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HomeMy WebLinkAboutReg 2012-12-03 Item 6C - Ordinance - $1,100,000 Limited Tax General Obligation Bond for Tukwila Pool Improvements CO UNCIL AGENDA SYNOPSIS -----------------------------Initials--------------------------------- ITEM NO. Meefingo Date Prepared by Mayor's review Council review • ., 11/26/12 PMC • 12/03/12 PMC /� 6.C. ITEM INFORMATION STAFF SPONSOR: PEGGY MCCARTHY ORIGINAL AGENDA DATE: 11/26/12 AGENDA ITEM TrTT E An Ordinance relating to contracting indebtedness to provide funds necessary to undertake certain improvements to the pool owned by the Tukwila Pool Metropolitan Park District. CATEGORY ® Discussion ❑Motion ❑ Resolution ® Ordinance ❑ BidAward ❑PublicHearin,g ❑ Other Mtg Date 11/26/12 Mtg Date Mtg Date Mtg Date 12103112 Mtg Date Mtg Date Mtg Date SPONSOR ❑ Council ❑Mayor ❑ HR ❑ DCD ® Finance ❑Fire ❑IT ❑P&R ❑Police ❑PW SPONSOR'S The City Council is being asked to approve an ordinance related to contracting SUMMARY indebtedness; providing for the issuance, sale and delivery of not to exceed $1,100,000 aggregate principal amount of limited tax general obligation bonds to provide funds necessary to undertake certain improvements to the pool and related facilities owned by the Tukwila Pool Metropolitan Park District. REVIEWED BY ❑ COW Mtg. ❑ CA&P Cmte ® F&S Cmte ❑Transportation Cmte ❑ Utilities Cmte ❑ Arts Comm. ❑ Parks Comm. ❑ Planning Comm. DATE: 11/06/12 COMMITTEE CHAIR: QUINN RECOMMENDATIONS: SPONsoR/ADMIN. Finance Department COMMITTEE Unanimous Approval; Forward to Committee of the Whole COST IMPACT / FUND SOURCE EXPENDITURE REQUIRED AMOUNT BUDGETED APPROPRIATION REQUIRED $ $ Fund Source: MISCELLANEOUS FUNDING SOURCES,SEE DETAIL Comments: MTG. DATE RECORD OF COUNCIL ACTION 11/26/12 Forward to next Regular Meeting MTG. DATE ATTACHMENTS 11/26/12 Informational Memorandum dated 11/20/12 Draft Ordinance 12/03/12 Ordinance in final form 129 130 CI*ty of la Washington Ordinance loo. AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF TUKWILA, WASHINGTON, RELATING TO CONTRACTING INDEBTEDNESS; PROVIDING FOR THE ISSUANCE, SALE AND DELIVERY OF NOT TO EXCEED $1,100,000 AGGREGATE PRINCIPAL AMOUNT OF LIMITED TAX GENERAL OBLIGATION BONDS TO PROVIDE FUNDS NECESSARY TO UNDERTAKE CERTAIN IMPROVEMENTS TO THE POOL AND RELATED FACILITIES OWNED BY THE TUKWILA METROPOLITAN PARK DISTRICT, AND TO PAY THE COSTS OF ISSUANCE AND SALE OF THE BONDS; FIXING OR SETTING PARAMETERS WITH RESPECT TO CERTAIN TERMS AND COVENANTS OF - THE BONDS; APPOINTING THE CITY'S DESIGNATED REPRESENTATIVE TO APPROVE THE FINAL TERMS OF THE SALE OF THE BONDS; AND PROVIDING FOR OTHER RELATED MATTERS; PROVIDING FOR SEVERABILITY; AND ESTABLISHING AN EFFECTIVE DATE. 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 capitalized terms shall have the following meanings: A. "Authorized Denomination" means $5,000 or any integral multiple thereof within a maturity. B. "Beneficial Owner" means, with respect to a Bond, the owner of any beneficial interest in that Bond. C. "Bond Counsel" means the firm of Foster Pepper PLLC, its successor, or any other attorney or firm of attorneys selected by the City with a nationally recognized standing as bond counsel in the field of municipal finance. D. "Bond Fund" means the Limited Tax General Obligation Bond Fund, 2012, created for the payment of the principal of and interest on the Bonds. W:Word ProcessinglOrdinances\Bond issuance 2012 for MPD 11-26-12 vc:bjs Page 1 of 13 131 E. "Bond Purchase Agreement" means an offer to purchase the Bonds, setting forth certain terms and conditions of the issuance, sale and delivery of the Bonds, which offer is authorized to be accepted by the Designated Representative on behalf of the City if consistent with this ordinance. F. "Bond Register'means the books or records maintained by the Bond Registrar for the purpose of identifying ownership of the Bonds. G. "Bond Registrar' means the Fiscal Agent, or any successor bond registrar selected by the City. H. "Bonds" means the bonds issued pursuant to and for the purposes provided in this ordinance. I. "City" means the City of Tukwila, Washington, a municipal corporation duly organized and existing under the laws of the State. J. "City Council" means the legislative authority of the City, as duly and regularly constituted from time to time. K. "Code"means the United States Internal Revenue Code of 1986, as amended, and applicable rules and regulations promulgated thereunder. L. "DTC" means The Depository Trust Company, New York, New York, or its nominee. M. "Designated Representative"means the officer of the City appointed in Section 4 of this ordinance to serve as the City's designated representative in accordance with RCW 39.46.040(2)_ N. "Final Terms" means the terms and conditions for the sale of a Series of Bonds including, but not limited to the amount, date or dates, denominations, interest rate or rates (or mechanism for determining interest rate or rates), payment dates, final maturity, redemption rights, price, and other terms or covenants. O. "Finance Director" means the Finance Director or such other officer of the City who succeeds to substantially all of the responsibilities of that office. P. "Fiscal Agent" means the fiscal agent of the State, as the same may be designated by the State from time to time. Q_ "Government Obligations" has the meaning given in RCW 39.53.010, as now in effect or as may hereafter be amended. R. "Issue Date" means, with respect to the Bonds, the date of initial issuance and delivery of the Bonds to the Underwriter in exchange for the purchase price of the Bonds. S_ "Letter of Representations" means the Blanket Issuer Letter of Representations dated October 18, 1999, between the City and the Securities W:Word