1988-25073-Resolution No. 88-073 Recorded 10/25/198888- 25073 c'r�
BEFORE THE BOARD OF COUNTY COMMISSIONERS OF DESCHUTES COUNTY, UXEUUN
A Resolution Adopting the
Preliminary Official Statement*
Relating to Deschutes County's*
Issuance of Certificates of *
Participation in the Principal*
Amount of $1,500,000.00, dated*
as of November 1, 1988.
RESOLUTION NO. 88 -073
0094 0004
WHEREAS, the Board of County Commissioners authorized the
issuance of Certificates of Participation in the principal amount
of One Million Five Hundred Thousand Dollars ($1,500,000.00),
dated as of November 1, 1988; and
WHEREAS, a preliminary Official Statement was prepared for
this issue by Seattle Northwest Securities Corporation, the
County's financial consultant; and
WHEREAS, the preliminary Official Statement was available
prior to the offer for sale of the Certificates of Participation;
and
WHEREAS, the Board of County Commissioners has reviewed the
preliminary Official Statement and finds that, to the knowledge
and belief of the Board of County Commissioners, as of the date
of the preliminary Official Statement, the preliminary Official
Statement did not contain any untrue statement of material fact,
omit to state a material fact in light of the circumstances under
which the statements were made, contain any misleading state-
ments, and that the preliminary Official Statement is representa-
tive of the financial condition of the County and the Issue; now,
therefore,
BE IT RESOLVED BY THE BOARD OF COUNTY COMMISSIONERS OF
DESCHUTES COUNTY, OREGON, as follows:
Section 1. That the preliminary Official Statement, marked
Exhibit "A ", attached hereto and by this reference incorporated
herein, is adopted as the County's preliminary Official Statement
relating to the Certificates of Participation, to be issued by
Deschutes County, Oregon, dated as of November 1, 1988.
1 - RESOLUTION NO. 88 -073
0094 0005
DATED this 0t day of D /jOk2 , 1988.
ATTEST:
(&ei424L.)(9/
Recording Secretary
2 - RESOLUTION NO. 88 -073
BOARD OF COUNTY COMMISSIONERS
OF ' SCHUT S COUNTY •REGON
LOIS
TOW PRANTE, Commissioner
TOM THROOP, Commissioner
DICK MAUDLIN, Chairman
Exhibit A
0094 0006
PRELIMINARY OFFICIAL STATEMENT DATED OCTOBER 25, 1988
NEW ISSUE
. In the opinion of Securities Counsel, interest on the Series 1988 Certificates is subject, under existing law and regulations, to
g E federal income, estate and gift taxes. Interest on the Series 1988 Certificates, less any interest expense incurred to carry the
certificates, may be subtracted from federal taxable income in determining Oregon taxable income. See "Tax Status" prouided
a".� herein.
ca L
C
$1,500,000
0.1 le. CERTIFICATES OF PARTICIPATION, SERIES 1988
o (Federally Taxable)
42 E Evidencing Undivided Proportionate Interests of
- the Owners thereof in Installment Payments by
in
Z'W DESCHUTES COUNTY, OREGON
118.°
O C co DATED: November 1, 1988 DUE: November 1, as shown below
y = The Certificates of Participation offered hereby evidence undivided proportionate interests in the
.2 -8 Installment Payments to be made by Deschutes County under an Installment Purchase and Trust
co Agreement between the County and Security Pacific Bank Oregon, as Trustee. The Certificates will
0 o be executed and delivered by the Trustee.
cov
Interest due with respect to the Certificates will be payable semiannually on May 1 and November 1,
-6 m commencing May 1, 1989, by check or draft of the Trustee, mailed to the Registered Owner as of the
a
m. record date at the address shown on the registration books. The Certificates will be issued in fully
$ g registered form without coupons in denominations of $5,000 each or any integral multiple thereof.
3 Principal is payable at the principal corporate trust office of Security Pacific Bank Oregon, in
72 i• Portland, Oregon. The Certificates are subject to prepayment or redemption prior to their stated
5. maturities as described hereinafter.
15
o 2 The principal of and interest on the Certificates are secured by a lien on and pledge of the Transient
Room Tax, levied by the County pursuant to Deschutes County Code 4.08.030. The Transient Room
la v Tax is a maximum seven percent room tax on all occupied transient hotel and motel rooms Iocated in
cc co o the County. The County may also utilize, to the extent necessary, general fund monies available. The
m m obligation of the County to utilize general fund monies is subject to annual appropriation.
FG
{ The Certificates are not secured by the unlimited taxing power of the County, and are not a general
1 8 obligation of the county. Neither the Certificates nor the obligation of the County to make Installment
oo Payments constitutes an indebtedness of the County, the State of Oregon or any political subdivision
thereof. See "SECURITY AND SOURCES OF PAYMENT FOR THE CERTIFICATES -
t E OBLIGATION OF THE COUNTY?
8�
m $1,500,000 Certificates
$150,000* % Term Bonds due November 1, 1993 @ %
. . $390,000* %Term Bonds due November 1, 2000 @ %
m i $960,000* % Term Bonds due November 1, 2008 @ %
E"
2. (Plus accrued interest from November 1, 1988)
Nza
71- R The Certificates are offered when, as and if issued and accepted by the Underwriter, subject to an
=•a approving legal opinion of Lindsay, Hart, Neil & Weigler, Portland, Oregon, Securities Counsel, and
o 8 certain other conditions. It is expected that the Certificates will be available for delivery in Portland,
e "o Oregon or at the facilities of The Depository Trust Company in New York, New York on or about
h November . 1988.
Ea
ate` E *Preliminary, subject to change
r
Dated:
1-
Seattle- Northwest Securities Corporation
0094 0007
DESCHUTES COUNTY, OREGON
1164 NW Bond
Bend, Oregon 97701
Board of County Commissioners
Dick Maudlin
Lois Bristow Prante
Tom Throop
Mike Dugan
Darrell Davidson
Oscar B. Bratton
Helen M. Rastovich
Mary Sue Penhollow
Dave Hoerning
Michael Maier
Richard L. Isham
Chairman
Commissioner
Commissioner
Elected Officials
District Attorney
Sheriff
Assessor
Treasurer /Tax Collector
County Clerk
Surveyor
Appointed Officials
Administrative Services Director
Legal Counsel
Securities Counsel
Lindsay, Hart, Neil & Weigler
222 SW Columbia, Suite 1800
Portland, Oregon 97201
Trustee
Security Pacific Bank Oregon
1001 SW Fifth Avenue
Portland, Oregon 97204
i
0094 0008
Certain of the information contained herein has been obtained from the County and other
sources which are believed to be reliable. Such information is not guaranteed as to
accuracy or completeness, and is not to be construed as a representation, by the
Underwriter. The information and expressions of opinion herein are subject to change
without notice, and neither the delivery of this Official Statement nor any sale made
hereunder shall, under any circumstances, create any implication that there has been no
change in the affairs of the County since the date hereof.
This Official Statement does not constitute an offer to sell or the solicitation of an offer
to buy, nor shall there be any sale of the Certificates in any jurisdiction in which it is
unlawful for any person to make such an offer, solicitation or sale. No dealer, broker,
salesman or other person has been authorized to give any information or to make any
representations other than as contained in this Official Statement. If given or made, such
other information or representations must not be relied upon as having been authorized by
the County or the Underwriter.
In connection with this offering, the Underwriter may overallot or effect transactions
which stabilize or maintain the market price of the Certificates at a level about that
which might otherwise prevail in the open market. Such stabilizing, if commenced, may
be discontinued at any time.
