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HomeMy WebLinkAboutFS 2010-07-07 COMPLETE AGENDA PACKET1. PRESENTATION(S) 2. BUSINESS AGENDA City of Tukwila Finance and Safety Committee O De'Sean Quinn, Chair O Allan Ekberg O Kathy Hougardy Item d. Sales Tax Report. Shawn Hunstock, Finance Director 3. ANNOUNCEMENTS 4. MISCELLANEOUS AGENDA WEDNESDAY, JULY 7, 2010 CONFERENCE Room #3, 5:00 PM a. A bond ordinance for Southcenter Parkway construction. Shawn Hunstock, Finance Director b. A resolution establishing a Seattle Southside Visitor Center Change Fund. Shawn Hunstock, Finance Director c. An ordinance regarding admissions and entertainment tax. Shawn Hunstock, Finance Director Distribution: D. Quinn A. Ekberg K. Hougardy D. Robertson Mayor Haggerton S. Lancaster C. O'Flaherty S. Brown J. Ferrer -Santa Ines B. Giberson D. Haynes Next Scheduled Meeting: Tuesday, July 20, 2010 Recommended Action S. Hunstock R. Still M. Hart D. Tomaso S. Kerslake J. Trantina K. Kertzman M. Villa T. Kinlow Judge Walden K. Matej B. Arthur M. Miotke C. Parrish G. Labanara S. Kirby D. Lincoln S. Norris N. Olivas J. Pace D. Speck Page a. Forward to 7/12 C.O.W. Pg.1 and 7/19 Regular Mtg. b. Forward to 7/12 C.O.W. Pg.37 and 7/19 Regular Mtg. c. Forward to 7/12 C.O.W. Pg.43 and 7/19 Regular Mtg. d. Information only Pg.47 Committee Goals: x Work together in cooperation with nearby cities to address common problems in the Highway 99 corridor and Military Road. x Ensure a commitment to continued human services funding in relation to the cost of living through consistent review of regional, state and federal budgets affecting human services progams and services (also assigned to CAP). x Research the viability of sponsoring a City -wide Citizens' Academy (also assigned to CAP). The City of Tukwila strives to accommodate individuals with disabilities. Please contact the City Clerk's Office at 206 433 -1800 (TDD 206 -248 -2933) for assistance. City of Tukwila INFORMATIONAL MEMORANDUM TO: Mayor Haggerton Finance and Safety Committee FROM: Shawn Hunstock, Finance Director DATE: July 1, 2010 SUBJECT: Bond Ordinance ISSUE BACKGROUND DISCUSSION Jim Haggerton, Mayor At the June 8, 2010 Finance and Safety Committee meeting, Council members asked staff for additional information regarding the specific capital equipment that was included in the draft ordinance. Council members also asked for information regarding the possibility of splitting the ordinance into two parts, one for the Tukwila South construction project and one for the emergency preparedness and response equipment. The City Council, at its May 17, 2010 meeting, approved the acceptance of nearly $12 million in state grant funding related to Tukwila South. The state funding, in addition to nearly $3.7 million in federal funding, will be used along with bonded indebtedness to fund realignment and construction of Southcenter Parkway. In addition to providing bond funding for the Southcenter Parkway project, the administration is proposing purchase equipment related to flood planning, response and mitigation. An updated equipment listing is included with this Information Memorandum. The departments were asked to again review the equipment list and provide background and justification for why the equipment was needed, if we would otherwise purchase it if it was not funded through bond proceeds, and if so, what the funding source would be. As you can see from the updated list, some items were removed and the quantity of some items was changed. In all cases, the equipment was something not currently budgeted for by the department, and no other identifiable funding was known at this time. Changes to the list decreased the amount of equipment to be bonded for from $1,544,231 to $1,530,965. Regarding the possibility of splitting the bond ordinance into two separate ordinances, we inquired about the implications of doing so with Hugh Spitzer at Foster Pepper and 1 2 INFORMATIONAL MEMO Page 2 Lindsay Sovde at Seattle Northwest Securities. They both recommended against splitting the bond ordinance. Doing so would require two separate smaller bond series, both of which could be sold as either taxable or tax exempt, or both, creating potentially four bond series. This would result in a bond series too small for them to market. The smaller bond series would also result in higher interest costs to the City. Over the life of the 15 year bonds, an increase in the interest rate of only 0.25% would result in an increase in the interest costs of over $135,000. The separate smaller bond issues would also increase issuance costs. They estimated the costs to be 5% higher, which if the total issuance costs are $200,000, the resulting increase would be about $10,000. Both Hugh and Lindsay recommended having the discussion about the capital items and make any necessary changes to the list, but leaving the ordinance as is. Lindsay also indicated that a short delay would not necessarily increase costs, but going over 30 days would more than likely require us to pay Moody's for a second rating fee, which would be about $5,000. Selling the bonds on July 19th, if approved at the Regular Council meeting that night, would be within that thirty day window. A ratings presentation for the City was conducted on June 1, 2010 with Moody's Investors Service. The presentation went very well, and Moody's showed particular interest in the City's recently adopted reserve policy. Moody's affirmed our existing credit rating based on the amount of fund balance and other reserves available to the City. The bonds are currently scheduled for pricing on July 19, 2010. RECOMMENDATION The Council is being asked to approve the ordinance providing for issuance of the new bonds, and authorizing the Mayor to execute a continuing disclosure agreement. This item is scheduled to be discussed at the July 7, 2010 Finance and Safety Committee meeting, the July 12 Committee of the Whole meeting, and the July 19 Regular meeting. ATTACHMENTS Bond Ordinance Information Memo, dated June 3, 2010, from Shawn Hunstock Southcenter Parkway spreadsheet, from April 12, 2010 C.O.W packet Emergency Preparedness Capital Asset List, dated June 30, 2010 Minutes from the June 8, 2010 Finance and Safety Committee Meeting W InfoMemos \BondOrdinance07072010.doc DRAFT AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF TUKWILA, WASHINGTON, RELATING TO CONTRACTING INDEBTEDNESS; PROVIDING FOR THE ISSUANCE OF $1,600,000 PAR VALUE OF LIMITED TAX GENERAL OBLIGATION BONDS, SERIES 2010A, AND $4,400,000 PAR VALUE LIMITED TAX GENERAL OBLIGATION BONDS, SERIES 2010B (TAXABLE BUILD AMERICA BONDS DIRECT PAYMENT), OF THE CITY FOR GENERAL CITY PURPOSES TO PROVIDE FUNDS WITH WHICH TO PAY THE COST OF SOUTHCENTER PARKWAY IMPROVEMENTS AND EMERGENCY RESPONSE CAPITAL EQUIPMENT; FIXING THE DATE, FORM, MATURITIES, INTEREST RATES, TERMS AND COVENANTS OF THE BONDS; ESTABLISHING A BOND REDEMPTION FUND AND PROJECT FUNDS; PROVIDING FOR THE PURCHASE OF BOND INSURANCE; AND APPROVING THE SALE AND PROVIDING FOR THE DELIVERY OF THE BONDS TO SEATTLE NORTHWEST SECURITIES CORPORATION OF SEATTLE, WASHINGTON; PROVIDING FOR SEVERABILITY; AND ESTABLISHING AN EFFECTIVE DATE. WHEREAS, the City of Tukwila, Washington (the "City is in need of carrying out the "Projects" (as that term is hereinafter defined), the estimated cost of which is $6,000,000 and the City does not have available sufficient funds to pay the cost; 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 bonds (the "Bonds authorized herein for general City purposes, to provide funds to carry out the Projects and to pay the costs of issuance of the Bonds, and WHEREAS, Seattle Northwest Securities Corporation 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; NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF TUKWILA, WASHINGTON, HEREBY ORDAINS AS FOLLOWS: Section 1. Definitions. For the purposes of this ordinance the words or phrases defined in this section shall have the following meanings. 