1992-40355-Resolution No. 92-089 Recorded 11/19/1992REVIEWED
92-40355 C OU S
J;ILE; - L OUNS;EL
BEFORE THE BOARD OF COUNTY COMMISSIONERS OF DESCHUTES COUry, OREGON
A Resolution Adopting the Preliminary Official
Statement Relating to Deschutes County's Issuance
of General Obligation Bonds in the Principal Amount
of $7,000,000.00, Dates as of December 1, 1992.
RESOLUTION NO. 92-089 M19-1493
WHEREAS, the Board of County Commissioners authorized the
issuance of General Obligation Bonds in the principal amount of
Seven Million and No/100 Dollars ($7,000,000.00), dated as of
December 1, 1992; and
WHEREAS, a preliminary Official Statement was prepared for
this issue by Public Financial Management, Inc., the County's
financial consultant; and
WHEREAS, the preliminary Official Statement was available
prior to the offer for sale of the General Obligation Bonds; 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 f act, omit to
state a material f act in light of the circumstances under which the
statements were made, contain any misleading statements, and that
the preliminary Official Statement is representative 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 General Obligation Bonds, to be issued by Deschutes
County, Oregon, dated as of December 1, 1992.
DATED this 16th day of November, /1992.
BOARD OF COUNTY COMMISSIONERS
OF DYXCPUTES COUNTY, OREGON
TTES
ecordinag Secretary
1 - RESOLUTION NO. 92-089 (11/16/92)
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PRELIMINARY OFFICIAL STATEMENT DATED: November 12,1992
NEW ISSUE - COMPETITIVE SALE DATE: December 2,1992
BOOK -ENTRY RATING: Moody's:
In the opinion of Preston Thorgrimson Shidler Gates & Ellis, Bond Counsel, under existing law and conditioned on the
Issuer complying with certain covenants relating to tax exempt status of the Bonds, interest on the Series 1992 Bonds is
excluded from gross income of Bondholders for federal income tax purposes and is not an item of tax preference for
purposes of determining alternative minimum taxable income for individuals and corporations under the Internal Revenue
Code of 1986, as amended ("the Code"). The interest on the bonds may, however, be subject to other collateral tax
consequences. In the opinion ofBond Counsel, interest on the bonds is exemptfrom personal income taxation by the State
of Oregon. See "Tax Exemption" herein.
DESCHUTES COUNTY,OREGON
$790009000 0119-1494
GENERAL OBLIGATION BONDS
Series 1992
DATED: December 1, 1992
DUE: December 1, as shown below
The Series 1992 Bonds (the "Bonds") are fully registered bonds in $5,000 denominations or integral multiples thereof.
Interest is payable semiannually on the first day of December and June, beginning December 1, 1993, through the
principal corporate trust offices of the registrar and paying agent of the County, currently United States National Bank of
Oregon, Portland, Oregon.
The Bonds will be issued as fully registered bonds in book -entry form only, registered initially in the name of Cede &
Co., as nominee of The Depository Trust Company, New York, New York ("DTC"). Individual purchasers of Bonds will
not receive physical delivery of Bond certificates. Rather, registration of ownership of the Bonds and subsequent transfers
of any Bonds will be made through the Book -Entry System. During any period in which the Bonds are subject to the
Book -Entry System, payment of the principal of, premium (if any) and interest on the Bonds will be paid through DTC
and DTC Participants.
Bond proceeds will be used to finance construction of a county correctional facility and to pay the costs of issuance of the
Bonds. The County is obligated to levy on all taxable property within the County a direct ad valorem tax, in addition to
other monies, sufficient to pay bond principal and interest promptly when and as they become due.
MATURITY SCHEDULE
Due
Principal Interest Price or
Due
Principal Interest Price or
December I
Amoun Rak Xidd
December 1
Amoun &t& Ew
1994
$195,000 %
2004
$365,000 %
1995
215,000
2005
390,000
1996
240,000
2006
415,000
1997
250,000
2007
440,000
1998
265,000
2008
470,000,
1999
280,000
2009
500,000
2000
295,000
2010
530,000
2001
310,000
2011
565,000
2002
325,000
2012
605,000
2003
345,000
Redemption Provision - The bonds maturing on or after
June 1, 2003 are subject to optional redemption as described
further herein.
Bank Designation - These bonds, combined with all other anticipated tax-exempt issues of the County, total less dian
$10,000,000 for calendar year 1992. Therefore the County has designated the Bonds as "qualified tax-exempt
obligations" pursuant to the Internal Revenue Code of 1986.
Legal Opinion - The Series 1992 Bonds are offered for sale to the original purchaser pursuant to the official Notice of
sale of the County, subject to the final approving opinion of Preston Thorgrimson Shidler Gates & Ellis, Portland, Oregon,
Bond Counsel. It is expected that the bonds in definitive form will be available for delivery in Portland, Oregon or
through the Depository Trust Company in New York, on or about December 17, 1992.
FINANCIAL ADVISOR:
Public Financial Management, Inc.
1300 SW Fifth Avenue, Suite 2929, Portland, Oregon 503/223-3383
OFFICIAL STATEMENT
OF
DESCHUTES COUNTY
OREGON
RELATING TO
$7,000,000
GENERAL OBLIGATION BONDS
SERIES 1992
COUNTY COMMISSIONERS
Dick Maudlin
Nancy Pope Schlangen
Tom Throop
ELECTED OFFICIALS
District Attorney:
Mike Dugan
TreasurerlTar Collector:
Helen M. Rastovich
Sheriff.
Darrel Davidson
County Clerk:
Mary Sue Penhollow
Assessor:
Oscar B. Bratton
Surveyor-
Jeff Kerns
APPOINTED OFFICIALS
Administrative Services Director:
MikeMaier
County Counsel:
Rick Ishain
PROFESSIONAL SERVICES
Preston Thorgrimson Shidler Gates & Ellis, Bond Counsel
Public Financial Management, Inc., Financial Advisor
Chair
Member
Member
0119-1495
This Official Statement has been designed to conform, where applicable, to the guidelines presented in Disclosure
Guidelines for Offerings of Securities by State and Local Governments, published by the Government Finance
Officers Association in 1976 and revised in 1979, 1988 and 199 1.
This Official Statement is intended only to furnish information in connection with the public invitation for bids for
the purchase of these Bonds. The Official Statement DOES NOT constitute a recommendation, expressed or
implied, to purchase or not to purchase these Notes or any other previous debt of the issuer.
The date of this Preliminary Official Statement is November 12, 1992.
1
0119-1496
TABLE OF CONTENTS
THE PROJECT
Table 1: Sources and Uses of Funds 5
DEBT INFORMATION
Page
MAP OF OREGON
6
OFFICIAL NOTICE OF SALE
NOS - I
BOND ISSUE SUMMARY
BIS - I
BOOK -ENTRY SYSTEM
I
DESCHUTES COUNTY
6
Government
3
The Board of Commissioners
3
Administration
3
Staff
4
THE PROJECT
Table 1: Sources and Uses of Funds 5
DEBT INFORMATION
Debt Summary
6
Debt Limitation
6
Debt Authorization
6
Debt Management
6
Future Debt Plans
6
Table 2: Outstanding Obligations as of October 14, 1992
7
Lease Purchase Agreements
7
Short Term Debt
7
Leases and Contract Payments
7
Accrued Vacation Liability
7
Table 3: Overlapping Debt as of October 14, 1992
8
Table 4: Combined Debt Service Requirement Total Principal and Interest
9
Pension Plan
to
Table 5: Employer Contributions to Retirement Plan
10
TAX INFORMATION
The Property Tax Limitation Measure
I I
Synopsis of Property Tax Administration
12
Table 6: Tax Collection Record
14
Table7: Consolidated 1992-93 Tax Rate Code Area 01-01
15
Table 8: Major Taxpayers
15
FINANCIAL INFORMATION
Budgetary Process and Controls
16
Fiscal Year
16
Financial Reporting
16
Audit Requirements
16
Table 9: Summary of 1992-93 Budget
17
Table 10: Budget and Bond Elections
18
Table 11: General Fund Balance Sheets
19
Table 12: General Fund Consecutive Statement of Revenue and Expenditures
20
Table 13: First Quarter Statement of Revenues and Expenditures
21
GENERAL AND ECONOMIC INFORMATION
Land Use Planning
Population
Employment
Economic Development
Tourism and Recreation
Transportation
Agriculture
Utilities
Public Facilities
Information Sources
Economic and Demograpffic Tables
Table 14: Population Estimates
Table 15: Average Annual Unemployment
Table 16: Labor Force
Table 17: Employment Annual Averages and Percent Distribution by Industry
Table 18: Major Employers 1992
Table 19: Retail Trade
Table 20: Income Estimates -
Table 21: Gross Farm Sales
Table 22: Building Activity
Rating
Legal Matters
Underwriting
Tax Exemption
Financial Advisor
Miscellaneous
Concluding Statement
APPENDIX A: June 30, 1991 Audited Financial Statements (Partial)
APPENDIX B: Legal Opinion
APPENDIX C: Oregon Public Employees Retirement System
0119-1497
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23
23
24
24
24
24
25
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26
27
27
28
29
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0119-1499
Official Notice of Bond Sale
f
$79000,000
Deschutes County, Oregon
General Obligation Bonds
Series 1992
NOTICE IS BEREBY GIVEN that sealed bids will be received on behalf of
Deschutes County Oregon (the "County"), for the purchase of its General Obligation Bonds,
Series 1992 (the "Bonds"), until 10:00 o'clock a.m. (Pacific Time) on Wednesday,
December 2, 1992, at the offices of Preston Thorgrimson Shidler Gates & Ellis,
3200 U.S. Bancorp Tower, I I I S.W. Fifth Avenue, Portland, Oregon 97204, at which time they
will be publicly opened and announced.
The bids shall be considered and acted upon by the County within four hours.
ISSUE: The issue shall be in the aggregate principal amount of SEVEN
MILLION DOLLARS ($7,000,000), consisting of registered Bonds in denominations of Five
Thousand Dollars ($5,000) or integral multiples thereof, all dated December 1, 1992.
INTEREST RATE: The maximum interest rate shall not exceed a true interest
cost of nine percent (9%) per annum. Interest is payable semiannually on December I and June I
of each year until maturity or prior redemption, commencing December 1, 1993. Bidders must
specify the interest rate or rates which the Bonds hereby offered for sale shall bear. The bids shall
comply with the following conditions: (1) each interest rate specified in any bid must be a
multiple of 1/8th or 1/20th of one percent (1%); (2) no Bond shall bear more than one rate of
interest; (3) each Bond shall bear interest from its date to its stated maturity date at the interest
rate specified in the bid; (4) all Bonds maturing at any one time shall bear the same rate of
interest; and, (5) interest rates specified for any maturity shall not be less than rates specified for
any earlier maturity.
MATURITIES: The Bonds shall mature on December I of each year as follows:
NOS - 1
U
0119-1500 A
Date
Amount
Date
Amount
1994
$195,000
2004
$365,000
1995
215,000
2005
390,000
1996
240,000
2006
415,000
1997
250,000
2007
440,000
1998
265,000
2008
470,000
1999
280,000
2009
500,000
2000
295,000
2010
530,000
2001
310,000
2011
565,000
2002
325,000
2012
605,000
2003
345,000
TERM BONDS AND MANDATORY SINKING FUND REDEMPTION:
Bidders have the option of specifying in their bid proposal that all of the principal amount of the
bonds scheduled in any two or more consecutive years may, in lieu of maturing in each such year,
be combined to comprise one or more maturities of the Bonds scheduled to mature in the latest
year of each such combination. The term bonds so specified by the bidder shall be subject to
mandatory sinking fund redemption at par in the principal amounts in each year during the
combined period of such Bonds which would otherwise have been scheduled to mature in such
years.
REGISTRATION: The Bonds will be issued in fully registered form, and may be
exchanged at the expense of the County for similar Bonds of different authorized denominations.
Bonds may not be converted to bearer form.
OPTIONAL REDEMPTION: The County reserves the right to redeem all or any
portion of the Bonds then outstanding, by lot, on the following dates and at the following prices
expressed as percentages of the principal amount, plus accrued interest to the date fixed for
redemption:
If Redeemed On Redemption PHce
December 1, 2002 or June 1, 2003 101.0%
December 1, 2003 and thereafter 100.0
NOTICE OF REDEMPTION: Notice of any call for redemption, unless waived
by the holders of the Bonds to be redeemed, shall be mailed not less than thirty days and not more
than sixty days prior to such call to the registered owners of the Bonds, and otherwise given as
required by the authorizing Bond Resolution and by law or as required by The Depository Trust
Company; however, any failure to give notice shall not invalidate the redemption of the Bonds.
All Bonds called for redemption shall cease to bear interest from the date designated in the notice.
NOS - 2
0119-1501
PAYMENT: Principal and interest are payable, either at maturity or upon earlier
redemption, through the registrar and paying agent of the County, which is currently United
States National Bank of Oregon, in Portland, Oregon. As book -entry bonds, the principal of and
interest on the bonds will be payable by the registrar and paying agent through The Depository
Trust Company. Interest is payable by check or draft which will be mailed on the interest
payment date (or the next business day if the interest payment date is not a business day) to the
registered owners at their addresses appearing in the Bond Register as of the fifteenth day of the
month preceding an interest payment date.
PURPOSE: The Bonds are being issued to finance, in part, to acquire property,
construct jail and related facilities and to pay all costs incidental thereto. The Bonds were
authorized at a special election held within the County on November 5, 1991.
SECURITY: The Bonds are general obligations of the County. The County has
covenanted to levy an ad valorem tax annually which, with other available funds, will be sufficient
to pay Bond principal and interest as they come due.
