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1787 - Ordinance - Relating to Contracting IndebtednessNOTICE OF CITY OF PORT ORCHARD ORDINANCE The following is a summary of an Ordinance approved by the Port Orchard City Council at their regular Council meeting held December 13, 1999. ORDINANCE NO. 1787 AN ORDINANCE OF THE CITY OF PORT ORCHARD, WASHINGTON RELATING TO CONTRACTING INDEBTEDNESS; PROVIDING FOR THE ISSUANCE OF A $3,300,000 PAR VALUE LIMITED TAX GENERAL OBLIGATION BOND OF THE CITY FOR GENERAL CITY PURPOSES TO PROVIDE FUNDS WITH WHICH TO PAY TO REDEEM THE CITY'S NOTE NOT TO EXCEED $3,300,000 LIMITED TAX GENERAL OBLIGATION ANTICIPATION NOTE, 1998 (LINE OF CREDIT); FIXING THE DATE, FORM, MATURITY, INTEREST RATE, TERMS AND COVENANTS OF THE BOND; ESTABLISHING A BOND REDEMPTION FUND; AND APPROVING THE SALE AND PROVIDING FOR THE DELIVERY OF THE BOND TO THE UNITED STATES OF AMERICA, ACTING THROUGH THE UNITED STATES DEPARTMENT OF AGRICULTURE. Copies of Ordinance No. 1787 are available for review at the office of the City Clerk of the City of Port Orchard. Upon written request a statement of the full text of the Ordinance will be mailed to any interested person without charge. Thirty days after publication, copies of Ordinance No. 1787 will be provided at a nominal charge. City of Port Orchard Cilu dA Michelle Merlino Deputy Clerk Publish: Port Orchard Independent December 22, 1999 ORDINANCE NO. 1787 AN ORDINANCE OF THE CITY OF PORT ORCHARD, WASHINGTON RELATING TO CONTRACTING INDEBTEDNESS; PROVIDING FOR THE ISSUANCE OF A $3,300,000 PAR VALUE LIMITED TAX GENERAL OBLIGATION BOND OF THE CITY FOR GENERAL CITY PURPOSES TO PROVIDE FUNDS WITH WHICH TO PAY TO REDEEM THE CITY'S NOTE NOT TO EXCEED $3,300,000 LIMITED TAX GENERAL OBLIGATION ANTICIPATION NOTE, 1998 (LINE OF CREDIT); FIXING THE DATE, FORM, MATURITY, INTEREST RATE, TERMS AND COVENANTS OF THE BOND; ESTABLISHING A BOND REDEMPTION FUND; AND APPROVING THE SALE AND PROVIDING FOR THE DELIVERY OF THE BOND TO THE UNITED STATES OF AMERICA, ACTING THROUGH THE UNITED STATES DEPARTMENT OF I5C3.01Cdi1ftn n WHEREAS, the City of Port Orchard, Washington (the "city"), by Ordinance No. 1733, authorized the issuance of a note not to exceed $3,300,000 Limited Tax General Obligation Bond Anticipation Note, 1998 (Line of Credit) (the "Outstanding Note") pending the issuance of bonds for the purpose of providing funds to pay the cost of construction of a new municipal facility to serve the police, municipal court, administration, and public works; and WHEREAS, the city has heretofore entered into a loan agreement with the United States of America, acting through the United States Department of Agriculture, providing for a loan in the amount of $3,300,000 under the conditions, terms and specifications set forth in such loan agreement, such loan agreement to be evidenced by the issuance and sale of a single limited tax general obligation bond in the principal amount of $3,300,000; and WHEREAS, the city has determined that it is in the best interest of the city to issue its limited tax general obligation bond for the purpose of redeeming the Outstanding Note and paying the cost of issuance and sale of the bond; now therefore, THE CITY COUNCIL OF THE CITY OF PORT ORCHARD, WASHINGTON, DOES HEREBY ORDAIN AS FOLLOWS: SECTION 1 Definitions. As used in this ordinance, the following words shall have the following meanings: "Bond" means the Limited Tax General Obligation Bond, 1999, of the city issued pursuant to and for the purposes provided in this ordinance. "Bond Fund" means the City's Limited Tax General Obligation Bond Fund, 1999, designated as such in Section 14 of this ordinance. Ordinance No. 1787 Page 2 of 6 "Bond Register" means the registration books of the Bond Registrar on which the recorded name and mailing address of the owner of the Bond. "Bond Registrar" means the City Treasurer of the City of Port Orchard, Washington. "City" means the City of Port Orchard, Washington. "Code," means the United States Internal Revenue Code of 1986, as amended, and applicable rules and regulations promulgated thereunder. "Installment Payment Date" means the date 12 months following the dated date of the Bond and the same date of every year thereafter to and including the final maturity of the Bond. "Purchaser" means the United States of America, acting through the United States Department of Agriculture, or its registered assigns. SECTION 2. Debt Capacity. The assessed valuation of the taxable property within the city as ascertained by the last preceding assessment for city purposes for the calendar year 1999 is $366,565,792, and the city has outstanding general indebtedness evidenced by limited tax general obligation bond anticipation note in the principal amount of $3,300,000 incurred within the limit of up to 1 '/2% of