TABLE OF CONTENTS
Page
Introduction 1
Authorization for Issuance 1
The Certificates 2
Sources and Uses of Funds 4
Installment Payments 4
Security and Sources of Payment for the Certificates 4
The Project 5
Summary of Certain Provisions of the Installment Purchase
and Trust Agreement 6
The County 9
Transient Room Tax Administration 10
Property Tax Administration 11
Tax Collection Record 14
County Indebtedness 14
Debt Payment Record 15
Financial Information 16
Debt Information 16
Bonded Debt Ratios 16
Summary of Overlapping Debt 17
Representative Levy Rates 17
Outstanding Obligations 18
Forecast of Cash Flow 19
County Financial Factors 20
General Fund - Balance Sheet 22
General Fund - Combined Statement of Revenues, Expenditures
and Changes in Fund Balance 23
General Fund - Budget of Revenues and Expenditures 24
Transient Room Tax Fund - Balance Sheet 25
Transient Room Tax Fund - Combined Statement of Revenues,
Expenditures and Changes in Fund Balance 26
Transient Room Tax Fund - Budget of Revenues & Expenditures 27
General and Economic Information 28
Litigation 32
Approval of Counsel 32
Tax Status 32
Underwriting 32
Appendix A - Form of Opinion of Securities Counsel
ii
0094 0009
OFFICIAL STATEMENT
$1,500,000
CERTIFICATES OF PARTICIPATION, SERIES 1988
(Federally Taxable)
Evidencing Undivided Proportionate Interests in Installment Payments by
DESCHUTES COUNTY, OREGON
Pursuant to an Installment Purchase and Trust Agreement
with Security Pacific Bank Oregon
INTRODUCTION
The purpose of this Official Statement, which includes the cover page and appendices
hereto, is to provide certain information with respect to the sale and delivery of
Certificates of Participation, Series 1988 (the "Certificates "), in the aggregate principal
amount of $1,500,000, evidencing undivided proportionate interests of registered owners
(the "Registered Owners ") thereof in payments (the "Installment Payments ") to be made
by Deschutes County (the "County "), a municipal corporation, in connection with the
Visitor's Welcome Center (the "Project ") pursuant to an Installment Purchase and Trust
Agreement dated , 1988 (the "Agreement ") by and between Deschutes County, as
lessee and Security Pacific Bank Oregon, Trustee (the "Trustee "), as lessor.
The principal of and interest on the Certificates are secured by a lien on and pledge of the
Transient Room Tax, levied by the County pursuant to Deschutes County Code 4.08.030.
The Transient Room Tax is a maximum seven per cent room tax on all occupied transient
hotel and motel rooms located in the County. The County may also utilize, to the extent
necessary, general fund monies available. The obligation of the County to utilize general
fund monies is subject to annual appropriation.
The Certificates are not secured by the unlimited taxing power of the County, and are not
a general obligation of the County. Neither the Certificates nor the obligation of the
County to make Installment Payments constitutes an indebtedness of the County, the
State of Oregon or any political subdivision thereof.
Capitalized words and phrases used in this Official Statement have the meanings as
defined in the Agreement. Brief descriptions and summaries of, and information relating
to, the Certificates, the County, and the Agreement are hereinafter included in this
Official Statement, including the Appendices hereto. Such descriptions, summaries and
information do not purport to be exhaustive, comprehensive, or definitive.
All references herein to the Certificates and the Agreement or the terms or provisions of
any of the foregoing, are qualified by reference to such documents in their entirety.
AUTHORIZATION FOR ISSUANCE
Deschutes County is a municipal corporation and is authorized under Oregon Revised
Statutes, Chapter 203, inclusive, as amended (the "Act "), to acquire, operate and maintain
properties of public concern. Under the Act, the County is authorized to enter into
contract arrangements relating to the construction and operation of its authorized
facilities.
1
0094 0010
THE CERTIFICATES
General Description
The Certificates are being executed and delivered in the aggregate principal amount of
$1,500,000 and mature on the dates set forth on the cover hereof. The interest
represented thereby will be calculated from November 1, 1988, at the rates per annum set
forth on the cover page hereof, payable semiannually on May 1 and November 1 of each
year until maturity or prior redemption, commencing on May 1, 1989.
The Certificates will be prepared only in fully registered form without coupons in
denominations of $5,000 or any integral multiple thereof. Interest is payable by check or
draft of the Trustee mailed on the due date to the Registered Owners of the respective
Certificates whose names appear on the registration books on the 15th day of the calendar
month preceding the interest payment date, at the address appearing on the registration
books or at such other address as may be furnished in writing by such Registered Owner to
the Trustee. Principal is payable to the Registered Owners upon presentation and
surrender of the Certificates on the date of maturity or prior redemption, at the principal
corporate trust office of the Trustee in Portland, Oregon.
The Certificates will be executed and delivered by the Trustee pursuant to the
Agreement. The Trustee is not liable for payment of any Installment Payments evidenced
by the Certificates. Rather, the Trustee's duty in this regard is to remit Installment
Payments received from or for the account of the County to the Owners of the
Certificates entitled thereto.
The principal of and interest on the Certificates are secured by a lien on and pledge of the
Transient Room Tax, levied by the County pursuant to Deschutes County Code 4.08.030.
The Transient Room Tax is a maximum seven per cent room tax on all occupied transient
hotel and motel rooms located in the County. See "Summary of Certain Provisions of
Installment Purchase and Trust Agreement - Remedies." The County is bound to annually
appropriate Room Tax Revenues in an amount sufficient to pay the Installment Payments.
This pledge of the Room Tax Revenues is binding and is not subject to nonappropriation of
funds. In the event that Transient Room Tax Revenues are insufficient to meet
Installment Payments, the County may also utilize, to the extent necessary, general fund
monies available. The authority of the County to utilize general fund monies is subject to
annual appropriation.
The Certificates are not secured by the unlimited taxing power of the County, and are not
a general obligation of the County. Neither the Certificates nor the obligation of the
County to make Installment Payments constitutes an indebtedness of the County, the
State of Oregon or any political subdivision thereof.
Optional Redemption Provisions
Certificates maturing in the year 1993 are not subject to optional redemption prior to
maturity. The County has reserved the right to redeem any or all of the Certificates
maturing on or after November 1, 2000, in whole or in part, in amounts of $5,000 or
integral multiples thereof, on the redemption dates and at the redemption prices shown
below, expressed as a percentage of the principal amount of the Certificates to be
redeemed, plus interest accrued to the date of redemption:
Date Percentage
November 1, 1998 and May 1, 1999 101%
November 1, 1999 and any interest payment thereafter 100%
2
0094 0011
Mandatory Redemption Provisions
The Certificates maturing on November 1, 1993 are subject to mandatory redemption
prior to maturity in part by lot at 100% of the principal amount thereof from the principal
component of Installment Payments in the following years:
Redemption Dates Component
November 1, 1989 $ 25,000
November 1, 1990 25,000
November 1, 1991 30,000
November 1, 1992 35,000
November 1, 1993* 35,000
If not previously called under the provisions for Optional Redemption, the Certificates
maturing on November 1, 2000 are also subject to mandatory redemption prior to maturity
in part by lot at 100% of the principal amount thereof from the principal component of
Installment Payments in the following years:
Redemption Dates Component
November 1, 1994 $ 40,000
November 1, 1995 45,000
November 1, 1996 50,000
November 1, 1997 55,000
November 1, 1998 60,000
November 1, 1999 65,000
November 1, 2000* 75,000
If not previously called under the provisions for Optional Redemption, the Certificates
maturing on November 1, 2008 are also subject to mandatory redemption prior to maturity
in part by lot at 100% of the principal amount thereof from the principal component of
Installment Payments in the following years:
Redemption Dates Component
November 1, 2001 $ 80,000
November 1, 2002 90,000
November 1, 2003 100,000
November 1, 2004 110,000
November 1, 2005 125,000
November 1, 2006 135,000
November 1, 2007 150,000
November 1, 2008* 170,000
*Final maturity
Notice of Redemption
Notice of redemption of any Certificates shall be given by mailing of notice to the
Registered Owner of any Certificates being called for redemption not less than thirty nor
more than sixty days prior to the redemption date at the address shown on the registration
books, or at such other address as may be furnished in writing by such Registered Owner
to the Trustee.