BOND INSURANCE: Application will be made for qualification of the Bonds for
debt service insurance. If the Bonds qualify for municipal bond insurance, any purchase of such
policy shall be at the sole option and expense of the bidder. Failure of the Bonds to be so insured
or of any such policy to be issued shall not in any manner relieve the successful bidder of his
contractual obligations arising from the acceptance of his proposal for the purchase of the Bonds.
LEGAL OPINION: The approving opinion of Preston Thorgrimson Shidler
Gates & Ellis, Bond Counsel, of Portland, Oregon, will be provided at no cost to the purchaser,
and will be printed on the Bonds at the expense of the County.
TAX-EXEIVIPT STATUS: In the opinion of Bond Counsel, under existing law
and conditioned on the County complying with certain covenants relating to the tax-exempt status
of the Bonds, interest on the Bonds is excluded from gross income for federal income tax
purposes (except for certain taxes on corporations). The Bonds are not "private activity bonds"
under Section 141 of the Internal Revenue Code of 1986, as amended (the "Code").
In the opinion of Bond Counsel, the interest on the Bonds is exempt from personal
income taxation by the State of Oregon under present state law.
Bond Counsel expresses no opinion regarding other federal or state tax
consequences arising with respect to the Bonds.
The County has the !egal authority to comply with its covenants.
BEST BID: The Bonds will be awarded to the responsible bidder whose proposal
will result in the lowest true interest cost to the County. True interest cost will be determined by
doubling the semiannual interest rate necessary to discount the debt service to December 1, 1992,
and the price bid for the Bonds. Each bidder is requested to supply the total interest cost and the
NOS - 3
0119-1502
true interest cost that the County will pay upon the issue if the bid is accepted. The purchaser
must pay accrued interest, computed on a 360 -day basis, from the date of the Bonds to the date of
delivery. The cost of printing the Bonds will be paid by the County.
CERTIFICATE REGARDING INITIAL OFFERING PRICE: To provide the
County with information required to enable it to comply with certain conditions of the Internal
Revenue Code of 1986, as amended, relating to the exclusion of the interest on the Bonds from
the gross income of their owners, the successful bidder will be required to complete, execute and
deliver to Bond Counsel (on or before three business days prior to the date of delivery of the
Bonds) a certification provided by Bond Counsel as to the "issue price" of each maturity of the
Bonds. In the event the successful bidder has (1) purchased the bonds for its own portfolio
without intention to resell the Bonds, or (2) made a bona fide private placement of the Bonds,
such certificate may be modified in a manner provided by Bond Counsel. Each bidder, by
submitting its bid, agrees to complete, execute and deliver such a certificate, if its bid is accepted
by the County. Failure to honor this agreement may result in the cancellation of the sale and the
forfeiture of the successful bidder's good faith deposit.
DELIVERY: Closing will occur in Portland, Oregon. Delivery of the Bonds will
be made without cost to the successful bidder at The Depository Trust Company, New York,
New York. Payment for the Bonds must be made in immediately available funds. Delivery of the
Bonds will be made within thirty days.
FORM OF BID: All bids must be for not less than all the Bonds hereby offered
for sale, and for not less than 98.75% of the par value thereof and accrued interest to the date of
delivery. Each bid together with bidder's check as herein specified must be enclosed in a sealed
envelope addressed to the County and designated "Proposal for Bonds."
BID CHECK: All bids must be unconditional and accompanied by a certified or
cashier's check on a bank doing business in the State of Oregon for One Hundred Forty Thousand
Dollars ($140,000) payable to the order of the County to secure the County from any loss
resulting from the failure of the bidder to comply with the terms of its bid. Checks will be forfeited
to the County as liquidated damages in case the bidder to whom the Bonds are awarded
withdraws its bid or fails to complete its purchase in accordance with the terms thereof No
interest shall be allowed on the deposit but the check of the successful bidder will be retained as
part payment of the Bonds or for liquidated damages as described above. Checks of the
unsuccessful bidders will be returned by the County promptly.
RIGHT OF REJECTION: The County reserves the right to reject any or all bids,
and to waive any irregularities.
OFFICIAL STATEMENT AND FURTHER INFORMATION: Further
information and a preliminary official statement relating to the Bonds will be provided upon
request to its financial advisor, Public Financial Management, Inc., Suite 2929, 1300 S.W. Fifth
Avenue, Portland, Oregon, 97201, telephone: (503) 223-3383.
NOS - 4
0119-1503
COMPLIANCE WITH SEC RULES: The County agrees to provide the
successful bidder with up to 150 copies of the official statement in a form "deemed final" by the
County for the Bonds at the expense of the County, and such additional copies as the successful
bidder may request in its bid form at the expense of the bidder, not later than the seventh business
day following the date on which bids are due. Bidders should expect that the official statements
will not be available prior to the seventh business day following the date on which bids are due,
and should not issue confirmations which request payment prior to that date. The successful
bidder must provide the reoffering yields or prices which will be printed on the cover of the final
official statement to the Countys financial advisor within twenty-four hours after bids are opened.
This provision will constitute a contract with the successful bidder upon acceptance of its bid by
the County, in compliance with Section 240.15c2 -12(b)(3) in Chapter II of Title 17 of the Code
of Federal Regulations.
CUSIP: CUSIP numbers will be imprinted upon all Bonds of this issue at the
County's expense. Failure to print, or improperly imprinted numbers will not constitute basis for
the purchaser to refuse to accept delivery.
NO LITIGATION: At the time of payment for the delivery of said Bonds, the
County will furnish the successful bidder a certificate that there is no litigation pending affecting
the validity of the Bonds.
FURTHER INFORMATION: Additional information regarding the County and
this sale may be obtained from Mike Maier, Administrative Director, Deschutes County,
1130 N.W. Harriman Street, Bend, Oregon, 97701, telephone: (503) 388-6565.
Administrative Director
Deschutes County, Oregon
NOS - 5
BOND ISSUE SUMMARY 0119-1504
DESCHUTES COUNTY, OREGON
$7,000,000
GENERAL OBLIGATION BONDS, SERIES 1992
This summary is subject in afl respects to more complete information contained in this Preliminary Official
Statement. This Preliminary Official Statement is final except for certain information relating to pricing
and the inclusion of term bonds, if any. The offering of these Bonds to potential investors is made only by
means of this entire Preliminary Official Statement, including the appendices hereto. No person is
authorized to detach this summary from this Preliminary Official Statement or otherwise to use it without
this entire Preliminary Official Statement, including the appendices hereto.
SALE DATE:
December 2, 1992, 10:00 am., Prevailing Pacific Time.
DATE OF ISSUE:
December 1, 1992.
RATING:
The County has applied to Moody's Investors Service for a rating
on this issue.
PURPOSE.
The Bonds are being issued to finance the construction of a correctional facility and
to pay the costs of issuance of the Bonds.
DENOMINATIONS:
$5,000 or integral multiples thereof.
MATURITIES:
Principal is payable December 1.
Interest is payable June
I and December 1,
commencing December 1, 1993.
Maturity Principal
Maturity
Principal
Date Amount
Date
Amount
12/01/94 $195,000
12/01/04
365,000
12/01/95 215,000
12/01/05
390,000
12/01/96 240,000
12/01/12
415,000
12/01/97 250,000
12/01/07
440,000
12/01/98 265,000
12/01/08
470,000
12/01/99 280,000
12/01/09
500,000
12/01/00 295,000
12/01/10
530,000
12/01/01 310,000
12/01/11
565,000
12/01/02 325,000
12/01/12
605,000
12/01/03 $345,000
AVERAGE LIFE:
.12.749 years.
BIS - I
P I
0119-1505
OPTIONAL The County reserves the right to redeem all or any portion of the Bonds then
REDEMPTION: outstanding, by lot, on the following dates and at the following prices expressed as
percentages of the principal amount, plus accrued interest to the date fixed for
redemption:
Redemption Date Redemption Price
December 1, 2002 or June 1. 2003 101.0%
December 1, 2003 and thereafter 100.0%
Notice of redemption, unless waived by the holders of the Bonds to be redeemed,
shall be mailed not less than 30 days and not more thart 60 days prior to the
redemption date to the registered owners of the Bonds, and as otherwise required by
the Bond Resolution and by law or as required by the Depository Trust Company-,
however, any failure to give notice shall not invalidate the redemption of the Bonds.
All Bonds called for redemption shall cease to bear interest from the date designated
in the notice.
MANDATORY REDEMPTION Bidders have the option of specifying in their bid proposal that all of the principal
OF TERM BONDS amount of the bonds scheduled in any two or more consecutive years may, in lieu of
manning in each such year. be combined to comprise one or more maturities of the
Bonds scheduled to mature in the latest year of each such combination. 'Me term
bonds so specified by the bidder shall be subject to mandatory sinking ftmd
redemption at par in the principal amounts in each year during the combined period
of such Bonds which would otherwise have been scheduled to mature in such years.
BANK DESIGNATION: These Bonds, combined with all other anticipated tax-exempt issues of the County,
total less than $10,000,000 for calendar year 1992. Therefore the County has
designated the Bonds as "qualified tax-exempt obligations" pursuant to Section
265(b)(3) of the Internal Revenue Code of 1986.
REOFFERING: The successful bidder must certify the initial reoffering price for each maturity of the
Bonds to the County's Bond Counsel not less than three business days- prior to
closing. This certification shall constitute the sale at a price no greater than the
reoffering price until at least ten percent of the principal amount of each maturity is
sold at a price less than or equal to the certified reoffering price. Failure to honor
this agreement may result in cancellation of the sale and forfeiture of the bidder's
good faith deposit. This requirement from Bond Counsel is intended to satisfy the
requirements of the Internal Revenue Code of 1986.
REGISTRATION The Bonds will be issued in fully registered book -entry form through the Depository
BOOK -ENTRY: Trust Company, New York, New York.
REGISTRAR/ The Bonds will be registered and payable upon presentation at the principal
PAYING AGENT. corporate trust offices of United States National Bank Oregon, Portland, Oregon, as
paying agent. Interest on the Bonds is payable by check of the paying agent mailed
to the registered owner.
RECORD DATE: The 15th day of the month preceding a bond payment date.
AUTHORIZATION: These bonds were authorized by the County's voters at a special election held on
November 5, 199 1.
BIS - 2
0119-1506
SECURITY: These Bonds are general obligations of the County. ne primary source of payment
for these Bonds is property taxes. The County has the power and is obligated to
cause ad valorem taxes, without limitation as to rate or amount. to be levied annually
upon all taxable property within the boundaries of the County in an amount sufficient
with other available monies to pay the principal of and interest upon the Bonds. The
Bonds are exempt from the property tax limitation requirements specified in Article
XI Section I l(b) of the Oregon Constitution. See "Tax Limitation" herein.
DISCOUNT: Bids must be for not less than 98.75% of the par value.
BIDDING LIMITATIONS: Each interest rate must be in multiples of 1/8 or 1/20 of one percent. The true
interest cost may not exceed 9%. No single interest rate may exceed 10%. Ile rate
bid for any maturity shall not be less than the rate bid for any earlier maturity.
DEBT LIM1ITATION. ORS 287.054 provides that the aggregate amount of outstanding general obligation
bonds of the County, shall at no time exceed two percent of the County's assessed
value.
TAX EXEM[PT STATUS: In the opinion of Bond Counsel, under existing law and conditioned on the County
complying with certain covenants relating to the tax-exempt status of the Bonds.
interest on these Bonds is excluded from gross income of bondholders for federal
income tax purposes. Bond interest may be subject to other federal tax
consequences. The interest on the Bonds is exempt from personal income taxation
by the State of Oregon. See Appendix B.
LEGAL OPINION: The unqualified legal opinion of Preston Tliorgrimson Shidler Gates & Ellis, Bond
Counsel, Portland, Oregon, will be furnished free of charge to the original purchaser
of the Bonds. A copy of the legal opinion will be printed on the Bond. A copy of
the legal opinion is provided in Appendix C.
PENDING LITIGATION: There is no litigation pending or threatened against the County that would in any way
relate to the bond issue.
DEFAULT: The County has never defaulted on any debt obligation.
REMEDIES IN THE EVENT In the opinion of Bond Counsel, if the County were to default, the County could be
OF DEFAULT: compelled by a court of competent jurisdiction, in an appropriate proceeding, to levy
annually a tax, without limit as to rate or amount. sufficient to pay principal and
interest on the Bonds and to order payment on the Bonds from funds lawfully
available therefore. In exercising its discretion as to whether to enter such an order,
the court may take into account all relevant factors including the current operating
needs of the County and the availability and adequacy of other remedies.
Enforcement of a claim for payment of principal or of interest on bonds may also be
subject to the applicable provisions of federal bankruptcy laws and -to the provisions
of other statutes, if any, hereafter enacted by the Congress or the State Legislature
extending the time for payment or- imposing other constraints upon enforcement
insofar as the same may be constitutionally applied.
CUSIP NUM13ERS: CUSIP identification numbers will be printed on the Bonds at the expense of the
County.
LEGALITY OF The bonds are legal investments for all Oregon trust funds, commercial and savings
INVESTMENT: banks, trust companies and funds of insurance companies.
BIS - 3
0119-1507
APPROVAL OF COUNSEL: Legal matters incident to the authorization. issuance and sale by the County of these
Bonds are subject to the unqualified approving opinion of Bond Counsel. Bond
Counsel has not independently verified the accuracy or completeness of the
representations in this Preliminary Official Statement except that information
contained in the preceding sections relating to the Bonds entitled "Authorization,"
"Security," "Debt Limitation." and "Tax Exempt Status."