Processing\Ordinances\Bond issuance 2012 for MPD 11-26-12 vc:bjs Page 2 of 13 132 Depository, as it may be amended from time to time, or any successor or substitute letter relating to the operational procedures of the Securities Depository. T. "MSRB"means the Municipal Securities Rulemaking Board. U. "Owner" means, without distinction, the Registered Owner and the Beneficial Owner. V. "Project" or "Pool Improvement Project" means certain improvements, repairs and upgrades to the pool and related facilities owned by the Tukwila Metropolitan Park District, and other capital purposes as deemed necessary and advisable in accordance with an interlocal agreement between the City and the District. Incidental costs incurred in connection with carrying out and accomplishing the Project, consistent with RCW 39.46.070, shall be included as costs of the Project. The term "Project" includes acquisition, construction and installation of all necessary furniture, equipment, apparatus, accessories, fixtures and appurtenances. W. ,"Project Fund" means the Pool Improvement Fund, 2012, created for the purpose of carrying out the Project. X. "Rating Agency" means any nationally recognized rating agency then maintaining a rating on the Bonds at the request of the City. Y. "Record Date" means the Bond Registrar's close of business on the 15th day of the month preceding an interest payment date. With respect to redemption of a Bond prior to its maturity, the Record Date shall mean the Bond Registrar's close of business on the date on which the Bond Registrar sends the notice of redemption in accordance with Section 9. Z. "Registered Owner"means, with respect to a Bond, the person in whose name that Bond is registered on the Bond Register. For so long as the City utilizes the book— entry system for the Bonds under the Letter of Representations, Registered Owner shall mean the Securities Depository. AA. "Rule 15c2-12" means Rule 15c2-12 promulgated by the SEC under the Securities Exchange Act of 1934, as amended. BB. "SEC"means the United States Securities and Exchange Commission. CC. "Securities Depository" means DTC, any successor thereto, any substitute securities depository selected by the City, or the nominee of any of the foregoing. Any Securities Depository must be qualified under applicable laws and regulations to provide the services proposed to be provided by it. DD. "State"means the State of Washington. EE. "System of Registration" means the system of registration for the City's bonds and other obligations set forth in Ordinance No. 1338 of the City. W:Word Processing\Ordinances%Bond issuance 2012 for MPD 11-26-12 vc:bis Page 3 of 13 133 FF. "Term Bonds" means those Bonds designated as Term Bonds and subject to mandatory redemption in the years and amounts set forth in the Bond Purchase Agreement. GG. "Undertaking" means the undertaking to provide continuing disclosure entered into pursuant to Section 15 of this ordinance. HH. "Underwriter" means Seattle-Northwest Securities Corporation, Seattle, Washington. Section 2. Findings and Determinations. The City takes note of the following facts and makes the following findings and determinations: A. Authority and Description of Project. The City and the Tukwila Metropolitan Park District are in need of funds with which to undertake needed improvements, repairs and upgrades to the pool and related facilities owned and operated by the Tukwila Metropolitan Park District. RCW 35.61.290, 36.61.300 and 67.20.010 authorize the City to independently or jointly undertake such improvements to pools and other recreational facilities. The City Council therefore finds that it is in the best interests of the City to carry out the Project. B. Plan of Financing. Pursuant to applicable law, including without limitation chapters 35.37 RCW, 39.46 RCW and other applicable law, the City is authorized to issue general obligation bonds for the purpose of financing the Project. The total expected cost of the Project is approximately $1,666,666, which is expected to be made up of proceeds of the Bonds and other available money of the City or the Tukwila Metropolitan Park District. C. Debt Capacity. , The maximum amount of indebtedness authorized by this ordinance is $1,100,000. Based on the following facts, this amount is to be issued within the amount permitted to be issued by the City for general municipal purposes without a vote- 1. The assessed valuation of the taxable property within the City as ascertained by the last assessed valuation of the taxable property in the City is $4,660,649,637 for the collection year 2012. 2. As of November 1, 2012, the City has limited tax general obligation indebtedness, consisting of bonds and leases outstanding in the principal amount of $21,011,400, which is incurred within the limit of up to 1'/2% of the value of the taxable property within the City permitted for general municipal purposes without a vote. 3. As of November 1, 2012, the City has no unlimited tax general obligation indebtedness for capital purposes only for general municipal purposes; for City-owned water, artificial light, and sewers; or for acquiring or developing open space, park facilities, and capital facilities associated with economic development. W:Word Processing\Ordinances\Bond issuance 2012 for MPD 11-26-12 vc:bis Page 4 of 13 134 D. The Bonds. For the purpose of providing the funds necessary to carry out the Project and pay the costs of issuance and sale of the Bonds, the City Council finds that it is in the best interests of the City and its taxpayers to issue and sell the Bonds to the Underwriter, pursuant to the terms set forth in the Bond Purchase Agreement as approved by the Designated Representative consistent with this ordinance. Section 3. Authorization of