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Home My WebLink AboutLimited Tax Obligation Refunding Bonds, Series 2015A & Series 2015B (Taxable) - 2015CITY OF RENTON, WASHINGTON LIMITED TAX GENERAL OBLIGATION REFUNDING BONDS, SERIES 2015A - $8,825,000 AND LIMITED TAX GENERAL OBLIGATION REFUNDING BONDS, SERIES 2015B (TAXABLE) - $3,695,000 Bonds Dated: May 13, 2015 Opinions Dated: May 13, 2015 PACIFICA LAW GROUP LLP 1191 2nd Avenue, Suite 2000 Seattle, Washington 98101-3404 CITY OF RENTON, WASHINGTON LIMITED TAX GENERAL OBLIGATION REFUNDING BONDS, SERIES 2015A - $8,825,000 and LIMITED TAX GENERAL OBLIGATION REFUNDING BONDS, SERIES 2015B (TAXABLE) - $3,695,000 RECORD OF PROCEEDINGS Organizational Documents 1.Certificate for Transcript 2.Certificate of the Director of King County Department of Elections stating the names and terms of office of the present Mayor and members of the City Council 3.Certificate of the Mayor stating the names of the Finance and Information Services Administrator and City Clerk 4.Certified copy of proceedings of the City Council last fixing the time, date and place of regular meetings of the City Council 5.Certificate of the City Clerk stating the official newspaper of the City 6.Certificate regarding assessed valuation of the City 7.Certificate of the Finance and Information Services Administrator as to the outstanding indebtedness of the City, including any lease-purchase or conditional sale contracts and any general obligation debt 8.Bond Counsel’s Calculation of Debt Limit Authorization of Bond 9.Certified copy of Ordinance No. 5754 passed on April 13, 2015 (the "Bond Ordinance") 10.Certified copy of the minutes of the meeting of the City Council held on April 6, 2015, showing the first reading of the Bond Ordinance 11.Certified copy of the minutes of the meeting of the City Council held on April 13, 2015, showing the second reading and passage of the Bond Ordinance 12.Affidavit of publishing a summary of the Bond Ordinance 13.Bond Purchase Contract 14. 15. 16. 17. Rating letter Refunding Documents Preliminary Official Statement Official Statement Rule 15c2-12 Certificate of the Finance and Information Services Administrator 18.Escrow Deposit Agreement between the City and U.S. Bank National Association (the "Escrow Agent") Certificate and Receipt of Escrow Agent Request for Defeasance Escrow prepared by Causey, Demgen & (the "Bidding Agent") Defeasance Escrow Portfolio of open market securities purchases Copies of the bids received in response to the request for bids for the open market securities 23. Escrow Verification from Grant Thornton LLP Closing Documents 24. 25. 26. 27. 28. Moore P.C. 29. 30. 31. Certificate of Manual Signature with Certificate of Mailing to the Secretary of State’s Office Signature Identification and Nonlitigation Certificate Certificate of City pursuant to Section 7 of the Bond Purchase Contract The Depository Trust Company Blanket Issuer Letter of Representations Tax Certificate and the following exhibits: a.Certificate of Underwriter; b.Verification Report and Financing Schedules; and c.Certificate of Bidding Agent. Copy of IRS Form 8038-G with affidavit of mailing Certificate of Authorization of Authorized Signer of U.S. Bank National Association Certificate regarding Authentication, Registration and Delivery of the Bonds -2- 32. 33. 34. 35. 36. Certificate of Delivery Receipt for Bonds Closing Memorandum and Distribution List Bond Form 101 Specimen Bonds Opinions 37. 38. 39. 40. Opinion of K&L Gates LLP, counsel to the Underwriter Defeasance Opinion of Pacifica Law Group LLP with respect to the Refunded Bonds Final approving Legal Opinion of Pacifica Law Group LLP for the Series 2015A Bonds Final approving Legal Opinion of Pacifica Law Group LLP for the Series 2015B Bonds -3- CERTIFICATE FOR TRANSCRIPT I, JASON A. SETH, the duly qualified City Clerk of the City of Renton, Washington (the "City"), DO HEREBY CERTIFY that the within and attached documents are in each case true and correct copies of the originals of such documents and that none of the resolutions, ordinances, proceedings, statements or certificates contained herein have been repealed, rescinded or canceled and all of the officers last certified as holding City offices have continued to hold their respective offices from such date to and including the date of this certificate. Dated this 13th day of May, 2015. A. Seth, CMC, City Clerk of Renton, Washington King County Department of Elections Sherril Huff, Director STATE OF WASHINGTON COUNTY OF KING ) )ss. ) This is to certify that I, Sherril Huff, am the Director of the King County Elections, King County, Washington; and That the following officials serve as elected officials for the City of Renton, King County, Washington, as determined from the official election records of King County, their terms of office included, as now on file in the Elections Department. Office Mayor Council Position No. 1 Council Position No. 2 Council Position No. 3 Council Position No. 4 Council Position No. 5 Council Position No. 6 Council Position No. 7 Municipal Court Judge Incumbent Denis Law Randy Corman Armondo Pavone Marcie Palmer Greg Taylor Ed Prince Ruth Perez-Madrigal Don Persson Terry L. Jurado Term of Office December 2015 December 2017 December 2017 December 2015 December 2015 December 2015 December 2015 December 2015 December 2017 Dated at Renton, King County, Washington this 12th day of May 2015. Sherril Huff, ~r RNT-EL-0100 I 919 SW Grady Way, Renton, WA 98057-2906 I 206-296-1540 TTY Relay: 711 I www. kingcounty.gov/elections CERTIFICATE I, DENIS W. LAW, Mayor of the City