1989-15296-Resolution No. 89-041 Recorded 6/22/19890095
89 -1F296
.�+ REVIE
rc COuNSa
BEFORE THE BOARD OF COUNTY COMMISSIONERS OF DESCHUT S CUuiii ORF ON
A Resolution Adopting the
Preliminary Official Statement*
Relating to Deschutes County's*
Issuance of Certificates of *
Participation in the Principal*
Amount of $1,800,000.00, Dated*
as of June 1, 1989.
RESOLUTION NO. 89 -041
WHEREAS, the Board of County Commissioners authorized the
issuance of Certificates of Participation in the principal amount
of One Million Eight Hundred Thousand Dollars ($1,800,000.00),
dated as of June 1, 1989; 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 June 1, 1989.
1 - RESOLUTION NO. 89 -041
DATED this
0095 1727
day of c)/(1ALL,1 , 1989.
ARD OF COUNTY COMMISSIONERS
OF D SCHUTES COUNTY - OREGON
STOW PRANTE, Chair
ATTEST: // / TOIL TI OOPV, Commissioner
Recording Secretary
2 - RESOLUTION NO. 89 -041
DICK MAUDLIN,'Commissioner
EXHIBIT "A"
0095 1728
PRELIMINARY OFFICIAL STATEMENT DATED JUNE 13, 1989
NEW ISSUE NOT RATED
In the opinion of Lindsay, Hart, Neil & Weigler, Special Counsel, under existing law and conditioned on Deschutes County
complying with certain covenants relating to the tax - exempt status of the Certificates, interest on the Certificates (including any
To E original issue discount properly allocable to the holders thereof) is excluded from gross income of Certificateholders for federal
w `o income tax purposes. The Certificates are "qualified tax - exempt obligations" as defined under Section 265 of the Internal
O.N Revenue Code of 1986, as amended. Certificate interest may be subject to other federal tax consequences. The interest on the
?£ Certificates (including any original issue discount properly allocable to the holders thereof) is exempt from personal income
taxation by the State of Oregon. Special Counsel expresses no opinion regarding other federal or state tax consequences arising
.E a with respect to the Certificates. Legislation is pending before the United States Congress which would affect the way
• .5 corporations are taxed on Certificate interest. (See pending Exemption" herein.)
m.§
15 CERTIFICATES OF PARTI IPATION, SERIES 1989
O N
Evidencing Undivided Proportionate Interests of
„,
the Owners Thereof in Installment Payments by
°'.� DESCHUTES COUNTY, OREGON
�o
W DATED: June 1,1889 DUE: June 1, as shown below
0•� The Certificates of Participation offered hereby evidence undivided proportionate interests in the
0i.-0 Installment Payments to be made by Deschutes County under an Installment Purchase and Trust
Agreement between the County and Security Pacific Bank Oregon, as Trustee. The Certificates will
S -S be executed and delivered by the Trustee.
32 `° Interest due with respect to the Certificates will be payable semiannually on June 1 and
cu December 1, commencing December 1, 1989, by check or draft of the Trustee, mailed to the
V E Registered Owner as of the record date at the address shown on the registration books. The
E. g Certificates will be issued in fully registered form without coupons in denominations of $5,000 each
IT or any integral multiple thereof. Principal is payable at the principal corporate trust office of
Security Pacific Bank Oregon, in Portland, Oregon. The Certificates are subject to prepayment or
Tz c redemption prior to their stated maturities as described hereinafter.
:=o
m The principal of and interest on the Certificates are secured solely by the right to receive installment
o£ payments (the "Installment Payments ") from the County under the Agreement, money held in the
m accounts under the Agreement (including the reserve account) and the right of the Trustee to
le :0 foreclose the Agreement against the Project. The obligation of the County to make Installment
Payments is subject to annual renewal and the County's covenant to make Lease Payments is
co-
,ci subject to and dependent upon annual appropriations.
�4 L
0 o The Certificates are not secured by the unlimited taxing power of the County, and are not a general
c a 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
0£ subdivision thereof. See "SECURITY AND SOURCES OF PAYMENT FOR THE CERTIFICATES-
21
o OBLIGATION OF THE COUNTY."
8=
o Due Interest Yield Due Interest Yield
t June 1 Amounts Rates Or Price June 1 Amounts Rates Or Price
N £o° 1990 $45,000 1995 $60,000
5 1991 50,000 1996 65,000
1992 50,000 1997 70,000
1993 55,000 1998 75,000
s 2 1994 60,000 1999 80,000
m(Plus accrued interest from June 1, 1989)
5 $610,000 _% Term Certificates due June 1, 2005 @ _%
g o $580,000 _% Term Certificates due June 1, 2009 @ _%
.1 o The Certificates are offered when, as and if issued and accepted by the Underwriter, subject to an
approving legal opinion of Lindsay, Hart, Neil & Weigler, Portland, Oregon, Special Counsel, and
ca
Ha, certain other conditions. It is expected that the Certificates will be available for delivery in
N 0 Portland, Oregon or at the facilities of The Depository Trust Company in New York, New York on or
0 about June 29, 1989.
