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HomeMy WebLinkAbout4638CITY OF AUBURN, WASHINGTON ORDINANCE NO. 4638 AN ORDINANCE of the City of Auburn, Washington, relating to contracting indebtedness; providing for the issuance of $995,000 par value of Limited Tax General Obligation Refunding Bonds, 1993, of the City to provide funds with which to pay the cost of refunding a portion of the City's outstanding Limited Tax General Obligation Bonds, 1982, and the costs of issuance and sale of the bonds; fixing the date, form, maturities, interest rates, terms and covenants of the bonds; establishing a bond redemption fund; providing for and authorizing the purchase of certain obligations out of the proceeds of the sale of the refunding bonds herein authorized and for the use and application of the money derived from those investments; authorizing the execution of a contract with Seattle-First National Bank of Seattle, Washington, as escrow agent; and approving the sale and providing for the delivery of the bonds to Seattle-Northwest Securities Corporation of Seattle, Washington. WHEREAS, pursuant to Ordinance No. 3802 passed September 7, 1982, the City of Auburn, Washington (the "City"), heretofore issued its Limited Tax General Obligation Bonds, 1982 (the "1982 Bonds"), in the original principal amount of $2,000,000, and by Section 7 of that ordinance the City reserved the right and option to redeem the 1982 Bonds maturing on or after October 1, 1993, on October 1, 1992, and on any interest payment date thereafter, at par plus accrued interest to the date fixed for redemption; and WHEREAS, there are presently outstanding $930,000 principal amount of 1982 Bonds maturing on October i of each of the years 1994 through 1997, inclusive, bearing interest at various rates from 9.00% to 9.30% (the "Refunded Bonds"); and WHEREAS, the City Council has determined that the Refunded Bonds may be refunded by the issuance and sale of the general obligation bonds authorized herein (the "Bonds") so that a substantial saving will be effected by the difference between the principal and interest costs over the life of the Bonds and the principal and interest costs over the life of the outstanding Refunded Bonds but for such refunding, which refunding will be effected by and (a) The issuance of the Bonds; and (b) The call, payment and redemption on October 1, 1993, of all the outstanding Refunded Bonds at a price of par plus accrued interest to the date of redemption; WHEREAS, to effect that refunding in the mannsr that will be most advantageous to the City and its taxpayers, the City Council finds it necessary and advisable that certain acquired obligations (hereinafter defined) bearing interest and maturing at the time or times necessary to accomplish the refunding as aforesaid be purchased out of the proceeds of the sale of the Bonds; and WHEREAS, the City Council has determined that it is necessary to issue and sell $995,000 par value of limited tax general obligation refunding bonds to provide the funds necessary to refund the Refunded Bonds and to pay the costs of the refunding and the issuance and sale of the Bonds, and Seattle-Northwest Securities Corporation has offered to purchase the Bonds under the terms and conditions hereinafter set forth; NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF AUBURN, WASHINGTON, DO ORDAIN as follows: Section 1. Debt Ca acit . The assessed valuation of the taxable property within the City as ascertained by the last -2- preceding assessment for City purposes for the calendar year 1993 is $2,368,432,000. The City has outstanding general indebtedness evidenced by (a) limited tax general obligation bonds and conditional sales contracts in the principal amount of $5,043,275 incurred within the limit of up to 3/4 of 1% of the value of the taxable property within the City permitted for general municipal purposes without a vote of the qualified voters therein, of which $930,000 will be refunded from the proceeds of the issuance and sale of the Bonds authorized herein, and (b) no unlimited tax general obligation bonds incurred within the limit of up to 2-1/2% of the value of the taxable property within the City for capital purposes only and unlimited tax general obligation bonds in the principal amount of $1,776,525 incurred within the additional limit of up to 2-1/2% of the value of the taxable property within the City for parks and open space purposes issued pursuant to a vote of the qualified voters of the City. The amount of indebtedness for which Bonds are authorized herein to be issued is $995,000. ~. Authorization of Bond~. The City shall borrow money on the credit of the City and issue