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HomeMy WebLinkAbout95-106RESOLUTION NO. ~~-io6 RESOLUTION OF THE BOARD OF SUPERVISORS OF BUTTE COUNTY AUTHORIZING THE ISSUANCE OF 1995-96 TAX AND REVENUE ANTICIPATION NOTES FOR BUTTE COUNTY OFFICE OF EDUCATION WHEREAS, pursuant to Sections 53850, et sea., 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 Board of Education of the office requesting the borrowing; and - WHEREAS, the County 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 Twenty-Five Million Dollars ($25,000,000) at an interest rate not to exceed 7%; ~ - zaaba~.i NOW, THEREFORE, the Board of Supervisors of Butte County hereby resolves as follows: Section 1. Findings. All of the above recitals are true and correct and the County Board so finds and determines. Section 2. Authorization of ~ss~ance of Notts, 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 $25,000,000 principal amount of Notes under Section 53850, et~5e ,., _ of the Act, designated "Butte .County Office of Education, Butte County, State of California, 1995-96 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) twelve months after said date of delivery, or if such date is not a day on which banks in New York or California are open for business, on the last business day preceding such date; and to bear interest, payable at maturity and computed on a 30-day monthl360-day year basis, at the rate or rates determined at the time of sale thereof, but not in excess of seven percent {7%) per annum. Subject to Section 3 hereof, both the principal of and interest on the Notes shall be payable, only upon surrender thereof, in lawful money of the United States of America at the principal office of the Butte County TreasurerlTax Collector, Oroville, California, which is hereby designated by this Board as the paying agent for the Notes (the "Paying Agent") -- 2 -- aoasa~.i Section 3. Form of Notes. The Notes shall be issued in registered form, without coupons, and shall be substantially in the form and substance set forth in Exhibit A attached hereto and by reference incozporated 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 Kronick, Moskovitz, Tiedemarin & Girard 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 Kronick, Moskovitz, Tiedemann & Girard, 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 ~. Transfer and Exchan a of Notes. Subject to the provisions of Section 5 hereof, the registration of any Nate 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. - 3 - zoaeai. i 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 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 iegistrataon 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 authorised denominations. The Paying Agent shall require the payment by the Nate owner requesting such exchange of any tax or other governmental charge required to be paid with respect to such exchange. The Office 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 Depositorx. (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: - ~ - zoa~a~.i (i) To any successar 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"}; rop vided, that any successor of Cede & Co. , as nominee of The Depositary Trust Company or a substitute depositary, 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 yr its successor) from its functions as depository, or (2) a determination by the Office to substitute another depository far The Depository Trust Company (or its successar) because The Depository Trust Company or its successor (or any substitute depositary 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; ar (iii) To any person as provided below, upon (X) the resignation of the Depasitary 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 - 5 - zoaba~.i (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 {I} 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 (1} of this subparagraph {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 be 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 6 - zoa6ai.i 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 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 investments as permitted by applicable California law. 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 - 7 - zoa~i.i 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 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. Pa meet 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 1995-1996 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) Pled e~ d 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 - 8 - 2oabal.l behalf of the Off ce in such months and in such amounts as shall be determined by the Butte County Superintendent of Schools {the "Superintendent"), ar 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 (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) Credit Enhancement. Notwithstanding the foregoing, the Notes may be secured, in whole or in part, by an irrevocable letter of credit to be issued by a bank approved by the Superintendent, or the Superintendent's designee, {the "Bank"}, or other credit enhancement vehicle approved by the Superintendent, or the Superintendent's designee, and the Superintendent, or the Superintendent's designee, is hereby separately authorized to execute a reimbursement agreement ox' other agreement with respect to such other credit enhancement vehicle {if one is needed), on behalf of the Office and the Clerk of the Office Board is hereby authorized to attest to the signature of the Superintendent, or the Superintendent's designee, such reimbursement agreement or other agreement with respect to such other credit enhancement vehicle to be substantially the same as that used on short term bond transactions similar to the Notes. In the event a determination is made to secure the Notes, in whole or in part, by an irrevocable letter of