Bonds. The City shall borrow money on the credit of the City and issue negotiable limited tax general obligation bonds evidencing indebtedness in the amount of not to exceed $1,100,000 to provide funds necessary to carry out the Project and to pay the costs of issuance and sale of the Bonds. The proceeds of the Bonds, after payment of costs of issuance, shall be deposited as set forth in Section 8 and shall be used to carry out the Project, or a portion of the Project, in such order of time as the City determines is advisable and practicable. Section 4. Description of the Bonds; Appointment of Designated Representative. The Finance Director is appointed as the City's Designated Representative and is authorized and directed to conduct a negotiated sale of such Bonds to the Underwriter upon the terms deemed most advantageous to the City, and to approve the Final Terms of the Bonds, with such additional terms and covenants as he or she deems advisable, within the following parameters- A. Principal Amount. The Bonds shall not exceed the aggregate principal amount of$1,100,000. B. Date. The Bonds shall be dated as of their date of delivery to the Underwriter, which date may not be later than December 1, 2013. C. Denominations, Designation, etc. The Bonds must be issued in Authorized Denominations, shall be numbered separately in the manner and shall bear any name and additional designation as deemed necessary or appropriate by the Designated Representative_ D. Interest Rate(s). The Bonds shall bear interest at fixed rates per annum (computed on the basis of a 360-day year of twelve 30-day months) from their date or from the most recent interest payment date for which interest has been paid or duly provided for, whichever is later. One or more rates of interest may be fixed for the Bonds, provided that no rate of interest for any Bond may exceed 6.00%, and the "all-in" true interest cost to the City for the Bonds may not exceed 4.00%. E. Payment Dates. Interest must be payable at fixed rates semi-annually on each June 1 and December 1, commencing on the next such semi-annual date occurring at least 45 days after the Issue Date. Principal payments shall commence on December 1, 2013 and must be payable at maturity or in mandatory redemption installments on such dates as are acceptable to the Designated Representative. F. Final Maturity. The Bonds shall mature no later than December 1, 2027. W:Word Processing\Ordinances\Bond issuance 2012 for MPD 11-26-12 vc:bjs Page 5 of 13 135 G. Redemption Rights. In his or her discretion, the Designated Representative may approve in the Bond Purchase Agreement provisions for the optional and mandatory redemption of Bonds, as follows: 1. Optional Redemption. Any Bond may be designated as being (a) subject to redemption at the option of the City prior to its maturity date on the dates and at the prices set forth in the Bond Purchase Agreement; or (b) not subject to redemption prior to its maturity date. If a Bond is designated as subject to optional redemption prior to its maturity, it must be subject to such redemption on one or more dates occurring not more than 10-1/2 years after the Issue Date. 2. Mandatory Redemption. Any Bond may be designated as a Term Bond, subject to mandatory redemption prior to its maturity on the dates and in the amounts set forth in the Bond Purchase Agreement. H. Price. The purchase price for the Bonds may not be less than 65% or more than 120% of the stated principal amount of the Bonds. I. Other Terms and Conditions. 1. The Bonds may not be issued if it would cause the indebtedness of the City to exceed the City's legal debt capacity on the Issue Date. 2. The Bonds may be sold by negotiated sale to the Underwriter in accordance with Section 14 of this ordinance. 3. The Designated Representative may determine whether it is in the City's best interest to provide for bond insurance or other credit enhancement; and may accept such additional terms, conditions and covenants as he or she may determine are in the best interests of the City, consistent with this ordinance. 4. The Mayor is authorized to execute an interlocal agreement with the Tukwila Metropolitan Park District substantially in the form on file with the City Clerk, with such changes as he may deem necessary or convenient. Section 5. Bond Registrar; Registration and Transfer of Bonds. A_ Bond Registrar; Duties. The Fiscal Agent is appointed as Bond Registrar for the Bonds. The Bond Registrar shall keep, or cause to be kept, sufficient books for the registration and transfer of the Bonds, which shall be open to inspection by the City at all times. The Bond Registrar is authorized, on behalf of the City, to authenticate and deliver Bonds transferred or exchanged in accordance with the provisions of the Bonds and this ordinance, to serve as the City's paying agent for the Bonds and to carry out all of the Bond Registrar's powers and duties under this ordinance and the System of Registration. The Bond Registrar shall be responsible for its representations contained in the Bond Registrar's Certificate of Authentication on each Bond. The Bond Registrar may become an Owner of a 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 members of, or in any other capacity with respect to, any committee formed to protect the rights of Beneficial Owners. W:Word Processing\Ordinances\Bond issuance 2012 for MPD 11-26-12 vc:bjs Page 6 of 13 136 B. Bond Register; Transfer and Exchange. The Bonds shall be issued only in registered form as to both principal and interest and shall be recorded on the Bond Register. The Bond Register shall contain the name and mailing address of the Registered Owner of each Bond and the principal amount and number of each Bond held by each Registered Owner. A Bond