the value of the taxable property within the city permitted for general municipal purposes without a vote of the qualified voters therein. The city has no outstanding unlimited tax general obligation bonds within the limit of up to 2 Y2% of the value of the taxable property within the city for capital purposes only. The amount of indebtedness for which obligations are authorized herein to be issued is $3,300,000. SECTION 3. Authorization of Bond. The city shall issue its negotiable limited tax general obligation bond evidencing that indebtedness in the amount of $3,300,000 for general city. purposes to provide the funds to redeem the Outstanding Note and to pay the costs of issuance and sale of the Bond (the "costs of issuance"). The general indebtedness to be incurred shall be within the limit of up to 1 %2% of the value of the taxable property within the city permitted for general municipal purposes without a vote of the qualified voters therein. SECTION 4. Description of Bond. The Bond shall be called the Limited Tax General Obligation Bond, 1999, of the city; shall be in the aggregate principal amount of $3,300,000; shall be dated as the date of its delivery to the purchaser; shall be issued only in registered form as to both principal and interest on the Bond Register maintained by the City Treasurer, who is designated the Bond Registrar; shall be numbered R-1; and shall bear interest at the rate of 5.00% per annum (computed on the basis of 3651366-day year for the actual number of days elapsed). The Bond shall be payable in annual installments of $264,825 on each Installment Payment Date, with the first payment due on the date 12 months from the date of issuance of the Bond and the last payment on the date that is 20 years after the date of issuance of the Bond, except that the last payment shall be in an amount equal to the remaining principal and interest due on the Bond. Ordinance No. 1787 Page 3 of 6 The life of the Municipal Facility to be constructed with the proceeds of the Bond exceeds the term of the Bond. SECTION 5. Registration and Transfer of Bond. The Bond shall be issued only in registered form as to both principal and interest and shall be recorded on the Bond Register maintained by the Bond Registrar. The Bond Register shall contain the name and mailing address of the owner of the Bond and the principal amount and number of the Bond held by the owner. The Bond may be transferred only in whole and only if endorsed in the manner provided thereon and surrendered to the Bond Registrar. Any transfer shall be without cost to the owner or transferee and shall be noted on the Bond Register. SECTION fi. Payment of Bond. Installments of principal and interest on the Bond shall be payable in lawful money of the United States of America and shall be paid by check, wire transfer, or draft mailed by the Bond Registrar on the installment Payment Date to the registered owner at the address appearing on the Bond Register, expect that the last installment of principal and interest shall be payable upon presentation and surrender of the Bond by the registered owner at the office of the Bond Registrar in Port Orchard, Washington. Thirty days following the surrender and payment in full of the Bond, the Bond Registrar shall destroy the Bond. SECTION 7. Optional Prepayment and Notice. The city may, from time to time, prepay the entire unpaid principal of the Bond or such lesser portion of the unpaid principal amount thereof as the city may determine. Upon prepayment of a portion of the principal of the Bond, the amount of the annual installments of principal and interest shall remain unchanged but shall be recalculated to reflect the reduction in the principal amount remaining unpaid and the resulting increase in the portion of each installment payment credited to the principal of the Bond. The final Installment Payment Date shall be adjusted to reflect the prepayment and increased amount applied to principal from each annual installment payment. Notice of any such optional prepayment shall be given at least 30 days prior to the prepayment date by mailing to the registered owner of the Bond a notice fixing such prepayment date and the amount of principal to be prepaid. SECTION 8. Failure to Pay Installments. If any installment of principal and interest is not paid when due, the city shall be obligated to pay interest on that installment at the same rate provided in the Bond from and after its payment date until that installment, both principal and interest, is paid in full. SECTION 9. Pledge of Taxes. For as long as any of the Bond is outstanding, the city irrevocably pledges to include in its budget and levy taxes annually within the constitutional and statutory tax limitations provided by law without a vote of the electors of the city on all of the taxable property within the city in an amount sufficient, together with other money legally available and to be used therefor, to pay when due the principal of and interest on the Bond, and the full faith, credit and resources of the city are pledged irrevocably for the annual levy and collection of those taxes and the prompt payment of that principal and interest. 