NEW ISSUE Jnthtopinzono Bond C on wie. the eilerest Dortlo?: 0 irn sin eat,’ u nde th ( i’rri 11 (ii C’ (‘X( ifl / regulatwns and dcezsio.’ aflU TO in .“tati 01 C ai torn it. /)Lr’’ ‘tie: in u 7Lae cxi.s tin ç stat ute regulation.’ and ((flirt decztion,, iron’ of: /ir tax,’.’ ‘i” ‘‘fl U ii’: er 0 decal rner’ni’ taxe Statute rx:sti fl $22 1,540,000 CERTIFICATES bF ‘PRTICIPATION (Various Properties’of the City 6f Oakland) 1985er’iesA Evidencingropottimte lnterest the Holders Thereof in Insta1lmnt ‘Purchas Payrieis a4.e W Bank of America 1trut 9 Na Sa’ings Associ’a,IoD by ‘the RedeiIornent Agency of the City of Oakland,’.:California Dated: August 1 985 Due: August I as snown (‘ion Principal or redemption prier of the (“cr1 itu,at (‘5 iS pavalile at the principal etiriwi ati trust office of Bank ot America National ‘Trust and Savings Association, San Francisco, California. the Trustee. Interest payable on each February 1 and August 1 commencing on February 1 1986 and accruing from August 1 1985, by check or draft mailed h the Trustee to the registered owner. The Certificates will bi issued in fulls iegistered torm in the denomination of 5,000 oi any’ integral multiple thereof The (‘ertincates are subject to redemption prior to maturity as more iullv described herein The (‘ertificates represent undivided proportionate rights to payments by the Re’dcvelopment Agency the City ut Oakland ‘‘the Agencs “i under the Installmen: Sale Agreement dated as of Augus: I 1965 between th’ Agenrs and disc City of Oakland, Caliiornia t the’ ‘‘City’,, as Seller, wtiich payments ys ili he made by the Agency soiels’ from revenue, eonsi,tinc of oavment do be made by the City pursuant i o a Masrer Lca,e Agreement dated a o: Augus: 1. 1985 tictwe”n tile Agnes and : no Ctts The proceeds of the Certihuate” wili be used to purchase ali of the I ‘ity ritzht tote anef interest in and to tia Installment Sale Agreement pursuant to a Sales Contract hetncen the City and the Trustet The City will u,e the proceeds of the transaction to provide refinancing for a portion ot its employee pension system and to reiund certain prior bond issues wnich financed certain ot the Properties descriheel herein. The C ertincate are being executed and deltvered under a Trust Agreement elan d as ot Auu,, 1, 1985 between the City ann Bank of America National Trus: and Savimigs Association acting as ‘Trustee The obligations of the Agency under the Installment Sale Agreement do not constitute an indebtedness of the Agency, the State of California or any political subdivision thereof within the meaning of the Constitution of the State of California. or otherwise, and neither the faith and credit nor the taxing power of the Agenc3. the State of California or any political subdivision thereof are pledged to the payment of the principal of or interest on the Certificates, is of V $68,870,000 Serial Certificates (Price—lOO%) Mat..dty (August I) 1986 1987 1988 1989 1990 1991 Principsi Amoutti ntero.t Rste 5 Mturit (Augu.t 1) Prinoipsi Amount Int.ren R.to $5,755,000 5,670,000 5,605,000 5,540,000 5,480,000 5,420,000 5i.,% 1992 1993 1994 1995 199€ 1997 85,350,000 5,255,000 5,155,000 5.025,000 7,300,000 7,315,000 8.20% 8.40 8.60 8.40 8.60 9 60 6’4 70 73 8 $14,700,000 9% Term Certificates due August 1, 1999 @ 100% $29,290,000 9% Term Certificates due August 1, 2003 @ 99% $108,680,000 9¼% Term Certificates due’ August 1, 2016 @ 99% (Accrued interest from August 1, 1985 to be added) Pavmcn: of th’ principa’ of ant’ interes: on tbs Serial Certincatc mat:tr’nti ir. 1005 and 5 OQt, and the Tern Cerrificao’ du in 1099 and 2003 have been insured pursuant to a municipal bond guaranty insurance poli’s simultaneously v.ith thi delivery ot the Certificates by issued BOND INVESTORS GUARANTY INSURANCE COMPANY The Certificates are offered when, and if delivered by the Trustee, subject to the appros.al of validity by Orrick, Herrington & .Sutcliffe, ban I’rancmsco, California and Alexander, Burro, Mmllner fo McGee. Oakland, California, Co Bond Counsel. Certain legal matters will he passed upon for the Underwriters bj Ballard, bpahr, Andrew., & Ingersoll, l4ashington D.C and Hunter & Anderson, Oakland. California, The Certiiicates were initially delivered in temporary form in ban I’ram. California on August 1. 1985. Ii is expected that the Certiuentcs in dcnnitm’is forni will fit at’amlabk for deime’ri’ mit 5 .ca )‘ork .Vets York on or about August 13. 1985. Suhicct to applmcahl, securitie: laws. (Old prevailinç’ marcel iondmtion.. the t’ndcrtcrizcr.c intend. hut Or,’ not obligated. to snake a market for the (‘ertitteates. Fo other inle,rmatio,: with resfie’cl to the t’nderwriters, see “L’ndcrwriti,tg’ herein. as isco, Goldman, Sachs & Co. Grigsby, Brandford & Co., Inc. Pryor, Govan, Counts & Company, Inc. Datce.t’ At.’r;t’s’ 1. 1085 I by the Redevelopment Agency of the City of No dealer, salesperson or other person has been authorized representations other than those contained Oakland or the City of Oakland to give any information or must not be relied upon as having herein and, if given or made, such other information or representation not constitute an offer to sell or the does been authorized by any of the foregoing. This Official Statement by a person in any jurisdiction Certificates solicitation of an offer to buy nor shall there be any sale of the of sale. This Official Statement solicitation in which it is unlawful for such person to make such an offer or Statements contained in this Certificates. is not to be construed as a contract with the purchasers of the whether or not expressly so opinion, of Official Statement which involve estimates, forecasts or matters representation of facts. The a as construed described herein, are intended solely as such and are not to be believed to be reliable but are which information set forth herein has been obtained from official sources a representation by the as construed , not guaranteed as to accuracy or completeness and is not to be change without notice to subject are herein of opinions expressions and underwriters. The information under any circum sale shall, any nor hereunder made this Statement Official of and neither delivery ent Agency Redevelopm been no change in the of affairs that has the there implication stances, create any the Trust the of since date hereof. summaries of Oakland All City the of or Oakland, of the City of are made other Master or documents, the Lease Agreement Agreement. Sale Installment Agreement. the of statements do complete respectively and not purport to be documents such of provisions subject to the provisions. such any or all of ITERS MAY OVERALLOT OR EFFECT IN CONNECTION WITH THIS OFFERING, THE UNDERWR MAINTAIN THE MARKET PRICE OF THE CERTIFICATES OR STABILIZE WHICH TRANSACTIONS E PREVAIL IN THE OPEN MARKET, AND OTHERWIS MIGHT WHICH THAT ABOVE AT A LEVEL UED DISCONTIN ANY TIME. BE AT MAY COMMENCED. IF SUCH STABILIZING, This Official Statement is submitted in connection with the sale of the Certificates referred to herein or in part, for any other purpose. and may not be reproduced or used, in whole TABLE OF CONTENTS PAGE PAGE I\TROI)[CTORS STVI EMENT TttF C’ERTIF1( ATE’ 4 . . . Sccurit\ or the Certincates General Description o the Certificates Redemption of thc Certificates Notice of Redemption 4 . INSURANCE COMPSXV BoNn INVESTORS G1’AkANT EsTItATE[ USE’ OF Fpxp 4 5 5 C 6 . fm . . S . . GOVFRNME Eleciecl and Appointed Officiak Government Services Local Government Agencies.. CIT\ F INANCi.SL INFORMATION Fund Structure and Format ot Financial Tables. Basis of Accounting Budget AdoPtion Procedure . . SUMMARY OF FINANCISL OPFRAT1ONS RES ENUE SOURCES OF THF CITY General Property Tax Rate and Appropriations Limitations Assessed Valuation and Tax Collection EXPENDITURES OF THE CJT . . . . ‘ . . . . . . . . . REtFVEt.OP\1E\E OF THF. (ii \ OF OAKLNl Authority and Personnel Power R,developmeitt Projects Financial Allaire Employees Sabre Adjutmcnts Retiremen- Programs. DEImr 01 1 HF Cu General Short Term Debt Long Term Debt Lease Obligationc Direct and Overlapping Debt LuTuTiuN ANt. C1.stM’ Ttti CITY General Pu1 mint ion industry and Employment Commercial Activity Construction Activite Largest Taxpayers Education 0 10 10 10 10 11 ii 12 12 13 . SUMMAR 01 Thd The The The The LEGAL DOCUMENTS Trust Agree-men’ Installment Sale Agreement Sale’ Contract Mastee 1.easc Agreement Assignment Agreemeni UNDERwRI1 INC 16 16 16 19 MISCELLANEOUS 20 APPF.NDIX B LEGAL OPINIoN APPENDIX A — Comprehensive Annual Financial Report toe the Fiscal Year Ended June 30, 1984 Form of Bond Investors Guaranty Insurance Company Policy 20 20 21 21 21 21 22 23 24 25 25 25 26 27 28 29 29 30 30 33 35 36 43 44 44 44 . OFFICIAL STATEIWENT $221,540,000 CERTIFICATES OF PARTICIPATION (Various Properties of the City of Oakland) 1985 Series A Evidencing Proportionate Interests of the Holders Thereof in Installment Purchase Payments Made to Bank of America National Trust and Savings Association by the Redevelopment Agency of the City of Oakland, California FVFHOI)UCTOH’ SThTEMENT The purpose of this Official Statement, which includes the cover page, table of contents and Appendix A, is to provide certain informal ion concerning the Redeveloument Agency of the City of Oakland, California the “Agency”, the Cit\ of Oakland, Cahfurnia the “City” and the pronosed issuance of 8221 .450.000 aggreegite principat amount of Certificates of Participation (\LriotlN Prooerries ot the City of Oakland, 1 985 SeriA rhe “Certificates” a The Certificates are being executed and deliveree under a Trust Agreement dated as of August 1 1 985 the “Trust Agreement between t tic Agency arm Bank o America Aaiona ‘I rum and Saving Asoctat ion, a ‘irustee tht “Trustee’’,. The Cert ificate evidence undivideet propom ioriate rlgnts to iiaments o’ tia purr huse prier installment p is able Os the gencs uncte tn Inst dims n al Agreement datcd a 01 August 1 1 985 (the “Installment Sale Agreement’’ hetsseen the Aoenc\ ansI the CIty. . Pui suant to ttic Intailment al Agi acme nt the \gene \ is i’ quming troni I he Cits the Oakland Eu s Hall and certain other properties (collectively, the “Properties”u The proceeds of the Certificates will he used to purchase all of the Citv’ right, title and in! ers’m in and to the Installment Sale :\grecrnent jaursuant to a Sales contract dated as of August 1, 1 985 the “Sales Contract” net ween the City and the Trustee and to nay certain costs incurred in connection with the issuance of the Certificates. The City will use the funds derived from the transaction ii to Provide for the’ refinancing of a ortior Of it emtdos cc s’r]sior system through the purchase’ of a commercial annuits con! raci or contracts covering a portion if im uniunded pension liability: to refund cert am bond issues which financed certain of the Propert ies a rid iii te esta i disn a reserve fund under the Master Lease Agreement described below. See ‘‘Retirement Progra me’’ at pa ge 19. The Agene’v will leac the Proerm tee to the Cttv pursuan: to a Mamer 1,ease Agreement da teel as of August 1 1 98 S ithe M sster La tee \grce me itt \e see urits tot its oldig Luion uneict the In t dIme nt sale Agreement the Agency will assign the Master Lease Agreement to the’ ‘I’rustee pursuant to an Assignment Agreement. date’ as of Augusi I 1985. the ‘‘Assignment Agreement” In and i ct wee!] thi Agency and the Trustee. The muie Os tne (its urid r tnt Mistem Li set Agi emsnt 111 subiem ism nt rcquireo to! 5 th ss uliliulits ot the Properties for use by the City, and will be in amounts sufficient to enable the’ Age’ncv to make its payments an I h Ii t I’imeu] si e Amt Lfl nt uid h’ ( rt n( ii t Thi \ me s 11 riO ni liii ii d is ins , ni”n: make :en’ otli” 11.13 IiIt’lil’ in re ‘“(t 01 ih. lnient Suit’ ‘ui” portion a. tilt pa”nlci.t— un.kt thc luaI Is. Ia’ I. cii ‘tic (‘its pursuant it at In r mua.’ anti asv’t— paia 1,5 01 at. ,lriL! il mc’i pan’ :h’ rc’r t I rcn’p ’ itirat (‘cr1 til’ Ma—i” l,,l 4%’ ‘‘ — —— a: dl £ an itiuelltf’Litft’ lust al.meni ‘%alt’ igl’t’t’flWIi’ cia itO, t’ni’il it Itt ut (‘oil— iou Tnt’ obiigatiun •i the AVeiIc3 tiiidt’i the en hit Ii. m.’:tnitw iii’ or au.’ polite ai suisli I’.iifl. lflt’l vol w. tin Agrnn I lit Stat’ ci (‘aluornia c ‘ent a: tin la’ciriu jnwei at ht am miii tilt dud arc no’ M( urc’ct In’ nng ‘,tig’ at orma (‘aiti o’ State at the a’ an pohti ‘a. %ubdivi.ion thcr’o1 Agc’nn the %ii’ U; i .ii.iorni:’ the’ (‘il lit Tru%t ku”ement, the 1. “ranc.ae— liii .urne There’ toikn in” de%crij’tion— ci LIt ‘n1gnineie. •1gr”tnu”r,i C antrac 1 tnt’ Ma— ci IA a .arc ‘ni ‘m .ut’i the’ .. Sale he ; .’nl, “e’m gt it sa ui, llme lm4a t’rt’nt c’— to “in clot ument— are’ qlnhiIit’t tt. 1w’ compn’hen%nc vu ciefiuiitivr Rc’t ort nut l.ur;l d.’ ort’ ripcs tint Such i’c’i’ic .n aiia.’uc LU! uus—u”c.i’n: i.. tii’ text— theteat, coJ’it’% ii %UC Is cit’c’umt’nt— leic romp the to et’ enur i in tht’i em ametiámc.nt’ us the at in’ (‘its inietni ai conditiin ant’ ‘I’ rt’ office’— ci thc Am ti”t. Fur a dc”.cription re’s “lath act’ “i)i—e’U——ioi, C,, ailec’lt’( tilt’ fl’’’— ahilit” ‘a that host 1 a toini i.’aii a’ Slat’ 11cc vi ’si, tjiutj C”ns :ed finanriaf -tatc’m”n,l tnt’ .” The (‘ity’s mu—’ re’.’iil auiii . , , , . . ‘— rj%e Source— ol Financial Operation—’ and “knenuc to. here art atta iad a. \ilendi3 A —‘ Cii> THE CERTIflc4fl:’ Securit for the tertificatee from The C’ ertrnca’t’- are payable ‘.ole’l> ii thc gen”> to ;hc Tru-tet under ih” 1ntalim’ :’ vine r”pa :1’ for n; t’m’ ‘trre ru.t ‘1 c’v held In the Tru%tec uncwr tic Salt’ grec’ment and trom an) tithe’! mon e 4gre’ement. Tru—wi. all it- right’ uu’icr h’ Ma%ler Leas tht u, gn a%’i will c Auen ,g Tin ateot the (‘ertitu are subject to the aiailal’ilit> under tht Master it use Agreement ’ tht t by (‘it> maci be u’ ireu er requ Payment Funt. punuan: lathe Mac City sstll estahh,h c’ Master Lease Rc’.erv the Propertie- tar use by the (“it>. The ment. jr an amount equal IC’ sree salt tht. ‘ale of the ln-tallmc nt worn ved recei eys mon with t Lease Agreemen Lease ureement annual rent due under the Maste” iuayment- ii> • maximum uring August 1. 1005. 1 OQo of and inte’r”st on the Certificate- ma’ ipal princ LIst. 01 du’ . whei ent Paym ’ .‘.sucd by Bond tnestor It. a muniripa. tion I tn’uiance pair uanl pur% : red itcau ne”n flu2003 1009 and .11 V —,..rnnaan 01’ 0.’! r• Li’ ‘ —ti” Gua”’t.’ Ial%iV’ull I . ban’ iai’ ‘‘on4 ‘c ran Insu Utk, its Guarn:t a. tilt ‘ crab’ ranlcc’ i— .o: the lit iiLili U’ HI’ tl’;I arinau such ncc ‘nura ‘I a. %u s term principal other Ct’rtincate’-. onl>, and does not extent. Its any ‘ , “ ‘ r’! tec General Description of the Certifica ,000. k”sun’iing lmnt. the (‘ertiiicate’. to hi. issued 1’ $221,540 The aggr”gatc i,nni’iiial amount of qt the co—i- of reiunciint ’ern” p.s’ :c i-suet) pur—aant to the ‘rrust Agr. certificate- ot subsequent ‘cries ma’ be’ C”rtiiic ales, to the extent permitted, an) outstanding :nui ” iiat f sc’n , s.u.l nate, pa>aeilt 1 1. 1085 anti will bear intern! iron ‘1 lit The’ Ceriiiu’ate— will he Jau’ci Augus, ion. mp. rede or rity Obi. unti. matu year neginning Februars 1. 1 St n’ inter on Februar> 1 and Augus’ I of c’acl bear will and unt-, 1 ot cad 01 thc years and in tIc print ipal amo ft—n lered Certificate ss’i!, matur” ir .ugu—t regi— zulk in cc. he i-’.u 3fiiciai Statement. TneC’crtificat”— wH the rates, set torth on tnt cover 01 thi— chanucahl.’ at the prinnna. intnr ’ and trahe regis oi, there ral multipit’ in denomination’ of $5,000 or any integ ’ gc nquired to Lw. pace payment of any tax or other rave’rnme’nta chan corporatt trus’ office of the Trustee, upon tt hi madc’ ciurtnir ired requ — or transfers of tht (‘t’rtizic’az”— sInai. be with respect it’ such exchange. No exchange eding a datc fixc’ti for redemption. the tony -five 45u clays next prec ipal corporaL’ rust ulTi”t’ all (‘ertificates will ix’ payahlt at hc vr’tie TIc print ipal o: ncdemption pnct’ at the C ertiiicate’s will lit an t’ a, Thc interest portion of pa men . oriui of the Trustee, in San Francisco, (‘alit art registerc’d tat the addre” pt’rn in, w hosL name tIc (‘trun’ ate the to ed mail t drat tr k payable In chec iS preceding t’arh intent’-’ Juli’ by the Trustee, a- of thc Januan is or shown on the regisi ration tiouks kept 4 1 ) iVmn’ da c or w the Trust in hc vent such in 1 cret is. not paid when due, or special record date estai:dished pursuant L\gr(Pflicnt Redemption of ihe Certificates Inc Certificates shall he suhect to redemption j nor to their respective stated maturities, on any date, (i whole or in Oari (hut if in part. only on an interest payment date on or after August 1 1Q95 from otitional prepayment of purchase payments by the Agency, or I it fl wnolt’ or in part from certain moneys received in the event of casualty, demolition or condemnation 0! any of the Properties, under he circumstances and upon the terms prescribed in the Installment Sale Agreement and the Master Lease Agreement. Any partial redemption pursuant to this paragrah shall he made in proportion to the respect vs aggregate principal amounts of the outstanding Certificates of each maturity and within a mat tinty by lot Redemption of the Certificates shall he at the principal amount thereof and accrued interest thereon to the date fixed for redemption, without premium in the case of redemption under tii above and with premium, as follows, in case of redemption under a nove: in August Augus.t August August August 1, 1, 1, 1, 1 , Redemption Date 1995 to july 31, 1996 199o to July 31. 1997 1997 to July 31. 1Q9 1998 to July 31, 1999 1999 and thereafter Redemption Premium 102% 10iI: , 101 100% V 100 ,... The Cert ificute maturing August 1. 