Loading...
HomeMy WebLinkAboutFIN 2019-06-24 COMPLETE AGENDA PACKETCity of Tukwila Finance Committee o Thomas McLeod, Chair • Verna Seal • De'Sean Quinn AGENDA MONDAY, JUNE 24, 2019— 5:30 PM HAZELNUT CONFERENCE ROOM (At east entrance of City Hall) Distribution: T. McLeod V. Seal D. Quinn K. Hougardy D. Robertson K. Kruller Z. Idan Mayor Ekberg D. Cline R. Bianchi C. O'Flaherty L. Humphrey Item Recommended Action Page I. PRESENTATION(S) 2. BUSINESS AGENDA a. Report from the Public Safety Bond Financial Oversight a. Discussion only. Pg.1 Committee. Sean Goode, Chair. Laurel Humphrey, Council Analyst b. Public Safety Plan: b. Forward to 7/8 C.O.W. and Pg.7 (1) An ordinance to issue Unlimited Tax General 7/15 Regular Mtg. Obligation (UTGO) bonds. (2) An ordinance to issue Limited Tax General Obligation (LTGO) bonds. Vicky Carlsen, Finance Director c. A contract for health care broker services. c. Forward to 7/8 C.O.W. and P .67 Juan Padilla, Human Resources Director 7/15 Regular Mtg. d. April 2019 departmental budget-to-actuals report. d. Discussion only. Pg.77 Jeff Friend, Fiscal Manager 3. MISCELLANEOUS 4. ANNOUNCEMENTS Next Scheduled Meeting: Monday, July 8, 2019 The City of Tukwila strives to accommodate individuals with disabilities. Please contact the City Clerk's Office at 206-433-1800 (TukwilaCityClerk@TukwilaWA.gov) for assistance. CITY OF TUUKWUUA �����UA�~������������� ~ `~~~�.,~,~....-. . ~�~~.~�- FUNANCUAU OVERSIGHT COMMUTTTEE Report tothe City Council June 2019 Onbehalf ofnlyfellow members, |arnpleased topresent you with a2Ol9Report ufthe Public Safety Bond Financial Oversight Committee. Per the Charter adopted in Resolution 1892, our role is to review the allocation of bond proceeds and progress on achieving the purposes of the Public Safety Bond and toreport tothe City Council sern|-annua|ly. The Committee met on April 11, 2019 Pursuant to Ordinance 2509 and Resolution 1892, during this meeting the Committee reviewed status and expenditure reports relating to the Public Safety Bond asapproved 6vTukwila voters atthe November 8,2OlOGeneral Election. City staff also provided an overview Afthe Public Safety Plan overall budget, schedule and status. The Committee also had the opportunity to meet Mr. Steve Go|db|att, the Cound|'s Public Safety Plan Program Management Quality Assurance Consultant. The Oversight Committee has to date reviewed bond expenditures through April 5, 2019 and finds that these expenditures are in compliance with the purposes of the Public Safety Bond, Minutes of the April 11, 2019 meeting are attached to this report. The Committee appreciates this opportunity and we look forward to our continued relationship with the City Council. Draft April 11,ZOI9Committee Meeting Minutes 2 City of TUUU~w^Ua Public Safety Bond Financial Oversight Committee April %%«20I9 City Halt Hazelnut Conference Room Attendees: Sean Goode, Andy Reiswig, Jun Castillo, Randy Coplen, David 11 McCarthy, Aaron Williams, Steve Goldblatt MINUTES �1 U, Call tmOrder 111111 'I'll -- Roll —Call — `vCommittee members: Sean Goode, Chair, Andy Reiswig � / Mr. Reiswig moved to excuse Ms. Jerw�t- m :ing, ancl'Qj�' len seconded. The motion carried unanimously. III. Approval of Agenda Mr. Reiswig moved -�J[Na if ?agenda, r Coplen seconded, The motion carried unanimously a ��q agenda lapproved. IV. Approval of Minut Mr, C9V d ap[ t . he August 6, 2018 minutes, and Mr. Reisvvg seconded. The motion 1 4 es were appro ca[i0i M nd jgt ved. MIR ^^'zmmzc-- ---`''--- .^ PubliCSofety r. -----'Council's PMQA consultantI(Commi hich isto provide independent, 3 party counsel to the City Council on the introduced himself and described his role to P �qls [an projects. He reiterated that the construction market is in an extraordinary time at there is a lack of trade availability and costs are escalated. City staff updated the Committee on the status of projects associated with the Public Safety Plan. The City now owns a[[ property and has reached settlements with the impacted businesses. Projects are on schedule, and on March 25 the City Council authorized proceeding with construction on the Justice Center and Station 51. The next big decision point will be the remainder of the Maximum Allowable Construction Cost (MACC) contract for the Justice Center at the end of May. The overall funding and revenue stream has not changed significantly sincethe Oversight Committee last met. Mr. Go|dbiottnoted that the bond measure did not anticipate the actual cost of construction and reminded the Committee that the Council / lt�urel Humphrey, Peggy 1 chose to remove construction of anew Station 54from the plan, although Counckmembers expressed SUppOrtforreh8bi|itatinn` 2. Public Safety Plan Financial Overview The Committee reviewed the origin alandrevisedrevenueandexpenditV,ebudpetsforthe Pub[ icSafety P[an.TOta|a[tua|revenues through Apri|Sare $4O2l3'245from the vote r- app[oVgd bond, fire impact fees, re a I estate excise tax, investment interest, and renta I income. The total for actual and projected reVeoues is $l27'675'333.The total expenditure budget change is $36,515,077. The remainder of the voted debt, P75,046, along with $17.5M in Councitmanic bonds will be issued in 2019. The City ilm veon bond issuance costs by doing both at the same time, Staff updated the Co ee regarding alternates at Station 51, The Council approved budget for 4 of 7 item been identified as desirable features not included ... the original .~-g~t /-._, -._, rough -in for new SCBAgear washer, and Vndergro... Ihies for f8 fue|ingstatic)n. The Couno|had ean|erapproveobudget nornameS �!o 52o'orme-tnrotanonsothat large apparatus vYU noth8Vetobackup n. � I � n1��* . ^�U�0U|Q�Uonu,�".~�` 1111 The Committq�e A Plan expenditures through April 5, 2019 eta M, t and current contracts. Actual expenditures through April 5, 2019 are The ttee also reviewed a current list of contracts for service associated I , " MTT. y^ ���*/�Ly _ ` �l �I�Mr. Goode asked staff to clarify revenue sobl� beyon, voter -approved b6nd. The ___~ |0 Sfglgjj�i,�ed that 1,, "Itity Council recently appointed Mr. Goode, Ms, Jerwa, and Mr. Copien to secons reappoiritrollots, Councilmember Quinn -stressed the importance of the Oversight Committee and asked s-aff to ensure that its members have the City support needed to be effective. He also suggested that the <Oversight Committee consider Mr. Goldblatt as resource, and to look for opportunities hoengage with the community. Staff asked the Oversight Committee for comments. Mr. Castillo stated that he finds the Committee tobeeffective and the right people are atthetable. He does get questions from other community members and heisable to'share the information. Mr. Coplen noted that the Committee reviews the reports provided, so it's hard tocomment oowhat else the City could offer. Mr. Goode stated that hesees the purpose Vfthe Committee is to review the financial reports and ask about outliers, delays, disputes and other 2 unusua|itenla Hedoes not get asked about the Committee's work b«other members nfthe community but isopen toother forms ofmessaging. Staff mentioned that it would be a good time to report to the Council and will work with the Chair to get it on the schedule. V11. Adjournment Mr. Reiswig moved adjournment and Mr. Castillo seconded the motion. The motion carried and the meeting was adjourned at5:04 p,m, Minutes hvLH,Reviewed hvAW 3 6 City of Tukwila Allan Ekberg, Mayor INFORMATIONAL MEMORANDUM TO: Finance Council Committee FROM: Vicky Carlsen, Finance Director CC: Mayor Ekberg DATE: June 19, 2019 SUBJECT: Public Safety Plan Unlimited Tax General Obligation Bond (UTGO) and Limited Tax General Obligation Bond (LTGO) Ordinances ISSUE Approve an ordinance authorizing the issuance of not to exceed $40.885 million in UTGO bonds and not to exceed $25 million in LTGO bonds; both for the Public Safety Plan. BACKGROUND On July 18, 2016, the City Council authorized placement of the $77.385 million Public Safety Plan bond measure on the November 8, 2016 ballot and was approved by voters on November 8, 2016. Also, in November of 2016, the City Council approved an ordinance authorizing the issuance of up to $36.5 million in UTGO bonds to provide sufficient resources for the first 2 1/2 years of expenditures. The remaining UTGO bonds would be issued in 2019 as outlined in the D-20 Financial Framework approved by Council in 2018 and as approved in the 2019 — 2020 biennial budget. The adopted budget also includes issuing LTGO bonds of not to exceed $25 million. It is currently estimated that both debt issuances would occur during the 4th quarter of 2019. DISCUSSION Based on the cash flow projections received from SOJ in April of 2019, the Public Safety Plan will need additional funding in the 4th quarter of 2019. As mentioned above, the 2019 — 2020 biennial budget includes a provision to issue both UTGO not to exceed $40.885 million and LTGO not to exceed $25 million. Proceeds from the UTGO bond measure would provide funding for the Justice Center and fire stations but not the Public Works Shops facility. The LTGO issue is currently budgeted to allow for up to $7.5 million to fund the Public Works Shops facility and the remaining balance of $17.5 million as funding for the Justice Center and fire stations. In order to reduce debt issuance costs, the LTGO debt issue will be timed to occur within a few weeks of issuing the UTGO debt. Both the UTGO and LTGO issues will not exceed the authorized amount and both will be repaid over 20 years. 7 INFORMATIONAL MEMO Page 2 FINANCIAL IMPACT The adopted budget includes debt service of $875,000 beginning in 2020 for the LTGO bond issue with the general fund contributing 50% of the debt service and the utility funds contributing the other 50%. Given current market conditions, it is anticipated that the budget is sufficient to cover the proposed bond issue. However, if interest rates rise significantly between now and when the bonds are issued in 4th quarter, an adjustment to the budget could be necessary. RECOMMENDATION Council is being asked to approve both ordinances and consider these items at the July 8, 2019 Committee of the Whole meeting and subsequent July 15, 2019 Regular meeting. ATTACHMENTS Draft UTGO bond ordinance Draft LTGO bond ordinance PFM slide presentation 8 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF TUKWILA, WASHINGTON, AUTHORIZING THE ISSUANCE OF UNLIMITED TAX GENERAL OBLIGATION BONDS OF THE CITY IN THE AGGREGATE PRINCIPAL AMOUNT OF NOT TO EXCEED $40,885,000, TO FINANCE COSTS RELATED TO ITS PUBLIC SAFETY PLAN AND PAYING COSTS OF ISSUING THE BONDS; PROVIDING THE FORM, TERMS AND COVENANTS OF THE BONDS; PROVIDING FOR THE DISPOSITION OF THE PROCEEDS OF THE SALE OF THE BONDS; DELEGATING AUTHORITY TO APPROVE THE METHOD OF SALE AND THE FINAL TERMS OF THE BONDS; AND PROVIDING FOR OTHER MATTERS RELATING THERETO; PROVIDING FOR SEVERABILITY; AND ESTABLISHING AN EFFECTIVE DATE. WHEREAS, at an election held in the City of Tukwila, Washington (the "City") on November 8, 2016, the City submitted the question to the qualified electors of the City of whether the City shall issue unlimited tax general obligation bonds in the aggregate principal amount of not to exceed $77,385,000 (the "Bond Authorization") to provide the funds necessary to implement its Public Safety Plan, which includes replacing three fire stations, financing critical items such as fire trucks and other life/safety equipment as necessary, and constructing a Justice Center to hold the Tukwila Police Department and Municipal Court, as identified in Ordinance No. 2509 (the "Election Ordinance") passed by the City Council on August 1, 2016 (collectively, the "Project"); and WHEREAS, the number and proportion of the qualified electors of the City required by law for the adoption thereof voted in favor of the Bond Authorization and the election results were certified by King County Elections, as ex officio supervisor of elections in King County, Washington, on November 29, 2016; and WHEREAS, pursuant to the Bond Authorization and Ordinance No. 2514, adopted on November 21, 2016, the City issued its Unlimited Tax General Obligation Bonds, 2016, and deposited into a designated fund a portion of the sale proceeds thereof in the amount of $36,500,000 (consisting of the par amount of $32,990,000 plus original issue premium of $3,510,000); and W: Word Processing\Ordinances\UTGO Bonds -Public Safety Plan 6-18-19 VC:bjs Review and analysis by Barbara Saxton Page 1 of 16 9 WHEREAS, it is deemed necessary and advisable that the City authorize the issuance of the second series of such Unlimited Tax General Obligation bonds (the "Bonds") to provide part of the funds necessary to finance the Project and to pay costs of issuance for the Bonds; and WHEREAS, this Council wishes to delegate authority to the Finance Director, or his or her designee (the "Designated Representative"), for a limited time, to approve the method of sale and the interest rates, maturity dates, redemption terms and principal maturities for the bonds within the parameters set by this ordinance; and WHEREAS, the Bonds shall be sold by negotiated or competitive public sale as set forth herein; NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF TUKWILA, WASHINGTON, HEREBY ORDAINS AS FOLLOWS: Section 1. Definitions. As used in this ordinance, the following words and terms shall have the following meanings, unless the context or use indicates another or different meaning or intent. Unless the context indicates otherwise, words importing the singular number shall include the plural number and vice versa. Beneficial Owner means any person that has or shares the power, directly or indirectly, to make investment decisions concerning ownership of any Bonds (including persons holding Bonds through nominees, depositories or other intermediaries). Bond Authorization means the Unlimited Tax General Obligation bonds in the aggregate principal amount of $77,385,000 authorized by the Election Ordinance and approved by the requisite number of voters of the City at a special election held on November 8, 2016 for the purpose of providing the funds necessary to carry out the Project and to pay the costs of issuance of such bonds. Bond Counsel means Pacifica Law Group LLP or an attorney at law or a firm of attorneys, selected by the City, of nationally recognized standing in matters pertaining to the tax exempt nature of interest on bonds issued by states and their political subdivisions. Bond Purchase Contract means the contract, if any, for the purchase of any Bonds sold by negotiated sale to the Underwriter, executed pursuant to Section 12. Bond Register means the registration books showing the name, address and tax identification number of each Registered Owner of the Bonds, maintained pursuant to Section 149(a) of the Code. Bond Registrar means, initially, the fiscal agent of the State, for the purposes of registering and authenticating the Bonds, maintaining the Bond Register, effecting transfer of ownership of the Bonds and paying interest on and principal of the Bonds. W: Word Processing \Ordinances\UTGO Bonds -Public Safety Plan 6-18-19 VC:bjs Review and analysis by Barbara Saxton Page 2 of 16 10 Bonds mean the City's Unlimited Tax General Obligation Bonds, 20XX, or other such series designation as approved by the Designated Representative, authorized to be issued pursuant to the terms of this ordinance. Certificate of Award means the certificate, if any, for the purchase of any Bonds sold by competitive sale awarding the Bonds to the initial purchaser as set forth in Section 12 of this ordinance. City means the City of Tukwila, a municipal corporation duly organized and existing under the laws of the State. City Administrator means the duly appointed and acting City Administrator, including anyone acting in such capacity for the position, or the successor to the duties of that office. City Clerk means the duly appointed and acting City Clerk of the City or the successor to the duties of that office. Closing means the date of delivery of the Bonds to the Underwriter. Code means the Internal Revenue Code of 1986 as in effect on the date of issuance of the Bonds or (except as otherwise referenced herein) as it may be amended to apply to obligations issued on the date of issuance of the Bonds, together with applicable proposed, temporary and final regulations promulgated, and applicable official public guidance published, under the Code. Commission means the United States Securities and Exchange Commission. Continuing Disclosure Certificate means the written undertaking for the benefit of the owners and Beneficial Owners of the Bonds as required by Section (b)(5) of the Rule. Council or City Council means the Tukwila City Council, as the general legislative body of the City as the same is duly and regularly constituted from time to time. Debt Service Fund means the fund or account created pursuant to this ordinance for the purpose of paying debt service on the Bonds. Designated Representative means the Finance Director, or his or her designee. DTC means The Depository Trust Company, New York, New York, a limited purpose trust company organized under the laws of the State of New York, as depository for the Bonds pursuant to Section 4 of this ordinance. Election Ordinance means Ordinance No. 2509 passed by the Council on August 1, 2016. W: Word Processing \Ordinances\UTGO Bonds -Public Safety Plan 6-18-19 VC:bjs Review and analysis by Barbara Saxton Page 3 of 16 11 Fair Market Value means the price at which a willing buyer would purchase an investment from a willing seller in a bona fide, arm's length transaction, except for specified investments as described in Treasury Regulation § 1.148-5(d)(6), including United States Treasury obligations, certificates of deposit, guaranteed investment contracts, and investments for yield restricted defeasance escrows. Fair Market Value is generally determined on the date on which a contract to purchase or sell an investment becomes binding, and, to the extent required by the applicable regulations under the Code, the term "investment" will include a hedge. Federal Tax Certificate means the certificate executed by the Designated Representative setting forth the requirements of the Code for maintaining the tax exemption of interest on the Bonds, and attachments thereto. Finance Director means the duly appointed and acting Finance Director of the City or the successor to such officer. Government Obligations means direct or indirect obligations of, or obligations the principal of and interest on which are unconditionally guaranteed by, the United States of America. Letter of Representations means the Blanket Issuer Letter of Representations given by the City to DTC, as amended from time to time. Mayor or City Mayor means the elected Mayor of the City or the successor to the duties of that office. MSRB means the Municipal Securities Rulemaking Board or any successors to its functions. Official Statement means the disclosure documents prepared and delivered in connection with the issuance of the Bonds. Project means the capital projects described in Section 2 of this ordinance. Project