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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. 1 "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: 2 (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 3 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 4 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. 5 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. 6 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