3
0094 0012
Additional Certificates
The County is permitted to cause to be issued additional Certificates upon compliance
with certain conditions set forth in the Agreement and more fully described in this
Official Statement. See "Summary of Certain Provisions of the Installment Purchase and
Trust Agreement - Additional Obligations."
SOURCES AND USES OF FUNDS
The proceeds to be received from the sale of the Certificates (other than accrued interest
which will be deposited into the Installment Payment Fund) plus other monies are to be
applied as follows:
Sources of Funds:
Principal Amount of Certificates
Total Sources of Funds
Uses of Funds:
Construction and Other Costs
Deposit to Reserve Account
Issuance Costs and Underwriters' Discount
Total Uses of Funds
INSTALLMENT PAYMENTS
$ 1,500,000
The County is obligated to make Installment Payments to the Trustee. In accordance with
the Agreement, the Installment Payments will be deposited by the Trustee in the
Installment Payment Account and applied to make principal and interest payments as due
with respect to the Certificates, sufficient to meet the schedule on page 19 of this
Official Statement.
SECURITY AND SOURCES OF PAYMENT FOR THE CERTIFICATES
The Certificates represent undivided ownership interests in the Installment Payments due
from the County under the Installment Purchase and Trust Agreement. The Certificates
are not general obligations of the County, the State of Oregon or any other political
subdivision or municipal corporation. The Certificates are secured solely by the pledge of
the Transient Room Tax; the Debt Service Reserve Account; a security interest in the
land, the building, and any improvements thereof; and any sums realized in connection
with the remedies available upon the occurrence of an event of default, all as provided in
the Agreement.
4
0094 0013
Obligation of the County
Each Certificate represents an undivided proportionate ownership interest in payments
made by the County under the Agreement. The County has pledged as payment, the
revenues it receives from its Transient Room Tax pursuant to Deschutes County Code
4.08.030. The Transient Room Tax is levied against all occupied transient hotel and motel
rooms located in the County. The room tax is currently levied at 7% and Deschutes
County voters have authorized up to a maximum seven percent room tax levy for the
County. Revenues sufficient to meet Installment Payments shall be deposited to the
Installment Payment Account held by the Trustee as provided in the Agreement.
The County is bound to annually appropriate Room Tax Revenues in an amount sufficient
to pay the Installment Payments. This pledge of the Room Tax Revenues is binding and is
not subject to nonappropriation of funds.
In the event that Transient Room Tax Revenues are insufficient to meet Installment
Payments, the County may also utilize, to the extent necessary, general fund monies
available to the County to make Installment Payments. The authority of the County to
utilize general fund monies is subject to annual appropriation. The County's obligations to
make Installment Payments are not subject to complete or partial abatement resulting
from damage, destruction, or loss of all or any substantial portion of the Project.
Reserve Account
A Debt Service Reserve Account is established by the Agreement. Immediately upon
receipt thereof, $ of the proceeds of the Certificates will be deposited by the
Trustee in such Reserve Account. Thereafter, there shall be maintained in the Reserve
Account a balance equal to the average annual debt service on the Certificates,
determined as of the date of issuance of the Certificates (the "Required Reserve. ")
Moneys required to be maintained in the Reserve Account shall be used only to pay debt
service on the Certificates and only in the event that the Installment Payments and
moneys in the Installment Payment Account are insufficient to pay debt service when due.
If the amount in the Installment Payment Account shall be less than the amount required
to pay any interest or principal installment in full when due, the Trustee shall apply
amounts from the Reserve Account to the extent necessary to make good the deficiency.
If a deficiency occurs in the Reserve Account, an amount equal to any deficiency of the
Required Reserve shall be deposited by the County to the Trustee in the next succeeding
fiscal year.
THE PROJECT
The Central Oregon Welcome Center is a new building, of approximately 12,000 square
feet, located one mile north of the City of Bend, Oregon on State Highway 97. The
purpose of the building is to promote tourism in Deschutes County.
The main area of the building will contain a tourist information center, incorporating
large displays. The remainder of the building will contain space for a workroom,
restrooms, two conference rooms, and a staff lounge. The conference rooms will have
access to external balcony decks, with views to the surrounding area and mountains. The
building site is 2.21 acres and will be landscaped to highlight the building. The building
will have parking for approximately 38 cars and seven recreational vehicles.
5
0094 0014
SUMMARY OF CERTAIN PROVISIONS OF THE
INSTALLMENT PURCHASE AND TRUST AGREEMENT
The following is a brief summary of the provisions of the Installment Purchase and Trust
Agreement between Deschutes County as lessee and Security Pacific Bank Oregon, as
lessor, dated as of , 1988. The summary contained herein is not intended to be
complete in its description of the Agreement. The referenced documents should be
examined in their entirety, for a complete description of the provisions thereof.
Under the Agreement, the County will purchase the Project from the Trustee, for a price
of $1,500,000 payable in installments, with interest. The County will make Installment
Payments to the Trustee on or before May 1 and November 1 in each year. The Trustee
has agreed, upon written direction from the County, to prepare, execute and deliver to
Seattle - Northwest Securities Corporation (the "Underwriter ") the Certificates, evidencing
undivided interests in the Installment Payments to be made by the County.
Installment Payments
The County agrees to make monthly Installment Payments to the Trustee consisting of an
amount equal to one -sixth (1 /6th) of the interest payment and one - twelfth (1/12) of the
principal payment next due on the Certificates. In the event that Transient Room Tax
Revenues are insufficient to meet Installment Payments, the County may also utilize, to
the extent necessary, general fund monies available to the County to make Installment
Payments. The authority of the County to utilize general fund monies is subject to annual
appropriation. The County's obligations to make Installment Payments are not subject to
complete or partial abatement resulting from damage, destruction, or loss of all or any
substantial portion of the Project.
Taxes, Other Governmental Charges and Utilities
The County shall pay, or cause to be paid, all excise and ad valorem taxes and other
governmental charges which are lawfully assessed against the Project. The County shall
also pay, when due, all utility charges incurred in the operation, maintenance, use and
upkeep of the Project.
Maintenance
The County shall cause the Project to be maintained, preserved and kept in good repair
and condition and shall from time to time make all repairs, replacements and improve-
ments necessary to keep the Project in such condition.
Events of Default
The following constitute "Events of Default" under the Agreement:
1. The County's failure to make any Installment Payment by the applicable
Payment Date;
2. The County's failure to make any monthly transfer to the Trustee as required
by Section 2.01(b) and (c) of the Installment Purchase and Trust Agreement;
3. The County's failure to comply in any material respect with any other
covenant, condition, or agreement of the County under the Agreement for a
period of thirty (30) days after notice thereof from the Trustee;
6
0094 0015
4. Any representation or warranty made by the County under the Agreement
shall be untrue in any material respect as of the date made; and /or
5. Certain events relating to the bankruptcy or insolvency of the County.
Remedies
Upon the occurrence of any Event of Default, the Trustee shall have the right to take one
or any combination of the following remedial actions:
1. Declare the unpaid principal balance, together with accrued interest immedi-
ately due and payable but such balance and interest may be paid only to the
extent of monies on deposit in any accounts held thereunder, moneys appro-
priated by the County for payments due under the Agreement and moneys
realized from the exercise of other remedies listed;
2. Judicially foreclose the lien of the Agreement against the Project, in the same
manner as mortgages are foreclosed;
3. Exercise its rights as a secured party under the Oregon Uniform Commercial
Code; and /or
4. Pursue and exercise any other remedy available at law or in equity.
Additional Obligations
The County may issue Parity Obligations to provide funds for any purpose authorized by
law, but only upon the following conditions:
1. No Default has occurred and is continuing;
2. At the time of the issuance of the Parity Obligations there is no deficiency in
the Installment Payment Account and the Reserve Account;
3. The Resolution authorizing the issuance of the Parity Obligations requires that
a deposit be made at closing sufficient to bring the balance in the Reserve
Account equal to the Required Reserve for all outstanding Certificates,
including the proposed Parity Obligations.
