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HomeMy WebLinkAbout4.11 Exhibit E Certificates of Participation - NEW ISSUE-FULL BOOK ENTRY In the opinion of Brown&Wood,San Francisco,California,Special Counsel,based on existing statutes,regulations,rulings and judicial decisions and assuming compliance with certain covenants described herein and requirements of the Internal Revenue Code of 1986,as amended(the "Code"),as described herein, the portion of each Lease Payment due under the Lease designated as and comprising interest and received by owners of the Certificates tes is not includable in gross income of the owners thereof for federal income tax purposes. hi the further opinion of Special Counsel,the portion of each Lease Payment due under the Lease designated as and comprising interest and received by owners of the Certificates will not be treated as an item of tax preference in calculating the federal alternative minimum taxable income of individuals and corporations. However,such portion of each Lease Payment will be included as an adjustment in the calculation of federal corporate alternative minimum taxable income and may therefore affect a corporation's alternative minimum tax and environmental tax liabilities. In the further opinion of Special Counsel,the portion of each Lease Payment due under the Lease designated as and comprising interest and received by owners of the Cemficates is exempt from personal income taxes imposed by the State of California. See "TAX MATTERS"herein. s CERTIFICATES OF PARTICIPATION (1993 Civic Center Refunding Project) Evidencing Direct, Undivided Proportionate Interests of the Owners Thereof in Lease Payments to be Made by the CITY OF DUBLIN (Alameda County, California) Dated: June 1,1993 Dues February 1,as shown below The Certificates are being sold to provide funds to refund outstanding City of Dublin 1988 Certificates of Participation originally sold to(i)refund outstanding City of Dublin 1985 Certificates of Participation,and(ii)provide additional moneys to complete the City's Civic Center. Interest represented by the Certificates is payable semiannually on February 1 and August 1 each year,commencing February 1, 1994. The Certificates will be delivered as fully registered Certificates and,when issued,will be registered in the name of Cede&Co.,as nominee of The Depository Trust Company,New York,New York ("DTC"). DTC will act as the initial Securities Depository for the Certificates. Individual purchases of Certificates will be made in book-entry form only,in the principal amount of$5,000 or any integral multiple thereof. Purchasers of such interests will not receive physical certificates representing the Certificates purchased. Principal of and interest on the Certificates will be paid by First Interstate Bank of California,as trustee(the"Trustee"),to DTC,which will in turn remit such principal and interest to its participants for subsequent disbursement to the beneficial owners of the Certificates. See"THE CERTIFICATES—Book-Entry Only System." The Certificates are subject to optional and mandatory prepayment,as described herein,prior to their stated maturities. The City has covenanted in the Lease to make all Lease Payments provided for therein subject to complete or partial abatement of such Lease Payments resulting from substantial interference with use and possession by the City of the Project caused by damage or destruction of the Project or taking by eminent domain or condemnation thereof. The City has also covenanted in the Lease to take such action as may be necessary to include such Lease Payments in its annual budgets and to make the necessary annual appropriations therefor. THE OBLIGATION OF THE CITY TO PAY LEASE PAYMENTS DOES NOT CONSTITUTE A DEBT OF THE CITY,THE STATE OF CALIFORNIA OR ANY POLITICAL SUBDIVISION THEREOF WITHIN THE MEANING OF ANY CONSTITUTIONAL OR STATUTORY DEBT LIMITATION OR RESTRICTION NOR DOES IT CONSTITUTE AN OBLIGATION FOR WHICH THE CITY IS OBLIGATED TO LEVY OR PLEDGE ANY FORM OF TAXATION OR FOR WHICH THE CITY HAS LEVIED OR PLEDGED ANY FORM OF TAXATION. This cover page contains information for quick reference only. It is not a summary of this issue. Potential investors must read the entire Official Statement to obtain information essential to making an informed decision. MATURITY SCHEDULE S Serial Certificates Maturity Maturity Date Interest Price or Date Interest Price or (February 1) Amount Rate Yield (February 1) Amount Rate Yield $ _%Term Certificates Due February 1,20_—Price % (Plus Accrued Interest from June 1,1993) The Certificates are offered when,as and if sold and received by the Underwriter,subject to approval as to their legality by Special Counsel, Brown&Wood,San Francisco,California. Certain legal matters will be passed upon for the Underwriter by Orrick,Herrington& Sutcliffe,San Francisco,California,and for the City by the City Attorney. It is anticipated that the Certificates in definitive form will be available for delivery to DTiC in New York,New York,on or about lune 1993. Rauscher Pierce Refsnes, Inc" Dated: May_, 1993 • Preliminary,subject to change. fib. by t1fl & -'21,.�c SF2-14290.5 F Certain of the information set forth herein has been obtained from the City, the Lessor and other sources which are believed to be reliable. Such information is not guaranteed as to accuracy or completeness and is not to be construed as a representation by the Underwriter. The information and expressions of opinion herein are subject to change without notice and neither delivery of this Official Statement nor any sale made hereunder shall, under any circumstances, create any implication that there has been no change in the affairs of the City or the Lessor since the date hereof. This Official Statement and its distribution have been duly authorized and approved by the City Council. This Official Statement is submitted in connection with the sale of the Certificates and may not be reproduced or used, in whole or in part, for any other purpose, unless authorized in writing by the City. This Official Statement does not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the Certificates by any person in any jurisdiction in which it is unlawful for such person to make such an offer, solicitation or sale. No dealer, broker, salesperson or other person has been authorized to give any information or to make any representations other than those contained in this Official Statement. If given or made, such other information or representations must not be relied upon as having been authorized by the City, the Lessor or the Underwriter. This Official Statement is not to be construed as a contract with the purchasers of the Certificates. Statements contained in this Official Statement which involve estimates, projections, forecasts or matters of opinion, whether or not expressly so described herein, are intended solely as such and are not to be construed as representations of facts. IN CONNECTION WITH THE OFFERING OF THE CERTIFICATES, THE UNDERWRITER MAY OVERALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE CERTIFICATES OFFERED HEREBY AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME. THE UNDERWRITER MAY OFFER AND SELL THE CERTIFICATES TO CERTAIN DEALERS, INSTITUTIONAL INVESTORS AND OTHERS AT PRICES LOWER THAN THE PUBLIC OFFERING PRICES STATED ON INSIDE COVER PAGES HEREOF AND SAID PUBLIC OFFERING PRICES MAY BE CHANGED FROM TIME TO TIME BY THE UNDERWRITER. SF2-14290.5 CITY OF DUBLIN, CALIFORNIA City Council Peter W. Snyder Mayor David C. Burton Vice Mayor Lisbeth A. Howard Paul C. Moffatt Guy S. Houston CITY STAFF Richard C. Ambrose, City Manager Paul S. Rankin, Assistant City Manager Stanley F. Stephens, Jr. , Interim Finance Director Elizabeth H. Silver, City Attorney PROFESSIONAL SERVICES Brown & Wood San Francisco, California Special Counsel First Interstate Bank of California San Francisco, California Trustee First Trust California San Francisco, California Escrow Agent SF2-14290.5 J 'L TABLE OF CONTENTS Page INTRODUCTORY STATEMENT 1 THE REFUNDING PLAN 2 THE CERTIFICATES 2 General Provisions 2 Book-Entry Only System 3 Prepayments 7 Manner of Selection of Certificates for Prepayment . . 7 Notice of Prepayment 8 Trustee 8 Lease Payment Schedule 8 SECURITY FOR THE CERTIFICATES . . . . . . . . . . . . 9 General 9 Reserve Fund 10 Insurance 10 ESTIMATED SOURCES AND USES OF FUNDS 11 THE PROJECT 11 RISK FACTORS 12 Lease Not a General Obligation 12 City's Lease Payments 12 No Liability by the Lessor to the Owners 13 Limited Recourse on Default 13 Abatement 13 No Acceleration Upon Default 14 Insolvency or Bankruptcy of the Lessor 14 State Budget 14 CONSTITUTIONAL AND STATUTORY LIMITATIONS ON TAXES AND APPROPRIATIONS 14 Article XIII A of the California Constitution 14 Court Challenges to Article XIII A 15 Article XIII B of the California Constitution 16 Statutory Spending Limitations 17 ECONOMIC CONDITIONS IN CALIFORNIA 18 CITY OF DUBLIN FINANCIAL INFORMATION 19 City Budget 19 General Fund Financial Summary 19 City of Dublin Direct and Overlapping Bonded Debt Statement 21 CITY OF DUBLIN 22 General 22 City Growth 22 SF2-14290.5 Page Population 22 Labor Relations 23 Property Taxation 23 Economic Structure 24 Employment 24 Building and Construction 27 Community Facilities 27 Parks and Recreation 28 Hospitals 28 Churches 28 Financial Institutions 29 Education 29 Transportation 30 Utilities 30 LESSOR 30 UNDERWRITING 30 RATING 31 TAX MATTERS 31 VERIFICATION OF MATHEMATICAL ACCURACY 32 LITIGATION 32 The City 32 Richmond School District Case 33 APPROVAL OF LEGALITY 34 OTHER MATTERS 34 APPENDIX A - CITY OF DUBLIN AUDITED FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 1992 APPENDIX B - SUMMARIES OF PRINCIPAL LEGAL DOCUMENTS APPENDIX C - FORM OF OPINION OF SPECIAL COUNSEL SF2-14290.5 c• r. ._.—•_ ` . •\ ) . 1 1 r �. fa .•HEALDIC .... . ,... \, •• " t SANTA •L'' • i • • ROSH m •‘ILEBASTOPOL 1 e i t, ....-..r4. N. •,� NAM 1•�(•r `•i. •` � • AIRFED j∎,rETALUMA Z L I %� • '}}'S •••' SAN RAFAEL y•4,. i••�• , �.% ■KMMQeo t r •• _ t 'C •' :•�,; ./.`• •MI►LNUf CREEL(• • / r • •!•• . ...• .../•. • • -.N r10 •• •St LLt ...I• • • •' � �Y � �----. 1 ' •f _ ~� o►w DUBLIN,,i• s:ot RAMCSCO Y► 1y• • • I?• : k..,,,......:.„...•. ,,j, .. e SAN MATEO~�• - T/[MOAT ! 4 ' :; •1 f - :•.a SANTA CLARA• l / •� JO • SAN SE ,J N. 0 ISmi _.J �•` 1 J •X. 1 0 24 km . :•S •.