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HomeMy WebLinkAboutCOW 2003-09-08 Item 4B - Ordinance - Contract Indebtedness and Issuance of Limited Tax GO Bonds (Foster Golf Course Clubhouse)CAS Number: Ref: 03-086 Original Agenda Date: 09 -08 -03 gpnda Item Title: Proposed 2003 Bond Issue Proposed Ordinance 'riginal Sponsor: Council imeline: Adopt Ordinance ponsor's Summary: Meeting Date 09 08 03 Initials Meeting Date Prepared by 1 Mayor's review 1 Council review 09 -08 -03 ARD IKflb 1 C. I I I I I I I I Admin. X ITEM No. The proposed ordinance relates to the bond issue for the Foster Golf Course project, payment to King County to turn over South Park Bridge and funding for Arterial Street projects. ecommendations: Sponsor: Adopt ordinance. Committee: At 6/16/03 Finance Safety Committee meeting. Forwarded to 6/23/03 COW meeting. Administration: Same as sponsor. ost Impact (if known): Debt Service for future payments. and Source (if known): Golf Course revenues and General Taxes per Planning Model fleeting Date 1 Action 06 -23 -03 I Discussed. Move forward when final bond issue is ready. 09 -08 -03 1 Attachments Staff report to Council from Alan Doerschel, dated September 4, 2003 Draft Ordinance To: Mayor & City Council From: Alan R. Doerschel Date: September 4, 2003 Subject: Proposed Bond Issue We are ready to actually issue the Bonds approved by the Council on June 23. Attached are the original draft ordinance and a draft contract with Lehman Brothers, Inc. T ~c.e will.be avalla~ble_o~n .Mon. day along with the contract when the financial numbers are dete~mined. This is the same procedure as previous bond issues. Concurrent with the adoption of the Bond Ordinances, the Council would authorize the Mayor to sign a contract with Lehman Brothers, Inc. to purchase the bonds. ..' AN ORDINANCE OF Tt-t~ Cl'rxr COUNCIL OF THE CITY OF TUKWILA, WASItINGTON, RELATING TO CONTRACTING INDEBTEDNESS; PROVIDING FOR '1'1t1~ ISSUANCE OF $9,850,000 PAR VALUE OF LIMITED TAX GENERAL OBLIGATION BONDS, SERIES 2003A AND $2~200,000 PAR VALUE OF LIMITED TAX GENERAL OBLIGATION · . BONDS, SERIES 2003T (TAXABLE) OF THE crrY' FOR GENERAL CITY · PURPOSES TO PROVIDE FUNDS WI'I'It V~ICH TO REIMBURSE ~ ..... ITSELF FOR A PART OF THE COST OF TRANSFERRING CERTAIN .:.-..:. PROPERTY BETWEEN THE CITXr AND KI1NG COUNTY, TO PAY OR ' :~- REIMBURSE ITSELF FOR A PART OF THE COST OF MAKIiNG - VARIOUS ARTERIAL STREET IMPROVEMENTS, TO REDEEM 'l'ldl~ : :.~ CITY'S OUTSTANDING LIMITED TAX GENERAL OBLIGATION BOND · ANTICIPATION NOTE, 2009 (FOSTER GOLF COURSE), TO MAKE ' .~: CERTAIN IMPROVEMENTS TO THE FOSTER. GOLF COURSE CLUBHOUSE, FOR OTHER CITY PURPOSES, AND TO PAY THE COSTS OF ISSUANCE OF THE BONDS; FIXING THE DATE, FORM, MATURITIES, INTEREST RATES, TERMS AND COVENANTS OF THE BONDS; ESTABLISHING A NOTE REDEMI~TION FUND AND A PROJECT FUND; AND APPROVING THE SALE AND PROVIDING FOR THE DELIVERY OF THE BONDS TO LEHMAN BROTHERS INC. OF SEATTLE, WASHINGTON; PROVIDING FOR SEVERABILITY AND ESTABLISIHNG AN EFI~'ECTIVE DATE. WHEREAS, purmant to Ordinance No. 1938, the City of Tukwila, Washington (th ::.:.~ "City"), issued and sold its not to exceed $3,500,000 par value Limited Tax General Obligation .. ~:~ ' "..' Bond Anticipation Note, 2000 (Foster GoffCourse) (the '~qote''), for the purpose of paying a pm of the .cost of mak~n.' g cc~ain improvements to the Foster Golf Course including a new clubhouse, parking, course maprovemants, a maintenance facility and other facility upgrades (the "Foster Golf WHEREAS, the City is in need of ~.nsferrmg certain property between the C~ty and King County, making various arterial street improvements, redeeming the City's outstanding Note, making ceVz~ improvements to the restaurant at the Foster Golf Course clubhouse, and for other City purposes (collectively, the '"Projects''), the estimated cost of which is moro than $12,050,000, '~. - ;::. and the City does not hav? available sufficient funds to pay the cost; and WHEREAS, the City Council on February 18, 2003 adopted Resolution No. 1514 declaring its intent to roimburso itself from the proceeds of a furore benowing for the transfer of certain property between the City and King County, and on May 27, 2003 adopted Resolution No.1523 declaring its intent to reimburse itself from the proceeds of a future borrowing for certain street improvements; and WHEREAS, the City Council deems it to be in the best interest of the City to borrow money by the issuance of limited tax general obligation bends in the principal amount of $12,050,000 to provide funds with which to pay and redeem the Note and to pay the costs of the Projects; 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, [Bond Imurance]. NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF TUKWJLA, WASHINGTON, DO ORDAIN AS FOLLOWS: Section 1. 