EXPERTS: The most recent audit report is for the fiscal year ended June 30, 1991, which was
rendered by Donaca. Battleson, Kerkoch. and Co.. P.C. independent certified public
accountants, Bend, Oregon. The auditors were not requested to review this
Preliminary Official Statement and have not completed any additional auditing or
review procedures subsequent to the issuance of their report on the 1991 fiscal year.
Copies of the complete 1991 audit are available upon request. Sections of the June
30, 1991 audit are contained in Appendix A.
INFORMATION SOURCES: The information contained in this Preliminary Official Statement has been obtained
from the County and State of Oregon public records or from the sources indicated in
the statement. Ms Preliminary Official Statement describes the affairs of the
County up to the date of this statement, it does not purport to describe the affairs of
the County after that date.
DELIVERY: It is expected that the Bonds in definitive form will be available for delivery in
Portland. Oregon or through the Depository Trust Company in New York, on or
about December 17, 1992.
ADDITIONAL Public Financial Management, Inc., 1300 SW Fifth Avenue, Suite 2929, Portland,
INFORMATION: Oregon, 97201, phone (503) 223-3383.
BIS - 4
BOOK -ENTRY SYSTEM 0119-1508
When the Bonds are issued, ownership interest will be available to purchasers only through a book -entry system
(the "Book -Entry System") maintained by the Depository Trust Company (the "DTC") or such other depository
institution designated by the County pursuant to the Resolution. If the Bonds are removed from the Book -Entry
System and delivered to owners in physical form, as described below, the following discussion of the Book -Entry
System will not apply.
The following information has been provided by DTC, and the County makes no representation as to the accuracy
or completeness thereof.
The Bonds will be issued as registered bonds, and, when issued, will be registered in the name of Cede & Co., as
nominee of DTC, which will act as securities depository for the Bonds. DTC! is a limited -purpose trust company
organized under the laws of the State of New York, a member of the Federal Reserve System, a "clearing
corporation" within the meaning of the New York Uniform Commercial Code, and a "clearing agency" registered
pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934, as amended.
DTC holds securities and facilitates the clearance and settlement of securities transactions through electronic
book -entry changes in accounts of its participants (the "DTC Participants"), thereby eliminating the need for
physical movement of certificates. DTC Participants include securities brokers and dealers, banks, trust
companies, clearing corporations and certain other organizations, some of which (and/or their representatives)
own DTC. Access to the DTC system is also available to other entities such as banks, brokers, dealers, and trust
companies that clear through or maintain a custodial relationship with a DTC Participant, either directly or
indirectly.
DTC Participants will be credited in the records of DTC with the amount of such DTC Participants' interests in the
Bonds. Beneficial ownership interests in the Bonds in the amount of $5,000 or any integral multiple thereof may
be purchased by or through DTC! Participants. A purchaser of such an interest (a "Beneficial Owner") will not
receive a certificate representing his beneficial ownership interest. 'Me ownership interest of each Beneficial
Owner will be recorded through the record of the DTC Participant from which he purchased his Bonds. Transfers
of ownership interests in the Bonds will be accomplished by book entries made by DTC and, in turn, by DTC
Participants acting on behalf of Beneficial Owners. It is anticipated that each Beneficial Owner will receive a
written confirmation of the ownership interests acquired by him in the Bonds from a DTC Participant.
So long as Cede & Co. is the registered owner of the Bonds, as nominee of DTC. references herein to the Owners
of the Bonds shall mean Cede & Co. and shall not mean the Beneficial Owners of the Bonds. Beneficial Owners
may desire to make arrangements with a DTC Participant so that all notices of redemption or other
communications to DTC, which affect such Beneficial Owners, and notification of all interest payments, will be
forwarded in writing by the DTC Participant.
Payments of principal of, redemption premium, if any, and interest on the Bonds will be paid by the Paying Agent
directly to DTC or its nominee, Cede & Co. DTC will remit such payments to DTC Participants and such
payments will thereafter be paid by DTC! Participants to the Beneficial Owners. No assurance can be given to the
County that DTC Participants will make prompt transfer of payments to Beneficial Owners. The County is not
responsible or liable for payment by DTC! or DTC Participants or for sending transaction statements or for
maintaining, supervising or reviewing records maintained by DTC or DTC Participants.
For every transfer and exchange of the Bonds, the Beneficial Owners may be charged a sum sufficient to cover
any tax, fee or other charge that may be imposed in relation thereto.
DTC may discontinue providing its services with respect to the Bonds at any time by giving notice to the County
and discharging its responsibilities with respect thereto under applicable law, or the County may terminate its
participation in the system of book -entry transfers through DTC at any time. In the event that the book -entry
system is discontinued, the County will authenticate and make available for delivery replacement Bonds in the
form of registered certificates. In addition, the following provisions would apply: principal of the Bonds and
redemption premium. if any, will be payable in lawful money of the United States of America at the office of the
Paying Agent, or any successor Paying Agent designated by the County, and interest on the Bonds will be payable
by check mailed to the respective addresses of the registered owners as of the record date for such payment.
0119-1509
NEITHER THE COUNTY NOR THE PAYING AGENT SHALL HAVE ANY RESPONSIBILITY OR
OBLIGATION TO DTC PARTICIPANTS OR THE PERSONS FOR WHOM THEY ACT AS NOMINEES
WITH RESPECT TO THE BONDS REGARDING (i) THE ACCURACY OF ANY RECORDS MAINTAINED
BY DTC OR DTC PARTICIPANTS OF ANY AMOUNT IN RESPECT OF PRINCIPAL OR REDFIVIPTION
PRICE OF OR INTEREST ON THE BONDS, OR (ii) ANY NOTICE WHICH IS PERMITTED OR REQUIRED
TO BE GIVEN TO REGISTERED OWNERS UNDER THE ORDINANCES (EXCEPT SUCH NOTICE AS IS
REQUIRED TO BE GIVEN BY THE COUNTY TO THE PAYING AGENT OR TO DTC), OR (iii) THE
SELECTION BY DTC OF ANY PARTICIPANT TO RECEIVE PAYMENT IN THE EVENT OF OPTIONAL
REDEMPTION OF THE BONDS, OR (IV) ANY CONSENT GIVEN OR OTHER ACTION TAKEN BY DTC
AS BOND OWNER, OR (v) ANY OTHER EVENT OR PURPOSE.
The information included under this caption, other than the preceding paragraph hereof, has been provided by
DTC. No representation is made by the County's Financial Advisor or the Underwriters as to the accuracy or
adequacy of such information provided by DTC or as to the absence of material adverse changes in such
information subsequent to the date hereof.
2
01119-1510'
DESCHUTES COUNTY
Deschutes County (the "County"), a municipal corporation of the State of Oregon, is located in the central portion
of the State of Oregon. It covers approximately 3,055 square miles, and its boundaries include the cities of Bend,
Redmond, and the Sisters. As of July, 199 1, the certified estimated estimated population of the County is 79,800.
GOVERNMENT
'Me 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
'Me policies of the County are established by an elected three-member Board of County Commissioners. ne
current members of the Board are:
Council Memb= Position Term Exll4res
Dick Maudlin Chairman January, 1993
Nancy Pope Schlangen Commissioner January, 1995
Tom Throop Commissioner January, 1995
Dick Maudlin, Chairman, has served on the Board of County Comn-tissioners since January 1985. Mr. Maudlin
was elected Chairman of the Board January, 1988, and presently serves in that capacity. Mr. Maudlin is a lifelong
Deschutes County resident, founded his own insurance company in 1972 and retired from that business in 1984.
Mr. Maudlin attended both the University of Oregon and Willamette University.
Nancy Pope Schlangen, Commissioner, was elected to the Board in November 1990. She also currently serves
on the boards of directors for the Education Service District. Central Oregon Community Action Agency Network,
Court Appointed Special Advocates, Deschutes County Children and Youth Services Commission. and Habitat for
Humanity. Ms. Pope Schlangen also serves as a member of the Association of Oregon Counties Human Services
and Public Safety Committee and the State Children and Youth Service Commission Budget and Policy
Committee. She has been a cattle rancher for the past 31 years, a police officer and small business owner.
Tom Throop, Commissioner, has been a County Commissioner since 1987. Previously, Mr. Throop served in
the Oregon House of Representatives from 1979 through 1986, and served as chair of the House Revenue and
School Finance Committee and a member of the House Environment and Energy and Joint Water Policy
Committees. Mr. Throop is also presently a member of the State's Land Conservation and Development
Commission.
ADMINISTRATION
Helen Rastovich, County Treasurer, has been serving as the elected County Treasurer since 1965. She was
appointed tax collector and finance officer for the County in 1983. Ms. Rastovich is past president of the. Oregon
Association of County Treasurers and Finance Officers, served on the board of directors of the National
Association of County Treasurers and Finance Officers, served on the Oregon Municipal Debt Advisory
Commission from 1983 to 1989, and served two terms on the board of directors of the Oregon Tax Collectors
Association.
Michael Maier, County Administrator, has served as the Deschutes County Administrator since 1979. Among
his management responsibilities, Mr. Maier serves as the County's financial manager and develops and monitors
the annual budget. Prior administrative experience includes serving as the court administrator for the fifth judicial
district in Oregon, as a management analyst for Orange County, California and as an administrative assistant with
the Orange County Superior Court. Mr. Maier served in the US Marine Corps from 1969 to 1971 and has a
Masters of Public Administration degree from the University of Southern California.
3
0119-1511
Richard Isham, County Counsel, has served as County Counsel since 1980. He has practiced municipal law for
Oregon counties for 15 years. and is the past president of the Oregon County Counsel's Association and the
Municipal Law Section of the Oregon State Bar. Mr. Isham is a graduate of Southern Oregon State College and
the Northwestern School of Law. He was admitted to the Oregon Bar in 1975, and is admitted to the Federal
District Court for Oregon and the Federal 9th Circuit Court of Appeals. Mr. Isharn has extensive experience in the
financing of public improvement and facility acquisition projects.
STAFF
The County currently employs 815 people, 578 full time. and 237 seasonal. The County negotiates labor
agreements with three units. The International Union of Operating Engineers, Local 701 represents 66 public
works employees. Their contract expires December 31, 1994. 'Me Deschutes County Sheriffs Association
represents 61 Sheriffs Department employees. 'Meir contract expired June 30, 1992 and is currently negotiating a
new contract. The Oregon Public Employees Union, Local 503 of SEIU, AFL-CIO, CLC (Deputy District
Attorneys), a new bargaining unit, represents 9 Deputy District Attorneys is just starting negotiations.
4
THE PROJECT 0-119-1512
Proceeds of the Bonds will be used to provide financing for certain costs related to the construction of a
correctional facility in Deschutes County. In November, 1991, voters authorized the County to issue up to $9.5
million in general obligation bonds to construct the facility. In early 1992 the County issued $1,000,000 in
Limited Tax Bond Anticipation Notes, 1992 Series C to fund the initial costs relating to site acquisition and
preparation, engineering and environmental studies, architect fees and utility work. The Bonds are being issued to
the next phase of construction of the correctional facility. Next spring, the County intends to issue up to $2.5
million in remaining voter -approved authorization to complete construction and to redeem the outstanding Bond
Anticipation Notes, 1992 Series C.
The proposed 150 -bed correctional facility will be located on a minimum ten acre site (plus surrounding buffer
zones) in the County. The facility will be designed to be expandable to approximately 300 beds. Construction
bids are expected to be received early in 1993 and the facility is expected to be completed in early 1994.
Table 1
DESCHUTES COUNTY
Sources and Uses of Funds
Sources:
Par Amount of Bonds
Accrued Interest
Total Sources
Uses:
Underwriter's Discount
Deposit to Construction Fund
Costs of Issuance
Deposit to Debt Service Fund
Contingency
Total Uses
Source: Deschutes County
w
ilv= I K
7 1
DEBT INFORMATION
DEBT SUMMARY - As of October 14,1992 (includes this issue)
Outstanding debt:
Short-term:
Long-term:
Gross bonded debt (aft debt with a general obligation pledge)
Net direct debt (all debt paid in whole or part by taxes)
Net overlapping debt
Total net direct and overlapping debt
Population
Assessed Value
Gross Bonded Debt
Net Direct Debt
Net Overlapping Debt
Net Direct and Overlapping Debt
0119-1513
$1,675,000
$ 7,000,000
68,420,945
$76,555,945
DEBT LIMITATION
Oregon Revised Statutes 287.054 provides that the aggregate amount of general obligation bonded debt of
counties shall not at any time exceed two percent of the assessed value of all taxable property in the county.
1992-93 Assessed Value $5,109,065,093
Debt limitation (2% of AV) $102,181,302
Applicable bonded debt (includes this issue) 7,000,000
Limitation remaining $95,181,302
Percent of limitation issued 6.85%
DEBT AUTHORIZATION
A majority vote of the County voters casting ballots is required to authorize the issuance of general purpose
obligation bonds. County voters approved these bonds in an election held November 5, 1991.
DEBT MANAGEMENT
The County has not defaulted on any debt obligation.
FUTURE DEBT PLANS
The County intends to issue up to $2.5 million in additional general obligation indebtedness in the Spring of 1993
in order to complete the correction facility and to redeem the County's Bond Anticipation Notes, 1992 Series C.
rol
Percent of
Yalu
Per Capka
Aggegged Value
79,800
$5,109,065,093
$64,023
$7,635,000
$96
0.16%
$7,000,000
$88
0.15%
S68,420,945
$857
1.34%
$76,555,945
$959
1.50%
DEBT LIMITATION
Oregon Revised Statutes 287.054 provides that the aggregate amount of general obligation bonded debt of
counties shall not at any time exceed two percent of the assessed value of all taxable property in the county.
