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21 ATTACHMENT 3
City of Pleasanton
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CITY CLERK
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AGENDA PACKETS
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2021
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072021
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21 ATTACHMENT 3
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7/15/2021 2:13:11 PM
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7/15/2021 1:02:08 PM
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CITY CLERK
CITY CLERK - TYPE
AGENDA REPORT
DOCUMENT DATE
7/20/2021
DESTRUCT DATE
15Y
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21
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\CITY CLERK\AGENDA PACKETS\2021\072021
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<br />87 <br />adopt or perform its obligations under any of the foregoing, or (v) wherein an unfavorable decision, <br />ruling or finding would materially adversely affect the operations or finances of LAVWMA. <br /> <br />Each Member will certify on the delivery date of the 2021 Bonds that there is no action, <br />suit, proceeding, inquiry or investigation, at law or in equity, before or by any court, governmental <br />agency, public board or body, pending or, to the best knowledge of the Member after reasonable <br />investigation, threatened against the Member (i) affecting the existence of the Member or the titles <br />of its officers to their respective offices or contesting or (ii) affecting, as to the Member, the validity <br />or enforceability of the Sewer Service Contract or (iii) contesting the powers of the Member or its <br />authority to enter into, adopt or perform its obligations under any of the foregoing, or (iv) wherein <br />an unfavorable decision, ruling or finding would materially adversely affect the finances and <br />operations of the Member. <br /> <br /> <br />TAX MATTERS <br /> <br />Federal Tax Status. In the opinion of Jones Hall, A Professional Law Corporation, San <br />Francisco, California, Bond Counsel, subject, however to the qualifications set forth below, under <br />existing law, the interest on the 2021 Bonds is excluded from gross income for federal income tax <br />purposes and such interest is not an item of tax preference for purposes of the federal alternative <br />minimum tax. <br /> <br />The opinions set forth in the preceding paragraph are subject to the condition that <br />LAVWMA comply with all requirements of the Internal Revenue Code of 1986, as amended (the <br />"Tax Code") that must be satisfied subsequent to the issuance of the 2021 Bonds in order that <br />the interest thereon be, and continue to be, excludable from gross income for federal income tax <br />purposes. LAVWMA has made certain representations and covenants in order to comply with <br />each such requirement. Inaccuracy of those representations, or failure to comply with certain of <br />those covenants, may cause the inclusion of such interest in gross income for federal income tax <br />purposes, which may be retroactive to the date of issuance of the 2021 Bonds. <br /> <br />Tax Treatment of Original Issue Discount and Premium. If the initial offering price to <br />the public at which a 2021 Bond is sold is less than the amount payable at maturity thereof, then <br />such difference constitutes "original issue discount" for purposes of federal income taxes and <br />State of California personal income taxes. If the initial offering price to the public at which a 2021 <br />Bond is sold is greater than the amount payable at maturity thereof, then such difference <br />constitutes "bond premium" for purposes of federal income taxes and State of California personal <br />income taxes. <br /> <br />Under the Tax Code, original issue discount is treated as interest excluded from federal <br />gross income and exempt from State of California personal income taxes to the extent properly <br />allocable to each owner thereof subject to the limitations described in the first paragraph of this <br />section. The original issue discount accrues over the term to maturity of the 2021 Bond on the <br />basis of a constant interest rate compounded on each interest or principal payment date (with <br />straight-line interpolations between compounding dates). The amount of original issue discount <br />accruing during each period is added to the adjusted basis of such 2021 Bonds to determine <br />taxable gain upon disposition (including sale, redemption, or payment on maturity) of such 2021 <br />Bond. The Tax Code contains certain provisions relating to the accrual of original issue discount <br />in the case of purchasers of the 2021 Bonds who purchase the 2021 Bonds after the initial offering <br />of a substantial amount of such maturity. Owners of such 2021 Bonds should consult their own <br />tax advisors with respect to the tax consequences of ownership of 2021 Bonds with original issue
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