1 999, August 1 2003 and 2016 shall be subiect to mandatory redemption urior to their stated mattirities, in direct order of their maturities and within a maturity by lot, from sinking fund payments provided for in the Trust Agreement, on August 1, 1 998 and on each August 1 thereafter, to and including August 1 2016. at the principal a mount thereof without premium , together with mt eres accrued tnereon to the date flxed for redemption, in the amounts and on the dates set forth below: August 1 1998 1999 2000 2001 20u 2003 2004 Principal Amount Principal Amount 8 7,050.000 August 1 8 7345,000 7,355,000* 2005 7,360.000 7 345 ooo ,,lLr,000 7,270,000* 7,215,000 7,165,000 200o 2007 2008 2009 2010 2011 2012 2013 2014 2015 7,105,000 2016 6,985000 6,930,000 6,880,000 6,840,000 6815,000 6.815,000 6830.000 6,880,000 25,170,000* * lotice of Redemption Notice of redemption shall he given by mail to the registered owner of each Certificate, not less than 30 davN nor than 45 days prior to the redemption date, but fail un ir respect of such ntailing will not a fiect more s iudi 01 rt d m ion “so ur’ Ii n er’ il ii u or 6 hold n of such 6 ruitit atec has e no righL x( cp to rn tsr p is men accrued to the redemption date. tn o ic ot tre i iIr d to r u rep or a i edemptieri pric 5 snd interesT RONI) INVESTORS (;UARANTY INSURANCE POLICY Bond investors Guaranty Insurance Compan I ‘‘Bond Investors Guaranty’ ha made a commitment to isstie a municipal bond inurance policy the ‘‘Policy relating i o the Certificates efiective a of the slate of tssuan C 01 th 6ci tide itc The tolloss ing v i summ Vt of the ‘crm o tht Poti( s w ha h does no purport io he I. terms and conditions ot i hc is math to Appendix 11 tor tnt compk’te e renc Refe . itive defin oc’ enaiv preh com 1999 and 2003. ificaies maturing August 1, 1 Q95, 1 99o, (‘cit abc rcove only y Polic The in. Pol of and agree’ to pay that portion ot tli principal n cn I4 cia term- of the Policy. Bond 1nvetor- Guaranty reaso by id unpa be shall e which shall become Due ior Paymen hut tht 01 ct respe in ent”. interest on thc Certificates listed abov Paym as hereinatLer provided, the term “Jim icr ing sink ry dato man or Nonpayment by the issuer. Except date y s to the amount clue ci: the ‘tatecl matunt n of reaso by date er principal amount ot a Certificate, refer earli an reler to any amount of principal which is due at cli ent ncem adva r othe or lund redempuon date and dues not uon datory sinking iund redempuon’, at i elera unt amo the to only s reter a caL icr redemption iot her than man a Certificate, the term “Dut ior Payment” failure of the issuer to maturity. tad ii: respect of the interest on - th payment” in respect ci a Certincan’ mean due on the stated payment date “Non ipal and interect Due for ng azent for payment in tull of all princ ot pnnc’ipai or interet have provided sufficient funds to the. payi ent “Nonpayment’ shah also incluck any paym recoverec from such 1 has Payment on such Certificate. The term been h behalf oi the issuer of such C’ertiñc.att whic tcy in accordance trup ban made to a Certficateholder by or on States Bankruptc’ (‘we by a trustee iii Certificateholder Pursuant to the United competen juriMlic tion. court having 1 with a final. nonappealable order of a reason of ate i’ Due for Payment but is unpaid by tinc (‘er a o’ ipal or princ on e4t inter that Bankers Trust Ii: the event ranty “ill maki payments to its agent. Gua stors inve d Bon ol, there r Issue later than one Nonpayment by the id amounts cit orincipat and interest not unpa such to 1 “qua i, ” aee Tru e ranc nonpayment Company nAte “Insu not ifled by thc (.‘erdflc’atehuicler that sucn urse’ to tnt been has ty ran Gua stors Inve d Bon r busine”, day a’te e Trustee will disr, date such payment i% clues. Tht Insuranc ent but i- unpaid upoi ha- ccc urred ‘bm not earlier t nan tha Paym for interest which i’ then Due and ipal princ 01 unt amo the receive pay meni oi such Certificateholder : the C”rtiticatehoider’s right to ence evid 0: tec Trus e ranc Insu tb” right- Ic receipt h tht umc’nts of as’iunmen:. whe-eupon afl of instr tc opria appr any ding inclu est, principa! and inter Investors Guaranty. est then Due for Payment shall vest it! Bond payment of ‘ucl principal or inter forcc as long as the and non-cancellablc and will remain a onal nditi unco is y polic e ranc insu The in outstanding. C’ertiflcates insured by such polk”. rema ‘wholly-osined subsidiary rance company incorporated in Illinois, is a Bond Investors Guaranty. a stock inau Gruuj’, ln. is owned uv re insurance holding compan. Bond Investor’ aaa Iiel a Inc., p. Grou stors Inve d inc.. Banters Tru-t New lhrL of Bon nationam Group. Inc.. Phibro-Salomor. Inter rican Ame rs. ‘eto in mit ’w iollo the any Thc itivesto” or Government Emp’ovees Insuranc c’ (omp and w ti pora Cc’r it . Cred Nero on. boat. I ‘e’ or Guaraimty Corporan to pay tnt debt. : or ,ht ciaim a.u it!st ated oblig nut arc Inc p Grou storwa’ approximately inve Bond ynoider’ -urplu- o: &nd Int.”tors Guaranty polic total the . 1985 h Marc 31, ut Iliinoi,. As of the inuranc’r Depart men! of Lilt Statc $74,000,000 ‘unaudited. as reported to number are 70 Pint ’s administrativc office’ anti it telephone The address ci Bond Inveator- Guaranty 10270 and i212. o07-57?7. Street, 47th floor. New ork. New York in Appt’ndi. Investors Guararny Lnsurancc Policy” ant’ d “Bon ing head the r unde ained cont The material by Bond Ins estors L guaranty. B i’ ba-ed upon information supplied — ESTIMATED USES 01 fl’M* U.n of Funds I’ur”ha-c ox Annuities ncl.,.,,.. Deposit to the Master Least Resei’s Fu Refunding of Prior IssueCost’ of issuance including I uderwritc’rs’ Discount and Certificate Insurancc Premium Original issue Discount Toni. ,, ,.., ...,...., 6 , Si 67,220,000 25.1 70,000 1 6,856,32? 418,150 1221,540,000 — ftEDE’ELOPMENT AGEfl OF THE (Tfl OF OAKLAND AuIhOriiy and Personnel The Rech’ elopment Agent y of the Cit 3 ox Oakland was activated ox’ Uctober 11, 1 95o, by action of thc uakland City Count P pus sLiant to a ht Calixornia (uminuiuty Redevelopment Lawi. Effective Decemer 31, 1075. the C’it C’ounc ii declared it’.eli jo 1* the Agency. The Mayor serve- a (‘hairman of th Agency Agenc staff service’ arc’ providc.d by (‘it> staft under an agreenieni beitseen the Agency and the City entered into in I ec ember 1975 Such support include’ projc ci management, real estate acquisition and disposition. relocation, ergineerinc aid planning, lega,, nnant’irig anti ficcai —ervice—. MR. Ilrcxi I. t; tkl”%FI serves a- (‘ity Manager and Aw’ncy dnxinktrawr. lie was. appointed it, those positions in 1081 He tormerly served a’ Assistant (‘its Manager. MR. kmnixi’ F.. Vr.xn. -i’ne- a- City Attorney ant’ Agency Counsel Nc’ ssa- appointed to these position- it 1082. Mi... Rh itiRli DIGicI serve- a’.. Agency Trenurer lie also serve- a- (‘ity Liirec.tor ot Fiiw.ncc. lit. was appointed it. these lmsitions iii 1063. AitJu’S’t JAMESLI) serves as Secretary to the Agency, a- well as (‘icy Clerk. Ms Jamneson has held the positior of Secretary to the Agency since 19fl’ and ha- been employed by the City since 1950. Administration ol tht Agency- Project- is a staff lunction sssthin thc City organizationa 1 Iramework and ha- been a shared rrsponsibility ot the Uffict. of Economic Development and Employment ‘Commer cial Industrial Projects and Office ci Community Development (Housing Projectsx Mx. Gn’RuF II. Vitusu, Director ox the Office of Economic Development and Employment. wa’ appointed in February 1079. Ms. Aismucrm litwtn’i ssa appointed Director of the Office of Community Devetopment in 1979. Sne has been associated with the Agency for 15 years. Powers The Agency is charaed with tht responsibility for elimination of blight mrough the proce- of redevelop ment. Generally. this process i’ culminated when the Agency dislxises of lanc for development by the private sector, but befor” this can be accomplished, the Agency must complete the process of acquiring and assembling thc neces’.ars sites, relocating residents anc. businesses. demolishing the deteriorated improvements. grading anti preparing the silts fo: purhasc L’y tlc”eloper: ai..cl providini for ancillary nff-4itc improvement-. All power- of the Agency arc sestec. in its nine member’. The Agency exercise- governments, function’ in carrying out projects and has sufficiently; broad authority to acquire, develop. administer and sell or least’ property. including the right of eminent domain and the right to issue bonds and expend their proceed-. The Agency can clear buildings and other improvements, can develop as a building sits any real property owned or acquired, and in connection vith such development can cause streets, highways and sidewalks to N. constructed or reconstructed and public utilities to be installed. Redevelopment ir. the Statc oi California is carried out pursuant to tlu Community Redeselopment Law (Section 33000 et. seq. ot the Health anti Safety Code,. Section 33020 of the Law defines redevelopment athe planning. cle elopment. replanning. redesign, clearance. recontruction or rehabilitation, or any combination of thea. of all or part of a survey area and the provision of such residential, commercial, industrial, public, or other structures or spaces as may bc appropriate or necessary in the interest of the general welfare, including recreational and other facilities incidental or appurtenant to them. The Agency may, out ot the funds available to it for such purposes. pay for all or part of the value of land and the coat of buildings, facilities, structures or other improvements to be publicly owned and operated to the extent that such improvements are of benefit to the project area and no other reasonable means of financing is available. Tne Agency’ must sell or lease remaining property within a project for redevelopment by others in strict conformity with the redevelopment plan, and may specify a period within which such redevelopme nt must begin and be completed. 7 r ‘I. IIir Redevelopment Projects ws: cts. These projects are briefly described as follo The Agency has seven redevelopment proje Central District Project Business ately 200 blocks, including the entire Central This project encompasses an area of approxim and Old n r redevelopment action areas: City Center, Chinatow District. Within the project area are three majo r City project, the Oakland Convention Center—George P. a majo Oakland. These three aétion areas surround . The project h was developed with Agency financial assistance whic l, Hote ncy Scot lan Memorial/Hyatt Rege land Metropolitan the east bay portion of the San Francisco-Oak area is the economic and transportation hub of ately 7,440,000 ings of over 30,000 square feet with approxim Area. It contains nearly 40 major office build ately 90%. The currently have an occupancy rate of approxim square feet of rentable space. These buildings its boundaries. it system, having three stations located within projecL is also at the heart of the BART trans munities. Freeway ct with other parts of Oakland and nearby com More than forty bus lines connect the proje on of the John significantly enhanced with the recent completi access to the project is excellent at present, and B. Williams Freeway. for the in the heart of downtown Oakland. The plan will thy Center is a 15-block development area area the d. plete com when that , the Agency expects ever how ion; revis r unde ntly curre is ent developm . Four office ing and a preservation park for historic structures contain office towers, a retail area, new hous story Clorox ur ty-fo twen the ; 1973 in Fargo Building, opened s Well story ten the d: plete com been have towers on 12 story IBM Building, opened in 1982 and a compani Building, opened in 1976; and the twelve story building, opened in 1985. The $70 lopment on a 4-block site assembled by thi Agency. The Chinatown Project is a multi-phased deve the two with k, bloc city one re feet, is a 6-story podium covering use. million first phase, consisting of 370,000 squa office for s floor four r l and restaurant use and the uppe over g lower floors designed for commercial, retai pyin t occu tenan r majo AT&T Information Systems is the Construction was completed in late 1982. 150.000 square feet of space. Oakland’s rehabilitation of an important commercial area in The Old Oakland development involves the ining rema The ted. 11-structure complex have been rehabilita history. The first. two structures of the three or four years. reconstruction will be phased over the next Acorn Project Acorn lock area west of downtown Oakland identified as the ed. In 1962 redevelopment commenced on a 50-b olish were dem acquired, occupants relocated, and the buildings l units Project. Approximately 61 O structures were entia t developers, over 1,000 low-moderate income resid After sale of assembled land to private non-profi es while MOR lopment contains 677 apartment.c and townhous were constructed. The Acorn Housing deve edge of the -rise apartments. A 23-block area at the southern Housing combines 357 townhouses and high land and ht lopment where more than 20 new firms have boug er 1983. project contains industrial and commercial deve hborhood shopping center was completed in Novemb built new facilities. A 50.000 square foot neig Oak Center Project . The and adjacent to the Acorn Project. began in 1967 Oak Center, a 56-block project located in West Oakl est Inter low gh throu tures struc rian ing, predominantly ‘icto ct emphasis of the project is on preservation of exist proje ern west g the alon s ertie prop l mpasses some industria enco area ect Proj The s. loan tion bilita reha rate ential develop The renewal process has also included new resid boundary which have also been rehabilitated. new parks. three of ion truct cons as ronmental improvements. such m “t on vacant lots as well as extensive envi ion of a truct cons s and wire y utilit rgrounding of all overhead street improvements, street tree planting, unde new elementary school. Peralta College Project ege and to assemble a site for the development of Laney Coll The purpose of the Peralta College Project was ed to open was us camp ege Coll In 1971 the $26 million Laney acquisition of property for housing development. & land vuiich remains (I h (listJOSt’d A 40 unit 12,000 full-timi and part-time studenis. Tnere i one uarce. housing development icr low and moderate incOfli(’ persons wa recentis completed in I he protect area Stanford/Adeline Pro!ecl An area 01 approxImately tive hlock i r.N or: h C)alani! whert three major street cOtTI( together 1 h’ ot of the Stanford/Adeline Pro ect. The principal aim o the Slantord Adelinc Project was the removal of blighting influences and replacement with ness housing and open Most ot the oroperts has beun COnVeyed to privat( developers. Elmhurst Project The Elmhurst Project is a 20—block (‘ommercial strip in East Oakland that stretches along East 14th Street from 81st to 1 00th Avenues. ‘Inc purpose oj the proinc: i’ to pro’ pUUi1 recreation tatilil it’—, a cite ior elderly housing and consi ruciion of puhli( improvements. 77th Avenue Industrial Project The project is comprised of approximately ten acres in an East Oakland industrial area. The uroe W the project is to eliminate blight t economic deterioration, disuse anti depreciated values arid to facilitate the expansion and development of labor-intensive industry. Financial Affairs The Community Redevelopment Lass provides a means for financing redevelopment projects based upon allocation of taxes collected within a project. The assessed valuation of a proiect area last enualized prior to adoption of the redeveloriment plan. or base roll, is established and, except for any period during whtch : h’ assessed valuation drops below the base year level, the taxing bodies thereafter receive the taxes produced by levy of the current tax rate upon the base roll. Taxes collected upon an\ increase in assessed valuation over the base roil maz he pledged by a redevelopment agency to the repayment of anr indebtedness incurred in financing or refinancing the project. Redevelopment agencie- themselves have ne authorits ti lev taxes and must look specificali\ to the allocation of taxes produceti as indicated above TABLE 1 REDEVELOPMENT AGEN(:1 OF THE CITI OF O4KLA,ND FULL CASH VALLE INCREMENTS AND TAX ALLOCATIONS Fiscal ear’ 1976-77 through 1982-83 Full Cash Value Incrernents(1) Fiscal Year 1979-77 1977-78 1978-79 1979-80 1 980-81 1981-82 1982-83 1983-84 1984-85 . . $229,188,572 27°,938,248 318,801.308 376.846.000 38ti,Q40,41 2 512472,758 609,966,980 719.812,097 962.881,373 Total Tax Allocations(2) $ 4,55°.792 4,470,911 3,367,098 4.193.010 4,1 n3.o51 o,490,oOS 7,854,385 9.463,o08 12.475.761 Full casi’ values mr alt reucvek)tirnrnt trojec at,ovt thu Ire ten’ ha’t year valuations ‘I’hcse data represent grov ib in tul’ (ash values generating Las evenu s for use hs tnp Agenes 2 revenues ci’ltecipd hs thu C ouni said -uhsuuucnt Is paid to tfle .‘\genrs Actual tax 9 levy ad valorem taxes on in limits on the ability of taxing bodies to “Revenue Sources of The California constitution places certa See cies. nues available to redevelopment agen e and local govern real property. thu. reducing the tax reve stat ore.. ns.” below. Furtherm itatio Lim s ation ropri App and e Rat The City Property Tax opriate funds. See. “Revenue onal limitation on their abilit to appr mental agencies are ‘aubject to a constituti Recently, the Calitornia and Appropriations Limitations,” below. Sources at The City Property Tax Rate s of taxes” subject to the ceed “pro that tax allocations shall not be deemed n has not been tested legislature passed a statute providing latio legis e of the Agenc>, this ledg know the To . tions opria appr on con%titulional limitation Agency would not be subject to but if it were upheld as constitutional, the. in the appellate. courts of California, . the. Lonstitutional appropriations limit 745,000, which includes btedness for tax allocation bonds was $83, of June 30, 1985, the Agency’s inde s A and B. The Agency’s pment Project Tax Allocation Bonds. Serie velo Rede rict Dist ral Cent of maximum annual 000 $80,820, tax allocation bonds i% $e.,1 81.307 and the ing tand outs its on ce servi debt al annu current debt service on these bonds is $10,885,000. CITY GOVERNMENT city in 188Q as a city in 1854, and became a charter and , 1852 in town a as ted rpora inco is no Sect ion? The City was revised in 1Q69 to take advantage of what ally tanti subs was r”) arte “ch It he rter l afiair. The The’ City’s cha a giving cities Home Rule as to municipa forni Cali of State the of tion stitu con l”t the of Arti. Ic XI of the duties of the legislative branch (the “C’ounci and ers pow ion, nizat orga ion, elect the personne Charter provides for branches, fiscal and budgetary matters e rativ inist adm and utive exec the of ion and poisers and duties : employeec’ pension funds and the creat sales and s lease its, perm ses, licen s, hise’ administ ration, franc organ!ntion of the Port of Oakland. Elected and Appointed Officials the Mayor elected by ditrict and one together tith are m who of n seve bers, mem nine has i elected at The Council serve terms of four years. The City Auditor bers mem ncil Cou the and or May The elected at-large. the same time a the Mayor. ority. The City Manager cil; he has no administrative auth The. Mayor presides over meetings of the coun is responsihk for appointing City employee other than tn ive officer 01 the City. He Managei the primary administrat 3 C’ler&. who I appointed by the City Council. and thc Cit thc by inted appo who rney Atto Cit5 subject to the approval of the Council. rs of the Ci:. rol and administration of the financia: affai times cont the for le nsib respo it ager fulb The City Man the Council at all al budget to the Council and keeping ncc Fina of ctor Dire a preparation and submission of the annu inted appo has The (‘ity Manager . City the of s need and ition cond cial advised as to finan affair’ of the City. to supervise the financial independent certifiec the approval of the Council. appoint an The Charter directs that the Mayor, with fiscal year to examine the prior year’s financial statements th of each public accountant during the first mon and available tar puhii’ public accountant is filed with the Council fied certi ent pend inde the of rt repo public accountant arc ir The. tions performed h the independent certified func ting audi The iew. it’ and n ectio insp the. City by the City Auditor addition to periodic financial reviews of Governmental Senicea buildings, communit, de maintenance of public works and inclu City the by idea prov ces servi l Municipa ices The City dloe% ne ral and recreationa’ facilities and cerv cultu and , ction prote e’ polic and firt development. ities. operate any hospitals or health care facil Local Government Agencies authoritie’. and quas a number of significant governmental nty the “C’ounty”i. i In addition to the Agency, there are Cou eda . Alam 5 within the Cit ces servi ide prov that ons orati corp go crnmental nonproflt 10 which the Cut i’ the ( ount> Mat. uro iels’ evi ral types of servo e’— ii’ thi rt-—t’ieuiu.. of ib City. includhu.a a court anti ;,,tp.ecutOriil ‘.t ‘acm anI j.ul’ht a—iseanre. to the extent it is iuiided liv local agent ie. The Oaklant Unifleti Schoo! I )istrirt I the “School Inst rict”i ha’. biutitiari”. approximatti’ oterminous with the (‘it> but is governed b> a ParaLci elected hoard ot Edue atiut. The S’ hool I)istrict i’ funded rough state and tederal aic. and iota! :a’cing power The (‘its does not Provide an wndinu tot the Scnool District The Oakland housing Authority h’ a public corporation that cm ii anti operatv. federal anci state -anisted housing I)rO.Wcts br lcm-iiicome tamilie’ and elderly jw’rsonc The Port of Oakland is ar. agent> of the City that k responiblc tor di velopinu the port area. The City has ft the past issued genera! obligation debt at the (‘itt’ to tinann’ the Per” acti nit—. hut such dclii i’ presently erviced in pa>ment’. directl> irom ‘he Port, ant! th. Port ntis reimbursed the City anci will rontinuc to being 5 reimbur” t hi Cit s ior ;.ast clime service anti lost interest. The’ Port also rc’iml,urscs I he (‘ity for the’ municipal services that an lirotided to it. The Parking Authority is a public agent> separdee from the Cii> crc’ateG io’ the purpose. at developing parkina tadliti.’ The City ha’ leased at least tine off-street ;uric.ing Ta’ ilit> tram the’ Parking .utliority and become the owner at a second ofi-street parkinu tacility developed In’ the Parking Authority Oakland- 4tameda Count> Coliseum, Inc. (the “Coliseum (‘orporation” is a nonprofit corporation organbed under the laws 01 the State of Calizorma to operate and manage the Oakland-Alameda Coliseum Complex under an agreement with the City and the Count> dated October 31, 10*3 On October 21. 1963. tht Coliseum Corpora: ion cnceruted a uround lease with the City and Count’. for a tern. oi fort> year-. suhj—ct to an agreement to c onstruct the’ Coliseum Complex. The Coliseum (‘orporauor 1 : bet. subleased t he Coliseum Complex to the City and (‘ounty br a term to e’cpire ten days prior te, the expiration ot the ground lease. The rental provisions of the sublease require the Cit> w pay the Coliseum Corporation $750,000 each year. The City is entitled to 50% 01 the net annual operating income of the Coliseum Complex. During fiscal year 19841985 thi. Cit> received $Thl,021 from the Coliseum Corporation On FINANCIAL INFtRM4TION The accompanying financial intormat.ion was prepared using iniormation from the financial statements that are audited by the City’s independent certified public at’ ouni.ants each year and the most recent unaudited material available tram the f)irector of Financ’. The Cit> uciitee, uinanc ial itate ments tar tn’ >‘ear ending Jun’ 30 1 084. tnt most recent audited finanria! s;ct.’meiit—. ar” prtn’ieiec it; Appeti’iir nerew. Fund Sinactuit and Fonnat of Financial Tables The accounting records 01 tnt City aft organized ou the basi- 01 func. and account groups, each of which is considered a separate accounting entity. The tunds are groupe’d inte’ seven iunds and two account groups a’ follows: Gtnerai Fund used to account for all financial resources 01 the City except those required to & accounted for in another fund. Special Rn’enuc Funds—used to account for the proceeds oi spetinc re’.enue sources that are, restricted h> law or administrative’ regulation to expenditures ioi 4Jwcitie purposes. Debt Service Fundo used to account for the accumulation oi resources tor, and the payment of. interest and principal on general onligat ion long-term debt. Capital Prnject$ Fund3—used to account for the resource- obtaineel and u.-ed for the acquisition. construction or improvement of capital facilities. Such resources are derived principally trom proceeds 01 municipal improvement revenue bond issues and sales of municipal assets. Enterprise Funds— used to account for the activities of operations ihich are financed primarily through user charges for goods or services jn’ovidecl to the general public on a continuing basis. Internal Service Fund.c—used to account for the financing oi goods and services provided by one department of the City to other departments on a cost-reimbursement basis. 11 J-uno. ue(: to a (‘OUfli br a s-t nt-th isv the City a a rutt- or a air agent tar frost uno 1itcn i1im’iiuai, Jrtvatt rt:zaHun’ or other guvertinuntal units. - (cncru/ Fixcd Li ae- irvised b\ tIlt ‘ Ci”. ‘‘the: o’ than 1( counts host a used oulit”n control ann cj: traOrrnatiot on ca t)ita or it. tnterprtse or inturnal rrvic fund’, a maintain ( ntrui Lone Jcrm /) hi (,muh of lccoiiiits used to act ouni to: all I tie-term obliga Lions, me] uding I tabilit ie and ve-teti oinpnat ion and sick leave, excel where accounted tot in entertrie or n i irnal servir’ tunds - -- clan-i, lii of Accounting Th modified accrual basis ot act ount ing is toliowed it I hi- governmental fund ti pes (general fund, special ret t-iiu und’, debt servict t unil and capital project I unds and trust and agenc tunds Revenues art re orded when measurable and available (i.e. collectable within the urrent period or soon enough thereafter to in usid to pay liabilities of tht current period). Expenditures, other than interest on long-term obligations w hi( s recorded when patti, art ret ordeti when the liability i’ expected to be liquidated with current availatle resour( e— Grant revenues. xx hich art rec ived as reimbursement br specifi based upor. the t xperidi tures recordet purposes or projects, are recognized Licenses, tines and penalties anti other revenues are recorded as revenues xx hen received in cash because hey are generallt not measuranlt un il actualR received mx estment earnings art at truce since they are measurable ann ax ailable. Tit Cit x aceruec br propert: taxes received within oP tlavs SL]bsettuent to year end. The a crual I ar ot accountinc fund i utilized in the enterprist and internal service fundc and pension trust Budget Adoption Procedure The fiscal year ot the City aecin’ on the tirst day of July ot each hirollowing vt-ar of i year and ends art the rhirtiet h day of Jun At üi r. da tt a tie tar Maaag--r i-:ermines, L’arh npar: nser: hai mus: arnisa a tn Cl’s Manager at. eN: iman ot revenue’ ann exteI,t:::ar-- br such Uepartmeni fur the ensuing fisca, year, deraited it .such manner as mar he tir”scribed by the Ci:r Manager, in preparing the prolosedbuutre: the Cit: Manager reviews the necessary. estimates. holds conference thereon with the respecttve dejiartmeni heads, boards or commissions and mar’ revise the estimates a ht may deem advisable. .-\t lea’t thirty tlavs prior to the beginning of each h al v-ar. the Citi Manager submits to the Council the proposed btidget as tiretiared or him After reviewing antl making Lich revisions as it seems advisable, the Council determines the time for the holding of public hearings thereon and causes to hr publisned a notice thereof not iCss than ten days urior te the hearing date. Copies of the proposed budge: art avabable to: irispeci ion by the public in the offiix of the City Clerk at leaNt ten tlavN prior to tne hea’in At the t onciusian of the tubdic hearing, the Council fLirt her considers the propc’d badge: and mazes any revisit thereof that it deems advisable and on or bemore Jun 30 it adopts the buda”: with r”visins. if any, by the affirmative vote of at lea’: a majority of the total members ot the Council. From the effectivt (late of the budget, the’ several amounts stat eel as proposed expendit ure become that year except for the Emergency Contingencx Project which requires City Council authorization All appropriations lapse at the end of the fiscal year to the extent that I hey have not been expended or lawfully encumbered. appropriated to the several departments, offices and agencies for the objects and purposes named, provided the C’iir Manager may transler funds bet ween departments and activit”’ programs during the budget 12 r SUMMARY OF FINANCIAL OPERATIONS General Fund Fiscal Year 1980-81 As of June 30, 1681 the City’s General Fund had a cumulative tund balance o: $7.7 million comuarec to wa comprised of an operating ueflcit or $3.6 million, and $11.1 million at Tom. 30, 1980. This decrease an offset of $420,000 br ogeratin Lransfewith . Bonds repayment ui $1 30,000 in Blood Band Revenues showed an increase of 11.1 percent from $867 million in 1979 80 o $96.6 million in 1 980-81 from $94.4 million i I (71L$9 million vhih expenditures showed an increase of 6.4 percen in 1080-81. (.eneral Fund Fiscal lear 1981-82 ar ivc fund [clan” t5i43 moliol: “‘m:ared A 01 June 36, 1Q82 the (i ;entd i un hall t. cumul 5 O $5.7 p°r cent frori the prior f5(a year balant e fund in sa a e increas This $7.7 million as if Tune 30, 1 981 br the year Iirt ime nscai since it the tcIsag during res result of n’ enues exueding cx enditu 13 in 1 680-81 to SI 18.8 million in 981 -82, while Revenues increased 16,2 percent from $00.6 million 1 t $1 12.1 million in 1 981 82. 1980-8 in million 03.3 $1 from expendit urec increased 8.6 percent General Fund Fiscal Year 1982-83 General Fund had a cumulat iv iund dalance 01 81 5. million for ar As of June 30, 1 983, the City fiscal (ar. This increase in rund ba]ancc wac a result ot increase iii fund balance of 1 0.5 Qercent from the prior rs. transfe other revenues exceeding expendit ure and in 1981 -82 t $124.2 million in 1 962-83 vhile Revenues increaec 4.e percent from $1 1 8.8 million 981 -82 to 120.5 million in 1 982-83. in 1 million $112.1 expenditures increased 7 4 percent from General Fund Hscal lear 1983-84 ative iurrd nalanc( Of 818.8 million or $3.0 As of June 30. 1Q84, the City’s General Fund had a cumul \\as a result of rev rices exceeding 5 ear flscal expenditure prior the million increas( in fund balance over in 1682-83 to 8130.6 million itt 1 Q$3$4, scOule Revenues increased 12.4 percent from $124.2 rniliion I 9b2-S5 to $1 38.9 million in 1 963-84. : in nultior 8120.5 from t expenditures increased 15.3 percen General Fund Fiscal lear 1984-85 tion trio’ t tat close ot tnc fica1 ear The City’s most recent estimate o. revenus and exrendttuni ;)roie° with at, rn Ilior, en,iint’ unrestricteo font, balance o” o:’ $1.1 itures expend indicates an excess ot revenues over e. year balanc us previo the 819.9 million or 5.9 percent above 1’.BLlf 2 CIT F OAKLANI) GENERAL. FUND SUMMARY SCHEDULE OF REVENUES AND EXPENDITURES Fiscal \ears 1 97)—8O through I 983’$4 (in thou a nil— of doI1ar. Total Revenues and Expenwtures 1979-80 1980-81 198182 1982-83 1983-84 Taxe...,.....,.............., 876,212 $ 85.824 $ 98,193 SI 04354 $11 5,6o7 Permit am] Lb ense 2.1 71 2,OSe 3013 3,373 3,502 irahie flnea and various penalties 1.969 2,222 2406 2,458 2.881 Interest and renrai income 2,565 2.729 5,614 4,088 5,375 Revenue from current services 2980 2.984 4.936 5,480 6,890 Grant revenue 616 782 1093 430 Other revenue 3J88 3.042 5,544 4.023 5,532 889.721 S 99.639 811 6.799 8124,206 $1 39,608 8,246 8 10,672 $ 12,060 85.148 Revenues TOTAL (239) Expenditures General government Public safety Office of public works $ 6,768 $ 8,095 59,196 67.407 73.978 78,456 4.850 5,13 7,267 6,7o3 9736 $ 2,687 2.732 2,805 3116 3,490 14,475 1 6,897 1. 7,388 18,597 19,537 545 370 1 74 1,182 3,895 5.871 2,604 2,270 1,689 5,010 TOT.XL 894.392 8103,266 8112,126 $120,477 $138,676 Surplus deficit 8 4.671 $ Offlce of genera] aervicts Parks, recreation and cultural Economic, community and social programs Nondepartmental Source: Cil\ of Oadland FTnanclai Saeinens and Cdv Direeor of Finan e. 14 3,629 S o.671 $ 3.729 $ 732 _____ __ TABLE 3 CITY OF OAKLAND GENERAl. FUND BALANCE SHEET 1980 THBOU(;I1 1984 (in thousands o do1iar’) June 30, 1980 June 30, 1981 June 30, 1982 June 30. 1983 June 30, 1934 $10490 $11998 814,500 834,989 $43,872 7,355 7653 8,6Q7 9,662 7,782 19.764 1 0,988 30,70° 15,215 8,496 o30 1,166 998 837 1,141 $38237 $4005 $54,994 $oO.703 $61,291 $ 7,081 $12,296 5 6.573 $ 3,504 580 5, 03 Assets Cash with (‘dv Treasurer Accoun! rereivabh .,., intl Due Iroin other fund Other assets TwAl ,Assiis Liabilities Warrants payable Accounts pavalle Aci:rued pavrofl 9,379 $ — 22,274 29,088 6,531 531 Accrued iar)iIItjes 1 .227 404 416 564 Liability ror workers corntensatlon 1,017 1.361 1.705 3,567 12,909 16,829 24,850 9,104 1,420 1,590 1,590 Due to other tunds Judbmeni. and claims ToTAL LIABILITIES — 4.851 — $27,158 $33,060 $40,703 $44,908 $42,470 $ 6,164 $ 5,440 $ 6.631 8 6,037 5 5995 4,745 2,673 5,1 65 4,535 7,911 2,495 4,923 414 Fund Equity Fund Balances Reserved Dntcd for future expenditures Lndes.idnated 170 Tomi. FuNo EQuITy fotal Liabilities and Fund Equity . 3681 $11,079 $ 7.745 $14,291 $15795 $18,821 836.237 840,805 $54,994 $60,703 $61,291 Source: (‘lv ut Oaklane Financa Sal emunts anti Liv Director ol Finance 15 TBLE 4 CITY OF OAKLANI) AI)OPTED BUDGET FOR FJSGAL YEARS 1980-81 through 195-86 GENERAL PURPOSE FUNDS (In thousands of dollars Revenues Properix ‘Ptxe’ Other taxes Licenses and permits Fines and penalties Interest and rental income’ From other agencies Charges for current services Other revenue Total Revenues . . . .., Expenditures General government Public safety Public works General services Culture and recreation Community and economic devel opment Non-departmental Cauital improvements Total’Expenditures Surplus (deflcju Adopted 1983-84 Budget Adopted 1984-85 Budget Adopted 1985-86 Budget $ 38 8ao 04,861 5,138 3,832 3,482 24,534 6,891 186 $147,780 $ 44 350 70,044 5,526 4,504 4,964 24,545 8,697 11,999 81 74,829 $ 30 390 83,120 6,695 5,760 6,150 22,542 8,549 9,944 $193,150 9,424 87,695. 12,160 4.084 18.824 $ 1 0.989 96.231 13,973 4.012 20.231 $ 1 4,280 99,621 16,331 4,858 21.524 S 17.415 108,410 18,586 4,623 23,715 895 12,014 1,090 6,831 1,606 $154,963 8 7,183, 1,878 14,130 2.197 1 7.703 501 $193,150 0 $ Adopted 1980-81 Budget Adopted 1981-82 Budget Adopted 1982-83 Budget $ 25 760 51,104 2,316 2,501 1 .705 25,555 2,822 4,129 $i15901 ‘1’ a1 51 57,790 .3,484 5,226 1,448 22.270 6,653 2,676 $129,061 $ 36 416 61,810 5,23o 2,674 3,31 7 24,206 8,812 11 7 $142,594 S 7.749 71,797 11,152 3,236 1 7,325 633 3,053 o45 $1 15,588 $ tl,687i - 5 9.222 77.825 12,954 3.864 20,OoO 935 3,518 685 $129,061 0 $ - $145,094 $ 2.500 211 $17233 S 1,996 REVENUE SOURCES OF THE CITY ;en eral es, fees and charges, and The Cdv derives its revenues primarily Trom various taxes, non-tax revenu es in the Community revenu include not es do revenu receipts from other governmental agencies.. These and yment Training Administra ve Emplo ehensi Compr Development Block Grant. Grant Revenue, and the Funds. ue tion Funds, which are classified as Special Reven XIII A to the California The passage of “Proposition 13” in June 6. 1 978. which added Article This constitutional amendment also Constitution precludes increases to the ad valorem property ax rates. approval of two-thirds of the voting dictates that increases to certain ‘‘special taxes’’ can he made with the imately 1 7f of the revenue base, etectorate. Non-tax revenues and fees and charges, which represent approx may be increased without voter approval. Property Tax Rate and Appropriations Linijiations property to one percent of full cash Section 1 of Article XIII A limits the maximum ad valorem ax on real ioned according to law. Sect ion 2 of value as defined in Section 2 , to he collected by the counties and a oport sessors valuation of real property as shown on Article XIII A defined “full cash value” to mean “the Counts ed value of real property when purchased, the 1975-76 tax bill under ‘full cash value’ or, thereafter, the apprais ent.” The full cash value may newly constructed, or a change in ownership has occurred after the 1 975 assessm t per year, or reduction in th he adjusted annually to reflect inflation at a rate not to exceed wo percen of declining property value caused by consumer price index or comparable local data, or reduced in the event izition has adopteo regulations tiamage, destruction or other factors. The California State Board 01 Lctual 16 binding on county assessor’ interpreting the meaning of ‘change in ownership” and “new construction” for purposes 01 determining ml! cash value of property under Article. XIII A At a special statewide election on November 6, 1979, an initiative measure entitled “Limitation on Government kppropriat ions” was approved by the voters. The initiative added provisions to the California Constitution which, among other things, limits tb annual appropriations of Stati and local guveriimental entities to the amount o appropriations of the entity for the fiscal year, as adjusted for changes in the cost of living, changc s in population and changes m sen’ices rendered by the entity. The City doe’ not anticipate any difficulty in holding approuriations below the allowed limit for fiscal year 1985 86. Legislation enacted by the California Legislature to implement Article XIII A (Statutes oi 1976, Chapter 292, as amended) provides that notwithstanding any other law, local agencies may not levy any property tax eiccept to pay debt service on indebtednes’ approved by the voters prior to July 1, 1 (‘76 and that each county will levy’ the ma’cimum tax permitted by Article XIII A oi $4.00 per $100 ot full cash value Prior to 198142 California real property was taxed at twenty-five percent of assessed valuation (based on the traditional practice oi using one-fourth of the full cash value as the assessed value for tax purposesL Subsequent legislation, Statutes of 1979. Chapter 282, as amended, enacted a new system br allocating property tax revenues among California local public entities. Under this law, cities and countie’ receive about one-third more of the property tax revenues collected instead of direct State aid. School districts receive a correspondingly reduced amount of property taxes. but are compensated directly by the State and given additional reliei In addition, the law provides for the State tc assume a greater share of health and welfare costs. Future assessed valuatior growth allowed under Article XIII A (new construction change of ownership 2 inflation) will be allocated on the basis of “situs” among the jurisdictions tha serve the tax rate area withir. which the growth occurs Local agencies and schools will share the growth of “base” revenues trom the tax rate area. Each year’s growth allocation becomes part of each agency’s allocation in the following year. The availability of revenues from growth in tax bases to such entities may be