Dated:
Seattle- Northwest Securities Corporation
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
Elected Officials
0095 1729
Chairman
Commissioner
Commissioner
District Attorney
Sheriff
Assessor
Treasurer/Tax Collector
County Clerk
Surveyor
Appointed Officials
Administrative Services Director
Legal Counsel
Special 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
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.
ii
0395 1730
TABLE OF CONTENTS
Page
Introduction 1
Authorization for Issuance 1
The Certificates 2
General Description 2
Optional Redemption Provisions 2
Mandatory Redemption Provisions 2
Notice of Redemption 3
Purpose and Application of Proceeds 3
Refunding Plan 3
Procedure 3
Verification of Mathematical Calculations 4
The Project 4
Installment Payments 4
Security and Sources of Payment for the Certificates 4
Obligation of the County 4
Reserve Account 5
Summary of Certain Provisions of the Installment Purchase
and Trust Agreement 5
Installment Payments 5
Taxes, Other Governmental Charges and Utilities 5
Maintenance 5
Events of Default 6
Remedies 6
Additional Obligations 6
Taxability Representation 6
Miscellaneous 7
The County 7
The Board of County Commissioners 8
Property Tax Administration 8
Valuation of Property - Assessment and Equalization 8
Tax Levies and Rates 9
Property Tax Collections 9
Other Possible Impacts on the County's Revenues 10
Assessed Value 10
Tax Collection Record 11
County Indebtedness 11
Debt Limitation 11
Debt Payment Record 12
Financial Information 13
Debt Information 13
Bonded Debt Ratios 13
Summary of Overlapping Debt 14
1988 -89 Representative Levy Rate 14
Outstanding Obligations 15
Forecast of Cash Flow 16
County Financial Factors 17
Budgetary Process and Controls 17
Financial Reporting 17
Independent Audit Requirement 17
Pension Plan 17
General Fund - Balance Sheet 18
General Fund - Combined Statement of Revenues, Expenditures
and Changes in Fund Balances 19
General Fund - Budget of Revenues and Expenditures 20
0095 1731
TABLE OF CONTENTS (Continued)
Page
General and Economic Information 21
Oregon Public Employees Retirement System 24
Litigation 24
Approval of Counsel 20
Tax Exemption 25
Underwriting 25
Appendix A - Legal Opinion
iv
0095 1732
OFFICIAL STATEMENT
$1,800,000
CERTIFICATES OF PARTICIPATION
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 1989 (the "Certificates "), in the aggregate principal amount of $1,800,000, 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, pursuant to an Installment Purchase and Trust Agreement dated (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 solely by the right to receive installment
payments (the "Installment Payments ") from the County under the Agreement, money held in the
accounts under the Agreement (including the reserve account) and the right of the Trustee to
foreclose the Agreement against the Project. The obligation of the County to make Installment
Payments is subject to annual renewal and the County's covenant to make Lease Payments is
subject to and dependent upon annual appropriations.
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 provision 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
THE CERTIFICATES
General Description
0395 1723
The Certificates are being executed and delivered in the aggregate principal amount of $1,800,000
and mature on the dates set forth on the over hereof. The interest represented thereby will be
calculated from June 1, 1989, at the rates per annum set forth on the cover page hereof, payable
semiannually on June 1 and December 1 of each year until maturity or prior redemption,
commencing December 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 solely by the right to receive Installment
Payments from the County under the Agreement, money held in the accounts under the Agreement
(including the reserve account) and the right of the Trustee to foreclose the Agreement against the
Project. The obligation of the County to make Installment Payments is subject to annual renewal
and the County's covenant to make Lease Payments is subject to and dependent upon annual
appropriations.
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 years 1990 to 1999, inclusive, are not subject to optional redemption
prior to maturity. The Certificates maturing on and after June 1, 2000, are subject to redemption at
the option of the County on and after June 1, 1999, in whole or in part, on any interest payment date
at a price of par plus accrued interest, if any, to the date of redemption, plus interest accrued to the
date of redemption.
Mandatory Redemption Provisions
The Certificates maturing on June 1, 2005 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
June 1, 2000 $ 85,000
June 1, 2001 90,000
June 1, 2002 100,000
June 1, 2003 105,000
June 1, 2004 110,000
June 1, 2005 120,000
2
0095 1734
The Certificates maturing on June 1, 2009 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
June 1, 2006 $130,000
June 1, 2007 140,000
June 1, 2008 150,000
June 1, 2009 160,000
Notice of Redemption
Notice of redemption of any Certificates shall be given not less than 30 nor more than 60 days prior
to the redemption date by registered or certified mail, postage prepaid, to the registered owner of
any Bond to be redeemed at the address appearing on the Bond Register.
PURPOSE AND APPLICATION OF PROCEEDS
A portion of the proceeds of the Certificates will be used to refund the $220,000 amount outstanding
of the County's Series 1987 Certificates of Participation, dated June 1, 1987, maturing June 1, 1990
through June 1, 2002 (the "Refunded Certificates "). The Refunded Certificates will be escrowed to
their call date of June 1, 1995, at which time they will be called at a premium of one percent of par
value. The Certificates are being issued for the purpose of debt reorganization.
A portion of the proceeds of the Certificates will be used for various County projects (see the caption,
"THE PROJECT ").
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
$ 1.500.000
$ 1.500,000
Uses of Funds:
Construction and Other Costs $
Deposit to Reserve Account
Deposit to Escrow Account
Issuance Costs and Underwriter's Discount
Total Uses of Funds
REFUNDING PLAN
Procedure
From the proceeds of the Certificates, and with other monies available, the County will purchase
certain direct United States Government obligations, including obligations of the State and Local
Government Series (referred to herein as "Acquired Obligations. ") These Acquired Obligations will
be deposited in the custody of Security Pacific Bank Oregon (the "Escrow Trustee. ") The maturing
principal of the Acquired Obligations, interest earned thereon, and necessary cash balance, if any,
will provide for payment of:
3
uii) i. t uO
(a) Principal of and interest on the Refunded Certificates through June 1, 1995; and
(b) On June 1, 1995, the principal of and one percent redemption premium on the
Refunded Certificates maturing in years 1996 through 2002.
The Acquired Obligations, interest earned on, and necessary cash balance, if any, will irrevocably be
pledged to and held in trust for the benefit of owners of the Refunded Certificates by the Escrow
Trustee, pursuant to an escrow deposit agreement to be executed by the County and the Escrow
Trustee.
Verification of Mathematical Calculations
An independent verification by Grant Thornton, certified public accountants, will be obtained to the
effect that the Acquired Obligations, interest thereon, and the cash balance will be adequate to make
all required payments outlined above. The verification will also confirm the correctness of the
mathematical computations supporting the conclusion of bond counsel that the Certificates are not
"arbitrage bonds" as defined by Section 148 of the Internal Revenue Code of 1986.