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 net general indebtedness evidenced by limited tax general obligation bonds [and notes] in the principal amount of $18,677,000 incurred 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, no outstanding unlimited tax general obligation bonds issued pursuant to a vote of the qualified voters of the City, and the amount of additional indebtedness for which bonds are authorized herein to be issued is $8,550,000. Section 2. 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 combined amount of $12,050,000 in two Series for the purposes described in subsections (A) and (B) of this Section. The general indebtedness to be incurred shall be 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. A. The Series 2003A Bonds shall be issued in the amount of $9,850,000 for general City purposes to provide the funds to pay and redeem the outstanding Note, to reimburse itself for a part of the costs of certain property transfers between the City and King County, to pay or reimburse itself for a part of the costs of various arterial street improvements, and for other City purposes (the "2003A Projects and to pay the costs of issuance and sale of the Series 2003A Bonds. B. The Series 2003T Bonds shall be issued in the amount of $2,200,000 to provide the funds to pay a part of the cost of constructing and equipping a restaurant and related facilities at the Foster Golf Course clubhouse (the "Restaurant Improvements Project and to pay the costs of issuance and sale of the Series 2003T Bonds. Section 3. Description of Bonds. The bonds shall be called Limited Tax General Obligation Bonds, Series 2002A (the "Series 2003A Bonds and Limited Tax General Obligation Bonds, Series 2003T (Taxable) (the "Series 2003T Bonds of the City (collectively, 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 June 1 and December 1, commencing December 1, 2003 to the maturity or earlier redemption of the Bonds; and shall mature on June 1 in years and amounts and bear interest at the rates per annum as described in this Section. A. Series 2003A Bonds. The Series 2003A Bonds shall be in the aggregate principal amount of $9,850,000 and shall mature on the dates and bear interest at the rates as follows: Maturity Interest Maturity Interest Years Amounts Rates Years Amounts Rates 2003 2013 2004 2014 2005 2015 2006 2016 2007 2017 2008 2019 2009 2020 2010 2021 2011 2022 2012 2023 The life of the capital facilities to be acquired with the proceeds of the Bonds exceeds the term of the Bonds. Galen] r "s .ad 9/5/032 B. Series 2003T Bonds, The Series 2003T Bonds shall be in the aggregate principal amount of $2,200,000 and shall mature on the dates and bear interest at the rates as follows: Maturity Interest Maturity Interest Years Amounts Rates Years Amounts Rates 2003 2013 5 2004 2014 2005 2015 2006 2016 2007 2017 2008 2019 2009 2020 2010 2021 2011 2022 2012 2023 Interest on the Series 2003T Bonds will not be excludable from the gross income of a registered owner for federal income tax purposes. Section 4. 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 therefor, 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 R_ ations 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). 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 Gomel Tax Bond sis'm 3 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 5. 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 pa date to the registered owners at the addresses appearing on the Bond Register on the 15 day of the month. preceding 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 6. Redemption Provisions and Open Market Purchase of Bonds. A. Bonds maturing in the years 2003 through 2012, inclusive, shall be issued without the right or option of the City to redeem those Bonds prior to their stated maturity dates. The City reserves the right and option to redeem the Bonds maturing on or after June 1, 2013, prior to their stated maturity dates at any time on or after June 1, 2012, as a whole or in part (within one or more maturities selected by the City and randomly within a maturity in such manner as the Bond Registrar shall determine), at par plus accrued interest to the date fixed for redemption. B. [[IF TERM BONDS]] [Bonds maturing in are Term Bonds and, if not redeemed under the optional redemption provisions set forth above or purchased in the open market under the provisions set forth below, shall be called for redemption randomly (in such manner as the Bond Registrar shall determine) at par plus accrued interest on June 1 in years and amounts as follows: Mandatory Mandatory Mandatory Mandatory Redemption Redemption Redemption Redemption Years Amounts Years Amounts C. [If the City shall redeem Term Bonds under the optional redemption provisions set forth above or purchase Term Bonds in the open market as set forth below, the par amount of the Term Bonds so