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HomeMy WebLinkAbout05-120BOARD OF SUPEftVLat~-~S COUNTY OF BUTTE, STATE OF CALIFORNIA REsolufion No. o5-i2o RESOLUTION OF THE BOARD OF SUPERVISORS OF BUTTE COUNTY AUTHORIZING THE ISSUANCE OF 2005-2006 TAX AND REVENUE ANTICIPATION NOTES FOR BUTTE COUNTY OFFICE OF EDUCATION WHEREAS, pursuant to Sections 53850, et se ., of the Government Code of the State of California (the "Act") contained in Article 7.6 thereof, entitled "Temporary Borrowing," school districts and county offices of education organized and existing under the laws of the State of California are authorized to borrow money by the issuance of temporary notes for any purpose which the office 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 must be issued in the name of the office by the Board of Supervisors of the County (the "County Board"}, the County Superintendent of which has jurisdiction over the office, as soon as possible following the receipt of a resolution of the Boazd of Education of the office requesting the borrowing; and WHEREAS, the County Superintendent (the "Superintendent") of Butte County (the "County") has jurisdiction over the Butte County Office of Education (the "Office"); and WHEREAS, the Board of Education of the Office (the "Office Board") has requested that the County Board authorize the issuance of and offer for sale tax and revenue anticipation notes in the name of and on behalf of the Office under and pursuant to the provisions of the Act in an amount not to exceed Thirty-Two Million Five Hundred Thousand Dollars ($32,500,000.00) at an interest rate not to exceed six percent (6%); NOW, THEREFORE, the Board of Supervisors of Butte County hereby resolves as follows: Section 1. Fem. All of the above recitals are true and correct and the County Board so finds and determines. Section 2. Authorization of Issuance of Notes• Terms Thereof; Paying Agent. The County Board hereby approves the request of the Office Board to issue notes on its behalf in an amount not to exceed $32,500,000.00 principal amount of Notes under Section 53850, et seq., of the Act, designated "Butte County Office of Education, Butte County, State of California, 2005- 2006 Tax and Revenue Anticipation Notes" (the "Notes"); to be numbered from 1 consecutively upward in order of issuance; to be in the denominations of $5,000, or integral multiples thereof, to be dated the date of delivery thereof; to mature (without option of prior redemption) on such date as shall be determined by the Superintendent (or the Superintendent's designee) prior to the date of sale of the Notes, and shall bear interest from their date, payable at maturity (if the maturity of the Notes is determined to be one year or earlier from the date of issuance) or payable twelve months from the date of issue 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 month/360-day year basis. Subject to Section 3 hereof, both the principal of an interest on the Notes shall be payable at the office of the Butte County Treasurer/Tax Collector (the "County Treasurer"), Oroville, California, which is hereby designated as the paying agent (the "Paying Agent"). Section 3. Form of Notes. The Notes shall be issued in registered form, without coupons signed by facsimile or manual signature of the County Treasurer or designee, 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. The Notes shall be issued in fully registered form, and at the closing, there shall be one Note registered in the name of Cede & Co., as nominee of The Depository Trust Company, New York, New York ("DTC"). DTC is hereby appointed depository for the Notes. There shall be printed on each Note the legal opinion of Bartkiewicz, Kronick &Shanhan respecting the validity of said Notes and, immediately following such legal opinion, a certificate executed with the manual or facsimile signature of the Clerk of the County Board, said certificate to be in substantially the following form: I HEREBY CERTIFY that the foregoing is a true and correct copy of the legal opinion regarding the Notes therein described that was manually signed by Bartkiewicz, Kronick &Shanhan, and was dated as of the date of delivery of and payment for said Notes. Manual or Facsimile Signature Clerk of the Board of Supervisors Section 4. Transfer and Exchange of Notes. Subject to the provisions of Section 5 hereof, the registration of any Note may, in accordance with its terms, be transferred, upon the registration books kept by the Paying Agent for such purpose, by the person in whose name it is registered, in person or by his or her duly authorized attorneys, upon surrender of such Note for cancellation, accompanied by delivery of a written instrument of transfer, fully executed in a form approved by the Paying Agent. Whenever any Note or Notes shall be surrendered for registration or transfer, the Paying Agent shall execute and deliver a new Note or Notes, for a like aggregate principal amount. The Paying Agent shall require the Note owner requesting such registration of transfer to pay any tax 2 or other governmental charge required to be paid with respect to such transfer. The County may require the owner requesting such registration of transfer to pay such additional reasonable charge as may be necessary to cover customary expenses incurred and fees charged by the Paying Agent with respect to such