HomeMy WebLinkAboutCOW 2003-10-13 Item 4A - Ordinance - Re-Fund Bond Issue for 1994 BondsRecommendations:
Sponsor:
Committee:
Administration:
Cost Impact (if known):
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1 Meeting Date
10/13/03
CAS Number: 03-126
Agenda Item Title:
Original Sponsor:
I Timeline:
Sponsor's Summary:
Meeting Date
10/13/03
10/13/03
10/13/03
COUNCIL AGENDA SYNOPSIS
Meeting Date
10/13/03
Prepared by
ARD
Initials
1 Mayor's review 1 Council review 1
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Original Agenda Date: 10/13/03
Action
Proposed Ordinance
Staff report from Alan Doerschel dated October 2, 2003
Finance Safety Committee October 6, 2003 minutes
ITEM No.
Refunding Bond Issue for 1994 Bonds
Council Admin. X
Final Ordinance approval on October 20, 2003
Refunding Bond Issue for 1994 Bonds (Community Center Fire Station #53) will save the
City approximately $373,000. These bonds will replace higher interest rate bonds during next
ten years.
Move forward for final Ordinance on October 20, 2003
Finance Safety Committee October 6, 2003 meeting Move to October 13, 2003 meeting.
Same as sponsor
Savings of $373,000
New Bonds
Attachments
Bond Refunding 10/10/03 1
1 IA
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF TUKWILA,
WASHINGTON, RELATING TO CONTRACTING INDEBTEDNESS;
PROVIDING FOR THE ISSUANCE OF $4,455,000 PAR VALUE OF LIMITED
TAX GENERAL OBLIGATION REFUNDING BONDS, SERIES 2003B OF
THE CITY FOR GENERAL CITY PURPOSES TO PROVIDE FUNDS WITH
WHICH TO PAY OR CURRENTLY REFUND ITS OUTSTANDING LIMITED
TAX GENERAL OBLIGATION BONDS, 1994, TO PAY THE
ADMINISTRATIVE COSTS OF SUCH REFUNDING AND TO PAY THE
COSTS OF ISSUANCE OF THE BONDS; PROVIDING FOR AND
AUTHORIZING THE PURCHASE OF CERTAIN OBLIGATIONS OUT OF
THE PROCEEDS OF THE SALE OF THE BONDS HEREIN AUTHORIZED
AND FOR THE USE AND AFFLICATION OF THE MONEY DERIVED
FROM THOSE INVESTMENTS; AUTHORIZING THE EXECUTION OF AN
AGREEMENT WITH U.S. BANK, NATIONAL ASSOCIATION OF SEATTLE,
WASHINGTON, AS REFUNDING TRUSTEE; PROVIDING FOR THE CALL,
PAYMENT AND REDEMPTION OF THE OUTSTANDING BONDS TO BE
REFUNDED; FIXING THE DATE, FORM, MATURITIES, INTEREST RATES,
TERMS AND COVENANTS OF THE BONDS; ESTABLISHING A BOND
FUND; PROVIDING FOR THE PURCHASE OF BOND INSURANCE; AND
APPROVING THE SALE AND PROVIDING FOR THE DELIVERY OF THE
BONDS TO LEHMAN BROTHERS INC. OF SEATTLE, WASHINGTON;
PROVIDING FOR SEVERABILITY; AND ESTABLISHING AN EFFECTIVE
DATE.
WHEREAS, pursuant to Ordinance No. 1698, the City of Tukwila, Washington (the
"City"), issued and sold its $6,000,000 par value Limited Tax General Obligation Bonds,
1994 (the "1994 Bonds for the purpose of acquiring and constructing a community
center and replacing a fire station, and by that ordinance reserved the right to redeem the
1994 Bonds maturing in 2005 through 2014 prior to their maturity on January 1, 2004, at
a price of 102% of par plus accrued interest to the date fixed for redemption; and
WHEREAS, there are presently outstanding $4,170,000 par value of 1994 Bonds
maturing on January 1 of each of the years 2004 through 2009 (inclusive), and 2014, and
bearing various interest rates from 5.10% to 5.90% (the "Refunded Bonds and
WHEREAS, after due consideration, it appears to the City Council that the
Refunded Bonds may be refunded by the issuance and sale of the limited tax general
obligation refunding bonds authorized herein (the "Bonds so that a substantial
savings will be effected by the difference between the principal and interest cost over
the life of the Bonds and the principal and interest cost over the life of the Refunded
Bonds but for such refunding, which refunding will be effected by carrying out the
Refunding Plan, as defined below; and
WHEREAS, to effect that refunding in the manner that will be most advantageous
to the City, it is found necessary and advisable that certain Acquired Obligations
(hereinafter defined) bearing interest and maturing at such time or times as necessary to
accomplish the refunding as aforesaid be purchased out of a portion of the proceeds of
the Bonds and other money of the City; and
WHEREAS, the City Council deems it to be in the best interests of the City to issue
and sell the Bonds to pay part of the cost of advance refunding the Refunded Bonds and
to pay the administrative costs of such refunding and the costs of issuance and sale of
the Bonds; and
WHEREAS, Lehman Brothers Inc. has offered to purchase the Bonds authorized
herein under the terms and conditions set forth in this ordinance in the form of a bond
purchase contract; and
WHEREAS, Ambac Assurance Corporation, a Wisconsin-domiciled stock insurance
company ("Ambac Assurance" or the "Bond Insurer"), has made a commitment to issue
an insurance policy (the "Financial Guaranty Insurance Policy") insuring the payment
when due of the principal of and interest on the Bonds as provided therein, and the City
Council deems that the purchase of the Financial Guaranty Insurance Policy is in the
best interest of the City;
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF TUKWILA,
WASHINGTON, DO ORDAIN AS FOLLOWS:
Section 1. Definitions.
A. "Acquired Obligations" means those United States Treasury Certificates of
Indebtedness, Notes, and Bonds—State and Local Government Series and other direct,
noncallable obligations of the United States of America purchased to accomplish the
refunding of the Refunded Bonds as authorized by this ordinance.
B. "Refunded Bonds" means the outstanding Limited Tax General Obligation
Bonds, 1994, of the City maturing in the years 2004 through 2009, inclusive, and in 2014,
issued pursuant to Ordinance No. 1698, the refunding of which has been provided for
by this ordinance.
C. "Refunding Plan" means:
1. the deposit of a sufficient amount of the proceeds of the Bonds, with
other funds of the City, if necessary, with the Refunding Trustee for the purchase
of the Acquired Obligations;
2. the payment of the principal of and interest on the Refunded Bonds
."f.*
when due up to and including January 1, 2004, and the call, payment, and
redemption on January 1, 2004, of all of the then-outstanding Refunded Bonds at a
price of 102% of par; and
3. the payment of the costs of issuing the Bonds and the costs of carrying
out the foregoing elements of the Refunding Plan.