0 0 Ordinance No. 1787 Page 4 of 6 SECTION 1.i3. Form and Execution of Bond. The Bond to be issued to the purchaser shall be in substantially the form attached hereto as Exhibit A and by this reference made a part hereof. The Bond may be typewritten, printed, or lithographed on good bond paper and shall be in a form consistent with the provisions of this ordinance and state law and shall be signed by the Mayor and City Clerk, either or both of whose signatures may be manual or in facsimile and the seal of the city or a facsimile reproduction thereof shall be impressed or printed thereon. Only a Bond bearing a Certificate of Authentication in the following form, manually signed by the Bond Registrar, shall be valid or obligatory for any purpose or entitled to the benefits of this ordinance: CERTICIATE OF AUTHENTICATION This bond is the fully registered City of Port Orchard, Washington, Limited Tax General Obligation Bond, 1999, described in the Bond Ordinance, City Treasurer of the City of Port Orchard, Washington, Bond Registrar The authorized signing of the Certificate of Authentication shall be conclusive evidence that the Bond so authenticated has been duly executed, authenticated and delivered and is entitled to the benefits of this ordinance. If any officer whose facsimile signature appears on the Bond ceases to be an officer of the city authorized to sign bonds before the Bond bearing his or her facsimile signature is authenticated or delivered by the Bond Registrar or issued by the city, that Bond nevertheless may be authenticated, issued and delivered and, when authenticated, issued and delivered, shall be as binding on the city as though that person had continued to be an officer of the city authorized to sign bonds. The Bond also may be signed on behalf of the city by any person who, on the actual date of signing of the Bond, is an officer of the city authorized to sign bonds, although he or she did not hold the required office on the date of issuance of the Bond. SECT_ION_11. Preservation of Tax Exemption for Interest on Bond. The city covenants that it will take all actions necessary to prevent interest on the Bond from being included in gross income for federal income tax purposes, and it will neither take any action nor make or permit any use of proceeds of the Bond or other funds of the city treated as proceeds of the Bond at any time during the term of the Bond which will cause interest on the Bond to be included in gross income for federal income tax purposes. The city certifies that it has not been notified of any listing or proposed listing by the Internal Revenue Service to the effect that it is a bond issuer whose arbitrage certifications may not be relied upon. 0 6 Ordinance No. 1787 Page 5 of 6 SECTION 12. Small Governmental Issuer Arbitrage Rebate Exception and Designation of Bond as a "Qualified Tax -Exempt Obligation". The city finds and declares that (1) it is a duly organized and existing governmental unit of the State of Washington and has general taxing power; (2) the Bond is not a "private activity bond" within the meaning of Section 141 of the Code; (3) at least 95% of the net proceeds of the Bond will be used for local governmental activities of the city (or of a governmental unit the jurisdiction of which is entirely within the jurisdiction of the city); (4) the aggregate face amount of all tax-exempt obligations (other than private activity bonds and other obligations not required to be included in such calculation) issued by the city and all entities subordinate to the city (including any entity which the city controls, which derives its authority to issue tax-exempt obligations from the city or which issues tax-exempt obligations on behalf of the city) during the calendar year in which the Bond is issued is not reasonably expected to exceed $5,000,000; and (5) the amount of tax-exempt obligations, including the Bond, designated by the City as "qualified tax-exempt obligations" for the purposes of Section 265(b)(3) of the Code during the calendar year in which the Bond is issued does not exceed $10,000,000. The city therefore certifies that the Bond is eligible for the arbitrage rebate exception under Section 148(f)(4)(D) of the Code and designates the Bond as a "qualified tax- exempt obligations" for the purposes of Section 265(b)(3) of the Code. SECTION 13. Bond Negotiable. The Bond shall be a negotiable instrument to the extent provided by RCW 