HomeMy WebLinkAboutCity of Auburn Continuing Disclosure Agreement CONTINUING DISCLOSURE AGREEMENT
This Continuing Disclosure Agreement (this "Disclosure Agreement") is executed and
delivered by the South Correctional Entity Facility Public Development Authority (the
"Authority") and the Cities of Auburn, Burien, Des Moines, Renton, SeaTac and Tukwila,
Washington (each, an "Owner City"), in connection with the issuance by the Authority of
$51,055,000 aggregate principal amount of its Refunding Bonds, Series 2019(the"Bonds"). The
Bonds are being issued pursuant to a Bond Resolution adopted by the Board of Directors of the
Authority (the "Bond Resolution") on September 25, 2019. The Authority and the Owner Cities
hereby covenant and agree as follows:
Section 1. Purpose of this Disclosure Agreement. This Disclosure Agreement is being
executed and delivered by the Authority and the Owner Cities for the benefit of the holders of the
Bonds and in order to assist the Participating Underwriter in complying with the Rule (each as
defined below).
Section 2. Definitions. In addition to the definitions set forth in the Bond Resolution
or in the Official Statement relating to the Bonds dated November 13, 2019 (the "Official
Statement"), which apply to any capitalized term used in this Disclosure Agreement unless
otherwise defined in this Section, the following capitalized terms shall have the following
meanings:
"Annual Report"means an Authority Annual Report and/or an Owner City Annual Report,
as applicable.
"Authority Annual Report"means any Authority Annual Report provided by, or on behalf
of, the Authority pursuant to, and as described in, Sections 3 and 4 of this Disclosure Agreement.
"Authority Submission Date," with respect to each Fiscal Year, means the date that is on
or before the last day of the ninth month after the end of such Fiscal Year.
"Commission"means the Securities and Exchange Commission.
"Financial obligation"means a(A) debt obligation; (B) derivative instrument entered into
in connection with, or pledged as security or a source of payment for, an existing or planned debt
obligation; or (C) guarantee of clause (A) or (B) of this definition. The term financial obligation
shall not include municipal securities as to which a final official statement has been provided to
the MSRB consistent with the Rule.
"Fiscal Year" means the fiscal year of the Authority, currently the twelve-month period
ending on each December 31, as such fiscal year may be changed from time to time.
"Listed Event"means any of the events listed in Section 5 of this Disclosure Agreement.
"MSRB"means the Municipal Securities Rulemaking Board.
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"Owner City" means each of the Cities of Auburn, Burien, Des Moines, Renton, SeaTac
and Tukwila,Washington,each a municipal corporation organized and existing under the laws and
statutes of the State.
"Owner City Annual Report" means any Owner City Annual Report provided by, or on
behalf of, an Owner City pursuant to, and as described in, Sections 3 and 4 of this Disclosure
Agreement.
"Owner City Submission Date,"with respect to each Fiscal Year,means the date that is on
or before the last day of the ninth month after the end of such Fiscal Year.
"Participating Underwriter" means the original underwriter of the Bonds required to
comply with the Rule in connection with offering the Bonds.
"Rule"means Section(b)(5)of Commission's Rule 15c2-12 under the Securities Exchange
Act of 1934, as the same may be amended from time to time.
"State"means the State of Washington.
Section 3. Provision of Annual Reports. Each Owner City shall, not later than the
Owner City Submission Date for each Fiscal Year, commencing in 2020 with the Fiscal Year
ending on December 31, 2019, provide to the MSRB an Owner City Annual Report consistent
with the requirements of Section 4 of this Disclosure Agreement, in an electronic format as
prescribed by the MSRB, accompanied by identifying information as prescribed by the MSRB.
Each Owner City shall provide notice to the Authority when it has submitted its Owner
City Annual Report for each Fiscal Year,provided however, that failure of an Owner City to do
so shall not constitute a breach of or failure under this Disclosure Agreement.
The Authority shall, not later than the Authority Submission Date for each Fiscal Year,
commencing with the Fiscal Year ending on December 31, 2019, provide to the MSRB an
Authority Annual Report consistent with the requirements of Section 4 of this Disclosure
Agreement, in an electronic format as prescribed by the MSRB, accompanied by identifying
information as prescribed by the MSRB.
Until otherwise designated by the MSRB or the Commission, any information or notices
submitted to the MSRB in compliance with the Rule are to be submitted through the MSRB's
Electronic Municipal Market Access system ("EMMA"), currently located at
www.emma.msrb.org. All notices, financial information and operating data, Owner City Annual
Reports and Authority Annual Reports required by this Disclosure Agreement to be provided to
the MSRB must be in an electronic format as prescribed by the MSRB. All documents provided
to the MSRB pursuant to this Disclosure Agreement must be accompanied by identifying
information as prescribed by the MSRB.