of Renton, Washington, do hereby certify that Iwen Wang is the duly appointed Finance and Information Services Administrator and Jason A. Seth is the duly appointed City Clerk of the City of Renton. Dated this 13th day of May, 2015. Denis W. Law, Mayor City of Renton, Washington CERTIFICATE I, JASON A. SETH, the duly qualified City Clerk of the City of Renton, Washington, do hereby certify that the attached is a true and correct copy of the proceedings of the City Council establishing the date, time and place for regular meetings of the City Council. Dated this 13th day of May, 2015. an ~. Set~,"C~’~IC, City Clerk City of Renton, Washington Subject: MEETINGS OF THE CITY COUNCIL Effective Date Supersedes Page 8/13/2007 1/27/1992 1 of 3 POLICY & PROCEDURE Index: LEGISLATIVE Number: 800-02 Staff Contact Approved By Jay Covington -~"~-t.,~ ~~.:7__~:~~- 1.0 PURPOSE: To establish the time and location of the various City Council meetings. 2.0 ORGANIZATIONS AFFECTED: City Council 3.0 REFERENCES: RCW 42.30 (Open Public Meetings act); RCW 35A.12.100; RCW 35A.12.110 4.0 POLICY: 4.1 Regular business meetings of the City Council shall be held the first four Mondays of each month commencing at 7:00 pm in the Council Chambers of City Hall, or at another location determined by the City Council. The City Council will not meet when a regular meeting falls on a holiday acknowledged as such by official Council action; all pending business and agenda items will be carried forward to the next regularly scheduled meeting. 4.2 There shall be regular Council meetings held the first four Mondays of each month except where a City holiday falls on a Monday. Committee of the Whole meetings (Council work sessions) may be held prior to weekly Council meetings. No final disposition shall be taken at any Council work session; rather, recommendations shall be offered for final action at a succeeding regular business meeting of the Council. 4.3 At all meetings of the City Council, a majority of the Councilmembers shall constitute a quorum for the transaction of business, but a less number may adjourn from time to time and may compel the attendance of absent members as prescribed by ordinance. 4.4 Except as provided for in law, all regular and special meetings of the City Council shall be open to the public as set forth in RCW 42.30.010. 4.5 The Mayor shall be the presiding officer at all meetings of the City Council except Council work sessions. The Council President shall preside in the mayor’s absence and shall be notified when the mayor leaves the state. In the absence of both the Mayor and the Council President, the Council President Pro Tem shall preside. 800-02 Page 2 4.6 4.5.1 The Mayor shall have a vote only in the case of a tie in the votes of the councilmembers with respect to matters other than the passage of any ordinance, grant, revocation of a franchise or license, or any resolution for the payment of any money. 4.5.2 The Mayor or other presiding officer may require any person addressing the City Council to be sworn as a witness and to testify under oath; the presiding officer shall so require, if directed to do so by a majority vote of the City Council. The Council President shall preside at all Council work sessions of the City Council. The President Pro Tem of the Council shall preside in the absence of the Council President. 5.0 DEFINITIONS: N/A 6.0 PROCEDURES: 6.1 Special meetings may be called by the Mayor or any four members of the City Council to discuss issues or business items provided that written notice is delivered to each member of the Council at least 24 hours before the time specified for the proposed meeting. 6.1.1 The notice shall specify the time and place of the special meeting and the business to be transacted. 6.2 6.1.2 In addition, the city clerk shall give notice of such special meeting as further provided for in RCW 42.30.080. 6.1.3 No final disposition shall be taken on any other matter at such special meeting by the governing body. 6.1.3.1 Written notice may be dispensed with for any Councilmember who, at or prior to the time the meeting convenes, files a written waiver of such notice with the city clerk. 6.1.3.2 Written notice may also be dispensed with for any member who is actually present at the meeting at the time it convenes. 6.1.3.3 Notice may be dispensed with in the event that a special meeting is called to deal with an emergency involving injury or damage to persons or property or the likelihood of such injury or damage when time requirements would make notice impractical and increase the likelihood of such injury or damage. The President or majority of the members of the City Council may hold executive sessions during a regular or special meeting to consider: matters affecting national security; the selection of a site or the acquisition of real estate by lease or purchase when public knowledge regarding such consideration could cause a likelihood of an increased price to the city; 800-02 Page 3 c.the appointment, employment or dismissal of a public officer or employee; d.complaints or charges brought against a public officer or employee by another public officer, employee or member of the public; e.any proceeding concerned with the formal issuance of an order granting, suspending, revoking or denying a license, permit or certificate to engage in any business, occupation or profession, or to any disciplinary proceedings involving a member of such business, occupation or profession; f.that portion of a meeting when the Council sits as a quasi-judicial body which relates to a quasi-judicial matter between named parties as distinguished from a matter having a general effect on the public or on a class or group; g.planning or adopting the strategy or position to be taken during the course of any collective bargaining, professional negotiations, grievance or mediation proceedings, or the review of proposals made in such negotiations or proceedings; h. input from the city attorney concerning settlements, avoidance or contemplated litigation, settlement offers and like matters which are subject to the statutory attorney-client privilege. 