registration of transfer. The Paying Agent may treat the registered owner of any Note as the absolute owner thereof for all purposes whatsoever in accordance with this resolution, and the Paying Agent shall not be affected by any notice to the contrary. Subject to the provisions of Section 4 hereof, Notes may be exchanged at the Office of the Paying Agent in Oroville, California for a like aggregate principal amount of Notes in other authorized denominations. The Paying Agent shall require the payment by the Note owner requesting such exchange of any tax or other governmental charge required to be paid with respect to such exchange. The Paying Agent may require the owner requesting such exchange to pay such additional reasonable charge as may be necessary to cover customary expenses incurred and fees charged by the Paying Agent or the Office with respect to such exchange. Section 5. Use of Depository. (1) The Notes shall be initially registered as provided in Section 3 hereof. Registered ownership of the Notes, or any portion thereof may not thereafter be transferred except: (i) To any successor of Cede & Co., as nominee of the Depository "Trust Company, or its nominee, or to any substitute depository designated pursuant to clause (ii) of this Section 5 (a "substitute depository"); provided, that any successor of Cede & Co., as nominee of The Depository Trust Company or a substitute depository, shall be qualified under any applicable laws to provide the services proposed to be provided by it; (ii) To any substitute depository not objected to by the Paying Agent, 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 Office to substitute another depository for The Depository Trust Company (or its successor) because The Depository Trust Company or its successor (or any substitute depository or its successor) is not longer able to carry out its function as depository; provided, that any such substitute depository shall be qualified under any applicable laws to provide the services proposed to be provided by it; or (iii) To any person as provided below, upon (1) the resignation of the Depository Trust Company or its successor (or substitute depository or its successor) from its functions as depository, or (2) a determination by the Office to remove the Depository Trust Company or its successor (or any substitute depository or its successor) from its functions as depository. (2) In the case of any transfer pursuant to clause (i) or clause (ii) of subsection (1) of this Section 5, upon receipt of the outstanding Notes by the Paying Agent, together with a request of the Office to the Paying Agent, a new Note shall be executed and delivered in the aggregate principal amount of the Notes registered in the name of such successor or such substitute depository, or their nominees, as the case may be, all as specified in such request of the Office. In the case of any transfer pursuant to clause (iii) of subsection (l} of this subparagraph 3 (d), upon receipt of the outstanding Notes by the Paying Agent together with a request of the Office to the Paying Agent, new Notes shall be executed and delivered in such denominations numbered in the manner determined by the Paying Agent and registered in the names of such persons as are requested in such a request of the Office; provided that the Paying Agent shall not be required to deliver such new Notes within a period less than sixty (60) days from the date of receipt of such a request of the Office. Thereafter, Notes shall he transferred pursuant to Section 3 hereof. (3) The Office 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 any applicable laws, notwithstanding any notice to the contrary received by the Paying Agent or the Office; and the Office and the Paying Agent shall have no responsibility for transmitting payments to, communication with, notifying, or otherwise dealing with any beneficial owners of the Notes and neither the Office nor the Paying Agent will have any responsibility or obligations, legal or otherwise, to the beneficial owners or to any other party, including The Depository Trust Company or its successor (or substitute depository or its successor), except for the Owner of any Notes. (4) So long as the outstanding Notes are registered in the name of Cede & Co. or its registered assigns, the Office and the Paying Agent shall cooperate with Cede & Co., as sole registered Owner, or its registered assigns in effecting payment of the principal of and interest on the Notes by arranging for payment in such manner that funds for such payments are properly identified and are made immediately available on the date they are due. Section 6. Deposit of Note Proceeds; No Arbitrage. The moneys so borrowed shall be initially deposited in the Treasury of the County in a proceeds fund (the "Proceeds Funds") to the credit of the Office and subsequently credited upon delivery of the District Notes to the respective general funds of the districts in the amount of the respective loans requested from the Office by certain school districts within the County. Until used or expended, the moneys may be 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 and Poor's Ratings Services criteria for investments, or other investments approved by Standard and Poor's Rating Services including, but not limited to, investment in the Local Agency Investment Fund maintained by the Treasurer of the State of California. The Office has covenanted 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 Office, and all of 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 or 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 certificate any duty or obligation to make the actual calculations of 4 arbitrage rebate liability of the Office, or to pay any such rebate or any penalties in regard thereto if the Office miscalculates or fails to pay or cause such rebate or such penalties to be paid. Section 7. 