Fund means the account created pursuant to Section 8 of this ordinance. Record Date means the close of business for the Bond Registrar that is 15 days preceding any interest and/or principal payment or redemption date. Registered Owner means the person named as the registered owner of a Bond in the Bond Register. For so long as the Bonds are held in book -entry only form, DTC or its nominee shall be deemed to be the sole Registered Owner. Rule means the Commission's Rule 15c2-12 under the Securities Exchange Act of 1934, as the same may be amended from time to time. 12 W: Word Processing\Ordinances WIG° Bonds -Public Safety Plan 6-18-19 VC:bjs Review and analysis by Barbara Saxton Page 4 of 16 Sale Document means the Bond Purchase Contract or Certificate of Award, if any, executed by the Designated Representative in connection with the sale of the Bonds pursuant to Section 12 of this ordinance, which shall provide for the name, principal and interest payment dates and amounts, redemption/prepayment rights, and other terms to describe such Bonds as determined to be necessary by the Designated Representative. State means the State of Washington. Underwriter means any underwriter, in the case of a negotiated sale, or initial purchaser, in the case of a competitive sale, the Bonds selected pursuant to Section 12. Section 2. Authorization of the Project. The Bonds are being issued to finance and/or reimburse the City for costs related to implementing its Public Safety Plan, which includes, but is not limited to: (a) replacing three fire stations; (b) financing critical items such as fire trucks and other life/safety equipment as necessary; and (c) constructing a Justice Center to hold the Tukwila Police Department and Municipal Court, as authorized and further described in the Election Ordinance, which description is incorporated herein by this reference (the "Project"); and to pay costs of issuance for the Bonds. Section 3. Authorization of Bonds and Bond Details. For the purpose of paying and/or reimbursing the City for costs of the Project and paying costs of issuance of the Bonds as authorized by the Election Ordinance and by the qualified electors of the City at a special election held on November 8, 2016, the City is hereby authorized to issue and sell unlimited tax general obligation bonds in an aggregate principal amount of not to exceed $40,885,000 (the "Bonds"). Notwithstanding anything in this ordinance to the contrary, the issuance of the Bonds shall be subject to satisfaction of the conditions set forth in Section 12 of this ordinance. The Bonds shall be general obligations of the City and shall be designated "City of Tukwila, Washington, Unlimited Tax General Obligation Bonds, 20XX" with additional series designation or other such designation as determined to be necessary by the Designated Representative. The Bonds shall be dated as of the date of Closing; shall be fully registered as to both principal and interest; shall be in the denomination of $5,000 each, or any integral multiple thereof, within a maturity; shall be numbered separately in such manner and with any additional designation as the Bond Registrar deems necessary for purposes of identification; shall bear interest from their date payable on the dates and commencing as provided in the Sale Document; and shall mature on the dates and in the principal amounts set forth in the Sale Document, as approved and executed by the Designated Representative pursuant to Section 12 of this ordinance. Section 4. Registration, Exchange and Payments. (a) Bond Registrar/Bond Register. The City hereby specifies and adopts the system of registration approved by the Washington State Finance Committee from time to time through the appointment of state fiscal agencies. The City shall cause a bond W: Word Processing\Ordinances\UTGO Bonds -Public Safety Plan 6-18-19 VC:bjs Review and analysis by Barbara Saxton Page 5 of 16 13 register to be maintained by the Bond Registrar. So long as any Bonds remain outstanding, the Bond Registrar shall make all necessary provisions to permit the exchange or registration or transfer of Bonds at its designated office. The Bond Registrar may be removed at any time at the option of the Finance Director upon prior notice to the Bond Registrar and a successor Bond Registrar appointed by the Finance Director. No resignation or removal of the Bond Registrar shall be effective until a successor shall have been appointed and until the successor Bond Registrar shall have accepted the duties of the Bond Registrar hereunder. The Bond Registrar is authorized, on behalf of the City, to authenticate and deliver Bonds transferred or exchanged in accordance with the provisions of such Bonds and this ordinance and to carry out all of the Bond Registrar's powers and duties under this ordinance. The Bond Registrar shall be responsible for its representations contained in the Certificate of Authentication of the Bonds. (b) Registered Ownership. The City and the Bond Registrar, each in its discretion, may deem and treat the Registered Owner of each Bond as the absolute owner thereof for all purposes (except as provided in the Continuing Disclosure Certificate), and neither the City nor the Bond Registrar shall be affected by any notice to the contrary. Payment of any such Bond shall be made only as described in Section 4(g), but such Bond may be transferred as herein provided. All such payments made as described in Section 4(g) shall be valid and shall satisfy and discharge the liability of the City upon such Bond to the extent of the amount or amounts so paid. (c) DTC Acceptance/Letters of Representations. The Bonds initially shall be held by DTC acting as depository. The City has executed and delivered to DTC a Blanket Issuer 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 (or any successor depository) with respect to the Bonds in respect of the accuracy of any records maintained by DTC (or any successor depository) or any DTC participant, the payment by DTC (or any successor depository) or any DTC participant of any amount in respect of the principal of or interest on Bonds, any notice which is permitted or required to be given to Registered Owners under this ordinance (except such notices as shall be required to be given by the City to the Bond Registrar or to DTC (or any successor depository)), or any consent given or other action taken by DTC (or any successor depository) as the Registered Owner. For so long as any Bonds are held by a depository, DTC or its successor depository or its nominee shall be deemed to be the Registered Owner for all purposes hereunder, and all references herein to the Registered Owners shall mean DTC (or any successor depository) or its nominee and shall not mean the owners of any beneficial interest in such Bonds. (d) Use of Depository. (1) The Bonds shall be registered initially in the name of "Cede & Co.", as nominee of DTC, with one Bond maturing on each of the maturity dates for the Bonds in a denomination corresponding to the total principal therein designated to mature on such date. Registered ownership of such Bonds, or any portions thereof, may not thereafter be transferred except: (A) to any successor of DTC or its nominee, provided 14 W: Word Processing \Ordinances\UTGO Bonds -Public Safety Plan 6-18-19 VC:bjs Review and analysis by Barbara Saxton Page 6 of 16 that any such successor shall be qualified under any applicable laws to provide the service proposed to be provided by it; (B) to any substitute depository appointed by the Finance Director pursuant to subsection (2) below or such substitute depository's successor; or (C) to any person as provided in subsection (4) below. (2) 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 Finance Director to discontinue the system of book entry transfers through DTC or its successor (or any substitute depository or its successor), the Finance Director may hereafter 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. (3) In the case of any transfer pursuant to clause (A) or (B) of subsection (1) above, the Bond Registrar shall, upon receipt of all outstanding Bonds together with a written request on behalf of the Finance Director, issue a single new Bond for each maturity of that series then outstanding, registered in the name of such successor or such substitute depository, or their nominees, as the case may be, all as specified in such written request of the Finance Director. (4) In the event that: (A) DTC or its successor (or substitute depository or its successor) resigns from its functions as depository, and no substitute depository can be obtained; or (B) the Finance Director determines that it is in the best interest of the beneficial owners of the Bonds that such owners be able to obtain physical Bond certificates, the ownership of such Bonds may then be transferred to any person or entity as herein provided, and shall no longer be held by a depository. The Finance Director shall deliver a written request to the Bond Registrar, together with a supply of physical Bonds, to issue Bonds as herein provided in any authorized denomination. Upon receipt by the Bond Registrar of all then outstanding Bonds together with a written request on behalf of the Finance Director to the Bond Registrar, new Bonds of such series shall be issued in the appropriate denominations and registered in the names of such persons as are requested in such written request. (e) Registration of Transfer of Ownership or Exchange; Change in Denominations. The transfer of any Bond may be registered and Bonds may be exchanged, but no transfer of any such Bond shall be valid unless it is surrendered to the Bond Registrar with the assignment form appearing on such Bond duly executed by the Registered Owner or such Registered Owner's duly authorized agent in a manner satisfactory to the Bond Registrar. Upon such surrender, the Bond Registrar shall cancel the surrendered Bond and shall authenticate and deliver, without charge to the Registered Owner or transferee therefor, a new Bond (or Bonds at the option of the new Registered Owner) of the same date, maturity, and interest rate and for the same aggregate principal amount in any authorized denomination, naming as Registered Owner the person or persons listed as the assignee on the assignment form appearing on the surrendered Bond, in exchange for such surrendered and cancelled Bond. Any Bond may be surrendered to the Bond Registrar and exchanged, without charge, for an equal aggregate principal amount of Bonds of the same date, maturity, and interest rate, in any authorized denomination. The Bond Registrar shall not be obligated to register the W: Word Processing \Ordinances \UTGO Bonds -Public Safety Plan 6-18-19 VC:bjs Review and analysis by Barbara Saxton Page 7 of 16 15 transfer of or to exchange any Bond during the 15 days preceding any principal payment or redemption date. (f) Bond Registrar's Ownership of Bonds. The Bond Registrar may become the Registered Owner of any Bond 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 a member of, or in any other capacity with respect to, any committee formed to protect the right of the Registered Owners or beneficial owners of Bonds. (g) Place and Medium of Payment. 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 calculated on the basis of a year of 360 days and twelve 30-day months. For so long as all Bonds are held by a depository, payments of principal thereof and interest thereon shall be made as provided in accordance with the operational arrangements of DTC referred to in the Letter of Representations. In the event that the Bonds are no longer held by a depository, interest on the Bonds shall be paid by check or draft mailed to the Registered Owners at the addresses for such Registered Owners appearing on the Bond Register on the Record Date, or upon the written request of a Registered Owner of more than $1,000,000 of Bonds (received by the Bond Registrar at least by the Record Date), such payment shall be made by the Bond Registrar by wire transfer to the account within the United States designated by the Registered Owner. Principal of the Bonds shall be payable upon presentation and surrender of such Bonds by the Registered Owners at the designated office of the Bond Registrar. If any Bond is duly presented for payment and funds have not been provided by the City on the applicable payment date, then interest will continue to accrue thereafter on the unpaid principal thereof at the rate stated on the Bond until the Bond is paid. Section 5. Redemption Prior to Maturity and Purchase of Bonds. (a) Mandatory Redemption of Term Bonds and Optional Redemption. The Bonds shall be subject to mandatory redemption to the extent, if any, set forth in the Sale Document and as approved by the Designated Representative pursuant to Section 12. The Bonds shall be subject to optional redemption on the dates, at the prices and under the terms set forth in the Sale Document approved by the Designated Representative pursuant to Section 12. (b) Purchase of Bonds. The City reserves the right to purchase any or all of the Bonds offered to it at any time at a price deemed reasonable by the Finance Director plus accrued interest to the date of purchase. (c) Selection of Bonds for Redemption. For as long as the Bonds are held in book -entry only form, the selection of particular Bonds within a maturity to be redeemed shall be made in accordance with the operational arrangements then in effect at DTC. If the Bonds are no longer held by a depository, the selection of such Bonds to be redeemed and the surrender and reissuance thereof, as applicable, shall be made as 16 W: Word Processing\Ordinances\UTGO Bonds -Public Safety Plan 6-18-19 VC:bjs Review and analysis by Barbara Saxton Page 8 of 16 provided in the following provisions of this subsection (c). If the City redeems at any one time fewer than all of the Bonds having the same maturity date, the particular Bonds or portions of Bonds of such maturity to be redeemed shall be selected by lot (or in such manner determined by the Bond Registrar) in increments of $5,000. In the case of a Bond of a denomination greater than $5,000, the City and the Bond Registrar shall treat each Bond as representing such number of separate Bonds each of the denomination of $5,000 as is obtained by dividing the actual principal amount of such Bond by $5,000. In the event that only a portion of the principal sum of a Bond is redeemed, upon surrender of such Bond at the designated office of the Bond Registrar there shall be issued to the Registered Owner, without charge therefor, for the then unredeemed balance of the principal sum thereof, at the option of the Registered Owner, a Bond or Bonds of like maturity and interest rate in any of the denominations herein authorized. (d) Notice of Redemption. (1) Official Notice. For so long as the Bonds are held by a depository, notice of redemption shall be given in accordance with the operational arrangements of DTC as then in effect, and neither the City nor the Bond Registrar shall provide any notice of redemption to any beneficial owners. The notice of redemption may be conditional. Thereafter (if the Bonds are no longer held by a depository), notice of redemption shall be given in the manner hereinafter provided. Unless waived by any owner of Bonds to be redeemed, official notice of any such redemption (which redemption may be conditioned by the Bond Registrar on the receipt of sufficient funds for redemption or otherwise) shall be given by the Bond Registrar on behalf of the City by mailing a copy of an official redemption notice by first class mail at least 20 days and not more than 60 days prior to the date fixed for redemption to the Registered Owner of the Bond or Bonds to be redeemed at the address shown on the Bond Register or at such other address as is furnished in writing by such Registered Owner to the Bond Registrar. All official notices of redemption shall be dated and shall state: (A) the redemption date, (B) the redemption price, (C) if fewer than all outstanding Bonds are to be redeemed, the identification by series and maturity (and, in the case of partial redemption, the respective principal amounts) of the Bonds to be redeemed, (D) any conditions to redemption, (E) that unless conditional notice of redemption has been given and such conditions have either been satisfied or waived, on the redemption date the redemption price shall become due and payable upon each such Bond or portion thereof called for redemption, and that interest thereon shall cease to accrue from and after said date, and IN: Word Processing \Ordinances\UTGO Bonds -Public Safety Plan 6-18-19 VC:bjs Review and analysis by Barbara Saxton Page 9 of 16 17 (F) the place where such Bonds are to be surrendered for payment of the redemption price, which place of payment shall be the designated office of the Bond Registrar. On or prior to any redemption date, unless such redemption has been rescinded or revoked, the City shall deposit with the Bond Registrar an amount of money sufficient to pay the redemption price of all the Bonds or portions of Bonds which are to be redeemed on that date. The City retains the right to rescind any redemption notice and the related optional redemption of Bonds by giving notice of rescission to the affected registered owners at any time on or prior to the scheduled 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. (2) Effect of Notice; Bonds Due. If notice of redemption has been given and not rescinded or revoked, or if the conditions set forth in a conditional notice of redemption have been satisfied or waived, the Bonds or portions of Bonds to be redeemed shall, on the redemption date, become due and payable at the redemption price therein specified, and from and after such date such Bonds or portions of Bonds shall cease to bear interest. Upon surrender of such Bonds for redemption in accordance with said notice, such Bonds shall be paid by the Bond Registrar at the redemption price. Installments of interest due on or prior to the redemption date shall be payable as herein provided for payment of interest. All Bonds which have been redeemed shall be canceled by the Bond Registrar and shall not be reissued. (3) Additional Notice. In addition to the foregoing notice, further notice shall be given by the City as set out below, but no defect in said further notice nor any failure to give all or any portion of such further notice shall in any manner defeat the effectiveness of a call for redemption if notice thereof is given as above prescribed. Each further notice of redemption given hereunder shall contain the information required above for an official notice of redemption plus: (A) the CUSIP numbers of all Bonds being redeemed; (B) the date of issue of the Bonds as originally issued; (C) the rate of interest borne by each Bond being redeemed; (D) the series and maturity date of each Bond being redeemed; and (E) any other descriptive information needed to identify accurately the Bonds being redeemed. Each further notice of redemption may be sent at least 20 days before the redemption date to each party entitled to receive notice pursuant to Section 14 and the Continuing Disclosure Certificate and with such additional information as the City shall deem appropriate, but such mailings shall not be a condition precedent to the redemption of such Bonds. (4) Amendment of Notice Provisions. The foregoing notice provisions of this Section 5, including but not limited to the information to be included in redemption notices and the persons designated to receive notices, may be amended by additions, deletions and changes in order to maintain compliance with duly promulgated regulations and recommendations regarding notices of redemption of municipal securities. 