6.2.1 No official action shall be taken at any executive session; however, nothing shall prevent the Council, when permitted by law, from taking an informal vote on any matter under discussion. 6.2.2 No member of the City Council, employee of the city or any person present during an executive session shall disclose to any other person the content or substance of discussion or action which took place during the session, unless a majority of the Council authorizes such disclosure. 6.2.3 Executive sessions, to the extent permitted by law, shall be limited to the Mayor and the members of the City Council unless the presence of non- members is requested by a majority of the City Councilmembers. CERTIFICATE I, Jason A. Seth, City Clerk of the City of Renton, Washington (the "City"), do hereby certify that the Renton Reporter is the official newspaper of the City. Dated this 13th day of May, 2015. Jas( City Clerk C of Renton, Washington King County Department of Assessments Accounting Division 500 Fourth Avenue, ADM-AS-0725 Seattle, WA 98104-2384 (206) 263-2308 FAX (206) 296-0106 Emaih assessor.info@kingcounty.gov http://www.kingcounff.gov/assessor/ Lloyd Hara Assessor I, Lloyd Hara, King County Assessor, pursuant to the duty imposed upon me by RCW 84.48.130, certify that the assessed valuation of all the property subject to taxation situated within the King County boundaries of the City of Renton, as equalized and fixed by the County Board of Equalization and the State Board of Tax Appeals, as of January 23, 2015 (for taxes payable in 2015) is $12,936,757,619 (Grand Total), $12,876,667,781 (Regular levy used for limited bonds), and $12,797,563,393 (Excess Total which excludes all exempt senior citizens). The TAV (timber assessed value) is $0. WITNESS my hand this 12th day of May, 2015. LH:dsm King County Assessor CERTIFICATE REGARDING OUTSTANDING NON-VOTED DEBT I, IWEN WANG, Finance and Information Services Administrator of the City of Renton, Washington (the "City"), do hereby certify that the following are all of the City’s currently outstanding general obligation bonds and long-term leases and financing contracts as of May 13, 2015 (excluding the City’s Limited Tax General Obligation Refunding Bonds, Series 2015A, and Limited Tax General Obligation Refunding Bonds, Series 2015B (Taxable)) issued on the date hereof): Voted General Obligation Bonds: Designation Outstanding Balance $0 Nonvoted General Obligation Bonds and Obligations: Designation Fire Protection District No. 40 Promissory Note 2006 LTGO 2009 SCORE Bonds ~1) 2010 Valley Com. Bonds ~2) LTGO & Refunding, 2010 LTGO Bonds, 2011A LTGO Refunding, 2011 LTGO Bond, 2013 Outstanding Balance $5,313,953 1,450,000 28,936,800 220,000 6,010,000 12,460,000 4,825,000 2,990,000 TOTAL $ 62,205,753 The South Correctional Entity Facility Public Development Authority issued bonds on November 4, 2009 (the "SCORE Bonds"). The par amount of the SCORE Bonds was $86,235,000 and pursuant to an interlocal agreement, the City is obligated to pay 36 percent of the debt service on the SCORE Bonds. (2)The Valley Communications Center Development Authority issued special obligation refunding bonds on April 5, 2010 in the total aggregate principal amount of $5,325,000 (the "Valley Com. Bonds"). Pursuant to an interlocal agreement, the City is obligated to pay 20 percent of the debt service on the Valley Com. Bonds. Long-term leases and conditional sale contracts (including COPs) and other debt: Designation Outstanding Balance $0 Dated as of this 13th day of May, 2015. Finance and Information Services Administrator City of Renton, Washington -2- BOND COUNSEL’S CALCULATION OF DEBT LIMIT Value of Taxable Property within the City of Renton, King County, as set in 2014 for purposes of 2015 regular and excess levies, per certificate of the King County Assessor: Nonvoted Limited Indebtedness: Nonvoted Debt Ceiling per RCW 39.36.020: 1.50% of value of taxable property Less: Nonvoted debt outstanding per Certificate of the Finance and Information Services Administrator Leases/Sale Contracts Less: Proposed Limited Tax General Obligation Refunding Bonds, Series 2015A Less: Proposed Limited Tax General Obligation Refunding Bonds, Series 2015B (Taxable) Total Nonvoted Debt Remaining Nonvoted Debt Capacity $ 12,876,667,781 $193,150,016 $ (62,205,753) 0 $(8,825,000) $(3,695,000) $ (74,725,753) $ 118,424,263 Total Debt Ceiling for General Municipal Purposes, Voted and Nonvoted: 2.50% value of taxable property (RCW 39.36.020)321,916,694 Less: Voted Debt Outstanding per Certificate of the Finance and Information Services Administrator 0 Nonvoted debt from above $(74,725,753) Total Debt $ (74,725,753) Remaining Debt Capacity Unused:$ 247,190,941 Based upon the certificate of assessed valuation of the King County Assessor and the certificate of general obligation debt outstanding as of May 13, 2015 of the City, the issuance of the Limited Tax General Obligation Refunding Bonds, Series 2015A and the Limited Tax General Obligation Refunding Bonds, Series 2015B (Taxable) by the City of Renton, Washington, will be within the constitutional and statutory limits for nonvoted, voted and total indebtedness. Dated as of this 13th day of May, 2015. PACIFICA LAW GROUP LLP By ~’~~~’*"~’2S’~ Deanna Gregory CERTIFICATE REGARDING ORDINANCE I, Jason A. Seth, City Clerk of the City of Renton, Washington (the "City"), do hereby certify: 1. That the attached Ordinance No. 5754 (the "Ordinance") is a true and correct copy of an ordinance of the City Council, as finally adopted at a regular meeting of the City Council held on April 13, 2015, and duly recorded in my office, and that such Ordinance has not been amended or superseded. 