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HomeMy WebLinkAbout4169 , , . . " . ~. " ORDINANCE NO. 4169 AN ORDINANCE OF THE CITY OF AUBURN, WASHINGTON, RELATING TO CONTRACTING INDEBTEDNESS; PROVIDING FOR THE ISSUANCE, SPECIFYING THE MATURITIES, MAXIMUM EFFECTIVE INTEREST RATE, TERMS AND COVENANTS OF $7,675,000 PAR VALUE OF UNLIMITED TAX GENERAL OBLIGATION BONDS, 1986, AUTHORIZED BY THE QUALIFIED VOTERS OF THE CITY AT A SPECIAL ELECTION HELD THEREIN PURSUANT TO ORDINANCES NOS. 4128 AND 4137; ESTABLISH- ING A BOND REDEMPTION FUND AND TWO CONSTRUCTION FUNDS; AND PROVIDING FOR THE SALE OF SUCH BONDS. WHEREAS, the City of Auburn, Washington (the "City"), pursuant to Ordinances Nos. 4128 and 4137, provided for submis- sion to the voters of the City at a special election held therein on September 16, 1986, the questions of whether the City should construct and develop approximately 60 acres of park land and associated recreational facilities at the Auburn Game Farm and Green River parks at an estimated cost of $2,970,000 and reconstruct and improve various streets within the City at an estimated cost of $4,705,000, respectively, and such proposi- tions were approved by the requisite number of voters voting at such special election; NOW THEREFORE, THE CITY COUNCIL OF THE CITY OF AUBURN, WASHINGTON, DO ORDAIN AS FOLLOWS: Section 1. The City shall presently issue and sell the total $7,675,000 par value of negotiable general obligation bonds authorized by the qualified voters of the City at a special election held on September 16, 1986, pursuant to Ordinances Nos. 4128 and 4137, as a single combined issue for the purpose of constructing and developing approximately 60 acres of park land and associated recreational facilities at the Auburn Game Farm and Green River parks and reconstructing and improving various streets within the City. The bonds shall be designated Unlimited Tax General Obligation Bonds, 1986 (the , . ,', "Bonds"), of the City; shall be dated December 1, 1986; 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 rate or rates specified in the successful bid for the Bonds (computed on the basis of a 360-day year of twelve 30-day months), but not in excess of an effective rate of 9% per annum, payable on December 1, 1987, and semiannually thereafter on each succeeding June 1 and December 1. The Bonds shall mature in the following amounts on December 1 of each of the following years (such maturity schedule being computed at an assumed interest rate of 9% per annum): Matur i ty Years Amounts 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 $ 250,000 430,000 500,000 560,000 625,000 700,000 780,000 1,170,000 1,290,000 1,370,000 If any Bond is not redeemed upon proper presentment at its maturity or call date, the City shall be obligated to pay interest at the same rate for each such Bond from and after its maturity or call date until such Bond, both principal and interest, is paid in full or until sufficient money for such payment in full is on deposit in the bond redemption fund hereinafter created and such Bond has been called for payment. The Bonds shall be issued only in registered form as to both principal and interest and recorded in the books and - 2 - · . 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 principal amounts and numbers of Bonds held by each owner. Upon surrender thereof to the Bond Registrar, the Bonds 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. Such exchange or transfer shall be without cost to the owner or transferee. The Bond Registrar shall not be obligated to transfer or exchange any Bond during the fifteen days preceding any principal or redemption date. 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 check or draft mailed to the registered owners at the addresses appearing on the Bond Register on the fifteenth 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 office of the Bond Registrar at the option of such owners. Bonds maturing in the years 1987 through 1992, inclusive, shall be issued without the right or option of the City to redeem the same prior to their stated maturities. The City reserves the right and option to redeem the Bonds maturing on or after December 1, 1993, as a whole, or in part in inverse order of maturity (and by lot within a maturity in such manner as the Bond Registrar shall determine), on December 1, 1992, and on any interest payment date thereafter, at par plus accrued interest to the date of redemption. Portions of the principal amount of - 3 - any Bond, in installments of $5,000 or any integral multiple of $5,000, may be redeemed. If less than all of the principal amount of any Bond is redeemed, upon surrender of such Bond at the principal office of the Bond Registrar, there shall be issued to the registered owner, without charge therefor, a new Bond (or Bonds at the option of the registered owner) of like maturity and interest rate in any of the denominations author- ized by this ordinance. Notice of any such intended redemption shall be given not less than 30 nor more than 60 days prior to the date fixed for redemption by first-class mail, postage prepaid, to the regis- tered owner of any Bond to be redeemed at the address appearing on the Bond Register. The requirements of this section shall be deemed to be complied with when notice is mailed as herein provided, whether or not it is actually received by the owner of any Bond. The interest on the Bonds so called