negotiable limited tax general obligation refunding bonds evidencing that indebtedness in the amount of $995,000 for the purpose of providing the funds required to call, pay and redeem on October 1, 1993, all of the outstanding Refunded Bonds at a price of par plus accrued interest to the date of redemption (the "Refunding Plan"), and to pay the costs of the refunding and the issuance and sale of the Bonds. The general indebtedness to be incurred by the issuance of the Bonds shall be within the limit of up to 3/4 of 1% of the value of the 00~$$04.01 -3- taxable property within the City permitted for general municipal purposes without a vote of the qualified voters therein. Section 3. DescriDtion of Bonds. The Bonds shall be called Limited Tax General Obligation Refunding Bonds, 1993, of the City (the "Bonds"); shall be in the aggregate principal amount of $995,000; shall be dated September 1, 1993; shall be in the denomination of $5,000 or any integral multiple thereof within a single maturity; shall be numbered separately in the manner and with any additional designation as the Bond Registrar (collectively, the fiscal agencies of the State of Washington located in Seattle, Washington, and New York, New York) deems necessary for purposes of identification; shall bear interest at the rates set forth below (computed on the basis of a 360-day year of twelve 30-day months), payable on April 1, 1994, and semiannually thereafter on each October i and April 1; and shall mature on October 1 in years and amounts and bear interest at the rates per annum as follows: Maturity Principal Interest Rates 1994 $225,000 2.80% 1995 240,000 3.10 1996 255,000 3.40 1997 275,000 3.65 and Transfer of Bonflm. The Bonds Reaistration shall be issued only in registered form as to both principal and interest and recorded on books or records maintained by the Bond Registrar (the "Bond Register"). The Bond Register shall contain the name and mailing address of the owner of each Bond and the -4- principal amount and number of each of the Bonds held by each owner. Bonds surrendered to the Bond Registrar may be exchanged for Bonds in any authorized denomination of an equal aggregate principal amount and of the same interest rate and maturity. Bonds may be transferred only if endorsed in the manner provided thereon and surrendered to the Bond Registrar. Any exchange or transfer shall be without cost to the owner or transferee. The Bond Registrar shall not be obligated to exchange or transfer any Bond during the 15 days preceding any principal payment date. Section 5. Pa__a~__~of Bonds. 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 paid by checks or drafts of the Bond Registrar mailed on the interest payment date to the registered owners at the addresses appearing on the Bond Register on the 15th day of the month preceding the interest payment date. Principal of the Bonds shall be payable upon presentation and surrender of the Bonds by the registered owners at either of the principal offices of the Bond Registrar at the option of the owners. Section 6. Optional Redemption and Open Market Purchase of Bonds. The Bonds shall be issued without the right or option of the City to redeem the Bonds prior to their stated maturity dates. The City reserves the right and option to purchase any or all of the Bonds in the open market at any time at a Drice not in excess of par plus accrued interest to the date of purchase. Ail Bonds purchased under this section shall be cancelled. 00~5504,01 -5- ~. Failure to Redeem Bond~. If any Bond is not redeemed when properly presented at its maturity date, the City shall be obligated to pay interest on that Bond at the same rate provided in the Bond from and after its maturity until that Bond, both principal and interest, is paid in full or until sufficient money for its payment in full is on deposit in the bond redemption fund hereinafter created and the Bond has been called for payment by giving notice of that call to the registered owner of that unpaid Bond. Section 8. P ed e~×es. For as long as any of the Bonds are outstanding, the City irrevocably pledges to include in its budget and levy taxes annually within the constitutional and statutory tax limitations provided by law without a vote of the electors of the City on all of the taxable property within the City in an amount sufficient, together with other money legally available and to be used therefor, to pay when due the principal of and interest on the Bonds, and the full faith, credit and resources of the City are pledged irrevocably for the annual levy and collection of those taxes and the prompt payment of that principal and interest. t~gg_~_D_~. Form and Execution