•.. ., � L. Location Map - f~`r 4 • $ * CERTIFICATES OF PARTICIPATION (1993 Civic Center Refunding Project) Evidencing Direct, Undivided Proportionate Interests of the Owners. Thereof in Lease Payments to be Made by the CITY OF DUBLIN (Alameda County, California) INTRODUCTORY STATEMENT The following introductory statement is subject in all respects to the more complete information set forth in this Official Statement, including the cover page and the appendices hereto (the "Official Statement") . The descriptions and summaries of the Constitution and laws of the State of California or various documents hereinafter set forth do not purport to be comprehensive or definitive and are qualified in their entirety by reference to the complete provisions or documents. All capitalized terms used in this Official Statement and not otherwise defined herein shall have the same meanings as in the Trust Agreement (as defined herein) . This Official Statement sets forth certain information in connection with the offering of the Certificates of Participation (1993 Civic Center Refunding Project) (the "Certificates") in the aggregate principal amount of $ * to refund the City of Dublin 1988 Refunding Certificates of Participation (the "Refunded Certificates") . The Refunded Certificates were originally issued to (i) refund outstanding City of Dublin 1985 Certificates of Participation, and (ii) provide additional moneys to complete the City' s Civic Center ("the Project") . The Certificates evidence and represent direct, undivided proportionate interests of the registered owners thereof (the "Owners") in lease payments (the "Lease Payments") to be made by the City of Dublin (the "City' ) . to Dublin Information, Inc. (the "Lessor") as rental for the Project to be used by the City pursuant to a lease agreement, dated as of June 1, 1993 (the "Lease") , between the City and the Lessor. The rights of the Lessor to receive payments under the Lease will be assigned to First Interstate Bank of California, as trustee (the "Trustee") under an assignment agreement, dated as of June 1, 1993 (the "Assignment Agreement") , whereby the Lessor shall assign to the Trustee for the benefit of the Owners its rights (i) to receive Lease Payments payable by the City under the Lease and (ii) to enforce amounts payable upon default. In addition, under the trust agreement, dated as of June 1, 1993, among the City, the Trustee and the Lessor (the "Trust Agreement") , the Lease Payments are irrevocably pledged to the payment of the principal * Preliminary, subject to change. SF2-14290.5 1 � , and interest represented by the Certificates. The . Certificates are being executed and delivered pursuant to the Trust Agreement. In general, the City is required to pay to the Trustee all of the Lease Payments required under the Lease, subject to complete or partial abatement of such Lease Payments resulting from substantial interference with the use and possession by the City of the Project caused by damage, destruction or taking by eminent domain or condemnation thereof. See "RISK FACTORS" and "APPENDIX B - SUMMARIES OF PRINCIPAL LEGAL DOCUMENTS. " Under the Lease, the City is also required to pay any taxes, assessments, insurance premiums or maintenance and repair costs in connection with the Project. The City has also covenanted in the Lease to take such action as may be necessary to include the Lease Payments in its annual budgets and to make the necessary annual appropriations therefor following completion of the Project. For certain financial information with respect to the City, see "CITY OF DUBLIN FINANCIAL INFORMATION" and "APPENDIX A. " THE REFUNDING PLAN A portion of the proceeds of the Certificates, together with a portion of the monies deposited in funds and accounts established with respect to the Refunded Certificates, will be deposited in an irrevocable escrow fund (the "Escrow Fund") established by First Trust California, as escrow agent (the "Escrow Agent") pursuant to an escrow agreement, dated as of June 1, 1993 (the "Escrow Agreement") , between the City and the Escrow Agent. The Escrow Fund will be invested in bills, certificates of indebtedness, notes, bonds or similar securities which are direct obligations of, or the principal and interest of which securities are guaranteed by, the United States; the interest and principal payments from which will secure, and are calculated to provide sufficient funds to pay the principal of and interest and prepayment premium, if any, with respect to the Refunded Certificates on their respective payment or prepayment dates. The Escrow Agent is irrevocably committed to pay the principal and interest and prepayment premium, if any, represented by the Refunded Certificates when and as required, but only from monies available in the Escrow Fund. THE CERTIFICATES General Provisions The Certificates will be executed and delivered in the aggregate principal amount of $ . * The Certificates are deliverable in fully registered form in denominations of $5, 000 or any integral multiples thereof. Each Certificate will be dated June 1, 1993 and interest represented thereby will be payable from the February 1 or August 1 (each a * Preliminary, subject to change SF2-14290.5 2 "Certificate Payment Date") next preceding the date of execution thereof, unless: (a) it is executed as of a Certificate Payment Date, in which event interest represented thereby shall be payable from the date thereof; or (b) it is executed after the close of business on the fifteenth day of the month immediately preceding a Certificate Payment Date, in which event interest represented thereby shall be payable from such Certificate Payment Date; or (c) it is executed prior to the close of business on January 15, 1994, in which event interest represented thereby shall be payable from June 1, 1993 . The interest represented by the Certificates will be calculated from June 1, 1993, at the rates per annum set forth on the cover page hereof, payable semiannually on February 1 and August 1 of each year commencing. February 1, 1994, and will represent the sum of the portions of the Lease Payments designated as interest components coming due on the Certificate Payment Dates in each year. The principal represented by the Certificates will be payable, subject to prior prepayment, on February 1 in each of the designated years and in the principal amounts set forth on the cover page hereof. Book-Entry Only System The information in this section concerning DTC and DTC's book-entry only system has been obtained from sources that the Trustee, the City and the Underwriter believe to be reliable, but the Lessor, the Trustee, the City and the Underwriter take no responsibility for the accuracy thereof. The Beneficial Owners should confirm the following information with DTC and DTC Participants. The Depository Trust Company, New York, New York ("DTC") will act as securities depository for the. Certificates., The Certificates will be executed and delivered as fully-registered certificates registered in the name of Cede & Co. (DTC's partnership nominee) . One fully-registered certificate will be executed and delivered for each principal payment date of the Certificates, each in the aggregate principal amount due on such principal payment date, and will be deposited with DTC. DTC is a limited purpose trust company organized under the New York Banking Law, a "banking organization" within the meaning of the New York Banking Law, a member of the Federal Reserve System, a "clearing corporation" within the meaning of the New York Uniform Commercial Code, and a "clearing agency" registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934. DTC holds securities that its participants ("Participants"). deposit with DTC. DTC also facilitates the settlement among Participants of securities transactions, such as transfers and pledges, in deposited securities through electronic computerized book-entry changes in Participants' accounts, SF2-14290.5 3 thereby eliminating the need for physical movement of securities certificates. Participants include securities brokers and - dealers, banks, trust companies, clearing corporations and certain other organizations ("Direct. Participants") . DTC is owned by a number of its Direct Participants and by the New York Stock Exchange, Inc. , the American Stock Exchange, Inc. and the National Association of Securities Dealers, Inc. Access to the DTC system is also available to others such as securities brokers and dealers, banks, and trust companies that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly ("Indirect Participants") . The Rules applicable to DTC and its participants are on file with the Securities and Exchange Commission. Purchases of Certificates under the DTC system must be made by or through Direct Participants, which will receive a credit for the Certificates on DTC's records. The ownership interest of each actual purchaser of each Certificate ("Beneficial Owner") is in turn to be recorded on the Direct and Indirect Participants' records. Beneficial Owners will not receive written confirmation from DTC of their purchase, but Beneficial Owners are expected to receive written confirmations providing details of the transaction,, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the Certificates are to be accomplished by entries made on the books of Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive Certificates representing their ownership interests, except in the event that use of the book-entry system for the Certificates is discontinued. To facilitate subsequent transfers, all Certificates deposited by Participants with DTC are registered in the name of DTC' s partnership nominee, Cede& Co. The deposit of Certificates with DTC and their registration in the name of Cede & Co. effect no change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Certificates; DTC' s records reflect only the identity of the Direct Participants to whose accounts such Certificates are credited, which may or may not be the Beneficial Owners. The Participants will remain responsible for keeping account of their holdings on behalf of their customers. So long as Cede & Co. is the registered owner of the Certificates, as nominee of DTC, references herein to the holders or registered owners of the Certificates will mean Cede & Co. and will not mean the Beneficial Owners of the Certificates. Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by SF2-14290.5 4 arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. Redemption notices shall be sent to Cede & Co. If less than all of the Certificates within a maturity are being redeemed, DTC's practice is to determine by lot the amount of the interest of each Direct Participant in such issue to be redeemed. Neither DTC nor Cede & Co. will consent or vote with respect to the Certificates. Under its usual procedures, DTC mails an Omnibus Proxy to the issuer of the securities as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co. ' s consenting or voting rights to those Direct Participants to whose accounts the Certificates are credited on the record date (identified in a listing attached to the Omnibus Proxy) . Principal and interest payments with respect to the Certificates will be made. to DTC. DTC' s practice is to credit Direct Participants' accounts on the payable date in accordance with their respective holdings shown on DTC's records unless DTC has reason to believe that it will not receive payment on the payable date. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in "street name, " and will be the responsibility of such Participant and not of DTC, the Trustee, the Lessor or the City, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of principal and interest to DTC is the responsibility of the Lessor or the Trustee, fiscal agent or other designated agent, disbursement of such payments to Direct Participants shall be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners shall be the responsibility of Direct and Indirect Participants. DTC may discontinue providing its services as securities depository with respect to the Certificates at any time by giving reasonable notice to the Trustee and the City. Under such circumstances, in the event that a successor securities depository is not obtained, physical certificates are required to be printed and delivered. In the event the City and the Trustee determine not to continue the DTC book-entry only system or DTC determines to discontinue its services with respect to the Certificates and the City does not select another qualified securities depository, the City shall deliver one or more Certificates in such principal amount or amounts, in authorized denominations, and registered in whatever name or names, as DTC shall designate. In such event, transfers and exchanges of Certificates will be governed by the provisions of the Trust Agreement. AS LONG AS A BOOK-ENTRY ONLY SYSTEM IS USED FOR THE CERTIFICATES, THE TRUSTEE WILL SEND ANY NOTICE OF PREPAYMENT OR SF2-14290.5 5 3 • y OTHER NOTICES TO HOLDERS ONLY TO CEDE & CO. , AS NOMINEE OF DTC. ANY FAILURE OF DTC TO ADVISE ANY PARTICIPANT, OR OF ANY PARTICIPANT TO NOTIFY ANY BENEFICIAL OWNER, OF ANY NOTICE AND ITS CONTENT OR EFFECT WILL NOT AFFECT THE VALIDITY OR SUFFICIENCY OF THE PROCEEDINGS RELATING TO THE PREPAYMENT OF THE CERTIFICATES CALLED FOR PREPAYMENT OR OF ANY OTHER ACTION PREMISED ON SUCH NOTICE. THE CITY, THE LESSOR, THE UNDERWRITER AND THE TRUSTEE DO NOT HAVE ANY RESPONSIBILITY OR OBLIGATION TO DTC PARTICIPANTS, TO THE PERSONS FOR WHOM THEY ACT AS NOMINEES, OR TO ANY OTHER PERSON WHO IS NOT KNOWN ON THE REGISTRATION BOOKS AS BEING AN OWNER OF THE CERTIFICATES, WITH RESPECT TO (i) THE ACCURACY OF ANY RECORDS MAINTAINED BY DTC OR ANY PARTICIPANT; (ii) THE PAYMENT BY DTC OR ANY PARTICIPANT OF ANY AMOUNT IN RESPECT OF THE PRINCIPAL OF, PREPAYMENT PRICE OF OR INTEREST WITH RESPECT TO THE CERTIFICATES; (iii) THE DELIVERY OF ANY NOTICE WHICH IS PERMITTED OR REQUIRED TO BE GIVEN TO REGISTERED OWNERS UNDER THE TRUST AGREEMENT; (iv) THE SELECTION BY DTC OR ANY PARTICIPANT OF ANY PERSON TO RECEIVE PAYMENT IN THE EVENT OF A PARTIAL PREPAYMENT OF THE CERTIFICATES; (v) ANY CONSENT GIVEN OR OTHER ACTION TAKEN BY DTC AS REGISTERED OWNER; OR (vi) ANY OTHER. PURPOSE. THE CITY, THE LESSOR, THE UNDERWRITER AND THE TRUSTEE CANNOT AND DO NOT GIVE ANY ASSURANCES THAT DTC WILL DISTRIBUTE PAYMENTS TO PARTICIPANTS OR THAT PARTICIPANTS OR OTHERS WILL DISTRIBUTE PAYMENTS WITH RESPECT TO THE CERTIFICATES RECEIVED BY DTC OR ITS NOMINEES AS THE HOLDER OR ANY PREPAYMENT NOTICES OR OTHER NOTICES TO THE BENEFICIAL HOLDERS, OR THAT THEY WILL DO SO ON A TIMELY BASIS, OR THAT DTC WILL SERVICE AND ACT IN THE MANNER DESCRIBED IN THIS OFFICIAL STATEMENT. The foregoing description of the procedures and record keeping with respect to beneficial ownership interests in the Certificates, payment of principal, prepayment premium, if any, and interest with respect to the Certificates to DTC, its Participants or Beneficial Owners, confirmation and transfers of beneficial ownership interests in the Certificates and other related transactions by and between DTC, its Participants and the Beneficial Owners is based solely on the City' s and the Trustee's understanding of such procedures and record keeping from information provided by DTC. Accordingly, no representations can be made concerning these matters and neither DTC, its Participants nor the Beneficial Owners should rely on the foregoing information with respect to such matters, but should instead confirm the same with DTC or its Participants, as the case may be. The City and the Trustee understand that the current "Rules" applicable to DTC are on file with the Securities and Exchange Commission and that the current "Procedures" of DTC to be followed in dealing with Participants are on file with DTC. SF2-14290.5 6 Y Prepayments Prepayment from Net Proceeds. The Certificates are subject to mandatory prepayment prior to their respective maturity dates, in whole or in part on any date, from the proceeds of insurance or taking by eminent domain or condemnation credited towards the prepayment of the Lease Payments by the City pursuant to the Lease, at a prepayment price equal to the principal amount thereof together with accrued interest to the date fixed for prepayment, without premium. Optional Prepayment. The Certificates maturing on or after February 1, 1999 are also subject to prepayment prior to their respective maturity dates, in whole or in part on any date on or after February 1, 1998, at the option of the City, in the event the City exercises its option under the Lease to prepay in whole or in part the principal component of the Lease Payments in order to cause prepayment in whole or in part of such Certificates, at the prepayment prices, expressed as percentages of the principal amount of such Certificates to be prepaid, set forth in the following table, together with accrued interest to the date fixed for prepayment: Redemption Period Redemption Price February 1, 1998 through January 31, 1999 101% February 1, 1999 and thereafter 100 Mandatory Sinking Account Redemption. The Certificates maturing on February 1, 20_, are subject to redemption prior to maturity in part, by lot, at the principal amount thereof plus accrued interest to the date of redemption, without premium, from mandatory sinking account payments on February 1 of each year on or after February 1, , at the respective principal amounts . specified for each of the years set forth below: Mandatory Sinking Account Mandatory Sinking Payment Dates (February 1) Account Payments Manner of Selection of Certificates for Prepayment Whenever less than all of the outstanding Certificates are called for prepayment, the Trustee will select Certificates for prepayment in authorized denominations in such order of maturities as shall be selected by the City, and by lot within any maturity. The Trustee will promptly notify the City in writing of the Certificates selected for prepayment. SF2-14290.5 7 S [ Notice of Prepayment Notice of prepayment will be mailed by first class mail, postage prepaid, to the Owners of Certificates designated for prepayment at their addresses appearing on the Certificate registration books,. at least 30 days but not more than 60 days prior to the prepayment date; provided that neither failure to receive such notice nor any defect in any notice so mailed will affect the sufficiency of the proceedings for the prepayment of such Certificates. Trustee First Interstate Bank of California, San Francisco, California, has been appointed as Trustee. The Trustee will receive all of the proceeds of the Certificates and will disburse such proceeds in conformity with the Trust Agreement. In addition to holding and administering various funds of the City, the Trustee will invest the funds held in trust and will be the recipient of the Lease Payments payable by the City for the Project. The Trustee will also act as paying agent for the purpose of disbursing payments of interest and principal represented by the Certificates. The Trustee will act as certificate registrar and will execute all Certificates. Lease Payment Schedule Lease Payments are required to be paid by the City under the Lease on each January 25 and July 25 (or if such day is not a Business Day (as defined in the Trust Agreement) , the immediately preceding Business Day) , commencing January 25, 1994. Pursuant to the Trust Agreement, the Lease Payments will be deposited in the Lease Payment Fund and applied to pay the principal and interest represented by the Certificates in accordance with the following schedule: Certificate Principal Interest Total Payment Dates Component Component Payment Total S S S * Represents mandatory prepayments. ** Final Certificate Payment Date. SF2-14290.5 8 SECURITY FOR THE CERTIFICATES General Each Certificate represents a direct, undivided proportionate interest in Lease Payments to be made by the City to the Lessor under the Lease. The Lessor, pursuant to the Assignment Agreement and the Trust Agreement, has assigned all its rights to receive Lease Payments under the Lease to the Trustee for the benefit of the Owners of the Certificates. Additionally, under the Trust Agreement, the Lease Payments are irrevocably pledged to the payment of the principal and interest represented by the Certificates. Lease Payments are subject to complete or partial abatement, however, in the event of loss or substantial interference in the use and possession of all or any portion of the Project by the City caused by damage, destruction, taking by eminent domain or condemnation of the Project. In the case of damage or destruction, the amount of abatement will be agreed upon by the City and the Lessor, or alternatively, determined by an independent market valuation such that the resulting Lease Payments represent fair consideration for the use and occupancy of the portions of the Project not damaged or destroyed. Such abatement shall continue for the period commencing with the date of such damage, destruction or taking and ending with the substantial completion of the replacement or work or repair of the Project. Additional lease payments due from the City to the Trustee include amounts sufficient to pay certain taxes and assessments charged with respect to the Project and administrative costs of the Lessor. The City is also responsible for repair and maintenance of the Project during the term of the Lease. THE CITY HAS COVENANTED IN THE LEASE TO TAKE SUCH ACTION AS MAY BE NECESSARY TO INCLUDE ALL SUCH LEASE PAYMENTS IN ITS ANNUAL BUDGETS AND TO MAKE THE NECESSARY ANNUAL APPROPRIATIONS THEREFOR. SUCH OBLIGATION AND THE OBLIGATION TO MAKE LEASE PAYMENTS DO NOT CONSTITUTE DEBTS OF THE CITY, THE STATE OF CALIFORNIA OR ANY POLITICAL SUBDIVISION THEREOF WITHIN THE MEANING OF ANY CONSTITUTIONAL OR STATUTORY DEBT LIMITATION NOR OBLIGATIONS OF THE CITY FOR WHICH THE CITY IS OBLIGATED OR PERMITTED TO LEVY OR PLEDGE ANY FORM OF TAXATION OR FOR WHICH THE CITY HAS LEVIED OR PLEDGED ANY FORM OF TAXATION. Should the City default in its payment obligation under the Lease or an event of default otherwise occurs under the Lease, the Trustee, as assignee of the Lessor, may retain the Lease and hold the City liable for all Lease Payments on an annual basis and have the right to re-enter and re-let the Project. Such re-entry and re-letting will not effect a surrender of the Lease. Alternatively, the Trustee may terminate the Lease and proceed against the City to recover damages pursuant to the Lease. No assurance