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 which are received by the Office during fiscal year 2005-2006 and which are available therefor. The Notes shall be a general obligation of the Office, 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 Office 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 Office 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, 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 Office as provided in Section 53856 of the Act, which are intended as receipts for the general fund of the Office and which are generally available for the payment of current expenses and other obligations of the Office, all as further defined in the Office Resolution. (C) Covenant Re arding Additional Short-Term Borrowing. The Office has covenanted and warranted that it will not request the County Treasurer/Tax Collector (in such capacity, the "County Treasurer") to make temporary transfers of funds in the custody of the County Treasurer to meet any obligations of the Office during the 2005-2006 fiscal year pursuant to the authority of Article XVI, Section 6, of the Constitution of the State of California or any other legal authority. (D) Deposit of Pledged Revenues in Repayment Fund. The Board of Education and each District have agreed to deposit, and the County shall receive from the Board of Education and each District, the Pledged Revenues in the County treasury in a special fund designated as the "Butte County Board of Education, 2005-2006 Tax and Revenue Anticipation Notes Repayment Fund" and, for each District, a special fund designated the "[name ofJ School District, 2005-2006 Tax and Revenue Anticipation Note Repayment Fund," (herein called the "Repayment Funds"), not later than the date the Board of Education and/or District receive(s) such funds. Any moneys placed in the Repayment Funds shall be for the benefit of the holders of the Notes, and, until the Notes and the promissory notes of each District and all interest thereon are paid or until provision has been made for such payment, the moneys in the Repayment Funds shall be applied only for the purposes for which the Repayment Funds are created. (E) 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 5 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 general fund of the Office upon the request of the Office. 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 law, as it is now in effect and as it may be amended, modified or supplemented from time to time, 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 Credit Markets Services criteria for investments, or other investments approved by Standard and Poor's Credit Markets 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 'T'reasury at least one business day prior to the maturity of the Notes. Section 8. Execution of Notes. The County Board hereby directs the County Treasurer to sign the Notes manually or by facsimile signature, the Clerk of the County Board (the "Clerk") to countersign the Notes manually or by facsimile signature (provided at least one of the signatures is manual); the Clerk to affix the seal of the County thereto or a facsimile of the seal thereto; and said officers to cause the blank spaces thereof to he filled in as may be appropriate. Section 9. Sale of the Notes. The Notes will be sold either at a private sale to an underwriter or underwriters upon terms and conditions as are acceptable to the Office and consistent herewith or by competitive bid and awarded as set forth in an Official Notice of Sale which the Financial Advisor and the Superintendent of the Office, or his or her designee, are hereby authorized to prepare consistent with this Resolution. The County Treasurer, or his or her designee, is hereby authorized to decide between competitive or private sale in conjunction with advice from the financial advisor. If the sale is negotiated, the County Treasurer, or his or her designee, is authorized to negotiate the sale of no more than $32,500,000.00 of notes at an interest rate of not more than 6%. If the sale is by competitive bid, the Superintendent of the Office, or his or her designee, is hereby directed to execute, and the Clerk of the Office is directed to publish, the Official Notice of Sale. The County Treasurer, with the prior concurrence of the Superintendent of the Office or the Superintendent's designee, is authorized to award the sale to said bidder. Section 10. Paying Agent. The County Treasurer is hereby appointed to act as the bond registrar and the Paying Agent of the Office for the purpose of receiving the payments of principal and interest made by the Office on the Notes at maturity, to hold, allocate, use, and 6 apply said payments and to perform such other duties and powers of the Paying Agent as are prescribed in this Resolution. Section 11. Delivery of Notes. The proper officers