Section 4. Content of Annual Reports.
(a) Owner City Annual Reports. Each Owner City Annual Report shall contain
or include by reference (without duplication)the following:
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(i) The audited financial statements of such Owner City for the prior
Fiscal Year,prepared in accordance with generally accepted accounting principles. If such Owner
City's audited financial statements are not available by the Owner City Submission Date, the
Owner City Annual Report shall contain unaudited financial statements in a format similar to the
format of the Owner City's audited financial statements, and the Owner City's audited financial
statements shall be filed in the same manner as the Owner City Annual Report when they become
available; and
(ii) The following financial and operating information of such Owner
City for such Fiscal Year (if not included in the financial statements): (A) principal amount of
outstanding general obligation indebtedness, if any, and (B) assessed valuation, ad valorem
property tax rate and amount of ad valorem property taxes collected.
(b) Authority Annual Reports. Each Authority Annual Report shall contain or
include by reference (without duplication)the following:
(i) The audited financial statements of SCORE and the Authority for
the prior Fiscal Year, prepared in accordance with generally accepted accounting principles. If
such audited financial statements are not available by the Authority Submission Date, the
Authority Annual Report shall contain unaudited financial statements in a format similar to the
Authority's and SCORE's audited financial statements, and the audited financial statements shall
be filed in the same manner as the Authority Annual Report when they become available; and
(ii) A statement of outstanding Authority indebtedness for such Fiscal
Year(if not included in the financial statements.
Any or all of the items to be included in the Annual Report may be provided in a single or
multiple documents, and may be incorporated by specific reference to documents available to the
public on EMMA or filed with the Commission.
Section 5. Reporting of Listed Events.
(a) Authority Listed Events. The Authority further agrees to provide or cause
to be provided to the MSRB, in a timely manner not in excess of 10 business days after the
occurrence of the event,notice 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, Notices of Proposed Issue
(IRS Form 5701-TEB) or other material notices or determinations with
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respect to the tax status of the Bonds, or other material events affecting the
tax status of the Bonds;
7. Modifications to the rights of Bondholders, if material;
8. Optional, contingent or unscheduled Bond calls other than scheduled
sinking fund redemptions for which notice is given pursuant to Exchange
Act Release 34 23856, if material, and tender offers;
9. Defeasances;
10. Release, substitution, or sale of property securing repayment of the Bonds,
if material;
11. Rating changes;
12. Bankruptcy, insolvency, receivership or similar event of the Authority;
13. The consummation of a merger, consolidation, or acquisition involving the
Authority,or the sale of all or substantially all of the assets of the Authority,
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;
14. Appointment of a successor or additional trustee or the change of name of
a trustee, if material;
15. Incurrence of a financial obligation of the Authority, if material, or
agreements to covenants, events of default, remedies, priority rights, or
other similar terms of a financial obligation of the Authority, any of which
affect security holders, if material; and
16. Default, event of acceleration, termination event, modification of terms, or
other similar events under the terms of a financial obligation of the
Authority, any of which reflect financial difficulties.
(b) Owner City Listed Events. Each Owner City further agrees to provide or
cause to be provided to the MSRB, in a timely manner not in excess of 10 business days after the
occurrence of the event,notice of the occurrence of any of the following events with respect to the
Bonds:
1. Bankruptcy events, or similar events involving the Owner City;
2. Consummation of a merger, consolidation, or acquisition involving the
Owner City or the sale of all or substantially all of the assets of the Owner
City (other than in the ordinary course of business), the entry into a
definitive agreement to undertake such action or the termination of a
definitive agreement relating to any such actions,other than pursuant to the
terms of such agreement, if material;
3. Incurrence of a financial obligation of the Owner City, if material, or
agreement to covenants,events of default,remedies,priority rights,or other
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similar terms of a financial obligation of the Owner City, any of which
affect bondholders, if material; and
4. Default, event of acceleration, termination event, modification of terms, or
other similar events under the terms of a financial obligation of the Owner
City, any of which reflect financial difficulties.
Section 6. Termination of Reporting Obligation. The Authority's and each Owner
City's obligations under this Disclosure Agreement shall terminate upon the legal defeasance,prior
redemption or payment in full of all of the Bonds. If the Authority's or any Owner City's
obligations under the Bond Resolution and/or the Interlocal Agreement are assumed in full by
some other entity, such entity shall be responsible for compliance with this Disclosure Agreement
in the same manner as if it were the Authority or such Owner City, as the case may be, and the
original Authority or Owner City, as the case may be, shall have no further responsibility
hereunder.
Section 7. Notification Upon Failure to Provide Financial Data The Authority, and
each Owner City, as applicable, further agrees to provide or cause to be provided, in a timely
manner, to the MSRB notice of its failure to provide the Annual Report described in above on or
prior to the date set forth in above.