4. (a) The Transient Room Tax Revenues for any 12 consecutive months during
the 18 months immediately preceding the date of issuance of the Parity
Obligations were not less than 1.50 times the actual debt service of the Series
1988 Certificates for that 12 -month period, and (b) the Transient Room Tax
Revenues, as projected for the next ensuing fiscal year and as certified by a
qualified engineering, auditing, or other qualified firm are not less than 1.50
times the actual debt service for the ensuing fiscal years' debt service on all
outstanding Series 1988 Certificates plus the average proforma annual debt
service on the proposed Parity Obligations.
The County may issue Parity Obligations to complete the project notwithstanding the
above requirements.
7
0094 0016
Taxability Representation
The County represents:
1. The interest on the Certificates are not intended to be excluded from gross
income for federal tax purposes.
2. The Internal Revenue Code of 1986 (the "Code ") does not provide a method by
which the County may declare Certificate interest to be taxable; since the
interest on the Certificates are not intended to be excluded from gross income
for federal tax purposes, the County will not comply with the reporting
requirements of Section 149(e) of the Code.
3. The declaration of intent will require that interest of Certificates be included
in gross income for federal tax purposes.
4. The Certificates are not "qualified tax - exempt obligations" under
Section 265(b)(3) of the Code.
5. The interest on the Certificates, less any interest expense incurred to carry
the Certificates, may be subtracted from federal taxable income in
determining Oregon taxable income.
Miscellaneous
The Installment Purchase and Trust Agreement establishes the following accounts to be
maintained by the Trustee:
The Proceeds Account: Monies in the Proceeds Account shall be used to pay any costs of
constructing the Project, costs incurred by the County in connection with execution of the
Agreement and issuance of the Certificates, and, if monies in the Installment Payment
Account and Reserve are insufficient, Installment Payments.
The Installment Payment Account: Accrued interest received from the sale of the
Certificates, Installments Payments, and any other amounts which the Trustee receives
and are available for use as Installment Payments shall be immediately deposited by the
Trustee in the Installment Payment Account. Monies on deposit in the Installment
Payment Account will be used by the Trustee to make payments of principal and interest
to the registered owners of the Certificates.
The Reserve Account: Monies in the Reserve Account shall be held in trust for the
payment when due of the Installment Payments to be paid pursuant to the Agreement, and
shall be used if on any Payment Date the moneys on hand in the Installment Payment
Account are not sufficient to make payments of principal and interest to the registered
owners of the Certificates.
The Trustee is required to invest and re- invest all monies held under the Agreement upon
written order of a representative of the County, in Permitted Investments (as that term is
defined in the Agreement).
8
0094 0017
The Trustee acts as a depository of amounts held in all Accounts established by the
Agreement. The Trustee may resign or be removed upon proper appointment of a
successor Trustee, which successor must have the qualifications set forth in full in the
Agreement.
The Agreement may be amended without the consent of the registered Owners of the
Certificates, in order to make changes which, in the reasonable judgment of the Trustee,
are not prejudicial to the interests of the Certificate Owners. Any other amendment to
the document requires the consent of Owners of Certificates constituting at least two -
thirds of the total principal amount of Certificates then outstanding.
THE COUNTY
Deschutes County (the "County "), a municipal corporation of the State of Oregon, is
located in the central portion of the State. The County encompasses approximately 3,055
square miles of area, and its boundaries include the cities of Bend, Redmond, and Sisters.
The current estimated population of the County is 65,600. The County is governed by its
Board of County Commissioners (the "Board"), consisting of three publicly- elected, full -
time members. The Board is responsible for the administration of the County. Other
elected officials, who are elected for the administration of their specific departments,
include the District Attorney, the County Clerk, the Sheriff, the Treasurer, the Assessor,
and the Surveyor.
The Board of County Commissioners
The policies of the County are established by an elected three - member Board of County
Commissioners. The current members of the Board are:
Position Term Expires
Dick Maudlin Chairman January, 1989
Lois Bristow Prante Commissoner January, 1991
Tom Throop Commissioner January, 1991
Dick Maudlin, President. Mr. Maudlin has served as a County Commissioner since 1984,
and was elected President in 1988. Mr. Maudlin founded his own insurance agency in 1972,
retiring from that business in 1984. Mr. Maudlin attended The University of Oregon and
Willamette University.
Lois Bristow Prante, Commissioner. Ms. Prante has served on the Deschutes County
Board of Commissioners since 1982. She also chairs the State /Local Partnership Strategic
Planning Committee and was recently named one of six Oregonians who has "made a
difference." From 1970 to 1980, Ms. Prante owned a marketing/management consulting
firm. Ms. Prante holds a Bachelor's degree in sociology and a Master's degree in
management.
Tom Throop, Commissioner. Mr. Throop was elected Commissioner in 1986. He is
currently Chairman of the Central Oregon Intergovernmental Council, President of the
Associated Economic Development Districts of Oregon, and chairs the Association of
Oregon Counties' Community and Economic Development Committee. Mr. Throop served
in the Oregon House of Representatives from 1979 to 1986, and was employed as a child
development specialist from 1971 to 1986. Mr. Throop has Bachelor's and Master's
degrees in psychology.
9
0094 0018
TRANSIENT ROOM TAX ADMINISTRATION
Administration and collection of the Transient Roorn Tax is detailed in Deschutes County
Code 4.08. For the privilege of occupancy in any hotel, each transient shall pay a tax in
the amount of seven percent of the rent charged by the operator. The tax constitutes a
debt owed by the transient to the County which is extinguished only by payment to the
operator as agent for the•County. The transient shall pay the tax to the operator of the
hotel at the time the rent is paid.
Every operator renting rooms in the County shall collect a tax from the occupant.
Exemptions from the tax are granted to (1) any occupant for more than thirty days;
(2) any occupant whose rent is less than four dollars a day; (3) any person who rents a
private home, vacation cabin, or like facility from an owner who personally rents such
facilities; and (4) any occupant of a hospital room, medical clinic, convalescent home or
home for aged people. The tax collected or accrued by the operator constitutes a debt
owed by the operator to the County.
Each operator shall collect the tax imposed at the same time as the rent is collected. All
amounts of such taxes collected are due and payable to the tax administrator on a
monthly basis on the fifteenth day of the month for the preceding month, and are
delinquent on the last day of the month in which they are due. On or before the fifteenth
day of the month following each month of collection a return for the preceding month's
tax collections shall be filed with the tax administrator. Returns shall show the amount
of tax collected or otherwise due for the related period. The tax administrator may
extend by not to exceed one month the time for making any return or payment of tax.
Any operator to whom an extension is granted shall pay interest at the rate of one percent
per month on the amount of tax due.