THE PROJECT
The County will use Certificate proceeds towards the following projects: purchase and remodeling of
a motel, for conversion to the County juvenile center; purchase of a warehouse, to be used for County
storage; purchase of a piece of land, to be used for the site of the County library; and purchase of a
second piece of land, to be used for parking for tenants of the County's existing warehouse storage
facility.
INSTALLMENT PAYMENTS
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 16 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 Installments paid by the County to the Trustee
pursuant to the Agreement; accounts held under the Agreement; a security interest in all fixtures
and personal property which are part of the Project; and any sums .realized in connection with the
remedies available upon the occurrence of an event of default, all as provided in the Agreement.
Obliffation of the County
Each Certificate represents an undivided proportionate ownership interest in payments made by the
County under the Agreement. The amounts due under the Agreement are payable from the general
fund of the County. The obligation of the County to make payments under the Agreement is subject
to annual appropriation. If the County fails to appropriate funds to make payments under the
Agreement, the Certificate Owners are entitled to be paid solely to the extent of previously
appropriated but unpaid moneys, moneys held in the trust accounts under the Agreement, and
moneys which become available from the foreclosure of the Project. The County is not liable to pay
any deficiency in the event such sums are not adequate to pay the unpaid amounts due under the
Agreement. 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.
4
0095 1736
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 lesser
of the maximum annual debt service on the Certificates, determined as of the date of issuance of the
Certificates, or ten percent of the original principal amount 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.
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
. 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
$ payable in installments with interest. 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
To provide additional security for the Owners, the County agrees to transfer each fiscal year to the
Trustee the sum of the following amounts (i) for deposit in the Installment Payment Account, the full
amount of all Installment Payments due in that fiscal year; plus (ii) for deposit into the Reserve
Account, the amount by which the Reserve Requirement exceeds the balance in the Reserve Account.
Such transfers shall be made as soon as possible after the beginning of each fiscal year, but no later
than August 15 of each year. Amounts on deposit in these accounts on the date of the transfer shall
be credited against the transfers required.
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 improvements necessary to
keep the Project in such condition.
5
0095 1737
Events of Default
The following constitute "Events of Default" under the Agreement:
1. The County's failure to make and Installment Payment by the applicable Payment
Date;
2. The County's failure to make any payment to the Trustee as required by Section
2.1(b) of the Agreement prior to August 15 of any year;
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;
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 immediately
due and payable, but such balance and interest may be paid only to the extent of
moneys on deposit in any accounts held thereunder, moneys appropriated 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 Ob1i cations
The County shall not issue obligations secured by the Project which have a lien on the Project
superior to or on a parity with the Agreement. The County may issue obligations secured by the
Project which have a lien on the Project which is subordinate to the Agreement only if:
1. The obligations are issued to finance modifications to the Project;
2. Prior to issuing the obligations the County files with the Trustee an MAI appraisal,
reasonably satisfactory to the Trustee, appraising the value of the Project as it is
proposed to be modified; and
3. The unpaid principal of this Agreement is 75% or less of the NAI appraised value of
the modified project.
Taxability R.enresentation
The County represents that:
1. The County will not take any action or omit any action if it would cause the Series
1989 Certificates to become "arbitrage Certificates" under Section 148 of the Code.
2. The County shall operate the facilities financed with the Certificates so that the
Series 1989 Certificates are not "private activity Certificates" within the meaning of
Section 141 of the Code.
6
0095 1738
3. The County shall comply with appropriate reporting requirements.
4. The County shall pay, when due, all rebates on the gross proceeds of the Series 1989
Certificates which are required under Section 148 of the Code.
5. The County designates the Certificates as "qualified tax- exempt obligations"
pursuant to Section 265(b)(3) of the Code and shall not designate nor sell tax- exempt
obligations in the aggregate amount of more than $10,000,000 in the 1989 calendar
year.
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,
Installment 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 moneys held under Agreement upon written order
of a representative of the County, in Permitted Investments (as that term is defined in the
Agreement).
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.
7
0 J 1 ~l39
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:
Council Member
Position Term Expires
Dick Maudlin Chairman January, 1993
Lois Bristow Prante Commissioner 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 Throon. 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.
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 six -year cycles and values are adjusted annually to maintain assessments within a
five percent 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.
8
0395 170
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 five percent 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:
Year "Owner - Occunied" Class "All Other" Class
1988 -89 100.0% of TCV 100.0% of TCV
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 governing 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. Lew Within 6% Limitation (Tax Base Lew). 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. Lew Outside 6% Limitation (Special, Serial or Continuinc Lew). 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. Lew Not Subject to 6% Limitation (Debt Lew). 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.
Pronertv 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 unsegregated 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.
The County Tax Collector extends authorized levies, computes tax rates, bills and collects all taxes
and makes periodic remittances of collections to tax levying districts. Taxes are levied and become a
lien on July 1 (the lien date for personal property is January 1) and tax payments are due
November 15 of the same calendar year.
9
0395 74;1
Under the partial payment schedule, taxes are payable in three equal installments on the fifteenth
of November, February and May of the same fiscal year. 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.
For late payments, interest accrues after each payment due date at the rate of one percent per
month. The method of giving notice of taxes due, the County Treasurer's accounting for the money
collected, the division of the taxes among the various taxing districts, notices of delinquency, and
collection procedures are all covered by detailed statutes. The lien for property taxes is prior to all
other liens or encumbrances of any kind on real or personal property subject to taxation. By law, the
County may not commence foreclosure of a tax lien on real property until three (3) years have passed
since the first delinquency.
Tax statements mailed to property owners state the assessed value of property, the tax rate and the
amount of taxes due and levied by each local unit. Tax rates, expressed as an amount per $1,000 of
assessed value, are obtained by dividing the taxes levied by the assessed values of the taxing
jurisdiction.
