HomeMy WebLinkAbout4169
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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
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"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
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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
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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
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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
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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.
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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
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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
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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
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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
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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
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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,
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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
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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:
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City Attorney
PUBLISHED:
NOVEMBER 23, 1986
1427a
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