2. That the meeting was duly convened and held in all respects in accordance with law, and to the extent required by !aw, due and proper notice of the meeting was given; that a legal quorum was present throughout the meeting and a legally sufficient number of members of the City Council voted in the proper manner for the adoption of the Ordinance; that all other requirements and proceedings incident to the proper adoption of the Ordinance have been duly fulfilled, carried out and otherwise observed; and that I am authorized to execute this certificate. Dated this 13th day of May, 2015. [~on A. Seth, CMC, City Clerk ~,/City of Renton, Washington CITY OF RENTON, WASHINGTON LIMITED TAX GENERAL OBLIGATION REFUNDING BONDS, SERIES 2015 ORDINANCE NO. S75_.._~4 AN ORDINANCE OF THE CITY OF RENTON, WASHINGTON, PROVIDING FOR THE ISSUANCE OF ONE OR MORE SERIES OF LIMITED TAX GENERAL OBLIGATION REFUNDING BONDS OF THE CITY IN THE AGGREGATE PRINCIPAL AMOUNT OF NOT TO EXCEED $14,000,000 TO REFUND CERTAIN OUTSTANDING LIMITED TAX GENERAL OBLIGATION BONDS AND TO PAY COSTS OF ISSUING THE BONDS; AND DELEGATING THE AUTHORITY TO APPROVE THE FINAL TERMS OF THE BONDS. PASSED: April 13, 2015 PREPARED BY: PACIFICA LAW GROUP LLP Seattle, Washington CERTIFICATE 1, the undersigned City Clerk of the City of Renton, Washington, certify that this is a true and correct copy of ~ ~"Tffq . Subscribed ORDINANCE NO. 5754 Section Section Section Section Section Section Section Section Section Section Section Section Section Section Section 2. 3. 4. S. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. TABLE OF CONTENTS* Definitions and Interpretation of Terms .................................................................2 Authorization of Bonds and Bond Details ...............................................................8 Registration, Exchange and Payments ....................................................................8 Redemption Prior to Maturity and Purchase of Bonds .........................................14 Form of Bonds ........................................................................................................ Execution of Bonds ................................................................................................ Refunding Plan; Application of Bond Proceeds .....................................................2 ] Tax Covenants ........................................................................................................23 Bond Fund and Provision for Tax Levy Payments .................................................26 Defeasance ............................................................................................................27 Sale of Bonds .........................................................................................................28 Undertaking to Provide Ongoing Disclosure .........................................................30 Lost, Stolen or Destroyed Bonds ...........................................................................3.~ Severability; Ratification ........................................................................................3~i Effective Date of Ordinance ..................................................................................36 * This Table of Contents is provided for convenience only and is not a part of this ordinance. 04/14/15 CITY OF RENTON, WASHINGTON ORDINANCE NO. S7S_._~4 AN ORDINANCE OF THE CITY OF RENTON, WASHINGTON, PROVIDING FOR THE ISSUANCE OF ONE OR MORE SERIES OF LIMITED TAX GENERAL OBLIGATION REFUNDING BONDS OF THE CITY IN THE AGGREGATE PRINCIPAL AMOUNT OF NOT TO EXCEED $14,000,000 TO REFUND CERTAIN OUTSTANDING LIMITED TAX GENERAL OBLIGATION BONDS AND TO PAY COSTS OF ISSUING THE BONDS; AND DELEGATING THE AUTHORITY TO APPROVE THE FINAL TERMS OF THE BONDS. WHEREAS, the City of Renton, Washington (the "City"), has outstanding its Limited Tax General Obligation Bonds, 2006, issued on August 8, 2006, pursuant to Ordinance No. 5215 adopted by the City Council (the "Council") of the City on July 17, 2006 (the "2006 Bond Ordinance"), which remain outstanding as follows: Maturity Dates (December 1)Principal Amounts Interest Rates 2015 $700,000 5.25 % 2016 750,000 4.30 2017 775,000 5.00 2019"1,670,000 5.00 2020 900,000 5.00 2021 945,000 5.00 2022 1,000,000 5.25 2023 1,040,000 5.25 2024 1,095,000 5.25 2028*4,975,000 5.00 * Term Bonds. (the "2006 Bonds"); and WHEREAS, the 2006 Bond Ordinance provides that the City may call the 2006 Bonds maturing on or after December 1, 2017 (the "Refunding Candidates"), for redemption on or CITY OF RENTON, WASHINGTON LIMITED TAX GENERAL OBLIGATION REFUNDING BONDS, SERIES 2015 ORDINANCE NO. 5754 AN ORDINANCE OF THE CITY OF RENTON, WASHINGTON, PROVIDING FOR THE ISSUANCE OF ONE OR MORE SERIES OF LIMITED TAX GENERAL OBLIGATION REFUNDING BONDS OF THE CITY IN THE AGGREGATE PRINCIPAL AMOUNT OF NOT TO EXCEED $14,000,000 TO REFUND CERTAIN OUTSTANDING LIMITED TAX GENERAL OBLIGATION BONDS AND TO PAY COSTS OF ISSUING THE BONDS; AND DELEGATING THE AUTHORITY TO APPROVE THE FINAL TERMS OF THE BONOS. PASSED: April 13, 2015 PREPARED BY: PA¢IFICA LAW GROUP LLP Seattle, Washinston Section Section Section Section Section Section Section Section Section Section Section Section Section Section Section ORDINANCE NO. 5754 TABLE OF CONTENTS* 1.Definitions and Interpretation of Terms ..................................................................2 2.Authorization of Bonds and Bond Details ................................................................8 3.Registration, Exchange and Payments ....................................................................8 4.Redemption Prior to Maturity and Purchase of Bonds .........................................14 5.Form of Bonds ......................................................................................................... 