Other Possible Imnacts on the Countv'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 annual revenues of
Oregon municipalities. Currently, there are no pending tax limitation measures.
Assessed Value
The table below gives the assessed valuation of the County:
Deschutes County
Assessed Value of Taxable Property (1)
Fiscal Year
Ending June 30
Assessed Value
1989 $2,470,839,078
1988 2,387,445,262
1987 2,390,606,753
1986 2,430,599,685
1985 2,372,010,585
1984 2,302,855,955
(1) Prior to fiscal year 1980 -81, property was assessed at true cash value (TCV). For subsequent
year 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
10
Taxpayer
Pacific Northwest Bell
DAW Forest Products Co. LP
Pacific Power & Light Co.
Sunriver Properties Oregon
Willamette Industries Inc.
Mt. Bachelor Inc.
Concord Equity Multiplier
Burlington Northern Inc.
Brooks Resources Corp.
Cascade Natural Gas Corp.
Deschutes County Major Taxpayers
Ltd.
Source: Deschutes County Assessor
Collection
Year
1988 -89
1987 -88
1986 -87
1985 -86
1984 -85
1983 -84
Tvue of Business
Telephone utility
Wood products
Electric utility
Recreation
Wood products
Recreation
Retail shopping mall
Railroad
Property development
Gas utility
DESCHUTES COUNTY
TAX COLLECTION RECORD
Tax Levv
$52,859,150
52,086,238
49,087,096
47,523,929
42,638,221
44,036,236
Discounts
Given Year
Of Levv
(2)
$(936,662)
(845,210)
(781,512)
(666,273)
(697,592)
0 095 1742
1987 -88
Assessed
Valuation
$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
Tax Collection (1)
Year As of
Of Levv 6/30/88
(2)
89.1%
86.2
85.1
84.0
83.0
(2)
89.1%
93.8
95.8
97.7
99.4
Percentage of total Tax Levy. Pre - payment discounts are considered to be collected when
outstanding taxes are calculated.
In process of collection.
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 and certificate of participation debt are not subject to the two preceding
limitations.
11
O 90 1743
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
(As of May 31, 1989)
Assessed Value (TCV) (1988 -89) $ 2,470,839,078(1)
General Obligation Debt Capacity (2% of Assessed Value) 49,416,782
Less: Outstanding Debt 0 (2)
Remaining Legal Debt Capacity $ 49.416.782
(1) Source: Municipal Debt Advisory Commission, State of Oregon Treasury Department.
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.
12
0095 1744
DESCHUTES COUNTY, OREGON
FINANCIAL INFORMATION
(As of May 31, 1989)
Assessed Valuation (1988 -89) (1) -- $2,470,839,078
Estimated Population -- 68,700
DEBT INFORMATION
Gross Bonded Debt $ 1,820,000
Net Direct Debt (Includes this issue) (2) $ 0
Estimated Overlapping Net Debt 42.401,544
Total Net Direct and Estimated Overlapping Debt $ 42.401.544
(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
Net Direct Debt to Assessed Valuation
Net Direct and Overlapping Debt to Assessed Valuation 1.7%
Per Capita Assessed Valuation
Per Capita Net Direct Debt
Per Capita Net Direct and Overlapping Debt
13
$ 35,966
$ 617
DESCHUTES COUNTY, OREGON
SUMMARY OF OVERLAPPING DEBT
(As of May 31, 1989)
OverlappinE District
Bend Metro Park & Rec.
Central Oregon Park & Rec.
LaPine Special Sewer Dist.
Laidlaw Water District
Cloverdale RFD
Black Butte Ranch RFPD
Central Oregon Hospital Dist.
Deschutes Co. S.D. No. 1
Deschutes Co. S.D. No. 1
Deschutes Co. S.D. No. 2J
Deschutes County S.D. No. 6
Central Oregon Comm. College
City of Bend
City of Redmond
City of Sisters
Total
1987 -88
Assessed
Valuation(1)
$ 912,718,239
362,011,809
10,799,923
6,032,818
36,553,049
114,821,782
362,011,809
1,671,355,660
1,671,537,755
486,336,553
253,781,957
3,306,924,669
563,163,705
182,956,742
28,475,794
r
Qe 5 t'45
Overlapping
Net (2)
Direct Debt
$ 440,000
505,000
378,300
95,975
63,000
150,000
2,740,000
725,000
18,240,000
2,578,755
1,575,000
559,514
7,970,000
6,021,000
360.000
Percent Gross (1)
Overlap Bonded Debt
100.0% $ 440,000
100.0 505,000
100.0 378,300
100.0 95,975
100.0 63,000
100.0 150,000
100.0 2,740,000
100.0 725,000
100.0 18,240,000
100.0 2,578,755
100.0 1,575,000
72.2 568,899
100.0 12,634,000
100.0 8,171,000
100.0 360.000
$49,224,929
$42,401,544
(1) Assessed Valuation figures used by State of Oregon Treasury Department as of May 31, 1989
are from Fiscal Year 1987 -88. Gross Debt and Net Debt figure are current as of May 31,
1989.
(2) 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.