affected by the establishment of redevelopment agencie% which under certain circumstances, ma> be entitled u such revenues resulting from the upgrading ot certain property values. Section 4 ot Article XIII A effectitely prohibits the levying of any other ad valorem propert tax above the limits set in Section 1, even with the approval of the aftected voters. S 17 ___ ___________ __________ TABLE: 5 CITY OF OAKLAND ASSESSED VALUE Last Five Fiscal \ears (thousands) Fiscal Year ended June 30 Land 1 981 1982 1 983 1984 1985 $2611008 2967,063 3,212064 3.395.910 3,5p7,285 Improvements Personal Property Total Gross Assessment Less Exemption Total Net Assessment $3606040 3.9Q4,403 4379.025 4,685.568 5408,745 8557764 677,789 850.461 858,331 845,537 $6774.81 2 7,639,255 8,441.550 9J39,809 9,821,567 $336048 436,456 478,324 868,453 859,756 $b,438,7o4 7,202,799 7.963,22 o 8.271.356 S,9p1 .811 T.BLE 6 CiTY OF OAKLAND Ratio of Net General Bonded Debt to Assessed Value and Net Bonded Debt Per Capita Last Fii’e Fiscal ‘sears Popuiation° Assessed (Full Cash) Value (thousands) Net Bonded Debt° (thousands) 1981 339,970 $6,438,764 1962 1983 1984 344,9.35 347,325 351,607 7,202,799 8,271,356 $3,495 2,610 1,725 840 1985 351,100 8,961.811 480 Fiscal Year ended June 30 7,963,226 Ratio of Net Bonded Debt to Assessed Value .0005 0004 .0002 .0001 .0001 Net Bonded Debt per Capita $1 0.28 4.97 2.39 1.37 Estiriah by State Department of Financ All General Ohligation Bonds. TABLE 7 CITY OF OAKLAND TAX LEVIES AND TAX COLLECTIONS Last Five Fiscal Years (thousand,) Secured Property Tax Levy Collection of Current Year’s Taxes During Fiscal Period Percentage of Levy Collected During Fiscal Period $21,626 $21,220 98.12 1982 1983 21.177 96.85 96.70 1984 1985 27,265 20,509 25,548 26,577 (1 Fiscal Year ended June 30 1981 26,420 29.867 97.48 Collection of Prior Year’s Taxes During Fiscal Period $ 863 5,031* 772 1.219 (1 Total Collections $22,082 25,340 26,320 27,796 (1 Ratio of Collections to Tax Levy 1.0211 1.2060 .9962 1 .0195 1. Increast’ for t 981-82 represents apportionment of 1978-79 unsecurer] tas that had been held in trust by Alameda County anti ilu State of California. (1, Not vet available. * 18 Asoewd Valuation and ‘In Collection, Taxe. ar’ trviecl ror ead fiscal year on .axattlc real and Pc’r”Oiia in’oiit’rt> which i’ ‘itUftttti U tnt’ t.Thy d? oi thc preceding March 1. For aac”sment and collect ion lIurIxnes. property 1% cias’ifled either as ‘secured’ or “un’,ecured’ ant; 1’ hted accordingly ot ?eparaW parts of the aS’Ies%men rolL The “secureu roil” that hart of the asecm”nL rofl containing Staw-aswned pablr tsti’itie’ propt rty ant count)-asaened prope”t.y on which the property vaiuc ‘c ufiicient to secure jidyment o the tar,. Other property Is asses”ed or, the ured roE.” Property taxe4 on the secured rot! arc duc in tw’ inctabmenn, oi, Nov”mrer 1 and February 1 of thi fiscal year 1. unpaid suer taxes become delinquent oi, I)ec ember 10 an) ‘prC 10. respectively, and a 6 per’ en: penalty attach” ii. any deUuouent pay mini. It, addition, proper ty ot the secured roil with respect to which taxes are di’iinqueiit is oid u’ the Stati on is about Junt 30 is the fiscal year Suit property may thereafter pp redeemec. P payment at thc delinquent taxes and ht deEnq ur’nt lw’ndz:y. g’lu’. a redempt tor. penalty n: 1 percent per month to the timi of rcdemptioi.. ii taxe on unpaid for a perux. o’ liv’ y”ar’ a- more hi proper by t cteeded to tnt Statt and then i’ %ubject to sale by the (‘ounty In Collector. Prop”rcy taxe% on the unsecured roll art aue a” of the March 1 lien dat” and b”comc’ aelinouen:. ir unpaid, on August 31 ox cli’ tical year. A 6 percent penalty attache’ to delinquen’ taxe’ ott property is thi unsecured roll, and an adciitiona! p’nalty oil percc.nt per month begins to accruc beginning November 1 of the tiscai ‘ear. Effective flscal year 1082-83 the delinquency penalty increases to 10 percent and tht additional penalty increast% to 1.5 percent jar month. Thi taxing author ity has four ways of collecting unsecured personal property taxis: (ii a civil action again%: the taxpay er: €2’ filing a certificate it, the offict of chi County Clerk specifying certain’ fact’. in ordei to obtain a judgment lien on c”rtaii. property of thi. taxpayer. (Si flling a certificatc o’ delinquency br recora ii. the County Recircler \ office. iii order to obtain a aen or’ certah, property ol the taxpayer: and t4i seiturc and %alc’ o perso’ia’ proper ty. improt ement or poss”s%ory interest belonging or assessed to th’ a”s”asec. “unset set torti kw’zoW is ct twin mformat tar r.’gardinu prorert .‘Ollt’t tint f’u’ tli” (‘fli’ 0! (‘laRland. Tana8 CITY OF OAKL4!%I) SUMMARY OF FULL CASH rALUE AND AD ‘ALOREM PROPERfl TAXATiON Fiscal icar- 1980-81 through 1984-85 Full Cash Fiscal Secured Pronerty Calleotlor. Current Year Valued) liz lanes(S) 1980-81 1061-62 1982-aS 1983-64 1084-85 Year’s Taxes 86,774.612 7,630,255 6.441.550 “.139,80Q 9.821,567 $21,626 21,177 2o,420 27,2c5 20.867 $21,220 20,500 25,546 2o,577 NA of Percat.ge Current Levy Collected 96.l2 96.85 06.70 07.48 ISA *1’ Amuuot’ pretiously ‘ihcmi. a& a’*’.aee vaiUtstlau% are non howr. a’ tul’ coat valuc Sec ‘Property in Rats”' ant’ .j’prapnata’m’ Lsmitaiun” l3”gtnnmg in hacai yc’r 1Qb0’bi nusiner tr,t’eni ane’ nr’ exrlueu’ct tram ih’ in han qnc’ tilt Stat’ incna’cc’ iii’ Nate urapcriy In cxemp nar toe’ businn’. inventone from 50 percent to 100 percen. Stat’ legisia lot at goternmc’nc for revenu’ tot.: as,. re-uI: o suct ni nac, how’ver, rcquire tis State to reimburu’ mptwn and vane- th” retm.’ur*menc to tuturt near’ haac,.l a, chc (‘,mumc: Pncc Inch. and population change. ;2t (‘icy at Oakland taan cmlv Xosenc: (‘ny ,. Fmanc’t Department 10 EXPENDITURES OF THE CITY salaries and retirement programs. Two maior sources of the Cdv’s expenditures are employee Employees— Salary Adjustments A summary of City employment levels follows. Some progra ms. employees are hired under various federally funded TABLE 9 CITY OF OAKLAND EMPLOYEES As of As of June 30 1976 1977 1978 1979 June Permanent ......... ... 4,078 3935 4,946 1981 4,709 4,551 .. Permanerit’ 30 3,416 3448 1982 1983 1984 4,007 3,332 Exciude temporary help. tions, the largest one being United Public City employees are represented by five labor unions and associa y 43 percen: ot all City employees. Currently 83 Employees Union tLocal 790 which represents approximatel enl Fh C1LS o Oakl md hac noi cxpc icnc C( a sgrccm pet c p ot sIt Ciii cmplos cc ire C( x en d hi n got iatcd maior employee work stoppage. Retirement Programs plan administered by a Board of Trustees The Police and Fire Retirement System (PFRS) is a contributory inc 1 Tjis 1 1 06 ne Ci s hcg it’ p oi ic Fu c j105 cc h c no o Jul i i 67e 5 and Ci) ( JflhiO med S m the and pants partici PFRS cost o all for and tunding an amount equal to the annual normal service of value t presen The . over a tortv s’ear period amortization of unfunded benefits accumulated as of that (late y recentl mOst \“ert servce tcss of fut tire vested benefits benefits to which pant citiants are enrted regard plan related ed exceed d in an amount that calculated by consulting actuaries as of June 30, 1983 and resulte . 57.000 assets at June 30. 1983 by 5505.8 utions to the PFRS were at the rate of 72 .74C From July 1, 1978, through Tune 30, 1 081 Lhe Cdv’s contrib nsation of uniformed employees covered by the of all uniformed employees’ compensation ies 25 of the compe denned Effective July 1, 1 981 the contribution Public Employees Retirement System PERS (as hereinafter 1984, svas reduced to 78.71 percent. The City factor ol 7274 was increased to 79.1 OC, anc effective July 1 .30. 1954, representing the normal cost for the contributed $27,242,526 during the fiscal year which ended tune 5 amortization of the tinfunded liability by July 1 201 e. “ear piu proceeds of the Certificates to the Following the delivery of tne Certificates, the Cdv will apply the rated A + in Best ‘s Insurance panics com ce insuran purchase oi commercial annuity contracts from one or more The City’s net obligation PFRS. with City by he ted Reports. The annuity contracts will he irrevocably deposi under such annuities, nts made payme the (it result to mad” pension contribui ions to PF’RS will be reduced as a for annual ension itures its expend t of amoun ed As a result of this transaction the City expects that the combtn what the pension than less he will ent Agreem contributions to PF’RS and rentals under the Master Lease contributions to PF’RS wotiid otherwise have been. . . . administered by the Cdv and covers Oakland Municipal Employees’ Retirement System tOMERS is. who have not elected to transfer to PERS as three nonuniformed employees hired prior to September 1, 1970 g an amount equal to normal service cost. well as 565 retired employees. The City is providing for and fundin 30, 1 985. The most recent actuarial There were no contributions from the City for the year ended Jtine 20 n plan assets in excess or present value ot vested benefits valuation calculated h consulting actuaries resulted 1 1 083. 30, 85,824.000 at June h\ 1>ERS is a modiflea contrihutor plan administerec b tn State of California and covers all unitormed employees hired after June 30, 1 976 and all nonunitormea employees ex ent tno’ who hax not elected to providing br and bonding ar amoUnt (qua] to normal serva e cost and transier Iron OMERS Th (‘itv amortization o: untunded prior service cost at a current rate ot 1 6.43 SC and 1 8.51 6C of covered employee compensatior br uniformed and nonuniformed emplovee respectivels, until June 30, 2019 At JuIx 1 1 985 tthe dat ot the last act uarta study thes’ unfunded irior servic costs seer’ approximatel\ $04,u2o,000. C out ributiurr it orn tta C tee I0 the e ear ended jum 30, 1 985 se “re a pproxima tele 81 0 81 9,000, ‘omoared to the prio seat contribur in of 110,5 84,000 ‘ (‘ommencirig Jul\ 1 1 984, the Cit agreed to pa\ toe emplox ecs portion o. tb’ retirement contrihujon on behal. of th nonuniformec emplo ce’s participating A toe PICkS plar. Fo’ th (is ‘ci yea’ endrri june 30, 1985, the City raid $2838000 br the nonuniformed employees’ contribution i PICkS. Should an employee resign prior io retirement, (‘ontrirtution’ paid either by h employee or by the (‘it on behalf of the employee are ret undable together se it h interest, to the emplos e’ CITI OF O4KLANI) RFTIREMEiT CONTIIHIL TIOl\ I’or Fiscal sear 1980-81 Through 1984-85 (m thousand’, of dollars) Police & Fire Retirement System Oakland \lunicipal Employees S, stern Public Employees Retirement Svlern TOTAL. . ... . . . . . 1980-81 198182 198283 1983.84 1984-85 820.431 $23,942 $25,650 $27243 $28,514 215 238 238 238 6,748 7,967 8,675 827,394 332.147 834.563 DEBT OF THE 0 3,125 $41,63C ci’n General Under (‘alitornia law, the Cit mas not incur indeft-dnes eviuenced rn genera oh igation bonds es hich would in the aggregan exceec htteen percent of the total assessed valuation br purposes 0. Cite taxation, or all the real and personal propert se ithin the C its. 8e bonded indebtedness se hid shall constitute a g”nerai obligation ot the C its mas be created unbes authorized hs the atTirmatis e vote 01 teso-thirds of the oualified electors s oting or such proposition at ans elect ion a’ which the question is submitted to the elector and unles in bull complianct es nb the orovision of the California Constitution ant City Chartrn Short Term Debt The City has issued 835,700000 of Tax and Ree enu \nti’ ipatioi. \otes etue July 30. 1 986 Long Term Debt of July The City ha never defaulted or. the pus ment ot principal or interest on any or t ind’bteeines. 1, 1985, the Cit\ ha’S $480,000 ot general obligation bonded indebtedness and 819.560,000 special nec enuc bonded indebtedness. The City has no authorizeer hut unissued debt. 21 _ ____ ____ _ TAnLE 10 CIT\ OF OAKLAND TO MATURITY FOR DEBT SERVICE REQUIREMENTS. F: BONDS GENERAL OBLIGATION AND REVENU 2011 s ended June 30. 198t through for the year (In I kiousand,, of d4 ilhlr% Fiscal Year 1086 Revenue Bonds: General Obligation Bonds Principal 5: 240 240 1987 1088 Principal Total Interest 248 240 5. l 1080 1990 1991 1992 1993 1994 1.950 2,270 290 305 325 265 280 1095 1996 1997 1Q96 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 $ 1.322 1,261 1,180 1,115 964 814 693 552 531 507 482 455 $ 8 $ 488 2,352 2,60t 2,235 3,585 .3,760 2,764 2,963 842 836 832 747 735 426 721 1.110 150 500 337 304 487 804 200 300 261 232 197 179 461 157 157 134 100 82 3,030 480 $ 295 134 $ * 5 1,030 1,345 1.055 2,470 2.785 Total Interest 619,560 532 197 179 109 82 51 18 3,048 $12,776 $32,338 — servicu requirument oi the outstanding are pledged a collareral br alul equal the deC Annex Lease Revenue Bonds ot the Including capitalized leasu onligatiorts which Flail the City g Authority o: thu Cttt w Pakiand and pursuant to a leasr of the Oakland Parking Lrae Revenue Bonds oi thi Parkin make, City toe nts payme rental table doe,. not include QSa I 98e_ tnt. .rc vtii Oakland Redevelopment Agency Tin, crttor’ Centur I Inca! \Cd n. on’.cn nor 6 ,jiter and Leorg P Sr otlar Cont Museum tnt Hr nr’ I isatser navntents make a total 01 $6.1 89122 in rental Source: City of Oaklanu. Lease Obligations use tax-exempt first municipality in the United States to In 1982 the City of Oakland became the buildings, the ic publ of back lease proiects through the sale and leveraged lease financing to finance capital buildings ii the s lease City nce of tax-exempt revenue bonds. The leveraging of private investment and the issua r’s infusion of equity. sold at rates reduced hs the purchase gements with the ed into three separate sale-leasehack arran Since 1982, the City of Oakland has enter George P. Scotlan er— ion Center, and the Oakland Convention Cent Oakland Museum. Henry J. Kaiser Convent Memorial 22 In the next five yea r the City of (Jakia 0(1 will he makine comhinek lease payments as shown [dow: TABLE 11 LEASE OHLIGATIONS CITY OF (JAKLANI) Fiscal Year 1985-86 lQSu-87 1987-88 1 988-SQ 1989-90 Socece: Museum Henry J. Kaiser Convention Center Oakland Convention Center Total 82,106.060 2,1 00n0 2.834.2o0 2.834,260 2,834,2o0 $261 9.062 2,ol Q.0o2 2,61 9.062 2.61 c, 062 3,482,266 $1 464,000 1 ,4e4,000 1 4L4000 1 ,4b4,000 2,682,000 6,1 89,122 o.1h9,1 22 o.92 7,322 6,91 7,322 8,998,52o CIT\ Oi ()-\KLAcl. 1)ireet and Overlapping Debt C ontained ithin the fi aie nume rou o rlapp ng local agent ie pros wing nublie 5er\ ices These loca’ agencies have outstanding bonds issued in the form of general obligation, lease revenue and special assessment bond Th dir ank U\ upin cletv o h Cn’ I sho\ I 0 lo i j p0 e re nue onci time ion riond ant non b )nded Capita 1 ftat o hiaLion an. exciudk iro’i m deb s a emen 23 TBLi. 12 STATE4E’3[ OF DfBECT & O’ EIRL&PPING DEBT CITY OF’ OAKLAND I 984-85 $8,448,925,431 :\sScssei \aiuat.ion after deduci.ing $802,336,545 redeveloonien:. las allocation increment City Share of Debt at June 30, ‘i985 (thousands) C, Applicable Direct and Overlapping Bonded Debt: S in F &fl( i$( (, I is \re Oalclandlamsia Counts’ Coliseum .\ia ITlt’i(ia (.ountv /I)U[)lifl Library Corporai or: it) r I i i l_aj ii tI i Edu it or a in’ Alameda Co. Certificates of Participation $ 9.318% 62.619 R iiiid I rai sit Us’ 220 2,197 “C Ceo o a i 25.239 25.239 24.470 56.625 \ ‘a rio us ro’ East Bay Municipal Utility District East Bay MCD., Special District No. I Other Special Districra Peralia Community college Dstr:ct Oakland Unified School District Other School Districts C’i t e of Oakland Cii of Oakland Bui ding Authorities Cay of Oakland i 915 Act Bond’ 3.28o 27,361 6.750 11,318 28,074 51 840% 71,7902 4.800 50412 99.995 \‘arious 100.000 1 00.000 100.000 DEJIT Less: East Bay MCI). (100% self-sutaporting) )t” QQ I Se cia. I) “itt \ M P F City of Oakland Ariiort Bonds 1 OOC self-upoortin Oakland-Alameda County Coliseum 2 00% self-upport ing To’r.si .N E’t’ DIRECT ANt) OvERLsPPINc BoNt)tto DElL 8220.548(3 27,361 6.750 TULlE GROSS DIRECT AND OVERLAPI’INC BONDRo S,J &t 2 Excludes ‘Ia, and Revenue snIJcipatiui Soius tx(’ii.i(ie- ire’ Ceri ideate, Excludes ire enuc, mortgage rc enue and ta. allocation honu,, a!i’i flOIii)ufldC,l Share of Authorized and Unsold Bonds: Source: California Municipal C 120 11,560 $1 74,757 capiLa. lease or)iigai ions, Ratios ro Assessed Valuation Grosi D:rect Debt $81,860,500r Net Direct Debt 872.51 0,000 Total Gross Direct and Overiappieg Bontleci DeE’ Total Net Direct anti Overlapping Bonded Debt General Obligation. Bonds Lease Revenue Bonds and Cert.iflcates of Particination Share of Oakland-Alameda County Coliseum Lease-Revenue Bonds East Bay MUD., Special District No. I SitvrE SCI’IOOL Bt’it.roto.; Alt REP.M’ABLE 5: OF 6,’30 ‘84’ 52,267 11.560 0.97 v 0.8 fiG 2.oi 2.07% 840,000 71.700.000 9,230.000 $81 ,8n0,000 8. $23.61 2,625 . . $25687095 Statistics. Inc. LITIGATiON AND CLAIMS Irl A inane v. City el Oakland, et at., the plaintiff seeks a permanent injunction against the completion ot sale of thc the sale and leasehack of the Properties by and between the Agency and the Cits that underlies the anc the Agency Certificates. In hts comolaint, the plaintiff alleges that the Master Lease Agreement between r)\ st no”ricd no, u c 1 ec’ au’ o Oat I i’ar at iu acne a! old (( o 01 hi C i 1 thi Cus constitute an ur vote of the electorate and certain other matters. Bond Counsel have advised that the likelihood of an adverse decision in thc matter is remote. Closing of the sale of the Certiflcates is subject to Bond Counsel’s confirmation of such opinion as of thc date of closing. lndependentl3 ox the litigation described above, a committee of the California legislature has approved an amendment to the state constitution which if approved, would prevent municipalities from engaginv in sale and leaselsack transactions of the kind invoived in the issuance of thc Certiflcates. The proposed amendment would apply to transactions authorized by municipal action after July 1, 1085 and would not apply to the sale and leninu of the Properties because of the City’s approval prior to such date. The r’jy is not aware of ani litigation pending or threatened questioning the political existenrc of the City or contesting the City’s ability to levy and collect ad valorem taxes or receive other general revenues. It is the opinion of the City Attorney that liabilities arising out of lawsuits and other claims against the City. which arise in the ordinary course of its operations. are adequately provided for by its self-insurance programs. The City has received significant financial assistance from numerous federal, state, and local governmental agencies. Expenditure of funds under these programs generally requires compliance with terms and conditions verified in thc grant agreements and regulations, and is subject to audit by the grantor agencies. An) disallowed expenditures resulting from such audits could become. a liability of the General Fund. Program expenditures totaling approximatel) $90,000,000 have been incurred under the Comprehensive Employment Training Act (CETA) for the years 1Q75 through 1979. All such expenditures have been accepted 3 the Department of Labor ‘DOL, except for approximately $o77,000 as ox June 30, 1984. DOL claims tor b this latter dmount are presently being appealed by the City through the administrative law process. Audit.. of CETA program expenditures for the years 1980 ant! 1981 are presently being conducted. Based upon the City’s experience, it ic anticipated that an) questioned costs which result from these audits will bc significantly reduced To the extent that questioned items are not resolved, the (‘ity intends to contest disallowance through the appea Process. In addition. approximately $300,000 it’ cost. incurred under various other grants have been questiuned by t hc’ respective agencies, TIn total amount of costs which wifl tie questioned on completion of audits in progress and the eventual diapositior ot unresolved costs which already have been questioned cannot be predicted Consequently. any ultimate liability siih respect to these programs cannot be reasonably estimated. City management believe., it is unlikely that the dltimate outcomi of thi- contingency ‘iIl have a material adverse effect on tin City’s tinanria lNti1fl.. THE CETI a General The City of Oakland is located or. the east side of San Francisco Ba) approximately seven miles from San Franci’c o via the San Francisco-Oakland Ba) Bridge. An area of diversc character, the City ranges from industrializea lands bordering the Bay to suburban foothill’ in the east. Historically the industrial heart of thc. Bay Area. Oakland has developed into a major financial, commercial and gmernmental center. The City is the huh 01 cxten’i4e transportation netsork which includes a highly developed freeway system and thc western terminals of major railroads and trucking firms, as well as tne largest container-ship port on the ‘xst Coast. Oakland supports ar expandine international airport and rapid-transit lines which connect it with most of the Bay Area. Population The i 980 U.S. Census reported a tota City population of 330,288, a decrease of six itrrent sinct the 1Q70 (‘ensu’ whet, City population totalea 356.486. This compares with a County-wide gain of four percent and a states uk gain of 1 6.