D. "Refunding Trust Agreement' means a Refunding Trust Agreement between the
City and the Refunding Trustee substantially in the form of that which is on file with the
City Clerk and by this reference incorporated herein.
E. "Refunding Trustee" means U.S. Bank National Association of Seattle,
Washington, serving as trustee or escrow agent or any successor trustee or escrow agent.
6(k.' 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 2003 is $3,489,704,657, and the City has outstanding general indebtedness
f
evidenced by limited tax general obligation bonds in the principal amount of
incurred within the limit of up to 1-1/2% of the value of the taxable
3# property within the City permitted for general municipal purposes without a vote of
the qualified voters therein, no outstanding unlimited tax general obligation bonds
issued pursuant to a vote of the qualified voters of the City, and the amount of
indebtedness for which bonds are authorized herein to be issued is $4,455,000.
Section 3. Authorization of Bonds. The City shall borrow money on the credit of
the City and issue negotiable limited tax general obligation bonds evidencing that
indebtedness in the amount of $4,455,000 for general City purposes to provide the funds
to pay or currently refund its outstanding Limited Tax General Obligation Bonds, 1994
by carrying out the Refunding Plan. The general indebtedness to be incurred shall be
Bond Refunding 10/10/03 2
within the limit of up to 1-1/ 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 Bonds. The bonds shall be called LiriiiEe Tax General
Qb iga„�'t3it fig Bon2'is,-S rIes 20031 (the "Bonds The Bonds shall be dated the
date of delivery; shall be in the denomination of $5,000 or any integral multiple thereof
within a single maturity; shall be numbered separately in the manner and with any
additional designation as the Bond Registrar (the fiscal agent of the State of
Washington) deems necessary for purposes of identification; shall bear interest
(computed on the basis of a 360 -day year of twelve 30 -day months) payable
semiannually on each January 1 and July 1, commencing January 1, 2004 to the maturity
or earlier redemption of the Bonds; and shall mature on January 1 in years and amounts
and bear interest at the rates per annum as follows:
Maturity Interest Maturity Interest
Years Amounts Rates Years Amounts Rates
2004 2010
2005 2011
2006 2012
2007 2013
2008 2014
2009
Section 5. Registration and Transfer of Bonds.
A. The Bonds shall be issued only in registered form as to both principal and
interest and shall be recorded on books or records maintained by the Bond Registrar
(the "Bond Register The Bond Register shall contain the name and mailing address
of the owner of each Bond and the principal amount and number of each of the Bonds
held by each owner.
B. Bonds surrendered to the Bond Registrar may be exchanged for Bonds in any
authorized denomination of an equal aggregate principal amount and of the same
interest rate and maturity. Bonds may be transferred only if endorsed in the manner
provided thereon and surrendered to the Bond Registrar. Any exchange or transfer
shall be without cost to the owner or transferee. The Bond Registrar shall not be
obligated to exchange or transfer any Bond during the 15 days preceding any principal
payment or redemption date.
C. The Bonds initially shall be registered in the name of Cede Co., as the
nominee of The Depository Trust Company, New York, New York ("DTC"). The Bonds
so registered shall be held in fully immobilized form by DTC as depository in
accordance with the provisions of a Blanket Issuer Letter of Representations with DTC
substantially in the form on file with the City Clerk and by this reference made a part
hereof (as it may be amended from time to time, the "Letter of Representations"). To
induce DTC to accept the Bonds as eligible for deposit at DTC, the City approves the
Letter of Representations. The Finance Director of the City is authorized and directed
to execute and deliver the Letter of Representations, on behalf of the City, to DTC on or
before the date of delivery of the Bonds to the purchaser thereof and the payment
therefore, with such changes as the Finance Director deems to be in the best interest of
the City, and his execution and delivery of the Letter of Representations shall evidence
irrevocably the approval of the Letter of Representations by the City. Neither the City
nor the Bond Registrar shall have any responsibility or obligation to DTC participants
or the persons for whom they act as nominees with respect to the Bonds regarding
accuracy of any records maintained by DTC or DTC participants of any amount in
respect of principal of or interest on the Bonds, or any notice which is permitted or
required to be given to registered owners hereunder (except such notice as is required
to be given by the Bond Registrar to DTC).
Bond Refunding 10/IO/03 3
D. For as long as any Bonds are held in fully immobilized form, DTC, its nominee
or its successor depository shall be deemed to be the registered owner for all purposes
hereunder and all references to registered owners, bondowners, bondholders or the like
shall mean DTC or its nominee and shall not mean the owners of any beneficial
interests in the Bonds. Registered ownership of such Bonds, or any portions thereof,
may not thereafter be transferred except:
1. To any successor of DTC or its nominee, if that successor shall be qualified
under any applicable laws to provide the services proposed to be provided by it;
2. To any substitute depository appointed by the City or such substitute
depository's successor; or
3. To any person if the Bonds are no longer held in immobilized form.
E. Upon the resignation of DTC or its successor (or any substitute depository or
its successor) from its functions as depository, or a determination by the City that it no
longer wishes to continue the system of book entry transfers through DTC or its
successor (or any substitute depository or its successor), the City may appoint a
substitute depository. Any such substitute depository shall be qualified under any
applicable laws to provide the services proposed to be provided by it.
F. If (1) DTC or its successor (or substitute depository or its successor) resigns
from its functions as depository, and no substitute depository can be obtained, or (2) the
City determines that the Bonds are to be in certificated form, the ownership of Bonds
may be transferred to any person as provided herein and the Bonds no longer shall be
held in fully immobilized form.
Section 6. Payment of Bonds. Both principal of and interest on the Bonds shall be
payable in lawful money of the United States of America. Interest on the Bonds shall be
paid by checks or drafts of the Bond Registrar mailed on the interest payment date to
the registered owners at the addresses appearing on the Bond Register on the 15th day
of the month preceding the interest payment date or, if requested in writing by a
registered owner of $1,000,000 or more in principal amount of Bonds prior to the
applicable record date, by wire transfer on the interest payment date. Principal of the
Bonds shall be payable upon presentation and surrender of the Bonds by the registered
owners at either of the principal offices of the Bond Registrar at the option of the
owners. Notwithstanding the foregoing, for as long as the Bonds are registered in the
name of DTC or its nominee, payment of principal of and interest on the Bonds shall be
made in the manner set forth in the Letter of Representations.
Section 7. Redemption Provisions and Open Market Purchase of Bonds. All
Bonds purchased or redeemed under this section shall be cancelled.
A. No Optional Redemption. The Bonds shall be issued without the right or
option of the City to redeem the Bonds prior to their stated maturity dates.
B. Open Market Purchase. The City reserves the right and option to purchase any
or all of the Bonds in the open market at any time at any price plus accrued interest to
the date of purchase.