can be given that the Trustee will be able to re-let the Project so as to provide rental income sufficient to make SF2-14290.5 9 principal and interest payments with respect to the Certificates in a timely manner, and the Trustee is not empowered to sell the Project for the benefit of the Owners of the Certificates. See "RISK FACTORS - Limited Recourse on Default. " Reserve Fund A Reserve Fund (the "Reserve Fund") will be established with the Trustee pursuant to the Trust Agreement and will be funded from proceeds of the Certificates in an amount initially equal to $ . All moneys at any time on deposit in the Reserve Fund shall be held by the Trustee in trust for the benefit of the City and for the benefit of the Owners of the Certificates, as a reserve for the payment when due of all the Lease Payments and prepayments to be paid pursuant to the Lease and of all payments on the Certificates and applied solely as provided in the Trust Agreement. Upon receipt of any delinquent Lease Payment with respect to which monies have been advanced from the Reserve Fund, such Lease Payment, to the extent it is not needed to pay interest and principal components payable to the Certificate Owners on the next Certificate Payment Date, will be deposited in the Reserve Fund to the extent of such advance. The City does not otherwise have an obligation to restore the Reserve Fund in the event moneys are withdrawn therefrom. The City may satisfy its obligations under the Reserve Fund at any time by the deposit in the Reserve Fund of a surety bond, an insurance policy or letter of credit, or any combination thereof, pursuant to the Trust Agreement. Upon receipt of any delinquent Lease Payment with respect to which monies have been drawn against such surety bond, insurance policy or letter of credit, such Lease Payment, to the extent it is not needed to pay interest and principal components payable to the Certificate Owners on the next Certificate Payment Date, will be used, prior to any possible deposit in the Reserve Fund as described in the preceding paragraph, to reimburse the provider of any such surety bond, insurance policy or letter of credit. Insurance The Lease requires the City to maintain fire, lightning and extended coverage insurance on the Project in an amount equal to the lesser of (a) the aggregate principal amount of the outstanding certificates, or (b) the replacement cost of the Project (subject to a deductible clause of not to exceed $100, 000 for any one loss) . Such fire, lightning and extended coverage insurance may be maintained in whole or in part in the form of self-insurance by the City. Under the terms of the Lease, the City must annually file a statement by its risk manager or an independent insurance advisor identifying the extent of such self-insurance and stating the determination that the City maintains sufficient reserves with respect thereto. In the event that any such insurance shall sae-14290.5 10 be provided in the form of self-insurance by the City, the City shall not be obligated to make any payment with respect to any insured event except from such reserves. Under the terms of the Lease, the City is also required to maintain rental interruption or use and occupancy insurance on the Project to cover a partial or total loss of the use of the Project in an amount at least equal to the maximum Lease Payments payable during any two consecutive Fiscal Years. The Lease does not require that the City maintain earthquake insurance on the Project. At this time, the City does not maintain earthquake insurance due to its determination that such insurance is not available at a reasonable cost. However, the City intends to reevaluate its options in the event such coverage subsequently becomes available at a reasonable cost from a reputable insurance company. There is no assurance, however, that earthquake insurance will be available or obtained. The Project, in any case, was designed to meet the stringent seismic building standards of the State of California (the "State") regarding an "Essential Service Facility" as well as the seismic building standards of [BOND INSURER] . See "THE PROJECT. " ESTIMATED SOURCES AND USES OF FUNDS The proceeds to be received from the sale of the Certificates (excluding accrued interest) and certain monies relating to the Refunded Certificates are anticipated to be applied as follows: Sources of Funds Principal Amount of Certificates $ Refunded Certificates Funds Total Sources $ Uses of Funds Deposit to the Escrow Fund $ Deposit to Reserve Fund Underwriter' s Discount Original Issue Discount Costs of Issuance Total Uses $ THE PROJECT The Dublin Civic Center (the "Project") is located on a 10-acre site in the City, adjacent to a 23-acre sports park, near the intersection of Interstate 580 and Interstate 680. The 53, 000 square-foot Project consists of two semi-circular wings with a central courtyard. One wing contains a City Council chamber, administrative offices, and a regional meeting room. The second wing is designed as a police facility, and contains a SB2-14290.5 11 dispatch area, administrative offices, evidence room, training area, emergency operations center and other support facilities. The Project was dedicated and occupied in October of 1989 . The unique design of the Project resulted in a Merit Award for "Best Public or Private Special Use" from the Pacific Coast Builders Conference. The awards program covered entries from the 14 western states. The Project grounds have also become a focal point for the display of public art. Dublin Fine Arts Foundation (the "Foundation") , a private entity, has arranged for the temporary public display of large scale sculptures on loan from various artists. In addition, the Foundation commissioned a mosaic sculpture, by New York artist Ned Smyth, which is the centerpiece of the interior courtyard and was presented as a gift to the City. As a public building which includes a police facility, it was important for the structural design of the Project to meet the State' s stringent seismic building code regulations. The structural design was based upon a detailed geotechnical investigation which analyzed the seismic response of the site. This data was used by the structural engineer in designing a facility to comply with the State building code requirements for an "Essential Service Facility. " [Add appropriate language regarding standards required by Bond Insurer. ] RISK FACTORS The following factors, along with the other information in this Official Statement, should be considered by potential investors in evaluating a purchase of the Certificates. Lease Not a General Obligation The obligation of the City to make Lease Payments does not constitute an obligation of the City for which the City must levy or pledge any form of taxation or for which the City has levied or pledged any form of taxation, nor does it constitute a debt or indebtedness of the City, the State of California or any of its political subdivisions, within the meaning of any constitutional or statutory debt limitation or restriction. City's Lease Payments The City' s Lease Payments and other payments due under the Lease (including payment of costs of improvements, repair and maintenance of the Project, taxes and other governmental charges and assessments levied against the Projects) are not secured by any pledge of taxes or other revenues of the City, but are payable from any funds lawfully available to the City. In the event the City's revenue sources are less than its total obligations, the City could choose to fund other municipal SF2-14290.5 12 services before making Lease Payments. The same result could occur if, because of State Constitutional limits on expenditures, the City is not permitted to appropriate and spend all of its available revenues. For a discussion of the City' s current appropriation limits, see "CONSTITUTIONAL AND STATUTORY LIMITATIONS ON TAXES AND APPROPRIATIONS. " No Liability by the Lessor to the Owners Except as expressly provided in the Trust Agreement, the Lessor shall not have any obligation or liability to the Owners of the Certificates with respect to the payment when due of the Lease Payments by the City, or with respect to the observance or performance by the City of other agreements, conditions, covenants and terms required to be observed or performed by it contained in the Lease or the Trust Agreement, or with respect to the performance by the Trustee of any obligation required to be performed by it contained in the Trust Agreement. Limited Recourse on Default If the City defaults on its obligations to make Lease Payments with respect to the Project, the Trustee, as assignee of the Lessor, may retain the Lease and hold the City liable for all Lease Payments on an annual basis and will have the right to re-enter and re-let the Project. Such re-entry and re-letting will not effect a surrender of the Lease. Alternatively, the Trustee may terminate the Lease and proceed against the City to recover damages pursuant to the Lease. No assurance can be given that the Trustee will be able to re-let the Project so as to provide rental income sufficient to make principal and interest payments with respect to the Certificates in a timely manner, and the Trustee is not empowered to sell the Project for the benefit of the Owners of the Certificates. Moreover, due to the governmental function of the Project, it is not certain whether a court would permit the exercise of the remedies of repossession and re-letting with respect thereto. Any suit for money damages would be subject to limitations on legal remedies against cities in California, including a limitation on enforcement of judgments against funds needed to serve the public welfare and interest. See "APPENDIX B - SUMMARIES OF PRINCIPAL LEGAL DOCUMENTS - - The Lease - - Default by City. " Abatement In the event of loss or substantial interference in the use and possession of all or any portion of the Project by the City caused by damage or destruction to or taking by eminent domain or condemnation of the Project, Lease Payments will be subject to abatement. In the event the Project, if damaged or destroyed by an insured casualty, could not be replaced during the period of time that proceeds of the City's rental interruption insurance will be available in lieu of Lease Payments plus the period for which funds are available from the Reserve Fund, or in the event SF2-14290.5 13 that casualty insurance proceeds or condemnation proceeds are insufficient to provide for complete repair or replacement of the Project or prepayment of the Certificates, there could be insufficient funds to cover payments to Owners in full. No Acceleration Upon Default If the City defaults on its obligations to make Lease Payments, the Trustee may have limited ability to re-let the Project so as to preserve the tax-exempt nature of the interest component of the Lease Payments and the Certificates. In the event of a default, there is