for redemption shall cease on the date fixed for redemption unless such Bond or Bonds so called are not redeemed upon presentation made pursuant to such call. In addition, such redemption notice shall be mailed within the same period, postage prepaid, to Moody's Investors Service, Inc., and Standard & Poor's Corporation at their offices in New York, New York, or their successors, and to the successful purchaser of the Bonds at its main office, or its successor, but such mailing shall not be a condition precedent to the redemption of such Bonds. The City further reserves the right and option to purchase any or all of the Bonds in the open market at any time at a price not in excess of par plus accrued interest to the date of such purchase. Section 2. The City pledges irrevocably to include in its budget and to levy taxes annually, without limitation as to rate - 4 - · ' or amount, on all property in the City subject to taxation in an amount sufficient, together with other money legally available and to be used therefor, to pay the principal of and interest on the Bonds as the same shall become due, 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. Section 3. The Bonds shall be printed or lithographed on good bond paper ln a form consistent with the provisions of this ordinance and state law, shall be signed by the Mayor and City Clerk, both of whose signatures shall be in facsimile, and a facsimile reproduction of the seal of the City shall be printed thereon. Only such Bonds as shall bear thereon a Certificate of Authentication in the following form, manually executed 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, Unlimited Tax General Obligation Bonds, 1986, described in the Bond Ordinance. WASHINGTON STATE FISCAL AGENCY Bond Registrar By Authorized Officer 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. In case either or both of the officers whose facsimile signatures appear on the Bonds shall cease to be such officer or officers of the City before the Bonds so signed shall have been authenticated or delivered by the Bond Registrar or issued by - 5 - the City, such Bonds nevertheless may be authenticated, deliv- ered and issued and upon such authentication, delivery and issue, shall be as binding upon the City as though those whose facsimile signatures appear on the Bonds had continued to be such officers of the City. Any Bond also may be signed on behalf of the City by such persons as at the actual date of execution of such Bond shall be proper officers of the City authorized to execute bonds although on the original date of such Bond such persons were not such officers of the City. Section 4. The Bond Registrar shall keep, or cause to be kept, at its principal corporate trust office, sufficient books for the registration and transfer of the Bonds which shall at all times be open to inspection by the City. 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, 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 shall be responsible for its represen- tations contained in the Bond Registrar's Certificate of Authentication on the Bonds. 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. Section 5. The Bonds shall be negotiable instruments to the extent provided by RCW 62A.8-102 and 62A.8-105. - 6 - Section 6. The City covenants that it will neither make nor permit any use of proceeds of the Bonds or other funds of the City at any time during the term of the Bonds which will cause the Bonds to be arbitrage bonds within the meaning of Section 148 of the United States Internal Revenue Code of 1986 and applicable regulations promulgated thereunder. Further, the City covenants that, if all proceeds of the Bonds have not been spent within six months from the date of issuance of the Bonds, it will calculate, or cause to be calculated, and rebate to the United States all earnings from the investment of Bond proceeds that are in excess of the amount that would have been earned had the yield on such investments been equal to the yield on the Bonds, plus all income derived from such excess earnings, to the extent and in the manner required by Section 148 of such Code and such applicable regulations. In the event the City shall fail to meet the rebate requirements applicable to the Bonds under Section 148 of such Code, the City covenants that, to the extent permitted by that Section, it shall pay the penalty provided in Subsection 148(f)(7)(C) if required to prevent a loss of the tax exemption for interest on the Bonds. The City has not been notified of any listing or proposed listing by the Internal Revenue Service to the effect that the City is a bond issuer whose arbitrage certifications may not be relied upon. Section 7. 