credit or. other - 9 - 2oabai,i enhancement vehicle, the first lien and charge on Pledged Revenues for the payment of the principal of and interest on the Notes will be subject to the prior lien thereon of the Bank or the issuer of such other credit enhancement vehicle. (D) Covenant Regardin~Additional Short-Term Borrowing. The Office has covenanted and warranted that it will not request the County TreasurerlTax 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 1995- 1996 fiscal year pursuant to the authority of Article XVI, Section 6, of the Constitution of the State of Califorzua or any other legal authority. (E) Deposit of Pledged Revenues in Repayment Fund. The Pledged Revenues shall be deposited in the County Treasury in the appropriate account in a special fund designated as the "Butte County Office of Education Tax and Revenue Anticipation Notes Repayment Fund" (herein called the "Repayment Fund"} and applied as directed in this Resolution. Separate accounts shall be established within the Repayment Fund for the deposit of (i) unrestricted revenues received by the Office as payments with respect to each loan made from the proceeds of the Notes to a school district and (ii) unrestricted revenues from other sources. 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. - ZO - zoa5a~.i (F) 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 PIedged 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 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 PIedged Revenues. Moneys so invested, and the earnings thereon, shall be accounted for as Pledged Revenues, to be withdrawn solely far deposit in the Repayment Fund and used, to the extent necessary, to gay 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. --11- xaa6a~.i Section S. 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 be 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 $25,0OO,OQO of notes at an interest rate of not more than 7%. 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, or his or her designee, is hereby authorized and directed to open the bids at the time and place specified in the Official Notice of Saie. The County Treasurer, or his or her designee, is hereby authorized and directed to receive and record the receipt of all bids made pursuant to the Official Notice -12 - 2oa6ai. ~ of Sale, to cause said bids to be examined for compliance with the Official Notice of Sale, to cause computations to be made as to which bidder has bid the lowest true interest cost, as provided in the Official Notice of Sale, to announce the bidder of the lowest true interest cost, and to award the sale to said bidder, and to notify this Board of the foregoing. Section 10. Pang 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 apply said payments and to perform such other duties and powers of the Paying Agent as are prescribed in this Resolution. Section 11. Authorization of Prelirr~inarY _Official Statement and Official Statement. The fuiancial advisor to the Office is hereby authorized to prepare a Preliminary Official Statement and an Official Statement relating to the Notes, to be issued in connection with the offering and sale of the Notes. The Superintendent of the Office, or his or her designee, is hereby authorized and requested to execute and deliver the Official Statement. The County authorizes the distribution by the financial advisor of the Official 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 "final" pursuant to Rule 15c2--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, which shall include 'such changes and additions -13 - Zoa6axa . thereto deemed advisable by the Superintendent or any other qualified officer of the Office and such information permitted to be excluded .from the Official Statement pursuant to the Rule shall be conclusive evidence of the approval of the 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 admit any statement made therein not misleading in the light of the circumstances under which it was made. The Superintendent, or the Superintendent's designee, shah take further action as prior to the signing of the Official Statement as are deemed necessary or appropriate to verify 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 12. 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. --14 - zoa6ai, z Sectian'l3. Further Actions Authorized. It is hereby covenanted that the County, and its appropriate officials, have duly taken all proceedings necessary to be taken by them, and will take any additional proceedings necessary to be taken by them, for the levy, collection, and enforcement of the secured property taxes pledged antler this Resolution in accordance with the law and for carrying out the provisions of this Resolution. PASSED AND ADOPTED by the Board of Supervisors of Butte County this 15 tti day of August, 1995, by the following vote: AYES: Supervisors Meyer, Dolan, Houma, '~homas and Chair McLaughlin NOES: None ABSENT: None Attest: ~~ Clerk, Board of Supervisors County of Butte .