of the County shall cause the Notes to be delivered to the successful bidder 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 further 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 corporations generally, certifying to the genuineness and the execution of the Notes, and (b) a receipt in similar form evidencing the payment of the purchase price of the Notes which receipt shall be conclusive evidence that said purchase price of the Notes have been paid and has been received on the behalf of the Office. Any purchaser or subsequent taker or holder of the Notes is hereby authorized to rely upon and shall be justified in relying upon any Certificate or receipt with respect to the Notes. Such officers and any other officers of the Office or of the County are hereby authorized to execute any and all other documents required to consummate the sale and delivery of the Notes. PASSED AND ADOPTED by the Board of Supervisors of Butte County this 13th day of September, 2005, by the following vote: AYES: Supervisors Connelly, Dolan, Houx, Josiassen and Chair Yamaguchi NOES: None ABSENT: None Chair, Board of Supervisors, County of Butte, California Attest: l Paul McIntosh, Clerk of the Board of Supervisors, County of Butte, California 7 CLERK'S CERTIFICATE I, Paul McIntosh, Clerk of the Board of Supervisors of Butte County, California, hereby certify as follows: The foregoing is a full, true, and correct copy of a resolution duly adopted at a regular meeting of the Board of Supervisors of said County duly and regularly and legally held at the regular meeting place thereof on . ~_, 2005, of which meeting all of the members of the Board of Supervisors of said County had due notice and at which a quorum was present. I have carefully compared the same with the original minutes of said meeting on file and of record, and the foregoing is a full, true, and correct copy of the original resolution adopted at said meeting and entered in said resolution. Said resolution has not been amended, modified or rescinded since the date of its adoption, and the same is now in full force and effect. ,', Dated: `; ; ' , "; 2005 ,~ ~ s r ~ ~~ ~ ~~ 6 P Paul McIntosh, Clerk of the Board of Supervisors of Butte County County Resolution ExxrerT A jAttach Notej BUTTE COUNTY OFFICE OF EDUCATION (BUTTE COUNTY, CALIFORNIA) 2005-2006 TAX AND REVENUE ANTICIPATION NOTE INTEREST RATE: MATURITY DATE: ISSUE DATE: CUSIP: 2006 , 2005 RF,GISTERED OWNER: CEDE & CO. PRINCIPAL SUM: DOLLARS AND NO/CENTS The BUTTE COUNTY OFFICE OF EDUCATION, Butte County, State of California (the "Office"), 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 in like lawful money at the rate per annum stated above on the Maturity Date stated above, calculated on the basis of 360-day year comprised of twelve 30-day months. 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 ($ .00), all of like tenor, issued pursuant to the provisions of Resolution No. of the Board of Supervisors (the "Board") of Butte County (the "County") duly passed and adopted on 2005 (the "Resolution"), and pursuant to Article 7.6 (commencing with section 53850) of Chapter 4, Part I, 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 County, 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 only from taxes, revenue and other moneys that are received by the County on behalf of the Office for the Repayment fund of the Office (as defined in the Resolution) during Fiscal Year 2005-2006. As security for the payment of the principal of and interest on the Notes, the Board, in the name of the Office, has pledged the first "unrestricted revenues", as hereinafter defined, (a) in an amount equal to twenty-five percent (25%) of the principal amount of the Notes from the F°rmofNoteButteCOF. doeE3utteCo unrestricted revenues received by the County on behalf of the Office in the month of 2006, (b) in an amount equal to twenty-five percent (25%) of the principal amount of the Notes from the unrestricted revenues received by the County on behalf of the Office in the month of , 2006, (c) in an amount equal to twenty-five percent (25%) of the principal amount of the Notes from the unrestricted revenues received by the County on behalf of the Office in the month of , 2006 and (d) an amount equal to twenty-five percent (25%) of the principal amount of the Notes, plus an amount sufficient to pay interest on the Notes, from unrestricted revenues received by the County on behalf of the Office in the month of __, 2006 (such pledged amounts being hereinafter called the "Pledged Revenues"}; and the principal of the Notes and the interest thereon shall constitute a first lien and charge against and shall be payable from the first money received by the County from such Pledged Revenues, and to the extent not so paid shall be paid from any other moneys of the County lawfully available therefor. The term "unrestricted revenues" shall mean taxes, income, revenue and other moneys intended as receipts for the general fund of the Office and which are generally available for the payment of current expenses and other obligations of the Office. The Notes are issuable as fully registered notes, without coupons, in denominations of $5,000 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 circumstances, 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 may treat the Owner hereof as the absolute owner hereof for all purposes and the Board shall not be 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 for 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. 