6.Execution of Bonds ................................................................................................20 7.Refunding Plan; Application of Bond Proceeds ....................................................... 8.Tax Covenants ........................................................................................................23 9.Bond Fund and Provision for Tax Levy Payments .................................................. 10.Defeasance ............................................................................................................27 11.Sale of Bonds .........................................................................................................28 12.Undertaking to Provide Ongoing Disclosure .........................................................30 13.Lost, Stolen or Destroyed Bonds ...........................................................................35 14.Severability; Ratification ........................................................................................ 15.Effective Date of Ordinance ...................................................................................36 * This Table of Contents is provided for convenience only and is not a part of this ordinance. 04/14/15 CITY OF RENTON, WASHINGTON ORDINANCE NO. 5754. AN ORDINANCE OF THE CITY OF RENTON, WASHINGTON, PROVIDING FOR THE ISSUANCE OF ONE OR MORE SERIES OF LIMITED TAX GENERAL OBLIGATION REFUNDING BONDS OF THE CITY IN THE AGGREGATE PRINCIPAL AMOUNT OF NOT TO EXCEED $14,000,000 TO REFUND CERTAIN OUTSTANDING LIMITED TAX GENERAL OBLIGATION BONDS AND TO PAY COSTS OF ISSUING THE BONDS; AND DELEGATING THE AUTHORITY TO APPROVE THE FINAL TERMS OF THE BONDS. WHEREAS, the City of Renton, Washington (the "City"), has outstanding its Limited Tax General Obligation Bonds, 2006, issued on August 8, 2006, pursuant to Ordinance No. 5215 adopted by the City Council (the "Council") of the City on July 17, 2006 (the "2006 Bond Ordinance"), which remain outstanding as follows: Maturity Dates (December 1)Principal Amounts Interest Rates 2015 $700,000 5.25 % 2016 750,000 4.30 2017 775,000 5.00 2019"1,670,000 5.00 2020 900,000 5.00 2021 945,000 5.00 2022 1,000,000 5.25 2023 1,040,000 5.25 2024 1,095,000 5.25 2028*4,975,000 5.00 * Term Bonds. (the "2006 Bonds"); and WHEREAS, the 2006 Bond Ordinance provides that the City may call the 2006 Bonds maturing on or after December 1, 2017 (the "Refunding Candidates"), for redemption on or ORDINANCE NO. 5754 after December 1; 2016, in whole or in part on any date, at the price of par plus accrued interest, if any, to the date of redemption; and WHEREAS, after due consideration it appears that all or a portion of the Refunding Candidates (the "Refunded Bonds") may be defeased and refunded by the proceeds of limited tax general obligation bonds at a savings to the City and its taxpayers; and WHEREAS, the Council deems it in the best interest of the City to issue one or more series of limited tax general obligation refunding bonds in the aggregate principal amount of not to exceed ~;14,OO0,O00 (the "Bonds") to redeem and defease the Refunded Bonds and to pay costs of issuing the Bonds; and WHEREAS, the Council wishes to delegate authority to the Mayor, Chief Administrative Officer and Finance Director (each, a "Designated Representative"), for a limited time, to approve the interest rates, maturity dates, redemption terms and principal maturities for the Bonds within the parameters set by this ordinance, in order to effect such a refinancing; and WHEREAS, the City expects to receive a proposal from Piper Jaffray & Co. (the "Underwriter") to underwrite the Bonds, and now desires to issue and sell the Bonds to the Underwriter as set forth herein; NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF RENTON, WASHINGTON, DOES ORDAIN AS FOLLOWS: Section 1. Definitions and Interpretation...o.fTerm~. (a) Definitions. As used in this ordinance, the following words shall have the following meanings: Acquired Obligations means the Government Obligations acquired by the City under -2-04/14/15 ORDINANCE NO. 575.