surrendered to the Bond Registrar may be exchanged for a Bond or Bonds in any Authorized Denomination of an equal aggregate principal amount and of the same interest rate and maturity. Bonds may be transferred only if endorsed in the manner provided thereon and surrendered to the Bond Registrar. Any exchange or transfer shall be without cost to the Owner or transferee. The Bond Registrar shall not be obligated to exchange any Bond or transfer registered ownership during the period between the applicable Record Date and the next upcoming interest payment or redemption date. C. Securities Depository; Book-Entry Form. The Bonds initially shall be registered in the name of Cede & Co., as the nominee of DTC, acting as Securities Depository. Bonds so registered shall be held fully immobilized in book-entry form by DTC in accordance with the provisions of the Letter of Representations. Registered ownership of any Bond (or portion of a Bond) held in book-entry form may not be transferred except: (i) to any successor Securities Depository; (ii) to any substitute Securities Depository appointed by the City or such substitute Securities Depository's successor; or (iii) to any person if the Bond is no longer held in book-entry form. Upon the resignation of the Securities Depository from its functions as depository, or upon a termination of the services of the Securities Depository by the City, the City may appoint a substitute Securities Depository. if (i) a Securities Depository resigns from its functions as depository, and no substitute Securities Depository can be obtained, or (ii) the City determines that a Bond is to be in certificated form, such Bond no longer shall be held in book-entry form and the ownership of such Bond may be transferred to any person as provided in this ordinance. Neither the City nor the Bond Registrar shall have any obligation to participants of any Securities Depository or the persons for whom they act as nominees regarding accuracy of any records maintained by the Securities Depository or its participants. Neither the City nor the Bond Registrar shall be responsible for any notice which is permitted or required to be given to a Registered Owner except such notice as is required to be given by the Bond Registrar to the Securities Depository. Section 6. Form and Execution of Bonds. A. Form of Bonds; Signatures and Seal. The Bonds shall be prepared in a form consistent with the provisions of this ordinance and State law. The Bonds shall be signed by the Mayor and the City Clerk, either or both of whose signatures may be manual or in facsimile, and the seal of the City or a facsimile reproduction thereof shall be impressed or printed thereon. If any officer whose manual or facsimile signature appears on a Bond ceases to be an officer of the City authorized to sign bonds before the Bond bearing his or her manual or facsimile signature is authenticated by the Bond Registrar, or issued or delivered by the City, that Bond nevertheless may be authenticated, issued and delivered and, when authenticated, issued and delivered, shall be as binding on the City as though that person had continued to be an officer of W:Word Processing\Ordinances\Bond issuance 2012 for MPD 11-26-12 vc:bjs Page 7 of 13 137 the City authorized to sign bonds. Any Bond also may be signed on behalf of the City by any person who, on the actual date of signing of the_ Bond, is an officer of the City authorized to sign bonds, although he or she did not hold the required office on its Issue Date. B. Authentication. Only Bonds bearing a Certificate of Authentication in substantially the following form, manually signed by the Bond Registrar, shall be valid or obligatory for any purpose or entitled to the benefits of this ordinance: "Certificate Of Authentication. This Bond is one of the fully registered City of Tukwila, Washington, Limited Tax General Obligation Bonds, 2012." The authorized signing of.a Certificate of Authentication shall be conclusive evidence that the Bond so authenticated has been duly executed, authenticated and delivered and is entitled to the benefits of this ordinance. Section 7. Payment of Bonds. Principal of and interest on the Bonds shall be payable in lawful money of the United States of America. For as long as a Bond is registered in the name of the Securities Depository, payment of principal of and interest on that Bond shall be made in the manner set forth in the Letter of Representations. If a Bond ceases to be in book-entry form, interest on that Bond shall be paid by electronic transfer on the interest payment date, or by check or draft of the Bond Registrar mailed on the interest payment date to the Registered Owner at the address appearing on the Bond Register as of the Record Date. However, the City is not required to make electronic transfers except pursuant to a request by a Registered Owner in writing received at least 10 days before an interest payment date and at the sole expense of the requesting Registered Owner. Principal of a Bond shall be payable upon presentation and surrender of the Bond by the Registered Owner to the Bond Registrar_ The Bonds are not subject to acceleration under any circumstances. .Section 8. Funds and Accounts; Deposit of Proceeds. A. Bond Debt Service Fund. The Bond Fund is created as a special fund for the sole purpose of paying principal of and interest on the Bonds. Bond proceeds in excess of the amounts needed to pay the costs of the Project and the costs of issuance, if any, shall be deposited into the Bond Fund. All amounts allocated to the payment of the principal of and interest on the Bonds shall be deposited in the Bond Fund as necessary for the timely payment of amounts due with respect to the Bonds. The principal of and interest on the