1. `Bond Fund" means the Limited Tax General Obligation Bond Fund, 2010, created by this ordinance for the payment of the Bonds. 2. "Bond Register" means the books or records maintained by the Bond Registrar containing the name and mailing address of the owner of each Bond and the principal amount and number of Bonds held by each owner 3 "Bond Registrar" means the Fiscal Agent. 4. "Bonds" means, collectively, the Series 2010A Bonds and the Series 2010B Bonds. 5 "City" means the City of Tukwila, Washington, a municipal corporation duly organized and existing under and by virtue of the laws of the state of Washington. 6 "Code" means the United States Internal Revenue Code of 1986, as amended, and applicable rules and regulations promulgated thereunder W \Word Processing Ordinances \General Obligation Bonds.doa KS:km 06/02/2010 Page 1 of 13 3 4 7 "DTC" means The Depository Trust Company, New York, New York. 8. "Finance Director" means the Finance Director of the City 9 "Fiscal Agent" means the fiscal agent of the State of Washington, as the same may be designated by the State from time to time. 10. "Letter of Representations" means the Blanket Issuer Letter of Representations dated October 18, 1999, between the City and DTC, as it may be amended from time to time. 11 "MSRB" means the Municipal Securities Rulelnaking Board. 12. "Projects" means Southcenter Parkway Improvements and Emergency Response Capital Equipment. 13. "Project Funds" means, collectively, the Southcenter Parkway Construction Fund, the Strander Boulevard Construction Fund and the Emergency Capital Fund, each created by this ordinance. 14. "Rating Agency" means the nationally recognized rating agency or agencies, if any, at the time rating the Bonds at the request of the City 15. "SEC" means the United States Securities and Exchange Commission. 16. "Series 2010A Bonds" means the $1,600,000 par value Limited Tax General Obligation Bonds, Series 2010A, of the City issued pursuant to and for the purposes provided in this ordinance. 17 "Series 2010B Bonds" means the $4,400,000 par value Limited Tax General Obligation Bonds, Series 2010B (Taxable Build America Bonds Direct Payment), of the City issued pursuant to and for the purposes provided in this ordinance. 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 2010 is $4,982,452,351, and the City has outstanding general indebtedness evidenced by limited tax general obligation bonds, notes, leases or conditional sales contracts in the principal amount of $25,876,800 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, has 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 the Bonds are authorized herein to be issued is $6,000,000 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 aggregate principal amount of $6,000,000 for general City purposes to provide the funds to pay the cost of the Projects and to pay the costs of issuance and sale of the Bonds (the "costs of issuance 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. Section 4. Description of Bonds. A. The Series 2010A Bonds shall be called Limited Tax General Obligation Bonds, Series 2010A, of the City and shall be issued in the aggregate principal amount of $1,600,000 The Series 2010B Bonds shall be called Limited Tax General Obligation Bonds, Series 2010B (Taxable Build America Bonds Direct Payment), of the City and shall be issued in the aggregate principal amount of $4,400,000 The Bonds shall be dated the date of their initial delivery; shall be in the denomination of $5,000 or any integral multiple thereof within a single series and maturity; shall be numbered separately in the manner and with any additional designation as the Bond Registrar 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 June 1, 2010, to the maturity or earlier redemption of the W: \Word Processing Ordinances \General Obligation Bonds.docx KS:ksn 06/02/2010 Page 2 of 13 Bonds, and shall mature on December 1 in years and amounts and bear interest at the rates per annum as follows: Series 2010A Bonds Series 2010B Bonds Maturity Interest Maturity Interest Years Amounts Rates Years Amounts Rates 2010 2011 2012 2013 2014 2015 B The life of the capital facilities financed with the proceeds of the Bonds exceeds the term of the Bonds. 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 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 series, 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 DTC. The Bonds so registered shall be held in fully immobilized form by DTC as depository in accordance with the provisions of the Letter of Representations. 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, except for the purpose of the City's undertaking herein to provide continuing disclosure, 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. W \Word Processing Ordinances \General Obligation Bonds.docx KS:ksn 06/02/2010 Page 3 of 13 5 6 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 Bonds prior to the applicable record date, by wire transfer on the interest payment date, provided that costs of the electronic transfer will be paid by the requesting registered owner. Principal of the Bonds shall be payable upon presentation and surrender of the Bonds by the registered owners to the Bond Registrar. 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. A. Optional Redemption. The Series 2010A Bonds shall be issued without the right or option of the City to redeem the Series 2010A Bonds prior to their stated maturity dates. The City reserves the right and option to redeem the Series 2010B Bonds maturing on or after December 1, 2020, prior to their stated maturity dates at any time on or after December 1, 2019, as a whole or in part, at a price equal to the principal amount to be redeemed, without premium, plus accrued interest to the date fixed for redemption. B Extraordinary Optional Redemption. The City additionally reserves the right and option to redeem the Series 2010B Bonds prior to their stated maturity dates at any time prior to December 1, 2019, as a whole or in part, upon the occurrence of an Extraordinary Event, at the Extraordinary Optional Redemption Price. 1. An "Extraordinary Event" will have occurred if the City determines that a material adverse change has occurred to Section 54AA or Section 6431 of the Code or there is any guidance published by the Internal Revenue Service or the United States Treasury with respect to such Sections or any other determination by the Internal Revenue Service or the United States Treasury, which determination is not the result of any act or omission by the City to satisfy the requirements to qualify to receive the 35% cash subsidy payment from the United States Treasury, pursuant to which the City's 35 cash subsidy payment from the United States Treasury is reduced or eliminated. 2. "Extraordinary Optional Redemption Price" means the greater of: a) 100% of the principal amount of the Series 2010B Bonds to be redeemed, or b) the sum of the present values of the remaining scheduled payments of principal of and interest to the stated maturity date on the Series 2010B Bonds to be redeemed, discounted to the date on which such Series 2010B Bonds are to be redeemed on a semi annual basis, assuming a 360 -day year consisting of twelve 30 -day months, at the Treasury Rate plus 100 basis points, plus, in each case, accrued interest on the Series 2010B Bonds to be redeemed to the date fixed for redemption. 