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HomeMy WebLinkAbout6789 CITY OF AUBURN, WASHINGTON LIMITED TAX GENERAL OBLIGATION REFUNDING BONDS, 2020 ORDINANCE NO. 6789 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF AUBURN, WASHINGTON, AUTHORIZING THE ISSUANCE OF ONE OR MORE SERIES OF LIMITED TAX GENERAL OBLIGATION REFUNDING BONDS IN THE AGGREGATE PRINCIPAL AMOUNT OF NOT TO EXCEED $24,000,000 FOR THE PURPOSE OF REFUNDING CERTAIN OUTSTANDING LIMITED TAX GENERAL OBLIGATION BONDS OF THE CITY; APPROVING THE SALE OF THE BONDS; AND DELEGATING THE AUTHORITY TO APPROVE THE FINAL TERMS OF THE BONDS. Passed September 21, 2020 PREPARED BY: PACIFICA LAW GROUP LLP Seattle, Washington CITY OF AUBURN ORDINANCE NO. 6789 TABLE OF CONTENTS* Page Section 1. Definitions and Interpretation of Terms 2 Section 2. Findings; Purpose and Authorization of the Bonds 6 Section 3. Registration, Exchange and Payments 6 Section 4. Redemption Prior to Maturity and Purchase of Bonds 9 Section 5. Form of Bonds 11 Section 6. Execution of Bonds 11 Section 7. Application of Bond Proceeds; Plan of Refunding 11 Section 8. Tax Covenants 12 Section 9. Pledge of Funds; General Obligation 13 Section 10. Sale of Bonds 14 Section 11. Undertaking to Provide Ongoing Disclosure 16 Section 12. Defeasance 16 Section 13. Lost, Stolen or Destroyed Bonds 16 Section 14. Severability; Ratification 16 Section 15. Corrections by Clerk 16 Section 16. Effective Date of Ordinance 0 17 Exhibit A: Form of Bond * This Table of Contents is provided for convenience only and is not a part of this ordinance. CITY OF AUBURN, WASHINGTON ORDINANCE NO. 6789 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF AUBURN, WASHINGTON, AUTHORIZING THE ISSUANCE OF ONE OR MORE SERIES OF LIMITED TAX GENERAL OBLIGATION REFUNDING BONDS IN THE AGGREGATE PRINCIPAL AMOUNT OF NOT TO EXCEED $24,000,000 FOR THE PURPOSE OF REFUNDING CERTAIN OUTSTANDING LIMITED TAX GENERAL OBLIGATION BONDS OF THE CITY; APPROVING THE SALE OF THE BONDS; AND DELEGATING THE AUTHORITY TO APPROVE THE FINAL TERMS OF THE BONDS. WHEREAS, the City of Auburn, Washington (the "City") has outstanding its Limited Tax General Obligation Bonds, 2010B (Taxable Build America Bonds — Direct Payment) (the "2010B Bonds") and Limited Tax General Obligation Bonds, 2010D (Taxable Build America Bonds — Direct Payment) (the "2010D Bonds"), issued on May 13, 2010, pursuant to Ordinance No. 6305 passed by the City Council (the "Council") on May 3, 2010 (the "2010 Bond Ordinance"); and WHEREAS, the outstanding 2010B Bonds and the 2010D Bonds may be defeased and/or refunded prior to maturity as provided in the 2010 Bond Ordinance; and WHEREAS, the 2010B Bonds and the 2010D Bonds were issued as taxable Build America Bonds with a direct federal interest subsidy payment to the City; and WHEREAS, upon the legal defeasance of the 2010B Bonds and the 2010D Bonds, such bonds will no longer qualify as Build America Bonds, the City will no longer be able to collect federal interest payment subsidies in connection with such bonds, and the defeased 2010B Bonds and 2010D Bonds will be taxable obligations eligible for refunding on a tax-exempt basis; and WHEREAS, the Council deems it in the best interest of the City to issue one or more series of limited tax general obligation refunding bonds (the "Bonds") to redeem and/or defease all or a portion of the outstanding 2010B Bonds and 2010D Bonds and to pay costs of issuing the Bonds; and WHEREAS, the City wishes to delegate authority to the Designated Representatives specified herein, for a limited time, to select the 2010B Bonds and the 2010D Bonds for defeasance and/or refunding and to approve the interest rates, maturity dates, redemption terms and principal maturities for the Bonds within the parameters set by this ordinance; and WHEREAS, the City expects to receive a purchase contract from Piper Sandler & Co. (the "Underwriter") to underwrite the Bonds, and now desires to issue and sell the Bonds to the Underwriter as set forth herein; NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF AUBURN, WASHINGTON, DOES ORDAIN as follows: Section 1. Definitions and Interpretation of Terms. (a) Definitions. As used in this ordinance, the following words shall have the following meanings: Acquired Obligations means the Government Obligations acquired by the City under the terms of this ordinance and the Escrow Agreement to effect the defeasance and/or refunding of the Refunded Bonds, but only to the extent that the same are acquired at Fair Market Value. Beneficial Owner means any person that has or shares the power, directly or indirectly, to make investment decisions concerning ownership of any Bonds (including persons holding Bonds through nominees, depositories or other intermediaries). Bond Counsel means Pacifica Law Group LLP or an attorney at law or a firm of attorneys, selected by the City, of nationally recognized standing in matters pertaining to the tax exempt nature of interest on bonds issued by states and their political subdivisions. Bond Fund means the "Bond Redemption Fund" authorized to be created pursuant to this ordinance. Bond Purchase Contract means the contract for the purchase of the Bonds between the Underwriter and City, executed pursuant to this ordinance. Bond Register means the registration books showing the name, address and tax identification number of each Registered Owner of the Bonds, maintained for the Bonds in the manner required pursuant to Section 149(a) of the Code. Bond Registrar means, initially, the fiscal agent of the State, for the purposes of registering and authenticating the Bonds, maintaining the Bond Register, effecting transfer of ownership of the Bonds and paying interest on and principal of the Bonds. Bonds means the Limited Tax General Obligation Refunding Bonds, 2020 authorized to be issued by the City in one or more series pursuant to this ordinance. Call Date means the call date for the Refunded Bonds selected by a Designated Representative and set forth in the Escrow Agreement. City means the City of Auburn, Washington, a municipal corporation duly organized and existing under the laws of the State. City Attorney means the duly appointed and acting City Attorney of the City, including anyone acting in such capacity for the position, or the successor to the duties of that office. City Clerk or Clerk means the duly appointed and acting City Clerk or the successor to the duties of that office. -2- City Council or Council means the City Council of the City as the general legislative authority of the City, as duly and regularly constituted from time to time. Closing means the date of delivery of the Bonds to the Underwriter. Code means the Internal Revenue Code of 1986, as in effect on the date of issuance of the Bonds or (except as otherwise referenced herein) as it may be amended to apply to obligations issued on the date of issuance of the Bonds, together with applicable proposed, temporary and final regulations promulgated, and applicable official public guidance, published, under the Code. Commission means the United States Securities and Exchange Commission. Continuing Disclosure Certificate means the written undertaking for the benefit of the owners and beneficial owners of the Bonds as required by Section(b)(5) of the Rule. Designated