{ Chair, Board of S ervisors, County of Butte - i 5 - zo~~~.2 - Lr~- EXHIBIT A BUTTE COUNTY OFFICE OF EDUC. STATE OF CALIFORNIA 1995-1996 TAX AND REVENUE ANTICIPATION NOTE NO. 1 $2s,oao,oao.ao REGISTERED OWNER: Cede & Co. 1995 CUSIP: 124081 FOR VALUE RECEIVED, the Butte County Office of Education, State of California, acknowledges itself indebted to and promises to pay the Registered holder hereof at the principal office of the Butte County TreasurerlTax Collector, Oroville, California {the Paying Agent"} the principal sum of TWENTY--FIVE MILLION DOLLARS {$25,000,000.00) in lawful money of the United States of America, on , 1996, together with interest thereon at the rate of PERCENT( %) per annum in like lawful money of the United States of America from the date hereof until payment in full of said principal sum. Both the principal of and interest on this Nate shall be payable only to the registered owner hereof upon surrender of this Note as the same shall fall due; provided, however, that no interest shall be payable far any period after maturity during which the registered owner fails to properly present this Note for payment. It is hereby certified, recited and declared that this Note is one of an authorized issue of Notes entitled "Butte County Office of Education, Butte County, State of California, 1995-1996 Tax and Revenue Anticipation Notes° (the "Notes") in the aggregate principal amount of Twenty-Five Million Dollars ($25,000,000.00), all of like date, tenor, and effect, made, executed, and given pursuant to and by authority of a resolution of the Board of Supervisors of the County of Butte duly passed and adopted on August t5 1995, under and by authority of Article '1.6 (commencing with Section 53850) of Chapter 4, Part 1, Division 2, Title 5, California Government Code, on behalf of the Office, and that all acts, conditions, and things required to exist, happen and be performed precedent to and in the issuance of this Note have exISted, happened, and had been performed in regular and due time, form and manner as 1 requixed by law, and that this Nate, together with all other indebtedness and obligations of the Office, 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, income, revenue, cash receipts, and other moneys that are received by the Office during Fiscal Year 1995-1996. As security for the payment of the principal of and interest on the Notes, the Office has pledged an amount equal to percent ~%} of the principal amount of the Nates from the unrestricted revenues received by the Office in the month ending 1996, an amount equal to percent (`%} of the principal amount of the Notes from the unrestricted revenues received by the Office in the month ending 1996 and an amount equal to percent (_%) of the principal amount of the Notes, plus an amount sufficient to pay interest on the Notes, from unrestricted revenues received by the Office in the month ending 1996 {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 Office from such Pledged Revenues, and to the extent not so paid shall be paid from any other moneys of the Office lawfully available therefor. Unless this certificate is presented by an autharized representative of the Depository Trust Company, a New York corporation ("DTC"), to the issuer or its agent for registration of transfer, exchange or payment and any certificate issued is registered in the name of Cede & Co. or such other name as requested by an authorized representative of the DTC (and any payment is made to Cede & Co.or to any such entity as is requested by an authorized representative of DTC}, ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL since the registered owner hereof, Cede & Co., has an interest herein. IN WITNESS WHEREOF, the Board of Supervisors has caused this Note to be executed by facsimile or manual signature, and countersigned by the Clerk of the County Board by facsimile signature or manual signature and has caused its official seal to be affixed hereto or a facsimile of its official seal to be printed hereon this 15 th day of August , 1995. COUNTY OF BUTTE [Seal] By: Treasurer Countersigned: By: Clerk of the Board of Supervisors 2 1995 Butte County Office of Education 1859- Bird Street Oroville, California 95965 Re: Butte County Office of Education State of California - 1995-1996 Tax and Revenue Participation Notes Dear Board Members: We have acted as bond counsel to the Butte County Office of Education (the "Offce") in connection with the issuance by the Board of Supervisors of Yuba County (the "Board"} of $25,000,000 principal amount of Butte County Office of Education State of California 1995-1996 Tax and Revenue Anticipation Notes, dated 1995 {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. adopted by the Board of Education of the Office on August 14, 1995, and Resolution -No. 95-10b adopted by the Board on August 22, 1995 (collectively, the "Note Resolution"). As to questions of fact material to our opinion, we have relied upon the representations of the Office contained in the Note Resolution and in the certified proceedings and other certifications of public affcials 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 Office is duly created and validly existing as a county office of education with the power to cause the Board to issue the Notes on its behalf and to perform its obligations under the Note Resolution. 2G1b77.1 Butte County Office of Education Page 2 2. The Nate Resolution has been duly adapted by the Board and 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 and are valid and binding general obligations of the Office 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 minimum tax imposed on corporations (as defined for federal income 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 Office comply with all requirements of the Code 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 Office 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 excluded from gross income for California personal income tax purposes. It is to be understood that the rights of the holders of the Notes and the enforceability of the Notes and the Note Resolution may be subject to bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting creditors' rights heretofore or hereafter enacted to the extent constitutionally applicable, and that their enforcement may also be subject to the exercise of judicial discretion in appropriate cases. Very truly yours, KRONTCK, MOSKOVITZ, TIEDEMANN & GiRARD 207677.1 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 Kronick, Moskovitz, Tiedemann & Girard, and was dated as of the date of delivery of and payment for said notes. Clerk of the Board of Supervisors Zoad~x.~ 3