(3) 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
DESCHUTES COUNTY, OREGON
1988 -89 REPRESENTATIVE LEVY RATE
(Rates Per $1,000 of Assessed Value)
Deschutes County
County Law Enforcement
County Extension and 4 -H
Education Service District
Central Oregon Community College
City of Bend
Bend Park & Recreation District
Bend School District
Central Oregon PUD
Total
Source: Deschutes County Assessor
14
$2.2511
.1009
.0405
.2754
1.6777
5.2773
1.4920
12.9029
.0082
$24.0260
0095 1746
DESCHUTES COUNTY, OREGON
OUTSTANDING OBLIGATIONS
(As of May 31, 1989)
Final
Maturity Amount Amount
General Obligation Bonds Issued Date Issued Outstanding
General Oblieation Improvement Debt
Bancroft 10/1/81 10/1/91 $ 1,635,000 $ 695,000
Bancroft 11/1/84 10/1/94 550,000 385,000
Bancroft 12/1/85 12/1/95 940,000 740,000
Total General Obligation Improvement : $ 1.820.000
Gross Bonded Debt Issued and Outstanding: $ 1.820.000
Revenue Bonds
Certificates of Participation 6/30/87 6/1/02 $ 240,000 $ 230,000
Certificates of Participation 11/15/88 5/1/09 1,500,000 1.475.000
Total $ 1,705,000
Source: Deschutes County
15
DESCHUTES COUNTY, OREGON
CERTIFICATES OF PARTICIPATION, SERIES 1989
FORECAST OF CASH FLOW
(Fiscal Year Ended June 30)
Year Principal Interest* Total
1990 $ 45,000 $ 124,525 $ 169,525
1991 50,000 121,735 171,735
1992 50,000 118,585 168,585
1993 55,000 115,385 170,385
1994 60,000 111,810 171,810
1995 60,000 107,850 167,850
1996 65,000 103,830 168,830
1997 70,000 99,443 169,443
1998 75,000 94,682 169,682
1999 80,000 89,545 169,545
2000 85,000 84,025 169,025
2001 90,000 78,075 168,075
2002 100,000 71,775 171,775
2003 105,000 64,775 169,775
2004 110,000 57,425 167,425
2005 120,000 49,725 169,725
2006 130,000 41,325 171,325
2007 140,000 32,063 172,063
2008 150,000 22,087 172,087
2009 160.000 11.400 171.400
$ 1.800.000
$ 1.600.065 $ 3.400.065
*Preliminary, subject to change; assumed interest rates range from 6.2% to 7.125 %.
16
0095 1748
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 requests 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 Commissioners 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 Reauirement
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
$500,000, 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
Kerkoch & Co., P.C., Bend, Oregon. The latest (1987 -88) 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.
Pension Plan
The County participates in the State of Oregon Public Employees Retirement System (PERS), an
agent multiple - employer public employee retirement system that acts as a common investment and
administrative agent for governmental units in the State of Oregon. All participating employees of
the County are covered by the plan after six months of employment. The plan is a defined benefit
plan to which the County contributes both the employer's portion and the employee's portion. The
rate of employer contribution is established by the Public Employees Retirement Board, based upon
actuarial valuations. The employer contribution rate for 1987 -88 was 7.97% plus the qualified
employees' contribution of 6.0 %. The total expense for the County for the 1987 -88 fiscal year was
approximately $1,074,301.
17
Assets
Cash & Investments
Property taxes rec.
Accounts receivable
Total Assets
Liabilities and Fund Eauitv
Liabilities:
Accounts payable
Deferred revenue
Total Liabilities
Fund Balances:
Undesignated
Total Liabilities and
Fund Equity
UiJ5 1149
DESCHUTES COUNTY, OREGON
GENERAL FUND
BALANCE SHEET
(Years Ending June 30)
1988 1987
$ 1,375,566 $ 1,148,110
982,480 794,978
69.687 37.443
$ 2.427.733 $ 1.198.531
1986
$ 1,226,553
424,024
66.464
$ 1.757.041
1985 1984
$ 1,585,107
44,414
41.197
$ 2.070.718
$ 1,499,940
461,236
81.224
$ 2.042.400
$ 58,010 $ 102,239 $ 40,081 $ 50,563 $ 33,045
861.616 689.247 339.371 384.711 438.143
$ 919.626 $ 791.486 $ 379.452 $ 435.274 $ 471,188
1.508.107 1.189.045 1.377.589 1.635.444
$ 2,427.733 $ 1.980.531 $ 1.757.041 $ 2,070,718
Source: Deschutes County audited financial statements
18
1.571.212
$ 2,042,400
Q0 95 1754
DESCHUTES COUNTY, OREGON
GENERAL FUND
COMBINED STATEMENT OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES
(Years Ending June 30)
Revenues
Local
Property Taxes
Other taxes
Licences & Fees
Fines & forfeitures
Charges for services
Interest
Other
Intergovernmental
Federal
State
Counties and cities
Total Revenues
1988
$ 6,072,046
71,187
1,296,100
0
349,871
232,383
35,401
295,783
602,786
41.170
7,996.726
Expenditures
Current
General government 1,152,323
General services 3,476,339
Health and welfare 521,115
Sanitation 0
Capital outlay 413.523
Total Expenditures 5,563.300
Excess (deficiency) of revenues
over expenditures 2.433.426
Other financing sources (uses)
Operating transfers in 1,408,672
Operating transfers out (3,523,036 )
Total other financing
sources (uses) (2.114.364 )
Excess (deficiency of revenues
and other sources over
expenditures and other uses 319,062
Fund balance - Beginning of year 1.189.045
Fund balance - End of year $ 1.508.107
1987
$ 4,605,630
68,327
966,250
0
214,099
169,882
28,760
144,702
789,298
39.160
7.015.108
1,067,370
3,334,261
442,534
0
305.072
5.149.237
1,865,871
946,116
(3.000.530)
(2.054.415 )
(188,544)
1.337.589
$ 1.189,045
19
1986 1985 1984
$ 1,481,501
59,932
973,838
0
153,985
215,403
165,439
148,022
493,018
38.804
3,729,942
$ 1,366,407 $ 1,213,241
57,596 60,214
839,688 801,243
0 0
195,622 149,082
270,654 339,213
88,967 121,014
261,660 406,596
426,954 378,826
35,314 35,314
3.542.862 3,504,743
1,085,576 820,101 611,762
3,402,791 2,929,363 2,233,043
401,297 458,189 500,693
0 0 0
66,503 7,110 4.037
4,956,167 4,214,763 3,349,535
(1,226,225) (671,901) 115,208
1,426,971 1,133,782 1,181,881
(458.421) (397,649) (389,974 )
968.370 736,133 791.907
(257,855 )
1,635,444
$ 1,377,589
64,232 947,115
1.571,212 624,097
$ 1,635,444 $ 1,571,212
i`�JJ 171
u �
DESCHUTES COUNTY, OREGON
GENERAL FUND
BUDGET OF REVENUES AND EXPENDITURES
(Years Ending June 30)
Revenues
Budget
1989
Resources except property taxes $ 6,344,966
Property taxes 5,572,724
Property taxes not received (672.724)
Total Revenues $ 11.244.966
Expenditures
Personal services $ 4,646,028
Materials and services 1,112,835
Capital outlay 334,320
Transfers 4,023,081
Contingencies 1.128.702
Total Expenditures $ 11,244,966
20
UUkid 11U040
GENERAL AND ECONOMIC INFORMATION
Deschutes County is located in the central portion of the State of Oregon. It covers approximately
3,055 square miles, and its boundaries extend from the Cascade Mountains on the west to the range
and forest lands of the central Oregon plateau on the east. The Deschutes River, running north -
south, bisects the County. The county seat and largest city is Bend, with a population of
approximately 18,970. Bend is the largest Oregon city east of the Cascade Mountains. Other
incorporated cities in Deschutes County are Redmond and Sisters.