no available remedy of acceleration of the total Lease Payments due over the term of the Lease. The City will only be liable for Lease Payments on an annual basis, and the Trustee would be required to seek a separate judgment each Fiscal Year for that Fiscal Year's Lease Payments. Insolvency or Bankruptcy of the Lessor Title to the Project will be held by the Lessor throughout the term of the Lease. Therefore, the title to the Project may be considered property of the estate of the Lessor which may be disposed of by a bankruptcy court in the event of a bankruptcy, insolvency or similar proceeding by or against the Lessor. State Budget The State of California (the "State") experienced a significant budget deficit for the 1991-92 Fiscal Year and according to a October 15, 1992 report issued by the Commission on State Finance, is projected to face a total deficit at June 30, 1993 of $2 .4 billion if no corrective action is taken. The State's budget problems may decrease the City's share of property tax revenues from the State. See "ECONOMIC CONDITIONS IN CALIFORNIA. " CONSTITUTIONAL AND STATUTORY LIMITATIONS ON TAXES AND APPROPRIATIONS Article XIII A of the California Constitution Section 1 (a) of Article XIII A of the California Constitution limits the maximum ad valorem tax on real property to 1% of full cash value (as defined in Section 2 of Article XIII A) , to be collected by each county and apportioned among the county and other public agencies and funds according to law. Section 1 (b) of Article XIII A provides that the 1% limitation does not apply to ad valorem taxes to pay interest or redemption charges on (1) indebtedness approved by the voters prior to July 1, 1978 or (2) any bonded indebtedness for the acquisition or improvement of real property approved on or after July 1, 1978, by two-thirds of the votes cast by the voters voting on the proposition. Section 2 of. Article XIII A defines "full cash value" to mean "the County Assessor's valuation of SF2-14290.5 14 real property as shown on the 1975/76 tax bill under `full cash value' or, thereafter, the appraised value of real property when purchased, newly constructed or a change in ownership has occurred after the 1975 assessment. " The full cash value may be adjusted annually to reflect inflation at a rate not to exceed 2% per year or to reflect a reduction in the consumer price index or comparable data for the. area under the taxing jurisdiction, or reduced in the event of declining property values caused by substantial damage, destruction or other factors. Legislation enacted by the State Legislature to implement Article XIII A provides that notwithstanding any other law, local agencies may not levy any ad valorem property tax except to pay debt service on indebtedness approved by the voters as described above. In the June 1990 election, the voters of the State approved amendments to Article XIII A permitting the State Legislature to extend the replacement dwelling provisions applicable to persons over 55 to severely disabled homeowners for a replacement dwelling purchased or newly constructed on or after June 5, 1990, and to exclude from the definition of "new construction". triggering reassessment improvements to certain dwellings for the purpose of making the dwelling more accessible to severely disabled persons . In the November 1990 election, the voters of the State approved an amendment of Article XIII A to permit the State Legislature to exclude from the definition of "new construction" seismic retrofitting improvements or improvements utilizing earthquake hazard mitigation technologies constructed. or installed in existing buildings after November 6, 1990. Court Challenges to Article XIII A In early 1989, the United States Supreme Court struck down as a violation of equal protection certain property tax assessment practices in West Virginia which had resulted in vastly different assessments of similar properties. Since Article XIII A provides that property may only be reassessed up to 2% per year, except upon change of ownership or new construction, recent purchasers may pay substantially higher property taxes than long-time owners of comparable property in a community. The Supreme Court in the West Virginia case expressly declined to comment in any way on the constitutionality of Article XIII A. Based on this decision, however, property owners in California brought three suits challenging the acquisition value assessment provisions of Article XIII A. Two cases involved residential property, and one case involved commercial property. In all three cases, State trial and appellate courts upheld the constitutionality of Article XIII A's assessment rules and concluded that the West Virginia case did not apply to California' s laws. On June 3, 1991 the United States Supreme Court agreed to hear the appeal in the challenge relating to commercial property, but the plaintiff subsequently decided to drop the case. SF2-14290.5 15 On June 18, 1992 the United States Supreme Court announced its decision in the case of Nordlinger vs. Hahn (one of the cases involving residential property) and upheld by an 8 to 1 majority the constitutionality of Article XIII A's method of assessing property. The majority held that the assessment method serves a rational state interest by providing certainty regarding property taxes to homeowners and therefore does not violate provisions of the Equal Protection Clause codified in the 14th Amendment of the U.S. Constitution. The City cannot predict whether future challenges to the State' s present system of property tax assessment will be made, when the ultimate resolution of any challenge will occur or the ultimate effect any decision holding the State' s present system of property tax assessment unconstitutional would have on the City's revenues. One possible outcome of a decision to invalidate Article XIII A would be a decrease in the amount of property tax revenues paid to the City. Such a decrease could have a negative impact on the City' s ability to pay Lease Payments when due. Article XIII B of the California Constitution Article XIII B of the California Constitution limits the annual appropriations of the State and of any city, county, school district, authority or other political subdivision of the State to the level of appropriations for the prior fiscal year, as adjusted for changes in the cost of living, population and services for which the fiscal responsibility is shifted to or from the governmental entity. The "base year" for establishing this appropriations limit is the 1978-79 fiscal year and the limit is adjusted annually to reflect changes in population, consumer prices and certain increases or decreases in the cost of services provided by these public agencies. Appropriations of an entity of local government subject to Article XIII B generally include any authorizations to expend during a fiscal year the proceeds of taxes levied by or for the entity, exclusive of certain State subventions, refunds of taxes and benefit payments from retirement, unemployment insurance and disability insurance funds. "Proceeds of taxes" include, but are not limited to, all tax revenues, most State subventions and the proceeds to the local government entity from (1) regulatory licenses, user charges, and user fees (to the extent that such proceeds exceed the cost reasonably borne by such entity) and (2) the investment of tax revenues. Article XIII B provides that if a governmental entity's revenues in any year exceed the amounts permitted to be spent, the excess must be returned by revising tax rates or fee schedules over the subsequent two years. Article XIII B does not limit the appropriation of moneys to pay debt service on indebtedness existing or authorized as of January 1, 1979, or for bonded indebtedness approved thereafter sFZ-14290.6 16 by a vote of the electors of the issuing entity at an election held for that purpose. In the June 1990 election, the voters of the State approved Proposition 111, which amended the method of calculating State and local appropriations limits. Proposition 111 made several changes to Article XIII B, three of which are reflected in the City's 1992-93 computation of its appropriations limit. First, the term "change in the cost of living" was redefined as the change in the California per capital personal income ( "CPCPI") from the preceding year. Previously the lower of the CPCPI or the United States Consumer Price Index was used. Second, the appropriations limit for the fiscal year was recomputed by adjusting the 1986-87 limit by the CPCPI for the three subsequent years. Third, Proposition 111 excluded appropriations for "all qualified capital outlay projects, as defined by the Legislature" from the definition of "appropriations subject to limitation. " At the time of preparing the Fiscal Year 1992-93 Budget, the City calculated its appropriations limit at $18, 978, 048. The 1992-93 Fiscal Year Budget adopted by the City included appropriations of $11, 339, 844 which were subject to the limit. Therefore, the City has extensive appropriations capacity available prior to reaching the legal appropriations limit for this fiscal year. The impact of the appropriations limit on the City's financial needs in the future is unknown. Statutory Spending Limitations A statutory initiative ( "Proposition 62") was adopted by the voters of the State at the November 4, 1986 General Election which (1) requires that any tax for general governmental purposes imposed by local governmental entities be approved by resolution or ordinance adopted by two-thirds vote of the governmental agency' s legislative body and by a majority of the electorate of the governmental entity, (2) requires that any special tax (defined as taxes levied for other than general governmental purposes) imposed by a local governmental entity be approved by a two-thirds vote of the voters within the jurisdiction, - (3) restricts the use of revenues from a special tax to the purposes or for the service for which the special tax is imposed, (4) prohibits the imposition of ad valorem taxes on real property by local governmental entities except as permitted by Article XIII A, (5) prohibits the imposition of transaction taxes and sales taxes on the sale of real property by local governmental entities and (6) requires that any tax imposed by a local governmental entity on or after March 1, 1985 be ratified by a majority vote of the electorate within two years of the adoption of the initiative or be terminated by November 15, 1988 . Several recent decisions of State Courts of Appeal have held that all or portions of the provisions of Proposition 62 are unconstitutional. SF2-14290.5 17 The City cannot predict the outcome of the litigation concerning the validity of Proposition 62 . If ultimately found valid, however, Proposition 62 could affect the ability of the City to continue the imposition of, or retain, certain taxes, such as sales and transient occupancy