2 FormotNoteButtcCOF.. docButtcCo IN WI"I'NESS WHEREOF, the Board of Supervisors of Butte County, California has caused this Note to be issued in the name of the County and to be executed by the manual or facsimile signature of the Treasurer-Tax Collector or designee and countersigned by the manual or facsimile signature of the Clerk or Assistant Clerk of the Board, all as of the Issue Date stated above. By: Countersigned: COUNTY OF BUTTE COUNTY Dick Puelicher Treasurer-Tax Collector Paul McIntosh Clerk of the Board of Supervisors 3 FormotNoteIiutteC'OF .docF3utteCo ASSIGNMENT For value received the undersigned hereby sells, assigns and transfers unto (Name, Address and Tax Identification or Social Security Number of Assignee) the within registered Note 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 Assigmnent 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. 4 t'ormo tN McButtcCOE. doc F3uttc('o FORM OF BOND COUNSEL OPINION September 29, 2005 Butte County Board of Education l 859 Bird Street Oroville, California 95965 Re: Butte County Board of Education Butte County, California 2005-2006 Tux and Revenue Anticipation 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 $14,100,000 principal amount of Butte County Board of Education, Butte County, California, 2005-2006 Tax and Revenue Anticipation Notes, dated September 24, 2005 (the "Notes"), pursuant to Article 7.6 (commencing with Section 53850), Chapter 4, Part 1, Division 2, Title 5 of the California Government Code, pursuant to the provisions of~ Resolution No. 05- 02 adopted by the Board of Education on August 9, 2005 (the "Board of Education Resolution"), and Resolution No. 04-172 adopted by the Board of Supervisors on September 14, 2005 (the "County Resolution") (the County Resolution and the Board of Education Resolution being referred to collectively as the "Note Resolution"). In such capacity, we have examined such law and such certified proceedings, certifications, and other documents as we have deemed necessary to render this opinion. Regarding 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 contained in the County Resolution, the representations of Butte County and Board of Education officials, and in the certified proceedings, and other certifications of public officials and others furnished to us without undertaking to verify the same by independent investigation. Based upon the foregoing, we are of the opinion that, under existing law: 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. 5 FomiotNutc R uttcC'OF.. docE3uttcCo 2. The County 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. Interest on the Notes is excludable 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; however, such interest is taken into account in determining adjusted earnings for the purpose of computing the alternative minimum tax imposed on certain corporations. The opinion set forth in the preceding sentence is subject to the condition that the Board of Education comply with all requirements of the Internal Revenue Code of 1986, as amended, that must be satisfied subsequent to the issuance of the Notes in order that interest thereon be, and continue to be, excludable from gross income for federal income tax purposes. The Board of Education has covenanted to comply with all such requirements. Failure to comply with certain of such requirements may cause such interest on the Notes to be included in gross income for federal income tax purposes retroactively to the date of issuance of the Notes. 5. Interest on the Notes is exempt from State of California personal income taxes. The rights of the holders of the Notes and the enforceability of the Notes, the Board of Education Resolution, and the County Resolution are 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. We express no opinion regarding the accuracy, adequacy, or completeness of the Official Statement or other offering material relating to the Notes. Further, we express no opinion regarding tax consequences arising with respect to the Notes other than as expressly set forth herein. This opinion is given as of the date hereof, and we assume no obligation to revise or supplement this opinion to reflect any facts or circumstances that may hereafter come to our attention or any changes in law that may hereafter occur. Very truly yours, BARTKIEWICZ, KRONICK, & SHANAHAN A Professional Corporation 6 FormotN otc B utteCOF.. docE3uttcC o I HEREBY CERTIFY that the foregoing is a true and correct copy of the legal opinion upon the Notes therein described that was manually signed by Bartkiewicz, Kronick & Shanahan, and was dated as of the date of delivery of and payment for said Notes. Marion Reeves Assistant Clerk of the Board of Supervisors Formo fN otc R uttcCOl :. doc B uttcC o RESOLUTION NO~O~-O t RESOLUTION OF THE OFFICE OF EDUCATION OF BUTTE COUNTY AUTHORIZING THE ISSUANCE OF 2005-2006 TAX AND REVENUE ANTICIPATION NOTES FOR SAID OFFICE AND REQUESTING THE BOARD OF SUPERVISORS OF BUTTE COUNTY TO ISSUE SAID NOTES WHEREAS, pursuant to Sections 53850, et seq., of the Government Code of the State of California (the "Act'') contained in Article 7.6 thereof, entitled "Temporary Borrowing,'' on or after the first day of any fiscal year (being July I ), the Butte County Office of Education (the "Off ce") may borrow money by issuing tax and revenue anticipation notes for any purpose for which the Ottice is authorized to expend moneys, including, but not limited to, current expenses, capital expenditures, and the discharge of any obligation or indebtedness of the Ol~Iice; and WHEREAS, Section 53853 of the Act provides that such notes must be issued in the name of the Office by the Board of Supervisors of the county (the "County Board"), the county superintendent of which has jurisdiction over the Ottice, as soon as possible following the receipt of a resolution of the governing board of the Office requesting the borrowing; and WEIEREAS, the County Superintendent of Butte County (the "County") has jurisdiction over the Office, and this Board of Education (the "Office Board"), being the governing board of the Office, hereby requests the borrowing of not to exceed Thirty-two Million Five Hundred 'T'housand Dollars ($32,500,000) an interest rate not to exceed eight percent (8%) through the issue by the County Board of 2005-2006 Tax and Revenue Anticipation Notes (the "Notes"") in the name of the Office; and WHEREAS, the Office Board has found and determined that said $32,500,000.00 maximum principal amount of Notes to be issued by the County Board on behalf of the Office in fiscal year 2005-2006, when added to the interest payable thereon, does not exceed eighty-five percent (85%) of the estimated amount of the uncollected taxes, income, revenue (including, but not limited to, revenue from state and federal governments), cash receipts and other moneys of the Oftice which will be available for the payment of the Notes and interest thereon, as required by Section 53858 of the Act; and NOW, THEREFORE, the Board of Education of Butte County Office of Education hereby resolves as follows: Section 1. Findings. All of the above recitals are true and correct and the Office Board so finds and determines. Section 2. Authorization of Issuance of Notes; Terms Thereof; Pang Agent. "I'he Office Board hereby authorizes the borrowing of an amount not to exceed $32,500,000.00 principal amount of and requests the County Board to issue in the name of the Office, Notes under Sections 53850, et seq., of the Act, designated "Butte County Office of Education, Butte 656112.1 [9932._ J County, State of California, 2005-2006 Tax and Revenue Anticipation Notes" (the "Notes""); to be numbered from 1 consecutively upward in order of issuance; to be in the denominations of $5,000, or integral multiples thereof, to be dated the date of delivery thereof; to mature (without option of prior redemption} on such date as shall be determined by the Superintendent (or the Superintendent's designee) prior to the date of sale of the Notes, and shall bear interest Isom their date, payable at maturity (if the maturity of the Notes is determined to be one year or earlier from the date of issuance) or payable twelve months from the date of issue 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 month/360-day year basis. The Butte County Treasurer/Tax Collector (the "County Treasurer"") is hereby designated as the paying agent (the "Paying Agent"). The Office Board hereby authorizes loans to be made to certain of those districts within the Office's jurisdiction (the "Districts"") from the proceeds of the Notes, provided that such loans shall be repayable at a rate of interest, computed on a 30-day month/360-day year basis, at the rate to be borne by the Notes, and as otherwise provided in the resolutions of the Districts authorizing such loans (the "District Resolutions'"). Section 3. Form of Notes. The Notes shall be in the form attached to the resolution entitled "Resolution of the Board of Supervisors of Butte County Authorizing the Issuance of the 2005-2006 'l'ax and Revenue Anticipation Notes for the Butte County Office of Education." That resolution, to be adopted by the County Board in substantially the form on file with the Secretary ofthe Office Board, is hereby approved. Section 4. Deposit of Note Proceeds; No Arbitrage. The moneys so borrowed shall be initially deposited in the Treasury of the Cotmty in a proceeds fund to the credit of the Office and subsequently credited in the amount of the respective loans concurrently with the delivery of the District Notes to the respective general funds of the District. Until used or expended, the moneys may be 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 and Poor's Ratings Services criteria for investments, or other investments approved by Standard and Poor"s Rating Services including, but not limited to, investment in the Local Agency Investment Fund maintained by the Treasurer of the State of California. "['he Office 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 Office, and all of 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 [lnited States Treasury promulgated thereunder or 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."' Section 5. 