3 "Treasury Rate" means, with respect to any date fixed for redemption for a particular Series 2010B Bond, the yield to maturity as of such date of United States Treasury securities with a constant maturity (excluding inflation indexed securities, and as compiled and published in the most recent Federal Reserve Statistical Release H.15 (519) that has become publicly available as of the first business day that is at least two business days prior to such date or, if such Statistical Release is no longer published, any publicly available source of similar market data) most nearly equal to the period from such date to the stated maturity date of such Series 2010B Bond. 1N Word Processing Ordinances \General Obligation Bonds.docx KS:ksn 06/02/2010 Page 4 of 13 4. At the request of the Bond Registrar, the Extraordinary Optional Redemption Price shall be determined by an independent accounting firm, investment banking firm or financial advisor retained by the City at the City's expense. Absent manifest error, such determination shall be conclusive and binding on the City, the Bond Registrar and the Registered Owners, and neither the City nor the Bond Registrar shall be liable for relying on such determination. C. Mandatory Redemption. 1. The Series 20105 Bonds maturing in 20_ and 20 are Term Bonds and, if not redeemed under the optional or extraordinary 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 December 1 in years and amounts as follows: 2010B Term Bonds Maturing 2010B Term Bonds Maturity in 20_ in 20_ Mandatory Mandatory Redemption Mandatory Redemption Mandatory Dates Redemption Dates Redemption (December 1) Amounts (December 1) Amounts Maturity 2. If the City redeems under Section 7.A or B, purchases in the open market or defeases Term Bonds, the par amount of the Tenn Bonds so redeemed, purchased or defeased (irrespective of their actual redemption or purchase prices) shall be credited against one or more scheduled mandatory redemption amounts for those Term Bonds. The City shall determine the manner in which the credit is to be allocated and shall notify the Bond Registrar in writing of its allocation at least 60 days prior to the earliest mandatory redemption date for that maturity of Term Bonds for which notice of redemption has not already been given. D Partial Redemption of Bonds. 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 to 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 series, maturity and interest rate in any of the denominations authorized by this ordinance in the aggregate principal amount remaining unredeemed. E. Open Market Purchase. 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. F Selection of Bonds for Redemption. If fewer than all of the outstanding Series 2010B Bonds are to be redeemed prior to maturity, then (a) if the Series 2010B Bonds are in book -entry form at the time of such redemption, the Bond Registrar shall instruct DTC to instruct the DTC participants to select the specific Series 2010B Bonds for redemption pro rata, and neither the City nor the Bond Registrar shall have any responsibility to ensure that DTC or the DTC participants properly select such Series 2010B Bonds for redemption, and (b) if the Series 20105 Bonds are not then in book entry form at the time of such redemption, on each date fixed for redemption, the Bond Registrar shall select the specific Series 2010B Bonds for redemption pro rata. The portion of any Series 2010B Bonds of a denomination more than $5,000 to be redeemed shall be in the principal amount of $5,000 or any integral multiple thereof. The Bond W. Word Processing Ordinances \General Obligation Bonds. docx KS:ksn 06/02/2010 Page 5 of 13 7 8 Registrar shall select such portions of Series 2010B Bonds to be redeemed in such manner as the Bond Registrar in its discretion may deem to be fair and appropriate. Notwithstanding the foregoing, for as long as the Series 2010E Bonds are registered in the name of DTC or its nominee, selection of Series 2010B Bonds for redemption shall be in accordance with the Letter of Representations. G. Cancellation of Bonds. All Bonds purchased or redeemed under this section shall be canceled. Section 8. Notice of Redemption. A. While the Bonds are held by DTC in book -entry only form, any notice of redemption shall be given at the time, to the entity and in the manner required by DTC in accordance with the Letter of Representations, and the Bond Registrar shall not be required to give any other notice of redemption. If the Bonds cease to be in book -entry only form, the City shall cause notice of any intended redemption of Bonds to be given by the Bond Registrar 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 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. B In the case of an optional redemption, the notice may state that the City retains the right to rescind the redemption notice and the related optional redemption of Bonds by giving a notice of rescission to the affected registered owners at any time prior to the scheduled optional redemption date. Any notice of optional redemption that is so rescinded shall be of no effect, and the Bonds for which the notice of optional redemption has been rescinded shall remain outstanding. C. 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 the MSRB and to such other persons and with such additional information as the Finance Director shall determine, but these additional mailings shall not be a condition precedent to the redemption of Bonds. Section 9. 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 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 10. 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 (including the federal credit payments described in the following sentence), 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. Section 11. Form and Execution of Bonds. A. The Bonds shall be prepared 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. W'\ Word Processing\ Ordinances\ General Obligation Bonds.docx KS:ksn 06 /02/2010 Page 6 of 13 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 Bonds, [Series 2010A/Series 2010B (Taxable Build America Bonds Direct Payment)], described in the Bond Ordinance WASHINGTON STATE FISCAL AGENT Bond Registrar By Authorized Signer C. The authorized signing of a Certificate of Authentication shall be conclusive evidence that the Bond so authenticated has been duly executed, authenticated and delivered and is entitled to the benefits of this ordinance. D 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 12. Duties of Bond Registrar. A. The Bond Registrar shall keep, or cause to be kept, 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 13. Preservation of Tax Exemption for Interest on Series 2010A Bonds. The City covenants that it will take all actions necessary to prevent interest on the Series 2010A 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 2010A Bonds or other funds of the City treated as proceeds of the Series 2010A Bonds at any time during the term of the Series 2010A Bonds which will cause interest on the Series 2010A 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 Code is applicable to the Series 2010A Bonds, take all actions necessary to comply (or to be treated as having complied) with that requirement in connection with the Series 2010A 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 W \Word Processing Ordinances \General Obligation Bonds.docx KS:ksn 06/02/2010 Page 7 of 13 9 1 0 Code to prevent interest on the Series 2010A Bonds from being included in gross income for federal income tax purposes. Section 14. Designation of Series 2010A Bonds as "Qualified Tax Exempt Obligations." The City has determined and certifies that: 1 the Series 2010A Bonds are not "private activity bonds" within the meaning of Section 141 of the Code; 2. 