taxes, and further restrict the City' s ability to raise revenue. ECONOMIC CONDITIONS IN CALIFORNIA Since the start of the 1990-91 Fiscal Year, the State has faced its worst economic, fiscal, and budget conditions since the 1930' s. The recession has seriously affected State tax revenues, which basically mirror economic conditions. It has caused increased expenditures for health and welfare programs. In addition, the State is facing a structural imbalance in its budget, with the largest programs supported by its General Fund (health, welfare, K-14 education and corrections) growing at rates significantly higher than the growth rates for the principal revenue sources of the General Fund. As a result, the State has entered a period of chronic budget imbalances; the State Controller reports that expenditures exceeded revenues for four of the last five fiscal years. By June 30, 1992, according to the State Department of Finance, the State General Fund had an accumulated deficit, on a budget basis, of approximately $2 .2 billion. Additionally, because of a delay in the adoption of a State Budget and because available cash resources were insufficient to pay State obligations due through June 30, 1992, the State issued registered warrants in the amount of $475 million to cover the shortfall. As a result of the deterioration in the State' s budget and cash situation and the delay in adoption of the 1992-93 State Budget, the rating on the State' s general obligation bonds was reduced by Standard & Poor's Corporation from "AAA" to "A+, " by Moody' s Investors Service from "Aaa" to "Aa, " and by Fitch Investors Service, Inc. from "AAA" to On October 15, 1992, the Commission on State Finance (the "Commission") issued its quarterly forecast, predicting that the State economy' s stagnant condition could continue for up to two or more years. The Commission concluded that the State could face a total deficit at June 30, 1993 of about $2 .4 billion if no corrective actions were taken during the fiscal year. The Governor's Budget proposal for the 1993-94 Fiscal Year, released on January 8, 1993 (the "Governor' s Budget") , confirmed the earlier forecasts about the State' s economy. According to the Governor' s Budget, recovery from the recession will begin only in late 1993 or 1994, and the Governor's Budget predicted the General Fund will end the 1992-93 Fiscal Year with a deficit of $2 .1 billion, compared to a $2 .2 billion deficit at June 30, 1992 . The Governor' s Budget identifies an estimated $2. 6 billion decrease from current levels in funding for counties, cities and SF2-14290.5 18 special districts. Under the proposed budget, approximately $2 . 075 billion in property tax revenue is proposed to be shifted from cities, counties and special districts. In the 1992-93 Fiscal Year, $1.1 billion in permanent property tax shifts from local governments to schools resulted in a loss of approximately $349 , 100 in City tax revenues. The Governor' s Budget represents the initial stage of the 1993-94 Fiscal Year budget negotiations, and the City cannot predict which, if any, of the provisions with respect to the local governments will be included in the 1993-94 Fiscal Year budget as finally enacted. CITY OF DUBLIN FINANCIAL INFORMATION City Budget The City adopts a final budget annually by June 30 for the following fiscal year. The City Manager prepares a proposed budget which is presented to the Council . The proposed budget may be modified by the City Council of the City (the "Council") during the budget hearing process. After the hearings, a final budget is adopted. Throughout the fiscal year, all revenues and appropriations are subject to review and since the budget must remain in balance, any overall reduction in revenues would require a reduction in appropriations. General Fund Financial Summary The information contained in the following table is summarized from audited financial statements for fiscal years 1989-90 through 1991-92 . SF2-14290.5 19 CITY OF DUBLIN STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES GENERAL FUND FOR THE YEARS ENDED JUNE 30, 1990, 1991 AND 1992 REVENUES 6/30/90 6/30/91 6/30/92 Taxes $9, 662, 335 $10,204, 052 $9,700,250 Licenses and permits 315, 010 248, 116 246,459 Intergovernmental 932, 834 973,266 864, 647 Charges for Services 1, 090,386 1, 196,484 939, 833 Use of Money and Property 1,333, 673 1,338,947 1, 038,503 Fines and Forfeitures 19,415 19,476 25, 780 Other Revenues 20, 609 290. 254 310, 851 $13, 374,262 $14,270,595 $13, 126,323 EXPENDITURES General Government $1, 335, 881 $2, 010, 105 $3,335,919 Facilities Rent 706, 909 1,579,472 (1) Public Safety 4,420,424 4, 800,963 5,404, 855 Highways and Streets 519, 166 837, 547 841,414 Health and Welfare 24, 580 26,277 29,526 Community Development 1, 566, 774 1, 827,354 1,438,474 Culture and Leisure 1,250, 106 1,459,419 1, 682,262 Capital Outlay 1, 169, 032 848,439 231, 877 $10, 992, 872 $13, 389,576 $12,964,327 Revenue in Excess or <less> than Expenditures $2,381, 390 $881, 019 $161,996 Other Financing Sources (uses) Operating transfers in 849,435 15, 023 Operating transfers out (75, 524) (4. 174) (50, 064) $ 773, 911 $ (4, 174) $ (35, 041) REVENUES AND OTHER FINANCING SOURCES IN EXCESS OR (LESS) THAN EXPENDITURES AND OTHER USES $ 3, 155, 301 $ 876, 845 $126,955 FUND BALANCE TRANSFER (67, 747) (13, 001) FUND BALANCE BEGINNING 11, 376,484 14,464, 038 15,327. 882 FUND BALANCE END OF YEAR $14,464, 038 $15, 327, 882 $15,454, 837 Source: Compiled from the City's financial statements for the individual years. (1) Facilities rent for the fiscal year ended June 3,0, 1992 has been accounted for in the City's Enterprise Fund, as detailed in the financial statements attached hereto as Appendix A. A copy of the City' s Audited General Purpose Financial Statements for the fiscal year ended June 30, 1992 is attached as Appendix A to this Official Statement. Audited financial statements for prior years are available upon request from the Finance Department of the City. SF2-14290.5 20 The following table has been obtained from California Municipal Statistics, Inc. The City and the Underwriter believe the information to be reliable, but take no responsibility for the accuracy thereof. CITY OF DUBLIN DIRECT AND OVERLAPPING BONDED DEBT STATEMENT 1992-93 Assessed Valuation: $1,470,529,568 DIRECT AND OVERLAPPING BONDED DEBT: % Applicable Debt 6/1/93 Alameda County Authorities 2.194% $ 7,378,620 Alameda County Superintendent of Schools Certificates of Participation 2.194 162,137 Oakland-Alameda County Coliseum Authority 1.097 140,361 Bay Area Rapid Transit District 0.856 2,400,438 Alameda County Flood Control District, Zone#7 12.946 55,021 Dublin Joint Unified School District 99.539 3,404,234 Dublin Joint Unified School District Certificates of Participation 99.539 77,640 Amador Valley Joint Union High School District 99.539 22,638 Murray School District 99.539 239,327 East Bay Regional Park District 1.263 1,476,700 City of Dublin 1988 Certificates of Participation 100. 15,895,000(1) City of Dublin 1915 Act Bonds 100. 2.790.000 TOTAL GROSS DIRECT AND OVERLAPPING BONDED DEBT $34,042,116(2) Less: Oakland-Alameda County Coliseum Authority(100% self-supporting) 140.361 TOTAL NET DIRECT AND OVERLAPPING BONDED DEBT $33,901,755 (1) Excludes refunding certificates of participation to be sold. (2) Excludes tax and revenue anticipation notes, revenue, mortgage revenue and tax allocation bonds and non-bonded capital lease obligations. Ratio to Assessed Valuation: Direct Debt 1.08% Total Gross Debt 2.31% Total Net Debt 2.31% STATE SCHOOL BUILDING AND AID REPAYABLE AS OF 6/30/92: $889,141 Source: California Municipal Statistics, Inc. sae-14290.5 21 CITY OF DUBLIN General The City of Dublin is located in the Tri-Valley in Alameda County. The City is bordered to the south by the City of Pleasanton and to the north by the City of San Ramon. The City is 35 miles southeast of San Francisco, 395 miles north of Los Angeles and is within a twenty-five minute drive from San Jose and Oakland. The City was incorporated on February. 1, 1982 and is governed by a Council-Manager form of government. The City Council consists of five members which includes a directly- elected Mayor and four City Councilmembers. The Mayor is elected to a two-year term, while each City Councilmember serves a four- year term. Interstate Freeways 580 and 680 intersect in Dublin and allow easy access to the stable economy of the East Bay. Residential areas are located 125 to 360 feet above sea level with average temperatures of 80° in the summer and 60° in the winter. City Growth At the time of its incorporation in 1982, the City covered 4.1 square miles. Since that time, the City has annexed 434 acres of land to the west which is primarily residential in nature and 2, 713 .47 acres of primarily governmentally-owned land to the east and now covers 9 . 02 square miles. The City is nearing completion of a General Plan Amendment, covering approximately 10 . 8 square miles of largely undeveloped land. Approximately five square miles are covered by a Specific Plan, which is being processed concurrently with the General Plan Amendment. The draft plans being considered provide for a fully integrated community including residential sites, commercial and employment generating properties, schools, public buildings, parks, and open space. Population The following table presents population data for the City, Alameda County and the State of California since 1988 . SF2-14290.5 22 CITY, COUNTY AND STATE POPULATION DATA City of Alameda State of Year Dublin County California 1988 20, 035 1,242,300 28, 060, 746 1989 21,420 1,261, 172 28,771,207 1990 23,229 1,279, 182 29, 760, 021 1991 23,450 1,290, 800 30,321, 000 1992 25, 150 1, 313, 300 30,989, 000 Sources: 1990 - - U.S. Census. 