Representative means the Mayor and the Finance Director of the City and any successor to the functions of such offices, and their designees. The signature of one Designated Representative shall be sufficient to bind the City. DTC means The Depository Trust Company, New York, New York, a limited purpose trust company organized under the laws of the State of New York. Escrow Agent means the trust company or state or national bank having powers of a trust company selected by the City to serve as escrow agent pursuant to this ordinance. Escrow Agreement means the Escrow Deposit Agreement between the City and the Escrow Agent to be dated as of the date of Closing of the Bonds. Escrow Fund means the fund or account established by the Escrow Agent under the Escrow Agreement executed in connection with the defeasance and redemption of the Refunded Bonds. Fair Market Value means the price at which a willing buyer would purchase an investment from a willing seller in a bona fide, arm's length transaction, except for specified investments as described in Treasury Regulations § 1.148-5(d)(6), including United States Treasury obligations, certificates of deposit, guaranteed investment contracts, and investments for yield restricted defeasance escrows. Fair Market Value is generally determined on the date on which a contract to purchase or sell an investment becomes binding, and, to the extent required by the applicable regulations under the Code, the term"investment" will include a hedge. Federal Tax Certificate means the certificate executed by a Designated Representative setting forth the requirements of the Code for maintaining the tax exemption of interest on the Bonds, and attachments thereto. Finance Director means the Finance Director or the successor to such officer. -3- Government Obligations mean those obligations now or hereafter defined as such in chapter 39.53 RCW constituting direct obligations of, or obligations the principal of and interest on which are unconditionally guaranteed by the United States of America, as such chapter may be hereafter amended or restated. Letter of Representations mean the Blanket Issuer Letter of Representations given by the City to DTC, as amended from time to time. Local Option Sales and Use Tax means the local option sales and use tax levied and imposed by the City as authorized by RCW 82.14.505 and RCW 82.14.510 and Ordinance No. 6301. Local Option Sales and Use Tax Revenue means the Local Option Sales and Use Tax credit revenues received by the City in an aggregate annual amount of approximately$250,000. LRF Projects mean the construction or reconstruction of the downtown improvements described in Resolution No. 4502, including, but not limited to, improvements to sidewalks, crosswalks, pedestrian street lighting, utility upgrades and other street improvements within the Revitalization Area. Mayor means the duly elected Mayor of the City or the successor to such officer. MSRB means the Municipal Securities Rulemaking Board or any successors to its functions. Official Statement means the disclosure documents prepared and delivered in connection with the issuance of the Bonds. Projects mean the capital projects refinanced with proceeds of the Refunded Bonds. Record Date means the close of business for the Bond Registrar that is 15 days preceding any interest and/or principal payment or redemption date. REET 1 means the real estate excise tax authorized under RCW 82.46.010(2), which is imposed, collected and allocated to expenditures for capital projects by Ordinance No. 3814 of the City. REET 2 means the real estate excise tax authorized under RCW 82.46.035(2), which is imposed, collected and allocated to expenditures for capital projects by Ordinance No. 4871 of the City. Refunded Bonds mean the Refunding Candidates selected by a Designated Representative for defeasance and/or refunding pursuant to this ordinance. Refunding Account means the account by that name established pursuant to this ordinance. Refunding Candidates mean all or a portion of the 2010B Bonds and the 2010D Bonds. -4- Registered Owner means the person named as the registered owner of a Bond in the Bond Register. For so long as the Bonds are held in book-entry only form, DTC shall be deemed to be the sole Registered Owner. Revitalization Area means the Auburn Revitalization Area designated by the City as a "local revitalization area" within the meaning of chapter 39.104 RCW as provided for in City Resolution No. 4502. Rule means the 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. Underwriter means Piper Sandler& Co., and its successors. 2010 Bond Ordinance means Ordinance No. 6305 passed by the Council on May 3, 2010. 2010B Bonds mean the Limited Tax General Obligation Bonds, 2010B (Taxable Build America Bonds — Direct Payment) of the City, issued pursuant to the 2010 Bond Ordinance as described in the recitals of this ordinance. 2010D Bonds mean the Limited Tax General Obligation Bonds, 2010D (Taxable Build America Bonds — Direct Payment) of the City, issued pursuant to the 2010 Bond Ordinance as described in the recitals of this ordinance. (b) Interpretation. In this ordinance, unless the context otherwise requires: (1) The terms "hereby," "hereof," "hereto," "herein," "hereunder" and any similar terms, as used in this ordinance, refer to this ordinance as a whole and not to any particular article, section, subdivision or clause hereof, and the term "hereafter" shall mean after, and the term"heretofore" shall mean before, the date of this ordinance; (2) Words of a gender shall mean and include correlative words of any genders and words importing the singular number shall mean and include the plural number and vice versa; (3) Words importing persons shall include firms, associations, partnerships (including limited partnerships), trusts, corporations and other legal entities, including public bodies, as well as natural persons; (4) Any headings preceding the text of the several articles and sections of this ordinance, and any table of contents or marginal notes appended to copies hereof, shall be solely for convenience of reference and shall not constitute a part of this ordinance, nor shall they affect its meaning, construction or effect; and (5) All references herein to "articles," "sections" and other subdivisions or clauses are to the corresponding articles, sections, subdivisions or clauses hereof. -5- Section 2. Findings; Purpose and Authorization of the Bonds. (a) Purpose and Authorization of Bonds. For the purpose of defeasing and/or refunding the Refunded Bonds and paying related costs of issuance, the City is hereby authorized to issue and sell one or more series of limited tax general obligation refunding bonds in an aggregate principal amount not to exceed $24,000,000 (the"Bonds"). The Bonds shall be general obligations of the City, shall be designated "City of Auburn, Washington, Limited Tax General Obligation Refunding Bonds, 2020," with any series or other designation as determined by a Designed Representative. The Bonds of each series shall be dated as of the date of Closing; shall be fully registered as to both principal and interest; shall be in the denomination of$5,000 each, or any integral multiple thereof, within a series and maturity; shall be numbered separately in