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 the principal of and interest on the Bonds, or such portion thereof included in a refunding or defeasance plan, as the same become due and payable and to redeem and retire or refund all such then-outstanding Bonds (hereinafter collectively called the "defeased Bonds") and - 7 - to pay the costs of such refunding or defeasance. In the event that money and/or "government obligations," as such obligations are defined in Chapter 39.53 RCW, as now or hereafter amended, maturing at such time or times and bearing interest thereon, in amounts (together with such money, if necessary) sufficient to redeem and retire or refund the defeased Bonds in accordance with their terms, are set aside irrevocably in a special fund for and are pledged irrevocably to such redemption and retire- ment (hereinafter called the "trust account"), then all right and interest of the owners of the defeased Bonds in the cove- nants of this ordinance and, except as hereinafter provided, in the funds and accounts obligated to the payment of such defeased Bonds thereafter shall cease and become void. Such owners thereafter shall have the right to receive payment of the principal of and interest on the defeased Bonds from the trust account, and the defeased Bonds shall be deemed not to be outstanding hereunder. Anything herein to the contrary notwith- standing, the pledge of the full faith, credit and taxing power of the City to the payment of the Bonds shall remain in full force and effect after the establishing and full funding of the trust account. Subject to the rights of the owners of the Bonds, the City may then 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 8. There is created and established in the office of the City Finance Director a special fund to be known and designated as the Unlimited Tax General Obligation Bond Fund, 1986 (the "Bond Fund"). The accrued interest received, if any, upon the sale and delivery of the Bonds shall be paid into the Bond Fund. There also is created and established in the office of the City Finance Director two special funds of the City to be - 8 - · . known and designated as Fund No. 324, 1986 Parks Construction, and Fund No. 325, 1986 Street Improvement Construction. $2,970,000 of principal proceeds (less allocable discount or plus allocable premium, if any) received from the sale and delivery of the Bonds shall be paid into Fund No. 324, 1986 Parks Construction, and used for the park purposes specified in Section 1 of this ordinance and to pay the costs of issuance and sale of the Bonds attributable to such purposes. $4,705,000 of principal proceeds (less allocable discount or plus allocable premium, if any) received from the sale and delivery of the Bonds shall be paid into Fund No. 325, 1986 Street Improvement Construction, and used for the street purposes specified in Section 1 of this ordinance and to pay the allocable costs of issuance and sale of the Bonds. Pending the expenditure of such principal proceeds, the City may temporarily invest such proceeds in any legal investment and the investment earnlngs may be retained in the respective construction funds and spent for the purposes of such funds. All taxes collected for and allocated to the payment of the principal of and interest on the Bonds shall hereafter be deposited in the Bond Fund. Section 9. The City has determined and certifies that (a) the Bonds are not "private activity bonds" within the meaning of Section 141 of the Internal Revenue Code of 1986; (b) the reasonably anticipated amount of tax-exempt obligations (other than private activity bonds) which the City and any entity subordinate to the City (including any entity which the City controls or which derives its authority to issue tax-exempt obligations from the City) will issue during the calendar year in which the Bonds are issued will not exceed $10,000,000; and (c) the amount of tax-exempt obligations, including the Bonds, designated as "qualified tax-exempt obligations" for the - 9 - purposes of Section 265(b)(3) of the Internal Revenue Code of 1986 or any predecessor provision of federal law by the City during the calendar year in which the Bonds are issued does not exceed $10,000,000. The City designates the Bonds as "qualified tax-exempt obligations" for the purposes of Section 265(b)(3) of the Internal Revenue Code of 1986. Section 10. The Bonds shall be sold for cash at public sale for not less than 98.75% of par plus accrued interest to of delivery of and payment for the Bonds. City Clerk is authorized to give notice calling for purchase the Bonds by publishing a short abbreviated form of such notice once in The Seattle Daily Journal of Commerce and Northwest Construction Record of Seattle, Washington, the Daily Bond Buyer of New York, New York, and the Valley Daily News of Auburn, Washington, at least ten days prior to the sale date. Such notice shall specify that sealed bids for the purchase of the Bonds shall be received by the City Clerk in the offices of Roberts & Shefelman, 4100 Seafirst Fifth Avenue Plaza, 800 Fifth Avenue, Seattle, Washington, on December 8, 1986, up to 12:00 noon, local time, at which time all bids will be publicly opened and read and an award made by the City Council at a special meeting to be held in the City Council Chambers commencing at 7:30 p.m., local time, on the same date. Bids shall be invited for the purchase of the Bonds with fixed maturities in accordance with the schedule specified in Section 1 hereof. The notice shall specify the maximum effective rate of interest the Bonds shall bear, namely, 9% per annum, and shall require each bidder to submit a bid specifying the lowest net the date The bids to - 10 - effective interest rate at which the bidder will purchase the Bonds and the total interest cost over the life of the Bonds. No bid will be considered for the Bonds for less than 98.75% of par plus accrued interest or for less than the entire issue. The purchaser must pay accrued interest to the date of delivery of the Bonds. Interest rates shall be in multiples of 1/8 or 1/20 of 1%, or both. No more than one rate of interest may be fixed