1992-93 Assessed Value $5,109,065,093
Debt limitation (2% of AV) $102,181,302
Applicable bonded debt (includes this issue) 7,000,000
Limitation remaining $95,181,302
Percent of limitation issued 6.85%
DEBT AUTHORIZATION
A majority vote of the County voters casting ballots is required to authorize the issuance of general purpose
obligation bonds. County voters approved these bonds in an election held November 5, 1991.
DEBT MANAGEMENT
The County has not defaulted on any debt obligation.
FUTURE DEBT PLANS
The County intends to issue up to $2.5 million in additional general obligation indebtedness in the Spring of 1993
in order to complete the correction facility and to redeem the County's Bond Anticipation Notes, 1992 Series C.
rol
Table 2
DESCHUTES COUNTY
Outstanding Obligations
As of October 14,1992
Date Final
GENERAL OBLIGATION BONDS Issued Maturity
A. Tax Supported
0119-1514
Amount
Issued
Correctional Facility (this issue) 12/01/92 12/01/12 $7,000,000
Total Tax Supported (Net Direct) Debt
B. Self Supporting
Norte
Total Self Supporting Debt
C. General Obligation Bancroft Bonds
Improvements
10/01/84
10/01/94
550,000
Improvements
12/01/85
12/01/95
940,000
Total G.O. Bancroft Debt
TOTAL GENERAL OBLIGATION DEBT (Gross Bonded Debt)
LEASE PURCHASE AGREEMENTS
Lease Purchase
11/01/88
5/01/99
1,500,000
Lease Purchase
6/01/89
6/01/09
1,800,000
Total
SHORT TERM DEBT
Limited Tax General Obligation Bond
Anticipation Notes, 1992 Series B 5/4/92 2/1/93 465,000
Limited Tax General Obligation Bond
Anticipation Notes, 1992 Series C 5/4/92 5/3/93 1,000,000
Limited Tax General Obligation Bond
Anticipation Notes, 1992 Series D 9/l/92 2/1/93 210,000
Amount
Outstanding
$7,000,000
7,000,000
0
0
off
JUN 1=1 #I
465,0001
LEASES AND CONTRACT PAYMENTS
AnnHal Payment
A. County Mainframe Computer, 7 year lease ($950,000 original loan)
with semi annual payments $180,115
B. Loaders for Public Works, 3 year lease ($405,000 original loan) 135,000
C. 14 G Motor Grader for Public Works, 3 year lease ($181,868) 64,000
D. Small Energy Loan, 15 year loan ($329.000) 37,740
E. Rosie Bareis Teen Center, 7 year loan ($300,000) 63,931
ACCRUED VACATION LIABILITY
As of October 1, 1992, the total potential liability for accrued vacation was $979,952.
1. These notes are expected to be retired from the proceeds of special assessment bonds to be sold early in 1993.
2. These notes are expected to be retired from the proceeds of general obligations bonds to be sold in the Spring
of 1993.
7
Table 3
0119-1515
DESCHUTES COUNTY
Overlapping Debt
As of October 14, 1992
1991-92
Gross
Net
Overlapp*ng
Gross
Net
Assessed
Bonded
Direct
Percent
Bonded
Direct
Overlapping District Valuaflon
DIU
DIU
OverlaR
DIU
DIU
Deschutes County SD I (Bend-LaPine) $3,168,323,585
$37,785,000 $37,785,000
100-00%
$37,785,000
$37,785.000
Deschutes County SD 6: (Sisters) 488,456,884
9,595,000
9,595,000
100.00
9,595,000
9,595.000
City Of Bend
9,916,156
5,910,000
100.00
9,916,156
5,910,000
City Of Redmond 265,985,353
6,624,000
4,839,000
100.00
6,624,000
4,839,000
Deschutes County SD. 1: 1977 Bonds
4,155,000
4,155,000
100.00
4,155,000
4,155,000
Deschutes County SD 2J
(Redmond -1978 Bonds) 860,965,884
2,005,000
2,005,000
95.56
1,916,076
1,916,076
Central Oregon Hospital District 561.687,641
1,535,000
1,535.000
100.00
1,535,000
1.535.000
Black Butte Ranch RFPD 220244,113
780,000
780,000
100.00
780,000
790,000
Deschutes County SD 1: 1973 Bonds
385,000
385,000
100.00
385,000
385,000
Central Oregon Park & Rec. District 561,687,641
380,000
380,000
100.00
380,000
380,000
La Pine Special Sewer District 15,073,278
366.628
366,628
100.00
366,628
366.628
Central Oregon Community College
420,000
420,000
80.46
337,940
337,940
Bend Metro Park & Rec. District
315,000
315,000
100.00
315,000
315,000
Laidlaw, Water District 9,969,436
94,301
94,301
100.00
94,301
94,301
Cloverdale RFPD 74,145,934
27,000
27,000
100.00
27,000
27,000
Deschutes County SD 2J
(Redmond -1990 Bonds) 782,580,678
1,520,000
0
95.13
1,446,075
0
Total
$75,658,176
J&,4 45
NOTE: Columns may not foot due to rounding.
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 improvement
bonds and self -
supported bonds are excluded.
Source: Municipal Debt Advisory Commission.
8
Table 4
DESCHUTES COUNTY
Combined Debt Service Requirement
Total Principal and Interest
Fiscal
Pro*ected
Tax -Supported*
Year
Bancroft
Series 1992
per $1,000
Ending
Bonds
G.O. Bondsl
Total
1993
$ 215,065
-
$ 215,065
1994
220,986
$ 605,599
826,585
1995
220,100
595,125
815,225
1996
138,375
607,110
745,485
1997
-
622.423
622,423
1998
621,268
621,268
1999
623,900
623,900
2000
625,268
625,268
2001
625,310
625,310
2002
623,968
623,968
2003
621,261
621,261
2004
622,161
622,161
2005
621,566
621,566
2006
624,190
624,190
2007
624,833
624.833
2008
623,535
623,535
2009
625,090
625,090
2010
624,410
624,410
2011
621,708
621,708
2012
621,800
621,800
2013
624.360
624.360
Total $ 794,526 $12,42LE.1 $13,199,409
Note: Columns may not foot due to rounding.
Preliminary; Subject to Change.
0119-1516
1. True Interest Cost estimated at 6.14 percent.
2. Assessed value projected to increase by two percent per year.
3. Projected tax rate on bonds currently or expected to be paid from property taxes.
4. Projected tax rate if all general obligation bonds paid from property taxes.
Source: Deschutes County.
VA
Pro*ected
Tax Rate
Tax Rate
Assessed
per $1,000
per $1,000
Valuation
(Tax -Supported)
(if all bonds
(in $000)2
Bonds only)
paid from taxet
$5,109,065
$0.00
$0.04
5211,246
0.12
0.16
5,315,471
0.11
0.15
5,421,781
0.11
0.14
5,530,216
0.11
0.11
1. True Interest Cost estimated at 6.14 percent.
2. Assessed value projected to increase by two percent per year.
3. Projected tax rate on bonds currently or expected to be paid from property taxes.
4. Projected tax rate if all general obligation bonds paid from property taxes.
Source: Deschutes County.
VA
0119-1517
PENSION PLAN
The County contributes to the Oregon Public Employees Retirement System (PERS), a multiple employer public
employee retirement system that sits as a common investment and administrative agent for all Oregon municipal
employers. Ile PERS is a defined benefit plan. The County payroll for employees covered by PERS for the year
ended June 30, 1991 was $11,009,776, and the total payroll was $11.899,963.
AU County employees are eligible to participate in PERS after six months of employment provided they work at
least 600 hours. Employees may retire with unreduced benefits at age 58 or after age 55 with 30 or more years of
creditable service. Retirement benefits, payable monthly for life equal to 1.67 percent of final average monthly
salary multiplied by the number of years of membership in PERS. Ile final average monthly salary is the greater
of the employees last three years of Wary, or the highest three calendar year salaries during their career in
covered employment� divided by 36. PERS also provides death and disability benefits. Benefits are established
by state statues.
Covered employees are required by state statutes to contribute 6 percent of their salary to the plan. The County
has established the policy of paying the employees required contribution as a fringe benefit. 'Me PERS Board
establishes the employer's rate of contribution to the plan. The rate for the employers share during the 1990-91
fiscal year was 7.92 percent. 'Me total contribution to the plan, both employer and employee contribution, paid by
the County was $1,588,483.
Table 5
DESCHUTES COUNTY
Employer Contributions to Retirement Plan
Fiscal
X=
1986-87
$1,025,212
1987-88
1,074,301
4.79%
1988-89
1,194,465
11.19
1989-90
1,368,092
14.54
1990-91
1,588,493
16.11
1991-921
1,704,090
7.28
1. Unaudited.
Source: Derived from audited financial statements and Deschutes County.
to
TAX INFORMATION 0119-1518
THE PROPERTY TAX LIMITATION MEASURE
(This summary of Article XI, Section I lb of the State of Oregon Constitution (Ballot Measure 5) does not purport
to be a complete explanation of this constitutional provision or any legislation enacted to implement Article )a
Section I I b.)
On November 6, 1990, Oregon voters approved a 1.5 percent property tax luinitation measure. Ballot Measure 5
(now Article XI, Section 1 lb of the Oregon Constitution). Therefore, beginning in fiscal year July 1, 199 1, taxes
imposed on property are separated into two categories: (1) property tax revenues raised to fund the state's public
school districts defined as "educational services, provided by some unit of government at any level from pre-
kindergarten through post -graduate training," and (2) "revenues raised to fund government operations other than
school systems."
Beginning in fiscal year 1991-92, property taxes for non -school government operations are limited to $10.00 per
$1,000 of Real Market Value (defined herein). There is no phase-in period. For public school systems
collections, Article XI, Section I lb of the Oregon Constitution phases in the property tax limitation rates over a
five-year period from $15.00 per $1,000 of Real Market Value ("RMV") in fiscal year 1991-92 to $5.00 per
$1,000 RMV in fiscal year 1995-96.
Exemptions from Property Tax Limitations
Sections I lb(3a) and (3b) of Article XI specifically exempt taxes imposed to pay principal and interest on bonded
indebtedness provided bonds are: (1) authorized by a specific provision of the Oregon Constitution, (2)
outstanding on November 6, 1990 and were for "capital construction or improvements," or (2) are approved by the
voters of a government unit and offered as general obligations for "capital construction or improvements." Capital
construction and improvements are not defined in Article XI Section I I b itself, but in new law which is described
in the next section.
Implementing Legislation
Chapter 459, 1991 Laws (House Bill 2550) is the statutory implementation of Article M Section I lb and became
effective on September 26, 1991. Chapter 459, 1991 Laws prescribes the overall tax assessment, administration
and collection methods and procedures which conform to the tax limitations and requirements of Article IX
Section I lb. In regard to bonded indebtedness, the new law also defines key terms including "Exempt Bonded
Indebtedness," "Capital Construction," and "Capital Improvements."
ORS 310.140(15)(b) exempts general obligation indebtedness issued before or on November 6, 1990, for capital
construction or improvements.
ORS 310.140(15)(c) exempts general obligation indebtedness issued after November 6. 1990 which is -voter
approved and used for capital construction or improvements.
ORS 310.140(17)-(19) defines capital construction and improvements to include all activities related to the
construction, modification, replacement, repair, remodeling and renovation of structures which have a useful life
of over one year-, the acquisition of land, or legal interest in land, in conjunction with the capital construction of a
structure; the acquisition and installation of machinery, equipment, furnishings and equipment which have a life
of over one year; and activities related to capital construction such as planning, design, studies, permits, and
obtaining financing. Structure is defined to mean any building or improvement to real property.
ORS 288.160 provides that under certain conditions general obligation refunding bonds that replace general
obligation bonds outstanding on November 6, 1990, may be issued and shall be deemed issued as of the date of
the general obligation bonds being replaced.
The Bonds satisfy ORS 310.140 (15)(c); therefore the ad valorem tax levy pledged for payment and security of the
Series A Bonds will not be subject under the limitations of Article XI, Section I lb of the Oregon Constitution.
I I
0119-1519
Real Market Value
Under new law, property taxes are calculated based on the "Real Market Value" (RMV) of each property. The
property identification date, the date on which the value of property is determined for tax purposes is now July 1,
the beginning of each tax. year. Section I lb(2)(a) of the measure defines Real Market Value as "the minimuin
amount of cash which could reasonably be expected by an informed seller, acting without compulsion, in an arms -
length transaction during the period for which the property is taxed." The State of Oregon Attorney General has
opined that the measure requires Real Market Value to be the minimum market value during the current tax year.
Chapter 459, 1991 Laws specifies that Real Market Value is based on the minimum market value of property
during the fiscal year. For 1991-92, interim procedures for calculating Real Market Value were developed by the
Oregon Department of Revenue. For subsequent years, the Department has developed permanent rules and
procedures for determining a property's Real Market Value. For the purposes of tax calculation Real Market
Value equals Assessed Value.
In the event that valuations decrease over the tax year, a reduced value appeals process is available to taxpayers.
commencing at the end of each fiscal year. (For further discussion, 'see the section titled "Assessment and
Equalization".)
SYNOPSIS OF PROPERTY TAX ADMINISTRATION
ne property tax is used by Oregon cities, counties. schools and other special districts to raise revenue to defray
the expense of local government. Ile State of Oregon has not levied property taxes since 1941 and obtains its
revenue principally from income and excise taxes.
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.
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 specified range of county -wide market value. Equalization of
values is performed by the County Board of Equalization. Administrative and judicial remedies are available to
property owners who disagree with assessments.