62A.8-102 and 62A.8-105. SECTION 14. Bond Fund and Deposit of Bond Proceeds. There is previously created in the Office of the City Treasurer, the Limited Tax General Obligation Bond Anticipation Note Fund, 1998 (Line of Credit), which fund shall upon the paying in full of the Outstanding Notes, be redesignated as the Limited Tax General Obligation Bond Fund 1999 (the "Bond Fund"). All taxes collected for and allocated to the payment of the principal of and interest on the Bond shall be deposited in the Bond Fund created by Ordinance No. 1733 and established in the Office of the City Treasurer. The principal proceeds received from the sale and delivery of the Bond shall be paid into the city's Expense Fund and used for the purposes specified in Section 3 of this ordinance. Until needed to pay the costs of the Municipal Facility and costs of issuance of the Bond, the city may invest principal proceeds temporarily in any legal investment, and the investment earnings may be retained in the Construction Fund and be spent for the purposes of that fund. SECTION 15. Loan Resolution. The city covenants and agrees with the Purchaser as the owner of the Bond, for so long as the Purchaser is the owner of the Bond, to abide by the conditions of the Loan Resolution dated September 9, 1996, relating to the Bond. Ordinance No. 1787 Page 6 of 6 SECTION 1E. Approval of Bond Purchase Offer and Delivery of Bond. The United States of America, acting through the United States Department of Agriculture, has offered to purchase the Bond at a price of par, the city to furnish the printed or typewritten Bond and the approving legal opinion of Foster Pepper & Shefelman, PLLC municipal bond counsel of Seattle, Washington, at the city's expense. Bond counsel shall not be required to review or express any opinion concerning the completeness or accuracy of any official statement, offering circular or other sales or disclosure material issued or used in connection with the Bond, and bond counsel's opinion shall so state. The City Council, being of the opinion that it is in the best interest of the city to accept such offer, accepts the same. The Bond, therefore, shall be delivered to the Purchaser after its execution upon payment therefor as aforesaid. The proper city officials are authorized and directed to do everything necessary for the prompt delivery of the Bond to the Purchaser and for the proper application and use of the proceeds of the sale thereof. SECTION 'I7. Effective Date of Ordinance. This ordinance shall take effect and be in force from and after its passage and five days following its publication as required by law. PASSED by the City Council of the City of Port Orchard, signed by the Mayor and attested to by the City Clerk in authentication of such passage this 13`h day of December 1999. ATTEST: atricia Parks, City lerk 62 APPROVED AS TO FORM: Fos r Pepper & Shefelm LLC Special Counsel and Bond Counsel to the City LESLIE J. WEATHERILL, MAYOR Sponsored by: Councilman Geiger R-1 "EXHIBIT .A" $3,300,004 UNITED STATES OF AMERICA STATE OF WASHINGTON CITY OF PORT ORCHARD LIMI ED TAX GENERAL OBLIGATION BOND,1999 5.00% The CITY OF PORT ORCHARD, WASHINGTON (the "City"}, a municipal corporation of the State of Washington, promises to pay to the UNITED STATES -OF AMERICA, ACTING THROUGH THE UNITED STATES DEPARTMENT OFAGRICULTURE (the "Registered Owner"); the principal amount of THREE MILLION THREE HUNDRED THOUSAND DOLLARS ($3,300,000) together with interest thereon at the rate of 5.00% per annum (computed on the basis of a -365/366-day year for actual number of days elapsed). Principal and interest shall be paid in annual installments of $264,825 on each Installment ,Payment Date, with the first payment due on the date 12 months from the date of issuance of this Bond and the last payment on the date that is 20 years after the date of issuance of this Bond, except that the last payment shalt be in an amount equal to the remaining principal and interest due on this Bond. If any installment of principal and interest is not paid when due, the City shall be obligated to pay interest on that installment at the saine rate provided herein from and after its due date until that installment is paid in full. This Bond, designated as the Limited Tax General Obligation Bond, 1999, issued by the City in fully registered form to provide funds required to redeem the Outstanding Note and to pay the costs of issuance of this Bond, all as set forth in the Bond Ordinance. Installments of principal of and interest 'on this Bond are payable in lawful money of the United States of America by check, or draft mailed by the City Treasurer (tire `Bond Registrar) mailed on the Installment Payment Date to the Registered Owner at its address appeasing on the books or records maintained by the Bond Registrar (the `Bond Register"), except that the last installment of principal and interest shall be payable upon presentation and surrender of this Bond by the Registered Owner at the office of the Bond Registrar in Port Orchard, Washington. . For as long as any principal of or interest on thisBond is outstanding, the City irrevocably pledges to include in its budget and to levy taxes annually within -the constitutional and statutory tax limitations provided by law without a vote of the electors of the City on all of the taxable property in the City bin an amount sufficient, together with other money legally available and to be used therefor, to pay when due the principal of and interest on this Bond, and the full faith, credit and resources of the City are pledged irrevocably for the. annual levy and collection of those taxes and the prompt payment of that principal and interest. The City may, from time to time, prepay the entire unpaid principal of this Bond, or such lesser portion as the Citymay determine of the unpaid principal amount thereof Upon prepayment of a portion of the principal of this Bond, the amount of the annual installments of principal and interest shall remain unchanged but shall be recalculated to reflect the reduction in the principal amount remaining unpaid and the resulting increase in the portion of each installment payment credited to the principal of this Bond. The final: Installment Payment Date shalt be adjusted to reflect the prepayment and increased amount applied to principal from each annual installment payment. Notice of any optionalprepayment shall be given at least 30 days prior to the prepayment date by mailing to the Registered Owner a notice fixing such prepayment date and the amount of principal to be prepaid Reference is made to the Bond Ordinance'for other covenants and declarations of.the. City. and other temos.and s conditions upon which thiBond has been issued, which tens and conditions are made a part hereof by this reference. The City irrevocably and unconditionally covenants that it will keep and perform all the covenants of this Bond and of the Bond Ordinance. Reference also is made to the Bond Ordinance for the definitions of the'capitalized terms used and not otherwise defined herein. The City in the Bond Ordinance has designated this Bond as a qualified tax-exempt obligation for. the purposes of Section 265(b)(3) of the internal Revenue Code of 1986, as amended. .This Bond shall not be valid or become obligatory for any purpose until the Certificate of Authentication . hereon has been signed by the Bond Registrar. This Bond may be transferred by the Registered Owner on surrender•of this Bond to'the Bond Registrar if that . transfer relates to the entire unpaid principal amount of this Bond -and only if endorsed in.the'manner provided hereon and surrendered to the Bond Registrar. Any transfer shall be without cost to the owner or transferee. - The installments of principal of and interest on this Bond shall be paid only to the Registered Owner as of the record date set forth above and to no other person or entity, and this Bond may not be assigned except on the Bond . Register. It is certified that -all acts, conditions and things required to be done precedent to and in the issuance of this Bond have been done, have happened and have been performed as required by law. IN WITNESS WHEREOF, the. City has caused this Bond to be signed by the Mayor and the City Clerk and the seal of the City to be impressed hereon as of the 27th day of December, 1999. CTTY OF PORT ORCHARD, WASHINGTON S By E Mayor - A L By City Clerk Date of Authentication: December 27, 1999 CERTIFICATE OF AUTHENTICATION This Bond is the fully registered City of Port Onccard, Washington, Limited Tax General Obligation Bond,1999, described in the Bond Ordinance. City Treasurer Bond Registrar 501433M.01 2 ASSIGNMBN T For value received, the undersigned Registered Owner does sell, assign and transfer unto: -_ (name, address and social security or" other identifying number of assignee) -the within -mentioned Bond and irrevocably constitutes and appoints to transfer the saisie on the Bond Register with full power of substitutiori'in the ptcmises. DATED: Registered Owner (NOTE: The signature,above Signature Guaranteed: _ must correspond with the name of the Registered. Owner as it appears on this Bond in every .particular, without alteration or enlargement _(NOTE: Signature must be or any change whatsoever.) .guaranteed pursuant to law. a • I, PATRICIA PARKS, City Clerk of the City of Port Orchard, Washington, certify that the attached copy of Ordinance No. 1787 is a true and correct copy of the original ordinance passed on the 131h day of December, 1999, as such ordinance appears in the Minute Book of the city. DATED this 141h day of December, 1999.