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 2010A Bonds are issued will not exceed $30,000,000; and 3. the amount of tax exempt obligations, including the Series 2010A Bonds, designated by the City as "qualified tax exempt obligations" for the purposes of Section 265(b)(3) of the Code during the calendar year in which the Series 2010A Bonds are issued does not exceed $30,000,000. The City designates the Series 2010A Bonds as "qualified tax exempt obligations" for the purposes of Section 265(b)(3) of the Code. Section 15. Election to Treat Series 2010B Bonds as "Build America Bonds Tax Covenants. A. The City hereby irrevocably elects to have Section 54AA of the Code apply to the Series 2010B Bonds so that the Series 2010B Bonds are treated as "build America bonds," and further to have Subsection 54AA(g) of the Code apply to the Series 2010B Bonds so that the Series 2010B Bonds are treated as "qualified bonds" with respect to which the City will be allowed a credit payable by the United States Treasury to the City pursuant to Section 6431 of the Code in an amount equal to 35% of the interest payable on the Series 2010B Bonds on each interest payment date. The City authorizes and directs the Finance Director (or his or her designee) to take such actions and enter into such agreements as are necessary or appropriate for the City to receive from the United States Treasury the applicable federal credit payments in respect of the Series 2010B Bonds, including, but not limited to, entering into a calculation agency agreement with a calculation agent and the timely filing with the Internal Revenue Service of Form 8038 -CP- "Return for Credit Payments to Issuers of Qualified Bonds" in the manner prescribed by Internal Revenue Service Notice 2009 -26. B. The City also covenants that it will not take or permit to be taken on its behalf any action that would adversely affect the entitlement of the City to receive from the United States Treasury the applicable federal credit payments in respect of the Series 2010B Bonds. Without limiting the generality of the foregoing, the City will comply with the provisions of the Code, compliance with which would result in the interest on the Series 2010B Bonds being excluded from gross income for federal tax purposes but for the City's irrevocable election to have Section 54AA of the Code apply to the Series 2010B Bonds. Section 16. 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 "government obligations" (as defined in chapter 39.53 RCW, as now or hereafter amended) 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, W \Word Processing\ Ordinances\ General Obligation Bonds.docx KS:ksn 06 /02/2010 Page 8of13 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 a series of 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. Section 17. Bond Fund; Project Funds; and Deposit of Bond Proceeds. A. The Bond Fund is hereby created and established in the office of the Finance Director as a special fund designated the Limited Tax General Obligation Bond Fund, 2010, for the purpose of paying principal of and interest on the Bonds. 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 The Project Funds also are hereby created and established in the office of the Finance Director as special funds designated the Southcenter Parkway Construction Fund, the Strander Boulevard Construction Fund and the Emergency Capital Fund. The principal proceeds and premium, if any, received from the sale and delivery of the Bonds shall be paid into the Project Funds and used to pay the costs of the Projects and costs of issuance of the Bonds Until needed to pay such costs, the City may invest principal proceeds temporarily in any legal investment, and the investment earnings may be retained in the Project Funds and be spent for the purposes of those funds except that earnings subject to a federal tax or rebate requirement may be withdrawn from the Project Funds and used for those tax or rebate purposes. Any amounts remaining in the Project Funds after payment of the costs of the Projects and costs of issuance of the Bonds may be used for any other proper City purpose. Section 18. Approval of Bond Purchase Contract. A. Seattle Northwest Securities Corporation 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 Finance Director and is incorporated herein by this reference. The City Council finds 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 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 19. Preliminary Official Statement Deemed Final. The City Council has been provided with copies of a preliminary official statement dated 2010 (the "Preliminary Official Statement prepared in connection with the sale of the Bonds. For the sole purpose of the Bond purchaser's compliance with SEC Rule 15c2- 12(b)(1), the City "deems final" that Preliminary Official Statement as of its date, except W: Word Processing\ Ordinances \General Obligation Bonds.docx K5:ksn 06/02/2010 Page 9 of 13 11 12 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 20. Undertaking to Provide Continuing Disclosure. To meet the requirements of 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, to the MSRB, in an electronic format as prescribed by the MSRB, accompanied by identifying information as prescribed by the MSRB. difficulties; difficulties; perform; a. 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. 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 (4) unscheduled draws on credit enhancements reflecting financial (5) substitution of credit or liquidity providers, or their failure to (6) adverse tax opinions or events affecting the tax exempt status of the Series 2O1OA Bonds; (7) modifications to rights of holders of the Bonds; (8) Bond calls (other than scheduled mandatory redemptions of Term Bonds); Bonds; and bonds; (9) defeasances; (10) release, substitution, or sale of property securing repayment of the (11) rating changes. c. 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. a. Shall consist of: (1) annual financial statements prepared (except as noted in the financial statements) in accordance with the generally accepted accounting principles applicable to Washington State local governmental units, as such principles may be changed from time to time, 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 W Word Processing\ Ordinances\ General Obligation Bonds.docx KS:ksn 06/02/2010 Page l0of13 (3) assessed valuation of property within the City for the fiscal year; and (4) regular property tax levy rate and regular property tax levy rate limit for the fiscal year; b Shall be provided 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, 2009; and c. May be provided in a single or multiple documents, and may be incorporated by specific reference to documents available to the public on the Internet website of the MSRB or filed with the SEC. 3 Amendment of Undertaking. 