Any operator who has not been granted an extension of time for remittance of tax due and
who fails to remit any tax imposed prior to delinquency shall pay a penalty of ten percent
of the amount of the tax due in addition to the amount of the tax. Any operator who has
not been granted an extension of time for remittance of tax due, and who failed to pay
any delinquent remittance on or before a period of 30 days following the date on which
the remittance first became delinquent shall pay a second delinquent penalty of 15% of
the amount of the tax due plus the amount of the tax and the ten percent penalty first
imposed. If the tax administrator determines that the nonpayment of any remittance due
under this chapter is due to fraud or intent to evade the provisions thereof, a penalty of
25% of the amount of the tax shall be added thereto in addition to the penalties stated.
The Transient Room Tax imposed, together with any interest and penalties, shall be and,
until paid, remain a lien from the date of its recording with the County Clerk, and
superior to all subsequent recorded liens on all tangible personal property used in the hotel
of an operator. Such tangible personal property may be foreclosed on and sold as may be
necessary to discharge such lien. The personal property subject to such lien seized by any
deputy or administrator may be sold at public auction after ten days notice.
10
0094 0019
Transient Room Tax Receipts
(Fiscal Year Ended June 30)
Year Collections Year Collections
1988 $1,097,033 1984 $593,875
1987 897,702 1983 514,139
1986 739,582 1982 464,869
1985 674,150 1981 404,164
Source: Deschutes County
PROPERTY TAX ADMINISTRATION
The property tax is used by Oregon cities, counties, schools and other special districts to
raise revenue to defray the expense of local government. The State of Oregon has not
levied property taxes since 1941 and obtains its revenue principally from income taxation.
Property tax administration, governed by the Oregon Constitution, the state's taxation
laws and regulations of the Department of Revenue, involves the process of assessment,
equalization, levy and collection of taxes.
Valuation of Property: Assessment and Equalization
The process of identifying and assigning a value to taxable property is termed
"assessment" and the process of maintaining uniformity of values between property
owners and various classes of property is termed "equalization." Assessment of property
is administered by the County Assessor except for public utility property which is assessed
by the state Department of Revenue. All property is reappraised in 6 -year cycles and
values are adjusted annually to maintain assessments within a 5% deviation of county-
wide market values. Equalization of values is performed by the county Board of
Equalization. Administrative and judicial remedies are available to property owners who
disagree with assessments.
Property subject to taxation includes all privately owned real property (land, buildings and
improvements) and personal property (machinery, office furniture, equipment and
livestock). There is no property tax on household furnishings (exempt in 1913), personal
belongings, automobiles (exempt in 1920), crops, orchards, business inventories or
intangible property such as stocks, bonds or bank accounts. Property used for religious,
fraternal and governmental purposes is exempt and reductions in assessments are granted
for veterans' homesteads, certain open space farm lands and historic buildings. The
assessment roll, a listing of all taxable property, is prepared as of January 1 of each year.
Prior to 1980 assessed and true cash value were identified as market value for all classes
of taxable property. From 1980 to 1983, taxable property was divided into two classes:
"Homestead" and "All Other." The Homestead class consisted of owner- occupied single
family residences. Property was appraised at true cash value (market value) but assessed
in a manner that limited the state -wide annual growth to 5% for either class. Beginning
in 1984 -85, the class distinction was eliminated with the state -wide growth limitation
applied to all property equally. Assigned ratios of assessed to true cash value of property
have been:
11
0094 0020
"Owner -Occupied" "All Other"
Year Class Class
1987 -88 100.0% of TCV 100.0% of TCV
1986 -87 100.0% of TCV 100.0% of TCV
1985 -86 100.0% of TCV 100.0% of TCV
1984 -85 96.0% of TCV 96.0% of TCV
1983 -84 90.3% of TCV 90.9% of TCV
1982 -83 83.8% of TCV 85.1% of TCV
1981 -82 81.6% of TCV 84.4% of TCV
1980 -81 84.2% of TCV 87.6% of TCV
Tax Levies and Rates
Authority to levy property taxes is vested with the governing body of each local
government unit. The governing body determines the levy annually before July 15 as part
of the budget process. Annual budgets for local units are based on a fiscal year which
begins on July 1 and ends the following June 30. Constitutional and statutory limitations
on the amount that a governing body may levy are:
1. Levy Within 6% Limitation (Tax Base Levy). A tax base, approved by a majority of
voters at a general election, represents permanent authority to annually levy a
dollar amount which cannot exceed the highest amount levied in the three most
recent years in which a levy was made, plus six percent thereof. Tax base levies
may also be increased in proportionate amounts for annexed territory. A local unit
is permitted to have but one tax base levy and proceeds may be used for any purpose
for which the unit may lawfully expend funds.
2. Levy Outside 6% Limitation (Special\ Serial or Continuing Levy). Special and serial
levies are temporary taxing authority permitting the levy of a specific dollar
amount for one year (special) or for two or more years up to ten years (serial).
Continuing levies are those approved by voters prior to 1953, are permanent in
nature and are limited in amount by the product of the voted tax rate and the
assessed value of the unit. Since 1978 serial levies may also be established based on
a specified tax rate but the term may not exceed three years. Not more than four
serial levy measures may be proposed in a given year.
3. Levy Not Subject to 6% Limitation (Debt Levy). Local units are required to
annually levy an amount sufficient to pay principal and interest costs for a bonded
debt. Bond measures to be paid from future tax levies must first be approved by a
majority of those voting unless otherwise provided by law. Proceeds from a debt
levy cannot be diverted to another purpose.
Property Tax Collections
Oregon Revised Statutes Chapter 311 requires that all tax levy revenues collected by a
county for all taxing units within the county be placed in an unsegrated pool, and each
taxing unit shares in the pool in the same proportion as its levy bears to the total of all
taxes levied by all taxing units within the county. As a result, the tax collection record of
each taxing unit is a pro rata share of the total tax collection record of all taxing units
within the county combined.
12
0094 0021
Other Possible Impacts on the County's Revenues
Oregon has rejected tax limitation measures five times in the past ten years, most
recently in November 1986. Each one, had it passed, would have reduced the composite
tax rate and limited growth of assessed valuation. These could have significantly
decreased the County's annual revenue. Currently, there are no pending tax limitation
measures.
Deschutes County Assessed Value of Taxable Property (1)
Fiscal Year
Ending June 30
1988
1987
1986
1985
1984
Assessed Value
$2,387,445,262
2,390,606,753
2,430,599,685
2,372,010,585
2,302,855,955
(1) Prior to fiscal year 1980 -81 property was assessed at true cash value (TCV). For
subsequent years the County Assessor applied a percentage factor to TCV to
determine Assessed Valuation. The percentage applied was determined for two
classes of property: "owner occupied" homestead properties and all other property.
The class distinction was eliminated beginning in the 1984 -85 fiscal year, with the
statewide growth limitation applied to all property equally. The distinction between
True Cash Value and Assessed Valuation was eliminated beginning in the 1985 -86
fiscal year.
Source: Deschutes County Assessor
Deschutes County Major Taxpayers
Taxpayer
Pacific Northwest Bell
Telephone Company
DAW Forest Products Co. LP
Pacific Power & Light Co.
Sunriver Properties Oreg. Ltd.
Willamette Industries Inc.
Mt. Bachelor Inc.
Concord Equity Multiplier
Burlington Northern Inc.
Brooks Resources Corp.
Cascade Natural Gas Corp.