C. Term Bonds.
1. Bonds maturing in are Term Bonds and, if
not purchased in the open market under the provisions set forth above, shall be called
for redemption randomly (in such manner as the Bond Registrar shall determine) at par
plus accrued interest on January 1 in years and amounts as follows:
Mandatory Mandatory
Redemption Years Redemption Amounts
Bond Refunding 10/10/03 4
2. If the City shall the purchase Term Bonds in the open market as set forth
above, the par amount of the Term Bonds so purchased (irrespective of their actual
purchase prices) shall be credited against one or more scheduled mandatory redemption
amounts for those Term Bonds (as allocated by the City) beginning not earlier than
60 days after the date of the purchase, and the City shall promptly notify the Bond
Registrar in writing of the manner in which the credit for the Term Bonds so purchased
has been allocated.
3. Portions of the principal amount of any Term Bond certificate, in
installments of $5,000 or any integral multiple thereof, may be redeemed [under these
Mandatory Redemption provisions]. If less than all of the principal amount of any
Term Bond certificate is redeemed, upon surrender of that certificate at either of the
principal offices of the Bond Registrar, there shall be issued to the Registered Owner,
without charge therefore, a new certificate (or certificates, at the option of the
Registered Owner) of the same series, maturity and interest rate in any of the
denominations authorized by this resolution in the aggregate principal amount
remaining unredeemed.
4. Notwithstanding the foregoing, for so long as the Bonds are registered in
the name of DTC or its nominee, selection of Tenn Bonds for redemption and the
issuance of new certificates therefore shall be in accordance with the Letter of
Representations
D. Notice of Redemption.
1. The City shall cause notice of any intended redemption of Term Bonds to
be given not less than 30 nor more than 60 days prior to the date fixed for redemption
by first -class mail, postage prepaid, to the Registered Owner of any Term Bond to be
redeemed at the address appearing on the Bond Register at the time the Bond Registrar
prepares the notice, and the requirements of this sentence shall be deemed to have been
fulfilled when notice has been mailed as so provided, whether or not it is actually
received by the Owner of any Bond. Interest on Term Bonds called for redemption shall
cease to accrue on the date fixed for redemption unless the Term Bond or Bonds called
are not redeemed when presented pursuant to the call. In addition, the redemption
notice shall be mailed within the same period, postage prepaid, to Moody's Investors
Service, Inc., and Fitch Ratings at their ffices in New York, New York, or their
successors, at their offices in New York, New York, or their successors, to Lehman
Brothers Inc., at its office in Seattle, Washington, or its successor, to the Bond Insurer, at
its principal office in New York, New York, or its successor, to each NRMSIR or the
MSRB and to such other persons and with such additional information as the Treasurer
shall determine, but these additional mailings shall not be a condition precedent to the
redemption of Term Bonds.
2. Notwithstanding the foregoing, for as long as the Term Bonds are
registered in the name of DTC or its nominee, notice of redemption shall be given in
accordance with the Letter of Representations.
Section 8. Failure to Redeem Bonds. If any Bond is not redeemed when properly
presented at its maturity or, for a Term Bond, its call date, the City shall be obligated to
pay interest on that Bond at the same rate provided in the Bond from and after its
maturity or call date, if applicable, until that Bond, both principal and interest, is paid in
full or until sufficient money for its payment in full is on deposit in the Bond Fund and
the Bond has been called for payment by giving notice of that call to the Registered
Owner of each of those unpaid Bonds.
Section 9, Pledge of Taxes. For as long as any of the Bonds are 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 Bonds, and the full faith, credit and resources of the
Bond Re0mding 10/10 /03 5
City are pledged irrevocably for the annual levy and collection of those taxes and the
prompt payment of that principal and interest.
Section 10. Form and Execution of Bonds.
A. The Bonds shall be printed on good bond paper 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.
B. Only Bonds 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:
CERTIFICATE OF AUTHENTICATION
This Bond is one of the fully registered City of Tukwila,
Washington, Limited Tax General Obligation Refunding Bonds,
Series 2003B, described in the Bond Ordinance.
WASHINGTON STATE FISCAL AGENT
By
Bond Registrar
Authorized Signer
The authorized signing of a Certificate of Authentication shall be conclusive evidence that
the Bonds so authenticated have been duly executed, authenticated and delivered and are
entitled to the benefits of this ordinance.
C. If any officer whose facsimile signature appears on the Bonds ceases to be an
officer of the City authorized to sign bonds before the Bonds bearing his or her facsimile
signature are authenticated or delivered by the Bond Registrar or issued by the City,
those Bonds 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. Any 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 Bonds.
Section 11. Bond Registrar.
A. The Bond Registrar shall keep, or cause to be kept, at its principal corporate
trust office, sufficient books for the registration and transfer of the Bonds, which shall
be open to inspection by the City at all times. The Bond Registrar is authorized, on
behalf of the City, to authenticate and deliver Bonds transferred or exchanged in
accordance with the provisions of the Bonds and this ordinance, to serve as the City's
paying agent for the Bonds and to carry out all of the Bond Registrar's powers and
duties under this ordinance and City Ordinance No. 1338 establishing a system of
registration for the City's bonds and obligations.
B. The Bond Registrar shall be responsible for its representations contained in the
Bond Registrar's Certificate of Authentication on the Bonds. The Bond Registrar may
become the owner of Bonds with the same rights it would have if it were not the Bond
Registrar and, to the extent permitted by law, may act as depository for and permit any
of its officers or directors to act as members of, or in any other capacity with respect to,
any committee formed to protect the rights of Bond owners.
Section 12. Preservation of Tax Exemption for Interest on Bonds. The City
covenants that it will take all actions necessary to prevent interest on the Bonds 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 Bonds or other funds of the
City treated as proceeds of the Bonds at any time during the term of the Bonds which
will cause interest on the Bonds to be included in gross income for federal income tax
purposes. The City also covenants that it will, to the extent the arbitrage rebate
Bond Refunding 10110/03 6
requirement of Section 148 of the Internal Revenue Code of 1986, as amended (the
"Code"), is applicable to the Bonds, take all actions necessary to comply (or to be
treated as having complied) with that requirement in connection with the Bonds,
including the calculation and payment of any penalties that the City has elected to pay
as an alternative to calculating rebatable arbitrage, and the payment of any other
penalties if required under Section 148 of the Code to prevent interest on the Bonds
from being 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.
Section 13. Refunding or Defeasance of the Bonds.
