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HomeMy WebLinkAboutORD 5020Amends Ordinance No. 5019 CITY OF RENTON, WASHINGTON ORDINANCE NO. 5020 AN ORDINANCE OF THE CITY OF RENTON, WASHINGTON, AMENDING ORDINANCE NO. 5019 OF THE CITY TO AMEND SECTION 18 TO DESIGNATE THE BONDS AS "QUALIFIED TAX- EXEMPT OBLIGATIONS" FOR PURPOSES OF SECTION 265 OF THE INTERNAL REVENUE CODE; AND DECLARING AN EMERGENCY AND ESTABLISHING AN IMMEDIATE EFFECTIVE DATE OF THIS ORDINANCE WHEREAS, pursuant to Ordinance No. 5019, passed by the City Council and approved by the Mayor on September 22, 2003, the City authorized the issuance and sale of its Water and Sewer Revenue Refunding Bonds, 2003 (the "Bonds") for the purpose of providing a part of the funds necessary to refund, on a current basis, and defease all of the City's outstanding Water and Sewer Refunding and Improvement Revenue Bonds, 1993, to advance refund and defease all of the City's outstanding Water and Sewer Revenue Bonds, 1994, and to pay the costs related to the sale and issuance of the Bonds; and WHEREAS, the Bonds will bring a significant debt service savings to the City; and WHEREAS, the Bonds were intended to be "qualified tax-exempt obligations" under Section 265 of the Code, were so described in the Preliminary Official Statement pertaining to the Bonds, dated September 10, 2003, were priced on this basis, and financial institutions have committed to purchase the Bonds on this basis at interest rates favorable to the City; and WHEREAS, the City has represented in the Bond Purchase Agreement, dated September 22, 2003, between D.A. Davidson & Co., that the information in the Preliminary Official Statement is true and correct; and ORDINANCE NO. 5020 WHEREAS, unless the amendments set forth in this Ordinance are in effect prior to the closing scheduled for September 30, 2003, the Bonds will not be designated as "qualified tax- exempt obligations," which will imperil the closing of the Bonds and put the City at risk; and WHEREAS, there is insufficient time for this Ordinance to become effective in the ordinary course of business prior to the closing and the only way for this ordinance to become effective prior to such closing is through the declaration of this emergency; and WHEREAS, it is in the best interests of the City to amend Ordinance No. 5019 to designate the Bonds as "qualified tax-exempt obligations" for purposes of Section 265 of the Internal Revenue Code of 1986, as amended (the "Code") and declare an emergency to ensure that the Bonds are issued and delivered at the most favorable interest rate and without risk to the City. NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF RENTON, WASHINGTON, DO ORDAIN AS FOLLOWS: Section I. Section 18 of Ordinance No. 5019 is amended in its entirety as follows: Section 18. No Private Activity Bonds; Bank Qualification. The City covenants that it will take no actions and will make no use of the proceeds of the Bonds or any other funds held under this ordinance which would cause any Bond to be treated as a "private activity bond" (as defined in Section 141(b) of the Code) subject to treatment under said Section 141(b) as an obligation not described in Section 103(a) of the Code, unless the tax exemption thereof is not affected. The City covenants that it will not issue more than $10,000,000 of "qualified tax-exempt obligations," as defined in Section 265 of the Code (relating to the deduction by financial 2 ORDINANCE NO. 5020 institutions of a portion of the interest incurred to carry tax-exempt debt) during calendar year 2003. The City hereby designates the Bonds as "qualified tax-exempt obligations" for such purposes and authorizes and directs the proper City officials to execute and deliver all documents necessary to evidence such designation to any and all interested parties. Section II. In all other respects, Ordinance No. 5019 shall remain in full force and effect and shall not be amended or modified hereby. Section III. Declaration of Emergency - Effective Date. This ordinance, being the exercise of a power specifically delegated to the legislative body of the City, is not subject to referendum. The City Council hereby declares, pursuant to RCW 35A.12.130 and Renton Municipal Code Section l-2-2(B), that an emergency exists necessitating that this ordinance take effect immediately in order to preserve the public health, safety, property, peace, and for the support of city government and its existing public institutions. Based upon the foregoing declaration of emergency, this Ordinance shall become effective immediately upon passage by the City Council. ORDINANCE NO. 5020 PASSED BY THE CITY COUNCIL this 29th day of September, 2003. Bonnie Walton, City Clerk •fA APPROVED BY THE MAYOR this ^_ day of September, 2003. Jesse Tarmer, Mayor Approved as to Form: Judith Andrews, Bond Counsel Date of Publication: 10/3/2003 (Summary)