redeemed or purchased (irrespective of their actual redemption or 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 optional redemption or purchase, and the City shall promptly notify the Bond Registrar in writing of the manner in which the credit for the Term Bonds so redeemed or purchased has been allocated.] D. Portions of the principal amount of any Bond, in installments of $5,000 or any integral multiple thereof, may be redeemed. If less than all of the principal amount of any Bond is redeemed, upon surrender of that Bond at either of the principal offices of the Bond Registrar, there shall be issued to the registered owner, without charge therefor, a new Bond (or Bonds, at the option of the registered owner) of the same maturity and interest rate in any of' the denominations authorized by this ordinance in the aggregate principal amount remaining unredeemed.._ E. The City further 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. omaaITV Bond 915103 4 F. All Bonds purchased or redeemed under this section shall be canceled. G. Notwithstanding the foregoing, for as long as the Bonds are registered in the name of DTC or its nominee, selection of Bonds for redemption shall be in accordance with the Letter of Representations. Section 7. Notice of Redemption. The City shall cause notice of any intended redemption of Bonds to be given not less than 30 nor more than 60 days prior to the date fixed for redemption by fast -class mail, postage prepaid, to the registered owner of any 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 Bonds called for redemption shall cease to accrue on the date fixed for redemption unless the 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 Investor Service, Inc., and Fitch Ratings at their offices in New York, New York, or their successors, to Lehman Brothers Inc., at its principal office in Seattle, Washington or its successor[[, to the Bond Insurer at its principal office in New York, or its successor]]; and to such other persons, including registered securities depositories, and with such additional information as the City Finance Director shall determine, but these additional mailings shall not be a condition precedent to the redemption of Bonds. Notwithstanding the foregoing, for as long as the 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 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 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 redemption fund hereinafter created 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 City are pledged irrevocably for the annual levy and collection of those taxes and the prompt payment of that principal and interest. 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: c,r.,arvewe 95/035 Section 10. Form and Execution of Bonds. CERTIFICATE OF AUTHENTICATION This Bond is one of the fully registered City of Tukwila, Washington, Limited Tax General Obligation Bondy, [Series 20034] [Series 2003T (Taxable)], described in the Bond Ordinance. By WASHINGTON STATE FISCAL AGENT 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 tunes. 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 Series 2003A Bonds. The City covenants that it will take all actions necessary to prevent interest on the Series 2003A 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 Series 2003A Bonds or other funds of the City treated as proceeds of the Series 2003A Bonds at any time during the term of the Series 2003A Bonds which will cause interest on the Series 2003A 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 requirement of Section 148 of the Internal Revenue Code of 1986, as amended (the "Code is applicable to the Series 2003A Bonds, take all actions necessary to comply (or to be treated as having complied) with that requirement in connection with the Series 2003A 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 Series 2003A 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 General TU Bond 9 /5/036 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. Section 14. Designation of Bonds as "Qualified Tax- Exempt Obligations." The City has determined and certifies that (a) the Series 2003A 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 Series 2003A Bonds are issued will not exceed $10,000,000; and (c) the amount of tax- exempt obligations, including the Series 20014 Bonds, designated by the County as "qualified tax- exempt obligations" for the purposes of Section 265(6)(3) of the Code during the calendar year in which the Series 2003A Bonds are issued does not exceed $10,000,000. The County designates the Series 2003A Bonds as "qualified tax- exempt obligations" for the purposes of Section 265(b)(3) of the Code. Section 15. Bond Fund and Deposit of Bond Proceeds. A. Bond Fund Created. There is created and established in the office of the City Finance Director a special fund designated as the Limited Tax General Obligation Bond Fund, 2003 (the "Bond Fund for the purpose of paying principal of and interest on the Bonds. 