___~4 the terms of this ordinance and the Escrow Agreement to effect the defeasance and refunding of the Refunded Bonds. Beneficial Owner means any person that has or shares the power, directly or indirectly to make investment decisions concerning ownership of any Bonds (including persons holding Bonds through nominees, de positories or other intermediaries). Bond Fund means the "City of Renton Limited Tax General Obligation Bond Debt Service Fund, 2015" authorized to be created pursuant to Section 9. Bond Purchose Controct means the contract for the purchase of the Bonds between the Underwriter and City, executed pursuant to Section :11. Bond Register means the registration books showing the name, address and tax identification number of each Registered Owner of the Bonds, maintained for the Bonds in the manner required pursuant to Section :149(a) of the Code. Bond Registrar means, initially, the fiscal agent of the State of Washington, for the purposes of registering and authenticating the Bonds, maintaining the Bond Register, effecting transfer of ownership of the Bonds and paying interest on and principal of the Bonds. Bond Yeor means each one-year period that ends on the date selected by the City. The first and last Bond Years may be short periods. If no day is selected by the City before the earlier of the final maturity date of the Bonds or the date that is five years after the date of issuance of the Bonds, Bond Years end on each anniversary of the date of issue and on the final maturity date of the Bonds. Bonds mean the not to exceed $14,000,000 aggregate principal amount of City of Renton, Washington, Limited Tax General Obligation Refunding Bonds, Series 2015[ .], or 04/14/15 ORDINANCE NO. 575_....~4 other series designation as approved by a Designated Representative, issued pursuant to this ordinance. Coil Dote means December :1, 2016. City means the City of Rentono Washington, a municipal corporation duly organized and existing by virtue of the laws of the State of Washington.~ Code means the Internal Revenue Code of :1986, as amended, and shall include all applicable regulations and rulings relating thereto. Commission means the Securities and Exchange Commission. Council means the City Council as the general legislative authority of the City, as duly and regularly constituted from time to time. Designated Representotive means the Mayor, the Chief Administrative Officer and the Finance Director of the City, and any successor to the functions of such offices. The signature of one Designated Representative shall be sufficient to bind the City. DTC means The Depository Trust Company, New York, New York, a limited purpose trust company organized under the laws of the State of New York, as depository for the Bonds pursuant to Section 3. Escrow Agent means U.S. Sank National Association, Seattle, Washington. Escrow Agreement means the Escrow Deposit Agreement between the City and the Escrow Agent, executed pursuant to Section 7. Federal Tax Certificate means the certificate executed by a Designated Representative setting forth the requirements of the Code for maintaining the tax exemption of interest on any series of Tax-Exempt Bonds, and attachments thereto. -4-04/14t15 ORDINANCE NO. 575~4 Finance Director shall mean the City’s Finance and Information Services Administrator or the successor to such officer. Government Obligations mean those obligations now or hereafter defined as such in chapter 39.53 RCW. Letter a,f Representations means the blanket issuer letter of representations from the City to DTC. MSRB means the Municipal Securities Rulemaking Board or any successors to its functions. Net Proceeds, when used with reference to any series of Tax-Exempt Bonds, mean the principal amount of such Tax-Exempt Bonds, plus accrued interest and original issue premium, if any, and less original issue discount, if any, Privote Person means any natural person engaged in a trade or business or any trust, estate, partnership, association, company or corporation. Private Person Use means the use of property in a trade or business by a Private Person if such use is other than as a member of the general public. Private Person Use includes ownership of the property by the Private Person as well as other arrangements that transfer to the Private Person the actual or beneficial use of the property (such as a lease, management or incentive payment contract or other special arrangement) in such a manner as to set the Private Person apart from the general public. Use of property as a member of the general public includes attendance by the Private Person at municipal meetings or business rental of property to the Private Person on a day-to-day basis if the rental paid by such Private Person is the same as the rental paid by any Private Person who desires to rent the property. Use of -5- 0~4~’~5 ORDINANCE NO. 5754 property by nonprofit community groups or community recreational groups is not treated as Private Person Use if such use is incidental to the governmental uses of property, the property is made available for such use by all such community groups on an equal basis and such community groups are charged only a de minimis fee to cover custodial expenses. Relunded Bonds mean those Refunding Candidates designated by a Designated Representative for refunding pursuant to Section 7 and Section 11. Relunding Account means the account by that name established pursuant to Section 7, Refunding Condidotes mean the 2006 Bonds maturing on or after December 1, 2017, as shown in the recitals to this ordinance. Registered Owner means the person named as the registered owner of a Bond in the Bond Register. For so long as the Bonds are held in book-entry only form, DTC shall be deemed to be the sole Registered Owner. Rule means the Commission’s Rule 15c2-12 under the Securities Exchange Act of 1934, as the same may be amended from time to time. Taxoble Bonds means any Bonds determined to be issued on a taxable basis pursuant to Section 11. Tox-Exempt Bonds means any Bonds determined to be issued on a tax-exempt basis under the Code pursuant to Section 11. 