18 W: Word Processing \Ordinances\UTGO Bonds -Public Safety Plan 6-18-19 VC:bjs Review and analysis by Barbara Saxton Page 10 of 16 Section 6. Form of Bonds. The Bonds shall be in substantially the form set forth in Exhibit A, which is incorporated herein by this reference. Section 7. Execution of Bonds. The Bonds shall be executed on behalf of the City by the facsimile or manual signature of the Mayor and shall be attested to by the facsimile or manual signature of the City Clerk, and shall have the seal of the City impressed or a facsimile thereof imprinted, or otherwise reproduced thereon. In the event any officer who shall have signed or whose facsimile signatures appear on any of the Bonds shall cease to be such officer of the City before said Bonds shall have been authenticated or delivered by the Bond Registrar or issued by the City, such Bonds may nevertheless be authenticated, delivered and issued and, upon such authentication, delivery and issuance, shall be as binding upon the City as though said person had not ceased to be such officer. Any Bond may be signed and attested on behalf of the City by such persons who, at the actual date of execution of such Bond shall be the proper officer of the City, although at the original date of such Bond such persons were not such officers of the City. Only such Bonds as shall bear thereon a Certificate of Authentication manually executed by an authorized representative of the Bond Registrar shall be valid or obligatory for any purpose or entitled to the benefits of this ordinance. Such Certificate of Authentication shall be conclusive evidence that the Bonds so authenticated have been duly executed, authenticated and delivered hereunder and are entitled to the benefits of this ordinance. Section 8. Application of Bond Proceeds. The Finance Director is hereby authorized to create a fund or account (the "Project Fund"), and subaccounts therein as necessary, for the purposes set forth in this section. From the money derived from the sale of the Bonds: (a) Net premium (premium minus costs of issuance) shall be deposited in the Debt Service Fund and/or the Project Fund and used to pay debt service on the Bonds coming due on the next upcoming interest payment date or costs of the Project, respectively; and (b) The balance of the proceeds of the Bonds shall be deposited in the Project Fund and shall be used solely to pay the allocable cost of issuing and selling the Bonds and to finance costs of the Project as authorized by the Election Ordinance. None of the proceeds of the Bonds shall be used for the replacement of equipment or for other than a capital purpose. The Finance Director shall invest money in the Project Fund and the subaccounts contained therein in such obligations as may now or hereafter be permitted to cities of the State by law and which will mature prior to the date on which such money shall be needed, but only to the extent that the same are acquired, valued and disposed of at Fair Market Value. W: Word Processing \Ordinances\UTGO Bonds -Public Safety Plan 6-18-19 VC:bjs Review and analysis by Barbara Saxton Page 11 of 16 19 Section 9. Tax Covenants. The City will take all actions necessary to assure the exclusion of interest on the Bonds from the gross income of the owners of the Bonds to the same extent as such interest is permitted to be excluded from gross income under the Code as in effect on the date of issuance of the Bonds, including but not limited to the following: (a) Private Activity Bond Limitation. The City will assure that the proceeds of the Bonds are not so used as to cause the Bonds to satisfy the private business tests of Section 141(b) of the Code or the private loan financing test of Section 141(c) of the Code. (b) Limitations on Disposition of Project. The City will not sell or otherwise transfer or dispose of: (i) any personal property components of the Project other than in the ordinary course of an established government program under Treasury Regulation § 1.141-2(d)(4); or (ii) any real property components of the Project, unless it has received an opinion of nationally recognized bond counsel to the effect that such disposition will not adversely affect the treatment of interest on the Bonds as excludable from gross income for federal income tax purposes. (c) Federal Guarantee Prohibition. The City will not take any action or permit or suffer any action to be taken if the result of such action would be to cause any of the Bonds to be "federally guaranteed" within the meaning of Section 149(b) of the Code. (d) Rebate Requirement. The City will take any and all actions necessary to assure compliance with Section 148(f) of the Code, relating to the rebate of excess investment earnings, if any, to the federal government, to the extent that such section is applicable to the Bonds. (e) No Arbitrage. The City will not take, or permit or suffer to be taken, any action with respect to the proceeds of the Bonds which, if such action had been reasonably expected to have been taken, or had been deliberately and intentionally taken, on the date of issuance of the Bonds would have caused the Bonds to be "arbitrage bonds" within the meaning of Section 148 of the Code. (f) Registration Covenant. The City will maintain a system for recording the ownership of each Bond that complies with the provisions of Section 149 of the Code until all Bonds have been surrendered and canceled. (g) Record Retention. The City will retain its records of all accounting and monitoring it carries out with respect to the Bonds for at least three years after the Bonds mature or are redeemed (whichever is earlier); however, if the Bonds are redeemed and refunded, the City will retain its records of accounting and monitoring at least three years after the earlier of the maturity or redemption of the obligations that refunded the Bonds. 20 W: Word Processing \Ordinances\UTGO Bonds -Public Safety Plan 6-18-19 VC:bjs Review and analysis by Barbara Saxton Page 12 of 16 (h) Compliance with Federal Tax Certificate. The City will comply with the provisions of the Federal Tax Certificate with respect to the Bonds, which are incorporated herein as if fully set forth herein. The covenants of this Section will survive payment in full or defeasance of the Bonds. Section 10. Debt Service Fund and Provision for Tax Levy Payments. The City hereby authorizes the creation of a fund or account to be used for the payment of debt service on the Bonds (the "Debt Service Fund"). No later than the date each payment of principal of or interest on the Bonds becomes due, the City shall transmit sufficient funds, from the Debt Service Fund or from other legally available sources, to the Bond Registrar for the payment of such principal or interest. Money in the Debt Service Fund may be invested in legal investments for City funds, but only to the extent that the same are acquired, valued and disposed of at Fair Market Value. Any interest or profit from the investment of such money shall be deposited in the Debt Service Fund The City hereby irrevocably covenants that, unless the principal of and interest on the Bonds are paid from other sources, it will make annual levies of taxes without limitation as to rate or amount upon all of the property in the City subject to taxation in amounts sufficient to pay such principal and interest as the same shall become due. All of such taxes and any of such other money so collected shall be paid into the Debt Service Fund. None of the money in the Debt Service Fund shall be used for any other purpose than the payment of the principal of and interest on the Bonds. The full faith, credit and resources of the City are hereby irrevocably pledged for the annual levy and collection of such taxes and for the prompt payment of the principal of and interest on the Bonds when due. Section 11. Defeasance. In the event that the City, in order to effect the payment, retirement or redemption of any Bond, sets aside in the Debt Service Fund or in another special account, cash or noncallable Government Obligations, or any combination of cash and/or noncallable Government Obligations, in amounts and maturities which, together with the known earned income therefrom, are sufficient to redeem or pay and retire such Bond in accordance with its terms and to pay when due the interest and redemption premium, if any, thereon, and such cash and/or noncallable Government Obligations are irrevocably set aside and pledged for such purpose, then no further payments need be made into the Debt Service Fund for the payment of the principal of and interest on such Bond. The owner of a Bond so provided for shall cease to be entitled to any lien, benefit or security of this ordinance except the right to receive payment of principal, premium, if any, and interest from the Debt Service Fund or such special account, and such Bond shall be deemed to be not outstanding under this ordinance. The City shall give written notice of defeasance of the Bonds in accordance with the Continuing Disclosure Certificate. W: Word Processing \Ordinances\UTGO Bonds -Public Safety Plan 6-18-19 VC:bjs Review and analysis by Barbara Saxton Page 13 of 16 21 Section 12. Sale of Bonds. (a) Bond Sale. The Council has determined that it would be in the best interest of the City to delegate to the Designated Representative, for a limited time, the authority to determine the method of sale for the Bonds and to approve the final interest rates, maturity dates, redemption terms and principal maturities for the Bonds. (b) Negotiated Bond Sale. If the Designated Representative determines that the Bonds are to be sold by negotiated public sale, the Designated Representative shall solicit proposals from one or more qualified underwriting firms and shall select the Underwriter that submits the proposal that is in the best interest of the City. Such Bonds shall be sold to the Underwriter pursuant to the terms of a Bond Purchase Contract. (c) Competitive Sale. If the Designated Representative determines that the Bonds are to be sold at a competitive public sale, the Designated Representative shall: (1) establish the date of the public sale; (2) establish the criteria by which the successful bidder will be determined; (3) request that a good faith deposit accompany each bid; (4) cause notice of the public sale to be given; and (5) provide for such other matters pertaining to the public sale as he or she deems necessary or desirable. The Designated Representative shall cause the notice of sale to be given and provide for such other matters pertaining to the public sale as he or she deems necessary or desirable. Such Bonds shall be sold to the Underwriter pursuant to the terms of a Certificate of Award. (d) Sale Parameters. Subject to the terms and conditions set forth in this Section 12, the Designated Representative is hereby authorized to approve the method of sale and the final interest rates, aggregate principal amount, principal maturities, and redemption rights for the Bonds in the manner provided hereafter so long as: (1) the aggregate principal amount of the Bonds does not exceed $40,885,000; (2) the final maturity date for the Bonds is no later than 20 years from Closing; (3) the aggregate purchase price for the Bonds shall not be less than 100.5% of the aggregate stated principal amount of the Bonds, excluding any original issue discount; and (4) the true interest cost for the Bonds (in the aggregate) does not exceed 4.50%. Subject to the terms and conditions set forth in this section, the Designated Representative is hereby authorized to execute the appropriate Sale Document on behalf of the City. 22 W: Word Processing \Ordinances\UTGO Bonds -Public Safety Plan 6-18-19 VC:bjs Review and analysis by Barbara Saxton Page 14 of 16 Following the execution of the Sale Document, the Designated Representative shall provide a report to the Council describing the final terms of the Bonds approved pursuant to the authority delegated in this section. The authority granted to the Designated Representatives by this Section 12 shall expire one year after the effective date of this ordinance. If a Sale Document for the Bonds has not been executed within one year after the effective date of this ordinance, the authorization for the issuance of the Bonds shall be rescinded, and the Bonds shall not be issued nor their sale approved unless such Bonds are re -authorized by ordinance of the Council. The ordinance re- authorizing the issuance and sale of such Bonds may be in the form of a new ordinance repealing this ordinance in whole or in part or may be in the form of an amendatory ordinance approving a Sale Document or establishing terms and conditions for the authority delegated under this Section 12. (e) Delivery of Bonds; Documentation. Upon the passage and approval of this ordinance and execution of the Sale Document, the proper officials of the City, including the Designated Representative, the City Administrator, the Mayor and the City Clerk, are authorized and directed to undertake all action necessary for the prompt execution and delivery of the Bonds to the Underwriter and further to execute all closing certificates and documents required to effect the closing and delivery of the Bonds in accordance with the terms of the Sale Document. Such documents may include, but are not limited to, documents related to a municipal bond insurance policy delivered by an insurer to insure the payment when due of the principal of and interest on all or a portion of the Bonds as provided therein, if such insurance is determined by the Designated Representative to be in the best interest of the City. Section 13. Preliminary and Final Official Statements. The Designated Representative is hereby authorized to deem final the preliminary Official Statement relating to the Bonds for the purposes of the Rule. The Designated Representative is further authorized to approve for purposes of the Rule, on behalf of the City, the final Official Statement relating to the issuance and sale of the Bonds and the distribution of the final Official Statement pursuant thereto with such changes, if any, as may be deemed by him or her to be appropriate. Section 14. Undertaking to Provide Ongoing Disclosure. The City covenants to execute and deliver at the time of Closing a Continuing Disclosure Certificate. The Designated Representative is hereby authorized to execute and deliver a Continuing Disclosure Certificate upon the issuance, delivery and sale of the Bonds with such terms and provisions as such officer shall deem appropriate and in the best interests of the City. Section 15. Lost, Stolen or Destroyed Bonds. In case any Bonds are lost, stolen or destroyed, the Bond Registrar may authenticate and deliver a new Bond or Bonds of like amount, date and tenor to the Registered Owner thereof if the owner pays the expenses and charges of the Bond Registrar and the City in connection therewith and files with the Bond Registrar and the City evidence satisfactory to both that such Bond or Bonds were actually lost, stolen or destroyed and of his or her ownership W: Word Processing \Ordinances \UTGO Bonds -Public Safety Plan 6-18-19 VC:bjs Review and analysis by Barbara Saxton Page 15 of 16 23 thereof, and furnishes the City and the Bond Registrar with indemnity satisfactory to both. Section 16. Severability; Ratification. If any one or more of the covenants or agreements provided in this ordinance to be performed on the part of the City shall be declared by any court of competent jurisdiction to be contrary to law, then such covenant or covenants, agreement or agreements, shall be null and void and shall be deemed separable from the remaining covenants and agreements of this ordinance and shall in no way affect the validity of the other provisions of this ordinance or of the Bonds. All acts taken pursuant to the authority granted in this ordinance but prior to its effective date are hereby ratified and confirmed. Section 17. Payments Due on Holidays. If an interest and/or principal payment date for the Bonds is not a business day, then payment shall be made on the next business day and no interest shall accrue for the intervening period. Section 18. Corrections by Clerk. Upon approval of the City Attorney and Bond Counsel, the City Clerk is hereby authorized to make necessary corrections to this ordinance, including but not limited to the correction of clerical errors; references to other local, state or federal laws, codes, rules, or regulations; ordinance numbering and section/subsection numbering; and other similar necessary corrections. Section 19. Effective Date. This ordinance shall be published in the official newspaper of the City, and shall take effect and be in full force five (5) days after the date of the publication. PASSED BY THE CITY COUNCIL OF THE CITY OF TUKWILA, WASHINGTON, at a Regular Meeting thereof this day of , 2019. ATTEST/AUTHENTICATED: Christy O'Flaherty, MMC, City Clerk APPROVED AS TO FORM BY: Pacifica Law Group LLP, Bond Counsel Allan Ekberg, Mayor Filed with the City Clerk: Passed by the City Council: Published: Effective Date: Ordinance Number: Attachments: Exhibit A — Form of Bond Exhibit B — Certificate of Authentication (substantial form) Exhibit C — Certificate (by City Clerk) 24 W: Word Processing \Ordinances\UTGO Bonds -Public Safety Plan 6-18-19 VC:bjs Review and analysis by Barbara Saxton Page 16 of 16 Exhibit A Form of Bond [DTC LANGUAGE] UNITED STATES OF AMERICA NO. STATE OF WASHINGTON CITY OF TUKWILA UNLIMITED TAX GENERAL OBLIGATION BOND, 20[ INTEREST RATE: MATURITY DATE: CUSIP NO.: REGISTERED OWNER: PRINCIPAL AMOUNT: The City of Tukwila, Washington (the "City"), hereby acknowledges itself to owe and for value received promises to pay to the Registered Owner identified above, or registered assigns, on the Maturity Date identified above, the Principal Amount indicated above and to pay interest thereon from , 20 , or the most recent date to which interest has been paid or duly provided for until payment of this bond at the Interest Rate set forth above, payable on 1, 20 , and semiannually thereafter on the first days of each succeeding and Both principal of and interest on this bond are payable in lawful money of the United States of America. The fiscal agent of the State of Washington has been appointed by the City as the authenticating agent, paying agent and registrar for the bonds of this issue (the "Bond Registrar"). For so long as the bonds of this issue are held in fully immobilized