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 or the MSRB, under the circumstances and in the manner permitted by the Rule. The City will give notice to the MSRB 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 prior redemption or payment in full of all the then outstanding 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 the MSRB 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 (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 1 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 W \Word Processing Ordinances \General Obligation Bonds.docx KS:ksn 06/02/2010 Page 11 of 13 13 14 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 21. Bond Insurance. The City Council finds that it is in the City's best interest to purchase, and that a savings will result from purchasing, the financial guaranty insurance policy for the Bonds. The City is hereby 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 such policy, including the payment of the premium therefor. The Mayor and the Finance Director are each independently authorized to execute the Bond Insurer's Commitment to Issue Financial Guaranty Insurance Policy and all other documents on behalf of the City in connection with the financial guaranty insurance policies. Section 22. 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 of 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 23. 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 full force five days after passage and publication as provided by law PASSED BY THE CITY COUNCIL OF THE CITY OF TUKWILA, WASHINGTON, at a Regular Meeting thereof this day of 2010 ATTEST/ AUTHENTICATED: Christy O'Flaherty, CMC, City Clerk APPROVED AS TO FORM BY Office of the City Attorney W.\ Word Processing Ordinances \General Obligation Bonds.docx K5:ksn 06 /02/2010 Jim Haggerton, Mayor Filed with the City Clerk: Passed by the City Council. Published. Effective Date: Ordinance Number Page 12 of 13 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 meeting of the City Council of the City held at the regular meeting place thereof on 2010, as that ordinance appears on the minute book of the City; and the ordinance will be in full force and effect five days after publication in the City's official newspaper; 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, 3 Written notice of the special meeting was given to each local radio or television station and to each newspaper of general circulation that has on file with the City a written request to be notified of special meetings, or to which such notice customarily is given, 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. IN WITNESS WHEREOF, I have hereunto set my hand this day of 2010 W \Word Processing\ Ordinances\ General Obligation Bonds.docx KS:ksn 06/02/2010 CERTIFICATION CITY OF TUKWILA, WASHINGTON Christy O'Flaherty, CMC, City Clerk Page 13 of 13 15 16 City of Tukwila TO: Mayor Haggerton Finance and Safety Committee FROM: Shawn Hunstock, Finance Director DATE: June 3, 2010 SUBJECT: Bond Ordinance ISSUE INFORMATIONAL MEMORANDUM Jim Haggerton, Mayor Section 4.3.7 of the Tukwila South Development Agreement (DA) calls for the City to issue up to $8.25 million in general obligation bonds for construction of Southcenter Parkway within the newly annexed area. All funding arrangements for the construction project, including securing the bonds, is to be accomplished by December 31, 2010 according to the DA. BACKGROUND The City Council, at its May 17, 2010 meeting, approved the acceptance of nearly $12 million in state grant funding related to Tukwila South. The state funding, in addition to nearly $3.7 million in federal funding, will be used along with bonded indebtedness to fund realignment and construction of Southcenter Parkway. In addition to providing bond funding for the Southcenter Parkway project, the administration is proposing to reimburse the City for previously incurred expenses related to flood planning, response and mitigation, as well as fund some related projects that have not occurred yet. The City Council on December 7, 2009 adopted Resolution No. 1702, thereby approving reimbursement for flood related expenses from bond funding to occur later. It should be noted that the City originally intended to bond this year for up to $1.9 million in expenses related to the Strander Boulevard project. Due to uncertainties related to funding for the project and the likelihood of rail line relocation, a key component of an overpass or underpass, the project is on hold indefinitely at this time. DISCUSSION According to Section 4.8.2 of the DA, the City will use increased property tax revenue from the annexation area to pay debt service costs on the first $6 million in bonding required to fund the Southcenter Parkway construction project. If it is necessary to issue more than $6 million in bonds, the DA states that the developer will pay for the 17 INFORMATIONAL MEMO Page 2 additional debt service costs, up to a total of $8.25 million in bonds. Should the increased property tax revenue more than cover the cost of debt service, this additional amount is available to the City's General Fund for regular operating expenses. According to the total project funding recently approved by Council, the Southcenter Parkway construction project will include $3,678,627 in federal funding, $11,980,000 in state funding, and $4,355,930 in bond funding. The total project costs are $19,714,557 plus $300,000 in City construction management, for a combined total of $20,014,557. Because the amount of bond funding needed is less than $6 million, according to the DA, the City will be responsible for debt service on this portion of the bond issue. Future property tax increases will be used to pay for this portion of the debt service, currently estimated to be approximately $382,000 annually, depending on the final structure of the bond sale. At the City's current property tax levy rate of $2.67 per $1,000 of assessed value, it would take an increase of just over $143 million in assessed value from the annexation area to pay for the annual debt service of $382,000. In addition to providing funding for the Southcenter Parkway, the administration is proposing to use additional bond proceeds to reimburse the City for previously incurred flood related expenses, as well as some needed purchases and facility upgrades for flood response and mitigation purposes. A detailed list of previously incurred and proposed expenses is attached to this information memorandum. The items are capital in nature, and are part of an overall $3.2 million the City has spent on flood related expenses since last fall. The total amount of flood related expenses proposed for bond funding is $1,544,231. The administration has determined that these items are above and beyond the normal operating expenses of the City, and the City's bond counsel has made a preliminary determination that these items are eligible for bond funding. Two of the emergency response capital equipment items impact the budget reductions recently reviewed by Council for the Information Technology department. The Microsoft Enterprise Agreement (EA) for MS Office, MS Exchange email using MS Outlook plus other software products will not at first decrease the annual budget needed for MS Office license purchases, but will immediately provide consistency with standardized versions for all PCs and laptops. Currently a new Office license is purchased every time a new computer is purchased, one quarter of the total per year allowing for differing versions throughout the departments. The EA will essentially give the City a site license for MS Office and other products, decreasing the current annual licensing costs for the IT department after the first three years and into the future. Software standardization will also decrease IT staff costs for software and hardware deployment. Training costs will be lowered with standardized software; the EA includes vouchers for IT staff technical training on the covered software plus online training for all users. The annual savings after the first three years for this item is estimated to be $27,000. The other item that impacts the IT budget reductions is the phone system replacement. Most of the required software for this new voice over IP phone technology system is included in the EA and will decrease the annual telephone system maintenance costs by approximately $30,000. The hardware costs and system maintenance through IT staff or outside consultants will be less than our current aging phone system once the new system is in place. Both items will provide the ability for system redundancy, disaster recovery and backup communications for our network infrastructure. 