1988, 1989, 1991 and 1992 -- California State Department of Finance. Labor Relations The City provides many traditional municipal services through contracts with both public and private entities. This allows the City to operate with a small staff of only 36 full- time positions. The Recreation Department supplements its regular staff with between 30-35 seasonal/part-time employees. Approximately 50 contract employees provide a variety of municipal services from City facilities. The City does not have any labor organizations which represent City employees. Property Taxation City property taxes are assessed and collected by Alameda County (the "County") at the same time and on the same rolls as the property taxes are collected for the County, special districts and school districts. Assessed valuations are based upon 1008 of market value at the time of sale and are limited to an increase of two percent per year. The value of improvements to property is added to assessed value at 100 percent of cost. For assessment and collection purposes, property is classified either as "secured" or "unsecured" , and is listed, accordingly, on separate parts of the assessment roll. The "secured roll" is that part of the assessment roll containing State assessed property, and property the taxes on which are a lien on real property, sufficient, in the opinion of the County Assessor, to secure payment of the taxes. All other property is assessed on the "unsecured roll. " The following table presents a summary of assessed valuations in the City for fiscal years 1988-89 through 1992-93 . sF2-14290.5 23 CITY OF DUBLIN ASSESSED VALUATIONS Fiscal Year Secured Unsecured State Board Exemptions Net Valuation 1988-89 $ 994,060,509 $84,480,331 $1,812,200 $31,333,584 $1,049,019,456 1989-90 1,127,686,003 95,509,285 1,812,200 41,999,100 1,183,008,388 1990-91 1,239,883,439 91,617,815 4,536,700 45,607,493 1,290,430,461 1991-92 1,331,220,658 93,627,706 4,536,700 46,860,508 1,382,524,556 1992-93 1,391,658,878 93,080,521 4,536,700 48,041,531 1,441,234,568 Source: Auditor-Controller of Alameda County. Economic Structure The City has approximately 800 commercial businesses serving the Tri-Valley area ranging from large department stores and discount stores to small individualized service stores. The Stoneridge Shopping Center is located across Interstate 580 approximately one mile from the City. Employment The following table shows the major employers in the City. CITY OF DUBLIN MAJOR EMPLOYERS Employer Industry Employees County of Alameda County Jail 500 Dublin Unified School District Education 375 Lucky Store Inc. Headquarters for Retail Grocery Co. 300 Hexcel Corporation Mfg. Honeycomb Resins, Adhesives & Glass 300 United States Dept. of Justice Federal Correctional Institute 295 Smith-Kline Beecham Medical Laboratory 201 Unisource Wholesale Paper Products Distribution 200 Montgomery Wards Department Store 190 Target Stores Retail Department Store 167 Mervyn's Department Store 115 Tele-Vue Systems, Inc. Cable Television 100 Shamrock Ford Auto Dealer 86 National Food Laboratory Food Laboratory 85 Source: City of Dublin, Dublin Chamber of Commerce. sae-14290.5 24 . The following table shows employment figures for Alameda County for the years 1987 through 1991. ALAMEDA COUNTY EMPLOYMENT Annual Averages (in thousands) 1987 1988 1989 . 1990 1991 Civilian Labor Force 639 . 8 662 .9 692 .0 675.7 679 .1 Employment 607.2 632 .2 662 . 8 647. 6 643 .2 Unemployment 32 .6 30 .7 29 .2 28 .1 35.9 Unemployment Rate 5.1% 4. 6% 4.2% 4.2% 5.3% Source: California Employment Development Department. As the following table shows, the County of Alameda has consistently recorded a lower annual average unemployment rate than the United States as a whole, and a significantly lower rate than the State of California. COUNTY OF ALAMEDA STATE OF CALIFORNIA UNITED STATES COMPARISON OF ANNUAL AVERAGE UNEMPLOYMENT RATES County of Alameda State of California United States 1987 5 .1 5. 8 6.2 1988 4 . 6 5 .3 5.5 1989 4.2 5 .1 5.3 1990 4 .2 7.4 6.6 1991 5.3 7.5 6.7 Source: California Employment Development Department SF2-14290.5 25 The following table shows the value of taxable transactions in the City for the years 1987 through 1991. CITY OF DUBLIN TAXABLE TRANSACTIONS (in thousands of dollars) 1987 1988 1989 1990 1991 Apparel Stores $ 13,968 $ 14,920 $ 16,011 $ 17,630 $ 18,119 General Merchandise Stores 43,183 56,072 62,383 68,573 72,912 Drug Stores 8,724 (1) (1) (1) 7,689 Packaged Liquor Stores (1) (1) (1) 3,658 3,491 Food Stores 15,821 15,443 16,397 14,885 18,418 Eating & Drinking Places 26,305 30,233 27,541 26,548 27,341 Home Furnish and Appliances 28,565 43,231 48,688 51,211 49,643 Building Material and Farm Implements 26,765 31,305 36,188 33,098 25,213 Auto Dealers and Auto Supplies 120,050 116,696 113,929 121,088 108,433 Service Stations 15,737 16,748 17,417 19,752 19,493 Other Retail Stores 41,844 62,285 63,476 67,687 52,161 Retail Stores Totals 340,962 386,933 402,030 424,130 402,913 All Other Outlets 68,800 82,793 87,248 88,221 64,850 Total All Outlets $409,762 $469,726 $489,278 $507,351 467,763 Source: California State Board of Equalization. (1) Sales omitted because their publication would result in the disclosure of confidential information. 52-14290.5 26 , Building and Construction The following table shows the value of building permits issued in the City between 1988 and 1992 . CITY OF DUBLIN BUILDING PERMIT VALUATIONS (in thousands of dollars) 1988 1989 1990 1991 1992 Residential New single-dwelling $ 4,182 $ 12,803 $ 0 $ 0 $ 7,756 New multi dwelling 7,740 21,025 5,320 5,500 0 Additions 494 578 783 494 631 Alterations 1.795 2.700 1,770 1,406 1.472 Total 14,221 37,106 7,873 7,400 9,859 Non-Residential New commercial 885 417 3,590 1,128 0 New industrial 0 0 0 0 0 Other 3,094 681 1,101 4,331 3,309 Additions 200 0 120 0 0 Alterations 3.902 3.640 5.093 4,694 3,479 Total 8,081 4,738 9,904 10,153 6,518 TOTAL VALUATION $22,293 $41,844 $17,,777 $17,555 S16,3// Number of New Dwelling Units Single Family 182 29 29 4 6 Multi-Family 382 327 35 461 180 Total 564 356 64 465 186 Source: City of Dublin, Building Inspection Department Note: Totals may not add due to independent rounding. Community Facilities The Dublin Library is one of the 12 branches of the Alameda County Library System. The Library is a well-used resource in the community and, as a result of City funding and support, the facility is open seven days a week. The entire system provides access to approximately 800, 000 volumes. The City also operates Shannon Community Center and Dublin Senior Center. These facilities provide space to accommodate various community meetings, instructional classes, and recreational activities. These facilities are also rented to area residents for social functions, such as wedding receptions and public dances. The Dublin Civic Center also provides meeting space for community groups. In addition to the public facilities located in Dublin. several privately-owned businesses provide recreational opportunities for area residents. Due to the city' s location, it has become a central point for the location of various entertainment-related businesses. This includes an ice skating rink, a bowling alley, and two large movie theater complexes containing a total of 14 screens. SF2-14290.5 27 Parks and Recreation The City' s Recreation Department is responsible for providing recreation programs for the residents of the City. Programs are offered on a quarterly basis and are publicized through the "Schedule of Recreation Classes and Programs" mailed to residents four times a year. The Department currently offers programs in the following areas: Preschool Classes (2-5 years) Leisure Enrichment Classes (All ages) Afterschool Playground_ Program (1-6 grades) Summer Playground Program (6-12 years) Summer Youth Employment Program (13-21 years) Special Events Volleyball Leagues (Adult) Teen Programs (trips & dances) There are currently 57 acres of developed parkland within the City, as follows: Alamo Creek Park Dolan Park Dublin Sports Grounds Kolb Park Mape Park Shannon Park & Community Center Stagecoach Park Dublin Swim Center In addition, 100 acres of open space have been designated for a future park. The City has also entered into a Facility Use and Development Agreement with the Dublin Unified School District which has resulted in improvement and maintenance of selected school district athletic facilities by the City. Hospitals The City does not have a hospital within City limits; however, nearby hospitals such as San Ramon Regional Medical Center located in San Ramon, Valley Memorial Hospital located in Livermore, Valley Care Medical Center located in Pleasanton and , Kaiser Permanente Hospital located in Walnut Creek are among those serving the City of Dublin. Churches Churches located in the City include the following: Church of Jesus Christ of Latter-Day Saints Dublin Christian Church Eagles Nest Christian Fellowship of No. California S72-14290.5 28 - L } John Knox Presbyterian Church Lutheran Church of the Resurrection - ELCA Parkway Baptist Church St. Philip Lutheran Church St. Raymond' s Catholic Church Tri Valley Chinese Bible Church Tri Valley. Church of God Valley Christian Center Valley Bible Church Financial Institutions Financial institutions located in the City include the following: Bank of America Community First National Bank Great Western Bank Homestead Savings Sanwa Bank of California Wells Fargo Bank ' Education The Dublin School District provides kindergarten through 12th grade education within the City. Its boundaries are contiguous with those of the City. The district operates Dublin High School, Valley Continuation High School, Wells Intermediate School, and Fredericksen, Nielsen, and Murray Elementary Schools. There are also five private schools located within the City. Valley Christian Center operates the Valley Christian School, a kindergarten through 8th grade program, located at a former public school site. The Valley Christian Center also operates a high school located on Valley Christian Center property in the western foothills. St. Raymond' s Catholic Church operates a school with a kindergarten through 8th grade program, and St. Philip Lutheran Church operates an elementary school. In addition, the Fountainhead Montessori School operates a school with a preschool through 3rd grade program. Los Positas College provides post-secondary education and is operated by the South County Community Colleges District. East Bay colleges and universities include the University of California at Berkeley, California State University at Hayward, Mills College, St. Mary' s College, Holy Names College and John F. Kennedy University in Orinda. In addition, Stanford University, the University of Santa Clara, San Jose State University and Hastings College of Law are all within an hour' s drive of the City. SF2-14290.5 29 Transportation The City is located at the intersection of Interstate 580 and Interstate 680. These interstates serve as major transportation corridors to and from the City. Oakland International Airport is within a 20 minute drive. Bay Area Rapid Transportation ("BART") has approved the extension of a line from Hayward to the City. Current projections are that the service could be in place by late 1995. The new Dublin station will be located approximately one mile from the Project. BART currently provides express bus service from the City to its Hayward station. Local bus service is provided by the Livermore Amador Valley Transit Authority (LAVTA) . This is a joint powers authority with representatives from the cities of Dublin, Livermore and Pleasanton and from Alameda County. LAVTA also provides Para- Transit services to its elderly and handicapped residents. Utilities Gas Electricity - Pacific Gas and Electric Telephone - Pacific Bell Cable Television - Viacom Cablevision Garbage Service - Livermore-Dublin Disposal, which is a division of Oakland Scavenger Company ( "OSC") . OSC is currently owned by Waste Management Inc. , which provides collection services and operation of the sanitary landfill. The landfill is not located in the City. Water and Sewer - These