such manner and with any additional designation as the Bond Registrar deems necessary for purposes of identification; shall bear interest from their date payable on the dates and commencing as provided in the Bond Purchase Contract; and shall be subject to optional and/or mandatory redemption and mature on the dates and in the principal amounts set forth in the Bond Purchase Contract. Section 3. Registration, Exchange and Payments. (a) Bond Registrar/Bond Register. The City hereby specifies and adopts the system of registration approved by the Washington State Finance Committee from time to time through the appointment of a State fiscal agent. The City shall cause a Bond Register to be maintained by the Bond Registrar. So long as any Bonds remain outstanding, the Bond Registrar shall make all necessary provisions to permit the exchange or registration or transfer of Bonds at its designated office. The Bond Registrar may be removed at any time at the option of the Finance Director upon prior notice to the Bond Registrar and a successor Bond Registrar appointed by the Finance Director. No resignation or removal of the Bond Registrar shall be effective until a successor shall have been appointed and until the successor Bond Registrar shall have accepted the duties of the Bond Registrar hereunder. The Bond Registrar is authorized, on behalf of the City, to authenticate and deliver Bonds transferred or exchanged in accordance with the provisions of such Bonds and this ordinance and to carry out all of the Bond Registrar's powers and duties under this ordinance. The Bond Registrar shall be responsible for its representations contained in the Certificate of Authentication of the Bonds. (b) Registered Ownership. The City and the Bond Registrar, each in its discretion, may deem and treat the Registered Owner of each Bond as the absolute owner thereof for all purposes (except as provided in the Continuing Disclosure Certificate), and neither the City nor the Bond Registrar shall be affected by any notice to the contrary. Payment of any such Bond shall be made only as described in Section 3(g), but such Bond may be transferred as herein provided. All such payments made as described in Section 3(g) shall be valid and shall satisfy and discharge the liability of the City upon such Bond to the extent of the amount or amounts so paid. (c) DTC Acceptance/Letters of Representations. The Bonds initially shall be held by DTC acting as depository. The City has executed and delivered to DTC a Blanket Issuer Letter of Representations. Neither the City nor the Bond Registrar shall have any responsibility or -6- obligation to DTC participants or the persons for whom they act as nominees (or any successor depository) with respect to the Bonds in respect of the accuracy of any records maintained by DTC (or any successor depository) or any DTC participant, the payment by DTC (or any successor depository) or any DTC participant of any amount in respect of the principal of or interest on Bonds, any notice which is permitted or required to be given to Registered Owners under this ordinance (except such notices as shall be required to be given by the City to the Bond Registrar or to DTC (or any successor depository)), or any consent given or other action taken by DTC (or any successor depository) as the Registered Owner. For so long as any Bonds are held by a depository, DTC or its successor depository or its nominee shall be deemed to be the Registered Owner for all purposes hereunder, and all references herein to the Registered Owners shall mean DTC (or any successor depository) or its nominee and shall not mean the owners of any beneficial interest in such Bonds. (d) Use of Depository. (1) The Bonds shall be registered initially in the name of "Cede & Co.", as nominee of DTC, with one Bond of a series maturing on each of the maturity dates for the Bonds in a denomination corresponding to the total principal therein designated to mature on such date. Registered ownership of such Bonds, or any portions thereof, may not thereafter be transferred except (A) to any successor of DTC or its nominee, provided that any such successor shall be qualified under any applicable laws to provide the service proposed to be provided by it; (B) to any substitute depository appointed by the Finance Director pursuant to subsection (2) below or such substitute depository's successor; or (C) to any person as provided in subsection (4) below. (2) Upon the resignation of DTC or its successor (or any substitute depository or its successor) from its functions as depository or a determination by the Finance Director to discontinue the system of book-entry transfers through DTC or its successor (or any substitute depository or its successor), the Finance Director may hereafter appoint a substitute depository. Any such substitute depository shall be qualified under any applicable laws to provide the services proposed to be provided by it. (3) In the case of any transfer pursuant to clause (A) or (B) of subsection (1) above, the Bond Registrar shall, upon receipt of all outstanding Bonds together with a written request on behalf of the Finance Director, issue a single new Bond for such series for each maturity then outstanding, registered in the name of such successor or such substitute depository, or their nominees, as the case may be, all as specified in such written request of the Finance Director. (4) In the event that (A) DTC or its successor (or substitute depository or its successor) resigns from its functions as depository, and no substitute depository can be obtained, or(B) the Finance Director determines that it is in the best interest of the beneficial owners of the Bonds that such owners be able to obtain physical Bond certificates, the ownership of such Bonds may then be transferred to any person or entity as herein provided, and shall no longer be held by a depository. The Finance Director shall deliver a written request to the Bond Registrar, together with a supply of physical Bonds, to issue Bonds as herein provided in any authorized denomination. Upon receipt by the Bond Registrar of all then outstanding Bonds together with a written request on behalf of the Finance Director to the Bond Registrar, new Bonds of such -7- series shall be issued in the appropriate denominations and registered in the names of such persons as are requested in such written request. (e) Registration of Transfer of Ownership or Exchange; Change in Denominations. The transfer of any Bond may be registered and Bonds may be exchanged, but no transfer of any such Bond shall be valid unless it is surrendered to the Bond Registrar with the assignment form appearing on such Bond duly executed by the Registered Owner or such Registered Owner's duly authorized agent in a manner satisfactory to the Bond Registrar. Upon such surrender, the Bond Registrar shall cancel the surrendered Bond and shall authenticate and deliver, without charge to the Registered Owner or transferee therefor, a new Bond (or Bonds at the option of the new Registered Owner) of the same series, date, maturity, and interest rate and for the same aggregate principal amount in any authorized denomination, naming as Registered Owner the person or persons listed as the assignee on the assignment form appearing on