House Bill 2550, Chapter 459 of 1991 Laws, establishes a permanent equalization, notification and appeals
process effective fiscal year 1991-92. The property identification date is July 1, value notices and tax statements
are sent together in October, and valuation appeal proceedings commence after tax statements are received.
Under the new law there are two appeals processes, one which begins in December which permits property owners
to appeal the real market value shown on their October tax statements and a second appeals process beginning the
end of each fiscal year which allows property owners to challenge that the RMV of their property, determined as
of the prior July 1, was not the minimum RMV during the year.
The new law establishes county Boards of Ratio Review (BORR) to take over some functions which were
previously the responsibility of the County Boards of Equalization. Each BORR performs ratio review and
equalization and is responsible for the fiscal year end valuation appeals process. County Boards. of Equalization
remain responsible for hearing the regular RMV appeals which begin each December.
Property which is assessed for 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 fin-nishings (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 July I of each year.
12
11 -q
U-119-1,520
Ballot Measure 5 and House Bill 2550 (Chapter 459, 1991 Laws) do not affect fully exempt property. Taxes on
partially exempt property such as historic buildings and certain farm and forest lands are calculated by a statutory
valuation formula, which, depending on each property, may be less than if the taxes were based on RMV.
Tax Levy
The process of ascertaining and declaring the amount of taxes to be raised from taxpayers is termed making the
levy. 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 15th as part of the budget process. Annual budgets for
local units are based on a fiscal year which begins July Ist and ends the following June 30th. 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 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,
or real market 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. Special levies are limited in size by the net tax rate freeze
described later in this section.
Ballot Measure 5 and the new laws to implement the measure do not affect the existing tax levying authority of
local government units. However, Measure 5 does impose caps on total amounts of property tax revenues local
government units may collect. Should the local government and its surrounding government wiits' combined
taxes exceed the rate limits imposed by Ballot Measure 5, new law specifies that the taxes owed to each
jurisdiction will be reduced by an equal percentage in order to bring the total rate in line with the measure's
maximums.
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.
Collection
The County Assessor extends authorized levies and computes tax rates. The Tax Collector bills all taxes and
makes periodic remittances of collections to tax levying units. To comply with Article X1. Section I I b of the
Oregon Constitution, assessors are charged with calculating public school and other local government unit taxes
separately, calculating any tax rate reductions to comply with the measure's limits, and developing percentage
distribution schedules. The tax collector then reports to each taxing district. within five days, the amount of taxes
imposed.
As each year's taxes for all taxing bodies within a county are collected, the money is segregated into one pool,
with each taxing body sharing in the pool on the basis of its tax rate, regardless of the actual collection experience
within each taxing body. Therefore, in application, the amount of each taxing body becomes a pro rata share of
the total tax collection record of all taxing bodies within the county. Thus. an overall collection rate of 90 percent
of the county -wide levy indicates a 90 percent tax levy collection for each taxing body.
13
0119-1521
Taxes are levied and become a lien on July I (the lien date for personal property is July 1) and tax payments are
due November 15 of the same calendar year. Under the partial payment schedule the first third of taxes are due
November 15, the second one-third on February 15 and the remaining one-third on May 15.
A 3 percent discount is allowed if full payment is made by the November 15 due date, 2 percent for a two-thirds
payment. For late payments interest accrues after each trimester at a rate of 1.33 percent per month. Property
foreclosure proceedings are initiated four years after the tax due date.
Tax statements mailed to property owners disclose the current and prior year's real market value of property, the
tax rates and the amount of taxes due and the amount levied by each taxing unit segregated by public school
district and other local government districts. Tax rates, expressed as an amount per $1,000 of the assessed real
market value, are obtained by dividing the taxable real market value of a local unit into the taxes levied.
Additionally, tax statements show the taxes are due if levied without limitation to the rate limits imposed by
Article M, Section I lb of the Oregon Constitution. Should reductions be required. tax statements show the tax
reductions for each segregated group and provide the actual tax amount due.
Table 6
DESCHUTES COUNTY
Tax Collection Record
1988-93
Compounded
Annual Rate
of Change: 16.4%
1. The levy used in this table has been adjusted by certain offsets before calculation of the tax rate.
2. Does not include interest, therefore the percentage cannot exceed 100 percent.
Source: Deschutes County Assessor's Office.
14
Percent
Percent
Fiscal
Assessed
Percent
Total
Percent
Tax Rate
Collected
Collected as
X=
Valuation
Chnnge
L=1
Change
Per S1,000
Year of Levv
of 10/31/92
1987-88
$2,387,445,262
$5,235,930
$2.2000
87.4%
99.8%
1988-89
2,470,839,078
3.5%
5,562,328
6.2%
2.2511
88.2
99.8
1989-90
2,684,653,081
8.7%
5,892,037
5.9%
2.1947
90.6
98.5
1990-91
3,164,505,791
17.9%
6,208,682
5.4%
1.9714
92.8
97.4
1991-92
4,431,322,622
40.0%
6,554,563
5.6%
1.4874
93.2
95.3
1992-93
5,109,065,093
15.3%
7,920,636
20.8%
1.5600
N/A
N/A
1988-93
Compounded
Annual Rate
of Change: 16.4%
1. The levy used in this table has been adjusted by certain offsets before calculation of the tax rate.
2. Does not include interest, therefore the percentage cannot exceed 100 percent.
Source: Deschutes County Assessor's Office.
14
0119-15,4002
Table 7
DESCHUTES COUNTY
Consolidated 1992-93 Tax Rate
Code Area 01-011
Taxing Bodl
Governmental
School
G.O. Deb law
Deschutes County
S1.5600
---
--- $1.5600
Deschutes County Extension Service
0.0249
---
--- 0.0249
911 County Service District
0.1416
---
--- 0.1416
City of Bend
0.0975
---
$3.2187 3.3162
Bend Metro Park & Recreation District
0.9106
---
0.0283 0.9389
Bend/La Pine Administrative School District
---
$8.4041
--- 8.4041
Deschutes Co. Education Service District
---
0.1695
--- 0.1695
Centmi Oregon Community College
0,0127
1,1276
1,1403
Total
S 2,7473
$ 9.7012
$3,2470 $15.6955
1. Code Area 01-01 is the largest taxing code area in Deschutes County. The total assessed valuation within Code Area
0 1-0 1 is $1,262,567,032, or about 24.7% of the total value of the County.
Source: Deschutes County
Name
U.S. West Communications Inc.
Pacificorp (PP& L)
Pacific Gas Transrrdssion Co.
Sunriver Properties Oregon Ltd.
Concord Equity Multiplier (Bend) Inc.
DAW Forest Products Co. LP
Willamette Industries
Brooks Resources Corp.
150 Spear St. Assoc.
Bend Millwork Systems Inc.
Table 8
DESCHUTES COUNTY
Major Taxpayers
Enterpr*qe
1992-93
Assessed Value
Percent of
County Tota I
Telephone utility
$ 54,806,825
1.68%
Electric utility
32,868,200
OAI%
Natural gas utWty
27,912,286
0.35%
Resort developers
21,255,345
0.26%
Shopping maU owners
18,042,350
0.22%
Wood products
17,416,710
0.22%
Wood products
17,179,010
0.21%
Land developers
13,402,655
0.17%
12,011,600
0.15%
Wood products
11,762,260
0,15%
$226,657,241
2.81%
1. Total tax levied $81,108,492.99. However, do to compression (Measure 5) the extended tax is $80,601,493.33. See
"Tax Information," page 10.
Source: Deschutes County.
15
0119-1523
FINANCIAL INFORMATION
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.
'Me 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 the 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 leving of taxes and sets appropriations. The btidget
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.
The governmental fund types are maintained on the modified accrual basis of accounting. The propriety fund
types (enterprise and internal service funds) are accounted for utilizing the accrual basis of accounting. The
County's accounting practices conform to generally accepted accounting principles.
FISCAL YEAR: July I to June 30
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 Fbiancial 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.
AUDIT REQUIREMENTS
The Oregon Municipal Audit Law (ORS 297.405 - 297.555) requires an audit and examination be made of the
accounts and financial affairs of every municipal corporation at least once a year. Unless the municipality elects
to have the audit performed by the State Division of Audits, the audit shall be made by accountants whose names
are included on the roster prepared by the State Board of Accountancy.
The County audits for the fiscal years 1982-83 through 1990-91 were performed by Donaca Battleson & Co., P.C.
The auditors did not review this official statement and offer no opinion regarding the information or tables.
16
Fund
General
Insurance Fund
Table 9
DESCHUTES COUNTY
Summary of 1992-93 Budget
Appropriation
(in $000)
$15,629
2,556
Bancroft Bond $1,550
Redemption Fund
Community Corrections 1,129
Deschutes County 911 Service 1,071
Jail Construction Fund 10,100
Library 1,344
Local Improvement 1,625
District Project Fund
Mental Health Services 3,995
Road 10,595
School 1,013
0119-15/204 1 1
continued on the following page
17
Percent
Percent
Ma eor Revenue Source
Amount
(in $000)
ofFund
Revenue
Property Tax Collections
$6,332
40.5%
Transfer from Transient Room Tax
1,392
8.9
Building Fees
1,325
8.5
Beginning Cash
1,200
7.7
Beginning Cash
1,750
68.2
Transfer from Road Fund
242
9.4
Transfer from Sheriff levy
180
7.0
Transfer from General Account
145
5.7
Beginning Cash
$1,250
80.6%
Assessment Payments
250
16.1
State Grant
665
58.9
Work Program Receipts
170
15.0
Beginning Cash
100
8.9
Probation Supervision Fees
75
6.6
Property Tax Collections
646
60.3
State Grant
195
18.2
Beginning Cash
120
11.2
Bond Proceeds
9,500
94.1
Beginning Cash
600
5.9
Transfer from General Account
1,116
83.0
Beginning Cash
132
9.8
Bond Proceeds
670
41.2
Municipal Warrant Proceeds
440
27.1
Beginning Cash
430
26.5
State Grant
2,528
63.3
Title 19
427
10.7
Transfer from General Account
382
9.6
Motor Vehicle Revenue
3.970
37.5
Forest Receipts
2,728
25.7
Beginning Cash
2,618
24.7
Transfer from Solid Waste
669
6.3
Forest Receipts
733
72.3
Electric Co-op Tax
150
14.8
Federal Mineral Leases
88
8.7
continued on the following page
17
Fund
Sheriffs Law enforcement
Solid Waste
Transient Room Tax
(continued)
Table 9
DESCHUTES COUNTY
Summary of 1992-93 Budget
0 119 - 15 0'25
Percent Percent
Appropriation
(in $000)
M2ior Revenue Source
Amount
(in SOOO)
ofFund
Revenue
S4,979
Transfer from General Accoun
$3,672
73.8%
D=
Property Tax Collections
800
16.1
2,765
Beginning Cash
805
29.1
5/15/90
Franchise Fees
760
27.5
11/15/91
Private Disposal Fees
700
25.3
5/19/92
Commercial Disposal Fees
350
12.7
1,647
Room Tax
1,647
100.0
Other Funds* 7,152
TOTAL $67,150
* Includes funds with appropriations of less than $ 1.000,000.
Source: Deschutes County 1992-93 Budget
Table 10
18
DESCHUTES COUNTY
Budget and Bond Elections
D=
1=
Vote
Amount yja
Margin
La Passed (Failed)
5/15/90
Establish Tax Base
$7,790.237 7,486
8,832 (2,191)
5/15/90
G.O. Library Bonds
7,243,260 7,565
8,698 (1,133)
11/15/91
Jail Bonds
9,500,000 14,109
8,744 5,365
5/19/92
Establish Tax Base
9,970,000 8,330
13,867 (5,537)
9/15/92
Sheriffs 2yr. Levy
(per yr.) 909,292 12,811
10,812 1,999
Source:
Deschutes County
18
Table 11
DESCHUTES COUNTY
General Fund Balance Sheets
As ofJune 30 .
19
Unaudited
$1,134,508
839,485
220,977
$2.194.970
127,328
648,577
775,905.
1,419,065
$2,194,970
Assets
Cash and cash equivalents
$1,375,566
$1,717,403
$2,347,333
$1,482,908
Taxes Receivable
Property Taxes- net of allowance
for uncollectibles
982,480
1,047,684
843,808
846,398
Due from other funds
--
--
400,000
--
Accounts receivable
69,687
100,669
132,841
144,404
Total Assets
$2,427,733
$2,865,756
$3,723,982
$2,473,710
Liabilities and Fund Balances
Liabilities
Accounts payable
58,010
97,546
70,706
119,317
Deferred revenue
861,616
882,751
686,076
674,874
Total Liabilities
919,626
980,391
756,782
794,191
Fund Balance
Undesignated
1 M8.1 W
1,888,455
2,967,200
1,679,519
Total Liabilities and
Fund Balance
$2,427,933,
$2,865,756
$3,723,992
12-473,710
Source: Derived from annual financial
statements.
19
Unaudited
$1,134,508
839,485
220,977
$2.194.970
127,328
648,577
775,905.