ô percent over the samt period. The recent growth patterns points to the changing characttr &‘ tIn City which emphasizes concentration and continued growth of business and industry ‘ishile many persons empioyec in the (‘ity live outside Its limits. The following tabk provides a historical summary of poliulation in tIn City and Alameda County. 25 T4BLE 13 \ 1 POPULATIO Year Oakland 1940 1950 1960 1970 1980 1982 1983 1984 1985 302,1o3 384575 367,548 358,486 339,288 344,935(2) 347,325(2) 351,600(2) 351,100(2) Alameda County 513011 740315 908,209 1,064,049 1,105,379 1.121,000(2) 1,145.177(2) 1,172,300(2) 1.174,800(2) 1 tniced States ( ensue bureau Seciai Census (2 Source: California Deparimen: of Finance. -- industry and Employment Over 700 manufacturing firms are located in the Citv Leading group classes of products are: fabricated metal products, stone, clay and glass products, machinery (non-electrical), and primary metal industries. The largest employers include the Kaiser Aluminum, Clorox Company, Transamerica Delaval Inc, Owens-Illinois, Inc. and Brookwav Glass Company. Other large employers are listed in the following table. Maior non-industrial employers include Alameda County (9,500 employees), Oakland Public Schools (6,500), Pacific Telephone and Telegraph Company (5,800), the U.S. Post Office (5,000) and Kaiser Foundation Health Plan (5,500). Further economic staoiiitv for the area is rovided by the presence of several permanent government installations including the U.S. Naval Supply Center in Oakland; the Alameda Naval Air Station, the world’s largest aircrafl overhaul and repair facility; and the Oakland Army Terminal, from which personnel and material are shipped to the entire Pacific region. TABLE 14 CITY OF OAKlAND MAJOR INI)[JSTRIAL EMPLOYERS Firm Product or Service Kaiser Aluminum Clorox Company Owens-Illinois, Inc. Aluminum & chemicals Household products Glass, corrugated shipping con tainers Glass containers Diesel and gae ngines. compressors Bakery goods Bakery Products Fur nit u cc Baby food Valves and regulators Brockwav Glass Company Transamerica Delaval, Inc. Mother’s Cake & Cookie Company Sunshine Biscuitc. Jç Modern Mode Gerber Products Company Grove Valve & Regulator Cornpa nv Source Oakland C’harnbcr of Commerce 2b Employment 1,400 1,400 850 483 450 500 475 463 440 345 T..BLE 15 ALAMEDA COUNTY LABOR MARKET SURVEY (in thousands of empovees 198O Mining and construction Manufacturing ‘Transporation and public ut jutes iraoe Wholes’il Retail Finance, insurance and real estate Services o\c nnvn Agriculture Iota] *Tutai Uu’ flOi ad(1 (JU(.’ i(’ ifl(it’t)cflUCfl Saii. Lkpaumc’n: 1981 1982 24,4 85.9 31 .5 31 .4 23.2 80.9 31 .4 29.0 83.7 25.6 95.4 ii 8 3.1 493.4 30.2 85.4 24.9 100.1 12 ô 3.1 490.4 30.2 83.4 25.1 100.1 1120 3.1 490.0 23.2 ..-— 1983 1984 24.3 71.7 32.8 26,6 74.8 33.3 31.2 94.8 26.3 106.4 32.0 99.1 27.2 114.0 1 2.6 525.1 1120 2.7 502.8 roun(lInu Emajcvmcn: LU\el000lSfll. The folluwinc table shows unemployment in Alameda County since 1980. A cu March 1 985 based on unadjusted data, unemhlovment in Alameda County was 0.6 tercenc, corntared with 7.3 nercent for the state and 7.5 percent for the nation. TABLE 1.6 ALAMEDA COUNTY UNEMPLOYMENT DATA Year Unemployment Rate 1980 1981 1982 1983 1984 1985 6.9 9.4 8.6 7.2 6.6 Commercial Activity Retail trade comprises an important part of the City’s economy A large portion of the City’s retail sales is generated within the central business district. The Oakland City Center redevelopment area will add to retail activity, The following table shows the annual volume of taxable transactions within the City since 1978. Retail sales have expanded by 7.3 percent to $1.31 billion in 1984 from 1980 when retail sales totaled $1.22 billion. Total taxable transactions rose h’ 24.5 percent o $2.31 billion from $1.85 billion over the five-year period as manufacturers’ sales of finished products increased. 27 TABLE 1 6 CITY OF OAK1JCNI) S TRADE OUTLETS & TAXABLE BETAII. SALE ( fl th0U%atid, of dollars) siOres.,.,,,,,........ Gencral Iflerchan(IiSe .iqurt1 sture.............. L)i’Ut.sIore Foot stores e liquor stores 1 k Eating and drinking 4 Humo iurnihmg and apii:ame Buildin mal ei’ia Is and ia rm implements A oh (IL’aIer ann supplies Service stal ons 57,830 58,048 0 S 5 66,245 120,950 40 OhS 123.571 125.e14 43,240 ‘2 128,023 51,349 103.604 45,030 45,857 Q 7.327 45.507 ,4 baSSo 42.280 30.31 6 188 oTh 209 S4 44,781 50.753 00 ‘2 1 014 2 44,794 44,805 45.787 91 ,28u 80.744 230,785 151,298 o9,298 243,105 144,701 201 ,5o2 81.243,605 674.679 51,91 S,34n 229,066 138,7n5 Retail ti ore Totas other outlets ‘Best. Ai.i. Ot’TLE’l’ nO.Q03 $ 62,453 I 4u,220 25,317 77.232 cj Oh her retail stores .Sourc hai’’ liai 5 1984 1983 19S2 1981 1980 211,921 224.247 $1,220,323 631,915 51.852,238 Si .205.083 h5,35i $1,925,434 ‘i) 78,096 290,23o 142,335 226.148 $1,345,554 675,425 $2,020,°79 94.529 335,675 154,088 276,142 $1,309,576 796,467 82.30o,043 of F.quaIi.atioii (ønitrtieton A.etivil’v ing table City exceeded $123 million in 1985. The iollow The value of nuading Tuermils issued in the the during ized author units ng dwelli new 0: r numbe ummarv of building permil valuations ann the provide’s a 5 Jul51 IIVC yearN. T.&BIE 17 CITY OF OAKLAND BUILDING PERMIT ALUATIONS ‘sears Ended June 30. 1 98() through 1985 (in thousands of dollars I \ al u at ion: RemIential iNonresidenl iaj T ies I Bess 1)wr’Iling Units. Si!ilu 1arnhl Mutipa family ‘Iii CAl I n.pr uma 1981 1982 1983 1984 1985 1980 5. 40,159 57,681 S 97,840 5 23,606 58,419 5 82,025 $ 20,100 108,249 8134.349 5 38.985 122.078 5161.063 $ 21,407 $ 29.658 525 104 174 231 142 707 368 254 407 661 116 127 243 ‘rvccs Deja ri nwni —-Ci a ()ai-JanC 28 50.059 5 71.466 93,232 $122,890 106 380 486 ___ Largest Taxpayers The ten largest taxpayers in the City as shown on the 1081-82 tax rolls and the approximate amounts. of their property tax payments br all taxi no iurisdictions with n the C>: y a shown below. TABLE 18 CITY OF OAKLAND LARGEST ThXPAYERS COMPANY AT&T Kaiser Center Inc........,.,...,.. Aoan H oldtn inc Owens Jllinoi’.. Inc Iieiavai Transamerica Inc Blue Cross of Northern California Brockwav Glass Company, Inc. Oakland Tribune Sunshine Biscuit Emporium Capweli Cu Kaiser Foundation Health Plan. inc. . 1984/85 TAXES PAID ASSESSED VALUE $1,645,410 641 .468 493.744 472.826 445,530 425,174 364,754 $1 26,823.670 49,1 04.499 38,034,882 36.148.416 33,821.657 32,759,986 27,881,289 19,537,190 17,700.193 17,479.101 13,792.3n4 266.134 320,956 22 7.o48 184.01 ti Education The Oakland .nined School I)istrict operates 62 elementary scnnols. 1 6 lunior high schools anti 15 seniot mgi> a riot>> bin ±he Li> x Fm ( it cd )\ t (urnmuni colO cc 1.”r ncx C oll( C Colica n which otter preparai ory courses for four-year colleces a well a two year vocational-technical courses. During the spi ang 1 983 semi stcr 8lcrri t collegc hat> a total rnrollm nL 01 8 600 student ann .anc\ College nad a total enrollment of 12,600 students. The City is also served by other higher education institutions including \l>11 Co 1I g ülit L ) tn HuR mc Soc Ca> oi r>i Colic o± s nd C> Li ‘ 29 :1 I. F. p SUMMARY OF LEGAL DOCUMENTS Agreement e for the establishment The Trust Agreement is entered into between the Trustee and the Agency to provid cates. and administration of funds and for the execution and delivery of the Certifi i. t . Principal Fund and the The Trust Agreement establishes the Acquisition Fund, the Revenue Fund, the to receive and deposit in the Interest Fund. On the date of delivery of the Certificates, the Trustee agrees between August 1, 1985 and said Interest Fund the interest accrued, if any, with respect to the Certificates Acquisition Fund. date of delivery and the balance of the proceeds of the Certificates in the title and interest in the The Acquisition Fund is to be used to pay the cost of acquiring the City’s right, cates. Upon receipt of Certifi of Installment Sale Agreement as wçll as the costs of preparing and delivering the t of the City for the accoun for the s the moan’s in the Acquisition Fund, the Trustee shall disburse such money City. the of tions City’s rights under the Installment Sale Agreement, in accordance with instruc se Payments to the The Revenue Fund is established to receive Purchase Payments and apply such Purcha payment of the Certificates when due. cates authorized by the Trust Any Certificate may be refunded from the proceeds of refunding Certifi with the Trust Agreement. iance compl upon only issued Agreement. Such refunding Certificates shall be Redemption of Cenifwatn Certificates.” The Certificates shall be subject to redemption as described above under “The Revenues nts and prepayments All of the Revenues (as defined in the Trust Agreement to include Purchase Payme punctual payment the for, used be under the Installment Sale Agreementi are irrevocably pledged to, and shall any of the Certificates remain while e purpos other any for used be not shall ues Reven of the Certificates, and sums, for such purposes, as such outstanding, except that out of Revenues there may be apportioned and paid and exclusive lien on and first a ute are expressly permitted by the Trust Agreement. Said pledge shall constit be perfected and be attach, shall security interest in the revenues in accordance with the terms thereof, and physical delivery t any withou valid and binding from and after delivery by the Trustee of the certificates, thereof or further act. ment Sale Agreement (the All Revenues to which the City. as Seller of the Properties under the Install pursuant to the Trust ents investm “Seller”) may at any time be entitled (including income or profit from shall be deposited by any time at Seller by the d Agreement) shall be paid directly to the Trustee, and if receive e shall deposit all Truste the and , thereof the Seller with the Trustee within one business day after the receipt a special fund in ent) Agreem Trust the Revenues (except income or profit from investments pursuant to as any of the long in so mainta and sh designated as the “Revenue Fund,” which the Trustee shall establi Certificates are outstanding. ry 1, 1986, the Trustee shall On or before each February 1 and August 1 of each year, commencing Februa nting the portion of the represe t an amoun Fund t Interes withdraw from the Revenue Fund and deposit in the t 1, respectively. On or before Purchase Payments designated as interest coming due on February 1 and Augus aw from the Revenue Fund and withdr e shall Truste August 1, of each year, commencing August 1, 1986, the se Payments designated as Purcha of the portion the deposit in the Principal Fund an amount representing principal coming due on each August 1. ing certificates of depositi oi Any moneys in any of the funds may be invested in time deposits (includ Federal Securities (as defineL certain repurchase agreements with primary government securities dealers or in ent. Ml interest earned on an in the Trust Agreement), subject to limitations as set forth in the Trust Agreem ‘ 30 sU’ 1. investm”fl shills (“come part o: the :and uaecl ii’ make’ such investment. The Truste” act only a- an aurizi iii makinc o: clipcning ot inve’tments and is not habit ior .tn loss resulting trona invetmeni Any such loss I- Ic’ Ix charged Ic’ th account uth respect Ic’ which th’ investment was made.. Monet— in ;nc• Reenu. luzi’! and the Acciuiskioi, FantI may be invested ii obligations which will mature l,c’tore. the ‘late— whet: surh money— ar” ‘enedulecl tc it’ needed for pa met.: fran’ such iund. Mc,nev. it. the 1 Fund and in the’ Prin’ ipal Func lnterc.s 4 ma be invested in obligat ion- which will, a,’ nearly as practicable, mature on or before the respe live semiannual interest payment dates or semiannua. principal payment date or (‘e—aitiraae matUrit5 date—. ‘ii. or Lovenmus mc’ Agency snal taos’ dli taze’, assessments and charge,, with respect to the Properties to N’ paid anC shaE cause insuranc’L on tnt l’roper:n’- to he maintained as provided in the Maer Least igreement. Ii all or an hiart 01 thc Properue- are taken by eminent domair. or condemnation proc eeding or Ii) a casualty, the proceed:. thereirom shall he applied as provided ir 1 th’ Master Leas’ Agreement and the Installment Sale grt’ement. The Trust gr’emc’nt contain— other covenant,, including hut not limited to. the iol,owing whereby the Agency agrees to (a i periorm its obligations under the. Installment Sale Agreement, Il,’ comply with cii the requirement’ under Secticir. lOSc of the. Internal Revenuc Code of 1954, a- amended cthe “Cedc.”i. regarding arbitrage, •i’the rc’quirements under ‘ection 103101 of th” Code, regarding pnvatc loan bond-: and ciii’ the r”quirements under %ertior. I 0& hi 01 the Code. regardinu iederallv guaranteed onhigation’, ‘c’ cause the Properties to be maintained in good condition and kept in good repair as provided in the. Master Lease Agreement, (t,cause th Propc.rties to be kept free. of liens and encumbrances as provided in the Master Least Agree ment anci ‘f’ Ca u-c to It taken suer. action a.- may It necessary or vroper to remeuy or cure any defect in or rioud upon the title to th’ Propertie—. Default and Remedies The following even;- are described a- Event:. o’. Default under the Trust Agreement: ca default in the due and punctual payment of the principal, or premium (if any,. with respect to any Certificate when ant as the same shall be”ome due and payable, w nether at matu-ity as therein expressed, h proceedings for redemption. by declaration or otnerwise, ii, diault macic it’ ui dut and punctual payme.nt oi any installment o intere-t with rspect tc. an) Crtifict,te tne date such interest installment shall have become due and payable. ici default En tnt 4gencv in the pcrfurmance or observance of any other of the covenants, agreementc or condition’. on its par: in the Trust Agreement or in the Certiflcates contained, an’! the continuation of such default br a period of thirty (30; days after written notice thereof, specitying such default and requiring the. same. to he. remedied, shall have been given to the Agency ana the City by the 7 rustee, or to the Agency. the City am 4 the Tru,tee by the holder of not less tnan twenty-nyc percent c25i’ in aggregate l)nncilm! amount of the Certificates at the time outstanding: and cdi the occurrence and continuation of an Event of Default under the Mane” Lease Agreement Sc, default speciflec in ic’ above halI constitute an Event of Default unless the Agency and the C:y have iailed to correct such dezault within 30 days after receiving the required notice: provided, however, if any such default shall be such that, in the judgment of the Trustee., it cannot be corrected within such period, it shall not constitute. an Event 01 Default if corrective, action is instituted by the. Agency or the City within the applicable period and, as determined by the Trustee in its discretion. diligently pursued until the default is corrected. During the continuance of any Event of Default, unless the principal with re.pect tc; the Certiflcates shall have already become due and payable, the Trustee, by notice in writing to the Agency and the City, may, and upon the written request 01 the holders of not less than (went) -five percent (25%) in aggregate principal amount of the Certificates a; the time outstanding, shall, declare the principal with respect to the Certificates 31 4 then outstanding, and the interest accrued thereon, to be due and payable immediately, and upon any such declaration the same shall become and shall be immediateb due and payable anything in the Trust Agreement or in the Certificates contained to the contrary notwithstanding. This provision, however, is subject to th. condition that. if. at any time after the principal with respect to the Certiflcates shall have been so declared due and payable. and before any judgment or decree for the payment of the moneys clue shall have been obtained or entered as provided in the Trust Agreement, there shall have been deposited with the Tru%tee a sum sufficient to pay all the principal with respect to the Certificates matured prior to such declaration and all mat urea installments of interest (if any) with respect to the Certificates, and the reasonable expense’ of the Trustee, an an and all other defaults known to the Trustee other than in the payment of principal and interest with respect to the Certificates due and payable solely by reason of such declaration’ shall have been made good or cured to the satistaction of the Trustee or provision deemed by the Trustee to be adequate shall have beer. made therefor. then, and in every such case, the holders of at least a majority in aggregate principal amount at theCertificates then outstanding, by written notice to the Agency and to the Trustee. may. on behalf ot the holur ot all the Certificates, rescind and annul cuch declaration