the surrendered Bond, in exchange for such surrendered and cancelled Bond. Any Bond may be surrendered to the Bond Registrar and exchanged, without charge, for an equal aggregate principal amount of Bonds of the same series, date, maturity, and interest rate, in any authorized denomination. The Bond Registrar shall not be obligated to register the transfer of or to exchange any Bond during the period from the Record Date to the redemption or payment date. (f) Bond Registrar's Ownership of Bonds. The Bond Registrar may become the Registered Owner of any Bond with the same rights it would have if it were not the Bond Registrar and, to the extent permitted by law, may act as depository for and permit any of its officers or directors to act as a member of, or in any other capacity with respect to, any committee formed to protect the right of the Registered Owners or beneficial owners of Bonds. (g) Place and Medium of Payment. Both principal of and interest on the Bonds shall be payable in lawful money of the United States of America. Interest on the Bonds shall be calculated on the basis of a year of 360 days and twelve 30-day months. For so long as all Bonds are held by DTC, payments of principal thereof and interest thereon shall be made to Registered Owners as of the Record Date as provided in accordance with the operational arrangements of DTC referred to in the Letter of Representations. In the event that the Bonds are no longer held by DTC or other depository, interest on the Bonds shall be paid by check or draft mailed to the Registered Owners at the addresses for such Registered Owners appearing on the Bond Register on the Record Date, or upon the written request of a Registered Owner of more than $1,000,000 of Bonds (received by the Bond Registrar at least by the Record Date), such payment shall be made by the Bond Registrar by wire transfer to the account within the United States designated by the Registered Owner. Principal of the Bonds shall be payable upon presentation and surrender of such Bonds by the Registered Owners at the designated office of the Bond Registrar. If any Bond is duly presented for payment and funds have not been provided by the City on the applicable payment date, then interest will continue to accrue thereafter on the unpaid principal thereof at the rate stated on the Bond until the Bond is paid. -8- Section 4. Redemption Prior to Maturity and Purchase of Bonds. (a) Mandatory Redemption of Term Bonds and Optional Redemption, if any. The Bonds of each series shall be subject to optional redemption on the dates, at the prices and under the terms set forth in the Bond Purchase Contract. The Bonds of each series shall be subject to mandatory redemption to the extent, if any, set forth in the Bond Purchase Contract. (b) Purchase of Bonds. The City further reserves the right and option to purchase any or all of the Bonds offered to it at any time at any price acceptable to the City plus accrued interest to the date of purchase. (c) Selection of Bonds for Redemption. For as long as the Bonds are held in book-entry only form, the selection of particular Bonds within a series and maturity to be redeemed shall be made in accordance with the operational arrangements then in effect at DTC. If the Bonds are no longer held in book-entry form, the selection of such Bonds to be redeemed and the surrender and reissuance thereof, as applicable, shall be made as provided in the following provisions of this subsection(c). If the City redeems at any one time fewer than all of the Bonds of a series having the same maturity date, the particular Bonds or portions of Bonds of such maturity to be redeemed shall be selected by lot (or in such manner determined by the Bond Registrar) in increments of$5,000. In the case of a Bond of a denomination greater than $5,000, the City and the Bond Registrar shall treat each Bond as representing such number of separate Bonds each of the denomination of$5,000 as is obtained by dividing the actual principal amount of such Bond by $5,000. In the event that only a portion of the principal sum of a Bond is redeemed, upon surrender of such Bond at the designated office of the Bond Registrar there shall be issued to the Registered Owner, without charge therefor, for the then-unredeemed balance of the principal sum thereof, at the option of the Registered Owner, a Bond or Bonds of like maturity and interest rate in any of the denominations herein authorized. (d) Notice of Redemption. (1) Official Notice. For so long as the Bonds are held in book-entry form, notice of redemption (which notice may be conditional) shall be given in accordance with the operational arrangements of DTC as then in effect, and neither the City nor the Bond Registrar will provide any notice of redemption to any Beneficial Owners. Thereafter (if the Bonds are no longer held in book-entry form), notice of redemption shall be given in the manner hereinafter provided. Unless waived by any owner of Bonds to be redeemed, official notice of any such redemption (which redemption may be conditioned by the Bond Registrar on the receipt of sufficient funds for redemption or otherwise) shall be given by the Bond Registrar on behalf of the City by mailing a copy of an official redemption notice by first class mail at least 20 days and not more than 60 days prior to the date fixed for redemption to the Registered Owner of the Bond or Bonds to be redeemed at the address shown on the Bond Register or at such other address as is furnished in writing by such Registered Owner to the Bond Registrar. All official notices of redemption shall be dated and shall state: (A) the redemption date, (B) the redemption price, (C) if fewer than all outstanding Bonds are to be redeemed, the identification by maturity (and, in the case of partial redemption, the respective principal amounts) of the Bonds to be redeemed, (D) any conditions to redemption, (E) that (unless such -9- notice is conditional) on the redemption date the redemption price will become due and payable upon each such Bond or portion thereof called for redemption, and that interest thereon shall cease to accrue from and after said date, and (F) the place where such Bonds are to be surrendered for payment of the redemption price, which place of payment shall be the designated office of the Bond Registrar. On or prior to any redemption date, unless any condition to such redemption has not been satisfied or waived or notice of such redemption has been rescinded, the City shall deposit with the Bond Registrar an amount of money sufficient to pay the redemption price of all the Bonds or portions of Bonds which are to be redeemed on that date. The City retains the right to rescind any redemption notice and the related optional redemption of Bonds by giving notice of rescission to the affected registered owners at any time on or prior to the scheduled redemption date. Any notice of optional redemption that is so rescinded shall be of no effect, and the Bonds for which the notice of optional redemption has been rescinded shall remain outstanding. (2) Effect of Notice; Bonds Due. If an unconditional notice of redemption has been given and not rescinded, or if the conditions set forth in a conditional notice of redemption have been satisfied or waived, the Bonds or