Deschutes County Population
Deschutes City of City of City of
Countv Bend Redmond Sisters
1988 68,700 18,970 6,950 770
1987 65,600 18,700 6,850 745
1986 65,400 18,575 6,830 725
1985 65,400 18,450 6,740 740
1984 64,000 18,270 6,675 720
1983 63,300 17,840 6,605 730
1982 64,350 17,800 6,615 730
1981 63,650 17,425 6,575 690
1980 62,500 17,300 6,480 695
1979 59,400 16,750 6,190 680
The County's economic base is centered in agriculture, lumber and wood products, and tourism.
Recent figure compiled by the State of Oregon Employment Division indicate that manufacturing
accounts for 18% of total employment, wholesale and retail trade accounts for 24% of total
employment, services account for 26% of total employment, and government employs 18 %.
Over one -half of total acreage within the County lies within the Deschutes National Forest. The
U.S. Forest Service, which administers the Deschutes National Forest, has a regional office in Bend
that employs approximately 430 persons. The Bend office of the U.S. Forest Service administers all
recreation, timber evaluation and logging activities within the Deschutes National Forest.
Major crops grown in Deschutes County include hays and silage, field crops, and grains; ranching of
cattle, calves and other animals (including sheep and lambs, horses, and llamas) also accounts for a
significant portion of agricultural activity in the County. Harvested acreage in the County in 1987
was approximately 26,280 acres. Gross farm sales in the County in 1988 were approximately
$37,006,000 (an increase of 37% over 1987), with animal ranching responsible for over 82% of gross
farm sales and crop harvesting responsible for 18 %.
In recent years, recreational activities have emerged as a major economic force within the County.
The Mt. Bachelor Ski Resort, one of the major ski resorts in the Pacific Northwest, is located within
Deschutes County; Inn of the Seventh Mountain, Sunriver Resorts, Black Butte Ranch, and Eagle
Crest Resort are all located within the County and provide year -round recreational opportunities.
Expansion activities at Mt. Bachelor Ski Resort in recent years have further enhanced the
recreational sector of the County's economy. Employment at Mt. Bachelor during the winter ski
season is approximately 700, with year -round employment standing at approximately 120.
Employment at Sunriver during the peak summer season of May to September is approximately 600,
with year -round employees comprising approximately 200 of the total.
Manufacturing, especially of wood products, accounts for a significant portion of economic activity in
Deschutes County. Bend Millwork Systems, which employs over 1,550 persons, is engaged in the
manufacturing of millwork products. Willamette Industries, located in Bend, is engaged in the
manufacture of particle board and has employment of approximately 200. DAW Wood Products
Company operates a sawmill in Bend, a softwood veneer and plywood manufacturing facility in
Redmond. Employment at the Bend sawmill is approximately 283, while employment in the two
Redmond plants is approximately 372.
21
O 95 1x'53
Beaver Coaches, located in Bend, is engaged in the manufacture of motor homes and employs
approximately 250. 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 each 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 920. The Medical Center provides medical care to residents within a wide radium of
Bend, including neighboring Brook, Jefferson, Lake and Klamath counties.
Following are economic indicators for Deschutes County:
1987
1986
1985
1984
1983
1982
Deschutes County
Total Personal Income
Total Personal
Income ($000)
$899,600
840,000
787,400
725,500
659,900
594,100
Per Capita
Income
The 1987 average per capita income for Oregon State was $14,018.