2006 Bond Ordinance means Ordinance No. 5215 adopted by the Council on July 17, 2006, authorizing the issuance of the 2006 Bonds. -6-04/14/15 ORDINANCE NO. 5754 2006 Bonds mean the Limited Tax General Obligation Bonds, 2006 of the City, issued on August 8, 2006, pursuant to the 2006 Bond Ordinance as described in the recitals of this ordinance. Underwriter means Piper Jaffray & Co. (b)Interpretation. In this ordinance, unless the context otherwise requires: (1) The terms "hereby," "hereof," "hereto," "herein," "hereunder" and any similar terms, as used in this ordinance, refer to this ordinance as a whole and not to any particular article, section, subdivision or clause hereof, and the term "hereafter" shall mean after, and the term "heretofore" shall mean before, the date of this ordinance; (2) Words of the masculine gender shall mean and include correlative words of the feminine and neutral genders and words importing the singular number shall mean and include the plural number and vice versa; (3) Words importing persons shall include firms, associations, partnerships (including limited partnerships), trusts, corporations and other legal entities, including public bodies, as well as natural persons; (4) Any headings preceding the text of the several articles and sections of this ordinance, and any table of contents or marginal notes appended to copies hereof, shall be solely for convenience of reference and shall not constitute a part of this ordinance, nor shall they affect its meaning, construction or effect; and (5) All references herein to "articles," "sections" and other subdivisions or clauses are to the corresponding articles, sections, subdivisions or clauses hereof. 04/14/15 ORDINANCE NO. 575_....~4 Section 2. Authorization of Bonds and Bond DetailS. For the purpose of refunding the Refunded Bonds and paying costs of issuance of the Bonds, the City is hereby authorized to issue and sell one or more series of limited tax general obligation refunding bonds in the aggregate principal amount of not to exceed $14,000,000 (the "Bonds"). The Bonds shall be general obligations of the City, shall be designated "City of Renton, Washington, Limited Tax General Obligation Refunding Bonds, Series 2015[___]" or other such designation as set forth in the Bond Purchase Contract and approved by a Designated Representative. The Bonds of a series shall be dated as of their date of initial delivery; shall be fully registered as to both principal and interest; shall be in the denomination of $5,000 each, or any integral multiple thereof, within a maturity; shall be numbered separately in such manner and with any additional designation as the Bond Registrar deems necessary for purposes of identification; and shall bear interest payable on the dates set forth in the Bond Purchase Contract; and shall mature on the dates and in the principal amounts set forth in the Bond Purchase Contract and as approved by a Designated Representative pursuant to Section 11. The Bonds of any of the maturities may be combined and issued as term bonds, subject to mandatory redemption as provided in the Bond Purchase Contract. Se~on 3. Registration, ~change and Payment. (a) Bond Registror/Bond Register. The City hereby specifies and adopts the system of registration approved by the Washington State Finance Committee from time to time through the appointment of a state fiscal agent, The City shall cause a bond register to be maintained by the Bond Registrar. So long as any Bonds remain outstanding, the Bond -8-04/14/15 ORDINANCE NO. 575.__..~4 Registrar shall make all necessary provisions to permit the exchange or registration or transfer of Bonds at its designated corporate trust office. The Bond Registrar may be removed at any time at the option of the Finance Director upon prior notice to the Bond Registrar and a successor Bond Registrar appointed by the Finance Director. No resignation or removal of the Bond Registrar shall be effective until a successor shall have been appointed and until the successor Bond Registrar shall have accepted the duties of the Bond Registrar hereunder. 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 and to carry out all of the Bond Registrar’s powers and duties under this ordinance. The Bond Registrar shall be responsible for its representations contained in the Certificate of Authentication of the Bonds. (b) Registered Ownership. The City and the Bond Registrar, each in its discretion, may deem and treat the Registered Owner of each Bond as the absolute owner thereof for all purposes (except as provided in Section ]L2), and neither the City nor the Bond Registrar shall be affected by any notice to the contrary. Payment of any such Bond shall be made only as described in Section 3(h), but such Bond may be transferred as herein provided. All such payments made as described in Section 3(h) shall be valid and shall satisfy and discharge the liability of the City upon such Bond to the extent of the amount or amounts so paid. (c) DTC Acceptance/Letters o,f Representations. The Bonds initially shall be held in fully immobilized form by DTC acting as depository. To induce DTC to accept the Bonds as eligible for deposit at DTC, the City has executed and delivered to DTC a Blanket Issuer Letter of Representations. Neither the City nor the Bond Registrar will have any responsibility or -9-o,~14ll 5 ORDINANCE NO. 575___~4 obligation to DTC participants or the persons for whom they act as nominees (or any successor depository) with respect to the Bonds in respect of the accuracy of any records maintained by DTC (or any successor depository) or any DTC participant, the payment by DTC (or any successor depository) or any DTC participant of any amount in respect of the principal of or interest on Bonds, any notice which is permitted or required to