A. The City may issue refunding bonds pursuant to the laws of the State of
Washington or use money available from any other lawful source to pay when due the
principal of and interest on the Bonds, or any portion thereof included in a refunding or
defeasance plan, and to redeem and retire, refund or defease all such then-outstanding
Bonds (hereinafter collectively called the "defeased Bonds") and to pay the costs of the
refunding or defeasance. If money and/or direct obligations of the United States of
America maturing at a time or times and bearing interest in amounts (together with
money, if necessary) sufficient to redeem and retire, refund or defease the defeased
Bonds in accordance with their terms are set aside in a special trust fund or escrow
account irrevocably pledged to that redemption, retirement or defeasance of defeased
Bonds (hereinafter called the "trust account"), then all right and interest of the owners
of the defeased Bonds in the covenants of this ordinance and in the funds and accounts
obligated to the payment of the defeased Bonds shall cease and become void. The
owners of defeased Bonds shall have the right to receive payment of the principal of
and interest on the defeased Bonds from the trust account. The City shall include in the
refunding or defeasance plan such provisions as the City deems necessary for the
random selection of any defeased Bonds that constitute less than all of a particular
maturity of the Bonds, for notice of the defeasance to be given to the owners of the
defeased Bonds and to such other persons as the City shall determine, and for any
required replacement of Bond certificates for defeased Bonds. The defeased Bonds shall
be deemed no longer outstanding, and the City may apply any money in any other
fund or account established for the payment or redemption of the defeased Bonds to
any lawful purposes as it shall determine.
B. If the Bonds are registered in the name of DTC or its nominee, notice of any
defeasance of Bonds shall be given to DTC in the manner prescribed in the Letter of
Representations for notices of redemption of Bonds.
C. Notwithstanding anything in this section to the contrary, if the principal of
and/or interest due on the Bonds is paid by the Bond Insurer pursuant to the Financial
Guaranty Insurance Policy, the Bonds shall remain outstanding for all purposes, not be
defeased or otherwise satisfied and not be considered paid by the City, and all covenants,
agreements and other obligations of the City to the registered owners of the Bonds shall
continue to exist and run to the benefit of the Bond Insurer shall be subrogated to the
rights of the registered owners.
Section 14. Designation of Bonds as "Qualified Tax Obligations." The
City has determined and certifies that (a) the Bonds are not "private activity bonds" within
the meaning of Section 141 of the Code; (b) the reasonably anticipated amount of tax-
exempt obligations (other than private activity bonds and other obligations not required to
be included in such calculation) which the City and any entity subordinate to the City
(including any entity that the City controls, that derives its authority to issue tax-exempt
obligations from the City, or that issues tax-exempt obligations on behalf of the City) will
issue during the calendar year in which the Bonds are issued will not exceed $10,000,000;
and (c) the amount of ta- obligations, including the Bonds, designated by the
County as "qualified tax c,...-a.pt obligations" for the purposes of Section 265(b)(3) of the
Code during the calendar year in which the Bonds are issued does not exceed $10,000,000.
Bond Refunding 10/10/03 7
The County designates the Bonds as "qualified tax- exempt obligations" for the purposes
of Section 265(b)(3) of the Code.
Section 15. Bond Fund. There is created and established in the office of the Finance
Director of the City a special fund designated as the Limited Tax General Obligation
Refunding Bond Fund, 2003E (the "Bond Fund Accrued interest on the Bonds, if any,
received from the sale and delivery of the Bonds shall be paid into the Bond Fund. All
taxes collected for and allocated to the payment of the principal of and interest on the
Bonds shall be deposited in the Bond Fund.
Section 16. Refunding of Refunded Bonds.
A. Appointment of Refunding Trustee. U.S. Bank National Association of
Seattle, Washington, is appointed Refunding Trustee.
B. Use of Bond Proceeds; Acquisition of Acquired Obligations. All of the
of the sale of the Bonds, exclusive of the accrued interest thereon (if any)
which shall be paid into the Bond Fund, shall be deposited immediately upon the
receipt thereof with the Refunding Trustee and used to discharge the obligations of the
City relating to the Refunded Bonds under Ordinance No. 1698 by providing for the
payment of the amounts required to be paid by the Refunding Plan. To the extent
practicable, such obligations shall be discharged fully. by the Refunding Trustee's
simultaneous purchase of the Acquired Obligations, bearing such interest and maturing
as to principal and interest in such amounts and at such times so as to provide, together
with a beginning cash balance, if necessary, for the payment of the amount required to
be paid by the Refunding Plan. The Acquired Obligations are listed and more
particularly described in Exhibit A attached to the Refunding Trust Agreement between
the City and the Refunding Trustee, but are subject to substitution as set forth below,
Any Bond proceeds or other money deposited with the Refunding Trustee not needed
to purchase the Acquired Obligations and provide a beginning cash balance, if any, and
pay the costs of issuance of the Bonds shall be returned to the City at the time of
delivery of the Bonds to the initial purchaser thereof and deposited in the Bond Fund to
pay interest on the Bonds on the first interest payment date.
C. Substitution of Acquired Obligations.
1. Prior to the purchase of any Acquired Obligations by the Refunding
Trustee, the City reserves the right to substitute other direct, noncallable obligations of
the United States of America "Substitute Obligations for any of the Acquired
Obligations and to use any savings created thereby for any lawful City purpose if, (a) in
the opinion of Foster Pepper Shefelman PLLC, the City's bond counsel, the interest on
the Bonds and the Refunded Bonds will remain excluded from gross income for federal
income tax purposes under Sections 103, 148, and 149(d) of the Code, and (b) such
substitution shall not impair the timely payment of the amounts required to be paid by
the Refunding Plan, as verified by a nationally recognized independent certified public
accounting firm.
2. After the purchase of the Acquired Obligations by the Refunding Trustee,
the City reserves the right to substitute therefore cash or Substitute Obligations subject
to the conditions that such money or securities held by the Refunding Trustee shall be
sufficient to carry out the Refunding Plan, that such substitution will not cause the
Bonds and the Refunded Bonds to be arbitrage bonds within the meaning of Section 148
of the Code and regulations thereunder in effect on the date of such substitution and
applicable to obligations issued on the issue date of the Bonds, and that the City obtain,
at its expense:
a. a verification by a nationally recognized independent certified public
accounting firm acceptable to the Refunding Trustee confirming that the payments of
principal of and interest on the substitute securities, if paid when due, and any other
money held by the Refunding Trustee will be sufficient to carry out the Refunding Plan;
and
b. an opinion from Foster Pepper Shefelman PLLC, bond counsel to the
City, its successor, or other nationally recognized bond counsel to the City, to the effect
Bond Refunding 10/10/03 8
that the disposition and substitution or purchase of such securities, under the statutes,
rules, and regulations then in force and applicable to the Bonds, will not cause the
interest on the Bonds or the Refunded Bonds to be included in gross income for federal
income tax purposes and that such disposition and substitution or purchase is in
compliance with the statutes and regulations applicable to the Bonds. Any surplus
money resulting from the sale, transfer, other disposition, or redemption of the
Acquired Obligations and the substitutions therefore shall be released from the trust
estate and transferred to the City to be used for any lawful City purpose.