Type of 1987 -88 Assessed
Business Valuation
Telephone utility
Wood products
Electric utility
Recreation
Wood products
Recreation
Retail shopping mall
Railroad
Property development
Gas utility
Source: Deschutes County Assessor
13
$ 54,571,447
25,371,940
21,348,700
15,552,625
11,038,520
8,360,480
8,093,515
7,949,620
7,844,075
7,746,447
0094 0022
DESCHUTES COUNTY
TAX COLLECTION RECORD
ALL TAXING DISTRICTS
Tax Collection (1)
Collection Discounts Given Year As of
Year Tax Levy Year of Levy of Levy 6/30/88
1988 -89 $52,859,150 (2) (2) (2)
1987 -88 52,086,238 $(1,017,342) 89.1% 89.1%
1986 -87 49,087,096 (845,210) 86.2 93.8
1985 -86 47,523,929 (781,512) 85.1 95.8
1984 -85 42,638,221 (666,273) 84.0 97.7
1983 -84 44,036,236 (697,592) 83.0 99.4
(1) Percentage of total Tax Levy
(2) In process of collection
Note: Taxes are payable in three equal installments on the fifteenth of November,
February and May. Discounts are allowed where partial or full pre - payment of
taxes is made, as follows: (a) A property owner who pays at least two - thirds of the
taxes due, but less than the total, on or before November 15, will receive a two
percent discount of such taxes paid on or before November 15; (b) A property
owner who pays the total taxes due, on or before November 15, will receive a three
percent discount of total taxes due.
Source: Deschutes County Assessor
COUNTY INDEBTEDNESS
Debt Limitation
Oregon statutes limit the amount of general obligation bonds which an Oregon county may
have outstanding at any time to two percent of the true cash value of the taxable
property within the county unless the county charter provides for a lower percentage.
This statutory limitation does not apply to general obligation bonds issued for water,
sanitary or storm sewers, sewage disposal plants, hospitals, infirmaries, gas, power, or
lighting purposes, or the acquisition, establishment, or reconstruction of any off - street
motor vehicle parking facility nor to bonds issued pursuant to applications to pay
assessments for improvements in installments under statutory or charter authority
("Bancroft" Bonds) which are completely self - supporting.
In addition, Oregon statutes limit the Bancroft bonded debt which a county may have
outstanding at any one time to three percent of the latest true cash value of the property
within the County.
Enterprise debt, utility debt and certificate of participation debt are not subject to the
two preceding limitations.
14
0094 0023
The County may issue tax anticipation notes in an amount which, in the aggregate, equal
up to 80% of ad valorem taxes upon real and personal property which have been levied and
are in the process of collection for the fiscal year in which the notes are issued, and 80%
of other budgeted and unpledged revenues which it is estimated will be received from
other sources during the tax year.
The following table shows the debt capacity of the County:
Debt Capacity
Assessed Value (TCV) (1987 -88)
General Obligation Debt Capacity (2% of Assessed Value)
Less: Outstanding Debt
Remaining Legal Debt Capacity
$2,387,445,262 (1)
47,748,905
50,000 (2)
$ 47,798,905
(1) Source: Municipal Debt Advisory Commission, State of Oregon Treasury Depart-
ment. Deschutes County Assessor.
(2) Does not include self- supporting debt or general obligation improvement (Bancroft)
bonds.
DEBT PAYMENT RECORD
The County has always promptly met principal and interest payment on outstanding bonds
when due. Additionally, no refunding bonds have been issued for the purpose of preventing
an impending default.
15
0094 0024
DESCHUTES COUNTY, OREGON
FINANCIAL INFORMATION
(As of August 31, 1988)
Assessed Valuation (1987 -88) (1) -- $2,387,445,262
Estimated Population -- 65,000
DEBT INFORMATION
Gross Bonded Debt
Net Direct Debt (2)
Estimated Overlapping Net Debt
Total Net Direct and Estimated Overlapping Debt
$ 2,175,000
$ 50,000
43,468,871
$43,518,871
(1) The distinction between true cash value and assessed valuation was eliminated
beginning in the 1985 -86 fiscal year.
(2) Net debt includes all tax - supported bonds. Bancroft Act General Obligation
Improvement Bonds and self- supporting general obligation bonds are excluded.
Source: Municipal Debt Advisory Commission, State of Oregon Treasury Department.
BONDED DEBT RATIOS
Direct Debt to Assessed Valuation 0.01%
Direct and Estimated Overlapping Debt to Assessed Valuation 1.82%
Per Capita Assessed Valuation $36,394
Per Capita Direct Debt $ 1
Per Capita Direct and Overlapping Debt $ 670
16
DESCHUTES COUNTY, OREGON
SUMMARY OF OVERLAPPING DEBT
(As of August 31, 1988)
Overlapping District
Bend Metro Park & Recreation
Central Oregon Park 3c Recreation
Laidlaw Water District
Cloverdale RFD
Black Butte Ranch
Central Oregon Hospital District
Deschutes County S.D. No. 1
Deschutes County S.D. No. 1
Deschutes County S.D. No. 23
Deschutes County S.D. No. 27
Deschutes County S.D. No. 6
Central Oregon Community College
City of Bend
City of Redmond
City of Sisters
1987 -88
Assessed
Valuation
912,718,239
362,011,809
6,032,818
36,553,049
114,821,782
362,011,809
1,671,355,660
1,671,537,755
486,336,553
494,806,961
253,781,957
3,306,924,669
563,163,705
182,956,742
28,475,794
Percent
Overlap
0094 0025
Overlapping
Gross (1) Net (2)
Bonded Direct
Debt Debt
100.0%$ 475,000
100.0 540,000
100.0 96,679
100.0
100.0
100.0
100.0
100.0
93.8
100.0
100.0
72.2
100.0
100.0
100.0
73,000
215,000
3,080,000
750,000
19,170,000
2,836,630
290,000
1,575,000
596,333
12,188,000
7,200,000
380,000
$49,465,642
475,000
540,000
96,679
73,000
215,000
3,080,000
750,000
19,170,000
2,836,630
290,000
1,575,000
577,562
7,230,000
6,180,000
380,000
$43,468,871
(1) Gross bonded debt includes all bonds backed by a general obligation pledge including
Bancroft Act general obligation improvement bonds and self - supporting general
obligation bonds.
(2) Net direct debt includes all tax - supported bonds. Bancroft Act general obligation
bonds and self- supporting bonds are excluded.
Source: Municipal Debt Advisory Commission, Oregon State Treasury
REPRESENTATIVE LEVY RATES
The actual rate levied in a representative area of the County for collection year 1987 -88
is shown below:
Deschutes County
Representative Levy Rates
Per $1,000 of Assessed Valuation)
Deschutes County
County Library
County Law Enforcement
County Extension and 4 -i-1
Education Service District
Central Oregon Community College
City of Bend
Bend Park do Recreation
Bend School District
Central Oregon PUD
$ 2.20
.02
.11
.04
.27
1.63
5.11
1.45
13.68
.01
Total $24.52
Source: Deschutes County Assessor's Office
17
0094 0046
DESCHUTES COUNTY, OREGON
OUTSTANDING OBLIGATIONS
(As of August 31, 1988)
Final
Date Maturity Amount Amount
General Obligation Bonds Issued Date Issued Outstanding
A. Tax Supported
Libraries 10/1/78 10/1/88 $ 383,097 $ 50,000
B. General Obligation Improvement (Bancroft) Bonds
Bancroft 10/1/81 10/1/91 1,635,000 880,000
Bancroft 11/1/84 10/1/94 550,000 430,000
Bancroft 12/1/85 12/1/95 940,000 815,000
Total General Obligation Improvement (Bancroft) Bonds $2,125,000
Total General Obligation Bonds (Gross Direct Debt): $2,175,000
Revenue Bonds
Certificates of Participation 6/30/87 6/1/02 $ 240,000 $ 230,000
Source: Deschutes County
13
DESCHUTES COUNTY, OREGON
CERTIFICATES OF PARTICIPATION, SERIES 1988
FORECAST OF CASH FLOW
(Fiscal Year Ended June 30)
Year Principal Interest (1) Total
1989 $ 0 $ 76,856 $ 76,856
1990 25,000 152,494 177,494
1991 25,000 150,056 175,056
1992 30,000 147,375 177,375
1993 35,000 144,206 179,206
1994 35,000 140,794 175,794
1995 40,000 137,063 177.063
1996 45,000 132,759 177,759
1997 50,000 127,950 177,950
1998 55,000 122,634 177,634
1999 60,000 116,813 176,813
2000 65,000 110,484 175,484
2001 75,000 103,397 178,397
2002 80,000 95,450 175,450
2003 90,000 86,631 176,631
2004 100,000 76,775 176,775
2005 110,000 65,881 175,881
2006 125,000 53,691 178,691
2007 135,000 40,203 175,203
2008 150,000 25,419 175,419
2009 170,000 8,819 178,819
$1,500,000 $2,115,750 $3,615,750
(1) Assumed interest rates ranging from 9.75% to 10.375%
(2) Actual collections from Fiscal Year 1987 -88
19
0094 0027
Transient
Room Tax Projected
Revenues (2) Coverage
$1,097,033
1,097,033
1,097,033
1,097,033
1,097,033
1,097,033
1,097,033
1,097,033
1,097,033
1,097,033
1,097,033
1,097,033
1,097,033
1,097,033
1,097,033
1,097,033
1,097,033
1,097,033
1,097,033
1,097,033
1,097,033
14.27
6.18
6.27
6.18
6.12
6.24
6.20
6.17
6.16
6.18
6.20
6.25
6.15
6.25
6.21
6.21
6.24
6.14
6.26
6.25
6.13
0094 0028
COUNTY FINANCIAL FACTORS
Budgetary Process and Controls
The County prepares an annual budget in accordance with the Oregon Local Budget Law.