portions of Bonds to be redeemed shall, on the redemption date, become due and payable at the redemption price therein specified, and, if the Bond Registrar then holds sufficient funds to pay such Bonds at the redemption price, then from and after such date such Bonds or portions of Bonds shall cease to bear interest. Upon surrender of such Bonds for redemption in accordance with said notice, such Bonds shall be paid by the Bond Registrar at the redemption price. Installments of interest due on or prior to the redemption date shall be payable as herein provided for payment of interest. All Bonds which have been redeemed shall be canceled by the Bond Registrar and shall not be reissued. (3) Additional Notice. In addition to the foregoing notice, further notice shall be given by the City as set out below, but no defect in said further notice nor any failure to give all or any portion of such further notice shall in any manner defeat the effectiveness of a call for redemption if notice thereof is given as above prescribed. Each further notice of redemption given hereunder shall contain the information required above for an official notice of redemption plus (A)the CUSIP numbers of all Bonds being redeemed; (B)the date of issue of the Bonds as originally issued; (C) the rate of interest borne by each Bond being redeemed; (D) the series and maturity date of each Bond being redeemed; and (E) any other descriptive information needed to identify accurately the Bonds being redeemed. Each further notice of redemption may be sent at least 20 days before the redemption date to each party entitled to receive notice pursuant to the Continuing Disclosure Certificate and with such additional information as the City shall deem appropriate, but such mailings shall not be a condition precedent to the redemption of such Bonds. (4) Amendment of Notice Provisions. The foregoing notice provisions of this Section 4, including but not limited to the information to be included in redemption notices and the persons designated to receive notices, may be amended by additions, deletions and changes in order to maintain compliance with duly promulgated regulations and recommendations regarding notices of redemption of municipal securities. -10- Section 5. Form of Bonds. The Bonds shall be in substantially the form set forth in Exhibit A, which is incorporated herein by this reference, with such changes thereto as may be approved by a Designated Representative, consistent with the provisions of Section 10 hereof Section 6. Execution of Bonds. The Bonds shall be executed on behalf of the City with the manual or facsimile signature of the Mayor, and shall be attested by the manual or facsimile signature of the Clerk, and shall have the seal of the City impressed or a facsimile thereof imprinted, or otherwise reproduced thereon. In the event any officer who shall have signed or whose facsimile signatures appear on any of the Bonds shall cease to be such officer of the City before said Bonds shall have been authenticated or delivered by the Bond Registrar or issued by the City, such Bonds may nevertheless be authenticated, delivered and issued and, upon such authentication, delivery and issuance, shall be as binding upon the City as though said person had not ceased to be such officer. Any Bond may be signed and attested on behalf of the City by such persons who, at the actual date of execution of such Bond shall be the proper officer of the City, although at the original date of such Bond such persons were not such officers of the City. Only such Bonds as shall bear thereon a Certificate of Authentication manually executed by an authorized representative of the Bond Registrar shall be valid or obligatory for any purpose or entitled to the benefits of this ordinance. Such Certificate of Authentication shall be conclusive evidence that the Bonds so authenticated have been duly executed, authenticated and delivered hereunder and are entitled to the benefits of this ordinance. Section 7. Application of Bond Proceeds; Plan of Refunding. (a) Plan of Refunding. The City proposes to defease and/or refund the Refunded Bonds as set forth herein. A portion of the proceeds of the Bonds shall be deposited, with other available funds of the City, if any, with the Escrow Agent pursuant to the Escrow Agreement to be used immediately upon receipt thereof to defease the Refunded Bonds as authorized by the 2010 Ordinance to the maturity date or Call Date and to pay costs of issuance and administrative costs of the refunding. The proceeds of the Bonds deposited with the Escrow Agent shall be used to defease the Refunded Bonds and discharge the obligations thereon by either holding such funds uninvested as cash or by the purchase of Acquired Obligations bearing such interest and maturing as to principal and interest in such amounts and at such times which, together with any necessary beginning cash balance, will provide for the payment of interest on the Refunded Bonds due at maturity or on and prior to the Call Date, and the principal amount due (100% of par) on such date. Such Acquired Obligations shall be purchased at a yield not greater than the yield permitted by the Code and regulations relating to acquired obligations in connection with refunding bond issues. (b) Escrow Agent; Escrow Agreement. The Designated Representative is hereby authorized to solicit proposals from and to select an Escrow Agent. A beginning cash balance and the Acquired Obligations, if any, shall be deposited irrevocably with the Escrow Agent in an amount sufficient to defease and/or redeem the Refunded Bonds. The proceeds of the Bonds -11- remaining after acquisition of the Acquired Obligations and provision for the necessary cash balance shall be used to pay expenses of the acquisition and safekeeping of the Acquired Obligations and costs of issuance of the Bonds and the administrative costs of the refunding. In order to carry out the purposes of this section, the Designated Representative is authorized and directed to execute and deliver the Escrow Agreement to the Escrow Agent. (c) Call for Redemption of Refunded Bonds. The City hereby sets aside available funds of the City and sufficient funds out of the proceeds of the Bonds and the purchase of Acquired Obligations, if any, from proceeds of the Bonds to make the payments described above. The City further calls the callable Refunded Bonds for redemption on the Call Date in accordance with the provisions of the 2010 Ordinance authorizing the redemption and retirement of the Refunded Bonds prior to their fixed maturities. Said defeasance and call for redemption of the Refunded Bonds shall be irrevocable after the issuance of the Bonds and delivery of cash and/or Acquired Obligations to the Escrow Agent. The Escrow Agent is hereby authorized and directed to provide for the giving of notices of defeasance and/or redemption of the Refunded Bonds in accordance with the applicable provisions of the 2010 Ordinance. The costs of publication of such notices shall be an expense of the City. The Escrow Agent is hereby authorized and directed to pay to the paying agent for the Refunded Bonds, sums sufficient to pay, when due, the payments specified in this section. All such sums shall be paid from the moneys and Acquired Obligations deposited