D. Administration of Refunding Plan. The Refunding Trustee is authorized and
directed to purchase the Acquired Obligations (or substitute obligations) and to make
the payments required to be made by the Refunding Plan from the Acquired
Obligations (or substitute obligations) and money deposited with the Refunding
Trustee pursuant to this ordinance. All Acquired Obligations (or substitute obligations)
and the money deposited with the Refunding Trustee and any income therefrom shall
be held irrevocably, invested and applied in accordance with the provisions of
Ordinance No. 1698, this ordinance, chapter 39.53 RCW and other applicable statutes of
the State of Washington and the Refunding Trust Agreement. All necessary and proper
fees, compensation, and expenses of the Refunding Trustee for the Bonds and all other
costs incidental to the setting up of the escrow to accomplish the refunding of the
Refunded Bonds and costs related to the issuance and delivery of the Bonds, including
bond printing, verification fees, bond insurance premium, bond counsel's fees, and
other related expenses, shall be paid out of the proceeds of the Bonds.
E. Authorization for Refunding Trust Agreement. To carry out the Refunding
Plan provided for by this ordinance, the Mayor or Finance Director of the City is
authorized and directed to execute and deliver to the Refunding Trustee a Refunding
Trust Agreement substantially in the form on file with the City Clerk and by this
reference made a part hereof setting forth the duties, obligations and responsibilities of
the Refunding Trustee in connection with the payment, redemption, and retirement of
the Refunded Bonds as provided herein and stating that the provisions for payment of
the fees, compensation, and expenses of such Refunding Trustee set forth therein are
satisfactory to it. Prior to executing the Refunding Trust Agreement, the Mayor or
Finance Director of the City is authorized to make such changes therein that do not
change the substance and purpose thereof or that assure that the escrow provided
therein and the Bonds are in compliance with the requirements of federal law
governing the exclusion of interest on the Bonds from gross income for federal income
tax purposes.
Section 17. Call for Redemption of the Refunded Bonds. The City calls for
redemption on January 1, 2004, all of the outstanding Refunded Bonds maturing in the
years 2005 through 2009, inclusive, and in 2014, at a price of 102% of par plus accrued
interest. Such call for redemption shall be irrevocable after the delivery of the Bonds to
the initial purchaser thereof. The date on which the Refunded Bonds are herein called
for redemption is the first date on which those bonds may be called. The proper City
officials are authorized and directed to give or cause to be given such notices as
required, at the times and in the manner required, pursuant to Ordinance No. 1698 in
order to effect the redemption prior to their maturity of the Refunded Bonds.
Section 18. City Findings with Respect to Refunding.
A. The City Council of the City finds and determines that the issuance and sale of
the Bonds at this time will effect a savings to the City and is in the best interest of the
City and its taxpayers and in the public interest. In making such finding and
determination, the City Council has given consideration to the fixed maturities of the
Bonds and the Refunded Bonds, the costs of issuance of the Bonds and the known
earned income from the investment of the proceeds of the issuance and sale of the
Bonds and other money of the City used in the Refunding Plan pending payment and
redemption of the Refunded Bonds.
B. The City Council further finds and determines that the money to be deposited
with the Refunding Trustee for the Refunded Bonds in accordance with Section 16 of
Bond Refunding 10/10/03 9
this ordinance will discharge and satisfy the obligations of the City under Ordinance
No. 1698 with respect to the Refunded Bonds, and the pledges, charges, trusts,
covenants, and agreements of the City therein made or provided for as to the Refunded
Bonds, and that the Refunded Bonds shall no longer be deemed to be outstanding
under such ordinance immediately upon the deposit of such money with the Refunding
Trustee.
Section 19. Approval of Bond Purchase Contract.
A. Lehman Brothers Inc of Seattle, Washington, has presented a purchase contract
(the "Bond Purchase Contract to the City offering to purchase the Bonds under the
terms and conditions provided in the Bond Purchase Contract, which written Bond
Purchase Contract is on file with the City Clerk and is incorporated herein by this
reference. The City Council finds that the purchase price offered is acceptable to the
City and that entering into the Bond Purchase Contract is in the City's best interest. The
City therefore approves the Bond Purchase Contract, accepts the offer contained
therein, and authorizes its execution by City officials.
B. The Bonds will be printed at City expense and will be delivered to the
purchaser in accordance with the Bond Purchase Contract, with the approving legal
opinion of Foster Pepper Shefelman PLLC, municipal bond counsel of Seattle,
Washington, regarding the Bonds.
C. The proper City officials are authorized and directed to do everything
necessary for the prompt delivery of the Bonds to the purchaser and for the proper
application and use of the proceeds of the sale thereof. All prior actions taken by the
City consistent with the provisions of this ordinance are ratified, confirmed and
approved.
Section 20. Preliminary Official Statement Deemed Final. The City Council has
been provided with copies of a preliminary official statement dated September
2003 (the "Preliminary Official Statement prepared in connection with the sale of the
Bonds and hereby ratifies and approves the distribution of that preliminary official
statement and the final official statement by the Bond purchaser. For the sole purpose
of the Bond purchaser's compliance with Securities and Exchange Commission Rule
15c2- 12(b)(1), the City "deems final" that Preliminary Official Statement as of its date,
except for the omission of information as to offering prices, interest rates, selling
compensation, aggregate principal amount, principal amount per maturity, maturity
dates, options of redemption, delivery dates, ratings and other terms of the Bonds
dependent on such matters.
Section 21. Undertaking to Provide Continuing Disclosure. To meet the
requirements of United States Securities and Exchange Commission "SEC Rule 15c2-
12(b)(5) (the "Rule as applicable to a participating underwriter for the Bonds, the City
makes the following written undertaking (the "Undertaking") for the benefit of holders
of the Bonds:
1. Undertaking to Provide Annual Financial Information and Notice of Material
Events. The City undertakes to provide or cause to be provided, either directly or
through a designated agent
a. To each nationally recognized municipal securities information repository
designated by the SEC in accordance with the Rule "NRMSIR and to a state
information depository, if any, established in the State of Washington (the "SID
annual financial information and operating data of the type included in the final official
statement for the Bonds and described in subsection 2. of this section "annual financial
information
b. To each NRMSIR or the Municipal Securities Rulemaking Board "MSRB
and to the SID, timely notice of the occurrence of any of the following events with
respect to the Bonds, if material:
(1) principal and interest payment delinquencies;
(2) non payment related defaults;
Bond RetWding 10 /10/03 10
difficulties;
(3) unscheduled draws on debt service reserves reflecting financial
(4) unscheduled draws on credit enhancements reflecting financial
difficulties;
(5) substitution of credit or liquidity providers, or their failure to perform;
(6) adverse tax opinions or events affecting the t c ..,pt status of the
Bonds;
Bonds);
of the City;
(7) modifications to rights of holders of the Bonds;
(8) Bond calls (other than scheduled mandatory redemptions of Term
(9) defeasances;
(10) release, substitution, or sale of property securing repayment of the
Bonds; and
(11) rating changes; and
c. To each NRMSIR or to the MSRB, and to the SID, timely notice of a failure
by the City to provide required annual financial information on or before the date
specified in subsection 2. of this section.
