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
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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
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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
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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.
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~. 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.
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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.
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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
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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
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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,
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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
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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
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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
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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
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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
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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.
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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
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,/
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: ~_~-/~ ~
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