Section 8. Responsible Officer;Dissemination Agent.The SCORE Executive Director
(or his or her designee) and the finance director or similar officer (or his or her designee) of each
Owner City is designated to carry out the obligations under this Disclosure Agreement on behalf
of the Authority and the Owner City, respectively, in accordance with the Rule. The Authority
may, from time to time, appoint or engage a dissemination agent to assist it in carrying out its
obligations under this Disclosure Agreement, and may discharge any such dissemination agent,
with or without appointing a successor dissemination agent.
Section 9. Modification. Any provision of this Disclosure Agreement shall be null and
void if the Authority(1)obtains an opinion of nationally recognized bond counsel to the effect that
the portion of the Rule that requires that provision is invalid, has been repealed retroactively or
otherwise does not apply to the Bonds and (2) notifies the MSRB of such opinion and the
cancellation of all or any portion of the undertaking under this Disclosure Agreement.
Notwithstanding any other provision of this Disclosure Agreement, the Authority and the
Owner Cities may amend this Disclosure Agreement, and any provision of the undertaking
contained herein may be waived, in accordance with Rule, which, as currently interpreted by the
Commission, requires that (a) the amendment or waiver be made in connection with a change in
circumstances that arises from a change in legal requirements, change in law, or change in the
identity, nature, or status of the Authority or Owner City, or type of business conducted; (b) the
undertaking, as amended or waived, would have complied with the requirements of Rule at the
time of the primary offering, after taking into account any amendments or interpretations of Rule,
as well as any change in circumstances; and (c) the amendment or waiver does not materially
impair the interests of holders of the Bonds, as determined either by parties unaffiliated with the
Authority or an Owner City (such as bond counsel) or by the approving vote of holders of the
Bonds.
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In the event of any amendment or waiver of the undertaking provided for in this Disclosure
Agreement, the Authority or an Owner City, as applicable, shall describe such amendment or
waiver in its Annual Report, and shall include a narrative explanation of the reason for the
amendment or waiver and its impact on the type (or in the case of a change of accounting
principles, on the presentation) of financial information or operating data being presented by the
Authority and/or an Owner City, as applicable. In addition, if the amendment relates to the
accounting principles to be followed in preparing financial statements, (i) notice of such change
shall be given in the same manner as for a Listed Event above, and (ii) the Annual Report for the
year in which the change is made shall present a comparison(in narrative form and also,if feasible,
in quantitative form) between the financial statements as prepared on the basis of the new
accounting principles and those prepared on the basis of the former accounting principles.
Section 10. Additional Information. Nothing in this Disclosure Agreement shall be
deemed to prevent the Authority or any Owner City from disseminating any other information,
using the means of dissemination set forth in this Disclosure Agreement or any other means of
communication, or including any other information in any Authority Annual Report or notice of
occurrence of a Listed Event, in addition to that which is required by this Disclosure Agreement.
If the Authority or any Owner City chooses to include any information in any Authority Annual
Report or notice of occurrence of a Listed Event in addition to that which is specifically required
by this Disclosure Agreement, the Authority shall have no obligation under this Disclosure
Agreement to update such information or include it in any future Authority Annual Report or
notice of occurrence of a Listed Event.
Section 11. Default. A default under this Disclosure Agreement shall not be deemed a
default under the Bond Resolution,the Interlocal Agreement or any other document relating to the
Authority or the Bonds (other than this Disclosure Agreement). The right of any bond owner or
beneficial owner of Bonds to enforce the provisions of this Disclosure Agreement shall be limited
to a right to obtain specific enforcement of the Authority and/or an Owner City's obligations under
this Disclosure Agreement. For purposes of this Disclosure Agreement,"beneficial owner"means
any person who has the power, directly or indirectly, to vote or consent with respect to, or to
dispose of ownership of, any Bonds, including persons holding Bonds through nominees or
depositories
Section 12. Beneficiaries. This Disclosure Agreement shall inure solely to the benefit
of the Authority,the Owner Cities,the Participating Underwriter and the holders from time to time
of the Bonds, and shall create no rights in any other person or entity.
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Section 13. Counterparts. This Disclosure Agreement may be executed in several
counterparts, each of which shall be an original and all of which shall constitute but one and the
same instrument.
Dated: December 11, 2019.
SOUTH CORRECTIONAL ENTITY FACILITY
PUBLIC DEVELOPMENT AUTHORITY
By
CITY OF AUBURN, WASHINGTON
By_21, 641 �r.
I'
CITY OF BURL , WASHINGTON
By
CITY OF DES MOINES, WASHINGTON
By
CITY OF RENTON, WASHINGTON
By
CITY OF SEATAC, WASHINGTON
By
CITY OF TUKWILA, WASHINGTON
By