services are provided by Dublin San Ramon Services District. LESSOR Dublin Information, Inc. is a non-profit public benefit corporation organized under the laws of the State of California. The Board of Directors of the Lessor is comprised of the members of the City Council, the City Manager and the Assistant City Manager. UNDERWRITING The Certificates will be purchased by Rauscher Pierce Refsnes, Inc. , San Francisco, California (the "Underwriter") . The Underwriter has agreed to purchase the Certificates at a , price equal to $ , plus accrued interest. The initial public offering prices set forth on the cover page may be changed by the Underwriter. The Underwriter may offer and sell the Certificates to certain dealers and others at prices lower SF2-14290.5 30 than the public offering prices set forth on the cover page hereof. The Contract of Purchase between the City and the Underwriter provides that the Underwriter will purchase all of the Certificates if any are purchased. RATINGS [TO BE REVISED RE BOND INSURANCE] Moody's Investors Service has given the Certificates c- rating of and Standard & Poor' s Corporation has given the Certificates a rating of . Any desired explanation of the significance of such ratings should be obtained from the respective rating agency furnishing the same. The City furnished to such rating agencies certain information and materials with respect to the Certificates and the City. Generally, rating agencies base their ratings on the information and materials so furnished to them and on investigations, studies and assumptions by the rating agencies. There is no assurance that such ratings will be retained for any given period of time or that it will not be lowered or withdrawn entirely if, in the judgment of the agencies originally establishing the ratings, circumstances so warrant. Any such change in or withdrawal of such ratings could have an adverse effect on the market price of the Certificates. TAX MATTERS In the opinion of Brown & Wood, San Francisco, California, Special Counsel, based on existing statutes, regulations, rulings and judicial decisions and assuming compliance with certain covenants set forth in the Lease and Trust Agreement and requirements of the Internal Revenue Code of 1986, as amended (the "Code") , regarding the use, expenditure and investment of proceeds of the Certificates and the timely payment of certain investment earnings to the United States, the portion of each Lease Payment due under the Lease designated as and comprising interest and received by owners of the Certificates is not includable in gross income of the owners thereof for federal income tax purposes. Failure to comply with such covenants and requirements may cause the portion of each Lease Payment due under the Lease designated as and comprising interest and received by owners of the Certificates to be included in federal gross income retroactively to the date of execution and delivery of the Certificates. In the further opinion of Special Counsel, the portion of each Lease Payment due under the Lease designated as and comprising interest and received by owners of the Certificates will not be treated as an item of tax preference in calculating the federal alternative minimum taxable income of individuals and corporations. However, such portion of each Lease Payment will be included as an adjustment in the calculation of federal corporate alternative minimum taxable income and may therefore SF2-14290.6 31 affect a corporation' s alternative minimum tax and environmental tax liabilities. Ownership of, or the receipt of interest on, tax-exempt obligations may result in collateral tax consequences to certain taxpayers, including, without limitation, financial institutions, property and casualty insurance companies, certain foreign corporations doing business in the United States, certain S corporations with excess passive income, individual recipients of Social Security or Railroad Retirement benefits and taxpayers that may be deemed to have incurred or continued indebtedness to purchase or carry tax-exempt obligations. Special Counsel expresses no opinion with respect to any collateral tax consequences and, accordingly, prospective purchasers of the Certificates should consult their tax advisors as to the applicability of any collateral tax consequences. In the further opinion of Special Counsel, the portion of each Lease Payment due under the Lease designated as and comprising interest and received by owners of the Certificates is exempt from personal income taxes imposed by the State of California. A copy of the proposed form of opinion of Special Counsel is attached hereto as APPENDIX C. VERIFICATION OF MATHEMATICAL ACCURACY Ernst & Young, independent certified public accountants upon delivery of the Certificates, will deliver a report on the mathematical accuracy of certain computations contained in the schedules provided to them, which are based on assumptions and information provided by the Underwriter on behalf of the City, relating to the sufficiency of the principal of and interest on the securities on deposit in the Escrow Fund to pay, when due, principal of and interest on the Refunded Certificates. The report of Ernst & Young will include the statement that the scope of their engagement is limited to reviewing the mathematical accuracy of the computations contained in the schedules provided to them, and that they have no obligation to update their report because of events occurring, or data or information coming to their attention, subsequent to the date of their report. LITIGATION The City Upon the delivery of the Certificates, the City will provide its certificate that there is no litigation of any nature now pending against the City or, to the knowledge of its officers, threatened, seeking to restrain or enjoin the execution or delivery of the Lease or Trust Agreement or the issuance or sale SF2-14290.5 32 C. C of the Certificates or in any way contesting the validity of the Lease, Trust Agreement, or the Certificates or any proceedings of the City taken with respect to such execution, delivery or sale, or the application of any monies or security provided for the payment of the Lease Payments or the use of the Certificate proceeds. There are several lawsuits and claims pending against the City. The aggregate amount of uninsured liabilities of the City which may result from such suits and claims, as determined by the City Attorney, will not, in the opinion of the City Attorney, materially affect the City's finances or impair its ability to pay the Lease Payments. Richmond School District Case In April, 1992, a complaint was filed in Superior Court in Contra Costa County, California, seeking to enforce payments by the Richmond Unified School District (the "District") under a lease arrangement having features similar to the Lease of the City. (This action is not against the City or the Lessor and does not involve the Lease of the City. ) In an answer to the complaint, the District, through its State-appointed trustee and administrator, and the State Superintendent of Public Instruction, another defendant in the action, contended, among other things, that the District lease is unenforceable in that it constitutes long-term debt of the District which has not received voter approval as required by the State Constitution. The State of California, another defendant, also answered the complaint contending that the District lease and related documents were entered into without proper authority and are without effect and void. The Court, in October 1992, issued two bench rulings in which the Court refused to issue writs of mandate to compel the District to budget and appropriate rental payments pursuant to its lease covenant. On December 11, 1992, the Court ruled that the certificates of participation issue was a valid contract and the District is obligated to pay holders of the defaulted certificates of participation. On April 23, 1993, the Court ruled that the District is obligated to pay past rents due under the lease, but that the Court does not have the power to actually order the appropriation or budgeting of money to make such payments. Brown & Wood, San Francisco, California, Special Counsel, is delivering its Final Opinion, in the form of Exhibit C to the Official Statement, incident to the closing of this transaction. That opinion is its regular Special Counsel opinion for transactions involving certificates of participation and provides, in part, that the Lease is a valid and binding obligation of the City and does not constitute a debt of the City within the meaning of any constitutional debt limitation. The opinion is subject to the standard conditions and limitations contained in the opinion, including the fact that the rights and obligations under the Lease may be subject to bankruptcy, SF2-14290.5 33 �. 1. , insolvency, reorganization, arrangement, fraudulent conveyance, moratorium and other laws relating to or affecting creditors' rights, to the application of equitable principles and to the exercise of judicial discretion in appropriate cases and to the limitations on legal remedies against cities in the State of California. Special Counsel expresses no opinion as to the outcome or effect of the above-mentioned litigation. APPROVAL OF LEGALITY At the time of the delivery of the Certificates, Brown & Wood, San Francisco, California, Special Counsel, will deliver its opinion, substantially in the form attached hereto as Appendix C. Certain legal matters will be passed upon for the Underwriter by Orrick Herrington & Sutcliffe, San Francisco, California, and for the City by the City Attorney. OTHER MATTERS This Official Statement is not to be construed as a contract or agreement between the City and the purchasers or any of the Owners of Certificates. Any statement made in this Official Statement involving matters of opinion, whether or not expressly so stated, are intended merely as an opinion and not as representations of fact. The information and expressions of opinion herein are subject to change without notice and neither the delivery of this Official Statement nor any sale made hereunder shall, under any circumstances, create any implication that there has been no change in affairs in the City since the date hereof. All references to the Trust Agreement, the Lease, the Escrow Agreement and the Assignment Agreement are brief outlines of certain provisions thereof. Such outlines do not purport to be complete and reference is made to such documents for a full and complete statement of such provisions. The execution and delivery of this Official Statement have been duly authorized by the City. CITY OF DUBLIN By City Manager SF2-14290.5 34 APPENDIX A , CITY OF DUBLIN AUDITED FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 1992 SF2-14290.5 A-1 APPENDIX B SUMMARIES OF PRINCIPAL LEGAL DOCUMENTS [TO COME] SP2-14290.5 B-1 S APPENDIX C FORM OF OPINION OF SPECIAL COUNSEL [TO COME] SF2-14290.5 C-1