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HomeMy WebLinkAboutOrd 2394 - $1,000,000 Limited Tax General Obligation Bonds for Tukwila Pool ImprovementsCity of Tukwila Washington Ordinance No. 2394 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 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 Y2% 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 3of8 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 10b -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 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 5of8 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:bjs 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 7 of 8 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 F THE CITY OF TUKWILA, WASHINGTON, at a Regular Meeting thereof this day of —3—a,,vu.ar , 2013. ATTEST /AUTHENTICATED: Christy O'Fla rty, MMC, City CI APPROVED AS TO FORM BY: Filed with the City Clerk: 1-1 7-L Passed by the City Council: ) , -I Published: / -a$ Effective Date: J - -'30-y Ordinance Number: a39 Lj . Shelley M. Kerslake, City Attorney W: Word Processing \Ordinances \Bond issuance 2013 for MPD 1 -16 -13 PM:bjs Page 8 of 8 City of Tukwila Public Notice of Ordinance Adoption for Ordinance 2394. On January 22, 2013 the City Council of the City of Tukwila, Washington, adopted the following ordinance, the main points of which are summarized by title as follows: Ordinance 2394: 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. The full text of this ordinance will be provided upon request. Christy O'Flaherty, MMC, City Clerk Published Seattle Times: January 25, 2013