Chapter 294 of the Oregon Revised Statutes establishes standard procedures for all budget
functions for all Oregon local governments. Under the applicable provisions, there must
be public participation in the budget process and the adopted budget must be balanced.
The Manager or Administrator evaluates the budget proposals of the various departments
of the County to determine the funding levels of the operating and public service
programs. The budget is presented to the public through public hearings held by a budget
committee consisting of County Commission members and laypersons. After giving due
consideration to the input received from the citizens, the County Commission adopts an
ordinance which adopts the budget, authorizes the levying of taxes and sets
appropriations. The budget ordinance must be adopted not later than June 30 of each
fiscal year.
The budget may be amended during the applicable fiscal year through the adoption of a
supplemental budget. Supplemental budgets may be adopted through the same process
used for adoption of the regular budget, including the use of public hearings.
Financial Reporting
The Annual Financial Report of the County is prepared in accordance with generally
accepted accounting principles ("GAAP "). In addition to presenting the financial position,
results of operations, and changes in financial position of the County's funds, the Annual
Financial Report reconciles differences in reporting activities between the budgeting
basis, as presented in the annual approved budget, and the basis according to GAAP as is
used in the preparation of the financial report. Also produced annually is the County's
annual financial review which is a report to the citizens of the County finances prepared
on a consolidated basis.
Independent Audit Requirements
Each Oregon municipal corporation must obtain an audit and examination of its accounts
and financial status at least once each year pursuant to the Oregon Municipal Audit Law,
Oregon Revised Statutes 297.405 to 297.555. Municipalities having annual expenditures of
less than $100,000, with the exception of counties and school districts, are exempt from
this requirement. All Oregon counties and school districts, regardless of amount of annual
expenditures, must obtain an audit annually. The required audit may be performed by the
State Division of Audits or by public accountants certified by the State as capable of
auditing municipal corporations.
The County audits for the fiscal years 1982 -83 through 1986 -87 were performed by
Donaca Battleson & Co., P.C. The latest (1986 -87) audit reports indicate the financial
statements present the County's financial picture fairly and are in conformance with
generally accepted accounting principles applied on a consistent basis.
20
0094 0029
Pension Plans
The County participates in the State of Oregon Public Employees Retirement System
(PERS). All participating employees of the County are covered by the plan after six
months of employment. County Railroad Workers are covered by the Railroad Retirement
Act. The plan is a defined benefit plan to which the County contributes both the
employer's portion and the employee's contribution. The rate of employee contribution is
established by law. The rate of employer contribution is set by the Public Employees
Retirement Board, based upon actuarial valuations. The employer contribution rate for
1986 -87 was 8.42% plus the qualified employees' contribution of 6.0%. The total expense
for the County for the 1986 -87 fiscal year was $1,025,212.
21
0094 0030
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0094 0032
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0094 0033
0094 0034
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0094 0035
0094 0037
economy. Employment at Mt. Bachelor during the winter ski season is approximately 500,
with year -round employment standing at approximately 120. Employment at Sunriver
during the peak summer season of May to September is approximately 550, with year -
round employees comprising approximately 200 of the total.
Manufacturing, especially of wood products, accounts for a signficant portion of economic
activity in Deschutes County. Bend Millwork Systems, which employs over 1,730 persons,
is engaged in the manufacture of millwork products. Willamette Industries, located in
Bend, is engaged in the manufacture of particle board and has employment of
approximately 205. DAW Wood Products Company operates a sawmill in Bend, a softwood
veneer and plywood manufacturing facility in Redmond, and a moldings manufacturing
facility in Redmond. Employment at the Bend sawmill is approximately 283, while
employment in the two Redmond plants is approximately 372. During the summer months
of 1988, approximately 450 DAW Wood Products workers, comprising all of the union
employees, were out on strike. The strike lasted for 13 weeks, and was settled in August
of 1988. The strike was settled by ratification of a new labor contract.
Beaver Coaches, located in Bend, is engaged in the manufacture of motor homes and
employs approximately 225. Fuqua Homes, located in Bend, also manufactures motor
homes and employs approximately 180 persons. Tektronix has a facility in Redmond that
is engaged in manufacturing telecommunications test equipment; employment is
approximately 150.
Highway access to the City of Bend is quite good. State Highway 97 runs north -south
from Portland, through Redmond and Bend, and south to Klamath Falls, Oregon. State
Highway 20 connects Bend to the cities of Salem and Eugene, Oregon and continues east
into the State of Idaho. Both Burlington Northern and Union Pacific railways provide the
County with rail freight service, while Amtrak provides Bend with rail passenger service.
The Redmond Airport is served by Horizon Airlines, U.S. Air, and United Express, all of
which provide direct service from Redmond to Portland, Seattle, and San Francisco.
Medical service is provided by St. Charles Medical Center in Bend, with employment of
approximately 850. The Medical Center provides medical care to residents within a wide
radius of Bend, including neighboring Crook, Jefferson, Lake and Klamath counties.
Following are economic indicators for Deschutes County:
Deschutes County
Total Personal Income
Total Personal Per Capita
Year Income (M) Income
1984 $672.6 $10,337
1983 606.3 9,516
1982 558.9 8,772
1981 545.4 8,597
1980 509.4 8,073
1979 476.1 8,146
Source: U.S. Bureau of Economic Analysis
The 1984 average per capita income for Oregon State was $11,613.