form, payments of principal and interest thereon shall be made as provided in accordance with the operational arrangements of The Depository Trust Company ("DTC") referred to in the Blanket Issuer Letter of Representations (the "Letter of Representations") from the City to DTC. The bonds of this issue are issued under and in accordance with the provisions of the Constitution and applicable statutes of the State of Washington and Ordinance No. duly passed by the City Council on , 2019 (the "Bond Ordinance"). Capitalized terms used in this bond have the meanings given such terms in the Bond Ordinance. This bond shall not be valid or become obligatory for any purpose or be entitled to any security or benefit under the Bond Ordinance until the Certificate of Authentication hereon shall have been manually signed by or on behalf of the Bond Registrar or its duly designated agent. A-1 UTGO 25 This bond is one of an authorized issue of bonds of like date, tenor, rate of interest and date of maturity, except as to number and amount in the aggregate principal amount of $ and is issued pursuant to the Bond Ordinance to provide a portion of the funds necessary to: (a) implement its Public Safety Plan, which includes replacing three fire stations, financing critical items such as fire trucks and other life/safety equipment as necessary, and constructing a Justice Center to hold the Tukwila Police Department and Municipal Court, as identified in Ordinance No. 2509 passed by the City Council on August 1, 2016 and approved by the qualified electors of the City at a special election held therein on November 8, 2016; and (b) to pay costs of issuance. The bonds of this issue are subject to redemption prior to their stated maturities as provided in the [Bond Purchase Contract/Certificate of Award]. The City has irrevocably covenanted with the owner of this bond that it will levy taxes annually upon all the taxable property in the City without limitation as to rate or amount and in amounts sufficient, together with other money legally available therefor, to pay the principal of and interest on this bond when due. The full faith, credit and resources of the City are irrevocably pledged for the annual levy and collection of such taxes and the prompt payment of such principal and interest. The pledge of tax levies for payment of principal of and interest on the bonds may be discharged prior to maturity of the bonds by making provision for the payment thereof on the terms and conditions set forth in the Bond Ordinance. It is hereby certified that all acts, conditions and things required by the Constitution and statutes of the State of Washington to exist and to have happened, been done and performed precedent to and in the issuance of this bond exist and have happened, been done and performed and that the issuance of this bond and the bonds of this issue does not violate any constitutional, statutory or other limitation upon the amount of bonded indebtedness that the City may incur. IN WITNESS WHEREOF, the City of Tukwila, Washington, has caused this bond to be executed by the manual or facsimile signatures of the Mayor and the City Clerk and the seal of the City to be imprinted, impressed or otherwise reproduced hereon as of this day of , 20 . [SEAL] ATTEST: Christy O'Flaherty, MMC, City Clerk CITY OF TUKWILA, WASHINGTON By Allan Ekberg, Mayor 26 A-2 UTGO Exhibit B The Bond Registrar's Certificate of Authentication on the Bonds shall be in substantially the following form: Date of Authentication: CERTIFICATE OF AUTHENTICATION This bond is one of the bonds described in the within -mentioned Bond Ordinance and is one of the Unlimited Tax General Obligation Bonds, 20 , of the City of Tukwila, Washington, dated , 2019. WASHINGTON STATE FISCAL AGENT, as Bond Registrar By B-1 UTGO 27 Exhibit C CERTIFICATE I, the undersigned, City Clerk of the City Council of the City of Tukwila, Washington (the "City"), DO HEREBY CERTIFY: 1. The attached copy of Ordinance No. (the "Ordinance") is a full, true and correct copy of an ordinance duly passed at a regular meeting of the City Council of the City held at the regular meeting place thereof on 2019 as that ordinance appears in the minute book of the City; and the Ordinance will be in full force and effect five (5) days after its passage and publication as provided by law; and 2. That said meeting was duly convened and held in all respects in accordance with law, and to the extent required by law, due and proper notice of such meeting was given; that a legal quorum was present throughout the meeting and a legally sufficient number of members of the Council voted in the proper manner for the passage of said Ordinance; that all other requirements and proceedings incident to the proper passage of said Ordinance have been fully fulfilled, carried out and otherwise observed; and that I am authorized to execute this certificate. 3. That Ordinance No. has not been amended, supplemented or rescinded since its passage and is in full force and effect and that I am authorized to execute this certificate. IN WITNESS WHEREOF, I have hereunto set my hand this day of 2019. CITY OF TUKWILA, WASHINGTON Christy O'Flaherty, MMC, City Clerk 28 C-1 UTGO AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF TUKWILA, WASHINGTON, AUTHORIZING THE ISSUANCE OF LIMITED TAX GENERAL OBLIGATION BONDS IN THE AGGREGATE PRINCIPAL AMOUNT OF NOT TO EXCEED $25,000,000 TO FINANCE COSTS RELATED TO THE CITY'S PUBLIC SAFETY PLAN AND PUBLIC WORKS FACILITIES AND TO PAY COSTS OF ISSUING THE BONDS; PROVIDING THE FORM, TERMS AND COVENANTS OF THE BONDS; PROVIDING FOR THE DISPOSITION OF THE PROCEEDS OF THE SALE OF THE BONDS; DELEGATING AUTHORITY TO APPROVE THE METHOD OF SALE AND THE FINAL TERMS OF THE BONDS; AND PROVIDING FOR OTHER MATTERS RELATING THERETO; PROVIDING FOR SEVERABILITY; AND ESTABLISHING AN EFFECTIVE DATE. WHEREAS, the City Council (the "Council") of the City of Tukwila, Washington (the "City") has deemed it is in the best interest of the City to acquire, improve, develop and equip certain capital improvements to City facilities, including but not limited to public works facilities and facilities related to the City's Public Safety Plan (the "Project"); and WHEREAS, after due consideration the Council has determined that it is in the best interest of the City to authorize the issuance and sale of limited tax general obligation bonds to pay all or a portion of the costs of the Project and to pay costs of issuance for the Bonds; and WHEREAS, this Council wishes to delegate authority to the Finance Director, or his or her designee (the "Designated Representative"), for a limited time, to approve the method of sale and the interest rates, maturity dates, redemption terms and principal maturities for the bonds within the parameters set by this ordinance; and WHEREAS, the Bonds shall be sold by negotiated or competitive public sale as set forth herein; NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF TUKWILA, WASHINGTON, HEREBY ORDAINS AS FOLLOWS: W: Word Processing\Ordinances\LTGO Bonds-PSP and PW Shops Facility 6-17-19 VC:bjs Review and analysis by Barbara Saxton Page 1 of 16 29 Section 1. Definitions. As used in this ordinance, the following words and terms shall have the following meanings, unless the context or use indicates another or different meaning or intent. Unless the context indicates otherwise, words importing the singular number shall include the plural number and vice versa. Beneficial Owner means any person that has or shares the power, directly or indirectly, to make investment decisions concerning ownership of any Bonds (including persons holding Bonds through nominees, depositories or other intermediaries). Bond Counsel means Pacifica Law Group LLP or an attorney at law or a firm of attorneys, selected by the City, of nationally recognized standing in matters pertaining to the tax exempt nature of interest on bonds issued by states and their political subdivisions. Bond Purchase Contract means the contract, if any, for the purchase of any Bonds sold by negotiated sale to the Underwriter, executed pursuant to Section 12. Bond Register means the registration books showing the name, address and tax identification number of each Registered Owner of the Bonds, maintained pursuant to Section 149(a) of the Code. Bond Registrar means, initially, the fiscal agent of the State, for the purposes of registering and authenticating the Bonds, maintaining the Bond Register, effecting transfer of ownership of the Bonds and paying interest on and principal of the Bonds. Bonds mean the City's Limited Tax General Obligation Bonds, 20XX, or other such series designation as approved by the Designated Representative, authorized to be issued pursuant to the terms of this ordinance. Certificate of Award means the certificate, if any, for the purchase of any Bonds sold by competitive sale awarding the Bonds to the initial purchaser as set forth in Section 12 of this ordinance. City means the City of Tukwila, a municipal corporation duly organized and existing under the laws of the State. City Administrator means the duly appointed and acting City Administrator, including anyone acting in such capacity for the position, or the successor to the duties of that office. City Clerk means the duly appointed and acting City Clerk of the City or the successor to the duties of that office. Closing means the date of delivery of the Bonds to the Underwriter. W: Word Processing \OrdinancesITGO Bonds-PSP and PW Shops Facility 6-17-19 VC:bjs Review and analysis by Barbara Saxton 30 Page 2 of 16 Code means the Internal Revenue Code of 1986 as in effect on the date of issuance of the Bonds or (except as otherwise referenced herein) as it may be amended to apply to obligations issued on the date of issuance of the Bonds, together with applicable proposed, temporary and final regulations promulgated, and applicable official public guidance published, under the Code. Commission means the United States Securities and Exchange Commission. Continuing Disclosure Certificate means the written undertaking for the benefit of the owners and Beneficial Owners of the Bonds as required by Section (b)(5) of the Rule. Council or City Council means the Tukwila City Council, as the general legislative body of the City as the same is duly and regularly constituted from time to time. Debt Service Fund means the fund or account created pursuant to this ordinance for the purpose of paying debt service on the Bonds. Designated Representative means the Finance Director, or his or her designee. DTC means The Depository Trust Company, New York, New York, a limited purpose trust company organized under the laws of the State of New York, as depository for the Bonds pursuant to Section 4 of this ordinance. Fair Market Value means the price at which a willing buyer would purchase an investment from a willing seller in a bona fide, arm's-length transaction, except for specified investments as described in Treasury Regulation § 1.148-5(d)(6), including United States Treasury obligations, certificates of deposit, guaranteed investment contracts, and investments for yield restricted defeasance escrows. Fair Market Value is generally determined on the date on which a contract to purchase or sell an investment becomes binding, and, to the extent required by the applicable regulations under the Code, the term "investment" will include a hedge. Federal Tax Certificate means the certificate executed by the Designated Representative setting forth the requirements of the Code for maintaining the tax exemption of interest on the Bonds, and attachments thereto. Finance Director means the duly appointed and acting Finance Director of the City or the successor to such officer. Government Obligations means direct or indirect obligations of, or obligations the principal of and interest on which are unconditionally guaranteed by, the United States of America. Letter of Representations means the Blanket Issuer Letter of Representations given by the City to DTC, as amended from time to time. IN: Word Processing\Ordinances\LTGO Bonds-PSP and PW Shops Facility 6-17-19 VC:bjs Review and analysis by Barbara Saxton Page 3 of 16 31 Mayor or City Mayor means the elected Mayor of the City or the successor to the duties of that office. MSRB means the Municipal Securities Rulemaking Board or any successors to its functions. Official Statement means the disclosure documents prepared and delivered in connection with the issuance of the Bonds. Project means the capital projects described in Section 2 of this ordinance. Project Fund means the account created pursuant to Section 8 of this ordinance. Record Date means the close of business for the Bond Registrar that is 15 days preceding any interest and/or principal payment or redemption date. Registered Owner means the person named as the registered owner of a Bond in the Bond Register. For so long as the Bonds are held in book -entry only form, DTC or its nominee shall be deemed to be the sole Registered Owner. Rule means the Commission's Rule 15c2-12 under the Securities Exchange Act of 1934, as the same may be amended from time to time. Sale Document means the Bond Purchase Contract or Certificate of Award, if any, executed by the Designated Representative in connection with the sale of the Bonds pursuant to Section 12 of this ordinance, which shall provide for the name, principal and interest payment dates and amounts, redemption/prepayment rights, and other terms to describe such Bonds as determined to be necessary by the Designated Representative. State means the State of Washington. Underwriter means any underwriter, in the case of a negotiated sale, or initial purchaser, in the case of a competitive sale, the Bonds selected pursuant to Section 12. Section 2. Authorization of the Project. The Bonds are being issued to finance and/or reimburse the City for costs of acquiring, improving, developing and equipping certain capital improvements to City facilities, including but not limited to public works facilities and facilities related to the City's Public Safety Plan, as it may be amended from time to time (the "Project") and paying costs of issuance for the Bonds. The cost of all necessary and other costs incurred in connection with the Project shall be paid from other City funds legally available for such purposes. Section 3. Authorization of Bonds and Bond Details. For the purpose of paying and/or reimbursing the City for costs of the Project and paying costs of issuance, the City shall issue and sell limited tax general obligation bonds in an aggregate principal amount not to exceed $25,000,000 (the "Bonds"). W: Word Processing \Ordinances\LTGO Bonds-PSP and PW Shops Facility 6-17-19 VC:bjs Review and analysis by Barbara Saxton Page 4 of 16 32 The Bonds shall be general obligations of the City and shall be designated "City of Tukwila, Washington, Limited Tax General Obligation Bonds, 20XX" with additional series designation or other such designation as determined to be necessary by the Designated Representative. The Bonds shall be dated as of the date of Closing; shall be fully registered as to both principal and interest; shall be in the denomination of $5,000 each, or any integral multiple thereof, within a maturity; shall be numbered separately in such manner and with any additional designation as the Bond Registrar deems necessary for purposes of identification; shall bear interest from their date payable on the dates and commencing as provided in the Sale Document; and shall mature on the dates and in the principal amounts set forth in the Sale Document, as approved and executed by the Designated Representative pursuant to Section 12 of this ordinance. Section 4. Registration, Exchange and Payments. (a) Bond Registrar/Bond Register. The City hereby specifies and adopts the system of registration approved by the Washington State Finance Committee from time to time through the appointment of state fiscal agencies. The City shall cause a bond register to be maintained by the Bond Registrar. So long as any Bonds remain outstanding, the Bond Registrar shall make all necessary provisions to permit the exchange or registration or transfer of Bonds at its designated office. The Bond Registrar may be removed at any time at the option of the Finance Director upon prior notice to the Bond Registrar and a successor Bond Registrar appointed by the Finance Director. No resignation or removal of the Bond Registrar shall be effective until a successor shall have been appointed and until the successor Bond Registrar shall have accepted the duties of the Bond Registrar hereunder. The Bond Registrar is authorized, on behalf of the City, to authenticate and deliver Bonds transferred or exchanged in accordance with the provisions of such Bonds and this ordinance and to carry out all of the Bond Registrar's powers and duties under this ordinance. The Bond Registrar shall be responsible for its representations contained in the Certificate of Authentication of the Bonds. (b) Registered Ownership. The City and the Bond Registrar, each in its discretion, may deem and treat the Registered Owner of each Bond as the absolute owner thereof for all purposes (except as provided in the Continuing Disclosure Certificate), and neither the City nor the Bond Registrar shall be affected by any notice to the contrary. Payment of any such Bond shall be made only as described in Section 4(g), but such Bond may be transferred as herein provided. All such payments made as described in Section 4(g) shall be valid and shall satisfy and discharge the liability of the City upon such Bond to the extent of the amount or amounts so paid. (c) DTC Acceptance/Letters of Representations. The Bonds initially shall be held by DTC acting as depository. The City has executed and delivered to DTC a Blanket Issuer 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 (or any successor depository) with respect to the Bonds in respect of the accuracy of any records maintained by DTC (or any successor depository) or any DTC W: Word Processing \Ordinances\LTGO Bonds-PSP and PW Shops Facility 6-17-19 VC:bjs Review and analysis by Barbara Saxton Page 5 of 16 33 participant, the payment by DTC (or any successor depository) or any DTC participant of any amount in respect of the principal of or interest on Bonds, any notice which is permitted or required to be given to Registered Owners under this ordinance (except such notices as shall be required to be given by the City to the Bond Registrar or to DTC (or any successor depository)), or any consent given or other action taken by DTC (or any successor depository) as the Registered Owner. For so long as any Bonds are held by a depository, DTC or its successor depository or its nominee shall be deemed to be the Registered Owner for all purposes hereunder, and all references herein to the Registered Owners shall mean DTC (or any successor depository) or its nominee and shall not mean the owners of any beneficial interest in such Bonds. (d) Use of Depository. (1) The Bonds shall be registered initially in the name of "Cede & Co.", as nominee of DTC, with one Bond maturing on each of