Stone & Youngberg

NEW ISSUE NO RATING In the opinion of· Quint & Thimmig LLP, San Francisco, CalifOrnia, Bond Counsel, subject, however, to certain qualifications described herein, under existing law, interest on the Bonds is excludablefrom gross income of the owners thereoffor federal income tax purposes and is not included as an item of tax preference in computing the federal alternative minimum tax for individuals and corporations under the Internal Revenue Code of 1986, as amended, but is taken into account in computing an adjustment used in determining the fi?.deral alternative minimum taxjOr certain corporations. In the jitrther opinion of.Bond Counsel, such interest is exempt from California personal income taxes. See "LEGAL MATTERS - Tax Matters" herein. CITY OF PALMDALE LIMITED OBLIGATION REFUNDING BONDS lOTH STREET WEST ASSESSMENT DISTRICT NO. 88-1 (REASSESSMENT AND REFUNDING OF 2005), $8,675,000 SERIES A $3,436,684 SUBORDINATE SERIES B Dated: Date of Issuance Due: September 2, as shown below The Series A Bonds and the Subordinate Series B Bonds (collectively, the "Bonds") are being issued by the City of Palmdale, California (the "City") pursuant to a Fiscal Agent Agreement, dated as of July 1, 2005 (the "Fiscal Agent Agreement"), between the City and U.S. Bank National Association, as fiscal agent (the "Fiscal Agent") and the Refunding Act of 1984 for 1915 Improvement Bonds, for the following purposes: (i) To refund a portion of the City's outstanding Limited Obligation Improvement Bonds, City of Palmdale 10th Street West Assessment District No. 88-1 Series 1989-A (the "Prior Assessment Bonds"). The City will use proceeds of special tax bonds to be concurrently issued by the City for and on behalf of its Community Facilities District No. 05-1 (Trade and Commerce Area) ("CFD 05-1") to refund the remaining Prior Assessment Bonds. (ii) To make an initial deposit into a debt service reserve fund for the Series A Bonds (there is no debt service reserve fund for the Subordinate Series B Bonds). (iii) To pay certain costs of issuance associated with the Bonds. The Series A Bonds will be issued in the denominations of $5,000 or any integral multiple thereof, and the Subordinate Series B Bonds will be issued in the denominations of$250,000 or any integral multiple of$5,000 in excess thereof (except that one Subordinate Series B Bond may be in an odd amount and except as otherwise described in this Official Statement). Interest on the Bonds is payable on March 2, 2006 and semiannually thereafter on September 2 and March 2 each year. The Series A Bonds will be initially issued only in book-entry form and registered to Cede & Co. as nominee of The Depository Trust Company, New York, New York ("DIC"), which will act as securities depository of the Series A Bonds. Principal and interest (and premium, if any) on the Series A Bonds is payable by the Fiscal Agent to DIC, which remits such payments to its Participants for subsequent distribution to the beneficial owners. As long as DIC acts as securities depository for the Series A Bonds, purchasers of beneficial interests in the Series A Bonds will not receive certificates evidencing their interests in the Series A Bonds and will not be paid dmctly by the Fiscal Agent. See "THE BONDS - Book-Entry Only System" and APPENDIX G - "DIC and the Book-Entry Only System" herein. The Subordinate Series B Bonds will not be issued in book-entry form. Principal and interest (and premium, if any) on the Subordinate Series B Bonds is payable by the Fiscal Agent to the registered o-wners thereof. Debt service due in each Bond Year on the Bonds will be paid from special assessments ("Reassessments") levied in the City's 10th Street West Assessment District No. 88-1 (the "District"). Although the Fiscal Agent Agreement provides that debt service on the Series A Bonds will be paid from available funds before such funds are used to make payments on the Subordinate Series B Bonds, the Reassessments used to pay both series of Bonds are secured by a single lien on each parcel of taxable property in the District. The City will establish a debt service reserve fund for the Series A Bonds under the Fiscal Agent Agreement, but will not establish a debt service reserve fund for the Subordinate Series B Bonds. The Subordinate Series B Bonds are subject to restrictions on transfer. See ""THE BONDS -Payment, Registration, Transfer and Exchange of Bonds" and "'SPECIAL RISK FACTORS -Transfer Restrictions". The Bonds are subject to redemption prior to maturity as described herein. NEITHER THE FAITH AND CREDIT NOR THE TAXING POWER OF THE CITY, THE COUNTY OF LOS ANGELES, THE STATE OF CALIFORNIA OR ANY POLITICAL SUBDIVISION THEREOF IS PLEDGED TO THE PAYMENT OF THE BONDS. MATURITY SCHEDULE (see inside cover) This cover page contains certain information for quick