2. T.oe of Annual Financial Information Undertaken to be Provided. The annual
financial information that the City undertakes to provide in subsection 1. of this section:
a. Shall consist of
(1) annual financial statements prepared (except as noted in the financial
statements) in accordance with applicable generally accepted accounting principles
applicable to governmental units in Washington State, as such principles may be
changed from time to time and in conformity with state law and regulations pertaining
to cities, which statements shall not be audited, except, however, that if and when
audited financial statements are otherwise prepared and available to the City they will
be provided;
(2) authorized, issued and outstanding balance of general obligation debt
(3) the assessed value of the property within the City subject to ad
valorem taxation; and
(4) ad valorem tax levy rates and amounts and percentage of taxes
collected;
b. Shall be provided to each NRMSIR and the SID, not later than the last day
of the ninth month after the end of each fiscal year of the City (currently, a fiscal year
ending December 31), as such fiscal year may be changed as required or permitted by
State law, commencing with the City's fiscal year ending December 31, 2003; and
c. May be provided in a single or multiple documents, and may be
incorporated by reference to other documents that have been filed with each NRMSIR
and the SID, or, if the document incorporated by reference is a "final official statement"
with respect to other obligations of the City, that has been filed with the MSRB.
3. Amendment of Undertakino,
a. The Undertaking is subject to amendment after the primary offering of the
Bonds without the consent of any holder of any Bond, or of any broker, dealer,
municipal securities dealer, participating underwriter, rating agency, NRMSIR, the SID
or the MSRB, under the circumstances and in the manner permitted by the Rule.
b. The City will give notice to each NRMSIR or the MSRB, and the SID, of the
substance (or provide a copy) of any amendment to the Undertaking and a brief
statement of the reasons for the amendment. If the amendment changes the type of
annual financial information to be provided, the annual financial information
Bond Refunding 10/10/03 11
containing the amended financial information will include a narrative explanation of
the effect of that change on the type of information to be provided.
4. Beneficiaries. The Undertaking evidenced by this section shall inure to the
benefit of the City and any holder of Bonds, and shall not inure to the benefit of or
create any rights in any other person.
5. Termination of Undertalcing. The City's obligations under this Undertaking
shall terminate upon the legal defeasance of all of the Bonds. In addition, the City's
obligations under this Undertaking shall terminate if those provisions of the Rule which
require the City to comply with this Undertaking become legally inapplicable in respect
of the Bonds for any reason, as confirmed by an opinion of nationally recognized bond
counsel or other counsel familiar with federal securities laws delivered to the City, and
the City provides timely notice of such termination to each NRMSIR or the MSRB and
the SID.
6. Remedy for Failure to Comply with Undertaking. As soon as practicable after
the City learns of any failure to comply with the Undertaking, the City will proceed
with due diligence to cause such noncompliance to be corrected. No failure by the City
or other obligated person to comply with the Undertaking shall constitute a default in
respect of the Bonds. The sole remedy of any holder of a Bond shall be to take such
actions as that holder deems necessary, including seeking an order of specific
performance from an appropriate court, to compel the City or other obligated person to
comply with the Undertaking.
7. Designation of Official Responsible to Administer Undertaking. The Finance
Director of the City (or such other officer of the City who may in the future perform the
duties of that office) or his or her designee is authorized and directed in his or her
discretion to take such further actions as may be necessary, appropriate or convenient
to carry out the Undertaking of the City in respect of the Bonds set forth in this section
and in accordance with the Rule, including, without limitation, the following actions:
a. Preparing and filing the annual financial information undertaken to be
provided;
b. Determining whether any event specified in subsection (a) has occurred,
assessing its materiality with respect to the Bonds, and, if material, preparing and
disseminating notice of its occurrence;
c. Determining whether any person other than the City is an "obligated
person" within the meaning of the Rule with respect to the Bonds, and obtaining from
such person an undertaking to provide any annual financial information and notice of
material events for that person in accordance with the Rule;
d. Selecting, engaging and compensating designated agents and consultants,
including but not limited to financial advisors and legal counsel, to assist and advise the
City in carrying out the Undertaking; and
e. Effecting any necessary amendment of the Undertaking.
Section 22. Bond Insurance.
A. The City is authorized to purchase from the Bond Insurer the Financial
Guaranty Insurance Policy insuring the prompt payment of the principal of and interest
on the Bonds and agrees to the conditions for obtaining that policy, including the
payment of the premium therefor. Any notice required to be given to the Bond Insurer
shall be sent by certified or registered mail to Ambac Assurance Corporation, One State
Street Plaza, New York, New York 10004.
B. While the Financial Guaranty Insurance Policy is in effect, the City or the Bond
Registrar shall furnish to the Bond Insurer (to the attention of the Surveillance
Department, unless otherwise indicated):
1. As soon as practicable after the filing thereof, copies of any financial
statements, audits and annual reports of the City;
Bond Refimding 10/10/03 12
2. copies of any notices given to the registered owners of the Bonds,
including, without limitation, notices of any redemption of or defeasance of Bonds, and
any certificate rendered pursuant to this resolution relating to the security for the Bonds
at no cost to the Bond Insurer;
3. to the extent that the City has entered into a continuing disclosure
agreement with respect to the Bonds, the Bond Insurer shall be included as a party to be
notified; and
4. such additional information the Bond Insurer may reasonably request.
C. The Bond Registrar shall notify the Bond Insurer (to the attention of the
General Counsel Office) of any failure of the City to provide relevant notices and
certificates.
D. The City will permit the Bond Insurer to discuss the affairs, finances and
accounts of the City or any information the Bond Insurer may reasonably request
regarding the security for the Bonds with appropriate officers of the City. The Bond
Registrar and the City will permit the Bond Insurer to have access to and make copies of
all books and records relating to the Bonds at any reasonable time.
E. The Bond Insurer shall have the right to direct an accounting at the City's
expense, and the City's failure to comply with such direction within 30 days after
receipt of written notice of the direction from the Bond Insurer shall be deemed a
default hereunder unless compliance cannot occur within such period. In that event
and only if an extension would not materially adversely affect the interest of any
registered owner of the Bonds, that 30 -day period will be extended so long as
compliance is begun within that period and diligently pursued.