1 8 W InfoMemos\ TukSoBondOrdinanceREVISED_1.doc INFORMATIONAL MEMO Page 3 The total bond issue for both Southcenter Parkway construction costs ($4,355,930) and flood related expenses ($1,544,231) is $5,900,161. A ratings presentation for the City was conducted on June 1, 2010 with Moody's Investors Service. The presentation went very well, and Moody's showed particular interest in the City's recently adopted reserve policy. The bonds are currently scheduled for pricing on June 21, 2010. RECOMMENDATION The Council is being asked to approve the ordinance providing for issuance of the new bonds, and authorizing the Mayor to execute a continuing disclosure agreement. This item is scheduled to be discussed at the June 8, 2010 Finance and Safety Committee meeting, the June 14 Committee of the Whole meeting, and the June 21 Regular meeting. ATTACHMENTS Bond Ordinance Information Memo, dated April 5, 2010, from Lisa Verner Southcenter Parkway spreadsheet, Attachment 9, from April 12, 2010 C.O.W packet Resolution 1702, Intent to Reimburse Capital Expenditures, passed December 7, 2009 Emergency Preparedness Capital Asset List W \2010 InfoMemos\ TukSoBondordinanceREVISED_1.doc 19 20 a m c a) E a) Cn .n E CO (0 co N ti r O O O O N O O O O cc; L6 0) O O O O r O O 0) LC) N N 1 05•4 N LO N CO N N O 0 0 0 0• d' O r 0 0 0 0 0 0 0 0 d• m 0 c- O O O O CO CO 0 0 0 0 0 0 0 0 CO 0 r 0 0 0 N 00 O O vi a) O CO O O O O LOS O O 0) O 4 C') in O r O LC) O O O L0 L() N O LC) O) r co O N- LC) 1` N N- O t O 0) CO CO O O) t— r- N O 00 d' 0) L() Cp LO) CO Cr CO Ln ti CO 0 O O r N d' 0 d 0) CO CO CO CO 0 CO d• LO N r r N CO CO 7- r 7 1 co N N N r r N H) 0 u) F- U) o U) d U C as o C J a) m Q n 0 Ca a) a) a� a) i= m O E 0 a a UisF° c 3 CL Q 0 "O N "a E Q- C N Ct C L'' 0) "t3 O (0 m a) 0) i c O) Q• O CO ,co c a). 3 Q as <w 2 3 7 c u) 2 0 7 7 L 0 0 O L C o o o F o U N, a) a) a) Cl.) a) CU I- U a) U -t3 U L C 7 7 7 7 7 7 O O CD a) a) a) a) a) c C •65 c w o U U U U U U 0 0 a) c a) (o -t 03 U 0)0)0)0)0) (1) 00000 fa_ a_ 4, CL) 0 0 0 0 0 O 0 0 0 0 0 0 O o CB t� O O O O 0 0 N O O O (+7 0 co O O O CA a0 O co O 10 N O co O Ln co O O O O Ch co co N ago n0 O0 o 0 0 o O Lo CO 0 N- o cr, ti O N- co O cs co co CO O 4- LC) Lf) C O N V' O O) (D CO CO r a) Q U) To 0 0 0 0 0 0 0 0 c O O O O O O O O p) 0 0 0 0 0 0 0 0 c 0 0 0 0 0 0 0 0 O 0 0 0 0 0 0 0 co 0 0 0 0 0) 0 co co O CO O O CO N L() CO O CT O O CO CO CO CO CO CO LO) O 4 N Attachment 9 0) a L O U r2 co 2 U C N c a) O •O c i U a. LL_ m w To O c a) Q a m a) c .o E Ta U O c a) c 0) 0 Q i.<m >.-o O N a) u) 0) O Q X C W V)) CD C J 21 22 EMERGENCY PREPAREDNESS CAPITAL ASSET LIST 24 EMERGENCY PREPAREDNESS CAPITAL ASSET LIST 25 26 EMERGENCY PREPAREDNESS CAPITAL ASSET LIST 27 28 EMERGENCY PREPAREDNESS CAPITAL ASSET LIST 29 30 EMERGENCY PREPAREDNESS CAPITAL ASSET LIST 31 32 EMERGENCY PREPAREDNESS CAPITAL ASSET LIST 33 34 Finance Safety Committee Minutes June 8, 2010 Pape 2 D. Bond Ordinance for Southcenter Parkway Extension Staff is seeking approval of an ordinance providing for the issuance of new bonds in the amount of Just under $6 million. The Committee discussed the issue of combining the needed funds for the Southcenter Parkway construction costs, together with Emergency Preparedness Capital equipment costs. The cost of each bond processing can be as high as $200,000, so it is staffs recommendation that the two needs be combined into one bond. This bond application has already been reviewed with Moody's, and there were no issues /concerns regarding the combining of these two areas into one bond. The Committee asked that the list of Emergency Preparedness Capital Assets be explained in further detail prior to Council review. One of the items (Fire/Police Command Unit) has grant funds attached, and there were some concerns that delays in moving this forward would jeopardize these grant funds. Staff were asked for the following: 1. Determine what the implications would be of splitting this bond application into two separate ordinances (Southcenter Parkway Construction, EOC Capital Assets) 2. What will the implication be of not moving forward at this time? 3. Would there be any cash flow implications related to State reimbursement on the Southcenter Parkway construction work if there is any delay in issuing bonds? 4. The Language in the agenda materials needs to be clarified to reflect that this bond would not be used for items already purchased. STAFF WAS ASKED TO ADDRESS THE QUESTIONS ABOVE AND BRING BACK TO COMMITTEE, IF THERE ARE NO NEGATIVE IMPLICATIONS OF WAITING. IF STAFF DETERMINES THAT A DELAY WILL ADVERSELY IMPACT GRANT FUNDS OR OTHER ISSUES, THEY W ILL NOTIFY THE COMMITTEE CHAIR AND DETERMINE NEXT STEPS. E. Animal Control Interlocal Agreement Staff is seeking Council approval to enter into an Interlocal Agreement with King County for animal control services. The City of Burien has decided not to be part of the Interlocal, which will raise Tukwila's costs by about $11,000 /year. Committee discussed the options of individual City's establishing fees or fines on recurring "problem properties UNANIMOUS APPROVAL. FORWARD TO JUNE 14 COW FOR DISCUSSION. F. Filing Dates for Elections Staff was asked to provide deadlines for upcoming elections to Committee INFORMATION ONLY. MISCELLANEOUS Meeting adjourned at 7:00 p.m. Next meeting Tuesday, June 22, 2010 5:00 p.m. Conference Room #3 Committee Chair Approval Minutes by JT Reviewed by SH. 35 36 TO: FROM: Peggy McCarthy, Deputy Finance Director DATE: June 16, 2010 SUBJECT: Establishment of a New $100.00 Change Fund Level for the Seattle Southside Visitor Center and Repeal of Resolution 1676. ISSUE To establish a new $100.00 change fund level for the Seattle Southside Visitor Center (SSVC) and for the repeal of Resolution No. 1676. BACKGROUND The Seattle Southside Visitors Center plans to begin selling tourist related items such as admission tickets to area attractions and bus passes. For operational efficiency and to best serve customers who tender cash in payment for these items, it is the desire of SSVC staff to establish a new change fund level in the amount of $100.00. DISCUSSION The attached proposed draft resolutions will establish a new change fund level for the Seattle Southside Visitor Center as follows: Once the City Council approves the establishment of a new change fund level for the Seattle Southside Visitor Center through the repeal of Resolutions No. 1676, a claims disbursement check will be issued through Accounts Payable to release the funds. RECOMMENDATION ATTACHMENTS City of Tukwila INFORMATIONAL MEMORANDUM Mayor Haggerton Finance and Safety Committee Hotel /Motel Tax Special Revenue Fund $100.00 Draft copy of resolution to repeal existing Resolution No. 1676 Copy of current Resolution No. 1676 Jim Haggerton, Mayor Please forward this item to the July 12, 2010 Committee of the Whole meeting for consideration and forward to the July 19, 2010 Regular Meeting for Council approval of final resolution. 