Bonds shall be paid out of the Bond Fund, and until needed for this purpose, the City may invest money in the Bond Fund temporarily in any legal investment, and the investment earnings shall be retained in the Bond Fund and be used for the purposes of that fund. B. Project Fund. The Project Fund is created for the purpose of paying the costs of the Project. Proceeds received from the sale and delivery of the Bonds shall be deposited into the Project Fund and used to pay the costs of the Project and costs of issuance of the Bonds. Until needed to pay such costs, the City may invest those proceeds temporarily in any legal investment, and the investment earnings shall be retained in the Project Fund and be used for the purposes of that fund, except that W:Word Processing\Ordinances\Bond issuance 2012 for MPD 11-26-12 vc:bjs Page 8 of 13 138 earnings subject to a federal tax or rebate requirement (if applicable) may be withdrawn from the Project Fund and used for those tax or rebate purposes. Section 9. Redemption Provisions and Open Market Purchase of Bonds. A. Optional Redemption. The Bonds shall not be subject to optional redemption prior to maturity. B. Mandatory Redemption. Bonds designated as Term Bonds by the Designated Representative, within the parameters set forth in Section 4, if not purchased and surrendered for cancellation under the provisions set forth below, shall be called for redemption at a price equal to the stated principal amount to be redeemed, plus accrued interest, on the redemption dates and in the redemption amounts as set forth in the Bond Purchase Agreement. If Term. Bonds are purchased by the City and cancelled, or defeased, the principal amount of the Term Bonds so purchased or defeased (irrespective of their actual purchase prices) shall be credited against one or more scheduled mandatory redemption amounts for those Term Bonds. The City shall determine the manner in which the credit is to be allocated and shall notify the Bond Registrar in writing of its allocation prior to the earliest mandatory redemption date for that maturity of Term Bonds for which notice of redemption has not already been given. C. Partial Redemptions. Portions of the principal amount of any Bond, in any Authorized Denomination, may be redeemed. If less than all of the outstanding principal amount of any Bond is redeemed, upon surrender of that Bond to the Bond Registrar, there shall be issued to the Registered Owner, without charge, a new Bond (or Bonds, at the option of the Registered Owner) of the same maturity and interest rate in any Authorized Denomination in the aggregate principal amount remaining unredeemed. While a Bond is held in book-entry form by the Securities Depository or its nominee, selection of the principal portion of any Bond to be partially redeemed shall be done in accordance with the Letter of Representations. If a Bond ceases to be held in book-entry form by the Securities Depository or its nominee, the portion to be partially redeemed shall be selected randomly in such manner as the Bond Registrar shall determine. D. Notice of Redemption. While a Bond is registered in the name of the Securities Depository, notice of redemption shall be given as required in accordance with the Letter of Representations_ If a Bond ceases to be held in book-entry form by the Securities Depository or its nominee, unless waived by the Registered Owner of the Bond to be redeemed, the City shall cause notice of an intended redemption of Bonds to be given by the Bond Registrar not less than 20 nor more than 60 days prior to the date fixed for redemption by first-class mail, postage prepaid, to the Registered Owner of each Bond to be redeemed at the address appearing on the Bond Register on the Record Date_ The requirements of the preceding sentence shall be satisfied when notice has been mailed as so provided, whether or not it is actually received by an Owner of any Bond. In addition, the redemption notice shall be mailed or sent electronically within the same period to the MSRB (if required under the Undertaking), to each Rating Agency, and to such other persons and with such additional information as W:Word Processing\Ordinances\Bond issuance 2012 for MPD 11-26-12 vc:bjs Page 9 of 13 139 the Finance Director shall determine, but these additional mailings shall not be a condition precedent to the redemption of a Bond. E. Effect of Redemption. Interest on Bonds called for redemption shall cease to accrue on the date fixed for redemption. F. Open Market Purchase. The City reserves the right to purchase any or all of the Bonds in the open market at any time at any price acceptable to the City plus accrued interest to the date of purchase. Section 10. Failure To Pay Bonds. If any Bond is not redeemed when properly presented at its maturity date or date fixed for redemption, the City shall be obligated to pay interest on that Bond at the same rate provided in the Bond from and after its maturity date or date fixed for redemption until that Bond, both principal and interest, is paid in full or until sufficient money for its payment in full is on deposit in the Bond Fund and the Bond has been called for payment by giving notice of that call to the Registered Owner. Section 11. Pledge of Taxes. The Bonds constitute a general indebtedness of the City and are payable from tax revenues of the City and such other money as is lawfully available and pledged by the City for repaying the Bonds. For as long as any of the Bonds are outstanding, the City irrevocably pledges that it shall, in the manner provided by law within the constitutional and statutory limitations provided by law without the assent of the voters, include in its annual levy amounts sufficient, together with other money that is lawfully available, to pay principal of and interest on the Bonds as the same becomes due. The full faith, credit and resources of the City are pledged irrevocably for the prompt payment of the principal of and interest on the Bonds. Section 12. Tax Covenants; Designation of Bonds as "Qualified Tax-Exempt Obligations." A. Preservation of Tax Exemption for Interest on Bonds. The City covenants that it will take all actions necessary to prevent interest on the Bonds from being included in gross income for federal income tax purposes, and it will neither take any action nor make or permit any use of proceeds of the Bonds or other funds of the City treated as proceeds of the Bonds at any time during the term of the Bonds which will cause interest on the Bonds to be included in gross income for federal income tax purposes. B. Post-Issuance Compliance. The Finance Director is authorized and directed to review and update the City's written procedures to facilitate compliance by the City with the covenants in this Section 12 and the applicable requirements of the Code that must be satisfied after the issue date to maintain the tax treatment of the Bonds and the receipt of interest thereon. C. Designation of Bonds as "Qualified Tax-Exempt Obligations." The Bonds shall be designated as "qualified tax-exempt obligations" for the purposes of Section 265(b)(3) of the Code, if the following conditions are met- W:Word Processing\Ordinances\Bond issuance 2012 for MPD 11-26-12 vc:bjs Page 10 of 13 140 1. the Bonds are not "private activity bonds" within the meaning of Section 141 of the Code; 2. the reasonably anticipated amount of tax-exempt obligations (other than private activity bonds and other obligations not required to be included in such calculation) which the City and any entity subordinate to the City (including any entity that the City controls, that derives its authority to issue tax-exempt obligations from the City, or that issues tax-exempt obligations on behalf of the City) will issue during the calendar year in which the Bonds are issued will not exceed $10,000,000, and 3. the amount of tax-exempt obligations, including the Bonds, designated by the City as qualified tax-exempt obligations for the purposes of Section 265(b)(3) of the Code during the calendar year in which the Bonds are issued does not exceed $10,000,000. Section 13. Refunding or Defeasance of the Bonds. The City may issue refunding bonds pursuant to State law or use money available from any other lawful source to carry out a refunding or defeasance plan, which may include (a) paying when due the principal of and interest on the Bonds (the defeased Bonds"); (b) redeeming the defeased Bonds prior to their maturity; and (c) paying the costs of the refunding or defeasance. If the City sets aside in a special trust fund or escrow account irrevocably pledged to that redemption or defeasance (the "trust account"), money and/or Government Obligations maturing at a time or times and bearing interest in amounts sufficient to redeem, refund or defease the defeased Bonds in accordance with their terms, then all right and interest of the Owners of the defeased Bonds in the covenants of this ordinance and in the funds and accounts obligated to the payment of the defeased Bonds shall cease and become void. Thereafter, the Owners of defeased Bonds shall have the right to receive payment of the principal of and interest on the defeased Bonds solely from the trust account and the defeased Bonds shall be deemed no longer outstanding. In that event, the City may apply money remaining in any fund or account (other than the trust account) established for the payment or redemption of the defeased Bonds to any lawful purpose. While a Bond is registered in the name of the Securities Depository, notice of any defeasance shall be given in the manner prescribed in the Letter of Representations for notices of redemption of Bonds. If a Bond ceases to be held in book-entry form, then unless specified by the City in a refunding or defeasance plan, selection of Bonds to be defeased, notice of defeasance and replacement of Bond certificates shall be done in accordance with the provisions of this ordinance for the redemption of Bonds prior to their maturity. Section 14. Delivery of Bonds. The Designated Representative is authorized to sell the Bonds to the Underwriter by negotiated sale. In determining the Final Terms of the Bonds, the Designated Representative shall take into account those factors that, in his or her judgment, may be expected to result in the lowest true interest cost on the Bonds to their maturity, including, but not limited to current interest rates for obligations comparable to the Bonds. The Bond Purchase Agreement shall set forth the Final Terms ,of the Bonds. The Designated Representative is authorized to execute the Bond W:Word Processing\Ordinances\Bond issuance 2012 for MPD 11-26-12 vCbjs Page 11 of 13 141 Purchase Agreement on behalf of the City, so long as the terms provided therein are. consistent with the terms of this ordinance. The Bonds will be prepared at City expense and will be delivered to the Underwriter in accordance with the Bond Purchase Agreement, with the approving legal opinion of Bond Counsel regarding the Bonds. Section 15. Official Statement; Continuing Disclosure. A. Preliminary Official Statement. The Designated Representative shall review the form of the preliminary official statement prepared in connection with the sale of the Bonds to the public For the sole purpose of the Underwriter's compliance with paragraph (b)(1) of Rule 15c2-12, the Designated Representative is authorized to "deem final" that preliminary official statement as of its date, except for the omission of information permitted to be omitted by Rule 15c2-12. The City approves the distribution to potential bond purchasers of a preliminary official statement that has been "deemed final" in accordance with this paragraph. B. Approval of Final Official Statement. The City approves the preparation of a final official statement for the Bonds to be sold to the public, in the form of the preliminary official statement, with such modifications and amendments as the Designated Representative deems necessary or desirable, and further authorizes the Designated Representative to execute and deliver such final official statement to the Underwriter. The City authorizes and approves the distribution by the Underwriter of that final official statement to purchasers and potential purchasers of the Bonds. C. Undertaking to Provide Continuing Disclosure. To meet the requirements of paragraph (b)(5) of Rule 15c2-12, as applicable to a participating underwriter for the Bonds, the Designated Representative is authorized to execute a written undertaking to provide continuing disclosure for the benefit of holders of the Bonds in substantially the form attached as Exhibit A. Section 16. Supplemental and Amendatory Ordinances. The City may supplement or amend this ordinance for any one or more of the following purposes without requiring the consent of any Owners of the Bonds- 1. To add covenants and agreements that do not adversely affect the interests of the Beneficial Owners of the Bonds, or to surrender any right or power reserved to or conferred upon the City. 2. To cure any ambiguities, or to cure, correct or supplement any defective provision contained in this ordinance in a manner that does not materially adversely affect the interest of the Beneficial Owners of the Bonds. Section 17. General Authorization and Ratification. The Designated Representative, and other appropriate officers of the City are severally authorized to take such actions and to execute such documents as in their judgment may be necessary or desirable to carry out the.transactions contemplated in connection with this ordinance, and to do everything necessary for the prompt delivery of the Bonds to the Underwriter and for the proper application, use and investment of the bond proceeds. All actions taken prior to the effective date of this ordinance in furtherance of W:Word Processing\Ordinances\Bond issuance 2012 for MPD 11-26-12 vc:bjs Page 12 of 13 142 the purposes described in this ordinance and not inconsistent with the terms of this ordinance are ratified and confirmed in all respects. Section 18. Severability. The provisions of this ordinance are declared to be separate and severable. If a court of competent jurisdiction, all appeals having been exhausted or all appeal periods having run, finds any provision of this ordinance to be invalid or unenforceable as to any person or circumstance, such offending provision shall, if feasible, be deemed to be modified to be within the limits of enforceability or validity. However, if the offending provision cannot be so modified, it shall be null and void with respect to the particular person or circumstance, and all other provisions of this ordinance in all other respects, and the offending provision with respect to all other persons and all other circumstances, shall remain valid and enforceable. Section 19. Effective Date. This ordinance or a summary thereof shall be published in the official newspaper of the City, and shall take effect and be in full force five days after passage and publication as provided by law_ PASSED BY THE CITY COUNCIL OF THE CITY OF TUKWILA, WASHINGTON, at a Regular Meeting thereof this day of ) 2012. ATTEST/AUTHENTICATED: Christy O'Flaherty, MMC, City Clerk Jim Haggerton, Mayor APPROVED AS TO FORM BY: Filed with the City Clerk: Passed by the City Council- Published- Effective Date: Shelley M. Kerslake, City Attorney Ordinance Number: Exhibit A — Form of Undertaking to Provide Continuing Disclosure W:Word Processing\Ordinances\Bond issuance 2012 for MPD 11-26-12 vc:bjs Page 13 of 13 143 144 EXHIBIT A Form of UNDERTAKING TO PROVIDE CONTINUING DISCLOSURE City of Tukwila, Washington Limited Tax General Obligation Bonds, 2012 To meet the requirements of paragraph (b)(5) of Rule 15c2-12, as applicable to a participating underwriter for the above-referenced Bonds (the "Bonds"), the City makes the following written Undertaking for the benefit of holders of the Bonds: A. Undertaking to Provide Annual Financial Information and Notice of Listed Events. The City undertakes to provide or cause to be provided, either directly or through a designated agent, to the MSRB, in an electronic format as prescribed by the MSRB, accompanied by identifying information as prescribed by the MSRB: 1. Annual financial information and operating data of the type included in the final official statement for the Bonds and described in subsection B of this section ("annual financial information"); 2. Timely notice (not in excess of 10 business days after the occurrence of the event) of the occurrence of any of the following events with respect to the Bonds: (1) principal and interest payment delinquencies; (2) non-payment related defaults, if material; (3) unscheduled draws on debt service reserves reflecting financial difficulties; (4) unscheduled draws on credit enhancements reflecting financial difficulties; (5) substitution of credit or liquidity providers, or their failure to perform; (6) adverse tax opinions, the issuance by the Internal Revenue Service of proposed or final determinations of taxability, Notice of Proposed Issue (IRS Form 5701 — TEB) or other material notices or determinations with respect to the tax status of the Bonds; (7) modifications to rights of holders of the Bonds, if material; (8) bond calls (other than scheduled mandatory redemptions of Term Bonds), if material, and tender offers; (9) defeasances; (10) release, substitution, or sale of property securing repayment of the Bonds, if material; (11) rating changes; A-1 145 (12) bankruptcy, insolvency, receivership or similar event of the City, as such "Bankruptcy Events" are defined in Rule 15c2-12; (13) the consummation of a merger, consolidation, or acquisition involving the City or the sale of all or substantially all of the assets of the City other than in the ordinary course of business, the entry into a definitive agreement to undertake such an action or the termination of a definitive agreement relating to any such actions, other than pursuant to its terms, if material; and (14) appointment of a successor or additional trustee or the change of name of a trustee, if material_ 3. Timely notice of a failure by the City to provide required annual financial information on or before the date specified in subsection B of this section. B. Type of Annual Financial Information Undertaken to be Provided. The annual financial information that the City undertakes to provide in subsection A of this section: 1. Shall consist of: (1) annual financial statements prepared (except as noted in the financial statements) in accordance with applicable generally accepted accounting principles applicable to State local governmental units such as the City, as such principles may be changed from time to time, which statements may be unaudited, provided, that if and when audited financial statements are otherwise prepared and available they will be provided; (2) principal amount of general obligation bonds outstanding at the end of the fiscal year described in the filed financial statements; (3) assessed valuation for that fiscal year; (4) regular property tax levy amount and rate for that fiscal year; and (5) a statement of revenues for that fiscal year from other revenue sources pledged to the Bonds (if any); 2_ Shall be provided not later than the last day of the ninth month after the end of each fiscal year of the City (currently, a fiscal year ending December 31), as such fiscal year may be changed as required or permitted by State law, commencing with the City's fiscal year ending December 31, 2012; and 3. May be provided in . a single or multiple documents, and may be incorporated by specific reference to documents available to the public on the Internet website of the MSRB or filed with the SEC. C. Amendment of Undertaking. The Undertaking is subject to amendment after the primary offering of the Bonds without the consent of any holder of any Bond, or of any broker, dealer, municipal securities dealer, participating underwriter, Rating Agency or the MSRB, under the circumstances and in the manner permitted by Rule 15c2-12. A-2 146 The City will give notice to the MSRB of the substance (or provide a copy) of any amendment to the Undertaking and a brief statement of the reasons for the amendment. If the amendment changes the type of annual financial information to be provided, the annual financial information containing the amended financial information will include a narrative explanation of the effect of.that change on the type of information to be provided. D. Beneficiaries. The Undertaking evidenced by this section shall inure to the benefit of the City and the Beneficial Owner of a Bond, and shall not inure to the benefit of or create any rights in any other person. E. Termination of Undertaking. The City's obligations under this Undertaking shall terminate upon the legal defeasance of all of the Bonds. In addition, the City's obligations, under this Undertaking shall terminate if those provisions of Rule 15c2-12 which require the City to comply with this Undertaking become legally inapplicable in respect of the Bonds for any reason, as confirmed by an opinion of Bond Counsel delivered to the City, and the City provides timely notice of such termination to the MSRB. F. Remedy for Failure to Comply with Undertaking. As soon as practicable after the City learns of any failure to comply with the Undertaking, the City will proceed with due diligence to cause such noncompliance to be corrected. No failure by the City or other obligated person to comply with the Undertaking shall constitute a default in respect of the Bonds. The sole remedy of a Beneficial Owner of a Bond shall be to take action to compel the City or other obligated person.to comply with the Undertaking, including seeking an order of specific performance from an appropriate court. G. Designation of Official Responsible to Administer Undertaking. The Finance Director or his or her designee is authorized to take such -further actions as may be necessary, appropriate or convenient to carry out this Undertaking in accordance with Rule 15c2-12, including, without limitation, the following actions: (1) Preparing and filing the annual financial information undertaken to be provided; (2) Determining whether any event specified in subsection A has occurred, assessing its materiality, where necessary, with respect to the Bonds, and preparing and disseminating any required notice of its occurrence (3) Determining whether any person other than the City is an "obligated person" within the meaning of Rule 15c2-12 with respect to the Bonds, and obtaining from such person an undertaking to provide any annual financial information and notice of listed events for that person in accordance with Rule 15c2-12; (4) Selecting, engaging and compensating designated agents and consultants, including but not limited to financial advisors and legal counsel, to assist and advise the City in carrying out the Undertaking; and (5) Effecting any necessary amendment of the Undertaking. 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