized representative of The Depository Trust Company and any payment is made to Cede & Co., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL since the registered owner hereof, Cede & Co., has an interest herein. A-2 707492.2 [9932.10] Butte County Board of Supervisors IN WITNESS WHEREOF, the Board of Supervisors of Butte County, California, has caused this Note to he issued in the name of the Board of Education and to be executed by the Treasurer-Tax Collector and countersigned by the Clerk of the Board of Supervisors, all as of the Issue Date stated above. COUNTY OF BUTTE By: Countersigned: Clerk of the Board of Supervisors Treasurer-Tax Collector ASSIGNI~~IENT For value received the undersigned hereby sells, assigns and transfers unto (Name, Address and Tax Identi Fication or Social Security Number of Assignee) the within registered Nate and hereby irrevocably constitute{s) and appoints attorney, to transfer the same on the Note register of the Treasurer-Tax Collector with full power of substitution in the premises. Dated: Signature: Note: The signature(s) on this Assignment must correspond with the name(s) as written on the face of the within Note in every particular without alternation or enlargement or any change whatsoever. Signature Guaranteed: Note: Signature(s) must be guaranteed by a qualified guarantor. A-3 707492.2 [9932.10] Butte County Board of Supervisors FORIl1 OF BOND COUNSEL OPINION Butte County Board of Education 1859 Bird Street Oroville, California 95965 Re: Butte Coztinty B©ctrcl ~f Eclueution Butte C©zinty, Culif©r~iica 2002-2D03 Tux aful RevettttE AnticiBatiorr Notes Dear Board Members: We have acted as bond counsel to the Butte County Board of Education (the "Board of Education") in connection with the issuance by the Board of Supervisors of Butte County (the "Board of Supervisors") of $ _ principal amount of Butte County Board of Education, Butte County, California, 200?-2003 Tax and Revenue Anticipation Notes, dated October , 2002 (the "Notes"), pursuant to Article 7.6 (commencing with Section 53850}, Chapter 4, Part 1, Division 2, Title 5 of the California Government Cade, pursuant to the provisions of Resolution No. 02-_ adopted by the Board of Education on August 12, 2002 (the "Board of Education Resolution"), and Resolution No. 02- adopted by the Board of Supervisors on August 27, 2002 (the "County Resolution") (the County Resolution and the Board of Education Resolution being referred to collectively as the "Note Resolution"). As to questions of fact material to our opinion, we have relied upon the representations of the Board of Education contained in the Board of Education Resolution, the representations of the Board of Supervisors in the Cowlty Resolution, the representations Butte County and Board of Education officials in the certified proceedings, and other certifications of public officials furnished to us without undertaking to verify the same by independent investigation. Based upon the foregoing, we are of the opinion, under existing law, as follows: 1. The Board of Education is duly created and validly existing as a county board of education with the power to request the Board of Supervisors to issue the Notes on its behalf and the power to perform its obligations under the Note Resolution. 2. The Co~mty Resolution has been duly adopted by the Board of Supervisors and the Board of Education Resolution has been duly adopted by the Board of Education. The Note Resolution creates a valid first lien on the funds pledged under the Note Resolution for the security of the Notes. 3. The Notes have been duly authorized, executed and delivered by the Board of Supervisors and are valid and binding general obligations of the Board of Education enforceable in accordance with their terms. 4. The interest on the Notes is excluded from gross income for federal income tax purposes and is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations; it should be noted, however, for the purpose of computing the alternative tr~inimum tax imposed on corporations (as defined for federal income A-4 707492.2 [9932.10] Butte County Board of Supervisors tax purposes}, such interest is taken into account in determining adjusted earnings. The opinions set forth in the preceding sentence are subject to the condition that the Board of Education comply with all requirements of the Internal Revenue Code of 1986 that must be satisfied subsequent to the issuance of the Notes in order that interest thereon be, or continue to be, excluded from gross income for federal income tax purposes. The Board of Education has covenanted to comply with each such requirement. Failure to comply with certain of such requirements may cause the inclusion of interest on the Notes in gross income for federal income tax purposes to be retroactive to the date of issuance of the Notes, We express no opinion regarding other federal tax consequences arising with respect to the Notes. 5. Interest on the Notes is exempt from State of California personal income taxes. It is to be ~mderstood that the rights of the holders of the Notes and the enforceability of the Notes and the Note Resolution may be limited by bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting creditors' rights generally and by equitable principles, whether considered at law or in equity. Very truly yours, KROMCK, MOSKOVITZ, TIEDEMANN & GIRARD A Professional Corporation I HEREBY CER"fIFY that the foregoing is a true and correct copy of the legal opinion upon the Notes therein described that was manually signed by Kronick, Moskovitz, Tiedemann & Girard, a Professional Corporation, and was dated as of the date of delivery of and payment for said Notes. Paul McIntosh, Clerk of the Board of Supervisors A-5 701492.2 [9932.10] Butte County Board of Supervisors