of BonS~. The Bonds shall be printed or lithographed on good bond paper in a form consistent with the provisions of this ordinance and state law, shall be signed by the Mayor and City Clerk, either or both of whose signatures may be manual or in facsimile, and the seal of the City or a facsimile reproduction thereof shall be impressed or printed thereon. -6- Only Bonds bearing a Certificate of Authentication in the following form, manually signed by the Bond Registrar, shall be valid or obligatory for any purpose or entitled to the benefits of this ordinance: CERTIFICATE OF AUTHENTICATION This bond is one of the fully registered City of Auburn, Washington, Limited Tax General Obligation Refunding Bonds, 1993, described in the Bond Ordinance. WASHINGTON STATE FISCAL AGENCY Bond Registrar By Authorized Signer The authorized signing of a Certificate of Authentication shall be conclusive evidence that the Bonds so authenticated have been duly executed, authenticated and delivered and are entitled to the benefits of this ordinance. If any officer whose facsimile signature appears on the Bonds ceases to be an officer of the City authorized to sign bonds before the Bonds bearing his or her facsimile signature are authenticated or delivered by the Bond Registrar or issued by the City, those Bonds nevertheless may be authenticated, delivered and issued and, when authenticated, issued and delivered, shall be as binding on the City as though that person had continued to be an officer of the City authorized to sign bonds. Any Bond also may be signed on behalf of the City by any person who, on the actual date of signing of the Bond, is an officer of the City authorized to sign bonds, although he or she did not hold the required office on the date of issuance of the Bonds. -7- or cause to be sufficient books B d Re istr . The Bond Registrar shall keep, keDt, at its Drincipal corporate trust office, for the registration and transfer of the Bonds which shall be open to inspection by the City at all times. The Bond Registrar is authorized, on behalf of the City, to authenticate and deliver Bonds transferred or exchanged in accordance with the provisions of the Bonds and this ordinance, to serve as the City's paying agent for the Bonds and to carry out all of the Bond Registrar,s powers and duties under this ordinance and City Ordinance No. 3905 establishing a system of registration for the City's bonds and obligations. The Bond Registrar representations contained in Authentication on the Bonds. shall be responsible for its the Bond Registrar's Certificate of The Bond Registrar may become the owner of Bonds 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 members of, or in any other capacity with respect to, any committee formed to protect the rights of Bond owners. ~. Preservation of Tax Exemption for Interest on Bonds. The City covenants that it will take all actions necessary to prevent interest on the Bonds from being included in gross income for federal income tax purposes, and it will neither take any action nor make or permit any use of proceeds of the Bonds or other funds of the City treated as proceeds of the Bonds at any time during the term of the Bonds which will cause interest on the Bonds to be included in gross income for federal income tax -8- purposes. The City certifies that it has not been notified of any listing or proposed listing by the Internal Revenue Service to the effect that it is a bond issuer whose arbitrage certifications may not be relied upon. Section 12. Small Governmental Issuer Arbitraqe Rebatn Exemption and Desianation of Bonds as "Oualified Tax-Exemu~ Obl~.,, The City finds and declares that (a) it is a duly organized and existing governmental unit of the State of Washington and has general taxing power; (b) no Bond which is part of this issue of Bonds is a "private activity bond" within the meaning of Section 141 of the United States Internal Revenue Code of 1986, as amended (the "Code"); (c) at least 95% of the net proceeds of the Bonds will be used for local governmental activities of the City (or of a governmental unit the jurisdiction of which is entirely within the jurisdiction of the City); (d) the aggregate face amount of all tax-exempt obligations (other than private activity bonds and other obligations not required to be included in such calculation) issued by the City and all entities subordinate to the City (including any entity which the City controls, which derives its authority to issue tax-exempt obligations from the City or which issues tax-exempt obligations on behalf of the City) during the calendar year in which the Bonds are issued is not reasonably expected to exceed $5,000,000; and (e) the amount of tax-exempt obligations, including the Bonds, designated by the City as "qualified tax-exempt obligations" for the purposes of Section 265(b) (3) of the Code during the calendar year in which the Bonds are issued does not exceed $10,000,000. The City therefore -9- certifies that the Bonds are eligible for the arbitrage rebate exemption under Section 148(f) (4) (D) of the Code and designates the Bonds as "qualified tax-exempt obligations,, for the purposes of Section 265(b) (3) of the Code. ~. Bo ds e ot'ab . The Bonds shall be negotiable instruments to the extent provided by RCW 62A.8-102 and 62A.8-105. Section 14. Advance Refunding or Defeasance of the Bondf. The City may issue advance refunding bonds pursuant to the laws of the State of Washington or use money available from any other lawful source to pay when due the principal of and interest on the Bonds, or any portion thereof included in a refunding or defeasance plan, and to redeem and retire, release, refund or defease all such then-outstanding Bonds (hereinafter collectively called the "defeased Bonds") and to pay the costs of the refunding or defeasance. If money and/or "government obligations,, (as defined in Chapter 39.53 RCW, as now or hereafter amended) maturing at a time or times and bearing interest in amounts sufficient to redeem and retire, release, refund or defease the defeased Bonds in accordance with their terms are set aside in a special trust fund irrevocably pledged to that redemption and retirement of defeased Bonds (hereinafter called the "trust account',), then all right and interest of the owners of the defeased Bonds in the covenants of this ordinance and in the funds and accounts obligated to the payment of the defeased Bonds shall cease and become void. The owners of defeased Bonds shall have the right to receive payment of the principal of and interest on the defeased Bonds from the trust account. The defeased Bonds shall be deemed no longer outstanding, 0095504.0! -10- and the City may apply any money in any other fund or account established for the payment or redemption of the defeased Bonds to any lawful purposes as it shall determine. Section 15. Bond Fund and DePosit of Bond Proceeds. There is created and established in the office of the Finance Director of the City a special fund designated as the Limited Tax General Obligation Refunding Bond Fund, 1993 (the "Bond Fund"). Accrued interest on the Bonds, if any, received from the sale and delivery of the Bonds shall be paid into the Bond Fund. All principal proceeds of the Bonds shall be deposited in accordance with the provisions of Section 16 of this ordinance. Ail taxes collected for and allocated to the payment of the principal of and interest on the Bonds shall be deposited in the Bond Fund. Sei~. Refundina of the Refunded Bond~. (a) Appointment of Escrow Aqent. Seattle-First National Bank of Seattle, Washington, is appointed the Escrow Agent. (b) Acuuisition of Acauired Obliaation~. All of the proceeds of the sale of the Bonds, except for the accrued interest received, if any, which shall be deposited in the Bond Fund, shall be deposited immediately upon the receipt thereof with the Escrow Agent to discharge the obligation of the City to carry out the Refunding Plan by providing for the payment of the amounts required to be paid by the Refunding Plan. To the extent practicable, such obligations simultaneous Indebtedness other shall be discharged fully by the Escrow Agent's purchase of United States Treasury Certificates of and/or Notes--State and Local Government Series or direct, noncallable obligations of the United States of 0095504.01 -11- required to independent accountants. America (the "Acquired Obligations"), bearing such interest and maturing as to principal and interest in such amounts and at such times so as to provide, together with a beginning cash balance, if necessary, for the payment of the amounts required to be paid by the Refunding Plan. The Acquired Obligations are listed and more particularly described in Schedule A attached to the Refunding Escrow Agreement between the City and the Escrow Agent, but are subject to substitution as set forth below. (c) Substitution of Acouired Obligation-. Prior to the purchase of any such Acquired Obligations, the City reserves the right to substitute other direct, noncallable obligations of the United States of America ("Government Obligations,,) for any of the Acquired Obligations and to use any savings created thereby for any lawful city purpose if, (a) in the opinion of Foster Pepper & Shefelman, the City's bond counsel, the interest on the Bonds will remain excluded from gross income for