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(b) Interest on the Bonds will be calculated at a fixed rate, which shall <br />not exceed the maximum rate of interest permitted by law. <br />(c) Principal of and interest and redemption premiums (if any) on the <br />Bonds shall be payable from the General Fund of the City and from <br />any other source of legally available funds of the City. The Bonds <br />shall not constitute an obligation of the City for which the City is <br />obligated to levy or pledge any form of taxation. <br />(d) Proceeds of the Bonds, except to the extent required to pay the <br />costs of issuing and underwriting the Bonds, shall be deposited with <br />the Trustee and applied to discharge the PERS Side Fund <br />Obligations of the City in whole or in part. <br />Section 3. Minimum Savings Threshold. The Bonds shall be issued only if <br />the net present value savings of refunding the PERS Side Fund Obligations are at least <br />equal to 3.00% of the principal amount of the PERS Side Fund Obligations which are <br />refunded. For purposes of determining the net present value savings of the refunding, <br />the rate of interest on the PERS Side Fund Obligations shall be assumed to be 7.75 %. <br />Determination of such net present value savings shall be made by Public Financial <br />Management Inc., as financial advisor to the City, whose determination shall be final and <br />conclusive. <br />Section 4. Institution of Judicial Validation Proceedings. The City Council <br />hereby authorizes the filing of an action to determine the validity of the Bonds, the <br />Indenture and related matters in the Superior Court of Alameda County, under the <br />provisions of Sections 860 et seq. of the Code of Civil Procedure of the State of <br />California. The firm of Jones Hall, A Professional Law Corporation, as bond counsel to <br />the City, is hereby directed, in concert with the City Attorney, to prepare and cause to be <br />filed and prosecuted to completion all proceedings required for the judicial validation of <br />the Bonds, the Indenture and related matters. <br />Section 5. Authorization to Acquire a Municipal Bond Insurance Policy. In <br />connection with the issuance of the Bonds, the City may negotiate the purchase of a <br />municipal bond insurance policy for the Bonds and enter into one or more agreements <br />with respect thereto, and the obligations of the City under any such arrangement shall <br />be payable from the sources described in Sections 2(c) and (d) above. <br />Section 6. Approval of Additional Documents. Upon completion of the <br />validation action authorized under Section 4, the City staff shall cause the following to be <br />submitted to the City Council for final approval: (a) an agreement for the purchase of the <br />Bonds by Wedbush Securities Inc., as underwriter, (b) a Preliminary Official Statement <br />relating to the Bonds, to be prepared by Jones Hall, A Professional Law Corporation, <br />acting as disclosure counsel to the City, (c) the final form of the Bond Indenture, (d) a <br />continuing disclosure certificate or agreement and (e) such other agreements and <br />documents as are necessary or convenient to implement the issuance, sale and delivery <br />of the Bonds. <br />Section 7. Effective Date. This Resolution shall take effect from and after the <br />date of approval and adoption thereof. <br />-2- <br />