29
0094 0038
Deschutes County Nonagricultural Wage and Salary Employment
Total
Manufacturing
Durable goods
Lumber and wood
Other durable goods
Nondurable goods
Food products
Other nondurable goods
Nonmanufacturing
Construction
Transportation, communication &
utilities
Trade
Finance, insurance & real estate
Services and miscellaneous
Government
Workers in Labor - Management Disputes
Net Change
July June July June'88 July'87
1988* 1988 1987 July'88 July'88
26,670 26,430 26,430 240 240
5,090 4,860 5,300 230 -210
4,470 4,250 4,690 220 -220
3,360 3,170 3,650 190 -290
1,110 1,080 1,040 30 70
620 610 610 10 10
140 130 140 10 0
480 480 470 0 10
21,580 21,570 21,130 10 450
1,430 1,280 1,310 150 120
980 990 930 -10 50
6,500 6,390 6,570 110 -70
2,190 2,080 2,240 110 -50
6,500 6,410 6,250 90 250
3,980 4,420 3,830 -440 150
450 610 0 -160 450
Source: State of Oregon Employment Division, Department of Human Resources
Major Employers in Deschutes County
Company
Bend Millwork Systems
Bend School District
St. Charles Medical Center
DAW Forest Products
Sunriver Resorts
Mt. Bachelor Ski Resort
U.S. Forest Service
State of Oregon
Deschutes County
Central Oregon Community College
Beaver Coaches
Willamette Industries
Industry
Wood products
Education
Health care
Lumber and wood products
Recreation
Recreation
National forest administration
Government
Government
Education
Motor homes
Wood products
(1) Includes part -time faculty
Source: Bend Chamber of Commerce and individual employers
30
No. of
Employees
1,730
850
850
655
200 -600
120 -500
430
420
400
345(1)
225
205
0094 0039
Deschutes County
Resident Labor Force and Employment
July June July
1988* 1988 1987
Resident Civilian Labor Force 37,190 37,270 36,310
Total Employment 34,580 34,610 33,940
Unemployment 2,610 2,660 2,370
Unemployment Rate 7.0% 7.1% 6.5%
Source: State of Oregon Employment Division, Department of Human Resources
The preliminary July, 1988 unemployment rate for Oregon State was 5.9%.
Deschutes County
Building Permits
Permits Issued Value of Buildings
Year Residential Non - Resid. Residential Non - Residential
1987 527 78 $42,816,343 $ 8,691,810
1986 479 70 33,274,854 5,686,101
1985 647 122 35,483,318 8,098,051
1984 315 65 18,759,388 10,014,279
1983 449 78 23,513,462 3,770,532
Source: Oregon Housing Agency
31
0094 0040
LITIGATION
There is no pending litigation questioning the validity of the Certificates or the
Agreement or the authority of the County to make the Installment Payments required by
the Agreement.
APPROVAL OF COUNSEL
Legal matters incident to the authorization, issuance and sale of the Certificates are
subject to the unqualified approving legal opinion of Lindsay, Hart, Neil & Weigler of
Portland, Oregon, Securities Counsel. A copy of the opinion of Securities Counsel will be
printed on the Certificates in substantially the form set forth in Appendix A hereto.
Counsel has reviewed only the sections of this Official Statement captioned "The
Certificates ", "Security for the Certificates ", "Summary of Certain Provisions of the
Installment Purchase and Trust Agreement" and "Tax Status."
TAX STATUS
With respect to the Series 1988 Certificates, no attempt has been made to comply with
certain requirements relating to the exemption from federal income taxation of interest
on the Series 1988 Certificates. It is, therefore, assumed that interest with respect to the
Series 1988 Certificates is subject to all applicable federal taxation. In the opinion of
Securities Counsel, under existing laws, interest on the Series 1988 Certificates, less any
interest expense incurred to carry the Certificates, may be subtracted from federal
taxable income in determining Oregon taxable income.
UNDERWRITING
The Certificates are being purchased by Seattle - Northwest Securities Corporation acting
as the Underwriter. The Certificate Purchase Contract between the County and the
Underwriter provides that the Underwriter will purchase all of the Certificates, if any are
purchased, at a price of % of the par value of the Certificates, plus accrued
interest. The Certificates will be reoffered at an average price of % of the par
value of the Certificates. The underwriting spread is points. After the initial
public offering, the public offering prices may be varied from time to time.
32
0094 0041
APPENDIX A
t
•
1001 FOURTH AVENUE PLAZA
ISEAFIRST BLDO.1. SUITE 3200
SEATTLE, WASHINGTON 98154
12081 023 4711
1401 NEW YORK AvENUE.N.W.
SUITE 1200
WASHINGTON. D.C. 20005
(202) 390.4480
LINDSAY, HART, NEIL 8e WEIGLER
LAWYERS
SUITE 1800
222 S.W. COLUMBIA
PORTLAND. OREGON 97201- a es 18
TELEPHONE (5001 226 -1191
TELECOPIER (500) 226.0079
TELEX 404 -7002
LEGAL OPINION
Deschutes County, Oregon
1164 N.W. Bond Street
Bend, Oregon 97701
Seattle- Northwest Securities Corporation
1300 S.W. Fifth Avenue
Portland, Oregon 97201
0094 0042
JEFFERSON PLACE
050 N. 9TH. SUITE 400
BOISE. IDAHO 83702
(2081036-8844
345 CALIFORNIA STREET
SUITE 2200
SAN FRANCISCO. CALIFORNIA 94104
(4151 984-5858
Re: $1,400,000 Certificates of Participation, Series 1988
(Federally Taxable) Evidencing Undivided Proportionate
Interests of the Registered Owners thereof in
Installment Payments made by Deschutes County, Oregon
under an Installment Purchase and Trust Agreement
between Deschutes County and Security Pacific Bank
Oregon
We have acted as bond counsel in connection with the
authorization and execution by Deschutes County, Oregon (the
"County ") of an Installment Purchase and Trust Agreement between
the County and Security Pacific Bank Oregon (the "Trustee "),
which is dated as of November 1, 1988 (the "Agreement "). The
Agreement provides for the execution and delivery by the Trustee
of Certificates of Participation, Series 1988 (Federally Taxable)
(the "Certificates ") in the aggregate principal amount of One
Million Four Hundred Thousand Dollars ($1,400,000). The
Certificates represent undivided proportional ownership interests
in the Installment Payments to be made under the Agreement by the
County.
We have examined the law, a duly certified transcript of
proceedings of the County, prepared in part by us, and other
documents which we deem necessary to render this opinion.
We have not been engaged or undertaken to review the
accuracy, completeness or sufficiency of the official statement
or other offering material relating to the Certificates, except
to the extent stated in the official statement, and we express no
opinion relating thereto, except to the extent stated in the
official statement.
As to questions of fact material to our opinion, we have
relied on the representations of the County contained in the
Agreement and in the certified proceedings and other
certifications of public officials furnished to us without
LINDSAY, HART, NEIL & WEIGLER
Legal Opinion
Page 2
0094 0043
undertaking to verify the same by independent investigation. We
have also relied upon a Certificate of the County that the County
does not intend for interest on the Certificates to be excluded
from gross income for federal tax purposes and that the County
will not meet the information reporting requirements of Section
149(e) of the Internal Revenue Code of 1986, as amended.
Based on our examination, we are of the opinion, under
existing law, as follows:
A. The County is duly created and validly existing as
a body corporate and politic and public instrumentality of the
State of Oregon with the corporate power to enter into and
execute the Agreement and perform the agreements on its part
contained therein.
B. The Certificates are payable solely from Pledged
Revenues under the Agreement, from funds deposited with the
Trustee for accounts under the Agreement, and from moneys
received by the Trustee from foreclosure of the project.
C. If the County follows its stated intent, the County
will fail to meet the reporting requirements of Section 149(e) of
the Code and the interest on the Certificates will be included in
gross income and will not be deducted from gross income in
arriving at taxable income for federal income tax purposes. The
State of Oregon, however, allows the amount of the interest on
the Certificates, less any interest expense incurred to carry the
Certificates, to be subtracted from federal taxable income in
determining Oregon taxable income.
D. The opinions set forth above are qualified only to
the extent that certain rights, remedies nad waivers contained in
the Agreement may be limited by or rendered ineffective by
applicable bankruptcy, insolvency, moratorium, reorganization or
other laws or judicial decisions or principles of equity relating
to or affecting the enforcement of creditors' rights or
contractual obligations generally.
Respectfully submitted,
LINDSAY, HART, NEIL & WEIGLER
By:
CWCcwc1341
Richard D. Roberts