Section 23. Payment Procedures Under Financial Guaranty Policy. The Bond
Insurer requires that the following sections be included in this resolution:
"As long as the bond insurance shall be in full force and effect, the
Obligor, the Trustee and any Paying Agent agree to comply with the
following provisions:
"(a) At least one (1) day prior to all Interest Payment Dates the
Trustee or Paying Agent [the Bond Registrar], if any, will determine
whether there will be sufficient funds in the Funds and Accounts to pay
the principal of or interest on the Obligations on such Interest Payment
Date. If the Trustee or Paying Agent, if any, determines that there will be
insufficient funds in such Funds or Accounts, the Trustee or Paying
Agent, if any, shall so notify Ambac Assurance. Such notice shall specify
the amount of the anticipated deficiency, the Obligations to which such
deficiency is applicable and whether such Obligations will be deficient as
to principal or interest, or both. If the Trustee or Paying Agent, if any, has
not so notified Ambac Assurance at least one (1) day prior to an Interest
Payment Date, Ambac Assurance will make payments of principal or
interest due on the Obligations on or before the first (1st) day next
following the date on which Ambac Assurance shall have received notice
of nonpayment from the Trustee or Paying Agent, if any.
"(b) The Trustee or Paying Agent, if any, shall, after giving notice
to Ambac Assurance as provided in (a) above, make available to Ambac
Assurance and, at Ambac Assurance's direction, to The Bank of New York
as insurance trustee for Ambac Assurance or any successor insurance
trustee (the "Insurance Trustee the registration books of the Obligor
maintained by the Trustee or Paying Agent, if any, and all records relating
to the Funds and Accounts maintained under this resolution.
"(c) The Trustee or Paying Agent, if any, shall provide Ambac
Assurance and the Insurance Trustee with a list of registered owners of
Obligations entitled to receive principal or interest payments from Ambac
Assurance under the terms of the Financial Guaranty Insurance Policy,
and shall make arrangements with the Insurance Trustee (i) to mail checks
Bond Refunding 10/10/03 13
or drafts to the registered owners of Obligations entitled to receive full or
partial interest payments from Ambac Assurance and (ii) to pay principal
upon Obligations surrendered to the Insurance Trustee by the registered
owners of Obligations entitled to receive full or partial principal payments
from Ambac Assurance.
"(d) The Trustee or Paying Agent, if any, shall, at the time it
provides notice to Ambac Assurance pursuant to (a) above, notify
registered owners of Obligations entitled to receive the payment of
principal or interest thereon from Ambac Assurance (i) as to the fact of
such entitlement, (ii) that Ambac Assurance will remit to them all or a part
of the interest payments next coming due upon proof of Holder
entitlement to interest payments and delivery to the Insurance Trustee, in
form satisfactory to the Insurance Trustee, of an appropriate assignment
of the registered owner's right to payment, (iii) that should they be
entitled to receive full payment of principal from Ambac Assurance, they
must surrender their Obligations (along with an appropriate instrument of
assignment in form satisfactory to the Insurance Trustee to permit
ownership of such Obligations to be registered in the name of Ambac
Assurance) for payment to the Insurance Trustee, and not the Trustee or
Paying Agent, if any, and (iv) that should they be entitled to receive
partial payment of principal from Ambac Assurance, they must surrender
their Obligations for payment thereon first to the Trustee or Paying Agent,
if any, who shall note on such Obligations the portion of the principal
paid by the Trustee or Paying Agent, if any, and then, along with an
appropriate instrument of assignment in form satisfactory to the
Insurance Trustee, to the Insurance Trustee, which will then pay the
unpaid portion of principal.
"(e) In the event that the Trustee or Paying Agent, if any, has
notice that any payment of principal of or interest on a Bond which has
become Due for Payment and which is made to a Holder by or on behalf
of the Obligor has been deemed a preferential transfer and theretofore
recovered from its registered owner pursuant to the United States
Bankruptcy Code by a trustee in bankruptcy in accordance with the final,
nonappealable order of a court having competent jurisdiction, the Trustee
or Paying Agent, if any, shall, at the time Ambac Assurance is notified
pursuant to (a) above, notify all registered owners that in the event that
any registered owner's payment is so recovered, such registered owner
will be entitled to payment from Ambac Assurance to the extent of such
recovery if sufficient funds are not otherwise available, and the Trustee or
Paying Agent, if any, shall furnish to Ambac Assurance its records
evidencing the payments of principal of and interest on the Obligations
which have been made by the Trustee or Paying Agent, if any, and
subsequently recovered from registered owners and the dates on which
such payments were made.
"(f) In addition to those rights granted Ambac Assurance under
this resolution, Ambac Assurance shall, to the extent it makes payment of
principal of or interest on Obligations, become subrogated to the rights of
the recipients of such payments in accordance with the terms of the
Financial Guaranty Insurance Policy, and to evidence such subrogation (i)
in the case of subrogation as to claims for past due interest, the Trustee or
Paying Agent, if any, shall note Ambac Assurance's rights as subrogee on
the registration books of the Obligor maintained by the Trustee or Paying
Agent, if any, upon receipt from Ambac Assurance of proof of the
payment of interest thereon to the registered owners of the Obligations,
and (ii) in the case of subrogation as to claims for past due principal, the
Trustee or Paying Agent, if any, shall note Ambac Assurance's rights as
subrogee on the registration books of the Obligor maintained by the
Trustee or Paying Agent, if any, upon surrender of the Obligations by the
Bond Refunding 10/10/03 14
registered owners thereof together with the proof of the payment of
principal thereof."
Section 24. Parties Interested Herein.
A. To the extent that this resolution confers upon or gives or grants to the Bond
Insurer any right, remedy or claim under or by reason of this resolution, the Bond
Insurer is explicitly recognized as being a third -party beneficiary hereunder and may
enforce any such right, remedy or claim conferred, given or granted hereunder.
Nothing expressed or implied in this resolution is intended or shall be construed to
confer upon, or to give or grant to, any person or entity, other than the City, the Bond
Insurer and the registered owners of the Bonds, any right, remedy or claim under or by
reason of this resolution or any covenant, condition or stipulation hereof, and all
covenants, stipulations, promises and agreements in this resolution contained by and
on behalf of the City shall be for the sole and exclusive benefit of the City, the Bond
Insurer and the registered owners of the Bonds.
B. Notwithstanding any other provision of this resolution, the City shall notify the
Bond Insurer immediately if at any time there are insufficient funds to make any
payments of principal and /or interest as required and immediately upon the
occurrence of any event of default hereunder. Anything in this resolution to the
contrary notwithstanding, upon the occurrence and continuance of an event of default,
the Bond Insurer shall be entitled to control and direct the enforcement of all rights and
remedies granted to the Bond owners for the benefit of the Bond owners pursuant to
state law.
C. Any provision of this resolution expressly recognizing or granting rights in or
to the Bond Insurer may not be amended in any manner which affects the rights of the
Bond Insurer hereunder without the prior written consent of the Bond Insurer. Unless
otherwise provided in this section, the Bond Insurer's consent shall be required, in
addition to Bond owner consent, when required, for the following purposes: (f)
execution and delivery of any supplemental resolution, and (11) initiation or approval of
any other action which requires Bond owner consent.