37 38 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF TUKWILA, WASHINGTON, ESTABLISHING A SEATTLE SOUTHSIDE VISITOR CENTER CHANGE FUND LEVEL; AND REPEALING RESOLUTION NO. 1676. WHEREAS, the Tukwila City Council previously established Change Funds and Petty Cash Fund levels, most recently by Resolution No 1676, passed February 2, 2009; and WHEREAS, for the implementation of new retail operations, cashiering functions and improved customer service, there is a need to establish a new change fund level in the amount of $100.00 for the Seattle Southside Visitor Center; NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF TUKWILA, WASHINGTON, HEREBY RESOLVES AS FOLLOWS: Section 1. The Change Fund levels are hereby set as follows: Finance Department City Clerk's Office Seattle Southside Visitor Center Municipal Court Parks and Recreation Golf Course Section 2. The Petty Cash Fund levels are hereby set as follows: Finance Department Police Investigation /Tukwila Fire Department Parks and Recreation Public Works Division II Public Works Division I Section 3. Resolution No. 1676 is hereby repealed. PASSED BY THE CITY COUNCIL OF THE CITY OF TUKWILA, WASHINGTON, at a Regular Meeting thereof this day of 2010 ATTEST /AUTHENTICATED Christy O'Flaherty, CMC, City Clerk APPROVED AS TO FORM BY. Office of the City Attorney WA Word Processing Resolutions \Southside Change Fund.docx PM:ksn 6/29/2010 DRAFT 1 Water Fund 000 I 100.00 General Fund 000 100.00 1 Hotel/Motel Tax Fund 101 1 100 00 General Fund 0001 300 00 j 1 General Fund 0001 300.00 1 Foster Golf Course Fund 411 1,200 00 (or Less, as needed) General Fund General Fund 1 General Fund General Fund General Fund 1 General Fund 000 000 000 000 000 000 Filed with the City Clerk: Passed by the City Council. Resolution Number 800 001 10,000.00 1 350 001 500 00 1 350 00 1 200.001 Dennis Robertson, Council President Page 1 of 1 39 40 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF TUKWILA, WASHINGTON, ESTABLISHING A CITY CLERK'S OFFICE CHANGE FUND LEVEL, AND REPEALING RESOLUTION NO 1664. WHEREAS, the Tukwila City Council previously established Change Funds and Petty Cash Fund levels, most recently by Resolution No 1664, passed June 23, 2008, and WHEREAS, for the implementation of a new cashiering system for operational efficiency and improved customer service, associated with City Clerk operations, there is a need to establish a new change fund Ievel in the amount of $100 00 for the City Clerk's Office, NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF TUKWILA, WASHINGTON, HEREBY RESOLVES AS FOLLOWS: Section 1, The Change Fund levels are hereby set as follows. I Finance Department 1 City Clerk's Office Municipal Court Parks and Recreation Golf Course Section 2, The Petty Cash Fund levels are hereby set as follows. Finance Department Police Investigation /Tukwila Fire Department Parks and Recreation Public Works Div II I Public Works Div I Section 3. Resolution No 1664 is hereby repealed. PASSED BY THE CITY COUNCIL OF THE CITY OF TUKWILA, WASHINGTON, at a Regular Council Meeting thereof this day of 'F2 Cirt. 2009 ATTEST/ AUTHENTICATED .�lt/1.'a�'r' Christy O'Flahgty, CMC, City C erk APPROVED AS TsIRM BY f City of Tukwila Washington Resolution No. t 5) 6 1 Water Fund General Fund I General Fund [General Fund Foster Golf Course Fund General Fund General Fund General Fund General Fund General Fund General Fund 000 000 000 000 411 000 1 000 1 000 000 000 000 1 10000 1 100 00 1 300 001 1 300 001 1,200 00 I (or less as needed) 800 001 10,000 00 1 350 001 500 00 350 00 200 00 Jd an Hernandez, Council President Filed with the City Clerk. l Ocl Passed by the City Council. .oc? Resolution Number. i WI G, C. \Documents and Settings \All Users Desktop \Kelly\MSDArA Change Fund City Clerk.doc LJ.KSN 1/27/2009 Page 1 of 1 41 42 INFORMATIONAL MEMORANDUM TO: Mayor Haggerton Finance and Safety Committee ISSUE City of Tukwila FROM: Shawn Hunstock, Finance Director DATE: July 1, 2010 SUBJECT: Admission Tax Code Updates BACKGROUND Jim Haggerton, Mayor Several questions have come up by staff and taxpayers over the last several years regarding application of the tax to specific types of businesses, and specific types of revenue received. The Admission Tax provisions found in TMC 3.20 were last reviewed by Council in 2004. The updates contained in the attached ordinance attempt to clarify and clean up the admission tax ordinance and administration of the tax. DISCUSSION The existing ordinance is inconsistent and unclear in its application to specific types of businesses. Currently, the only businesses paying the admission tax are theaters and the Deja Vu- Airport company. The updated ordinance would apply the admission tax to other businesses such as amusement and recreation services, clubs with an admission charge, indoor go -kart tracks, golf, pool and billiard establishments, etc. Application of the new ordinance to specific businesses will be determined on a case -by -case basis, in consultation with the City Attorney. The effect of the new ordinance will be to expand the types of businesses the admission tax is applicable to. RECOMMENDATION The Council is being asked to approve the ordinance providing for changes to the admission tax section of the Tukwila Municipal Code. This item is scheduled to be discussed at the July 7, 2010 Finance and Safety h Committee meeting, the July 12 Committee of the Whole meeting, and the July 19 Regular meeting. ATTACHMENT Admission Tax Ordinance 43 44 DRAFT AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF TUKWILA, WASHINGTON, AMENDING ORDINANCE NO. 2080 §1 (PART), AS CODIFIED AT TUKWILA MUNICIPAL CODE CHAPTER 3.20, "ADMISSIONS AND ENTERTAINMENT TAX PROVIDING FOR SEVERABILITY; AND ESTABLISHING AN EFFECTIVE DATE WHEREAS, the City's admission tax was last reviewed in 2004, and WHEREAS, since 2004, administration of the admission tax has highlighted several areas for clarification; and WHEREAS, the City desires to collect the admission tax as inclusively as possible; NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF TUKWILA, WASHINGTON, DO ORDAIN AS FOLLOWS: Section 1. TMC Section 3.20.010, Amended. Tukwila Municipal Code Section 3.20.010, "Admission Charge Definitions" is hereby amended to read as follows: A. "Admission charge" means the price required or paid for entering a premise or location and includes but is not limited in meaning to 1 A charge made for season tickets or subscriptions (including, but not limited to, dues paid by a member of a club) 2. A cover charge or a charge made for use of seats or tables reserved or otherwise. and similar accommodations. 3 A charge made for food or refreshments in any place where any free entertainment. recreation or amusement is provided. 4. A charge made for rental or use of eouipment or facilities for purposes of recreation or amusement and, where the rental of the equipment or facilities is necessary to the eniovment of the privilege for which a general admission is charged, the combined charge shall be considered as the admission charge. 5 A charge made for entrance to any theater. dance hall. amphitheater, private club, auditorium. observation tower. stadium, athletic pavilion or field. baseball or athletic park, circus. outdoor amusement park or any similar Place; and includes equipment to which Persons are admitted for Purposes of recreation such as merry -go- rounds, ferris wheels, roller coasters. go -carts and other rides whether such rides are restricted to tracks or not. 6. A charge made for automobile Parking where the amount of the charge is determined according to the number of passengers in an automobile. 