Source: U.S. Bureau of Economic Analysis
$12,899
12,239
11,795
11,141
10,301
9,296
Major Employers in Deschutes County
Company
Bend Millwork Systems
St. Charles Medical Center
Bend School District
Mt. Bachelor Ski Resort
DAW Forest Products
U.S. Forest Service
Sunriver Resorts
State of Oregon
Deschutes County Oregon Community College
Kaa- Nee -Ta Resort
Beaver Coaches
Willamette Industries
Industry
Wood products
Health care
Education
Recreation
Lumber and wood products
National forest administration
Recreation
Government
Government
Education
Recreation
Motor homes
Wood products
(1) Includes part-time faculty
Source: Bend Chamber of Commerce and individual employers
22
No. of
Employees
1,550
920
815
120 -700
655
610
200 -600
550
450
345(1)
90 -260
250
200
0095 1754
Deschutes County
Building Permits
Permits Issued Value of Buildings
Year Residential Non - Residential Residential Non - Residential
1988 747 120 $60,998,240 $17,651,488
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
Deschutes County
Nonagricultural Wage & Salary Employment
(By Place of Work)
Change From
March Feb. March Feb. March
1989* 1988 1988 1989 1989
Total 27,070 26,670 25,990 400 1,080
Manufacturing 4,860 4,810 4,590 50 270
Durable Goods 4,230 4,170 3,980 60 250
Lumber & wood 3,120 3,090 2,960 30 160
Other durable goods 1,110 1,080 1,020 30 90
Nondurable Goods 630 640 610 -10 20
Food products 130 140 120 -10 10
Other nondurable goods 500 500 490 0 10
Nonmanufacturing 22,210 21,860 21,400 350 810
Construction 1,150 1,060 1,060 90 90
Transportation, Communication,
& Utilities 980 990 930 -10 50
Trade 6,540 6,400 6,340 140 200
Finance, Insurance
& Real Estate 1,730 1,710 1,660 20 70
Services & miscellaneous 7,060 7,000 6,860 60 200
Government 4,750 4,700 4,550 50 200
Labor - Management Disputes 0 0 0 0 0
*Preliminary
Source: State of Oregon Employment Division
Deschutes County
Resident Civilian Labor Force and Unemployment
March Feb. March
1989* 1989 1988
Resident Civilian Labor Force 36,940 36,750 35,640
Employment 34,040 33,730 32,620
Unemployment 2,900 3,020 3,020
Unemployment Rate 7.9% 8.2% 8.5%
The preliminary March 1989 unemployment rate for Oregon State was 5.1 %.
Source: State of Oregon Employment Division, Department of Human Resources
23
(1,2:95 1755
OREGON PUBLIC EMPLOYEES RETIREMENT SYSTEM
The Oregon Public Employees Retirement System collects contributions from both employers and
employees for the purpose of funding retirement benefits (called "retirement allowances "). The
system at December 31, 1987, covered approximately 113,285 state and local government Oregon
employees and 50,466 retired employee - beneficiaries. The system is administered by the Oregon
Public Employees Retirement Board.
Employee contributions and employer contributions are collected and used to fund a full formula
pension retirement allowance. The pension is based on a statutory formula and is set according to
employee's final average salary and term of service. Such pensions are paid exclusively out of
interest and principal accumulations from employer contributions.
The following figures reflect the total system assets as of December 31, 1987, and the other figures
represent transactions during the 1987 calendar year:
Total system assets at book value $ 7,720,502,193
Total system benefit payments made 274,081,008
Total employer contributions 287,795,014
Total employee contributions 160,357,774
Total system investment income 545,117,837
Total annual payroll of members covered by the system 2,826,023,317
The system's pension program is a defined benefit plan, and requires periodic actuarial review.
Under ORS 237, this review must be performed at least every four years. The Governmental
Accounting Standards Board (GASB) requires actuarial reviews every two years with an actuarial
update between years.
The most recently completed evaluation, conducted by the firm of Milliman and Robertson, Inc.,
indicates total assets of $8,408.7 million as of December 31, 1987. For the system as a whole, the
unfunded actuarial liability under the entry age actuarial cost method was $881.8 million as of
December 31, 1987. To amortize this unfunded liability over the 30 -year period ending December 31,
2017, 1.25 percent of future payroll will be required. In addition, a contribution of 0.75 percent of
future payrolls is required to fund previously granted benefit improvements to retirees. The
aggregate employer normal cost is 9.30 percent of payroll, thus requiring a total employer
contribution rate of 11.30 percent. At the August, 1988 meeting, the Retirement Board adopted new
contribution rates for all employers. All employers have district contribution rates and none bears
the responsibility to fund the benefits of other employers. Rate decreases will be effective January 1,
1990 and rate increases will be implemented in two steps effective January 1, 1991 and 1992. All
state agencies and community colleges are considered one employer, and for the purposes of
actuarial computation under ORS 237.081(1) all school districts are also regarded as constituting
one employer.
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."
24
0095 1756
TAX EXEMPTION
In the opinion of Lindsay, Hart, Neil & Weigler, Portland, Oregon, Special Counsel, under existing
law and conditioned on the County complying with certain covenants designed to maintain the
federal tax- exempt status of the Certificates, interest on the Certificates (including any original
issue discount properly allocable to the holders thereof) is excluded from gross income of
Certificateholders for federal income tax purposes. If the County fails to comply with its covenants,
Interest may become retroactively taxable. Interest is not a preference item for purposes of the
alternative minimum tax imposed on individuals or corporations. However, Certificate interest may
be taken into account for the alternative minimum tax and environmental tax imposed on certain
corporations. The Certificates have been designated as "qualified tax- exempt obligations" under
Section 265 of the Internal Revenue Code of 1986, as amended (the "Code "). The interest on the
Certificates (including any original issue discount properly allocable to the holders thereof) is exempt
from personal income taxation by the state of Oregon. Special Counsel expresses no opinion
regarding other federal or state tax consequences arising with respect to the Certificates.
Prospective purchases of the Certificates should be aware that many provisions of the Code, while
not imposing a tax directly on otherwise tax- exempt interest, reduce other tax benefits for certain
classes of recipients of tax- exempt income. Prospective purchases of the Certificates should consult
their tax advisors about the applicability of any such collateral provisions, including, but not limited
to, the following: (i) with respect to insurance companies subject to the tax imposed by Section 831
of the Code, for taxable years beginning after December 31, 1986, Section 832(b)(5)(i) reduces the
deduction for loss reserves by 15 percent of the sum of certain items, including interest on the
Certificates; (ii) for taxable years beginning after December 31, 1986, interest on the Certificates
earned by certain foreign corporations doing business in the United States could be subject to a
branch profits tax imposed by Section 884 of the Code; (iii) passive investment income, including
interest on the Certificates, may be subject to federal income taxation under Section 1375 of the
Code for Subchapter S corporations that subject Subchapter C earnings and profits at the close of the
taxable year if greater than 25 percent of the gross receipts of such Subchapter S corporation is
passive investment income; and (iv) Section 86 of the Code requires recipients of certain Social
Security and Railroad Retirement benefits to take into account in determining gross income, receipts
of accruals of interest on the Certificates.