1,419,065
$2,194,970
M
Table 12
DESCHUTES COUNTY
General Fund
Consecutive Statement of Revenues and Expenditures
Fiscal Year Ending June 30
Revenues
Local
Taxes - property
Taxes - other
Licenses and fees
Charges for services
Interest
Other
Intergovernmental
Counties and cities
State
Federal
Total Revenue
Expenditures
Current
General government
General service
Health and welfare
Capital outlay
Total expenditures
Excess (deficiency) of revenues
over expenditures
Other financing sources (uses)
Operating transfers in
Operating transfers out
Total other financing sources
Excess of revenues and other
sources over expenditures
and other uses
Fund Balance,
Beginning of year
Fund Balance, End of year
im
0119-15,2o7
Unaudited
im im im im
$5,072,045
$5,541,247
$6,106,655
$6,250,710
$6.611,849
71,187
61,528
112,466
--
--
1,296,100
1,703,906
2,437,858
2,573,500
3,003.809
232,383
328,656
476,808
244,573
380,671
35,401
334,576
403,146
349,902
260,084
--
134,980
55,681
236,830
49,416
41,170
44,179
46,885
159,425
54,193
602,786
721,085
785,005
1,095,736
1,185,476
295,783
360,661
337,431
402,189
406,790
10,761,935 11,312,865 11,951288
1,152,323 1,775,259 1,643,033 2,528,634 2,213,174
3,476,339 4,218,509 4,391,182 5,316,544 5,512,934
521,115 599,462 792,579 852,831 916,422
413,523 -- -- -- --
2,433,426 2,637,588 3,935,141 2,614,856 3,309,758
1,408,672 1,863,200 1,750,650 1,900,000 2,140,841
(3,523,036) (4,123,440) (4,604,046) (5,802,537) (5,711,053)
(2,114,364) (2,260,240) (2,853,396) (3,902,537) (3,570,212)
319,062
1,189,045
$1,508,107
Source: Derived from annual financial statements.
377,348
1,081,745
(1,287,681)
(260,454)
1,508,107
1,885,455
2,967,200
1,679,519
$1,885,455
$2,967,200
$1,679�519
$1,419,065
20
0 119 - 15 flo';'o 8
Table 13
DESCHUTES COUNTY
General Fund
First Quarter Statement of Revenues and Expenditures
As of September 30, 1991
(Unaudited)
Source: Deschutes County (unaudited).
21
M
Budgeted
Amount
Percent of
RESOURCES:
Actual
Estininted
Available fund balance
$1,200,000
$1,044,113
87.0%
Property taxes
6,331,892
---
0.0
Other revenues
3,395,750
1,378,239
41.0
Assessor's office
284,591
93,260
32.8
Clerk/Elections
549,590
182,409
33.2
Board of Commissioners
1,500
---
0.0
Data Processing
43,490
14,094
32.4
Building services
5,000
1068
21.4
District Attorney
77,912
30,237
38.8
Juvenile Division
193,123
22,806
11.8
Treasurer/Tax
116,150
30,725
26.5
Treasurer
275,000
47,657
17.3
Health
631,011
159,222
25.2
Veterwfs Service
12,500
3,125
25.0
Watermaster
57,549
13,124
22.8
Surveyor
18,500
10,022
54.2
Contract payments
64,000
--
--
Comunity development
2,381,350
716,632
30.1
Total Resources
LIU=
-2&M
EXPENDITURES:
Assessor's office
1,120,267
$264,132
24%
Clerk/Elections
379,265
86,984
23
Board of Commissioners
358=
83,289
23
Data Processing
732,229
206,994
28
Building services
878,741
152,739
17
District Attorney
798,481
195,317
24
Juvenile Division
898,114
205,482
23
Treasurer/Tax
268,174
49,713
19
Treasurer
137,230
21,692
16
Health
1,047,040
211,280
20
VeteraWs Service
36,710
8287
23
Watermaster
78,440
19,768
25
County counsel
160,720
29,842
19
Surveyor
22,585
5,891
26
Personnel
166,487
44,728
27
Comunity development
2,142,922
491,062
23
Other expenditures
5,734,260
935,460
16
Total Expenditures
L12=
Source: Deschutes County (unaudited).
21
M
011,9-154^9
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 to theCity of Bend. Other incorporated cities in
Deschutes County are Redmond and Sisters. 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. The Bend office of the U.S. Forest Service administers all recreation, timber evaluation,
and logging activities within the Deschutes National Forest.
LAND USE PLANNING
State law requires comprehensive land -use planning to be accomplished at the city and county levels'. To provide
common direction and consistency within each city and county comprehensive plan, the Oregon Legislature
directed the Land Conservation and Development Commission (LCDC) to adopt statewide planning goals and
guidelines. All zoning and development within a city or a county must conform to the appropriate comprehensive
plan. Each plan must address certain applicable goals. Nineteen statewide planning goals have been adopted
dealing with matters that include:
Economy Air, Water and Land Resources Quality
Housing Willamette River Greenway
Urbanization Public Facilities and Services
Transportation
Deschutes County adopted its comprehensive plan in 1979.
POPULATION
Deschutes County is the ninth largest county in Oregon, with a 1991 certified population estimate of 79,800. The
County is located in central Oregon. According to the U.S. Census. Deschutes County's population for 1990 was
75,600. Fifty-seven percent of Deschutes County residents live in the Bend area, nineteen perscent in the
Redmond area, twenty-two percent in the LaPine area, and eleven percent in the Sister area.
The County has experienced the most rapid growth of any county in the state during the past ten years. According
to the Center for Population Research and Census at Portland State University, population in Deschutes County
increased at an average annual rate of 2.1 percent between 1981 and 1991. Population increased from 1981 to
1982, decreased slightly in 1983, fluctuating between 64,000 and 65,400 through 1986. In 1987, the population
once again began to increase and has continued to do so since then.
EMPLOYMENT
The County's economic base is centered in agriculture, lumber and wood products, and tourism. Recent figures
compiled by the State of Oregon Employment Division indicate that manufacturing accounts for 15.5 percent of
total employment, wholesale and retail trade accounts for 27.1 percent of total employment, services account for
24.1 percent of total employment, and government employs 15.2 percent. The resident labor force in the County
increased from 32,000 in 1981 to 46,000 as of September 1992. This represents a 3.1 percent annual increase. In
1981, 14.7 percent of workers were employed in manufacturing, while 85.3 percent were in non -manufacturing
jobs. By 1991, manufacturing employment had decreased to 5.2 percent, and non-manufacuiring had increased to
28.3 percent. In September 1992, the raw unemployment rate was 8.2 percent in the County. Principal
employment is in wood products, agriculture, tourism, and recreation. However, the County is diversifying its
economy by attracting maufacturing and high-technology firms.
Employment at Mt. Bachelor during the winter ski season is approximately 668, 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.
22
Manufacturing, especially of wood products, accounts for a: significant portion of economic activity in Deschutes
County. Bend Millwork Systems, which employs over 1,500 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 176. 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 242, while employment in the two Redmond plants is
approximately 490.
Beaver Coaches, located in Bend. is engaged in the manufacture of motor homes and employs approximately 400.
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 135.
Trade. Employment in wholesale and retail trade accounted for 9.1 percent of the jobs in the County in 1991,
making this the largest sector. Between 1981 and 1991, trade grew at an annual rate of 27.1 percent, making it the
fastest growing sector in the County economy.
Food Products. This employment sector is the second largest source of jobs. Also, it was the second fastest
growing sector in the County, with an annual growth rate of 8.2 percent between 1981 and 1991.
Services. Employment in the services sector is the third largest source of jobs. With an annual growth rate of 8.1
percent between 1981 and 199 1, this sector continues growing.
ECONOMIC DEVELOPMENT
Deschutes County, its cities, civic organizations, and private businesses are developing diversification in their
economies. The County's strategy is to attract new business investment to Central Oregon that will create family -
wage employment opportunities for area residents, reduce the regioWs dependence on cyclical industries, and
provide the financial base to support the regioWs growth. Several local economic development organizations
operate to assist prospective companies in evaluating opportunities to expand or relocate in their respective
communities and to obtain the resources needed to establish their facilities.
For example, the Central Oregon Economic Development Council conducts a regional marketing and
development program, the Central Oregon Intergovernmental Council provides employment and training services,
administers five public leiiding programs, and writes grants for the County and cities, and the Redmond Economic
Development Action Program does local advocacy with prospects for the Redmond area.
Deschutes County was ranked 7th in assessed value statewide in 1991. Assessed value was approximately $3.16
billion in 1990 and $5.2 billion in 1992, a 62 percent increase in two years.
TOURISM AND RECREATION
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. Deschutes County
attracts recreation enthusiasts because of its year-round recreational opportunities, including downhill and cross
country skiing, fishing, hunting, whitewater rafting, golfing, and rock climbing. The County has many popular
attractions such as the High Desert Museum, Lava Lands State Park, Smith Rocks, the Newberry Volcanic
National Monument, and many waterways, including the Deschutes River and Cascade Lakes. The County also
has 16 golf courses, with three more almost complete and scheduled to open in 1993.
There are five golf courses in the planning stages at the current time. Bend is home of the world-famous annual
Pole Pedal Paddle race and the Cascade Cycling Classic, and Mt. Bachelor is one of the training sites for the
winter Olympics ski team. Expansion activities at Mt. Bachelor Ski Resort in recent years have further enhanced
the recreational sector of the County's economy.
Tourism/recreation plays a significant role in the region. In 1990, travelers spent nearly $170 million in
Deschutes County.
23
TRANSPORTATION 0-1 - i 9 - 15
Airports
Central Oregon is served by United Express and/or Horizon Air from San Francisco, Seattle, and Portland. Alaska
Airlines provides connections from most Western cities. All flights arrive at the Redmond Airport. where rental
cars and/or taxi and van service is available. A recent study concluded that activity at the Redmond Airport
generated almost $152 million in sales and S70 million in other income during 1987 in Deschutes County alone.
Since 1987, annual enplanements have increased by over 53 percent. Tliat means the airport's total economic
impact this year may approach S340 million. The Redmond Airport has recently been expanded in order to
accommodate the increased use. Additional airports in Central Oregon include: Sunriver Airport. Sisters Airport,
Bend Municipal Airport.
Bus
Greyhound operates daily service into Central Oregon, and several other private bus companies provide express
and charter service as well. Mt. Bachelor operates a free shuttle from its corporate office on Century Drive to the
West Village on the mountain during peak season. Greyhound service is available from Bend, Madras. Prineville,
and Redmond.
Passenger Rail
AMTRAK provides daily service from San Diego, Los Angeles, Oakland/San Francisco, and Redding northbound
and from Vancouver, B.C., Seattle, Portland, and Eugene southbound. Tle train serves Chemult, 40 minutes
south of Sunriver and 60 miles south of Bend on Highway 97.
Highways
Central Oregon has a nurnber of highways that connect to Interstates and metroploitan areas. Highways 97,20,
and 58 access Interstate 5 via South and WeSL Highways 97,197, 26, and 20 to the North and East join Interstate
84. State Highway 20 connects Bend to the cities of Salem and Eugene, Oregon and continues East into the State
of Idaho. In most cases any Oregon metropolitan destinantion can be reached within 3 hours.
AGRICULTURE
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 flamas) also accounts for a significant portion of
agricultural activity in the County. Gross farm sales in the County in 1991 were approximately $37 million with
animal ranching responsible for 83 percent of gross farms sales and crop harvesting responsible for 17 percent.
Commercial agriculture in Deschutes County consists primarily of field crops (alfalfa, other hay, some
peppermint, potatoes, and seed crops) and livestock operations. Irrigation is essential for crops and is used
extensively for irrigated pastures. Livestock sales make up $30 million and $21 million of the livestock sales was
from specialty animals, such as Llamas.
UTILITIES
Deschutes County is served by the Central Electric Cooperative, Pacific Power & Light, Cascade Natural Gas, and
U.S. West Comunications
PUBLIC FACILITIES
Water, Sewerage, and Landfill
These services are provided by each of the municipalities. Some suburban areas are served by private water
companies. The following are combined average rates (by month) for each service: Water: residential: $8.80 (1"
meter), commercial: $87.90 (Y meter), industrial: $201.47 (6meter). Sewerage: residential: $10.79. Landfills:
Cost per ton: $11.75
kyj
011 19_15*1r32
L
Public Safety
Each of the cities have their own city police force, the County's Sheriff deputies patrol nonurban areas, and the
Oregon State Police regional headquarters is housed in Bend at the intersection of two major arterials. Deschutes
County provides juvenile and adult corrections, incorporating electronic monitoring, parole and probation,
counseling, and other innovative programs.
Deschutes County citizens approved a bond measure for the construction of a new jail in November 1991. which
will increase the jail bed capacity by over 200 percent. Deschutes County operates the only lock-up facility; the
cities do not have their own city jails.
Fire
The three cities of Bend, Redmond, and Sisters, and communities of Sunriver and Black Butte Ranch have fire
departments. Communities such as LaPine, Cloverdale, Terrebonne, and other rural areas are served by fire
protection districts.
Health Care
The Central Oregon region has four hospitals. 222 staff doctors, 304 total beds, and 52 physicians with
specialities. All Central Oregon hospitals are served by Air Life of Oregon. There are 16 clinics or immediate
care facilities throughout Central Oregon.
Education
Four school districts service almost 16,000 students in Deschutes County. There are 19 elementary schools, 3
middle schools, 3 high schools, and 2 combined middle/high schools. 'Me Bend-LaPine School District is in the
process of constructing three new elementary schools and one new middle school. There are also nine private
elementary and secondary schools in Deschutes County. The Central Oregon Community College has its main
campus in Bend and six off -campus teaching centers throughout the region. ne Central Oregon Consortium for
Higher Education offers bachelor and master degree programs through COCC.
INFORMATION SOURCES
Historical data have been collected from generally accepted standard sources, usually from public bodies. In
Oregon, data are frequently available for counties and, -to a somewhat lesser degree, for cities. This statement
presents data for Deschutes County.
ECONOMIC AND DEMOGRAPHIC TABLES
The tables that follow provide further information about the economic and demographic nature of the County.