7. A charge made for entrance to any building. enclosure or area in which there is a swimming Pool, skating rink. golf driving range. miniature golf course. short nine, or other golf course, or to gain entrance to such Pool, rink or course itself. or for the use of the facilities thereof. or any rental Paid by the Person paving for such entry for the use of equipment and facilities supplied him and appropriate to the eniovment of the privilege for which the admission is charged, or the aggregate thereof. B "Admission charge" does not include school activities for grades K -12. W Word Processing Ordinances \Tukwila Amending Admissions Tax 06 2210 CLEAN.doc SH:mrh 06/30/2010 Page 1 of 2 45 46 C. "Cabaret" means a room where musical entertainment is permitted in connection with a restaurant business. D "College" or "university" means any accredited public or private college, iunior college or university. or the recognized student body association thereof insofar as the admission charges received by the college. university. or student body association are budgeted, and applied solely for exhibition. performance. study and /or teaching of the performing arts, visual arts. history or science. It specifically excludes any athletic department or division or activities of the college or university or of the recognized student body association thereof. E. "Department" means the Finance Department of the City of Tukwila, or its functional successor. F "Director" means the Tukwila Finance Director or his or her designee. G. "Market price" means the price at which a seller is ready and willing to sell and a buyer is ready and willing to buy. Market price is a price that is acceptable to both buyer and seller and which might be different from the listed price. Section 2. TMC Section 3.20.020, Amended. Tukwila Municipal Code Section 3.20.020, "Admission Tax Levied" is hereby amended to read as follows: A. There is hereby levied a 5% tax on admissions for entertainment purposes in the City of Tukwila. B. The City of Tukwila will forego collection of admissions tax from Footer Colf Course for a period of three yea=s, beginning January 1, 2005. Section 3. 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 of 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 4. 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 full force five days after passage and publication as provided by law. PASSED BY THE CITY COUNCIL OF THE CITY OF TUKWILA, WASHINGTON, at a Regular Meeting thereof this day of 2010 ATTEST/ AUTHENTICATED• Christy O'Flaherty, CMC, City Clerk Jim Haggerton, Mayor Filed with the City Clerk. APPROVED AS TO FORM BY Passed by the City Council. Published: Effective Date: Shelley M. Kerslake, City Attorney Ordinance Number: W.\ Word Processing Ordinances \Tukwila Amending Admissions Tax 06 2210 CLEAN.doc SH:mrh 06/30/2010 Page 2 of 2 TO: Mitigation Received City of Tukwila INFORMATIONAL MEMORANDUM Mayor Haggerton Finance and Safety Committee FROM: Shawn Hunstock, Finance Director DATE: June 22, 2010 SUBJECT: Sales Tax Revenue for April 2010 Schedule I Sales Receipt 2009 2010 2010 Increase /(Decrease) %Increase /(Decrease) Month Month Actual Estimated Actual Month YTD Month YTD Jan Mar 1,172 1,483 1,036 (447) (447) -30 14% 0.00% Feb Apr 1,051 1,462 1,006 (456) (903) 31.19% 30.66% Mar May 1,146 1,705 1,157 (548) (1,451) 32.14% 31.20% Apr June 1,191 1,578 1,070 (508) (1,959) 32.19% -31 45% May July 1,082 1,603 (1,603) (3,562) -100 00% 45.49% June Aug 1,217 1,812 (1,812) (5,374) -100 00% 55.73% July Sept 1,473 1,793 (1,793) (7,167) 100.00% 62.67% Aug Oct 1,118 1,656 (1,656) (8,823) -100 00% -67 39% Sept Nov 1,110 1,682 (1,682) (10,505) -100 00% 71.10% Oct Dec 1,032 1,556 (1,556) (12,061) -100 00% 73.86% Nov Jan11 1,140 1,631 (1,631) (13,692) -100 00% 76.23% Dec Feb11 1,690 2,270 (2,270) (15,962) 100.00% 78.90% Totals 14,422 20,231 4,269 623 4,892 78 55% of Budget Incl. Mitigation Jim Haggerton, Mayor in 1,000's Sales tax collections for April showed the third decrease this year through four months of collections. For April, collections were less than both budget and the same month in the prior year. Actual receipts for April were $508,000 less than budget, and $121,000 less than the same period last year. We are down 32.19% for the month compared to budget, and down by 10.16% compared to the same month last year. We are now down 31.45% for the year compared to budget, and down by 6.38% compared to the same period last year. The chart above also includes the mitigation payment we received at the end of June. Including the mitigation payments, we are currently at 78.55% of budget for the year to date. The latest mitigation payment we received was on June 30, 2010 and was for $311,098.16. This was the same amount as the last mitigation payment received on March 31 because the payments are now annualized and will only be adjusted once per year in the fall. The next mitigation payment will be received on September 30` Staff completed work on the last mitigation detail file and submitted to the Department of Revenue a list of firms that should be removed from the mitigation calculation process. These firms are ones that were offsetting other losses, thereby reducing our mitigation payment. 47 48 INFORMATIONAL MEMO Page 2 Schedule II shows the year -to -date sales tax from the top ten industry classifications. As this schedule indicates, the trend is flat or down for most of the classifications. Schedule II Group Name 452* General Merchandise Stores 448* Clothing and Accessories 722* Food Services, Drinking Places 423* Wholesale Trade, Durable Goods 443* Electronics and Appliances 441* Motor Vehicle and Parts Dealer 451* Sporting Goods, Hobby, Books 444* Building Material and Garden 453* Miscellaneous Store Retailers 721* Accommodation Mitigated NAICS Code As you can see there are large variances from last year for the same time period. For instance, sales tax for Motor Vehicle and Parts Dealer is down by 20.26 and Miscellaneous Store Retailers is down by 19.19 As you can see from Schedule II, seven of the top ten merchant categories have declined versus prior year, and all of the ten industry classification codes are ones for which we receive streamlined sales tax mitigation. Schedule III shows the ten largest declines in sales tax revenue for industries with over $10,000 collected year -to -date. Schedule I11 YTD Group Name Current 238 Specialty Trade Contractors 70,276 236 Construction of Buildings 122,159 561 Administrative and Support Svc 31,951 621 Ambulatory Health Care Service 14,274 323* Printing and Related Support 15,828 541 Professional, Scientific, Tech 50,584 441* Motor Vehicle and Parts Dealer 204,899 453* Miscellaneous Store Retailers 144,118 424* Wholesale Trade, Nondurable 31,342 336 Transportation Equipment Man 42,482 Mitigated NAICS Code YTD YTD Dollar Current Prior Diff. Diff. 573,469 575,818 (2,348) -0.41% 558,164 569,121 (10,958) 1.93% 436,752 414,538 22,214 5.36% 414,341 468,320 (53,979) 11.53% 285,390 306,935 (21,545) -7.02% 204,899 256,954 (52, 054) 20.26% 185,531 170,380 15,151 8.89% 156,488 153,666 2,822 1.84% 144,118 178,342 (34,223) 19.19% 137,459 150,460 (13,001) -8 64% Attached is a Sales Tax Summary comparing year -to -date 2010 vs. 2009 by major NAICS codes. Also included is a comparison of total receipts year -to -date for the last five years. Please let me know if you have any comments or questions. Thank you. W \FIN Projects\Sales Tax Information\Sales Tax Files from Shawn1201011nfo Memo Sales Tax 062210.docx YTD Dollar Prior Diff. Diff. 149,108 (78,832) 52.87% 193,667 (71,508) 36.92% 48,564 (16,613) 34.21% 20,032 (5,758) 28.74% 21,324 (5,496) -25 77% 63,752 (13,168) 20.65% 256,954 (52,054) 20.26% 178,342 (34,223) 19.19% 38,737 (7,395) 19.09% 50,906 (8,423) 16.55% SALES TAX SUMMARY APRIL 2010 50 Five Year Comparison $2,000,000 $4,000,000 Taxes Collected Year to Date $6,000,000