for any one maturity. The maximum differential between the lowest and highest interest rates named in any bid shall not exceed 3%. For the purpose of comparing the bids only, the lowest net effective interest rate bid being controlling, each bid shall state the total interest cost over the life of the Bonds and the net effective interest rate of the bid. The Bonds shall be sold to the bidder making the best bid, subject to the right of the city Council to reject any and all bids and to readvertise the Bonds for sale or otherwise sell the Bonds, and no bid for less than all of the Bonds shall be considered. The City further reserves the right to waive any irregularity in any bid or in the bidding process. All bids shall be sealed and shall be accompanied by a deposit of $383,750. The deposit shall be by either certified or cashier's check made payable to the City Finance Director and shall be returned promptly if the bid is not accepted. The City reserves the right to invest the good faith deposit of the purchaser pending the payment for the Bonds. The purchaser shall not be credited for such earnings. If the Bonds are ready for delivery and the successful bidder shall fail or neglect to complete the purchase of the Bonds within forty days following the acceptance of its bid, the amount of its deposit shall be forfeited to the City and in that event the City may accept the - 11 - , . bid of the one making the next best bid. If there are two or more equal bids for not less than 98.75% of par plus accrued interest and such bids are the best bids received, the City Council shall determine by lot which bid shall be accepted. The Bonds will be delivered to the successful bidder upon payment of the purchase price plus accrued interest to the date of deliv- ery, less the amount of the good faith deposit, in Seattle, Washington, at the City's expense, or at such other place upon which the City Finance Director and the successful bidder may mutually agree at the purchaser's expense. Settlement shall be made in federal funds immediately available at the time of delivery of the Bonds. A no-litigation certificate and official statement certificate in the usual forms will be included in the closing papers. CUSIP numbers will be printed on the Bonds, if requested in the bid of the successful bidder, but neither failure to print such numbers on any bond nor error with respect thereto shall constitute cause for a failure or refusal by the purchaser thereof to accept delivery of and pay for the Bonds in accord- ance with the terms of the purchase contract. All expenses in relation to the printing of CUSIP numbers on the Bonds shall be paid by the City, but the fee of the CUSIP Service Bureau for the assignment of those numbers shall be the responsibility of and shall be paid by the purchaser. Any bid presented after the time specified for the receipt of bids will not be received, and any bid not accompanied by the required bid deposit at the time of opening will not be read or considered. If, prior to the delivery of the Bonds, the interest receivable by the owners thereof shall become taxable, directly or indirectly (other than under any alternative minimum tax, - 12 - · . environmental tax or reductions of tax deductions of property and casualty insurance companies), by the terms of any federal income tax law, the successful bidder, at its option, may be relieved of its obligation to purchase the Bonds, and in such case the deposit accompanying its bid will be returned, without interest. The notice of bond sale shall provide that the City will cause the Bonds to be printed or lithographed and signed and will furnish the approving legal opinion of Roberts & Shefelman, bond counsel of Seattle, Washington, covering the Bonds without cost to the purchaser, the opinion also being 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 (except for the description of the Bonds in the official statement), and bond counsel's opinion shall so state. Such notice also shall provide that further information regarding the details of the Bonds may be received upon request made to the City Clerk or to Yeasting & Hughes Associates - Municipal Advisors, the City's financial consultant. Section 11. Pending the printing, execution and delivery to the purchaser of the definitive Bonds, the City may cause to be executed and delivered to such purchaser a single temporary Bond in the principal amount of $7,675,000. Such temporary Bond shall bear the same date of issuance, interest rates, principal payment dates and terms and covenants as the definitive Bonds, and shall be issued as a fully registered Bond in the name of such purchaser, and shall be in such form as acceptable to such purchaser. Such temporary Bond shall be exchanged for the - 13 - · , definitive Bonds as soon as the same are printed, authenticated and available for delivery. Section 12. The appropriate officers of the City are authorized to execute such documents, including the official statement, and perform such other requirements as may be necessary to effect the delivery of the Bonds to the successful purchaser thereof. Section 13. This ordinance shall take effect and be in force five (5) days from and after its passage, approval and publication as provided by law. INTRODUCED: NOVEMBER 17, 1986 PASSED: NOVFMRFR 17, 1qAfi 1986 ATTEST: ß¡µ~)W~L City Clerk AS TO FORM: i ({J~ City Attorney PUBLISHED: NOVEMBER 23, 1986 1427a - 14 -