25
Table 14
DESCHUTES COUNTY
Population Estimates
0 -1, - 1-9. - 1 5L"'*'3
1982-1992
Compounded
Annual Rate
of Change 2.5% 1.2%
Source: Under State law, the State Board of Higher Education must estimate annually the population of Oregon
cities and counties so that shared revenues may be properly apportioned. The Center for Population
Research and Census at Portland State University performs this statutory duty.
�Fp
Deschutes
Percent
State of
Percent
County
Change
OreLron
Change
1982
64,350
1.1%
2,656,185
1983
63,300
(1.6)
2,635,000
(0.8)
1984
64,000
1.1
2,660,000
0.9
1985
65,400
2.2
2,675,800
0.6
1986
65,400
0.0
2,659,500
(0.6)
1987
65,600
0.3
2,690,000
1.1
1988
68,700
4.7
2,741,000
1.9
1989
70,600
2.8
2,791,000
1.8
1990
74,958
6.2
2,847,000
2.0
1991
79,800
10.2
2,930,000
4.6
1992
82,600
3.5
2,979,000
1.7
1982-1992
Compounded
Annual Rate
of Change 2.5% 1.2%
Source: Under State law, the State Board of Higher Education must estimate annually the population of Oregon
cities and counties so that shared revenues may be properly apportioned. The Center for Population
Research and Census at Portland State University performs this statutory duty.
�Fp
Table 16
DESCHUTES COUNTY
Labor Force
By Place of Residence
Resident Civilian
01
Total
Table 15
Unemployment
Percent of
DESCHUTES COUNTY
XAK WM
MM
Average Annual Unemployment
WM
1981 32.0
As a Percent of Labor Force
13.9
27.6
Deschutes Con= Orepon
Un*tedStates
1981
13.9% 9.7%
7.6%
1982
15.9 11.5
9.7
1983
13.3 10.8
9.6
1984
11.9 9.4
7.5
1985
10.9 8.8
7.2
1986
10.3 8.5
7.0
1987
7.8 6.2
6.2
1988
7.5 5.8
5.5
1989
6.8 5.7
5.3
1990
5.9 5.5
5.1
1991
6.7 6.0
6.8
Sept. 1992
8.2 7.4
7.4
Source: State of Oregon Employment Division, Department of Human Resources.
41.0
Table 16
DESCHUTES COUNTY
Labor Force
By Place of Residence
Resident Civilian
Unemployment as a
Total
Labor Force
Unemployment
Percent of
Employmentl
XAK WM
MM
Labor Force
WM
1981 32.0
4.5
13.9
27.6
1982 32.0
4.9
15.9
26.1
1983 32.0
4.2
13.3
27.4
1984 32.5
3.9
11.9
28.7
1985 33.0
3.6
10.9
29.4
1986 35.1
3.6
10.3
31.5
1987 35.4
2.8
7.8
32.7
1988 37.1
2.8
7.5
34.3
1989 40.0
2.7
6.8
37.3
1990 42.0
2.5
5.9
40.0
1991 44.2
3.2
7.3
41.0
Sept. 19922 46.0
3.3
7.2
42.7
1. Includes non-agricultural wage and salary, self-employed, unpaid family workers. domestics, agricultural
workers and labor disputants.
2. Preliminary and not seasonally adjusted.
Source: State of Oregon Department of Human Resources, Employment
Division.
27
011 '9'-1 mr*
Table 17
DESCHUTES COUNTY
Employment
Annual Averages and Percent Distribution by Industry
(By place of employment)
NOTE: Columns may not foot due to rounding.
Source: State of Oregon Department of Human Resources, Employment Division.
28
Annual
Annual
Average
Percent
Average
Percent
(000)
of Total
(000)
of Total
Total wage & salary employment
21,100
100.0%
33,600
100.0%
Manufacturing total
3,100
14.7
5200
15.5
Durable goods
2,800
13.3
4,500
13.4
Lumber & wood products
2,200
10.4
3,200
9.5
Other durable goods
600
2.8
1,300
3.9
Non -durable goods
400
1.9
700
2.1
Food products
8,100
39.5
8,200
25.6
Other non -durable products
300
1.4
500
1.5
Non -manufacturing total
18,000
85.3
28,300
84.2
Trade
5,300
25.1
9,100
27. 1
Services
4,300
20.4
8,100
24.1
Government
4,100
19.4
5,100
15.2
Finance, insurance & real estate
1,900
9.0
2,500
7.4
Transportation, communications
. & utilities
1,200
5.7
1,100
3.3
Construction & mining
1,200
5.7
2,400
7.1
NOTE: Columns may not foot due to rounding.
Source: State of Oregon Department of Human Resources, Employment Division.
28
Name
Bend Millwork Systems
St. Charles Medical Center
Bend-LaPine School District
Mount Bachelor Ski Area
Sunriver ResorttProperties
Warm Springs Tribal Government
State of Oregon
Deschutes County
Redmond School District
Beaver Coaches
Black Butte Ranch
Central Oregon Community College
Eagle Crest Partners, Ltd.
Safeway Stores, Inc.
Bend Memorial Clinic
Inn of the Seventh Mountain
Wagners Supermarkets
DAW Forest Products Co.
City of Bend
Central Oregon District Hospital - Redmond
DAW Remanufacturing
Table 18
DESCHUTES COUNTY
Major Employers 1992
Product or Servace
Wood Products
Hospital
Public Schools
Ski Slopes
Destination Resort Developers and Operators
Indian Reservation Government
State Government
County Government
Public Schools
Motor Homes
Vacation Resort
Education
Resort Operators
Grocery Store Chain
Medical Clinic
Vacation Resort
Grocery Store Chain
Wood Products - Bend
City Government
Hospital
Wood Products - Redmond
1. Denotes Seasonal employment.
Source: Central Oregon Economic Development Council, Inc.
Table 19
DESCHUTES COUNTY
Retail Trade
N 1= IT7111 �� �', go
1981
$403,304
$13,861.576
1982
416,133
14,487,767
1983
436,535
14,879,990
1984
340,299
14,267,550
1985
353,106
15,159,386
1986
364,508
15,872,208
1987
365,587
16,183,394
1988
402,009
17,724,240
1989
610,786
20,225.882
1990
681,612
22,416,796
1991
728,971
23,262,179
1981-91 Compounded
Annual Rate
of Change
5.53%
4.82%
Source: Sales & Marketing Management,
Survey of Buying Power.
29
1992
1500
1094
983
6681
6501
645
582
525
400
400
3801
319
2701
270
268
265
261
242
231
232
210
T
0 -3 t-'*
1-19-15`7
Table 20
DESCHUTES COUNTY
Income Estimates
Source: U.S. Department of Commerce, Bureau of Economic Analysis, Survey of Current Business
Sales & Marketing Management, Survey of Buying Power.
Table 21
DESCHUTES COUNTY
Gross Farm Sales
(in $000)
Deschutes County
Median Household
Total
Per
Capka Income
Mal
Effeefive Ruj*ng
fricome
Mai
Personal Income
Deschutes
State of
$12,559
Deschutes
State of
$1,734,921
(in millions)
Couna
Oregon
LLSA
County
Orepon
1981
$162.3
$9,159
$10,448
$10,949
$18,522
$19,036
1982
160.1
9,296
10,589
11,482
17,823
19,571
1983
176.0
10,301
11,281
12,100
19,615
20,825
1984
185.8
11,141
12,069
13,116
21,364
22,796
1985
787.0
11,795
12,641
13,899
19,982
21,385
1986
840.0
12,239
13,228
14,609
20,402
22.306
1987
900.0
12,899
13,851
15,425
20,217
22,309
1988
993.0
13,866
14,883
16,510
19,860
22,464
1989
1,137.0
15,520
16,009
17,592
21,452
23,624
1990
1,271.0
16,817
17,182
18,696
23,000
25,082
Source: U.S. Department of Commerce, Bureau of Economic Analysis, Survey of Current Business
Sales & Marketing Management, Survey of Buying Power.
Table 21
DESCHUTES COUNTY
Gross Farm Sales
(in $000)
*Preliminary estimates.
Source: Extension Economic Information Office, Oregon State University
30
Deschutes County
Oregon
C, -r=
LivestocklProducts
Mal
!2=
Livestock(Products
Mai
1981
$4,571
$7,988
$12,559
$1,136,904
$598,017
$1,734,921
1982
5,083
8,471
13,554
1,076,495
656,993
1,733,488
1983
6,724
13,599
20,323
1,154,481
598,468
1,743,949
1984
7,045
17,740
24,785
1,178,167
639,792
1,817,959
1985
6,632
18,590
25,222
1,188,638
625,739
1,814,377
1986
5,639
18,673
24,312
1,266,969
661,385
1,928,354
1987
5,282
21,749
27,031
1,333,924
680,650
2,014,574
1988
6,720
30,286
37,006
1,564,836
741,674
2,306,510
1989
6,994
30,674
37,668
1,767,943
767,924
2,535,867
1990
6,987
32,654
39,641
1,765,172
855,558
2,620,730
1991
6,286
30,811
37,097
1,734,676
817,235
2,551,911
*Preliminary estimates.
Source: Extension Economic Information Office, Oregon State University
30
k,ffM
1983
1984
1985
1986
1987
1988
1989
1990
1991
19921
Table 22
DESCHUTES COUNTY
Building Activity
Num her of Perm its
Single Multi -
470
108
394
18
547
100
449
50
524
3
703
441
966
91
974
95
919
156
791
136
(1) Through August only.
Source: State of Oregon Housing Agency.
31
Total Residential
Costs: Construction
and Alterations
(in $000)
$31,370
27,788
39,030
37,206
46,947
66,757
99,005
105,488
122,098
125,554
Total
Non -Residential
Costs: Construction
and Alterations
(in $000)
$8,666
16,467
15,487
11,376
14,712
23,334
28,637
9,520
14,545
28,742
RATING
The Bonds have been rated "_" by Moody's Investors Service, Inc., 99 Church Street, New York, New York.
10007 ("Moody's"). Such rating reflects only the view of the rating agency and an explanation of the significance
of the rating may be obtained from the rating agency.
There is no assurance that such rating will continue for any given period of time or that it will not be revised
downward or withdrawn entirely by the rating agency if, in its judgment. circumstances so warrant. Any such
downward revision or withdrawal of the rating may have an adverse effect on the market price of the Bonds.
LEGAL MATTERS
Preston Thorgrimson Shidler Gates & Ellis, Bond Counsel for the County, will render an opinion with respect to
the validity of and tax exemption on the Bonds. A copy of such opinion of Bond Counsel is included in Appendix
B of this Official Statement.
UNDERWRITING
. (the "Underwriter") has agreed, subject to certain conditions, to purchase the Bonds from
the County less an underwriter's discount of $ Ile Underwriter will be obliged to purchase all such
Bonds. if any such Bonds are purchased.
TAX EXEMPTION
General. In the opinion of Preston Thorgrimson Shidler Gates & Ellis, Portland, Oregon, Bond Counsel, interest
on the Bonds is excluded from gross income subject to federal income taxation under Section 103(a) of the
Internal Revenue Code of 1986 (die "Code"), provided the requirements of the Code described in this section
under the heading "Continuing Requirements" are complied with.
The Bonds are not private activity bonds and interest on the Bonds is not an item of tax preference for purposes of
determining alternative minimum taxable income for individuals or corporations under the Code. However,
interest on the Bonds is taken into account in the computation of adjusted current earnings for purposes of the
corporate alternative minimum tax under Section 55 of the Code and in the computation of the environmental tax
on corporations under Section 59A of the Code as more fully described in this section under the heading "Certain
Federal Income Tax Consequences."
Except as described herein. Bond Counsel expresses no opinion on any federal, state or local tax consequence
arising with respect to ownership of the Bonds.
Continuing Requirements. 'Me Code imposes a munber of requirements that must be satisfied for interest on
state or local obligations, such as the Bonds to be excludable from gross income for federal income tax purposes.
These requirements include limitations on the use of bond proceeds and the facilities financed or refinanced with
such proceeds, limitations on the investment of bond proceeds prior to expenditure and a requirement that excess
arbitrage earned on the investment of bond proceeds be paid periodically to the United States. The Issuer has
covenanted in the bond documents that it will comply with these requirements.
Bond Counsel's opinion will assume continuing compliance with the covenants of the Issuer contained in the bond
documents pertaining to those sections of the Code which affect the exclusion from gross income of interest on the
Bonds for federal income tax purposes and, in addition, will rely on representations by the Issuer with respect to
matters solely within the knowledge of the Issuer, which Bond Counsel has not independently verified. If the
Issuer should fail to comply with the covenants in the bond documents or if the foregoing representations should
be determined to be inaccurate or incomplete, interest on the Bonds could become taxable from the date of
delivery of the Bonds, regardless of the date on which the event causing such taxability occurs.
32
1
031-1-9-1540
Certain Federal Income Tax Consequences. The following is a discussion of certain federal tax matters under
the Code. This discussion does not purport to deal with all aspects of federal taxation that may be relevant to
particular bondowners. Prospective bondowners. particularly those who may be subject to special rules, are
advised to consult their own tax advisors regarding the federal tax consequences of owning and disposing of the
Bonds, as well as any tax consequences arising under the laws of any state or other taxing jurisdiction.
Alternative Minimum Tax on Corporations. Section 55 of the Code imposes an alternative minimum tax on
corporations equal to the excess of the tentative minimurn tax for the taxable year over the regular tax for such
year. The tentative minimum tax is based upon alternative minimum taxable income which is regular taxable
income with certain adjustments and increased by the amount of certain items of tax preference. One of the
adjustments is a portion (75% for any taxable year beginning after 1989) of the amount by which a corporation's
adjusted current earnings exceeds the corporations alternative miriiniurn taxable income (determined without
regard to such adjustment and the alternative tax net operating loss deduction). Interest on tax-exempt
obligations, such as the Bonds, is included in a corporation's adjusted current earnings.