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 which are received by the Office during fiscal year 2005-2006 and which are available therefor. "I'he Notes 2 656112.1 [9932. J shall be a general obligation of the Office, 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 Office 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 Office 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, 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 Office as provided in Section 53856 of the Act, which are intended as receipts for the general fund of the Office and which are generally available for the payment of current expenses and other obligations of the Office, including, but not limited to, those amounts paid by the Districts under the District Notes. "hhe dates so designated shall constitute the "deposit dates"" referred to in Section 5(B) of each District resolution. (C) Covenant Regarding- Additional Short-Term Borrowing. "I'he Office hereby covenants and warrants that it will not request the County Treasurer/Tax Collector (in such capacity, the "County Treasurer'") to make temporary transfers of funds in the custody of the County Treasurer to meet any obligations of the Office during the 2005-2006 fiscal year pursuant to the authority of Article XVI, Section 6, of the Constitution of the State of California or any other legal authority. (D) Deposit of Pledged Revenues in Repayment Fund. "I~he Board of Education shall deposit Pledged Revenues in the County treasury in a special fund designated as the "Butte Cowlty Board of Education, ?005-2006 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 thereon 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. (E) 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 general hued of the Office upon the request of the Office. The Office hereby covenants to return to the respective District any amount received by the Office which represents any portion of a deposit made by the District described in Section 4 hereof and the investment earnings thereon. 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 -, 656112.1 [9932. ] investment agreement, in investments as permitted by applicable California law, as it is now in effect and as it may be amended, modified or supplemented from time to time, 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 Rating Services criteria for investments, or other investments approved by Standard and Poor's Rating Services including, but not limited to, the investments in the Local Agency Investment Fund maintained by the 'T'reasurer 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 6. Execution of Notes. The Office hereby requests the County "Creasurer, or designated deputy thereof, to sign the Notes manually or by facsimile signature; the Clerk of the County Board (the "Clerk") to countersign the Notes manually or by facsimile signature (provided at least one of the foregoing signatures is manual; the Clerk to affix the seal of the County or a facsimile of the seal thereto; and said officers to cause the blank spaces thereof to be tilled in as may be appropriate. Section 7. Sale of the Notes. 'T'he Notes will be sold either at a private sale to an underwriter or underwriters upon terms and conditions as are acceptable to the Office and consistent herewith or by competitive bid and awarded as set forth in an Official Notice of Sale which the Financial Advisor and the County Superintendent, or his or her designee, are hereby authorized to prepare consistent with this Resolution. The County "Treasurer, or his or her designee, is hereby authorized to decide between competitive or private sale in conjunction with advice from the financial advisor. [f the sale is negotiated, the County Treasurer, or his or her designee, is authorized to negotiate the sale of no more than $32,500,000.00 of notes at an interest rate of not more than eight percent (8%). [f the sale is by competitive bid, the Superintendent, or his or her designee. is hereby directed to execute, and the Clerk of the Office is directed to publish, the Official Notice of Sale. The County Treasurer is authorized to award the sale to said bidder. Section S. Paying A~,ent. ~fhe County Treasurer is hereby appointed to act as the registrar and Paying Agent of the Office for the purpose of receiving the payments of principal and interest made by the Office on the Notes at maturity, 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. The Office shall compensate the County for the services of the County Treasurer for any expense determined by the County "Treasurer. Section 9. Authorization of Preliminary Official Statement and Official Statement. "I'he Official Statement relating to the Notes in preliminary form is hereby approved. The Superintendent, or his or her designee, is hereby authorized and requested to execute and deliver the Official Statement in substantially the form presented to the Ottice Board, with such changes and additions thereto deemed advisable by the Superintendent or any other qualified officer of the Office. 'T'he Office authorizes the distribution by the financial advisor of the Official 4 656112.1 [9932. ] Statement to prospective purchasers of the Notes, and authorizes and directs the Superintendent, or the Superintendent's designee, on behalf of the Office, to deem "tinaC' pursuant to Rule 1 Sc2- 12 under the Securities Exchange Act of 1934 (the "Rule") the Official Statement prior to its distribution by the Office's financial advisor. The execution of the Official Statement, shall be conclusive evidence of the approval ofthe Official Statement by the Office. The Superintendent, or the Superintendent's designee, is separately authorized and directed to execute a statement that the facts contained in the Official Statement, and any supplement or amendment thereto (which shall be deemed an original part thereto for purposes of such statement) were, at the time of the sale of the Notes, true and correct and are material respects and that the Official Statement did not, on the date of the sale of the Notes, and does not, as of the date of the delivery of the Notes, contain any untrue statement of a material fact with respect to the Office or omit to state material facts with respect to the Office required to be stated or necessary to make any statement made therein not misleading in the light of the circumstances under which it was made. 