and its consequence’ and waive such defauh: but nc’ such rescission and annulment shall extend to or shall affect any subsequent default, or shall impair or exhaust any right or power consequent thereon. Following the occurrence of an Event of Default, whether or not the principal with respect tc the Certificates outstanding and the interest accrued thereon is declared due and payable, the Trustee may, and at the request of the holders of 25% in aggregate principal amount of the Certificates outstanding shall, exerciv any and all rights and remedie’. available to the Trustee under the Installment Sale Agreement and the Master Lease Agreement Non-Liability of Agency Except for the payment of Purchase Payments when due in accordance with the Installment Sate Agreement and the performance of the other covenants and agreement% of the Agenc) contained in “aid Installment Sale Agreement, the Agency shall have no obligation or liability to any of the other parties or to the holders of the Certificate’ with respect to the Trust Agreement or the term’, execution, delivery or transter of the Certificates, or the distribution of Purchase Payments to the holder% by the Trustee. Notwithstanding anything to the contrary contained in the Trust Agreement or the Installment Sale Agreement the Agency shall not & obligated to pay. any portion of the Purchase Payment or make an) other payment’ or advancc any money’ or be liable for any other costs or expenses except from the payments anc’ other money- an asset, paid by or o behalf of the City pursuair to the Master Lease 4gr”vmen:. Tin 4.en”y smilE n’c :.t iu-tc’ i’ or ‘uch the Agency indirectly or contingently or morally obliaatec ut any other moneys incident& the Trust to Agreement. expenses cons and or other Payments Purchase or assets to of tar any a’ S Amendments The Trust Agreement and the rights and obligations 01 the Agency and of the Owner’ & the Certiñeates and of the Trustee may be modified or amended at any time by an amendment hereto which shall the tbO°c i in aggregate principal binding when the written consents of the Owner.s of sixty per Certificates then outstanding exclusive ot disqualified Certificates, shall have been flied with the Trustee. No ‘uch modification or amendment shall (ii extend the fixed maturities a: the Certiflcates, or reduce the rate 01 interest represented thereby, or extend the time of payment of interest, or reduce the amount øf princi:’ai represented thereby, or redu’e any premium payable on the redemption re precented thereny. without the consent of the Owner of each Certificate so affected, or • 2t reduce the aforesaid wrcentage of Owners of or Certificate’ whose consent is required for the execution of any amendment or modification of this (3’ modify any of the rights or obligations of the Trustee, the City or the Agency without their written con’,ent thereto. wcome 1 cent amount of The Trust Agreement and the rights and obligations of the Agency and of the Owners of the (‘ertifiates may also be modified or amended at any time by an amendment hereto which shall become binding upon adoption. without the consent of the Owners cit any Certificates, hut only to t he’ extent permit ted F.v law ant: only for any one or more of the following purposes— 32 a .1, tc. add to the covenants and agreements of tin .Agenc ii. the Trust Aureem ent wnaain.’i. at her covenant’ and aureements thereafter to be obsen’ed or to surrender any right or pov.er herein re’erveci to or rontured upon the Auency. and i2 i to rum, correct or 5upulement an) ambiguou’ or defectiw orousion contain ed in thc Trust Agreement or it 1 regard to quest ions arising under the Trust :greement. as tht Agenn may deem necessary or deirabk and not incon’Jstent with the Trust Agreement, and which snat not adversely affect the interests oi thc Ownen ot the Certificates. The Trustee shall not agree to any amendment to or niudiñc anon o: either the Intalim eist Sale Agreement or the Master Lease Agreement if such amendment or modification would in effect reduce th’ amount 01 principal or inttrest to be paid Li’ tin Owners at the (‘ertiñcates. extenci t he payme nt ‘chedulc on suet (‘ertific.ate’ or reduce any premium payable on redemption of the Certificate%. The lnctallmcnt Sale Agreement The lns..allznent Sale Agreement i 5 at agreement between the (‘ity in its capaciiy as Sejier and the Agency, pursuant to which tnt. Seller agrees w sell the I’roperue to the Agency. Til lc to the Properties will v”st ir thc Agency subject to certair. Permitted &ceptions las denneci in the Trust Agreemenu. Purchase anti Sale of the Properties The ¼ency agree’ to pay to : in Seller, or its assignee, t h.’ price of $221 .121,850 which il’ tie pal’! as purchase payments (the “Purchast Payments” comprised of annual principal installm ent payment’ due and payable or each August 1. commencing August 1, 1 98b. and semiannual interest payme nt’ on tflt outstanding principal amount due and payable on each February 1. and August 1, commencing Februa ry 1. 1986. Such principal installment payments shall aggregate $221 .540.000 at which amount the sum of $1 46.4K is original ts’.uc discount allocable u’ the principal installments due on August 1 in the years 2000 to 2003 in:lusivt and the sum ol $271,700 is original issue discount allocable to the principal installments due on August 1 in the years 2004 to 201o inclusive. The Agency is entitled to a credit against each Purchase Payme nt in an amount equal to the amounts or deposit in the Principal Funa and the Interest Fund on each suck’ due date. The Seller and the Agency agree that the Agency. pursuant to the terms of the Master Least Agreem”n:. shall cause. the Rental Payments payable thereunder w be made by the City directly to the Truste e, as assignee 01 the Seller, for deposit into the Revenue Fund. Limitation of Agency Liability The obligation of the Agency to make the Purchase Payments constitutes a special obliga tion of the Agency payable solely from the moneys and assets paid by or on behalf of the City pursua nt to the Master Lease Agreement. The Installment Sale Agreement expressly provides that the Agenry ii. not directly o indirectly or contingently or morally obligated to use any other money or assets of thc Agency to make suck Purchase Payment’. Security Agreement As security for its payment of Purchase Payments, the Agency pledges and grants a securit y interest, an? transfers. assigns and sets over (for s”curity only’ to the Trustee, as the Seller’s assignee of the Installment Saic Agreement, all rights, privileges and obligations it. has under the Master Lease Agreem ent including, without limitation, the right w collect and receive all moneys due and payable to the Agency under the Master Least Agreement. except any moneys due and payable to the Agency tor amounts it may advance for tne account ot the City under the Master Lease Agreement, together with an assignment of proceeds of dispos ition of the Properties, including proceeds of insurance. The lien and charge of the Installment Sale Agreement of the Master Lease Agreement. is unconditionally subordinate to each of the estates 33 A Defaults and Remedies An Ev”nt of Default under the Installment S.k Agreement ‘hail mean: In%tallmen’ ‘a) if default shall be made in the payment or an’ Purchase Payment and premium on the Salt Agreement the installment as in payahk. and he due sale Agreement, if any. when and as the same shall to the Truee trorn the thereof notice written after day ten provided, and any such default shall continue. tor Agency, ated befurt it’ r’kpi—aL:on for an” reaon or i! the Master 1 (l, ii the’ Master Lease Agreement shall be termir installment Least’ Agreement shall in an way be amended or modified except as expressl3 provided for in the shall Agreement Lease Master the Agency under o’ Sale 4neement or therein’ or, any rights and interests the unaer as assignee Trustet., of the to the subject right’ be assigned or pledged without making the same expressly the. Assignment Agreement, (ci if any representation or warranty of the Agenc5 set iorth in the Installment Sale Agreement or in the time they are 4ssignment Agreement shall prove to be incorrect in any materiai and adverse respect as 0: the 30 clay’ after within warranty or n made and, in each case, the facts shall not be contormed to the representatio the same, or delivering or makinu party to the the earlier of (ii written notice of such incorrectness fran’. Trust cc any loss or been have shall ii there iii the Agency obtaining actual knowledge of such incorrectness, and period, the day said 30 within , detriment to the Propertie% or to the Trustee, a’ a result 01 such incorrectness beet. detriment loss or such had nut Trustee and the Properties shall not have been restoreei to tneir conditions incurred: covenant or ‘d if default by the Agency ,hall be made in the due observance or perlormance of any agreement contained under the Master Lease Agreement: cc) if default shall be made in the due observance or performanc’c. of an other covenant, condition or anti agreement of the Agency contained in the. installment sale Agreement or in the Master Lease Agreement, the to Agenc’: much default shall have continued fur 30 days arter written notice tnereuf from Trustee turther such have shall AgenQ the period, cia) 30 such within cured be cannot default proiided, that if such reasonable time as may be necessary to cure such default: or of the d , if a receiver, U.S. Trustee, trustee or liquidator (or other similar official, of the Properties interest in kg”ncy cif the Agency then owns any interest in the Properties) or any then owner of the Agency’s sirat no: be and auency u’ suate office’ or iederal by or proceeding an2’ any in the Properties shall be appointed ir any interest owns the .4genc the Agency (if the if or appointment such discharged within 120 days alter appointment such to shall consent Propertie% the in interest Agency’s the of the Properties’ or any then owner or if a custodian for purpo&’s of any federal bankruptcy statute of substarnially at of the assets of the Agency in the (if the Agency then owns any interest in the Properties) or any then owner oi the Agency’s interest the (if the Agency court such of decree if by or thereof, possession takes Properties is appointed or otherwise Properties in the interest the Agency’s of owner then any or Properties, in the Agenc) then owns any interest law, shall be adjudicated a debtor or bankrupt or be declared insolvent under any federal or state bankruptc’ if the Agency cif the Arency then owns any interest in the Properties) shall be dissolved and not be dissolved, or if the reconstituted in 90 days, or any then owner 01 the Agency’s interest in the Propertie’ shall Agency’s intere’st in the of owner then an) or Properties’ the in Agency (if the Agency then owns any interest similar law or shall or bankruptcy any under cas” voluntar) a the Properties shall file a petition commencing to pay its debt’ 5 it inability in writing shall admit or make an assignment for the benefit of its creditors or if a petition the Properties, of receiver of a appointment the generall) as they become due or shall consent to an interest owns then Agency the Agency (if the of liquidation or any answer proposing the reorganization or the Federal to pursuant Propertie% the in interest Agency’s in the Properties’ or any then owner of the and court; any by, approved and in, filed be shall state, or Bankruptcy Code or any similar law, federal i (hi if any of the creditors of the Agency tif the’ Agency then owns any interest in the Properties’ or an to then owner of the Agency’s interest in the Properties shall file a petition commencing an involuntary case law, similar or any Code Bankruptcy Federal to the pursuant reorganize or liquidate the Agency or such owner 34 federal or state, and it uch petition snal not ne dischargeei or deniec wit nm such petitiol sa filed 120 da\ s after the date or wOk S pon the occurrence of such an e ent ot uetault the Seller may dee are the total unpaid principa. amount ot Purchase Pavment to be immediatei due and payable and take x hatevur act ion at lae or in equit\ may appear necessar\ or desirable to collect payments then due and thereat ter t become’ du or I c entord performance and observance or any obligation, condiuon or covenant o the \genct under the Inst ailment Sale Agreement or or the Cit\ under the Master Lease Mereement, Prepayment In the event the C it exercises its option to prepay rental pavmenb under the Master Lease greement, the Agency will he deemed to have pretaici Purchase Payment- due uricier the Installment Sale Agreement, in accordance with and upon the same’ terms and conditions as the Cit\ prepaid rentat payments under toe Master Lease Agreement. Notwithstanding any such prepayment the Agenc shall not he relieved o its ohligation under toe 1nsallment Sale Agreement including its oblrgai ions relating to the purcnas’ o toe Properties until the Purchase’ Payments shah have been multv paid i or provision br payment tnereo shah have been made to the written satisfaction ot the Seller). The Agencr shall h required to prepa the Purchase Payments required in the Installment Sale Agreement, subject to the limitation on the Agencv’ liahilit\ set torth in such Agreement, if and at such time that the Cit prepays the rent due under the Master Lease Agreement, or if the Agency receives am Net Proceeds (as defined in the’ Master Lease Agreernent following a rasualts or condemnation aflecting am of toe Properties. The Agency shall not reject an offer to purchase an\ Propert or Properties pursuant te, the provisions of the Master Lease Agreement unless the Net Proceeds are at le’ast equal to the Earh Termination Amount of such Propertl or Properties (as such terms are defined in the Master Lease Agreements In the event that the Agency makes any prepayment, the Agencr shall, within thirty days follomng the event causing the exercise of such right to prepay or creating such obligation to prepay, cause written notice to he given to the Seller describing such event and specifying the date on which the prepayment will he made, which date shall be not less than thirty days from the date such notice is mailed, In the case of an optional prepayment, the amount to be paid shall he h the principal amount the City has elected to prepa plus ij the interest accrued and to accrue on such principa amount to the interest pavmenL date fixed for such prepayment plus (iii) a premium if any, on such urincipa a described ir the Installmen’ ale Agreemen’ In the case om a manuatory prepayment, the amount to be pamei shah oe ui the principal amount of the Purchase Payments being prepaid, withot premium, plus ii the interest accrued and to accrue on such principal amount to the date fixed for such prepayment. The Sales Contract The Sales Contract is entered into between the Cit1 and Bank Association (in its capacity as “Buyer”). Oi Ame’ricr National Trust and Savings The City sells and agrees to convey and Buyer agrees to purchase all ot the City’s rights, title and interest in the Installment Sale Agreement, subject to certain terms and conditions including hut not limited to, the following: I. The Buyer will pay to the City $216,203,6o2 as the purchase price for all of the City’s rights, title and interest in the Installment Sale Agreement, 2, The rights, title and interest in the Installment Sale Agreement are being transferred and being conveyed subject only to such limitations and exceptions as are found within the Installment Sale Agreement. 3. The City is transferring to Buyer all rights, title and interest (including aol cause of action) which the City may have under any contract or guarantee relating to the Installment Sale Agreement. 35 4 4. The Citx flas naid all taxes and assessments, it an\ if the same are imposed, levied or assessed with respect to thi Prunerties on or prlor o the date hereof. Buyer aeree to pa’ all of the same it they are imposed. jevied and as.essec after the dat hereot, to the extent thai monev are available under the Installment Sale Ag rec’ men! 5, The City agrees to indemnify Bayer for and to hold Buyer harmless against any aria all claims, and any and all expenses tincluding reasonable attorney’s fees), losses or liabilities paid, incurred as a resuiL of such claimc, made ce ith regard to the Installment Sale Agreement on or prior to the date hereof, The Master Lease Agreement Th” Master Lease’ Agreement i, eniereu iflit) i)etween tne Agent”, a Lessor, and the Ci:’,, as Lesee, The Master Lease Agreement sets forth the terms of tht’ Rental Payments, the nature and extent of the remedies for breach, and variou rights and obligations ot the Agency and the (‘itt Purpo.e and Term Coder the Master Lease, the’ Agency leases all its right, title and interest in the properties to the City and ne Cit’ teases tne Properties from the Agency, on the terms and 0000ttions set forth in the Master Lease Agruement and subiect to all interests easement. encumbrancec, and restrictions that existed at the time the 5 The City agrees and covenants during the Agency obtained title to and at, owneship interest in the Proaertie term of the Master Lease Agreement that, except as provided ir ih Master Lease Agreement, ii will use the te thu benefits contempla’ d b the 6 Pruner: iu solely for public and municipal f)u:’n)ose so a to aftorri the pu Master Leas Agreement and so as te permit the Agenct to cart’ oat it. agreements and covenants coniaineet in the Trust Agreement and tin’ (‘its’ further agrees that it will no’ rturmacv-ntlv abandon or entire’l” vacate’ the Potter t n the City covenants to, with the Agreement, 0:’ use moneys Lease written approva, of the’ Agency, substitute another be’ attributable to those would which amount rental the avaiiahle to the City to prepay in a lump um substitute properties or to faiC Ciiy the’ If Master Lease tnt Agreement. properties, in the manner described in io Trustee, the’ rca’. t}t”r the City shah pay liquidated damage Should tnt C’ity abandon or vacate an of the’ Properties, mr ant property int the reason, Master The term o’ the Maste Lease Agreement commences or, August 1, 1 955 and ends or, August 1, 2010 unles’ such t”rm js extended or sooner terminated If or \ugeist 1, 2016 the (‘ertificate’s shall not have been fulit paid and retiree or b the retirac payah]’ unde toe Master Leas Agree mont shall na ce’ Deen abatec a: any time and for an’ reaor, then the term of the Master Lease’ Agreement cnail’’ae extended until 10 aas’ after all the Certificar’s have been fulv paid and reiied, exrt’J! that tb t”rcr of : he Master Lease Agreement shall itt no event be extended he’s ono August 1, 2051 If prior tü August 1, 201 u, the Certificates have been fully :aid anc retired, the term of the Master Lease Agreement shall end. Rental ne City agrees to pat to the Agenct its successors or assigns, v,’i:hout deduction or offset of any kind. a rental fur the us),’ and o cupary’s of the’ Propertie’, the tolioxvtng tenouat a: the following : , 5 (‘its’ pall pay to th’ Agency a nae rental payments itt accordaticr’ with tnt a Bate Rental. Th t Payment Schc’du]’ a:: at hod to the Mast or Ta’a e \gr t’mín, Each base rental pas’nsent shah at Rent a payable on the 15th dat of th month immediatels preceding its due date’ and any interes’ or other income cc ilk respect thereto accruing prior to such due’ date’ chci Ii belong to the City and shall he returned by the’ Agency to the’ City It the tern’ of the Master Lease Agreement, :s extended pursuant to the’ Master Lease’ Agreeme’nt, base’ rental payments shah be’ (lue in cad, seat on I’e’oruarv 1 and August 1 in each year, antE pas’artk’ a 5 described above, coot inuing to and including the elate of te’rmination of the Master Lease rn cot roe Ag ‘ ib ,4ddztzona/ Rental, The Cits shall pox’ to the Agen v as additional rental such amounts in each at the Agency for the payment of all dOs, c antI expenses incurred by the gency year a shall he’ required 30 r _ in connection sdth thc. execution. performancc o enforcemcn. of thc Master Lease Agreement or any assignment tnereof thc Trust Agreement. thc. ownership oi the Properties and tht least of the Properties to the City, including but not limited to payment of all fee ,costs and expenses and all administrative costs of the Agency in connection with thc Properties, including but not limited to all expenses, compensation and indemnification of th Trustn payahlc by thc Agency under the Trust Agreement, iee of auditors or attorneys, insurance premiumb and all other necessary administrative costs of the Agency or charge’ required to be paid by it in order to comply with the terms o. tin, certificates or of the Trust Agreement Such additional rental shall bc. billed w the City by thc Agency or the Trustee from time to time, together with a statement certifyint that the amount so billed has been paid by the Agency or by the Trustee on 5 then payable by behalt 01 thc Agency tee one or more of the items described abovc. or that such amount i for such items. Trustec. on thc %gency behalf of Amounts billed shall lx. due and thc, Agency’ or the payable by the City withir 30 days after receint of tnt bil’ by thc City of the Sucl. payments 01 baa rental and additional rental br tack rental payment pa’iod ciurin& Master Least Agreement shall constitute the tota rental foi such rental pay men. period, and shal Lit paid by the Ciy iii each rental payment period br arid ii consideration of tIn right ti’ tht. use and uccupanci, and the. continued quiet enjoyment, 01 the, Properties during each such rental payment period for which such rental is paid. The City and the Agency have agreed and determined that such total rental represent.’ the fair rental value ot the Properties. bne term • • • Each installment of renta’ payable under the Master Least Agreement snall lx paid in lawiul money of th’ United State’ at America to or upor. the order of the Agency at thc principal corporate trust oflict 0. thc Trustce in San Francisco, California, or such other place as the Trustee shall designate. Any installment a rentai accruing under the Master Least Agreemenb. which thai. not be paid when due shall bear interest at the rate of % per annum from the. due datc until paid. Notwithstanding any dispute betweer. the Agency and the City, the City shell makc all rental payments when due without dcduction or offset of any kind and shall not uthhold any rental payments pending the final resolution of such dispute.. Tnt City covenants in the. Master Lease Agreement to take such action as may be necessary to include all such rental payment. in its annual budgets and to make the necessary annual appropriations for all such renthl payments. The City will furnish to the Agency and the. Truste’ copie’ of each budget ordinance of the City and preliminary budaet of the. City within 10 days after the adoption thereof and copie’. of each annua’ budget o’ the City within 120 days after the adoption thereof. Tnt covenants on the part of the City contained in the Master Lease Agreement shall be deemed t be and shall be construed to be dutie’ imposed by law, and it shall be the auty 01 cad’ and every public officia’ 01 the City to take su ‘h aetion ant’ do sucF thing. a a required by. in in the performance. of the. offlcia duty of such official te enabk the. “i’y to carry out and perborn’ th agreements and covenants in the Master Lease AgreemenL . nce.d to be carried out anc: performeci by the City 1 All rental payment received shall belppli”cI first to the base renta. and thereabter to all additional rentai. but no such application of any payment’s hich arc. less than the total renta’ due and owing shall be deemed a waiver ot any default under the Master Lease Agreement Reserve Fund The City further agree’. to pay to the. Trustee. the sur o 825.’ 70.000 ior deposit in a separate special fund, to be held by the Trustee br and on nehalt ol the City knrmn a’. thc “City or Oakland 1985 Master Least Reserve. Fund” (the “Reserve Fund”;. ThL City agree.s to maintain thc Reserve Fund in an amoun’ equal tc $25,1 70,000 until August 1. 201* ‘such amoun’ to 1w knos r. a the “Rpservc Fund Requireme.n’ “ kmount’. on deposit in the Reserve Fund ir. excer of the Rscrve Funci Re.quiremeni. ‘hall Is applied by the. Trustee on behalf at the City on February and August 1,01 each year to thc payment ot the base rental payment due or. the next succeeding February and August 1. The City further agree’. to appl’s the money’ on deposit in the Reserve. Fund solely tee the payment of base rental payments due and payable ny the City if and ‘shen rentals shall be abated in accordancc with the Master when other mone.ys at the City are not otherwis” available, to make such base rental payments or to pay the final scheduled base rental payme nt under the Master Lease Agreement. The City pledges and grant’ a lien on and a security intereq ir the Reservr Fund to the Agency’ ir order U. secure. the. City’s obligation to pay the base. rental payment’.. At tn’ termination of the Master Lease 3;, Agreement in accordance ts ith IL’ terms, an) balance remaining in the Resent Fund shall be released worn such pledgc, lien and security interest and may be transferred to -uch other fund or account of the City, or otherwise used ny thc cit for any other lawful purposes. a’. the (‘ity may direct. Any money held ii) the Trustee in the Lease Fund or in the Reserve Fund may be invested (and, at the direction at the City. shall bt invested’ by the Trustee in Permitted Investments (as defined in the Trust Agreement; which will, a’ nearly as practicable. maturt or or before inc dates when such money’s are anticipatea to be needed for disbursement under the Master Lease Agreement and, in the case of moneys Oh deposit in the Reserve Fund, may be invested in Permitted Investments maturing not later than the last scheduled base rental payment under the Master Lease. Such Permitted In eat ment’i from moneys on deposit in ,hi. Reserve Fund shall be valued by the Trustee at the lower of the cost or fair market value thereat, on kugust I of each year. In the event that o any February 1 or August 1. tnt value a: the investments in the Reserve Fund ‘determined at the lower of cost or current market valae of suck investments’ is less than the Reserve Fund Requirement. the City shall restore uch deficiency not later than the next su’ceeding February 1 or August 1, a- the case may be Maintenance, Utilities, Insurance, Taxes and Assessments During such time a’, the City ic in possession ot the. Properties, all maintenance and repair. both ordinary and extraordinary, of the Properties shall be the sole responsibility of the City, which shall at all times maintain or otherwise arrange for the maintenancc of the Propertie’ in usabk condition, and the City shall pay zor or otherwise arrange tor the payment of all utility sen’ices supplied to the Properties and shall pay for or otherwise arrange for the payment of the costs of the repair and replacement of the Properties resulting from ordinary wear and tear or want of care on the part of the City or any other cause and shall pay for or otherwise arrange for the payment at all insurance policies required to be maintainec. ii ith respect to the Properties. In ex’hange for tb’ rentah, the Agency agrees to provide only the Propertie. A’ more fully set forth in the Master Lease Agreement, the City shall aho pay to the Agency as additional rental such amounts if any. in each year as shall be required by the Agency for the payment of all license and registrauon fees and all taxes. Changes to th Properties. Substitutions of Properties The (‘its slaB have the right during the term of th’ lease tG make addiiions. betterments, extensiorn or improvements to tnt Properties, if such additions betterment- •‘xtension- ur zn!sruvements art necessary or beneficial to the use of the Properties, so lona as such action- shal. not materially auverseiy affect the aggregate va;ue of the Properties. The City shall have the right to make. substitutions of the. Properties under the Master Lease Agreement (including replacement of properties demolished; provided that 0’ the aggregate rental value of the Properties shall not be decreased thereby; cii the Rental Payments required to be made. by tne City shall not decrease and the. City shall continue to make said Rental Payment’: ‘iii no properties shall be substituted without the consent of the Agency; tivi the. City shall have delivered to the Agency all documents, plans and contracts relating tc’ the qubstitut ion; v’ title to al! tubstituted properties ‘hall be transferred to the Agency and the properties shal. nave been made subject to the Master Lease Agreement, anë wi. th” useful life of the substiwtd Property shall be at least equal to the Master Lease Agreement Insurance The City will maintain, or cause to be maintained at all times during the term of the Master Lease Agreement, fire, lightning and extended coverage insurance, including vandalism and malicious mischief insurance on each Property and sprinkler system leakage insurance, on eack Propery or any pan thereof in ar amount equal to 1 OO° of the then current replacement cost or in iue h other amount as the City may in its sole discretion determine to be necessary to enable the City. in the event of total oi partial loss, to restore any Property or any part thereof to the condition existing prior to ich loss, but in either event not less than the 38 P “Early Terminal ion Amount’s for such Property ‘as defineci belowt All extended coverage endorsement shall, as nearly a practicable., cover loss 01 damagc by explosion, windstorm, riot, aircraft, vehicle damage, smoke, and such other nasards as are. normall covered by such endorsement. Each such policy of insurance shall be in torni %atisfat ton’ tu the Tru’tee and chall contain a clause makitw all losses payable to the Tru’tee a its interest may appear. The City wil! also maintain, or cause to be maintained, at all times durinu the te-m of the Mater Lease ‘zrecmc nt. a romprehcni e. public liability and property damage insurance policy or policies insuring thi City, the Agency and its directors. officers, agent and employ ees. and the Trustee again’i all direct oi contingent los’ or liability lot damages br person injury, death or property damage occasioned by reason ot the operation of any Property or ani part thereof. with minimum liability limits of $1,000,000 for personae injury or death 01 each person and $1 0.000,000 br personal injury or dcaths oi two or more. persons in each accident or “vent, and in a minimum amount of $200,000 subject to a deductible clause, 01 not to eiceea $F,000’tor ciamagc to propert resulting from each accident or event. Such public liability anu property damage iiisuranct. may, however, be in the iorin of a single limit polin’ in the amount oi $3,000,000 covering a1 such risk’ These public liability’ insurance ca erage may be eftected by blanket policies covering the Property or the Propertie’ issued to the parties required to provide such insurance. The. City will have the right, exen liable at any time, to provide other kind’ of insurance or methods or plans of protection, including sell-insurance against earthquake or any other risk of loss which shall be in sul.stitutioi. fot any of the ioregoing ty3ie- of insurance. provideci such other insurance. plan’. or methods or selfinsurance shall afford reasonable protection to the Agency, its dire.ctor&. officers, agents and emplovee and the Trustee., in light oi all circumstances, giving consideration to cost. a ailability and plans or methods of protection or self-insurance adopted by California cities other than the City. Before. another method or plan relating to thc insurance required under the. preceding paragraph (other than earthquake insurancei may be. provided by the City, there shall be. flIed with the Trustee. a certificate of an actuary’. an independent insurance consultant or other qualifled persons acceptable to the Trustee, stating that, in the opinion 01 the signer, the substitute method or plan of protection or sell-insurance i’ in accordance with the. foregoing requirements and. when effective, would afford adequate protection to the Agency, it’ members, directors, officers, agent’ and employees and the Trustee against loss and damage. from hazards and risks covered thereby. The City will maintain or cause to be. maintained rental interruption or use and occupancy insurance to cover los’, total or partial, of the use of any Property or any part thereof, as a result of any of the hazard’ covered by tht. fire. lightning and extended coverage insurance described above in an amount not les., than the base rental due under the Master Lease 4greement for a period of 24 months, excluding any properties self insured under the. preceding paragraph. Any such insurance policy shall be in form aticfactory to the Trustee and shall contain & los’. uayable clause making any’ loss thereunder payabk to ui Trustee. a’ its interests may appear. Any proceeds of such insurance shall be. used by the Trustee to reimburse the City for any rentai previously paid by the City under the Master Lease Agreement for a periou of time during which the payment oi rental under the Master Lease Agreement is abated, and any proceeds or such insurance. not so used shall he applied to the prepayment of base rental payments as described below. Breach and Remedies (a) If default shall be made. by the City in the payment of any installment of basic rent on the due date thereof, or in the performance or obsen’ance of any other agreement or covenant in the Master Lease Agreement, or upon the. happening of any 01 the events specified in paragraph W below, then it shall be lawiul for the Agency to exercise any and all remedies available pursuant to law or granted pursuant to the. Master Lease Agreement. Upon the. breach of any agreement and covenant to be performed or cibsen’ed by’ tne City. the Agency may exercise any and al! rights of entry upon or possession of the Properties, and also, at its option, with or without such entry’, may terminate the Master Lease. Agreement; provided, however, that no termination shall be effected either by’ operation of law or acts of the City or Agency’ except upon express written notice 1mm the Agency to the City terminating the Master Lease Agreement, as described below. t In addition to any default resulting from breach by the City of any term or covenant of the Master Lease Agreement, if tU the City’s interest in the Master Lease Agreement he assigned, sublet or transferred without the written consent of the Agency which shall not be unreasonably’ withheld either voluntarily or by 39 ‘a for terms ol 5 years or less thai: not at operation ol law ‘except that any operatinz agreements and sublease,. this paragraph) or (2 ‘the City or any considered an interest in the Master Least Agreement for the purposes 01 act or acts. state or zedera,. dealing with assignee shall file any petition or institute any proceedings under any ment of suth act or acts, either as a or relating to the subject of bankruptcy or insolvency or under an> amend whereiz’ or whereby the Cit’ asks oz seeks hankrupt or as an insolvent or as a debtor or in any similar capacity. or all of the City’s debts or obligations, or or l’ra3 to tie adjudicated a bankrupt. or is to be discharged trom any the City’s debts, or asks, seeks or to offers to the City’s creditors to effect a composition or extension of timc pa> tment of the Cit 3 ‘s debt’ or for a readjus pray’ tor a reorganization or to effect a plan of reorganization or for dings of the same or similar lund or an other imilar relief, or it an> such petition or if an> such procee receivr of the husine& or oz tnt property or character he filed or b” instituted or taken against the City. or i; a r appointed at the instance or request o the assets of the City shall be appointed by any court except a receive the benefit oz the City s creditors, or t3i the Agenc>. of t’ the City snaIl make a general or any assignment zor or Properties and fail to substitute new ty City shall permanent]> abandon or entirely vacate any Proper is lessened thereby, then the City shall be propert> such that the aggregatc. fair rental value of the Properties deemed to be in default under the Master Lease Agreement. ent and notwithstanding any entry by the it, iii the even: of default under the Master Lease Agreem and demand ana without limiting an) notice Agenr. the Agency may at any time. thereafter, with or without othet rights or remedies the Agency may have: effect and recover rent and other ‘H Maintain the Master Lease Agreement in full fon and to possession, regardies of ‘s monetary charges as the) become due, without terminatint the Cit) right .1.gency elects not w tenninate the whether or not the City has abandoned the Properties. in the event tne ties at such rent, upon such Master Lease Agreement, it shall have the right to attempt to relet the Proper ties. including the ronditions and for such term, and to do all other acts to maintain or preserve the Proper as the 4gency deems necessan or removal of persons or property therefrom or taking possession thereof, ate this lease and the City shall desirable, provided however that no such actions %nal: be deemed to termin ng, payable at the same time continue to remain liable for any deficiency that may arise out of such re.letti the Properties may be stored by the and manner as provided for base rental. AU property removed from Agency at the City’s sole cost and expense. of termination to the City. On i 2’ Terminate the City’s right to possession b giving a written notice days after the giving of sucn thirt> (30 the date specified in such notice (which shall be not less than terminate and the City shall thaI! ent Master Lease Agreem notieei the City’s right to posses4ion and the date ali arrears oi rental and such before surrender possession ot the Properties to the Agency, unless on or costs and expene ineurrea al: and went all other sums