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. B. Deposit of Proceeds. a. Note Redemption. Principal proceeds received from the sale and delivery of the 2003A Bonds sufficient in amount, together with other funds available therefor, to pay and redeem the Note shall be deposited in the previously established Limited Tax General Obligation Bond Anticipation Note Account 2000. b. 2003A Project Accounts within the Foster Golf Course Fund. City Finance Director special fund designated as the fib' 3 Fund (the "2003A Project Fund The Finance Director is authorized to establish within the 2003A Project Fund such accounts for the 2003A Projects as he may deem appropriate. The remaining principal proceeds and premium, if any, received from the sale and delivery of the Series 2003A Bonds shall be paid into one or more accounts within the 2003A Project Fund and used for the purposes specified in Section 2.A of this ordinance. Until needed to pay the costs of the 2003A Projects and costs of issuance of the Bonds, the City may invest principal proceeds temporarily in any legal investment, and the investment earnings may be retained in the 2003A Project Fund and be spent for the purposes of that fund except that earnings subject to a federal tax or rebate requirement may be withdrawn from the 2003A Project Fund and used for those tax or rebate purposes. 2. Series 2003T Bonds. There is created and established in the office of the City Finance Director, a special account designated as .'((ro lrilC"iouse:lfesiatiairt gm eil "i t�l�a�'iy1� �J. The Finance Director is authorized to establish within the 2003T Project Fund such accounts as he may deem appropriate. The principal proceeds and premium, if any, received from the sale and delivery of the Series 2003T Bonds shall be paid into one or more accounts within the 2003T Project account and used for the purposes specified in Section 2.B of this ordinance. Until needed to pay the costs of the 2003T Projects and costs of issuance of the Bonds, the City may invest principal proceeds in any legal investment, and the investment earnings may be retained in the 2003T Project Fund and be spent for the purposes of that fund. Omen] TuMwd wxad 7 1. Series 2003A Bonds. Section 16. 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 fords that entering into the Bond Purchase Contract is in the City's best interest and therefore 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. Section 17. Preliminary Official Statement Deemed Final. The City Council has been provided with copies of a preliminary official statement dated June 2003 (the "Preliminary Official Statement prepared in connection with the sale of the Bonds. For the sole purpose of the Bond purchaser's compliance with Securities and Exchange Commission Rule 15c2- 12(6)(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 18. 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; (3) unscheduled draws on debt service reserves reflecting financial difficulties; (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 tax exempt status of the Bonds; (7) modifications to rights of holders of the Bonds; (8) Bond calls (other than scheduled mandatory redemptions of Tenn Bonds); (9) defeasances; GenaaTVDond 9/5/03 8 (10) release, substitution, or sale of property securing repayment of the Bonds; and (11) rating changes. 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. Type of Annual Financial Information Undertaken to be Provided. The annual financial information that the City undertakes to provide in subsection (1) of this section: (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, cmmn+^ncing 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 Undertaking. 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 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 Undertaking. 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. Genets Tax Bond 9 /5/03 9 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, 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 of the City; (3) the assessed value of the property within the City subject to ad valorem taxation; and 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: provided; a. Preparing and filing the annual financial information undertaken to be 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 19. 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 20. 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 Special Meeting thereof this day of 2003. Al I EST/AUTHENTICATED: Jane E. Cantu, CMC, City Clerk APPROVED AS TO FORM BY: Office of the City Attorney cmw Tax Bond 95/0310 Steven M. Mullet, Mayor Filed with the City Clerk: Passed by the City Council: Published: Effective Date: Ordinance No.: