Loading...
HomeMy WebLinkAboutReg 2013-01-22 Item 7 - Ordinance - $1,000,000 Limited Tax General Obligation Bond for Tukwila Pool ImprovementsCOUNCIL AGENDA SYNOPSIS Initials Meeting Date 01/22/13 Prepared by M r s review PMC Council review WqH ITEM INFORMATION ITEM No. 7 259 STAFF SPONSOR: PEGGY MCCARTHY ORIGINAL AGENDA DATE: AGENDA ITEM TITLE 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 Mtg Date ❑ Motion Mtg Date ❑ Resolution Mtg Date Ordinance ❑ Bid Award Mtg Date ❑ Public Hearing Mtg Date ❑ Other Mtg Date Mtg Date 01/22/13 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 $1,000,000 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. Financing must be obtained soon, and for this reason, this item is being brought directly to a Regular Meeting. REVIEWED BY ❑ COW Mtg. ❑ CA &P Cmte ❑ F &S Cmte ❑ Transportation Cmte ❑ Utilities Cmte ❑ Arts Comm. ❑ Parks Comm. ❑ Planning Comm. DATE: COMMITTEE CHAIR: RECOMMENDATIONS: SPONSOR /ADMIN. COMMIYFEE Finance COST IMPACT / FUND SOURCE EXPENDITURE REQUIRED AMOUNT BUDGETED APPROPRIATION REQUIRED $ $ $ Fund Source: Comments: MTG. DATE RECORD OF COUNCIL ACTION MTG. DATE ATTACHMENTS 01/22/13 Informational Memorandum dated 1/16/13 Ordinance in Final Form Draft Bond Purchase Agreement - Cashmere Valley Bank Seattle Northwest Securities Debt Service Schedule -based on 1/3/13 market conditions 259 260 TO: City of Tukwila Jim Haggerton, Mayor INFORMATIONAL MEMORANDUM Mayor Haggerton City Council FROM: Peggy McCarthy, Finance Director DATE: January 16, 2013 SUBJECT: Bond Issue for Metropolitan Park District Capital Financing ISSUE Adopt an ordinance authorizing the sale of a $1,000,000 City of Tukwila, King County, Washington, Limited Tax General Obligation Bond, 2013, to Cashmere Valley Bank to finance Tukwila Metropolitan Park District (MPD) capital improvements. BACKGROUND Approximately $1,000,000 is needed by the MPD to finance a pool renovation project that began November 5, 2012. To ensure sufficient funding exists to pay contractor costs, project financing must be obtained soon. For this reason, this item is being brought directly to Council rather than going first through the Finance and Safety Committee and the Council Committee of the Whole. As further background, on December 10, 2012 the Council approved a public bond sale and the bonds were scheduled to be sold on December 20, 2012. However, on the proposed sale date, volatility in the bond market and a lack of demand for bonds in general, and for smaller bond issues in particular, created a poor sale environment and the decision was made to postpone the bond sale until 2013. In the meantime, other financing sources were considered and a private bond placement with Cashmere Valley Bank was identified as a beneficial alternative. With a private bond sale to Cashmere Valley Bank, bond proceeds would total $1,000,000, annual debt service would be $113,130 paid in semi - annual payments of $56,565 over a 10 year term; the interest rate would range from 1.75% per annum to 4.00% per annum over the term of the debt. Early payoff would be allowed at any time with no pre - payment penalties. The chart below compares the terms of the Cashmere Valley Bank private bond sale with a public sale through Seattle Northwest Securities. Terms SCENARIO 1 -- Private Bond Sale with Cashmere Valley Bank (a) SCENARIO 2 -- Public Bond Sale through Seattle Northwest Securities (b) Proceeds $1,000,000 Not to exceed $1,100,000 Issuance costs paid from bond proceeds $20,000 estimate $32,500 estimate Net proceeds (c) $ 980,000 $1,000,000 approximately Term 10 years 15 years Annual debt service $113,130 $85,880 average Pre - payment Any time without penalty After 10 years Total debt service $1,131,285 $1,288,211 Savings estimate (d) $136,926 261 262 INFORMATIONAL MEMO Page 2 (a) Based on the draft Bond Purchase Agreement (see attachment). (b) Estimated based on market conditions on January 3, 2013 (see attachment). (c) Net proceeds equal bond proceeds less cost of issuance paid from proceeds. (d) Savings is computed as the difference between the total debt service of Scenario 1 and Scenario 2, less the $20,000 additional proceeds received in Scenario 2 ($1,288,211 - $1,131,285- $20,000). To determine the affordability of the higher annual debt service of $113,130, the MPD 20 -year plan was updated with this debt service amount and term, and for property tax revenue (the levy amount confirmed in December by the King County Assessor's office) and a more accurate estimate of the beginning 2013 fund balance. With these changes incorporated into the plan, the MPD meets its ending fund balance reserve requirements in all years of the 20 -year plan except year 2021 and 2022 when the fund balances of $145,221 and $127,278 are $20,846 and $36,143 Tess than the targeted fund balance minimum of $166,066 and $163,421. However, in addition to these funds ($145,221 at 2021 and $127,278 at 2022), the Capital Reserve fund will have a balance of $270,000 at 2021 and $300,000 at 2022 if the $30,000 annual reserve funding is accomplished. The Capital Reserve funds could be used for general MPD uses if the need arises. By adopting this method of financing for the MPD pool improvements, the previous ordinance adopted in December for a public bond sale needs to be repealed. The Bond Ordinance includes Section 13 which repeals Ordinance No. 2393 in its entirety. FINANCIAL IMPACT There will be no financial impact to the City since the debt service on this debt will be paid by the MPD. DISCUSSION A private bond sale to Cashmere Valley Bank under the terms described in this memo would save the MPD approximately $137,000. The modified repayment plan appears affordable based on the MPD 20 -year plan and the debt can be paid off at any time without penalty. For these reasons, it is considered in the best interest of the City of Tukwila and the Tukwila Metropolitan Park District for the City to adopt the bond ordinance and obtain capital project financing through a private bond sale to Cashmere Valley Bank. Should the Council approve the bond ordinance, an addendum to the November 19, 2012 MPD Capital Financing Interlocal Agreement will be prepared to incorporate the revised bond ordinance number, bond issuance name, and revised repayment schedule into the agreement. RECOMMENDATION The Council is being asked to approve the bond ordinance. ATTACHMENTS: -Bond Ordinance -Draft Bond Purchase Agreement — Cashmere Valley Bank - Seattle Northwest Securities Debt Service Schedule - based on market conditions on January 3, 2013 W:12013 Info Memos - Council \MPD Capital Financing options 1- 22- 13.doc City of Tukwila Washington Ordinance No. AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF TUKWILA, WASHINGTON, RELATING TO CONTRACTING INDEBTEDNESS; PROVIDING FOR THE ISSUANCE, SALE AND DELIVERY OF $1,000,000 PRINCIPAL AMOUNT LIMITED TAX GENERAL OBLIGATION BOND 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 BOND; REPEALING ORDINANCE NO. 2393; 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. "Bank" means Cashmere Valley Bank, or its corporate successor. B. "Bond" means the City's Limited Tax General Obligation Bond, 2013, in the principal amount of $1,000,000, issued pursuant to this ordinance. 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, 2013, created for the payment of the principal of and interest on the Bond. E. "Bond Register means the books or records maintained by the Bond Registrar for the purpose of identifying ownership of the Bond. F. "Bond Registrar" means the Finance Director of the City. W: Word Processing \Ordinances \Bond issuance 2013 for MPD 1 -16 -13 PM:bjs Page 1 of 8 263 264 G. "Business Day" means any day of the year other than (i) a Saturday or Sunday, (ii) any day on which banks located in City are required or authorized by law to remain closed, or (iii) any day on which the New York Stock Exchange is closed. H. "City" means the City of Tukwila, Washington, a municipal corporation duly organized and existing under the laws of the State. I. "City Council" means the legislative authority of the City, as duly and regularly constituted from time to time. J. "Code" means the United States Internal Revenue Code of 1986, as amended, and applicable rules and regulations promulgated thereunder. K. "Finance Director" means the Finance Director or such other officer of the City who succeeds to substantially all of the responsibilities of that office. L. "Maturity Date" means December 1, 2022. M. "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 Tukwila Metropolitan Park 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. N. "Project Fund" means the Pool Improvement Fund, 2012, created for the purpose of carrying out the Project. O. "Purchase Offer" means the Bank's offer to purchase the Bond, setting forth certain terms and conditions of the issuance, sale and delivery of the Bond. P. "System of Registration" means the system of registration of the City's bonds and other obligations set forth in Ordinance No. 1338 of the City. 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 by the Tukwila Metropolitan Park District and operated by the City pursuant to an interlocal agreement. RCW 35.61.290, 35.61.300 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. W: Word Processing \Ordinances \Bond issuance 2013 for MPD 1 -16 -13 PM:bjs Page 2 of 8 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 Bond 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 $1,000,000. 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 $28,022,930, 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. D. The Bond. For the purpose of providing the funds necessary to carry out the Project and pay the costs of issuance and sale of the Bond, the City Council finds that it is in the best interests of the City and its taxpayers to issue and sell the Bond to the Bank, pursuant to the terms set forth in the Purchase Offer. Section 3. Authorization and Description of Bond. A. The City shall borrow money on the credit of the City and issue its negotiable limited tax general obligation bond evidencing indebtedness in the amount of $1,000,000 to provide funds necessary to carry out the Project and to pay the costs of issuance and sale of the Bond. B. The Bond shall be issued as a single bond in the amount of $1,000,000, shall be dated its date of delivery to the Bank, shall bear interest from its date, shall be issued in fully registered form and shall be numbered R -1. The proceeds of the Bond, after payment of costs of issuance, shall be deposited as set forth in Section 11 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. C. From the date of delivery of the Bond to the Bank, through and including November 30, 2015, the unpaid principal amount of the Bond will bear interest at a fixed rate of 1.75% per annum. Commencing on December 1, 2015, through and including November 30, 2018, the unpaid principal amount of the Bond will bear interest at a fixed rate of 2.85% per annum. Commencing on December 1, 2018, through and including W: Word Processing \Ordinances \Bond issuance 2013 for MPD 1 -16 -13 PM:bjs Page 3 of 8 265 December 1, 2022 (the Maturity Date), the unpaid principal amount of the Bond will bear interest at a fixed rate of 4.00% per annum. Interest will be computed on the basis of a 360 -day year consisting of twelve 30 -day months. D. The Bond will be paid in approximately equal semiannual installments of principal and interest due on each June 1 and December 1, beginning June 1, 2013, to the Maturity Date or earlier prepayment of the Bond. A debt service schedule describing the installments of principal and interest on the Bond will be attached to the Bond form as Exhibit A. The final installment payment of principal of and interest on the Bond, whether on the Maturity Date or upon prepayment, shall be in an amount equal to the remaining principal and interest due on the Bond. Section 4. Bond Registrar; Registration and Transfer of Bond. A. The Finance Director is appointed to act as Bond Registrar for the Bond. The Bond shall be issued to the Bank only in registered form as to both principal and interest. The Bond Register shall contain the name and mailing address of the owner of the Bond. When the Bond has been paid in full, both principal and interest, the Bond shall be surrendered by the owner to the Bond Registrar, who shall cancel the Bond. B. The Bond may be assigned or transferred only in whole and Bank will not transfer the Bond to a subsequent investor unless the Bank causes such investor to receive such information regarding the City and the Bond as is necessary to comply with Rule 1Ob -5 of the Securities and Exchange Commission. The Bank agrees to indemnify the City and all of its agents and attorneys, with respect to any claim asserted against the City or any of its agents or attorneys that is based on or related to the Bank's sale, transfer or other disposition of the Bond, other than any claim that is based upon the willful misconduct of the City or any of its agents or attorneys. C. The Bond Registrar shall keep, or cause to be kept, sufficient books for the registration and transfer of the Bond, which shall be open to inspection by the City at all times. The Bond Registrar shall serve as the City's authenticating agent, registrar and paying agent for the Bond and shall comply fully with all applicable federal and state laws and regulations respecting the carrying out of those duties. The Bond Registrar is authorized, on behalf of the City, to authenticate and deliver the Bond should it be transferred or exchanged in accordance with the provisions of the Bond and this ordinance, to serve as the City's paying agent for the Bond and to carry out all of the Bond Registrar's powers and duties under this ordinance and the System of Registration. D. The Bond Registrar shall be responsible for its representations contained in the Bond Registrar's Certificate of Authentication on the Bond. The Bond shall state on its face that the principal of and interest on the Bond shall be paid only to the owner thereof registered as such on the Bond Register as of the record date set forth therein and to no other person or entity. W: Word Processing \Ordinances \Bond issuance 2013 for MPD 1 -16 -13 PM:bjs 266 Page 4 of 8 Section 5. Payment of Bond. Both principal of and interest on the Bond shall be payable in lawful money of the United States of America. Principal of and interest on the Bond shall be paid by electronic funds transfer, or by checks or drafts of the Bond Registrar mailed on the payment date to the registered owner at the address appearing on the Bond Register no later than the second Business Day preceding the payment date. Section 6. Prepayment of Bond. The outstanding principal amount of the Bond may be prepaid in whole or in part at any time prior to the Maturity Date at par plus accrued interest to the date of prepayment. The City will provide the Bank with written notice of any intended prepayment at least 15 days prior to such prepayment date. At any time there is a partial prepayment, the remaining semiannual installment payments shall be recalculated as mutually agreed upon, in writing, by the City and the Bank to reflect either a reduction in the semiannual payment amount, or the earlier maturity date of the Bond. Within seven business days of prepayment, the Bank shall provide to the City and the Bond Registrar a recalculated payment schedule. Section 7. Failure To Pay Bond. If the Bond is not paid when properly presented at its prepayment date or Maturity Date, the City shall be obligated to pay interest on the Bond at the same rate provided in the Bond until the 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 owner. Section 8. Pledge of Taxes. The Bond constitutes a general indebtedness of the City and is payable from tax revenues of the City and such other money as is lawfully available and pledged by the City for repaying the Bond. For as long as the Bond is 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 Bond 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 Bond. Section 9. Tax Covenants; Designation of Bond as a "Qualified Tax - Exempt Obligation." A. Preservation of Tax Exemption for Interest on Bond. The City covenants that it will take all actions necessary to prevent interest on the Bond 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 Bond or other funds of the City treated as proceeds of the Bond at any time during the term of the Bond which will cause interest on the Bond 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 9 and the applicable requirements of the Code that must be satisfied after the issue date to maintain the tax treatment of the Bond and the receipt of interest thereon. W: Word Processing \Ordinances \Bond issuance 2013 for MPD 1 -16 -13 PM:bjs Page 5 of 8 267 C. Designation of Bond as a "Qualified Tax - Exempt Obligation." The City designates the Bond as a "qualified tax-exempt obligation" for the purposes of Section 265(b)(3) of the Code, and makes the following findings and determinations: 1. the Bond is not a "private activity bond" 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 Bond is issued will not exceed $10,000,000; and 3. the amount of tax - exempt obligations, including the Bond, 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 Bond is issued does not exceed $10,000,000. Section 10. Form and Execution of Bond. A. Form of Bond; Signatures and Seal. The Bond shall be prepared in a form consistent with the provisions of this ordinance and State law. The Bond 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 the 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, the 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 the City authorized to sign bonds. The 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 if the Bond contains a Certificate of Authentication in substantially the following form, manually signed by the Bond Registrar, shall the Bond be valid or obligatory for any purpose or entitled to the benefits of this ordinance: "Certificate Of Authentication. This Bond is the fully registered City of Tukwila, Washington, Limited Tax General Obligation Bond, 2013." The authorized signing of the Certificate of Authentication shall be conclusive evidence that the Bond has been duly executed, authenticated and delivered and is entitled to the benefits of this ordinance. Section 11. Funds; 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 Bond. Bond proceeds in excess of the amounts needed to pay the costs of the Project and the costs of issuance, if any, W: Word Processing \Ordinances \Bond issuance 2013 for MPD 1 -16 -13 PM: bj s 268 Page 6of8 shall be deposited into the Bond Fund. All amounts allocated to the payment of the principal of and interest on the Bond shall be deposited in the Bond Fund as necessary for the timely payment of amounts due with respect to the Bond. The principal of and interest on the Bond 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 Bond shall be deposited into the Project Fund and used to pay the costs of the Project and costs of issuance of the Bond. 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 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 12. Acceptance of Purchase Offer. A. The Bank has submitted a proposal to purchase the Bond from the City under the terms and conditions of the Purchase Offer. The City Council finds that accepting the Purchase Offer is in the City's best interest and therefore accepts the Purchase Offer. There will be no loan fee due to the Bank. The City will be responsible for all other costs of issuance of the Bond. The amount of Bond Counsel's fee will be withheld from the Bond proceeds and wire transferred, on behalf of the City, directly to Bond Counsel at closing. B. The Bond will be prepared at the City's expense and will be delivered to the Bank in accordance with the Purchase Offer, with the approving legal opinion of Foster Pepper PLLC, municipal bond counsel of Seattle, Washington, regarding the Bond. The proper City officials are authorized and directed to do everything necessary for the prompt delivery of the Bond to the Bank and for the proper application and use of the Bond proceeds. Section 13. General Authorization and Ratification. The 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 Bond to the Bank 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 the purposes described in this ordinance and not inconsistent with the terms of this ordinance are ratified and confirmed in all respects. Section 14. Repealer. Ordinance No. 2393 of the City, passed December 10, 2012, is repealed in its entirety. W: Word Processing \Ordinances \Bond issuance 2013 for MPD 1 -16 -13 PM:bjs Page 7of8 269 Section 15. Financial Reporting Requirements. So long as the Bond is outstanding, the City will provide to the Bank in form and content acceptable to the Bank its annual financial report. Section 16. Corrections by City Clerk or Code Reviser. Upon approval of the City Attorney, the City Clerk and the code reviser are authorized to make necessary corrections to this ordinance, including the correction of clerical errors; references to other local, state or federal laws, codes, rules, or regulations; or ordinance numbering and section /subsection numbering. Section 17. 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 18. 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 , 2013. ATTEST /AUTHENTICATED: Christy O'Flaherty, MMC, City Clerk APPROVED AS TO FORM BY: Shelley M. Kerslake, City Attorney Jim Haggerton, Mayor Filed with the City Clerk: Passed by the City Council: Published: Effective Date: Ordinance Number: W: Word Processing \Ordinances \Bond issuance 2013 for MPD 1 -16 -13 PM:bjs 270 Page 8 of 8 January 22, 2013 Honorable City Council City of Tukwila 6200 Southoenter Blvd Tukwila. WA 98188 flonorable COlincil Members, Ilwrik you for the opportunity to propose an offer to purchase the City of Tukwila, King County. Washington. Limited Tax General Obligation Bond, 2013, (the Cashmere Valley Bank (the "Bank") itas approved the borrowing outfitted in this tanurnittnent letter under the following terms: 1 13orrtiwer: City of Tlikedia, King County, Washington (the "City-)„ 2, Amount: $1,0008,100 Form: Fully registered, bank-qualified tax-exempt limited tax general obligation bond issue*d by the City and purchased by the Batik at private sale, 4. Purpose: For the purpose of making improvements to the Tukwila Metropolitan Park District swimming pool and to pay related costs of issuance of the Bond. Bond Terms: ) Interest Rate; From the Date of Delivery. thmugh and including Noventber 30, 2015, the =paid pritici amoutit of the Bond will bear interest at a fixed rate a 1,75% per .cinnunt. Commencing on December 1, 2015, dimwit and including Noventber 30. 2( 18, the unpaid principal arnotun a the Bortd will bear interest at a fixed rate of 2.85%per anntmL Commencintl on December 1, 2018, thniugh and including Demniber 1, 20 the 'Maturity Date), the unpaid prineiptd amt)unt of 'the turd 1 1)ear interest at a fixed rate of 4.00$8 per annum. In re mill be computed on 1400'1121e AMeeue 8.1.F.,„,,6 ei.W 10a *peeve% Weehieffien ,98004-0997* OM 6884935: o' Too Peel (OW 252-2265 - Fax 0125j 688,3937 271 Ciry of Tuicwi la January' 22. P e 2 the basis of.a 360-day year consisting..of twelve 30-day -months. The .Bond will be dated the Date of Delivery and will -bear interest from its date. b) Terms: Approximately equal semiannual installments of principal and interest will be due June I and December 1, beginning June 1, 2013 to the Maturity .Date or earlier prepayment. A-debt service schedule deseribing the above installments of principal and interest on the Bond is attached hereto as Exhibit A and incorporated herein by this reference. The final installment payment of principal-of-and interest on the Bond, whether on the Maturity Date or upon prepayment. shall he in an amount equal to the remaining principal and interest due on the Bond. The Bond -Registrar and Paying Agent will be .the City of Tukwila. c) Security The City ‘vi.11 irrevocably covenant for as long as the Bond is outstanding and unpaid. that each year it will include in its budget and levy an ad valorem tax, within and as a part of the tax it-tillage levy permitted to cities without a Vote of the electorate, upon all the property within the City subject to taxation in an amount which will be sufficient, together with all other funds of the City which may legally be used and which the City may apply for such purposes to pay the principal of and interest on the Bond as the -same shall -become due and payable. d) Transferability The Bank will hold. this Bond with no intent. to sell or transfer, The Bond may be transferred only in whole. subject. to the Bank. Re-presentations set forth in Section 9 herein. and as provided in the authorizing ordinance --(the "Bond Ordinance".) to be adopted by the City Council of the City (capitalized terms- used herein will. have the meanings given them in the Bond Ordinance), and the Bond Ordinance is by this reference incorporated herein. 6. Prepayment The outstanding principal. amount of the Bond may be .prepaid in whole or in part at any time prior to the Maturity Date at par .plus accrued interest to the date of prepayment. The City will provide the Bank with written notice of any intended prepayment at :least 15- days prior to such prepayment date. At any time there is .a partial. prepayment, the remaining semiannual installment payments shall be recalculated as mutually agreed upon. in ‘vriting by the City and the Bat* to reflect either a reduction in the semiannual payment amount, or the earlier maturity date of the Bond. Within seven (7) business days of prepayment, thc Bank shall provide to the City and the Bond Re,gistrar recalculated payment schedule. 272 City of Tilkwila January 22. 2013 e 3 Fees: There is no an fee due to the Bank. The City is responsible for all other costs of issuance oldie Bond. An amount. of $ 18.900. representing lees and costs of •bond counsel. will be withheld from Bond proceeds and wire transferred. on behalf of the City. directly to bond counsel at closing, Additional Terms: The Bond documents will be in the standard forms customarily required by the Bank for municipal funding and will include additional terms and conditions not discussed above. The City will designate the Bond as a "qualified tax-exempt obligation'. under Section 265(h) (3) of the Internal Revenue Code of 1986. as amended, for investment by financial institutions. The City will provide its annual :financial report to the Bank during the period the Bond is outstanding and held by the Bank. At the date of closing the Bond. the financial condition and credit of the City and all other features of this transaction ‘vill be as represented to the Bank without material adverse change. In the event of adverse material changes in the credit worthiness of the City, including litigation involving or claims filed against. the this' commitm.ent will terminate upon notice by the Bank. This commitment is non- assignable by the City. This commitment supersedes any prior commitments,. oilers., or agreements, written or oral concerning this financing and can only be modified in writing., Bank Representations: As a material :inducement to the City's promise to sell the Bond to the E3ank, the Bank hereby makes the following representations: a) The Bank is a bank as defined in Section 3(a)(2) of the Securities Act of 1933. as amended, or a savings and loan association or other institution as defined. in Section 3(a)( 5)(a) ofthe Securities Act of 1933. b) The Bank is sufficiently .knowledgeable and experienced in financial and business matters. .including the purchase and. ownership of debt. securities, to he able to evaluate the risks:and merits of the investment represented by the purchase of the Bond, and it is capable of and has made its own investigation. of the C.Ity and the use of the Bond proceeds in connection with its decision to purchase the Bond. Th.c Bond is being acquired by the Bank for investment and not with a view 'to, or for resale in connection vith. any distribution of the .Bond. and the Bank intends to hold the Bond 1br its own account and for an indefinite period of time. and does not intend at this time to dispose of all or any part of the Bond. The Bank . understands that it may need to bear the risks of this investment for an indefinite time, since an sale prior to maturity may not be possible. c) The Bank acknowledges that (i) it has received a copy of the Bond Ordinance and all other documents: certineates and instruments with respect to the Bond and the transactions contemplated thereby that it deems necessary to make a decision- with respect to an investment in the 273 Cib of Tukwila January 22. 2013 P 4 Bond and (ii) it is familiar with the conditions. financial and otherwise. of the City and understands the security pledged for payment of the Bond. Further. the 'Bank understands and acknowledges that. among other risks. principal of and interest on the Bond is payable solely from the sources described in the Bond Ordinance. The ..Bank has made such inquiry with respect to all of the foregoin.g as it believed to be desirable for its purposes. d) It is acknowledged that no official statement, offering circular or other securities disclosure document. has.been provided by the City, and that any written. .information furnished by the City or any other party to the transaction does not purport to fully disclose all information pertinent to the Bond.... In entering into this transaction. the .Bank has not relied upon any representations or opinions made by the City relating to the legal consequences or other aspects of the transaction. nor has it looked to. nor expected. the City to undertake or require any credit investigation or due diligence .reviews relating to the City. its financial condition or business operations, the use of the Bond proceeds. or any other -matter pertaining to the merits or risks of the transaction. or the adequacy of the fun.ds.pledged to secure repayment of the Bond. e) The Bank has independently evaluated the factors associated with its investment decision. The Bank has been given full and complete access to and has been: furnished with all. information requested by the Bank regarding the City and the use of the Bond proceeds. and has conducted such other investigations relating to the City. the use of the Bond proceeds and the Bond: as in the opinion of the Bank was necessary in connection with its purchase of the .Bond. f) -Fhe Bank will not transfer the Bond to a subsequent investor unless the Bank causes such investor to receive such information regarding the Citv . and the Bond as is .accessary to comply with Rule 104-5 of the Securities and Exchange Commission, The Bank agrees to indemnify the City and all of its agents and attorneys. with respect to any claim asserted against. the City or any of its agents or attorneys that is based. 00 or related to the Banks sale, transfer or other disposition of the Bond. other than any claitn that is based upon the .\villful misconduct Of the City or any of its agents or attorneys. 10. Closing: The Bond is anticipated to -1( se on or about February 1. 2013. Acceptance; This commitment is not binding unless the City signs and retunis this letter to the Bank. prior to the close of business on January 30, 2013 at which time the commitment will expire without notice. 1 1 after acceptance. the Bond has not closed by February 15. 2013, this commitment will expire without notice. 274 City of Tukwila January 22 2013 P e 5 ORAL AGREEMENTS O1. ORAL COMMITMENTS TO LOAN MONEY. EXTEND CREDIT OR TO FORBEAR FROM ENFORCING REPAYMENT OF A DEBT ARE NOT ENFORCEABLE UNDER WASHINGTON LAW. Thank you for this opportunity to work with the City. Sincerely, CASE, ERE VALLEY BANK Y Ron Olsen Director Municipal Services Acknowledged and accepted this 22nd day ofJanuary, 2013 CITY OF TUKWILA KING COUNTY., WASHINGTON By: Title: cc: Alice Ostdiek, Foster Pepper 275 C atTukwila January 22, 2013 1' a 11 6 EXHIBIT A L11.1.0.01 Ptivm(101„Nti i J114 Principal ftwe (0-4..‘st 13.ndioe. Cash. flow 02401/13 1M00.000.00 1,000.000.00 06/0113 1.000.000.00 (50,73) 67) 1.75% (5.833.33) 049.268.33 (56.565.00) 1.2/01/13 949.268.33 (48.258,90) 1.7.5% (8.306.10) 901.009,43 (56,565.00) 06/01/14 901.009.43 (48.681.17) 1,75% (7,883,83) 852,328.26 (56,565.00) 12/004 852.328,26 (49,107.13) 1 75% (7.457.87) 803,221,13 (56.565.00) 06/01/15 803.221.13 (49,536.82) 1,75% (7.028,18) 753,684.31 (56.565.00) 12/01/15 753.684.31 (49.970,26) 1.75% (6.594.74) 703.714,05 (56.565.00) 06/01116 703.714,05 (46.537.07) 2,85% (10.027,03) 657.176„98 (56.565.00) 12401/16 657.176.98 (47_200.23) .18599 (9.364,77) 609.976,75 (56.565.00) 06/01/17 609.976.75 (17,872,83) 2.859 f. (8,692.17) 562.103.92 (56.565.00) 12/01/17 562,103.92 (48.555,02) 7.85% (8,009,98) 5) 3,548.90 (56.565.00) 06/01/18 513,548.90 (49,246,93) 2.85% (7,318,07) 464,301.97 (56.565,00) 12/01/18 464,301,97 (49,948,70) 1385% (6.6)6.3(1) 414,353.27 (56.565.00) 06/01/19 414.35127 (48.277,931 1.0099 (8,287.07) 366,075.34 (56.565.00) 12/01/19 366,075.34 (49,243.49) 4,00% (7,321.51) 316.831.85 (56.565.00) 06/01/20 316.831.35 (50,228.36) 4.00% (6.336.64) 266,603.49 (56.565.00) 12/01/20 266,603,49 (51,232,93) 4,00% (5„33107) 215,370.56 (56,565.00) 06101,21 215.370.56 (52,257 59) 4,0099 (4.307,41) 163.112.97 (56.565.00) 12/01/21 163.11,2,97 (51.302,71) 4,0099 (3.262.26) 109.810.23 (56.565.00) 06/01/22 109.810.23 (54.36880) 4,0099 (2,196.20) 55.441.43 (56,565.00) 12/01/22 53.14 1:43 (55.141.43) 4.00% (1.198.83) (56.550.26) (131.285.26) 276 BOND DEBT SERVICE City of Tukwila, Washington Proposed Limited Tax General Obligation Bonds, 2013 PRELIMINARY NUMBERS Period Ending Principal Coupon Interest Debt Service 12/01/2013 45,000 2.000% 29,561.11 74,561.11 12/01/2014 55,000 2.000% 33,100.00 88,100.00 12/01/2015 55,000 2.000% 32,000.00 87,000.00 12/01/2016 55,000 3.000% 30,900.00 85,900.00 12/01/2017 55,000 3.000% 29,250.00 84,250.00 12/01/2018 60,000 3.000% 27,600.00 87,600.00 12/01/2019 60,000 4.000% 25,800.00 85,800.00 12/01/2020 65,000 4.000% 23,400.00 88,400.00 12/01/2021 65,000 4.000% 20,800.00 85,800.00 12/01/2022 70,000 4.000% 18,200.00 88,200.00 12/01/2023 70,000 4.000% 15,400.00 85,400.00 12/01/2024 75,000 4.000% 12,600.00 87,600.00 12/01/2025 75,000 4.000% 9,600.00 84,600.00 12/01/2026 80,000 4.000% 6,600.00 86,600.00 12/01/2027 85,000 4.000% 3,400.00 88,400.00 970,000 318,211.11 1,288,211.11 Jan 3, 2013 10:31 am Prepared by Seattle- Northwest Securities Corp. (k:\ analysis \dbc \city \Tukwila:TUKWILA- 13LTGO) Page 2 277