'I~he Superintendent, or the Superintendent's designee, shall take such further action as prior to the signing of the Official Statement as are deemed necessary or appropriate to verity the accuracy thereof. The Superintendent, or his or her designee, is hereby authorized to execute, as necessary, a continuing disclosure certificate as may be required pursuant to subsection 15c2-12(b)(5)(i)(C) of the Rule. Section 10. Delivery of Notes. The proper officers of the County Board are hereby requested to deliver the Notes to the successful bidder when the County Treasurer has received confirmation of receipt of the proceeds. All actions heretofore taken by the officers and agents of the Office Board with respect to the Notes are hereby approved, confirmed, and ratified, and the officers of the Office Board are hereby authorized and directed to do any and all things and take any and all actions which they, or any of them, may deem necessary or advisable in order to consummate the lawful issuance and delivery of the Notes in accordance with this Resolution, any supplemental resolution to this Resolution, and resolutions hereafter adopted by the County Board. Section 11. Financial Advisor. "Che Office Board hereby confirms the hiring of Government Financial Strategies, Inc., as financial advisor to the Office with respect to the sale of the Notes. Section ] 2. Bond Counsel The Office Board hereby confirms the hiring of Kronick, Moskovitz, Tiedemann & Girard, as bond counsel to the Office with respect to the sale of the Notes. Section l3. Further Actions Authorized. All actions heretofore taken by the officers and agents of the Office Board with respect to the sale and issuance of the Notes are hereby approved, and the Superintendent, the Secretary of the Board and any and all other officers of the Office are hereby authorized and directed for and in the name and on behalf of the Office, to do any and all things and take any and all actions related to the execution and delivery of any and all certificates, requisitions, agreements and other documents, which they, or any of them, may deem necessary or advisable in order to consummate the lawful issuance and delivery of the 5 656 I I Z. l [993?. l Notes. The Secretary of the Board is hereby authorized and directed to file a certified copy of this Resolution with the County Board, which shall constitute the request of the Office that the County Board issue and sell the Notes as soon as practicable, and to simultaneously provide certified copies of this Resolution to the County Treasurer. PASSED AND ADOPTED by the Board of Education of the Butte County Office of Education this ,~ttt day of August, 2005, by the following vote: ~S ~'`~ AYES: !o NOES: ~l ABSENT: ! ~~ `~, ~'~ President, Board of Education Butte County Office of Education Attest: -; - Clerk, Board of Education Butte County Oftice of Education 6 656112.1 [9932. J SECRETARY'S CERTIFICATE Certified Copy of Resolution ~°~-Ot Adopted on August-$' 2005 /S I, Don McNelis, hereby certify that I am the Superintendent of the E3utte County Ottice of Education, a county office duly organized and existing under and by virtue of the Constitution and laws of the State of California (the "Office") and that as such I am authorized to execute this Certificate on behalf of the Office. I hereby further certify that attached hereto is a complete copy of a resolution which was duly adopted by the Board of Education of the Office at a meeting thereof which was duly called and held on ~ /S , 2005, and at such meeting a quorum was present and acting throughout, and that said resolution has not been amended, modified or rescinded since the date of adoption and is now in full force and eft-ect. Dated: $' /S~' , 2005 BUTZ~E COUNTY OFFICE OF EDUCATION ray Don McNelis, Superintendent SECRETARY'S CERTIFICATE Certitied Copy of Resolution No. 06-O1 Adopted on August I5, 2005 [, Don McNelis, hereby certify that I am the Superintendent of the Butte County Office of Education, a county office duly organized and existing under and by virtue of the Constitution and laws of the State of California (the "Office'") and that as such I am authorized to execute this Certificate on behalf of the Office. 1 hereby further certify that attached hereto is a complete copy of a resolution which was duly adopted by the Board of Education of the OTtice at a meeting thereof which was duly called and held on August 15th, 2005, and at such meeting a quorum was present and acting throughout, and that said resolution has not been amended, modified or rescinded since the date of adoption and is now in hill force and effect. Dated: S l (s , ?005 BUTTE COUN'T'Y OFFICE OF EDUCA~1'[ON I Don McNelis, Superintendent