the maturity dates for the Bonds in a denomination corresponding to the total principal therein designated to mature on such date. Registered ownership of such Bonds, or any portions thereof, may not thereafter be transferred except: (A) to any successor of DTC or its nominee, provided that any such successor shall be qualified under any applicable laws to provide the service proposed to be provided by it; (B) to any substitute depository appointed by the Finance Director pursuant to subsection (2) below or such substitute depository's successor; or (C) to any person as provided in subsection (4) below. (2) 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 Finance Director to discontinue the system of book entry transfers through DTC or its successor (or any substitute depository or its successor), the Finance Director may hereafter 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. (3) In the case of any transfer pursuant to clause (A) or (B) of subsection (1) above, the Bond Registrar shall, upon receipt of all outstanding Bonds together with a written request on behalf of the Finance Director, issue a single new Bond for each maturity of that series then outstanding, registered in the name of such successor or such substitute depository, or their nominees, as the case may be, all as specified in such written request of the Finance Director. (4) In the event that: (A) DTC or its successor (or substitute depository or its successor) resigns from its functions as depository, and no substitute depository can be obtained; or (B) the Finance Director determines that it is in the best interest of the beneficial owners of the Bonds that such owners be able to obtain physical Bond certificates, the ownership of such Bonds may then be transferred to any person or entity as herein provided, and shall no longer be held by a depository. The Finance Director shall deliver a written request to the Bond Registrar, together with a supply of physical Bonds, to issue Bonds as herein provided in any authorized denomination. Upon receipt by the Bond Registrar of all then outstanding Bonds together with a written request on behalf of the Finance Director to the Bond Registrar, new Bonds of such W: Word Processing\Ordinances\LTGO Bonds-PSP and PW Shops Facility 6-17-19 VC:bjs Review and analysis by Barbara Saxton Page 6 of 16 34 series shall be issued in the appropriate denominations and registered in the names of such persons as are requested in such written request. (e) Registration of Transfer of Ownership or Exchange; Change in Denominations. The transfer of any Bond may be registered and Bonds may be exchanged, but no transfer of any such Bond shall be valid unless it is surrendered to the Bond Registrar with the assignment form appearing on such Bond duly executed by the Registered Owner or such Registered Owner's duly authorized agent in a manner satisfactory to the Bond Registrar. Upon such surrender, the Bond Registrar shall cancel the surrendered Bond and shall authenticate and deliver, without charge to the Registered Owner or transferee therefor, a new Bond (or Bonds at the option of the new Registered Owner) of the same date, maturity, and interest rate and for the same aggregate principal amount in any authorized denomination, naming as Registered Owner the person or persons listed as the assignee on the assignment form appearing on the surrendered Bond, in exchange for such surrendered and cancelled Bond. Any Bond may be surrendered to the Bond Registrar and exchanged, without charge, for an equal aggregate principal amount of Bonds of the same date, maturity, and interest rate, in any authorized denomination. The Bond Registrar shall not be obligated to register the transfer of or to exchange any Bond during the 15 days preceding any principal payment or redemption date. (f) Bond Registrar's Ownership of Bonds. The Bond Registrar may become the Registered Owner of any Bond 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 a member of, or in any other capacity with respect to, any committee formed to protect the right of the Registered Owners or beneficial owners of Bonds. (g) Place and Medium of Payment. 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 calculated on the basis of a year of 360 days and twelve 30-day months. For so long as all Bonds are held by a depository, payments of principal thereof and interest thereon shall be made as provided in accordance with the operational arrangements of DTC referred to in the Letter of Representations. In the event that the Bonds are no longer held by a depository, interest on the Bonds shall be paid by check or draft mailed to the Registered Owners at the addresses for such Registered Owners appearing on the Bond Register on the Record Date, or upon the written request of a Registered Owner of more than $1,000,000 of Bonds (received by the Bond Registrar at least by the Record Date), such payment shall be made by the Bond Registrar by wire transfer to the account within the United States designated by the Registered Owner. Principal of the Bonds shall be payable upon presentation and surrender of such Bonds by the Registered Owners at the designated office of the Bond Registrar. If any Bond is duly presented for payment and funds have not been provided by the City on the applicable payment date, then interest will continue to accrue thereafter on the unpaid principal thereof at the rate stated on the Bond until the Bond is paid. W: Word Processing \Ordinances\LTGO Bonds-PSP and PW Shops Facility 6-17-19 VC:bjs Review and analysis by Barbara Saxton Page 7 of 16 35 Section 5. Redemption Prior to Maturity and Purchase of Bonds. (a) Mandatory Redemption of Term Bonds and Optional Redemption. The Bonds shall be subject to mandatory redemption to the extent, if any, set forth in the Sale Document and as approved by the Designated Representative pursuant to Section 12. The Bonds shall be subject to optional redemption on the dates, at the prices and under the terms set forth in the Sale Document approved by the Designated Representative pursuant to Section 12. (b) Purchase of Bonds. The City reserves the right to purchase any or all of the Bonds offered to it at any time at a price deemed reasonable by the Finance Director plus accrued interest to the date of purchase. (c) Selection of Bonds for Redemption. For as long as the Bonds are held in book -entry only form, the selection of particular Bonds within a maturity to be redeemed shall be made in accordance with the operational arrangements then in effect at DTC. If the Bonds are no longer held by a depository, the selection of such Bonds to be redeemed and the surrender and reissuance thereof, as applicable, shall be made as provided in the following provisions of this subsection (c). If the City redeems at any one time fewer than all of the Bonds having the same maturity date, the particular Bonds or portions of Bonds of such maturity to be redeemed shall be selected by lot (or in such manner determined by the Bond Registrar) in increments of $5,000. In the case of a Bond of a denomination greater than $5,000, the City and the Bond Registrar shall treat each Bond as representing such number of separate Bonds each of the denomination of $5,000 as is obtained by dividing the actual principal amount of such Bond by $5,000. In the event that only a portion of the principal sum of a Bond is redeemed, upon surrender of such Bond at the designated office of the Bond Registrar there shall be issued to the Registered Owner, without charge therefor, for the then unredeemed balance of the principal sum thereof, at the option of the Registered Owner, a Bond or Bonds of like maturity and interest rate in any of the denominations herein authorized. (d) Notice of Redemption. (1) Official Notice. For so long as the Bonds are held by a depository, notice of redemption shall be given in accordance with the operational arrangements of DTC as then in effect, and neither the City nor the Bond Registrar shall provide any notice of redemption to any beneficial owners. The notice of redemption may be conditional. Thereafter (if the Bonds are no longer held by a depository), notice of redemption shall be given in the manner hereinafter provided. Unless waived by any owner of Bonds to be redeemed, official notice of any such redemption (which redemption may be conditioned by the Bond Registrar on the receipt of sufficient funds for redemption or otherwise) shall be given by the Bond Registrar on behalf of the City by mailing a copy of an official redemption notice by first class mail at least 20 days and not more than 60 days prior to the date fixed for redemption to the Registered Owner of the Bond or Bonds to be redeemed at the address shown on the Bond Register or at such other address as is furnished in writing by such Registered Owner to the Bond Registrar. W: Word Processing \Ordinances\LTGO Bonds-PSP and PW Shops Facility 6-17-19 VC:bjs Review and analysis by Barbara Saxton 36 Page 8 of 16 All official notices of redemption shall be dated and shall state: (A) the redemption date, (B) the redemption price, (C) if fewer than all outstanding Bonds are to be redeemed, the identification by series and maturity (and, in the case of partial redemption, the respective principal amounts) of the Bonds to be redeemed, (D) any conditions to redemption, (E) that unless conditional notice of redemption has been given and such conditions have either been satisfied or waived, on the redemption date the redemption price shall become due and payable upon each such Bond or portion thereof called for redemption, and that interest thereon shall cease to accrue from and after said date, and (F) the place where such Bonds are to be surrendered for payment of the redemption price, which place of payment shall be the designated office of the Bond Registrar. On or prior to any redemption date, unless such redemption has been rescinded or revoked, the City shall deposit with the Bond Registrar an amount of money sufficient to pay the redemption price of all the Bonds or portions of Bonds which are to be redeemed on that date. The City retains the right to rescind any redemption notice and the related optional redemption of Bonds by giving notice of rescission to the affected registered owners at any time on or prior to the scheduled 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. (2) Effect of Notice; Bonds Due. If notice of redemption has been given and not rescinded or revoked, or if the conditions set forth in a conditional notice of redemption have been satisfied or waived, the Bonds or portions of Bonds to be redeemed shall, on the redemption date, become due and payable at the redemption price therein specified, and from and after such date such Bonds or portions of Bonds shall cease to bear interest. Upon surrender of such Bonds for redemption in accordance with said notice, such Bonds shall be paid by the Bond Registrar at the redemption price. Installments of interest due on or prior to the redemption date shall be payable as herein provided for payment of interest. All Bonds which have been redeemed shall be canceled by the Bond Registrar and shall not be reissued. (3) Additional Notice. In addition to the foregoing notice, further notice shall be given by the City as set out below, but no defect in said further notice nor any failure to give all or any portion of such further notice shall in any manner defeat the effectiveness of a call for redemption if notice thereof is given as above prescribed. Each further notice of redemption given hereunder shall contain the information required above for an official notice of redemption plus: (A) the CUSIP numbers of all Bonds being redeemed; (B) the date of issue of the Bonds as originally issued; (C) the rate of interest borne by each Bond being redeemed; (D) the series and maturity date of each W: Word Processing \Ordinances\LTGO Bonds-PSP and PW Shops Facility 6-17-19 VC:bjs Review and analysis by Barbara Saxton Page 9 of 16 37 Bond being redeemed; and (E) any other descriptive information needed to identify accurately the Bonds being redeemed. Each further notice of redemption may be sent at least 20 days before the redemption date to each party entitled to receive notice pursuant to Section 14 and the Continuing Disclosure Certificate and with such additional information as the City shall deem appropriate, but such mailings shall not be a condition precedent to the redemption of such Bonds. (4) Amendment of Notice Provisions. The foregoing notice provisions of this Section 5, including but not limited to the information to be included in redemption notices and the persons designated to receive notices, may be amended by additions, deletions and changes in order to maintain compliance with duly promulgated regulations and recommendations regarding notices of redemption of municipal securities. Section 6. Form of Bonds. The Bonds shall be in substantially the form set forth in Exhibit A, which is incorporated herein by this reference. Section 7. Execution of Bonds. The Bonds shall be executed on behalf of the City by the facsimile or manual signature of the Mayor and shall be attested to by the facsimile or manual signature of the City Clerk, and shall have the seal of the City impressed or a facsimile thereof imprinted, or otherwise reproduced thereon. In the event any officer who shall have signed or whose facsimile signatures appear on any of the Bonds shall cease to be such officer of the City before said Bonds shall have been authenticated or delivered by the Bond Registrar or issued by the City, such Bonds may nevertheless be authenticated, delivered and issued and, upon such authentication, delivery and issuance, shall be as binding upon the City as though said person had not ceased to be such officer. Any Bond may be signed and attested on behalf of the City by such persons who, at the actual date of execution of such Bond shall be the proper officer of the City, although at the original date of such Bond such persons were not such officers of the City. Only such Bonds as shall bear thereon a Certificate of Authentication manually executed by an authorized representative of the Bond Registrar shall be valid or obligatory for any purpose or entitled to the benefits of this ordinance. Such Certificate of Authentication shall be conclusive evidence that the Bonds so authenticated have been duly executed, authenticated and delivered hereunder and are entitled to the benefits of this ordinance. W: Word Processing \Ordinances\LTGO Bonds-PSP and PW Shops Facility 6-17-19 VC:bjs Review and analysis by Barbara Saxton 38 Page 10 of 16 Section 8. Application of Bond Proceeds. The Finance Director is hereby authorized to create a fund or account (the "Project Fund"), and subaccounts therein as necessary, for the purposes set forth in this section. A portion of the proceeds of the Bonds net of any Underwriter's discount and fees, shall be deposited in the Project Fund in the amounts specified in the closing memorandum prepared in connection with the issuance of the Bonds. Such proceeds shall be used to pay and/or reimburse the City for the costs of the Project and to pay costs of issuance of the Bonds. The Finance Director shall invest money in the Project Fund and the subaccounts contained therein in such obligations as may now or hereafter be permitted to cities of the State by law and which will mature prior to the date on which such money shall be needed, but only to the extent that the same are acquired, valued and disposed of at Fair Market Value. Upon completion of the Project, Bond proceeds (including interest earnings thereon) may be used for other capital projects of the City or shall be transferred to the Debt Service Fund. Section 9. Tax Covenants. The City will take all actions necessary to assure the exclusion of interest on the Bonds from the gross income of the owners of the Bonds to the same extent as such interest is permitted to be excluded from gross income under the Code as in effect on the date of issuance of the Bonds, including but not limited to the following: (a) Private Activity Bond Limitation. The City will assure that the proceeds of the Bonds are not so used as to cause the Bonds to satisfy the private business tests of Section 141(b) of the Code or the private loan financing test of Section 141(c) of the Code. (b) Limitations on Disposition of Project. The City will not sell or otherwise transfer or dispose of: (i) any personal property components of the Project other than in the ordinary course of an established government program under Treasury Regulation § 1.141-2(d)(4); or (ii) any real property components of the Project, unless it has received an opinion of nationally recognized bond counsel to the effect that such disposition will not adversely affect the treatment of interest on the Bonds as excludable from gross income for federal income tax purposes. (c) Federal Guarantee Prohibition. The City will not take any action or permit or suffer any action to be taken if the result of such action would be to cause any of the Bonds to be "federally guaranteed" within the meaning of Section 149(b) of the Code. (d) Rebate Requirement. The City will take any and all actions necessary to assure compliance with Section 148(f) of the Code, relating to the rebate of excess investment earnings, if any, to the federal government, to the extent that such section is applicable to the Bonds. W: Word Processing \Ordinances\LTGO Bonds-PSP and PW Shops Facility 6-17-19 VC:bjs Review and analysis by Barbara Saxton Page 11 of 16 39 (e) No Arbitrage. The City will not take, or permit or suffer to be taken, any action with respect to the proceeds of the Bonds which, if such action had been reasonably expected to have been taken, or had been deliberately and intentionally taken, on the date of issuance of the Bonds would have caused the Bonds to be "arbitrage bonds" within the meaning of Section 148 of the Code. (f) Registration Covenant. The City will maintain a system for recording the ownership of each Bond that complies with the provisions of Section 149 of the Code until all Bonds have been surrendered and canceled. (g) Record Retention. The City will retain its records of all accounting and monitoring it carries out with respect to the Bonds for at least three years after the Bonds mature or are redeemed (whichever is earlier); however, if the Bonds are redeemed and refunded, the City will retain its records of accounting and monitoring at least three years after the earlier of the maturity or redemption of the obligations that refunded the Bonds. (h) Compliance with Federal Tax Certificate. The City will comply with the provisions of the Federal Tax Certificate with respect to the Bonds, which are incorporated herein as if fully set forth herein. The covenants of this Section will survive payment in full or defeasance of the Bonds. Section 10. Debt Service Fund and Provision for Tax Levy Payments. The City hereby authorizes the creation of a fund or account to be used for the payment of debt service on the Bonds (the "Debt Service Fund"). No later than the date each payment