Prospective purchasers should also be aware that with respect to the computation of the Federal
alternative minimum tax liability of corporations (H.R. 1761), recently proposed legislation would
repeal the inclusion of a portion of corporate adjusted current earnings as an item of tax preference
and instead would treat 100 percent of the interest on all tax- exempt obligations, including the
Certificates, as an item of tax preference for taxable years beginning after December 31, 1989.
Special Counsel expresses no opinion whether or in what form such proposed legislation may be
enacted.
Prospective investors should consult with their tax advisors as to all federal, state and local tax
consequences of investing in the Certificates.
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.
25
0,95 t?57
APPENDIX A
1001 FOURTH AVENUE PLAZA
(SEAFIRST BLDG.), SUITE 3200
SEATTLE. WASHINGTON 98154
(208) 023-4711
122510TH STREET.N.W.
SUITE 200
WASHINGTON, D. C. 20036
12021 393.4480
LINDSAY, HART, NEIL & I EIGLER
LAW YE
SUITE 1800
222 S. W. COLUMBIA
PORTLAND, OREGON 97201-6018
TELEPHONE 1503) 228.1191
TELECOPIER 1503) 226 -0079
TELEX 494-7032
LEGAL OPINION
Deschutes County, Oregon
1164 N.W. Bond Street
Bend, Oregon 97701
Seattle- Northwest Securities Corporation
1300 S.W. Fifth Avenue, Suite 3030
Portland, Oregon 97201
Security Pacific Bank Oregon
Corporate Trust Department
1001 S.W. Fifth Avenue
Portland, Oregon 97204
0395 1758
JEFFERSON PLACE
650 N. 9TH. SUITE 400
BOISE. IDAHO 83702
(208) 336.8844
345 CALIFORNIA STREET
SUITE 2200
SAN FRANCISCO, CALIFORNIA 94104
14151084-5858
Re: $1,800,000 Certificates of Participation, Series 1989,
Evidencing Undivided Proportionate Ownership Interests
in the installment Payments under an Installment
Purchase and Trust Agreement between Deschutes County,
Oregon as Purchaser and Security Pacific Bank Oregon as
Trustee.
We have acted as special counsel in connection with the
authorization and execution by Deschutes County, Oregon (the
"County ") of an Installment Purchase and Trust Agreement between
the County, as Purchaser, and Security Pacific Bank Oregon, as
Trustee, which is dated as of June 1, 1989 (the "Agreement ").
The Agreement provides for the execution and delivery by the
Trustee of Certificates of Participation, Series 1989 (the
"Certificates ") in the aggregate principal amount of One Million
Eight Hundred Thousand Dollars ($1,800,000). The Certificates
represent undivided proportionate ownership interests in
specified Installment Payments to be made under the Agreement by
the Purchaser. Any capitalized terms not defined herein shall
have the meanings assigned to them in the Agreement.
We have examined the law, a duly certified transcript of
proceedings of the County, prepared in part by us, relating to
the execution and delivery of the Agreement and the Certificates,
and other documents which we deem necessary to render this
opinion.
LINDSAY, HART. NEIL & WEIGLER
Legal Opinion
, 1989
Page 2
OA5 1759
We have relied on the representations of the County
contained in the Agreement and in the certified proceedings and
other certifications of public officials regarding questions of
fact material to our opinion and have not undertaken to verify
the same by independent investigaton.
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, if any, stated in the official statement, and we
express no opinion relating thereto, excepting only the matters
set forth as our opinion in the official statement.
Based on our examination, we are of the opinion, under
existing law, as follows:
A. The Agreement has been duly authorized, executed
and delivered by the County, and constitutes a valid and binding
agreement of the Purchaser which is enforceable in accordance
with its terms. The obligation of the County to make Installment
Payments is subject to annual appropriation of funds.
B. The interest component of the Installment Payments
to be made under the Agreement ( "Interest ") (i) is excluded from
gross income of Certificate owners for federal income tax
purposes and (ii) is not an item of tax preference for purposes
of the federal alternative minimum tax imposed on individuals and
corporations; however, it should be noted that with respect to
corporations (as defined for federal income tax purposes), such
Interest is taken into account in determining adjusted net book
income (adjusted current earnings for taxable years ending after
December 31, 1989) for the purpose of computing the alternative
minimum tax imposed on such corporations and for purposes of
computing such corporations' environmental tax liabilities. The
opinion set forth in (i) above is subject to the condition that
the Purchaser comply with all requirements of the Internal
Revenue Code of 1986, as amended (the "Code "), that must be
satisfied subsequent to the execution and delivery by the Trustee
of the Certificates in order that Interest be (or continue to be)
excluded from gross income for federal income tax purposes.
Failure to comply with certain of such requirements would cause
such Interest to be so included for federal income tax purposes
in gross income of Certificate owners retroactively to the date
of execution and delivery of the Certificates. The Purchaser has
covenanted to comply with all such requirements.
LINDSAY, HART. NEIL & WEIGLER
Legal Opinion
, 1989
Page 3
005 taPO
C. The Agreement and the Certificates are not private
activity bonds under Section 141 of the Code.
D. Interest is exempt from personal income taxation by
the State of Oregon.
E. Legislation is now pending before the United States
Congress which, if enacted, would require corporations to treat
100 percent of Interest as an item of tax preference for tax
years beginning after December 31, 1989.
F. We express no opinion regarding other federal or
state tax consequences arising with respect to the Installment
Payments or the Certificates.
G. The opinions set forth above are qualified only to
the extent that rights and remedies of the Certificate owners and
the Trustee may be limited or rendered ineffective by applicable
bankruptcy, insolvency, reorganization, moratorium 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:
Richard D. Roberts
CWCcwc1560