Environmental Tax on Corporations. Section 59A of the Code imposes an environmental tax on corporations
for taxable years beginning before January 1. 1996 (subject to certain exceptions) equal to .12 percent of modified
alternative minimum taxable income (determined, in part, without regard to the alternative tax net operating loss
deduction) that is in excess of $2,000,000. Interest on tax-exempt obligations, such as the Bonds, is included in a
corporatiori's alternative minimum taxable income for purposes of this environmental tax. The environmental tax
is payable whether or not an alternative minimum tax is payable.
Qualified Tax -Exempt Obligations. The Issuer has designated the Bonds as Qualified Tax -Exempt Obligations
for banks, thrift institutions and other financial institutions so that such financial institutions will not be denied a
deduction of 100% of their interest expenses allocable to the Bonds. However, corporate tax preference rules
reduce by 20% the amount that may be deducted by such financial institutions for interest on funds allocable to
tax-exempt obligations such as the Bonds.
Borrowed Funds. 'Me Code provides that interest paid on funds bon -owed to purchase or carry tax-exempt
obligations during a tax year is not deductible. In addition, under rules used by the Internal Revenue Service for
determining when borrowed funds are considered used for the purpose of purchasing or when carrying particular
assets, the purchase of obligations may be considered to have been made with borrowed funds even though the
borrowed hinds are not directly traceable to the purchase of such obligations.
Property and Casualty Insurance Companies. The deduction for loss reserves for property and casualty
insurance companies is reduced by 15 percent of the sum of certain items, including the interest received on tax-
exempt Bonds, such as the Bonds.
Social Security and Railroad Retirement Benerits. The Code also requires recipients of certain Social Security
or Railroad Retirement benefits to take into account, in determining gross income, receipts or accruals of interest
that is exempt from federal income tax.
Branch Profits Tax. Certain foreign corporations doing business in the United States may be subject to a branch
profits tax on their effectively connected earnings and profits, including tax-exempt interest on obligations such as
the Bonds.
S Corporations. Certain S corporations that have subchapter C earnings and profits at the close of a taxable year
and gross receipts more than 25% of which are passive investment income, which includes interest on tax-exempt
obligations, such as the Bonds, may be subject to a tax on excess net passive income.
In the opinion of Bond Counsel, interest on the Bonds is exempt from present State of Oregon personal income
taxation.
33
01
FINANCIAL ADVISOR "19-1541
The County has retained Public Financial Management, Inc., Portland, Oregon, as financial advisor (the
"Financial Advisor") in connection with the Bonds and with respect to the authorization and issuance of the
Bonds. The Financial Advisor is not obligated to undertake, and has not undertaken to make, an independent
verification or to assume responsibility for the accuracy, completeness. or fairness of the information contained in
the Official Statement. Public Financial Management, Inc., is an independent advisory firm and is not engaged in
the business of underwriting, trading, or distributing municipal securities or other public securities. Public
Financial Management, Inc., is a wholly-owned subsidiary of Marine Midland Bank, N.A., New York. New York.
MISCELLANEOUS
All quotations from and summaries and explanations of provisions of law herein do not purport to be complete,
and reference is made to said laws for full and complete statements of their provisions.
This Official Statement is not to be construed as a contract or agreement between the County and the purchasers
or holders of any of the Bonds. Any statements made in this Official Statement involving matters of opinion are
intended merely as opinion and not as representation of fact. The information and expressions of opinion herein
are subject to change without notice, and neither the delivery of this Official Statement nor any sale made
hereunder shall, under any circumstances, create any implication that there has been no change in the affairs of the
County or its agencies, since the date thereof.
CONCLUDING STATEMENT
ne undersigned certifies that to the best of my knowledge and belief. (i) the Official Statement, both as of its date
and as of the date of delivery of the Bonds, does not contain any untrue statement of a material fact or omit any
statement of a material fact necessary to make the statements herein, in the light of the circumstances under which
they were made, not misleading and (ii) between the date of the Official Statement and the date of delivery of the
Bonds there has been no material change in the affairs (financial or others), financial condition, or results of
operations of the County except as set forth in or contemplated by the Official Statement.
DESCHUTES COUNTY
By:
Director Of Administration
And Personnel
34
0"
Appendix A
JUNE 30,1991 AUDITED FINANCIAL STATEMENTS (PARTIAL)
DONACA 225 NW Franklin Street
BATTLESON P.O. Box 591
KERKOCH &CO Bend. Oregon 97709
Telephone 503/389-3080 r
CERTIFIED PUBLIC ACCOUNTANTS Facsimile 503/389-3082
Board of Commissioners
Deschutes County, Oregon
We have audited the accompanying general purpose financial statements of Deschutes
County, Oregon, and the combining, individual fund, and account group financial
statements of Deschutes County, Oregon, as of and for the year ended June 30, 1991,
as listed in the table of contents. These financial statements are the responsibility
of Deschutes County, Oregon, management. Our responsibility is to express an opinion
on these statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards,
Governmental Auditing Standards, issued by the Comptroller General of the United
States, and provision of office of management and Budget Circular A-128 "Audits of
State and Local Governments", and the provisions of the nMinimum Standards for Audits
of Oregon Municipal Corporations" except that the county's general fixed asset records
were not adequate for us to apply the tests necessary to express an opinion on the
amount of aggregate original cost invested in the county's general fixed assets. Those
standards require that we plan and perform the audit to obtain reasonable assurance
about whether the general purpose financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting the
amounts and disclosures in the general purpose financial statements. An audit also
includes assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation. We
believe that our audit provides a reasonable basis for our opinion.
In our opinion, except for the amount of aggregate original cost invested in general
fixed assets, the general purpose financial statements referred to above present
fairly, in all material respects, the financial position of Deschutes County, Oregon,
as of June 30, 1991, and the results of its operations and cash' flows of its
proprietary fund types for the year then ended in conformity with generally accepted
accounting principles. Also, in our opinion, the combining, individual fund, and
account group financial statements referred to above present fairly, in all material
respects, the financial position of each of the individual funds and account groups
of Deschutes County, Oregon, at June 30, 1991, and the results of operation of such
funds and cash flows of individual proprietary funds for the year then ended, in
conformity with generally accepted accounting principles.
Our audit was made for the purpose of forming an opinion on the general purpose
financial statements taken as a whole and on the combining, individual fund, and
account group statements. The accompanying financial information listed as schedules
in the table of contents is presented for purposes of additional analysis and is not
a required part of the financial statements of Deschutes County, Oregon. The
information in these schedules has been subjected to the auditing procedures applied
in the audit of the general purpose, combining, individual fund, and account group
financial statements and, in our opinion, is fairly stated in all material respects
in relation to the financial statements of each of the respective individual funds and
account groups taken as a whole.
-X> JAL"'s—. i4c v -46J, 4 cc
By:_ %-�� c,4L.,
Richard W. Donaca
September 6, 1991
1
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PRES-FON
THoRGRimsoN
SHIDLER
GATES & ELLIS
ATTORNEYS AT LAW
Deschutes County
1164 N.W. Bond
Bend, Oregon 97701
Subject:
Appendix B
LEGAL OPUVION
O'l 97
- 1 '93 2 0 15 22, pTower
I I I S.W. Fifth Avenue
Portland. OR 97204-3688
Telephone: (503) 228-3200
Facsimile: (503) 248-9085
Draft Legal Opinion
<<Initial Purchaser>>
$7,000,000 Deschutes County, Deschutes County, Oregon General Obligation
Bonds, Series 1992
We have acted as bond counsel in connection with the issuance by Deschutes County, Oregon
(the "Issuer") of its General Obligation Bonds, Series 1992 (the "Bonds"), which are dated December 1, 1992 and
are in the aggregate principal amount of Seven Million Dollars ($7,000,000).
We have examined the law, a duly certified transcript of proceedings of the Issuer, prepared in
part by us, and other documents which we deem necessary to render this opinion.
We have relied on 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 investigation.
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 Bonds, 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.
Based on our examination, we are of the opinion, under existing law, as follows:
1. The Bonds have been legally authorized under and pursuant to the Constitution and
Statutes of the State of Oregon. The Bonds are valid and legally binding general obligations of the Issuer. The
Issuer has pledged its full faith and credit to the payment of the Bonds. The Bonds are payable from ad valorem
taxes which may be levied without limitation as to rate or amount on all taxable property within the boundaries of
the Issuer, to the extent necessary funds are not provided from other sources.
2. Interest on the Bonds is excluded from gross income for purposes of federal income
taxation under Section 103(a) of the Internal Revenue Code of 1986, as amended (the "Code"). We are also of the
opinion that the Bonds are not private activity bonds.
3. Interest on the Bonds is not an item of tax preference for purposes of the federal alter-
native minimum tax imposed on individuals or corporations, but is taken into account in the computation of
adjmsted current earnings for purposes of the corporate alternative minimum tax under Section 55 of the Code and
in the computation of the environmental tax on corporations under Section 59A of the Code.
4. Under the Code, the Issuer is required to comply with certain requirements relating to
the use of the facilities financed with the proceeds of the Bonds and the use and investment of the proceeds of the
Bonds. The Issuer has covenanted to comply with these requirements and our opinion assumes such compliance.
Anchorage - Bellevue— Seattle - Spokane - Tacoma - Washington NbT�IDESCHM.CO\COPR-FAC.9ZOPN.DOC
A Partnership Including A Professional Corporation
PRESTON THORGRIMSON SHIDLER GATES & ELLIS
JL
Legal Opinion
Page 2
Failure to comply with these requirements may cause the interest on the Bonds to be included in gross income for
federal income tax purposes retroactively to the date of issuance of the Bonds.
5. The Issuer has designated the Bonds as "qualified tax-exempt obligations" pursuant to
Section 265(b)(3) of the Code.
6. Interest on the Bonds is exempt from State of Oregon personal income taxes.
Except as stated herein, we express no opinion regarding any fcderal, state or local tax
consequences arising with respect to ownership of the Bonds. Owners of the Bonds should be aware that the
ownership of tax-exempt obligations may result in collateral tax consequences.
The opinions set forth above arc qualified only to the extent that certain rights and remedies of
the Bondowners may be limited or rendered ineffective by applicable bankruptcy, insolvency, reorganization,
moratorium or other laws orjudicial decisions or principles of equity relating to or affecting the enforcement of
creditors' rights or contractual obligations generally.
Our opinion is limited to matters of Oregon law and applicable federal law, and we assume no
responsibility as to the applicability of laws of other jurisdictions.
Respectfully submitted,
PRESTON THORGRIMSON SHIDLER GATES & ELLIS
Lawyers
Appendix C
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 June 30, 1990, covered
approximately 148,255 state and local government employees and 54,765 retired employee -beneficiaries. The
system is administered by the Oregon Public Employees Retirement Board.
Employee contributions and employer contributions are collected an used to fund a full formula pension
retirement allowance. The pension is based on a statutory formula and is set according to an 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, 1989, and the other figures represent
transactions during the 1989 calendar year -
Total system net assets available for benefits $11,293,600,000
Total system benefit payments made 2,366,380.600
Total employer contributions 363,819,927
Total employee contributions 191,097,679
Total system investment income 1,811,425,976
Total annual payroll of members covered by the system 3,250,900,000
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 once every four years. The most recently completed evaluation, conducted
by Milliman, and Robertson, Inc., indicates total system assets of $11,293,600 as of December 31, 1989. The
December 31, 1989, actuarial valuation of the system reported that the present value of projected benefits to be
earned in future years by present members is not fully funded. These two segments represent the unfunded
actuarial liability. This is the amount by which the accumulated entry age costs for all non -retired members of the
system exceed the assets available to meet benefit commitments.
'Me unfunded actuarial accrued liability is amortized over a rolling 30 -year period, commencing on the date of the
actuarial valuation. The use of a rolling amortization period is a change from the fixed period ending in 2005
which had been utilized for most employers prior to the December 31, 1987, actuarial valuation. This change had
no effect on the actuarial accrued liability at December 31, 1987 and 1988. Ile decrease in the unfunded
actuarial liability from $881,800,000 in 1987 to ($73,400,000) in 1989 reflects the net impact of actuarial gains
and losses, revised actuarial assumptions and benefit improvements enacted in 1989. A significant factor was an
investment gain during 1988 and 1989 of $1,838,700.
PERS funding policy for monthly employer contributions at actuarial determined rates that, expressed as a level
percentage of annual covered payroll, coupled with employee contributions, are sufficient to accumulate sufficient
assets to pay benefits when due.
Employer contributions for 1989 were $363,819,927, equivalent to 11.19 percent of members' aggregate annual
salaries of $3,250,900,000. Amounts actually contributed by employers were in accordance with actuarially
computed funding requirement determinations. Employer contributions consist of three components: a normal
cost rate, an unfunded liability contribution rate, and a rate for ad hoc increases.
The rates for political subdivisions are presented in the aggregate. Actual rates for political subdivisions vary by
employer. Effective January 1, 1989, the rates, as a percent of members' salaries, for the employer groups are:
state agencies and community colleges, 10.22 percent-, schools, 11.80 percent; political subdivisions — police and
fire, 17.53 percent, general services employees, 7.52 percent. All state agencies and community colleges are
considered one employer, and for the purposes of actuarial comparison under ORS 237.081(l), all school districts
are also regarded as constituting one employer. The current rates will be retained for all employer groups until
July 1992, at which time the rate for state agencies and community colleges will be 8.59 percent and the rate for
schools will be 10.86 percent.
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