of principal of or interest on the Bonds becomes due, the City shall transmit sufficient funds, from the Debt Service Fund or from other legally available sources, to the Bond Registrar for the payment of such principal or interest. Money in the Debt Service Fund may be invested in legal investments for City funds, but only to the extent that the same are acquired, valued and disposed of at Fair Market Value. Any interest or profit from the investment of such money shall be deposited in the Debt Service Fund. The City hereby irrevocably covenants and agrees for as long as any of the Bonds are outstanding and unpaid that each year it shall include in its budget and levy an ad valorem tax upon all the property within the City subject to taxation in an amount that will be sufficient, together with all other revenues and money of the City legally available for such purposes, to pay the principal of and interest on the Bonds as the same shall become due. The City hereby irrevocably pledges that the annual tax provided for herein to be levied for the payment of such principal and interest shall be within and as a part of the property tax levy permitted to cities without a vote of the electorate, and that a sufficient portion of each annual levy to be levied and collected by the City prior to the full payment of the principal of and interest on the Bonds will be and is hereby irrevocably set aside, pledged and appropriated for the payment of the principal of and interest on the Bonds. The full faith, credit and resources of the City are hereby irrevocably W: Word Processing \OrdinancesITGO Bonds-PSP and PW Shops Facility 6-17-19 VC:bjs Review and analysis by Barbara Saxton 40 Page 12 of 16 pledged for the annual levy and collection of such taxes and for the prompt payment of the principal of and interest on the Bonds when due. Section 11. Defeasance. In the event that the City, in order to effect the payment, retirement or redemption of any Bond, sets aside in the Debt Service Fund or in another special account, cash or noncallable Government Obligations, or any combination of cash and/or noncallable Government Obligations, in amounts and maturities which, together with the known earned income therefrom, are sufficient to redeem or pay and retire such Bond in accordance with its terms and to pay when due the interest and redemption premium, if any, thereon, and such cash and/or noncallable Government Obligations are irrevocably set aside and pledged for such purpose, then no further payments need be made into the Debt Service Fund for the payment of the principal of and interest on such Bond. The owner of a Bond so provided for shall cease to be entitled to any lien, benefit or security of this ordinance except the right to receive payment of principal, premium, if any, and interest from the Debt Service Fund or such special account, and such Bond shall be deemed to be not outstanding under this ordinance. The City shall give written notice of defeasance of the Bonds in accordance with the Continuing Disclosure Certificate. Section 12. Sale of Bonds. (a) Bond Sale. The Council has determined that it would be in the best interest of the City to delegate to the Designated Representative, for a limited time, the authority to determine the method of sale for the Bonds and to approve the final interest rates, maturity dates, redemption terms and principal maturities for the Bonds. (b) Negotiated Bond Sale. If the Designated Representative determines that the Bonds are to be sold by negotiated public sale, the Designated Representative shall solicit proposals from one or more qualified underwriting firms and shall select the Underwriter that submits the proposal that is in the best interest of the City. Such Bonds shall be sold to the Underwriter pursuant to the terms of a Bond Purchase Contract. (c) Competitive Sale. If the Designated Representative determines that the Bonds are to be sold at a competitive public sale, the Designated Representative shall: (1) establish the date of the public sale; (2) establish the criteria by which the successful bidder will be determined; (3) request that a good faith deposit accompany each bid; (4) cause notice of the public sale to be given; and (5) provide for such other matters pertaining to the public sale as he or she deems necessary or desirable. The Designated Representative shall cause the notice of sale to be given and provide for such other matters pertaining to the public sale as he or she deems necessary or desirable. Such Bonds shall be sold to the Underwriter pursuant to the terms of a Certificate of Award. W: Word Processing \OrdinancesITGO Bonds-PSP and PW Shops Facility 6-17-19 VC:bjs Review and analysis by Barbara Saxton Page 13 of 16 41 (d) Sale Parameters. Subject to the terms and conditions set forth in this Section 12, the Designated Representative is hereby authorized to approve the method of sale and the final interest rates, aggregate principal amount, principal maturities, and redemption rights for the Bonds in the manner provided hereafter so long as: (1) the aggregate principal amount of the Bonds does not exceed $25,500,000; (2) the final maturity date for the Bonds is no later than 21 years from Closing; (3) the aggregate purchase price for the Bonds shall not be less than 100.5% of the aggregate stated principal amount of the Bonds, excluding any original issue discount; and (4) the true interest cost for the Bonds (in the aggregate) does not exceed 4.50%. Subject to the terms and conditions set forth in this section, the Designated Representative is hereby authorized to execute the appropriate Sale Document on behalf of the City. Following the execution of the Sale Document, the Designated Representative shall provide a report to the Council describing the final terms of the Bonds approved pursuant to the authority delegated in this section. The authority granted to the Designated Representatives by this Section 12 shall expire one year after the effective date of this ordinance. If a Sale Document for the Bonds has not been executed within one year after the effective date of this ordinance, the authorization for the issuance of the Bonds shall be rescinded, and the Bonds shall not be issued nor their sale approved unless such Bonds are re -authorized by ordinance of the Council. The ordinance re- authorizing the issuance and sale of such Bonds may be in the form of a new ordinance repealing this ordinance in whole or in part or may be in the form of an amendatory ordinance approving a Sale Document or establishing terms and conditions for the authority delegated under this Section 12. (e) Delivery of Bonds; Documentation. Upon the passage and approval of this ordinance and execution of the Sale Document, the proper officials of the City, including the Designated Representative, the City Administrator, the Mayor and the City Clerk, are authorized and directed to undertake all action necessary for the prompt execution and delivery of the Bonds to the Underwriter and further to execute all closing certificates and documents required to effect the closing and delivery of the Bonds in accordance with the terms of the Sale Document. Such documents may include, but are not limited to, documents related to a municipal bond insurance policy delivered by an insurer to insure the payment when due of the principal of and interest on all or a portion of the Bonds as provided therein, if such insurance is determined by the Designated Representative to be in the best interest of the City. 42 W: Word Processing \Ordinances\LTGO Bonds-PSP and PW Shops Facility 6-17-19 VC:bjs Review and analysis by Barbara Saxton Page 14 of 16 Section 13. Preliminary and Final Official Statements. The Designated Representative is hereby authorized to deem final the preliminary Official Statement relating to the Bonds for the purposes of the Rule. The Designated Representative is further authorized to approve for purposes of the Rule, on behalf of the City, the final Official Statement relating to the issuance and sale of the Bonds and the distribution of the final Official Statement pursuant thereto with such changes, if any, as may be deemed by him or her to be appropriate. Section 14. Undertaking to Provide Ongoing Disclosure. The City covenants to execute and deliver at the time of Closing a Continuing Disclosure Certificate. The Designated Representative is hereby authorized to execute and deliver a Continuing Disclosure Certificate upon the issuance, delivery and sale of the Bonds with such terms and provisions as such officer shall deem appropriate and in the best interests of the City. Section 15. Lost, Stolen or Destroyed Bonds. In case any Bonds are lost, stolen or destroyed, the Bond Registrar may authenticate and deliver a new Bond or Bonds of like amount, date and tenor to the Registered Owner thereof if the owner pays the expenses and charges of the Bond Registrar and the City in connection therewith and files with the Bond Registrar and the City evidence satisfactory to both that such Bond or Bonds were actually lost, stolen or destroyed and of his or her ownership thereof, and furnishes the City and the Bond Registrar with indemnity satisfactory to both. Section 16. Severability; Ratification. If any one or more of the covenants or agreements provided in this ordinance to be performed on the part of the City shall be declared by any court of competent jurisdiction to be contrary to law, then such covenant or covenants, agreement or agreements, shall be null and void and shall be deemed separable from the remaining covenants and agreements of this ordinance and shall in no way affect the validity of the other provisions of this ordinance or of the Bonds. All acts taken pursuant to the authority granted in this ordinance but prior to its effective date are hereby ratified and confirmed. Section 17. Payments Due on Holidays. If an interest and/or principal payment date for the Bonds is not a business day, then payment shall be made on the next business day and no interest shall accrue for the intervening period. Section 18. Corrections by Clerk. Upon approval of the City Attorney and Bond Counsel, the City Clerk is hereby authorized to make necessary corrections to this ordinance, including but not limited to the correction of clerical errors; references to other local, state or federal laws, codes, rules, or regulations; ordinance numbering and section/subsection numbering; and other similar necessary corrections. W: Word Processing \Ordinances\LTGO Bonds-PSP and PW Shops Facility 6-17-19 VC:bjs Review and analysis by Barbara Saxton Page 15 of 16 43 Section 19. Effective Date. This ordinance shall be published in the official newspaper of the City, and shall take effect and be in full force five (5) days after the date of the publication. PASSED BY THE CITY COUNCIL OF THE CITY OF TUKWILA, WASHINGTON, at a Regular Meeting thereof this day of , 2019. ATTEST/AUTHENTICATED: Christy O'Flaherty, MMC, City Clerk APPROVED AS TO FORM BY: Pacifica Law Group LLP, Bond Counsel Allan Ekberg, Mayor Filed with the City Clerk: Passed by the City Council: Published: Effective Date: Ordinance Number: Attachments: Exhibit A — Form of Bond Exhibit B — Certificate of Authentication (substantial form) Exhibit C — Certificate (by City Clerk) W: Word Processing\Ordinances\LTGO Bonds-PSP and PW Shops Facility 6-17-19 VC:bjs Review and analysis by Barbara Saxton 44 Page 16 of 16 NO. Exhibit A Form of Bond [DTC LANGUAGE] UNITED STATES OF AMERICA STATE OF WASHINGTON CITY OF TUKWILA LIMITED TAX GENERAL OBLIGATION BOND, 20[ 1 INTEREST RATE: MATURITY DATE: REGISTERED OWNER: PRINCIPAL AMOUNT: CUSIP NO.: The City of Tukwila, Washington (the "City"), hereby acknowledges itself to owe and for value received promises to pay to the Registered Owner identified above, or registered assigns, on the Maturity Date identified above, the Principal Amount indicated above and to pay interest thereon from , 20 , or the most recent date to which interest has been paid or duly provided for until payment of this bond at the Interest Rate set forth above, payable on 1, 20 , and semiannually thereafter on the first days of each succeeding and . Both principal of and interest on this bond are payable in lawful money of the United States of America. The fiscal agent of the State of Washington has been appointed by the City as the authenticating agent, paying agent and registrar for the bonds of this issue (the "Bond Registrar"). For so long as the bonds of this issue are held in fully immobilized form, payments of principal and interest thereon shall be made as provided in accordance with the operational arrangements of The Depository Trust Company ("DTC") referred to in the Blanket Issuer Letter of Representations (the "Letter of Representations") from the City to DTC. The bonds of this issue are issued under and in accordance with the provisions of the Constitution and applicable statutes of the State of Washington and Ordinance No. duly passed by the City Council on [ 1, 2019 (the "Bond Ordinance"). Capitalized terms used in this bond have the meanings given such terms in the Bond Ordinance. This bond shall not be valid or become obligatory for any purpose or be entitled to any security or benefit under the Bond Ordinance until the Certificate of Authentication hereon shall have been manually signed by or on behalf of the Bond Registrar or its duly designated agent. A-1 45 This bond is one of an authorized issue of bonds of like date, tenor, rate of interest and date of maturity, except as to number and amount in the aggregate principal amount of $ and is issued pursuant to the Bond Ordinance to provide a portion of the funds necessary to pay the cost of acquiring, improving, developing and equipping certain capital improvements to City facilities, including but not limited to public works facilities and facilities related to the City's Public Safety Plan, and to pay costs of issuance. The bonds of this issue are subject to redemption prior to their stated maturities as provided in the [Bond Purchase Contract/Certificate of Award]. The City has irrevocably covenanted with the owner of this bond that it shall include in its annual budget and levy taxes annually, within and a part of the tax levy permitted to the City without a vote of the electorate, upon all the taxable property in the City and in amounts sufficient, together with other money legally available therefor, to pay the principal of and interest on this bond when due. The full faith, credit and resources of the City are irrevocably pledged for the annual levy and collection of such taxes and the prompt payment of such principal and interest. The pledge of tax levies for payment of principal of and interest on the bonds may be discharged prior to maturity of the bonds by making provision for the payment thereof on the terms and conditions set forth in the Bond Ordinance. It is hereby certified that all acts, conditions and things required by the Constitution and statutes of the State of Washington to exist and to have happened, been done and performed precedent to and in the issuance of this bond exist and have happened, been done and performed and that the issuance of this bond and the bonds of this issue does not violate any constitutional, statutory or other limitation upon the amount of bonded indebtedness that the City may incur. IN WITNESS WHEREOF, the City of Tukwila, Washington, has caused this bond to be executed by the manual or facsimile signatures of the Mayor and the City Clerk and the seal of the City to be imprinted, impressed or otherwise reproduced hereon as of this day of , 20 . [SEAL] ATTEST: Christy O'Flaherty, MMC, City Clerk CITY OF TUKVVI A, WASHINGTON By Allan Ekberg, Mayor 46 A-2 Exhibit B The Bond Registrar's Certificate of Authentication on the Bonds shall be in substantially the following form: Date of Authentication: CERTIFICATE OF AUTHENTICATION This bond is one of the bonds described in the within -mentioned Bond Ordinance and is one of the Limited Tax General Obligation Bonds, 20 , of the City of Tukwila, Washington, dated , 2019. WASHINGTON STATE FISCAL AGENT, as Bond Registrar By B-1 47 Exhibit C CERTIFICATE I, the undersigned, City Clerk of the City Council of the City of Tukwila, Washington (the "City"), DO HEREBY CERTIFY: 1. The attached copy of Ordinance No. (the "Ordinance") is a full, true and correct copy of an ordinance duly passed at a regular meeting of the City Council of the City held at the regular meeting place thereof on 2019 as that ordinance appears in the minute book of the City; and the Ordinance will be in full force and effect five (5) days after its passage and publication as provided by law; and 2. That said meeting was duly convened and held in all respects in accordance with law, and to the extent required by law, due and proper notice of such meeting was given; that a legal quorum was present throughout the meeting and a legally sufficient number of members of the Council voted in the proper manner for the passage of said Ordinance; that all other requirements and proceedings incident to the proper passage of said Ordinance have been fully fulfilled, carried out and otherwise observed; and that I am authorized to execute this certificate. 3. That Ordinance No. has not been amended, supplemented or rescinded since its passage and is in full force and effect and that I am authorized to execute this certificate. IN WITNESS WHEREOF, I have hereunto set my hand this day of , 2019. CITY OF TUKWILA, WASHINGTON Christy O'Flaherty, MMC, City Clerk 48 C-1 City of Tukwila, Washington Finance Committee Meeting I Upcoming UTGO & LTGO Financings June 24, 2019 PFM Financial Advisors LLC 1200 Fifth Avenue Suite 1220 Seattle, WA 98101 Duncan Brown (206) 858-5367 Steven Amano (206) 858-5366 pfm Outline Background Timing Considerations PFM Recommendation Unlimited Tax General Obligation Bonds Limited Tax General Obligation Bonds Timing: Key Milestones Appendix — Debt Capacity & Market Update 1 Background The City is considering the issuance of both Limited Tax General Obligation Bonds ("LTGO Bonds") and Unlimited Tax General Obligation Bonds ("UTGO Bonds") Proceeds of the LTGO Bonds may be used to finance project costs related to the City's Public Safety Plan and Public Works Facilities Proceeds of the UTGO Bonds may only be applied to the projects included in the Public Safety Plan The City's cash flow projections suggest that bond proceeds to finance the Public Safety Plan projects will be needed in the fourth quarter of 2019 The City expects it will need additional funds for the Public Works Facilities in the first quarter of 2020 2 Timing Considerations Key considerations regarding bond sale timing include: Cash flow needs — Q4 2019 for Public Safety Plan (LTGO or UTGO); Q1 2020 for Public Works Facilities (LTGO only) Source of repayment — UTGO Bonds are payable from a separate, excess property tax levy; LTGO Bonds are payable from general resources of the City Issuance cost savings — issuing the two series of Bonds at the same time (or close to the same time) allows for shared issuance costs, a single credit rating, and reduced staff time commitment Tax levy timing — UTGO Bonds' excess levy must be finalized prior to the year in which it is imposed, typically by late November or early December Cost of carry — Issuing either series of Bonds before proceeds are actually needed results in added "cost of carry" Interest rate risk — waiting to issue either series of Bonds exposes the City to changes in interest rates PFI 3 PFM Recommendation PFM recommends that the City target both UTGO and LTGO bond sales in October 2019. This will allow the City to: Meet its project cash flow needs Avoid duplicative bond issuance costs and minimize required staff time commitment Minimize interest rate risk Come October, the City could consider postponing the sale of its LTGO Bonds until later in 2019, if market conditions are stable. This would allow the City to reduce its cost of carry while still capturing the cost and time efficiencies associated with a combined transaction. 