federal income tax purposes under Sections 103, 148 and 149(d) of the Code, and (b) such substitution shall not impair the timely payment of the amounts be paid by the Refunding Plan, so verified by an nationally recognized firm of certified public After the purchase of the Acquired Obligations by the Escrow Agent, the City reserves the right to substitute therefor cash or Government Obligations subject to the conditions that such money or securities held by the Escrow Agent shall be sufficient to carry out the Refunding Plan, that such substitution will not cause the Bonds to be arbitrage bonds within the meaning of Section 148 of -12- the Code and regulations thereunder in effect on the date of such substitution and applicable to obligations issued on the issue date of the Bonds, and that the City obtain, at its expense: (1) verification by an independent nationally recognized firm of certified public accountants acceptable to the Escrow Agent confirming that the payments of principal of and interest on the substitute Acquired Obligations, if paid when due, and any other money held by the Escrow Agent will be sufficient to carry out the Refunding Plan; and (2) an opinion from Foster Pepper & Shefelman, bond counsel to the City, its successor, or other nationally recognized bond counsel to the City, to the effect that the disposition and substitution or purchase of such securities, under the statutes, rules and regulations then in force and applicable to the Bonds, will not cause the interest on the Bonds or the Refunded Bonds to be included in gross income for federal income tax purposes and that such disposition and substitution or purchase is in compliance with the statutes and regulations applicable to the Bonds. Any surplus money resulting from the sale, transfer, other disposition or redemption of the Acquired Obligations and the substitutions therefor shall be released from the trust estate and transferred to the City to be used for any lawful City purpose. (d) Administration of Refundinq Plan. The Escrow Agent is authorized and directed to purchase the Acquired Obligations (or substitute obligations) and to make the payments reguired to be made by the Refunding Plan from the Acquired Obligations (or substitute obligations) and money deposited with the Escrow Agent pursuant to this ordinance. All Acquired Obligations (or -13- substitute obligations) and the money deposited with the Escrow Agent and any income therefrom shall be held irrevocably, invested and applied in accordance with the provisions of Ordinance No. 3802, this ordinance, Chapter 39.53 RCW and other applicable statutes of the State of Washington, and the Refunding Escrow Agreement. Ail necessary and proper fees, compensation and expenses of the Escrow Agent for the Bonds and all other costs incidental to establishing the escrow to accomplish the refunding of the Refunded Bonds and costs related to the issuance and delivery of the Bonds, including bond printing, rating service fees, verification fees, bond counsel's fees and other related expenses, shall be paid out of the proceeds of the Bonds. (e) Authorization for Refunding Escrow AGreement. To carry out the Refunding Plan provided for by this ordinance, the Mayor or Finance Director is authorized and directed to execute and deliver to the Escrow Agent a Refunding Escrow Agreement substantially in the form on file with the City Clerk and by this reference made a part hereof, setting forth the duties, obligations and responsibilities of the Escrow Agent in connection with the payment, redemption and retirement of the Refunded Bonds as provided herein and stating that the provisions for payment of the fees, compensation and expenses of the Escrow Agent set forth therein are satisfactory to it. Prior to executing the Refunding Escrow Agreement, the Mayor or Finance Director is authorized to make such changes therein which do not change the substance and purpose thereof or which assure that the escrow provided therein and the Bonds are in compliance with the requirements of federal -14- law governing the exclusion of interest on the Bonds from gross income for federal income tax purposes. ~. Call for Redemption of the Refunded Bonds. The City has called for redemption on October 1, 1993, all of the Refunded Bonds at par plus accrued interest. Such call for redemption shall be irrevocable after the delivery of the Bonds to the initial purchaser thereof. The date on which the Refunded Bonds are called for redemption is the earliest date on which those Refunded Bonds may be called for redemption. The City Council ratifies, approves and confirms the giving of such notices at the times and in the manner