with the Escrow Agent, and the income therefrom and proceeds thereof. All such sums so paid shall be credited to the Refunding Account (which is hereby authorized to be created) or other funds created under the Escrow Agreement. All moneys and Acquired Obligations deposited with the Escrow Agent and any income therefrom shall be held, invested (but only at the direction of the Finance Director) and applied in accordance with the provisions of this ordinance, the Escrow Agreement, and with the laws of the State for the benefit of the City and owners of the Refunded Bonds. The City will take such actions as are found necessary to see that all necessary and proper fees, compensation and expenses of the Escrow Agent for the Refunded Bonds shall be paid when due. Section 8. Tax Covenants. The City will take all actions necessary to assure the exclusion of interest on the Bonds from the gross income of the owners of the Bonds to the same extent as such interest is permitted to be excluded from gross income under the Code as in effect on the date of issuance of the Bonds, including but not limited to the following: (a) Private Activity Bond Limitation. The City will assure that the proceeds of the Bonds are not so used as to cause the Bonds to satisfy the private business tests of Section 141(b) of the Code or the private loan financing test of Section 141(c) of the Code. (b) Limitations on Disposition of Project. The City will not sell or otherwise transfer or dispose of(i) any personal property components of the projects financed with proceeds of the Refunded Bonds (the "Projects") other than in the ordinary course of an established government program under Treasury Regulation 1.141-2(d)(4) or (ii) any real property components of the Projects, unless it has received an opinion of Bond Counsel to the effect that such disposition will not adversely affect the treatment of interest on the Bonds as excludable from gross income for federal income tax purposes. -12- (c) Federal Guarantee Prohibition. The City will not take any action or permit or suffer any action to be taken if the result of such action would be to cause the Bonds to be "federally guaranteed" within the meaning of Section 149(b) of the Code. (d) Rebate Requirement. The City will take any and all actions necessary to assure compliance with Section 148(f) of the Code, relating to the rebate of excess investment earnings, if any, to the federal government, to the extent that such section is applicable to the Bonds. (e) No Arbitrage. The City will not take, or permit or suffer to be taken any action with respect to the proceeds of the Bonds which, if such action had been reasonably expected to have been taken, or had been deliberately and intentionally taken, on the date of issuance of the Bonds would have caused the Bonds to be an "arbitrage bonds" within the meaning of Section 148 of the Code. (f) Registration Covenant. The City will maintain a system for recording the ownership of the Bonds that complies with the provisions of Section 149 of the Code until the Bonds have been surrendered and canceled. (g) Record Retention. The City will retain its records of all accounting and monitoring it carries out with respect to the Bonds for at least three years after the Bonds mature or are redeemed (whichever is earlier); however, if the Bonds are redeemed and refunded, the City will retain its records of accounting and monitoring at least three years after the earlier of the maturity or redemption of the obligations that refunded the Bonds. (h) Compliance with Federal Tax Certificate. The City will comply with the provisions of the Federal Tax Certificate with respect to the Bonds, which are incorporated herein as if fully set forth herein. The covenants of this section will survive payment in full or defeasance of the Bonds. Section 9. Pledge of Funds; General Obligation. (a) General. The City hereby authorizes the creation of a fund to be used for the payment of debt service on the Bonds, designated as the "Bond Redemption Fund" (the "Bond Fund"). No later than the date each payment of principal of or interest on the Bonds becomes due, the City shall transmit sufficient funds, from the Bond Fund or from other legally available sources, to the Bond Registrar for the payment of such principal or interest. Money in the Bond Fund may be invested in legal investments for City funds. (b) Pledge of Full Faith and Credit. The City hereby irrevocably covenants and agrees for as long as the Bonds are outstanding and unpaid that each year it will include in its budget and levy an ad valorem tax upon all the property within the City subject to taxation in an amount that will be sufficient, together with other revenues and money of the City legally available for such purposes, to pay the principal of and interest on the Bonds when due. The City hereby irrevocably pledges that the annual tax provided for herein to be levied for the payment of such principal and interest shall be within and as a part of the tax levy permitted to cities without a vote of the people, and that a sufficient portion of each annual levy -13- to be levied and collected by the City prior to the full payment of the principal of and interest on the Bonds will be and is hereby irrevocably set aside, pledged and appropriated for the payment of the principal of and interest on the Bonds. The full faith, credit and resources of the City are hereby irrevocably pledged for the annual levy and collection of said taxes and for the prompt payment of the principal of and interest on the Bonds when due. (c) Pledge of REET 1. The City hereby further pledges the proceeds of REET 1, as necessary, to the series of Bonds or the portion of a series of Bonds allocated to pay costs of the defeasance and/or refunding of all or a portion of the 2010B Bonds, and related costs of issuance. (d) Pledge of REET 2. The City hereby further pledges the proceeds of REET 2, as necessary, to the series of Bonds or the portion of a series of Bonds allocated to pay costs of the defeasance and/or refunding of all or a portion of the 2010D Bonds, and related costs of issuance. (e) Pledge of Local Option Sales and Use Tax Revenues. The City hereby further irrevocably pledges all Local Option Sales and Use Tax Revenues to the series of Bonds or the portion of a series of Bonds allocated to pay costs of the defeasance and/or refunding of all or a portion of the 2010D Bonds allocated to the financing of the LRF Projects, and related costs of issuance. The City further covenants to impose the Local Option Sales and Use Tax, collect the Local Option Sales and Use Tax Revenues under and in accordance with RCW 82.14.505 and RCW 82.14.510, and apply Local Option Sales and Use Tax Revenues to pay debt service on such series of Bonds or the portion of a series of Bonds. (f) Multipurpose Bond Issue. In the event that the Bonds authorized herein are issued as a single series or combined with other limited tax general obligation bonds of the City and sold as a single series, REET 1 and REET 2 and Local Option Sales and Use Tax Revenues shall be pledged to the portion of the combined series of bonds allocable to the defeasance and/or refunding of all or a portion of the 2010B Bonds and the 2010D Bonds, respectively. Section 10. Sale of