4 Unlimited Tax General Obligation Bonds, 2019 * The City's original plan in 2016 assumed the authorized borrowing amount ($77,385,000) would be issued in smaller amounts, over a longer term • The current expectation is that the City will issue the remainder of the 2016 Authorization with the 2019 UTGO Bonds • The table to the right compares the levy rate projections at the time of the 2016 Bond issuance vs. current projections • Note: the City's UTGO Bonds are limited to a 20-year term (may not mature more than 20 years from the closing date) 2016 Levy Rate Estimates 2019 — Updated Levy Rate Estimates 2017 0.47 0.47* 2018 0.47 0.46* 2019 0.47 0.43 2020 0.47 0.54 2021 0.47 0.54 2022 0.55 0.64 2023 0.62 0.64 2024 - 2036 0.69 0.67 2037 0.70 0.43 2038 0.70 0.43 2039 0.70 2040 0.09 2041 0.09 2042 0.09 2043 0.09 *Actual Levy Rates PFM 5 Unlimited Tax General Obligation Bonds, 2019 (continued) • The graph below details the estimated debt service requirements and levy rates following the issuance of the 2019 UTGO Bonds (and compared to the levy rate estimates made at the time of the 2016 UTGO Bonds) $8.0 $7.0 $6.0 $5.0 cn 2. $4.0 $3.0 $2.0 $1.0 $0.0 PFM O O - N CO 10 CO N- 00 O O N N N N N N N N N N Cr) O O O O O O O O O O O O NNNNNNNNNNNN cY) O N N C) d IC) CO N- CO 6) O — N C'r) 01 01 M 0" CO Cr) CO Cr) ' ' " r`71- O O O O O O O O O O O O NNNNNNNNNNNN $0.80 $0.70 $0.60 $0.50 $0.40 $0.30 $0.20 $0.10 $0.00 2016 Bonds Debt Service 2019 Bonds Debt Service Levy Projection 2019 Levy Projection Assumes remainder of the 2016 Authorization is issued ($40, 885, 000), AA MMD as of 6/6/2019 plus 0.50% cushion, shared issuance costs with UTGO Bonds totaling $250,000, underwriters discount of $7 per $1,000 of par amount, 2.50% annual growth rate assumed for assessed valuation growth to calculate future levy rates a) a) J 6 UTGO Bond Ordinance The City Council is being asked to adopt an ordinance that would authorize the issuance of Unlimited Tax General Obligation (UTGO) debt within the following parameters: • Par amount: Not -to -exceed $40.885 million (remainder of 2016 Authorization) • Final maturity: No later than 20 years from the Closing Date • True Interest Cost: Not -to -exceed 4.50% • The authority granted to the Designated Representative shall expire one year after the effective date of the Bond Ordinance If authorized, proceeds of the 2019 UTGO Bonds would be used to finance costs related to the City's Public Safety Plan UTGO Bonds payable from an excess property tax levy upon all property in the City PFM 7 Limited Tax General Obligation Bonds, 2019 • The graph below reflects the estimated debt service requirements of non -voted debt issued to finance the Public Works Shops and Public Safety Plan projects following the issuance of the 2019 LTGO Bonds • The annual debt service requirement of the 2019 LTGO Bonds is estimated to be approximately $1.7 million(1) LTGO Debt Service Estimate u) $3.5 0 $3.0 2 $2.5 $2.0 $1.5 $1.0 $0.5 $0.0 PFM ri9 rt>1, 1.5 rv't 95) tik b 19 ())9 n't` ())(1' c())(5 99 (19 (19 99 (19 99 (19 99 99 (419 99 (19 r19q,9, ry A cb 99 'Pr)) Prb Outstanding LTGO PW Shops/PSP Debt (2018 Bonds) 2019 Bonds Interest n 2019 Bonds Principal (1) Assumes level debt service structure, project funding of $25 million, AA MMD as of 6/6/2019 plus 0.50% cushion, shared issuance costs with UTGO Bonds totaling $250,000, underwriters discount of $7 per $1,000 of par amount 8 LTGO Bond Ordinance The City Council is being asked to adopt an ordinance that would authorize the issuance of Limited Tax General Obligation (LTGO) debt within the following parameters: • Par amount: Not -to -exceed $25 million • Final maturity: No later than 21 years from the Closing Date • True Interest Cost: Not -to -exceed 4.50% • The authority granted to the Designated Representative shall expire one year after the effective date of the Bond Ordinance If authorized, proceeds of the 2019 LTGO Bonds would be used to finance costs related to the City's Public Safety Plan and Public Works Facilities LTGO Bonds will be secured by the City's full faith and credit and non -voted property taxing authority PFM 9 Timing: Key Milestones 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 AUGUST T F 5 5 M T W T 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 EPTEMB T W T F 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 OCTOBER T W T 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 Finance Committee Meeting — Consideration of Bond Ordinance (5:30 p.m.) Committee of the Whole — Consideration of Bond Ordinance (7:00 p.m.) City Council Meeting — Consideration of Bond Ordinance (7:00 p.m.) Bond Rating Agency Call Bond Sale Bond Closing — funds delivered 0 PFM 6/24 7/8 7/15 Week of 9/9 10/9 10/23 10 Calculation of Debt Capacity • The table below summarizes the City's non -voted and total general obligation debt capacity, as limited by statute 2018 Assessed Value for 2019 Tax Year Non -Voted Debt Capacity (1.5% of AV) Less: Outstanding Non -Voted Debt Less: LTGO 2019 Bonds (Estimated) $6,685,919,176 100,288,788 (49,251,753) (25,000,000) Remaining Non -Voted Debt Capacity 2018 Assessed Value for 2019 Tax Year Total Debt Capacity (2.5% of AV) Less: Outstanding Voted Debt Less: Outstanding Non -Voted Debt Less: LTGO 2019 Bonds (Estimated) Less: UTGO 2019 Bonds (Estimated) Remaining Total Debt Capacity for General Municipal Purposes 26,037,035 $6,685,919,176 167,147,979 (30,635,000) (49,251,753) (25,000,000) (40,885,000) 21,376,226 ©PFM 12 Recent AAA MMD Yield Curve Movement r ove Current (06/17/2019) Last Year (06/18/2018) Past Year Low (06/07/2019) 3.50% 3.00% 2.50% 2.00% 1.50% 1.00% 0.50% 0.00% s. t c t c t t t c c" t t t'. c c c t t t t c c" t t t -°-°-l°-°-1°-l�-le-°-°.1°-1°-l°-°-°-°-1°-1°-1°-l°-°-°-°-°-1°-°y�-- -°-°°° `1% ^D' V (0' � 1 (b ,�O' �� ,``t; ,\rb' P\V 1\h 1\� ,�'l' ,\"1 ,\c �O ti^ ti�'3 ti, 0' �D�' �� r1' (i our e,: Thomson Reuters PFM Maturity A Since A Since 06/18/2018 06/07/2019 1-Year -0.16% 0.00% 2-Year -0.34% 0.00% 3-Year -0.48% 0.00% 4-Year -0.56% 0.00% 5-Year -0.64% 0.01% 6-Year -0.72% 0.02% 7-Year -0.78% 0.04% 8-Year -0.83% 0.05% 9-Year -0.83% 0.05% 10-Year -0.82% 0.05% 11-Year -0.80% 0.05% 12-Year -0.77% 0.05% 13-Year -0.75% 0.04% 14-Year -0.74% 0.04% 15-Year -0.74% 0.05% 16-Year -0.75% 0.05% 17-Year -0.75% 0.05% 18-Year -0.75% 0.05% 19-Year -0.73% 0.05% 20-Year -0.71% 0.05% 21-Year -0.69% 0.05% 22-Year -0.67% 0.05% 23-Year -0.65% 0.05% 24-Year -0.64% 0.05% 25-Year -0.64% 0.05% 26-Year -0.64% 0.05% 27-Year -0.64% 0.05% 28-Year -0.64% 0.05% 29-Year -0.64% 0.05% 30-Year -0.64% 0.05% 13 AAA MMD Position Since Inception Fate Position nception to }une 17, 2013 14.00% 12.00% 10.00% 8.00% 6.00% 4.00% 2.00% 0.00% e 9 3' etr • Current ■Average MMD Range Sinai cf Jun 7, 2019 vs. Hist°ricai {since iriceptton} MMif Statistic June 17, 2019 Historical Average Spread to Average Minimum Maximum % of Time Lower PFM 1-Year 2-Year 3-Year .31% 1.32% 1.33% .00o 3.32% 3.55% -1.69% -2.00% -2.22% 0.11% 0.25% 0.36% 9.65% 9.85% 10.05% 27.62% 24.58% 22.24% Source: Thor son Reuters 4-Year 1.34% .75% -2.41% 0.44% 10.30% 19.05% 5-Year 1.36% -2.58% 0.62% 10.65% 15.08% 7-Year 10-Year 15-Year 20-Year 25-Year 30-Year 1,46% 1.66% 1.96% 2.16% 2.30% 2,35% 4,28%° ' 4,6" 5 17% 5:43% 5.5 -2.82% -3.02% -3.21% -3.27% -3.25% -3.24% 0.89% 1.29% 1.57% 1.80% 1.88% 1.93% 11.05% 11.50% 12.40% 12.70% 12.80% 12.90% 6.57% 1.76% 1.24% 0.98% 0.93% 0.93% 14 Municipal Market Supply & Demand 4 New issuance volume was down 21.88% year -over -year and down 0.15% year-to-date through May. t erat unicipal Market \tofum (Supply) ■ 2018 $40 Bn $35 Bn $30 Bn $25 Bn $20 Bn $15 Bn $10 Bn $5 Bn $0 Bn PFM • 2019 unkJP Fund FIO W ' $15 Bn $10 Bn $5 Bn $ Bn ($5) Bn ($10) Bn ($15) Bn ($20) Bn Source: Bond Buyer ,investuent Company instiitL CD CD CD CD CD CD N- I - CO 00 00 CO cc m C0 0 z 2 cnz `—°�2 CO CO 15 PFM Financial Advisors LLC 1200 Fifth Avenue I Suite 1220 I Seattle, WA 9801 Duncan Brown, Senior Managing Consultant (206) 858-5367 I brownd@pfm.com Steven Amano, Senior Analyst (206) 858-5366 I amanos@pfm.com pfm 66 City of Tukwila FOR ATIO AL E 0 TO: Finance Committee FROM: Juan Padilla, Human Resources Director BY: Erika Eddins, Human Resources Analyst CC: Mayor Ekberg DATE: June 19, 2019 SUBJECT: Healthcare Broker Contract ISSUE • A DU Allan Ekberg, Mayor The Council is being asked to allow the mayor to execute a contract with USI insurance for healthcare broker services in an annual amount of $90,000, not to exceed $7,500.00 per month, for a 36 month period beginning mid -July 2019. BACKGROUND The City of Tukwila has had the same insurance broker for our self -funded health insurance program for many years. The broker's role is to help the City to manage the costs of both the retiree and active employee health insurance plans, as well as negotiate prices on life, long- term disability, and stop -loss insurance. With new leadership in the Human Resources department and following best practice to periodically go to the market to ensure competitive service and pricing, the City submitted a request for proposals (RFP) for healthcare broker services. DISCUSSION The City received five responses to the RFP, which were reviewed through a vetting process involving HR and Finance staff, Administration representatives and members of our labor partners. There was consensus from the group that USI was the clear winner based upon their industry experience and depth of service resources they offer. Sufficient funding for this contract exists within the 502 medical plan fund. The existing contract with the City's current broker will be terminated in late July to ensure a consistent transition between brokers. RECOMMENDATION The Finance Committee is being asked to forward this item to the Committee of he Whole, July 8, 2019, and then to Regular Meeting on July 15, 2019, for approval. ATTACHMENT Draft contract with Exhibits A and B 67 68 City of Tukwila 6200 Southcenter Boulevard, Tukwila WA 98188 CONTRACT FOR SERVICES Contract Number: This Agreement is entered into by and between the City of Tukwila, Washington, a non -charter optional municipal code city hereinafter referred to as "the City," and USI Insurance Services Northwest, hereinafter referred to as "the Contractor," whose principal office is located at 601 Union Street, Suite 1000, Seattle, WA 98101. WHEREAS, the City has determined the need to have certain services performed for its citizens but does not have the manpower or expertise to perform such services; and WHEREAS, the City desires to have the Contractor perform such services pursuant to certain terms and conditions; now, therefore, IN CONSIDERATION OF the mutual benefits and conditions hereinafter contained, the parties hereto agree as follows: 1. Scope and Schedule of Services to be Performed by Contractor. The Contractor shall perform those services described on Exhibit A attached hereto and incorporated herein by this reference as if fully set forth. In performing such services, the Contractor shall at all times comply with all Federal. State, and local statutes, rules and ordinances applicable to the performance of such services and the handling of any funds used in connection therewith. The Contractor shall request and obtain prior written approval from the City if the scope or schedule is to be modified in any way 2. Compensation and Method of Payment. The City shall pay the Contractor for services rendered according to the rate and method set forth on Exhibit B attached hereto and incorporated herein by this reference. The total amount to be paid shall not exceed $90,000 at a rate of $7,500 per month. 3. Contractor Budget. The Contractor shall apply the funds received under this Agreement within the maximum limits set forth in this Agreement, The Contractor shall request prior approval from the City whenever the Contractor desires to amend its budget in any way. 4. Duration of Agreement. This Agreement shall be in full force and effect for a period commencing July 16, 2019, and ending July 15, 2022, unless sooner terminated under the provisions hereinafter specified. 5. Independent Contractor. Contractor and City agree that Contractor is an independent contractor with respect to the services provided pursuant to this Agreement. Nothing in this Agreement shall be considered to create the relationship of employer and employee between the parties hereto. Neither Contractor nor any employee of Contractor shall be entitled to any benefits accorded City employees by virtue of the services provided under this Agreement. The City shall not be responsible for withholding or otherwise deducting federal income tax or social security or contributing to the State Industrial Insurance Program, or otherwise assuming the duties of an employer with respect to the Contractor, or any employee of the Contractor. CA Revised December 2016 Page 1 of 7 69 G. Indemnification. The Contractor shall defend, indemnify and hold the Public Entity, its officers, officials, employees and volunteers harmless from any and all claims,injuries, damages, losses or suits including attorney fees, arising out oforinconnection with the performance ofthis Agreement, except for injuries and damages caused bVthe sole negligence ofthe Public Entity. Should a court of competent jurisdiction determine that this Agreement is subject to RCW 4.24.115, then, in the event of liability for damages arising out of bodily injury to persons or damages to property caused by or resulting from the concurrent negligence of the Contractor and the Public Entity, its officers, officials, employees, and volunteers, the Contractor's liability hereunder shall be only to the extent of the Contractor's negligence. It is further specifically and expressly understood that the indemnification provided herein constitutes the Contractor's waiver of immunity under Industrial Insurance, Title 51 RCW, solely for the purposes of this indemnification. This waiver has been mutually negotiated by the parties. The provisions of this section shall survive the expiration or termination of this Agreement. 7. Insurance. The Contractor shall procure and maintain for the duration of the Agreement, insurance against claims for injuries to persons or damage foP[Opedx»vhjdlDlayahSe from D[inconnection with the performance of the work hereunder by the Contractor, their agents, representatives, employees or subcontractors. Contractor's maintenance of insurance, its scope of coverage and limits asrequired herein shall not he construed to limit the liability of the Contractor to the coverage provided by such insurance, or otherwise limit the CitV's r8COUrSe to any remedy available at |8vv or in equity. A. Minimum Scope of Insurance. Contractor nho|| obtain insurance of the types and with the limits described below: 1. /\Utnnnobi|e Liability insurance with a miOjnnUnn combined single limit for bodily injury and property damage of $1.000.000 per accident, Automobile liability insurance shall cover all owned, non -owned, hired and leased vehicles. Coverage shall be written on Insurance San/ices Office (|G{}) form [}/\ OO 01 or G substitute form providing equivalent liability coverage. If necessary, the policy shall be endorsed to provide contractual liability coverage. 2` Commercial General Liability insurance with limits no less than $1,000,000 each occurrence, $2.000.00Ogeneral aggregate and $2.000.0OQprod uCts-completedOperatiQOs aggregate limit. Commercial General Liability insurance shall be as least at broad as /G[} occurrence form CG OD Oi and Sh8U cover liability arising from p[enOiaeo, operations, independent contractors, prod UCtS-Connp|8ted operations, stop gap |i@bUity, personal injury and advertising injury, and liability assumed under gninsured contract. The Commercial General Liability insurance shall be endorsed toprovide aper project genoro|aggregede|irnituSing ISO form [|G25O3O5Ogor an equivalent endorsement. There shall b8Do exclusion for liability arising from exp|osion, collapse orunderground property damage. The City shall henamed as an additional insured under the Contractor's [)Qnonn8[cia| General Liability insurance policy with respect to the work performed for the City using ISO Additional Insured endorsement CG 20 10 10 01 and Additional Insured -Completed Operations endorsement CG70 371001 or substitute endorsements providing gtleast oobroad coverage. 3. Professional Liability Insurance with a minimum coverage of $1,000,000 per claim and $3,000,000 aggregate. Contractor shall provide evidence of such coverage in a manner and form acceptable tothe City in sole discretion. Cancellation ofthe required insurance shall automatically result in termination ofthis Agreement. 4. Workers' Compensation coverage as required by the Industrial Insurance laws of the State of Washington. B. Other Insurance Provision. The Contractor's Automobile Liability and Commercial General Liability insurance policies are to o}nt8iO, or be endorsed to contain that they shall be primary CA.Revised December 200 Page 2Vf7 70 insurance with respect to the [:itv Any innunanca, aeUf-inounanoa, or insurance pool coverage maintained bythe City shall be excess Ofthe Contractor's insurance and shall not contribute with it. C. Acceptability of Insurers. Insurance is to be placed with insurers with a oVrnent/\.