payable by tnt Cit> under the Master Least Agre’ attorne ‘s fees ncurred in ing by or on behalf of the Agency under the Maste” Lease Agreement, includ s under or breaches of default other ali and connection with suck default’. shall have been paid by the Cit) ction of the Agency. satisfa the to ed remedi th6 lease by the City at the time existing shall have been fully le by contract or availab es damag other all Upon such termination, the Agency may recover, in addition to earned at the been had which renta! a law, from the City: (ii the worth at the time of award of the unpaid rental whicF unpaid the which t by amoun time 01 termination; (ib the worth at the time of award o’ the rental loss such of t amoun the s exceed wouid have been earned after termination until the timt of award of the award of time at the worth that the City proves could have been reasonably avoided; dii’ the the after ent Agreem Lease Master the amount by which the unpaid rental for the balance of the term of anc d; ably avoide reason be prove could time oi award exceeds the amount of such rental loss that the City ent proximately caused by the (iv)an> other amoimt necessary to compensate the Agenc> tor all the detrim which in the ordinary course ent or Aureem City’s failure to perform its obligations under the Master Least of the. amounts referred u award” of of things would be likely to result therefrom. The “worth at the time per annum. The worth a O” 1 of rate the in clau.ies ib and ‘iii above is computed by allowing interest at discounting such amoun ted by compu the time of award of the amount referred to in clause diii above is of award plus 1°. time the at sco at the discount rate of the Federal Resent Bank of San Franci any part thereof or fails t’ 3 if the City permanentl> abandons or entirely vacates any Property or nt to the Master Lease Agreement. th substitute Properties or make prepayments of basic rent pursua ation Amount of such Property City shall pay liquidated damages in an amount equal to the Early Termin 40 This liquidated thm ge’ provbion is siwcifiralh agreed ci. tic a alid and reasonalil” estimate o: the 4 meacurt c,: damage’. untie: the t’xistinu conditions Each and al! or the r”medir giver. tc’ the’ Agency hereunder or 1. any la mm existing or her”azter ‘riacted are cumt.la; ive and thc exercise of any 01k riimi or remedy “hail not impair the righ. o: thc Agenn to an’ or al! other remedies. edi The City ‘hal. in rio event nt in cieiault in the’ periormancc’ of any of its oblitrat ions under tue Ma4ter Lease Agreement, other than with repect to the timely pavmiii of rent. unless and until tht City shall have zailec: to p”rfo—m urh obhigationc wi;hn. rn;rtv iSO’ ‘lay’ or cudi additional time a p. reaconabh required to correct an) such dezault alter notu e by the genn to the City properly suecitying wherein the City ha’ failed ii. perform an soc h obliga: iou The “Early Termination Amount” for any panic ular Property shall mean at any timc the result V multiplying: (ii the quotient o’ cAl the “Base Wiuc” for sort Propert> set forth in the Installment Sale Agreement divided b’s (B) $1 96.370,000; by iii) the sum of tA; the remaining unpaid amount oi principal ot the Certincates plus (B the amount of mterest duc and payable on the. Installment Sale 4.grecment on the. next interest payment date and (Ci the amount of premium. ii any, that would be due arm payable ii the full amount oi the principal on the Installment Salt Agreement were paid on said date under the circumstances of the payment. Londesuruzuon and Casualty a, The’ C in irrevocably asign”. U’ kgency. except a Prcn icled in the Master Lease’ Aareenint. any award. compenation. insurance payment o the assets set aside pursuant to a seli-insuranee procram implemented by th” City ic. whucl’ the City ma) become ntitlet, by reason o the City’s imeres; in an) Property o- an) part thereof ii: if the use, occupancy or titie of such Property or an) part thereot I.’ condemned or is taucen. requisitioned or sold in, b’s or on account of any actual or threatened eminent domain proceeding or other action by any person having the power of eminent domain “Conaemnation” ‘or ‘ii’ if such Property or part thereof are damaged or destroyed by tire, flood or other casualty “Casualty”. cAll awards. compensation, insurance payments or the assets set aside pursuant to a self-insurance ‘rogram implementec. by the City on account of any Condemnation or Casualty are hereinafter collectively referred to as “Compensa ion”.’ The Agency may appear in an) such proceeding or action, to negotiate, rosecuw and adjust an> :lain” for Compensation and the Agency shall collect any such C’ompensation. All Compenation shall 1>” applieC pursuant to thi’ section. and all such Compensation c les’ the sum of the costs and expenses of collectini, such (‘ompe haion art nereinafte- referred to as the. ‘Net Proreeds Tue Cit3 shal 1 be entitieo to participat in an) suck’ proceeding action, negotiation, promecutior ci- acl;u%tment. an) ‘ (b. Ii a Condemnation a- Casualty shaF affect all or substantially all of any Propc.rty or ‘,lid. render all or substantially all 01 any Property unsuitable for restoration for the purposes for which they ‘su.rc used by the City. then the City shall, not later than 30 days after such Condemnation or Casualty, deliver to thc Agency ii notice o its intention to terminate this lease, with respect to such condemned, damagea, or destroyed Property or Properties, on the next Rental Payment date (the “Condemnation or Casualty Termination Date.” whicn occur’ not less than 1 oCr days alter thc delivery of such notice, ‘iii a certificate of the City describing the e vent giving rise to such termination and stating that the City has determined that %uch Condemnation or Casualty has rencierec! said Propert) or Properties or a substantial portioit thereof unsuitable for restoration to: continued u-t and occupancy for the’ Cit) ‘s purposes and ciiii documentation te the effect that termination or the Master Least Agreement with respect to such property or Properties will not 1w in vio atior o: any 1 agreemen! then in effect with which the City i’ obligated to comply pursuant to this lease. Such notice. snaIl be an ompanied by an irrevocable oiler in the City to the Agency to purchase on the Condemnation or Casualty Termination Date the interests of the City in any remainint portion of the condemned, âamaed or destroyed Property or Properties and the Net Proceeds, if any, payable in connection with such Condemnation or Casualty c or the riut to receive the same when made. ii payment thereof has not yet been made u, a: a Price equal to tue Early’ Termination Amount for such Property or Properties. if the Agency shall reject such oiler by notice given to the City not later than the 15th day prior tc. the Condemnation or Casualty Termination Date. the. Master Least. Agreement shall terminate with respect to said condemned, damaged or deatroyed Property 41 a except with respect to obligations anc or Properties or’ the Condemnation or Casualty Termination Date, which have risen on or prior c liabilities of the City under the Master Lease Agreement, actual or contingent, City of all Basic Rent. Additional ken: the Condemnation or Casualty Termination Date, upon payment by the ent to and including the Condemnation u” and other sums then due and payable under the Master Lease Agreem the Agijncc. Unless the Agency shall hav Casualt Termination Date, and the Net Proceeds shall belong tO be conclusively considered to havr y rejected such offer in accordance with this paragraph. the Agenc shall Date, there shall he conveyed to the accepted such offer, and, on the Condemnation or Casualty Termination of the “ondemned, damaged o City or its designee of the interests of the Agency in the remaining portion the Cits or its designee ab of the destroyed Property or Properties, if any, and there shall he assigned to interests of th Agency in the Net Proceeds. taken under toe power of eminen (c) If less than all or substantially all of any of the Properties shall he ty and trw remainder are usable for tnt domain or Condemnation or shall be damaged o destror’ed hr Casual , then the Master Lease Agreernen: purposes for which they were used by the City at the time of such taking waive the beneflts of any tas to the shall continue in full force and effect as to such remainder, and the parties abatement of the base rental our contrary. In such event, at the option of the City, there shall be a partial Property or Properties being condemned or under the Master Lease Agreement, which is attributable to the Certificates shall he outstanding any Net losses hr Casualtx, to the following extent: so long as any of the nts a provided in the Master Leacz’. Proceeds shall be applied to the prepayment of base rental payme ion payments which remain the properts Agreement, except tenant improvements, personal propertr or relocat of the City. of the Properties the Cits docs not tclt If, alter a Condemnation or Casualtr, affecting a portion of any Master Lease Agreement as provider. in give notice of its intention to partially abate the rent under the ue in tull effect and the City shall, at its paragraph (c above, then the Master Lease Agreement shall contin conlormitv with the requirements ot the expense, rebuild, replace, or repair the Property or Propertie in case of Condemnation, as nearly as Master Lease’ Agreement so as to restore the Property or Properties un the such occurrence. Prior to ans suet practicable) to the condition and fair value thereot immediately prior to on the maximum cost thereof thr shalt agree City the and y rebuilding, replacement or repair, the Agenc own funds to the’ extent thai the City’s the out of flrst paid he shall “Restoration Cost”). The Restoration Cost ence, after which expenditure occurr such with tion connec in e payabl ds Restoration Cost exceeds the’ Net Procee of the City delivered p the ificate cer: only acainse out ds, City shall he’ entitled to receive the’ Net Procee sses each such certificati progre repair and ment replace ing, Agencr from time to time’ as such work of rehuiid , b the Clv in conrtw!. incurre cost the and ’n oar’mr tine 5 reques descring the work for which the City i tor such wore. Ans Net Procee therewith and stating that the City has nut Lneretorore rec’ ivt’n tjavme’rir Citr ha been reirnhnrsi’d for an’ the’ after and sork sucit for remaining alter final payment has been made portions it contributed to he Restoration Cost shall be’ retanec or the’ Cit’. shall remain in full effect and the In the’ event of any temporary requisition, the’ Master Lease Agreement rary requisition, except that sU. C tempo to uch le allocab ds City shall be’ entitled to receive the Net Prorwe ation of the term of the l\lastetr portion of the Net Proceeds allocable to the period after the expiration or termin rnent or ropair required ii’ hr iirtg, r”ulace renuih any of cost the if Lease Agreement shall he paid to the Agency. shall he paid hr the Cd, ncr deficie ’d, the Procee Net such of made by the’ City shall exceed the amount Prpaynient . H; 5 nallor; and Casualty roce”d The’ Cit’ shall preuav on any date’ ij from the’ insurance are (000em tv ahanoun or ent City perman th shoule (‘dv, to the le’ availab s extent described above, or (ii, from tne money t for any suet Amoun ation Termin Earlr’ ‘he’ to equal t entirely vacate ana of the Properties, in an amoun of tb le of $5,000 multip l an integra in part any or all to Property, anti such payments shalt he applied ts il of amoun Irincip annual ate the’ aggreg that so unpaid then nts principal components of base rental payme near)’ be as shall (late ment prepay such after e shall navabl be’ components of base rental payments which a components of base rental Tavme’n: proportional as practicable to the aggregate annual amounts 01 Trincp 5 las’s lollowing the event cre’atint xri:hin shall, the City ment, then unpaid. Before making an such prepay event and srr’cifving the’ elate e’ ing suer describ \gencv roe such obligation to prepay, give written notice to 42 which the prepayment will be made, which date shall be not less than 30 nor more than 45 days from the date such notice is given. Right of Entry The Agency shall have the right to enter the Properties during reasonable business hours f and in emergencies at all times) to inspect them and to inspect any personal property located thereon for any tiurpose connected with the City’s or the Agency’s rights or obligations under the Master Lease Agreement and for all other lawful purposes. Liens In the event the City shall at anr’ time during the term of the Master Lease Agreement cause any additions to the Properties to he constructed upon or attached H the Properties, the City shall pay or cause to be paid when due all sums that may become due for any labor, services, material, supplies or equiument fin-nished to the City upon or relating to the Properties and shall keep the Properties free of any and all mechanics’ or materialmen’s liens or other liens against the Properties or the Agency’s interest therein. Title to the Property Except as provided in the Master Lease Agreement, title to the Properties shall remain in the Agency during the term of the Master Lease Agreement. Title to all moveable property and fixtures placed in or about the Properties by the City during the term of the Master Lease Agreement shall remain in the City, The City shall take all necessary actions to execute and deliver or cause to be executed and delivered all such other and further instruments, documents and assurances as may he necessary or reasonably required in order to further and more fully vest in the Agency the title to the Properties. Disclaimer o Warranties The Agency makes no agreement, warranty or representation, either express or implied, as to the value, design, condition, merchantability or fitness for particular purpose or fitness for use of the Properties. or warranty with respect thereto. The City acknowledges that the Agency is not a manufacturer of any o:’ the Properties or a dealer therein, that the City leases the Properties aszs, it being agreed that au of the aforementioned risks are to be borne by the City. In no event shall the Agency he liable for any inctuental, indirect scicta 1 o conseqan jal ddmag ir cOnnecior u’fl o arising ou tn Me LL Lra mc the existence, furnishing, functioning of the City’s use of an’ item or products or services provided for in the Master Lease Agreement. The Assignment Agreement The Assignment Agreement is entered into between the Agency and the Trustee to provide for the assignment of the Agency’s rights, title and interest in and under the Master Lease Agreement to the Trustee, as security for the performance by the Agency of its obligations under the Installment Sales Agreement, and for the benefit of the owner of the Certificates. The Assignment The Agency sells, assigns and transfers for security only and grants a security interest to the Trustee without recourse, for the benefit of the owners of the Certificates, all of the right, title and interest of the Agencs in, to and under the Master Lease Agreement, including, without limitation, (i) its rights to receive Rental Payments from the City under the Master Lease Agreement, (ii) the right to exercise such rights and remedies as are conferred on the Agency by the Master Lease Agreement, as may he necessary to enforce payment of such Rental Payments when due or otherwise protect its interests in the event of a default by the’ City, and iiii’ all rights and interest of the Agency as secured party with respect to Revenues. a.s defined in the Trust Agreement. All rental payments under the Master Lease Agreement receivec hr the’ Trustee shaH be credited against the Agency’s payment obligations under the Installment Sale’ Agreement. 43 -4 Tile Acceptance ‘Flit 1 rustee accepts such assignment iw inc purpo& of securing payments to be made to and rights 01 thc owner’ 01 dx Certificates delivered pursuant w the Trust Agreement, and subject to the provisions of the Trust Agreement UNDERWRITING The I. ndc’rwriters have agreed, subject to certain condiLion%. to riurchase the Certificate at a prict 0! o; 7W’ of the principal amount ott he (‘en iticates (CkCIJbiVC at original isue discounts plus interest accrued. if am, won: August 1. 1Q65. Alter the (‘ertiñcate’. arc releasec for sale. th” price and other term- may be varied tram tinu it’ iimt by the Umlerwritr’ and tñe (‘ertificatez’ may ‘it offered and sold at prire lower than hit initial puiiii’ oftering price to certain dealer- cmnclteding dealers who ma) sell the (‘ercificates intc’ investment arcount%I The Underwriters are committed to take and my Ir all of the Certificates ii any ot thy Cnificate are taker. Thi City ha. agreed to indemnift thc Underwriter’ against certain civil liabilities LEGAL OPINIO!% The opinion of Orrick. Herrinmon & Sutclif!c. San Francisro. California. and Alexander. Burns. Miliner & McGee., Oaidand, (‘alifornia, Co-Ikinc Counsel. approving the validity at th’ Installment Sale Agreement ana the fl’rtificats and stating tha’ the interest portion or th” payment- under the Certiflcates is exempt frau incomE taxes at thc’ United State, of America under present federal incom” in law and that suck interest i ai exempt fran 1 personal income taxes oi the State of Calitornia under present State income tax laws, will lit. jera turd to the Underwriters at tht umc a: the deliver) of dx (ertificate—. A copy of ‘ uch o;iiniore will 1w 1 printed ott the Inu’k o: each Certificate. (‘erwin iega matter’ will be passed upon for the Underwriters icy &;idrei. Snahr. Andrc’ws and Ingersoll. Vashingtar 4 D.C.. and Hunter & Anderson. Oakland. California. MJSaLLA’%EOt’s The purpose of thi’ Official Statement to suppl) information to Prospective buyer- of the (‘ertificate Quotations from and summaries and expanations ot the Certificatea, dx resolutiot. authorizing the rertificate and of statutes and documents contained herein do not purport to be complete and reference i’ made to saia dcx ument’ and statute’ for full and c ompleti statements of thei- prot isionc. l data contained heri’iii havi been taken r constructed from .genc) and (‘it) records. Appropriate City al Statc.mrn. anc’ ha 1 atit .4eian offir iah at time in thi ii ofik Li ‘apic, ha ‘ r”vic iscr.. dii’. Offir & tc.rminc a 11w a. a: tht uau hc reos thc intonnatior c ontaaiec. nereir i-, to the Lwit ot their know leagc ant’ l’liv., trw and corr—ct in tall mat eria. repect% and doe’ not contail. ar untrue statement üi a materia act or 1 to ‘atc a materiam tart necessan in order to make thc statcments made., in tight ol the circum-tance omi under which the) were made, not misleading. The appropriate. Cit) and Agenc) officiah will execute a certificate to this eftect upon deliver) of the Certificates. This 011k ial Statement and its distribution ha e been duly authunited and approved Ii) thc Agency. RFln Li OPUL’cr A tE%’ UI Till ( ri’, ot O%Li.VU, B’: 44 s IlhNR\ L. G.R1’\FR .ldrnmnLciralur