Bonds. (a) Bond Sale. The Bonds shall be sold by negotiated public sale to the Underwriter pursuant to the terms of a Bond Purchase Contract. The Council has determined that it would be in the best interest of the City to delegate to each Designated Representative, for a limited time, the authority to select the Refunded Bonds from the Refunding Candidates, to authorize the Bonds to be issued in one or more series, and to approve the final interest rates, maturity dates, redemption terms and principal maturities for each series of Bonds. (b) Sale Parameters. Subject to the terms and conditions set forth in this Section 10, each Designated Representative is hereby authorized to select the Refunded Bonds from the Refunding Candidates, to authorize the Bonds to be issued in one or more series, and to approve the final interest rates, aggregate principal amount, principal maturities, and redemption rights for the Bonds in the manner provided hereafter so long as: (1) the aggregate principal amount of all Bonds issued under this ordinance does not exceed $24,000,000, -14- (2) the final maturity date for the Bonds is no later than December 1, 2039, (3) the aggregate purchase price for the Bonds shall not be less than 95% or more than 140% of the aggregate stated principal amount of the Bonds, (4) the true interest cost for the Bonds (in the aggregate) does not exceed 3.00%, (5) the Bonds are sold for a price that results in net present value debt service savings over the Refunded Bonds (in the aggregate) of at least 4.0%, as adjusted for the federal subsidy net of the sequestration factor in effect at the time of such sale, and (6) the Bonds conform to all other terms of this ordinance. Subject to the terms and conditions set forth in this section, each Designated Representative is hereby authorized to execute the Bond Purchase Contract on behalf of the City. The signature of one Designated Representative shall be sufficient to bind the City. Following the execution of the Bond Purchase Contract, a Designated Representative shall provide a report to the Council describing the final terms of the Bonds approved pursuant to the authority delegated in this section. The authority granted to each Designated Representative by this Section 10 shall expire 180 days after the effective date of this ordinance. If a Bond Purchase Contract for the Bonds has not been executed within 180 days after the effective date of this ordinance, the authorization for the issuance of the Bonds shall be rescinded, and the Bonds shall not be issued nor their sale approved unless such Bonds are re-authorized by ordinance of the Council. The ordinance re-authorizing the issuance and sale of such Bonds may be in the form of a new ordinance repealing this ordinance in whole or in part or may be in the form of an amendatory ordinance approving a Bond Purchase Contract or establishing terms and conditions for the authority delegated under this Section 10. (c) Delivery of Bonds; Documentation. Upon the passage and approval of this ordinance, the proper officials of the City, including the Designated Representatives, are authorized and directed to undertake all action necessary for the prompt execution and delivery of the Bonds to the Underwriter and further to execute all closing certificates and documents required to effect the closing and delivery of the Bonds in accordance with the terms of the Bond Purchase Contract. Such documents may include, but are not limited to, documents related to a municipal bond insurance policy delivered by an insurer to insure the payment when due of the principal of and interest on all or a portion of the Bonds as provided therein, if such insurance is determined by a Designated Representative to be in the best interest of the City. (d) Preliminary and Final Official Statements. The Finance Director is hereby authorized to ratify and to deem final the preliminary Official Statement relating to the Bonds for the purposes of the Rule. The Finance Director is further authorized to ratify and to approve for purposes of the Rule, on behalf of the City, the final Official Statement relating to the issuance and sale of the Bonds and the distribution of the final Official Statement pursuant thereto with such changes, if any, as may be deemed to be appropriate. -15- Section 11. Undertaking to Provide Ongoing Disclosure. The City covenants to execute and deliver at the time of Closing a Continuing Disclosure Certificate consistent with the Rule. Each Designated Representative is hereby authorized to execute and deliver a Continuing Disclosure Certificate upon the issuance, delivery and sale of the Bonds with such terms and provisions as such officer shall deem appropriate and in the best interest of the City. Section 12. Defeasance. In the event that money and/or noncallable Government Obligations, maturing at such time or times and bearing interest to be earned thereon in amounts (together with such money, if necessary) sufficient to redeem and retire part or all of the Bonds in accordance with their terms, are set aside in a special account of the City to effect such redemption and retirement, and such money and the principal of and interest on such Government Obligations are irrevocably set aside and pledged for such purpose, then no further payments need be made into the Bond Fund for the payment of the principal of and interest on the Bonds so provided for, and such Bonds shall cease to be entitled to any lien, benefit or security of this ordinance except the right to receive the money so set aside and pledged, and such Bonds shall be deemed not to be outstanding hereunder. The City shall give or cause to be given written notice of defeasance in accordance with the Continuing Disclosure Certificate. Section 13. Lost, Stolen or Destroyed Bonds. In case any Bond or Bonds shall be lost, stolen or destroyed the Bond Registrar may execute and deliver a new Bond or Bonds of like series, date, number and tenor to the Registered Owner thereof upon the Registered Owner's paying the expenses and charges of the City and the Bond Registrar in connection therewith and upon his/her filing and the City evidence satisfactory to the City that such Bond was actually lost, stolen or destroyed and of his/her ownership thereof, upon furnishing the City and/or the Bond Registrar with indemnity satisfactory to the City and the Bond Registrar. Section 14. Severability; Ratification. If any one or more of the covenants or agreements provided in this ordinance to be performed on the part of the City shall be declared by any court of competent jurisdiction to be contrary to law, then such covenant or covenants, agreement or agreements, shall be null and void and shall be deemed separable from the remaining covenants and agreements of this ordinance and shall in no way affect the validity of the other provisions of this ordinance or of the Bonds. All acts taken pursuant to the authority granted in this ordinance but prior to its effective date are hereby ratified and confirmed. Section 15. Corrections by Clerk. Upon approval of the City Attorney and Bond Counsel, the City Clerk is hereby authorized to make necessary corrections to this ordinance, including but not limited to the correction of clerical errors; references to other local, state or