reference only. /tis not a summary ofthe issue. Potential investors must read the entire Official Statement to obtain information essential to the making ofan informed investment decision with respect to the Bonds. Investment in the Bonds involves risks which may not be appropriate for some investors. See "SPECIAL RISK FACTORS" for a discussion of special risk factors that should be considered in evaluating the investment qualiry of the Bonds. The Bonds will be offered when, as and if issued and received by the Underwriter, subject to the approval as to their legality by Quint & Thimmig LLP, San Francisco, California, Bond Counsel. In addition, certain legal matters will be passed upon for the City by the City Attorney. Jones Hall, A Professional Law Corporation, San Francisco, California, is acting as disclosure counsel to the City. It is anticipated that the Bonds in definitive form will be available for delivery on or about August 2, 2005. STONE & YOUNGBERG LLC Dated: June 30, 2005. MATURITY SCHEDULE (Base CUSIP': 69672H) Series A Bonds Maturity Principal lnterest (September 2) Amount Rate Price CUSIPNo.' 2006 $ 765,000.00 5.000% 101.578 DWI 2007 835,000.00 5.000 102.580 DX9 2008 875,000.00 4.625 102.229 DY7 2009 920,000.00 4.625 102.329 DZ4 2010 960,000.00 4.625 101.694 EA8 2011 1,005,000.00 4.750 101.846 Ell6 2012 1,050,000.00 4.875 102.249 EC4 2013 1,105,000.00 4.875 101.835 ED2 2014 1,160,000.00 5.000 102.193 EEO Subordinate Series B Bonds $3,436,684 5.75% Term Subordinate Series B Bond due September 2, 2014, Price: 59.146 CUSIPt No. EF 7 r Copyright 2003-2005, American Bankers Association. CUSIP data herein is provided by Standard & Poor's CUSIP Service Bureau, a division of The McGraw-Hill Companies, Inc. CITY OF PALMDALE CITY COUNCIL James C. Ledford, Jr., Mayor Mike Dispenza, Mayor Pro Tem Steven D. Hofbauer, Councilmember Richard Loa, Councilmember James A. Root, Council member CITY STAFF Robert W. Toone, Jr., City Manager Stephen Williams, Assistant City Manager Betsy St. John, Director of Finance Leon Swain, Director of Public Works Matthew Ditzhazy, City Attorney Victoria L. Hancock, CMC, City Clerk PROFESSIONAL SERVICES BOND COUNSEL Quint & Thimmig LLP San Francisco, California DISCLOSURE COUNSEL Jones Hall, A Professional Law Corporation San Francisco, California FINANCIAL ADVISOR Northcross, Hill & Ach, Inc. Petaluma, California REASSESSMENT ENGINEER NBS Government Finance Group Temecula, California FISCAL AGENT U.S. Bank National Association Los Angeles, California VERIFICATION AGENT Grant Thornton LLP San Francisco, California APPRAISER (1 parcel only) Valentine Appraisal & Associates Santa Clarita, California (THIS PAGE INTENTIONALLY LEFT BLANK) CITY OF PALMDALE Los Angeles County, CA '-'"" TABLE OF CONTENTS INTRODUCTION ............................................................................................................................ 1 The City ...................................................................................................................................... l The District and the Prior Assessment Bonds ........................................................................... 1 The Reassessments and Refinancing of the Prior Assessment Bonds ....................................... 2 Sources of Payment for the Bonds ............................................................................................. 3 Subordinate Nature of Subordinate Series B Bonds; No Reserve Fund .................................... 3 Description of the Bonds............................................................................................................ 3 Professionals Involved in the Offering ..................................................................................... .4 Authority for Issuance of the Bonds ......................................................................................... .4 Continuing Disclosure .............................................................................................................. .5 PLAN OF REFINANCING ............................................................................................................. .5 Refunding of the Prior Assessment Bonds ............................................................................... .5 Estimated Sources and Uses of Funds ....................................................................................... 6 Ongoing Efforts to Resolve Tax and Assessment Delinquencies and Bond Defaults .............. .7 THEBONDS .................................................................................................................................... 7 General Provisions ....................................................................................................................

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