D. Any reorganization or liquidation plan with respect to the City must be
acceptable to the Bond Insurer. In the event of any reorganization or liquidation, the
Bond Insurer shall have the right to vote on behalf of all Bond owners who hold Ambac
Assurance- insured bonds absent a default by the Bond Insurer under the applicable
Financial Guaranty Insurance Policy insuring such bonds.
Section 25. Severability. If any section, subsection, paragraph, sentence, clause or
phrase of this ordinance or its application to any person or situation should be held to
be invalid or unconstitutional for any reason by a court to competent jurisdiction, such
invalidity or unconstitutionality shall not affect the validity or constitutionality of the
remaining portions of this ordinance or its application to any other person or situation.
Section 26. Effective Date. This ordinance or a summary thereof shall be
published in the official newspaper of the City, and shall take effect and be in force five
days following its passage and publication as required by law.
PASSED BY THE CITY COUNCIL OF THE CITY OF TUKWILA, WASHINGTON,
at a Regular Meeting thereof this day of
2003.
ATTEST /AUTHENTICATED:
Jane E. Cantu, CMC, City Clerk
APPROVED AS TO FORM BY:
Office of the City Attorney
Bond Refmding 10/10/03 15
Steven M. Mullet, Mayor
Filed with the City Clerk:
Passed by the City Council.
Published:
Effective Date:
CERTIFICATION
I, the undersigned, City Clerk of the City of Tukwila, Washington (the "City'), hereby
certify as follows:
1. The attached copy of Ordinance No. (the "Ordinance is a full, true and
correct copy of an ordinance duly passed at a [special/regular] meeting thereof on September
2003, as that ordinance appears on the minute book of the City; and the Ordinance will be in
full force and effect five days after the publication of its summary in the City's official
newspaper; and
2. [Written notice specifying the time and place of the special meeting and noting the
business to be transacted was given to all members of the City Council by mail or by personal
delivery at least 24 hours prior to the special meeting, a true and complete copy of which notice
is attached hereto as Appendix 1; and
3. No local radio or television stations, or newspapers of general circulation, have on
file with the City a written request to be notified of any special meetings; and]
4. A quorum of the members of the City Council was present throughout the meeting
and a majority of those members present voted in the proper manner for the passage of the
Ordinance.
2003.
IN WITNESS WHEREOF, I have hereunto set my hand this day of October,
Bond Refunding 10/10/03 16
CITY OF TUKWILA, WASHINGTON
Jane E. Cantu, City Clerk
To: Tukwila City Council
From: Alan R. Doerschel
Date: October 2, 2003 U
Subject: Refunding Bond Issue
Attached is a Savings Summary from Lehman Brothers that shows a $373,966 savings to
The City when we refund the 1994 Bonds and replace them with new lower interest rate
bonds.
The scheduled date for the closing is October 20, 2003. A final Ordinance and Purchase
Contract will be presented to the full Council on that date, a process similar to the 2003
new bond issue.
SAVINGS
City of Tukwila, Washington
Limited Tax General Obligation Refunding Bonds
Series 2003B
Present Value
Prior Refunding to 11/04/2003
Date Debt Service Debt Service Savings 3.2093039%
12/31/2004 512,085.00 485,120.69 26,964.31 37,865.63
12/31/2005 512,275.00 486,605.00 25,670.00 35,759.18
12/31/2006 515,785.00 486,536.00 29,249 00 38,144.99
12/31/2007 512,560.00 485,461.00 27,099.00 35,154.50
12/31/2008 513,092.50 487,747.00 25,345.50 32,766.28
12/31/2009 512,300.00 483,387.00 28,913.00 34,865.95
12/31/2010 514,917.50 487,564.00 27,353.50 32,810.86
12/31/2011 515,875.00 489,813.00 26,062.00 31,040.80
12/31/2012 515,357.50 485,448.00 29,909.50 33,184.85
12/31/2013 513,365.00 484,788.00 28,577.00 31,390.04
12/31/2014 514,750.00 488,048.00 26,702.00 29,380.33
5,652,362.50 5,350,517.69 301,844.81 372,363.42
Savinas Summary
PV of savings from cash flow 372,363.42
Plus: Refunding funds on hand 1,602.47
Net PV Savings 373,965.89
Oct 1, 2003 1:06 pm Prepared by Lehman Brothers (Finance 5.000 tukwila:GO- 2003B,2003B)
Finance and Safety Committee
October 6, 2003
Present: Joe Duffle, Chair; Jim Haggerton, Richard Simpson
Alan Doerschel, Rhonda Berry, Lucy Lauterbach
1. Refinancing 1994 Bond Issue In 1994 the City issued bonds for building a new community
center and fire station. The committee considered a new bond to replace those older bonds at a
lesser rate that will save the City money. This was not done with the other recent bond to avoid a
limit for the bonding. A chart showed savings of about $26,000 each year until the bonds mature
in 2014. This will be handled in the same manner as the recent bond, with the final interest
numbers being added on the night of the Council meeting the bond is on the agenda..
Recommend bond to COW.
2. Cancellation of Accounts Receivable Each year the City gives up on collecting some
revenues owed it because neither the city nor the collection agency is able to get the funds. The
largest bill is owed by Loews Theater, which went bankrupt. Another large fee was from David
L. Wilson, who damaged city property (sewer facility) and is not able to pay the cost. Alan said
the $18,974 amount is about what is has always been. Recommend issue to COW.
3. Write Off of Warrants. Checks and Gift Certificates Just as the City is owed some monies
it cannot collect, so do some people not cash city certificates or small checks. The largest credit
balances come from the court, and golf course certificates are also often unused. After
understanding how that happens, the committee recommended the resolution. Recommend
resolution to COW.
4. Witness Fee Increase Because the current level of funding witnesses is $200 every two
week period, it is often not enough, and court personnel have to come to Finance for more
funding. By raising the amount to $500, it should allow the court to pay witness vouchers as they
get them. Alan will need to do a budget amendment. Recommend increase in revolving_ fund to
COW.
5. 2003 Budget Amendment Alan went through the items in the budget amendment. They
have all but one been to Council before. On the revenue side, a grant for Foster playground came
in, and in the spring some summer help was hired to help clean the parks. There was a large
payoff of unused vacation/sick leave for John McFarland who was a PERS 1 employee. Extra
funds for ACC and for the DC lobby firm of Michelle Guigere who was re -hired after the first of
the year added costs. Funds were added to demolish the burned house on Poverty Hill (the
money will be put as a lien against the house). We got money from six cities for V -Net, as we are
the financial city for that fund now. The proceeds and expenditures from the bond recently
passed are included, as are costs for the new bond being considered now. Recommend
ordinance to COW.
6. Lodging Tax Advisory Board Two new members are being added to the LTAB, bringing the
number on the Board to 9. Alan said the new members should be good additions: one is from the
Doubletree and one from Starfire, so a contributor and beneficiary balance one another. An
ordinance will be needed to make the formal change. Recommend issue to COW.
Committee chair approval