required by Ordinance No. 3802 in order to effect the redemption prior to their maturities of the Refunded Bonds. ~. City Findinos with Respect to Refunding. The City Council finds and determines that the issuance and sale of the Bonds at this time will effect a saving to the City and its taxpayers and is in the best interest of the City and in the public interest. In making such finding and determination, the City Council has given consideration to the fixed maturities of the Bonds and the Refunded Bonds, the costs of issuance of the Bonds and the known earned income from the investment of the proceeds of the issuance and sale of the Bonds and other money of the City used in the Refunding Plan pending payment and redemption of the Refunded Bonds. The City Council further finds and determines that the money to be deposited with the Escrow Agent for the Refunded Bonds in accordance with Section 16 of this ordinance, together with known 00~5504.01 -15- earned income from the investments thereof, will be sufficient to carry out the Refunding Plan and discharge and satisfy the obligations of the City under Ordinance No. 3802 with respect to the Refunded Bonds and the pledges, charges, trusts, covenants and agreements of the City therein made or provided for as to the Refunded Bonds and that the Refunded Bonds shall no longer be deemed to be outstanding under such ordinance immediately upon the deposit of such money with the Escrow Agent. ~. ADDroval of Bond Purchase Contract. Seattle- Northwest Securities Corporation of Seattle, Washington, has presented a purchase contract dated September 7, 1993 (the "Bond Purchase Contract"), to the City offering to purchase the Bonds under the terms and conditions provided in the Bond Purchase Contract, which written Bond Purchase Contract is on file with the City Clerk and is incorporated herein by this reference. The City Council finds that entering into the Bond Purchase Contract is in the City,s best interest and therefore accepts the offer contained therein and authorizes its execution by City officials. The Bonds will be printed at City expense and will be delivered to the purchaser in accordance with the Bond Purchase Contract, with the approving legal opinion of Foster Pepper & Shefelman, municipal bond counsel of Seattle, Washington, regarding the Bonds printed on each Bond. Bond counsel shall not be required to review and shall express no opinion concerning the completeness or accuracy of any official statement, offering circular or other sales material issued or used in connection with the Bonds, and bond counsel's opinion shall so state. 0~95504.0! -16- The proper City officials are authorized and directed to do everything necessary, including reviewing and executing the final official statement, for the prompt delivery of the Bonds to the purchaser and for the proper application and use of the proceeds of the sale thereof. ~. Preliminary Official Statement Deemed "Final',. The City Council has been provided with copies of a preliminary official statement dated August 25, 1993 (the "Preliminary Official Statement',), prepared in connection with the sale of the Bonds. For the sole purpose of the purchaser,s compliance with Securities and Exchange Commission Rule 15c2-12(b)(1), the City "deems final" that Preliminary Official Statement as of its date, except for the omission of information as to offering prices, interest rates, selling compensation, aggregate principal amount, principal amount per maturity, maturity dates, options of redemption, delivery dates, ratings, and other terms of the Bonds dependent on such matters. Section 21. Tem orar Bond. Pending the printing, execution and delivery to the purchaser of definitive Bonds, the City may cause to be executed and delivered to the purchaser a single temporary Bond in the total principal amount of the Bonds. The temporary Bond shall bear the same date of issuance, interest rates, principal payment dates and terms and covenants as the definitive Bonds, shall be issued as a fully registered Bond in the name of the purchaser, and otherwise shall be in a form acceptable to the purchaser. The temporary Bond shall be exchanged for -17- ,/ definitive Bonds as soon as they are Printed, executed and available for delivery, ~lhtgJl._~. ~. All actions heretofore taken by the city consistent ~ith the provisions of this ordinance ara ra~ifted and confirmed. ~C-~k~_~. Kffective Date of Ordinanc.__.. This ordinance shall take effect and be in force from and after its passage and five (5) days following its publication aa required by law. Mayor ATTEST: y Clerk APPROVED AS TO FORM: for ~he Citysel and Bond Counsei PUBLISHED: ~_~-/~ ~ -18-