[N` Best rating of not less than A: VII. O. Verification of Coverage. Contractor shall furnish the City with original certificates and $copy of the amendatory endorsements, including but not necessarily limited to the additional insured endorsement, evidencing the insurance requirements of the Contractor before commencement of the work. Upon request by the City. the Contractor shall furnish certified copies of all required insurance po|icies, including endorSemeOt3. required in this Agreement and evidence of all subcontractors' coverage. E. Subcontractors. The Contractor shall have sole responsibility for determining the insurance coverage and limits required, if any, to be obtained by subcontractors, which determination shall be made inaccordance with reasonable and prudent business practices. F. Notice of Cancellation. The Contractor shall provide the City and all Additional |nnunyda for this work with written nOt\C8 Ofany policy cance||@tiDn, within two business days Uftheir receipt Qfsuch notice. G. Failure to Maintain Insurance. Failure on the part of the Contractor to maintain the insurance as required shall constitute a material breach of contract, upon which the City may, after giving five business days notice to the Contractor to correct the breach, immediately terminate the contract or, at its discretion, procure or renew such insurance and pay any and all premiums in connection therewith, with any sums so expended to be repaid to the City on demand, or at the sole discretion of the City, offset against funds due the Contractor from the City. 8. Record Keeping and Reportinq. A. The Contractor shall maintain accounts and records, including peroonDe|, property, financial and programmatic records which sufficiently and properly reflect all direct and indirect costs of any nature expended and services performed in the performance of this Agreement and other such records as may be deemed necessary by the City to ensure the performance of this Agreement. B. These records ahG|| be maintained fora period of seven (7) years after termination hereof unless permission to destroy them is granted by the office of the archivist in accordance with R[}VV Chapter 40.14 and by the City. 9. Audits and Inspections. The records and documents with respect to all matters covered by this Agreement shall be subject at all times to inspection, review oraudit by |aDV during the performance of this Agreement. 10.Temminatimn' This Agreement may at any time be terminated by the City giving to the Contractor thirty (3O1 days ��i���O notice of the <�itv'g intention to terminate the same. Failure to provide products on ' ' result contracttermination. |�th� on [} t tinsurance o8Verageiocanco|edfo[any �ohedu|ennayresU in Contractor's reagon. the City shall have the right to terminate this Agreement immediately. 11.Discrimination Prohibited. The Consultant, with regard tothe work performed byitunder this AgreeDlSOt, will not discriminate on the grounds of race, re|igion, creed, color, n8tiVD8| origin, 'age, veteran status, sex, sexual orientation, gender identity, marital status, political affiliation, the presence of any diSabi|itV. or any other protected class status under state or federal lavV, in the selection and retention ofemployees orprocurement Cfmaterials or supplies. 12.Assignmment and Subcontract' The Contractor ahm|| not assign or subcontract any portion of the services contemplated by this Agreement without the written consent of the City. CARevised December 2O16 Page 3of7 71 13. Entire Agreement; Modification. This Agreement, together with attachments or addenda, represents the entire and integrated Agreement between the City and the Contractor and supersedes all prior negotiations, representations, or agreements written or oral. No amendment or modification of this Agreement shall be of any force or effect unless it is in writing and signed by the parties. 14. Severability and Survival. If any term, condition or provision of this Agreement is declared void or unenforceable or limited in its application or effect, such event shall not affect any other provisions hereof and all other provisions shall remain fully enforceable. The provisions of this Agreement, which by their sense and context are reasonably intended to survive the completion, expiration or cancellation of this Agreement, shall survive termination of this Agreement. 15. Notices. Notices to the City of Tukwila shall be sent to the following address: City Clerk, City of Tukwila 6200 Southcenter Blvd. Tukwila, Washington 98188 Notices to the Contractor shall be sent to the address provided by the Contractor upon the signature line below. 16. Applicable Law; Venue; Attorney's Fees. This Agreement shall be governed by and construed in accordance with the laws of the State of Washington. In the event any suit, arbitration, or other proceeding is instituted to enforce any term of this Agreement, the parties specifically understand and agree that venue shall be properly laid in King County, Washington. The prevailing party in any such action shall be entitled to its attorney's fees and costs of suit. DATED this day of , 20 . CITY OF TUKWILA USI Insurance Services Northwest Allan Ekberg, Mayor ATTEST/AUTHENTICATED: By: Todd McMahon, Chief Compliance Officer, SVP Northwest Region Address: 601 Union Street, Suite 1000 City Clerk, Christy O'Flaherty Seattle, WA 98101 APPROVED AS TO FORM: Office of the City Attorney CA Revised December 2016 Page 4 of 7 72 EXHIBIT A INSURANCE BROKERAGE SERVICES Section 1.0Analytica| Services and Plan Administration: 1.1 Design of health care plans, cost -containment and other plan design recommendations 1.1.1Review benefit designs and compare bJCit«s strategic objectives. Recommend modifications where appropriate and assist the City instrategic benefit planning Annually 1.1,2 Evaluate the impact of plan modifications oOemployees and the potential savings to the City. As appropriate 1.1.3 Evaluate alternate carriers and product offerings. Annually 1.1.4Provide benefit beOChnla[kiOg. As appropriate 1.1.5/\Ct as on advocate of the participants and City in neSQ|ViDg difficult claims and administrative problems. 12 Preparation ofbid specifications URFF1(as needed) 1.2.1 Consult with []tv to establish objectives for market review and identify potential carriers orvendors. Annually 1.2.2 /\saaO1Ne benefit. rate and claim data for inclusion in RFP. Annually 1.2.3 Deliver RFP to selected vendors and provide any requested additional information. AnnU8||V 1.3 Analysis Vfproposals and presentation Offindings 1.3.1 Compare coSLS, funding. benefite. COrtr8ctS, negotiated provider discounts, employee network disruption issues, financial strength and anticipated service level for each carrier Orvendor, asappropriate. AOOUa||y 1.3.2Present US|'erecommended carriers orvendors, Recommendation supported by detailed analysis. Annually 1.3.3 Organize finalist meetings with the City, if appropriate. Annually 1.4 Renewal analysis and negotiation 1.4,1 EVo|usde carrier underwriting practices. Annually 1.4,2Negotiate with carriers based Qninternal underwriting analysis and market trends. AOOU8U 14'3Actuarial services and certification Ofrates and retiree subsidy. Annually 1.4.5 Assist in providing detailed 3nnUo| financial ooCOUOhng. Annually 1/5 Reporting/Servicing Meetings ` 1.5.1 Claims and utilization reporting O[summary. Monthly 1.5,2Review ofannual accounting (as appropriate). /\ODUaxy 1.5.3Benefit Resource Center Reports Quarterly 1.5.4 Meet, at least quarterly, with Health Care Committee, and as desired, with City representatives to discuss claims experience, administration SerVices, cost containment ideas, benefit design, new programs and other employee benefitp|8nissueeandprQb|ems. Quarterly CARevised December 2O18 Page 5of7 73 Section 2.0 Account Management Services: 2.1 Contract Review 2.1�1 Perform contract and Benefit Booklet review for each brokered plan Annually 2.1.2Compliance review and support Aaappropriate 2.1.3Assist the City (Plan Sponsor) tQcomply with Federal and State Laws impacting benefit Plans, i.e., COBRA, PPACA, TEFRA, H|P/A As Appropriate 3.1.4 Evaluate cVc[eMt/proSpectiVeTPAs Annually 3.1.5Assist with billing and eligibility problems As appropriate 2.1.6 Monitor TPA for compliance with contract terms. AS appropriate 2.2 Employee Meetings 2.2'1Employee meetings and/or benefit fairs will belimited hJomaximum Of(1)one per fifty (50)enlo|oy88S 2.2.2Benefit fairs may be selected iOlieu Ofemployee meetings and will belimited tO /1\per 100 benefit eligible employees. 2-3 Employer/Employee Communications Support 2.3.1 Consolidated Benefit Summary and Mobile /\opBuild and Updates 2.3.2UG|Insider and Health & Wellness articles 2.3.3 Service Calendar 2.3.4TeChOicg| Bulletins 2.3.5\8/eUneae Consulting, Program Design and Support 2.3.6 UG| Benefit Resource Center —Advocacy Unit available to all members Oanl- Spnl Pacific Time 2.4Tax Reporting 2.4.1 Provide signature ready 5500fi|iDgs. along with other plan compliance materials as required by the Employee Benefits Security Administration. Annually Annually Annually Monthly Annually As appropriate As appropriate As Appropriate Annually CARevised December 2O1G Page Oo[7 74 1.1 EXHIBIT B BROKERAGE FEES & COMMISSION SCHEDULE USI fees will be in effect for thirty-six (36) months following the date this Contract for Services is signed by both parties. In consideration of the performance of the Services as described in Exhibit A, USI shall be compensated as outlined below: USI Fees: Not to exceed $7,500 per month except where an additional service fee of $50 per month will be charged to accounts more than thirty (30) days past due. Fees, net of commission income received by USI from the insurance carriers, will be billed by USI on a monthly basis and are due by the end of the month for which brokerage services are provided. 1.2 For specific services that are requested in writing by the Client, but not outlined in the description of services to be provided by USI as outlined on Exhibit A, and where USI has provided a not to be exceeded by cost estimate for the requested service agreed to by the City , the City will be billed for work performed. The cost for these services will be billed on a per hour or per project basis and included in the next available monthly invoice. No services will be performed without prior written approval from the Client. 1.3 USI reserves the right to change the fees outlined in this section after expiration of this 36 month term. The City will receive a minimum of thirty (30) days notice prior to any changes in fees. 1.4 Fees are fixed for a period of 3 years and subject to negotiation thereafter. CA Revised December 2016 Page 7 of 7 75 76 City of Tukwila Allan Ekberg, Mayor INFOR ATIONAL E ORANDU TO: Finance Committee FROM: Vicky Carisen, Finance Director BY: Jeff Friend, Fiscal Manager CC: Mayor Ekberg DATE: June 19, 2019 SUBJECT: Year -to -Date April 2019 General Fund Update Summary The purpose of the April 2019 General Fund Financial Report is to summarize for the City Council the general state of departmental expenditures and to highlight significant items. The following provides a high-level summary of the departmental financial performance. The April 2019 Report is based on financial data available as of June 14, 2019, for the period ending April 30, 2019. Additional details can be found within the attached financial report. Expenditures General Fund expenditures totaled $22.4M through April, which is about $400K below the allocated budget of $22.8M. The allocated budget is calculated to reflect year-to-date spending patterns of the previous year. There are a few significant, unbudgeted events that have occurred in 2019 that affect multiple departments. East Marginal Way Power Pole Accident On April 5th, there was a large accident where numerous power poles toppled over on East Marginal Way. The City incurred $24K in costs through the end of April and are reflected in the totals in this report. Current estimates for this incident through June 17, 2019 are as follows: Department Overtime and Benefits Repairs and Maintenance Combined Street Maintenance and Operations $ 30,281.39 $ 214,890.16 $ 245,171.55 A claim totaling $245K has been initiated with the Washington Cities Insurance Authority for reimbursement of the current estimated expenditures. 77 INFORMATIONAL MEMO Page 2 Snomstoms-Uocated During the month of February, the City experienced two winter snowstorms. Since the prior report, Public Works have received additional invoices for sand and salt brine that was purchased to replenish the C|t«'esupplies. AnofApril 3O.unbudgetedcosts related tothe snow events are on Department Overtime and Benefits Supplies Combined Police $ - $ 143 $ 143 Fire 30.813 285 30,598 Public Works - 286 286 Park Maintenance - 452 452 Street Maintenance and Operations 19.463 30.555 50.018 Total $ 49.777 $ 31'721 $ 81,497 Departmental Variances Eleven of fourteen General Fund departments were under their allocated budget through April 2019. Major variances are: Police was $306Kbekoyv budget through April primarilydue to salaries and benefits being below budget by $424Kwhi|e supplies were $38Kover budget. Aadiscussed in previous 2019 monthly reports, the department has had afew open positions while new employees have filled positions at o lower pay level than that ofthe employees who were employed during |ont year's budget process. Purchases of equipment for new employees resulted insupplies being over budget through April. � Fire is $181|{ over budget. Salaries and benefits were $299K over budget resulting from filling four unbudoeted pipeline positions /$145W1ond overtime costs that were over budget through April (8154K)'Services d supplies were under budget byabout $118Kpartially offsetting the amount the department was over budget onsalaries and benefits. As of the May 28m Finance Committee meeting. the Finance Committee began onongoing analysis ofoptions toaddress the Fire operating budget issues. � Street Maintenance and Operationsxyae $120K over budget through Ao[U primarily due hoovertime ($19.5K) and supplies costs ($3.6K) related tothe February snow events, overtime and benefits related to the East Marginal VVav power pole event ($12.8K) as well as inventory replenishment and equipment rep|@cennerd($57.QK). In total, overtime vvoe$28PCover budget while supplies were $O8Kover budget. � Community Development ie$72K over budget Ul gh AprilaeProfessional Services expenditures have been greater than anticipated in the budget. The budget had aSeUyMed development activity would aiovv in 2019; hovvever, this has not been the case. Therefore, services directly related todevelopment activity, such aapeer review, that are typically oUtSouLced, are now over budget. It should be noted that large portion of Professional Services are revenue -backed. Additi0n8|/y, an unexpected structural code compliance review was done for alocal business ($51K) in the first 78 INFORMATIONAL MEMO Page 3 Year to Date Department Expenditures Compared to Allocated Budget (Through April 2019) City Council 5S153129 Mayor Administrative Services Finance Attorney Recreation Community Development Municipal Court Police Fire Technology & Innovation Svcs Public Works Park Maintenance Street Maintenance & Operations Dept 20 5823 5783 5640 S575 5239 S160 5430 5411 5634 5621 S603 51,084 S1,016 51,030 5954 51,108 S1180 51.388 1,337 51,661 51,781 S2,285 S2,335 S4,172 54,353 S6573 56,187 SO 51,000 52,000 S3,000 54,000 S5,000 56,000 57,000 Thousands YTD Budget ■ YTD Actual GENERAL FUND CITY OF TUKW ILA GENERAL FUND EXPENDITURES YTD AS OF APRIL 30, 2019 SUMMARY OF EXPENDITURES BY DEPARTMENT BUDGET ACTUAL COMPARISON OF RESULTS 2019 ANNUAL 2019 ALLOCATED 2017 2018 2019 ACTUAL OVER!(UNDER) %CHANGE ALLOCATED BDGT % EXPENDED 2017/2018 2018/2019 01 City Council 432,111 153,417 118,237 130,672 129,011 (24,406) 30% 11% (1)% 03 Mayor 2,595,514 823,419 754,301 804,533 782,920 (40,499) 30% 7% (3)% 04 Administrative Services 2,111,509 639,725 567,459 579,130 574,739 (64,985) 27% 2% (1)% 05 Finance 2,671,195 1,083,600 1,017,916 1,034,969 1,015,746 (67,854) 38% 2% (2)% 06 Attorney 710,730 239,283 164,735 281,094 159,675 (79,608) 22% 71% (43) % 07 Recreation 3,294,138 1,030,402 957,556 928,620 953,908 (76,494) 29% (3)% 3% 08 Community Development 3,511,558 1,107,985 1,055,429 1,056,415 1,180,149 72,163 34% 0% 12% 09 Municipal Court 1,298,228 429,584 384,641 421,124 411,411 (18,173) 32% 9% (2)% 10 Police 19,427,613 6,572,998 5,791,860 5,944,575 6,187,217 (385,781) 32% 3% 4% 11 Fire 12,473,387 4,172,109 4,055,249 4,004,015 4,353,376 181,267 35% (1)% 9% 12 Technology& Innovation Svcs 2,043,934 633,509 464,522 624,891 620,648 (12,861) 30% 35% (1)% 13 Public Works 3,948,613 1,387,864 1,232,312 1,251,831 1,337,030 (50,834) 34% 2% 7% 15 Park Maintenance 1,630,586 603,087 468,494 458,842 600,834 (2,253) 37% (2)% 31% 16 Street Maintenance & Operations 3,354,733 1,660,752 1,094,655 1,125,799 1,780,958 120,206 53% 3% 58% Subtotal 59,503,849 20,537,735 18,127,368 18,646,510 20,087,623 (450,111) 34% 3% 8% 20 Dept20 19,067,819 2,284,572 771,501 2,978,863 2,335,097 50,525 12% 286% (22)% Total Expenditures 78,571,668 22,822,306 18,898,869 21,625,373 22,422,720 (399,586) 29% 14% 4% Percent of year completed 33% 79 INFORMATIONAL MEMO Page 4 GENERAL FUND CITY OF TUKWILA GENERAL FUND EXPENDITURES YTD AS OF APRJL 30, 2019 SUMMARY OF SALARIES AND BENEFITS BUDGET ACTUAL COMPARISON OF RESULTS 2019 ANNUAL 2019 ALLOCATE) 2017 2018 2019 ACTUAL OVIE1R/(UNDER) % CHANGE ALLOCATE) BDGT % ISCPENIDED 2017/2018 2018/2019 11 Salaries 28,891,480 9,630,493 8,893,204 9,028,751 9,319,643 (310,851) 32% 2% 3% 12 Extra Labor 762,833 216,793 162,882 167,794 214,940 (1,854) 28% 3% 28% 13 Overtime 1,350,099 426,688 533,904 455,417 624,049 197,361 46% (15)% 37% 15 Holiday Pay 504,517 7,591 4,726 6,826 5,996 (1,595) 1% 44% (12)% 21 FICA 2,107,153 702,384 575,302 588,065 607,257 (95,127) 29% 2% 3% 22 Pension-LEOFF 2 922,206 307,402 264,742 275,467 289,308 (18,094) 31% 4% 5% 23 Pension-PERS/PSERS 1,751,656 583,885 478,303 552,164 583,811 (74) 33% 15% 6% 24 Industrial Insurance 861,417 287,139 197,679 197,859 288,101 962 33% 0% 46% 25 Medical & Dental 5,998,564 1,999,521 1,874,680 1,850,100 1,899,085 (100,436) 32% (1)% 3% 28 Uniform/Clothing 8,525 2,318 965 1,391 1,090 (1,228) 13% 44% (22)% Total Salaries and Benefits 43,158,450 14,164,216 12,986,857 13,140,455 13,833,280 (330,936) 32% 1% 5% SUMMARY OF SUPPLIES, SERVICES, AND CAPITAL BUDGET ACTUAL COMPARISON OF RESULTS 2019 ANNUAL 2019 ALLOCATED 2017 2018 2019 ACTUAL OERANGE V/(UNDER) % CI- ALLOCATE:. BOOT V. EXPENDED 2017/2018 2018/2019 0 Transfers 19,067,819 2,284,572 771,501 2,978,863 2,335,097 50,525 12% 286% (22)% 31 Supplies 1,072,087 318,452 413,381 318,468 456,706 138,254 43% (23)% 43% 34 Items Purchased for resale 22,000 3,340 3,822 3,414 600 (2,741) 3% (11)% (82)% 35 Small Tools 163,569 21,787 32,258 27,625 13,192 (8,595) 8% (14)% (52)% 41 Professional Services 6,404,856 1,875,937 598,760 873,103 1,794,613 (81,323) 28% 46% 106% 42 Communication 434,600 118,458 106,342 124,511 113,732 (4,726) 26% 17% (9)% 43 Travel 159,630 70,409 65,171 52,956 82,642 12,234 52% (19)% 56% 44 Advertising 47,550 9,892 7,139 6,961 7,237 (2,655) 15% (2)% 4% 45 Rentals and Leases 2,901,035 1,019,776 717,979 715,244 941,752 (78,024) 32% (0)% 32% 46 Insurance 1,005,775 1,005,775 881,033 974,066 889,864 (115,911) 88% 11% (9)% 47 Public Utilities 1,999,424 1,308,584 750,450 771,461 1,311,641 3,057 66% 3% 70% 48 Repairs and Maintenance 623,150 232,242 183,011 102,308 249,831 17,589 40% (44)% 144% 49 Miscellaneous 1,271,723 423,780 435,539 532,677 386,700 (37,080) 30% 22% (27)% 51 Inter -Governmental - - 922,921 975,182 5,574 5,574 - 6% (99)% 53 Ext Taxes, Oper. Assess _ - 52 234 260 260 350% 11% 64 Machinery & Equipment 240,000 5,975 22,653 27,845 - (5,975) - 23% - Total Supplies, Services, and Capital 35,413,218 8,698,977 5,912,012 8,484,918 8,589,440 (109,536) 24% 44% 1% Total Expenditures 78,571,668 22,863,192 18,898,869 21,625,373 22,422,720 (440,473) 29% 14% 4% Percent of year completed 33% 80