federal laws, codes, rules or regulations; ordinance numbering and section/subsection numbering; and other similar necessary corrections. -16- Section 16. Effective Date of Ordinance. This ordinance will become effective five days from and after its passage, approval and publication. PASSED by the City Council of the City of Auburn, Washington, at a regular meeting of the City Council held on September 21, 2020. SEP 1 4 zp, FIRST READING: SEP 2 1 2ud SECOND READING:. PASSED: P 2 1 2020 APPROVED: SEP 2 1 2020 CITY OF AUBURN, WASHINGTON cy Backus, Mayor ATTEST: Shawn Campbell, city Clerk APPROVED AS TO FORM: Pac. Ica Law Group LLP,Gon ounsel ILC.. -17- EXHIBIT A FORM OF BOND [DTC LANGUAGE] UNITED STATES OF AMERICA NO. $ STATE OF WASHINGTON CITY OF AUBURN LIMITED TAX GENERAL OBLIGATION REFUNDING BOND, 20201 ] INTEREST RATE: % MATURITY DATE: CUSIP NO.: REGISTERED OWNER: CEDE & Co. PRINCIPAL AMOUNT: NO/100 DOLLARS The City of Auburn, Washington (the "City"), hereby acknowledges itself to owe and for value received promises to pay to the Registered Owner identified above, or registered assigns, on the Maturity Date identified above, the Principal Amount indicated above and to pay interest thereon from , 20 , or the most recent date to which interest has been paid or duly provided for until payment of this bond at the Interest Rate set forth above, payable on 1, 20 , and semiannually thereafter on the first days of each succeeding and . Both principal of and interest on this bond are payable in lawful money of the United States of America. The fiscal agent of the State of Washington has been appointed by the City as the authenticating agent, paying agent and registrar for the bonds of this issue (the "Bond Registrar"). For so long as the bonds of this issue are held in fully immobilized form, payments of principal thereof and interest thereon shall be made as provided in accordance with the operational arrangements of The Depository Trust Company ("DTC") referred to in the Blanket Issuer Letter of Representations (the "Letter of Representations") from the City to DTC. The bonds of this issue are issued under and in accordance with the provisions of the Constitution and applicable statutes of the State of Washington and Ordinance No. duly passed by the City Council on , 2020 (the "Bond Ordinance"). Capitalized terms used in this bond have the meanings given such terms in the Bond Ordinance. This bond shall not be valid or become obligatory for any purpose or be entitled to any security or benefit under the Bond Ordinance until the Certificate of Authentication hereon shall have been manually signed by or on behalf of the Bond Registrar or its duly designated agent. This bond is one of an authorized issue of bonds of like series, date, tenor, rate of interest and date of maturity, except as to number and amount in the aggregate principal amount of $ and is issued pursuant to the Bond Ordinance to provide a portion of the funds necessary (a) to defease and refund certain limited tax general obligation bonds of the City, and (b) to pay costs of issuance and costs related to the administration of the refunding. [Simultaneously with the issuance of this bond, the City is also issuing its Limited Tax General Obligation Refunding Bonds, 20201 1 pursuant to the Bond Ordinance to defease and refund certain limited tax general obligation bonds of the City.] The City hereby irrevocably covenants and agrees with the owner of this bond that it will include in its annual budget and levy taxes annually, within and as a part of the tax levy permitted to the City without a vote of the electorate, upon all the property subject to taxation in amounts sufficient, together with other money legally available therefor, to pay the principal of and interest on this bond as the same shall become due on and after such date. The full faith, credit and resources of the City are hereby irrevocably pledged for the annual levy and collection of such taxes and the prompt payment of such principal and interest. [The City has further irrevocably pledged all Local Option Sales and Use Tax Revenues to the portion of the bonds of this issue allocable to refinancing the LRF Projects. The City further covenanted to impose the Local Option Sales and Use Tax, collect the Local Option Sales and Use Tax Revenues under and in accordance with RCW 82.14.505 and RCW 82.14.510, and apply Local Option Sales and Use Tax Revenues to pay debt service on the portion of the bonds of this issue allocable to refinance the LRF Projects. [The City has further irrevocably pledged certain real estate excise taxes to pay the principal of and interest on this bond.] The pledge of tax levies for payment of principal of and interest on the bonds may be discharged prior to maturity of the bonds by making provision for the payment thereof on the terms and conditions set forth in the Bond Ordinance. It is hereby certified that all acts, conditions and things required by the Constitution and statutes of the State of Washington to exist and to have happened, been done and performed precedent to and in the issuance of this bond exist and have happened, been done and performed and that the issuance of this bond and the bonds of this issue does not violate any constitutional, statutory or other limitation upon the amount of bonded indebtedness that the City may incur. IN WITNESS WHEREOF, the City of Auburn, Washington, has caused this bond to be executed by the manual or facsimile signatures of the Mayor and the City Clerk and the seal of the City imprinted, impressed or otherwise reproduced hereon as of this day of , .c. ,,,\ 2020. [SEAL] CITY OF AUBURN, WASHINGTON di. Byyi - Mayor ATTEST: _,,,,... , - '`s �L /s L City Clerk -2- The Bond Registrar's Certificate of Authentication on the Bonds shall be in substantially the following form: CERTIFICATE OF AUTHENTICATION This bond is one of the bonds described in the within-mentioned Bond Ordinance and is of the Limited Tax General Obligation Refunding Bonds, 20201 1, of the City of Auburn, Washington, dated , 2020. WASHINGTON STATE FISCAL AGENT, as Bond Registrar By -3- CERTIFICATE I, the undersigned, City Clerk of the City of Auburn, Washington, DO HEREBY CERTIFY: 1. That the attached is a true and correct copy of Ordinance Noci (the "Ordinance") of the City, duly passed at a regular meeting of the City Council (the "Council") of the City held on September 21, 2020. 2. That said meeting was duly convened and held in all respects in accordance with law, and to the extent required by law, including but not limited to Washington State Governor Inslee's emergency proclamation No. 20-28 issued on March 24, 2020, as amended and supplemented, temporarily suspending portions of the Open Public Meetings Act (chapter 42.30 RCW), due and proper notice of such meeting was given; that a legal quorum was present throughout the meeting and a legally sufficient number of members of the Council voted in the proper manner for the passage of said Ordinance; that all other requirements and proceedings incident to the proper passage of said Ordinance have been fully fulfilled, carried out and otherwise observed; and that I am authorized to execute this certificate. IN WITNESS WHEREOF, I have hereunto set my hand this 21st day of September, 2020. City Clerk