be given to Registered Owners under this ordinance (except such notices as shall be required to be given by the City to the Bond Registrar or to DTC (or any successor depository)), or any consent given or other action taken by DTC (or any successor depository) as the Registered Owner. For so long as any Bonds are held in fully-immobilized form hereunder, DTC or its successor depository shall be deemed to be the Registered Owner for all purposes hereunder, and all references herein to the Registered Owners shall mean DTC (or any successor depository) or its nominee and shall not mean the owners of any beneficial interest in such Bonds. If any Bond shall be duly presented for payment and funds have not been duly provided by the City on such applicable date, then interest shall continue to accrue thereafter on the unpaid principal thereof at the rate stated on such Bond until it is paid. (d)Use of Depository. (1) The Bonds shall be registered initially in the name of "Cede & Co.", as nominee of DTC, with one Bond maturing on each of the maturity dates for the Bonds within a series in a denomination corresponding to the total principal therein designated to mature on such date. Registered ownership of such immobilized Bonds, or any portions thereof, may not thereafter be transferred except (A) to any successor of DTC or its nominee, provided that any such successor shall be qualified under any applicable laws to provide the service proposed to ORDINANCE NO. 5754 be provided by it; (B) to any substitute depository appointed by the Finance Director pursuant to subsection (2) below or such substitute depository’s successor; or (C)to any person as provided in subsection (4) below. (2) Upon the resignation of DTC or its successor (or any substitute depository or its successor) from its functions as depository or a determination by the Finance Director to discontinue the system of book entry transfers through DTC or its successor (or any substitute depository or its successor), the Finance Director may hereafter appoint a substitute depository. Any such substitute depository shall be qualified under any applicable laws to provide the services proposed to be provided by it. (3) In the case of any transfer pursuant to clause (A) or (B) of subsection (1) above, the Bond Registrar shall, upon receipt of all outstanding Bonds of a series, together with a written request on behalf of the Finance Director, issue a single new Bond for each maturity of that series then outstanding, registered in the name of such successor or such substitute depository, or their nominees, as the case may be, all as specified in such written request of the Finance Director. (4) In the event that (A) DTC or its successor (or substitute depository or its successor) resigns from its functions as depository, and no substitute depository can be obtained, or (B) the Finance Director determines that it is in the best interest of the beneficial owners of the Bonds that such owners be able to obtain such Bonds in the form of Bond certificates, the ownership of such Bonds may then be transferred to any person or entity as herein provided, and shall no longer be held by a depository. The Finance Director shall deliver a written request to the Bond Registrar, together with a supply of physical Bonds, to issue ORDINANCE NO. 575._._~4 Bonds as herein provided in any authorized denomination. Upon receipt by the Bond Registrar of all then outstanding Bonds together with a written request on behalf of the Finance Director to the Bond Registrar, new Bonds of such series shall be issued in the appropriate denominations and registered in the names of such persons as are requested in such written request. (e) Registration of Transfer of Ownership or Exchange; Change in Denominations. The transfer of any Bond may be registered and Bonds may be exchanged, but no transfer of any such Bond shall be valid unless it is surrendered to the Bond Registrar with the assignment form appearing on such Bond duly executed by the Registered Owner or such Registered Owner’s duly authorized agent in a manner satisfactory to the Bond Registrar. Upon such surrender, the Bond Registrar shall cancel the surrendered Bond and shall authenticate and deliver, without charge to the Registered Owner or transferee therefor, a new Bond (or Bonds at the option of the new Registered Owner) of the same date, series, maturity and interest rate and for the same aggregate principal amount in any authorized denomination, naming as Registered Owner the person or persons listed as the assignee on the assignment form appearing on the surrendered Bond, in exchange for such surrendered and cancelled Bond. Any Bond may be surrendered to the Bond Registrar and exchanged, without charge, for an equal aggregate principal amount of Bonds of the same date, series, maturity and interest rate, in any authorized denomination. The Bond Registrar shall not be obligated to register the transfer or to exchange any Bond during the i5 days preceding any interest payment or principal payment date any such Bond is to be redeemed. ORDINANCE NO. 575____..~4 (f) Bond Registrar’s Ownership o.f Bonds. The Bond Registrar may become the Registered Owner of any Bond 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 a member of, or in any other capacity with respect to, any committee formed to protect the right of the Registered Owners of Bonds. (g) Registration Covenant. The City covenants that, until all Bonds have been surrendered and canceled, it will maintain a system for recording the ownership of each Bond that complies with the provisions of Section 149 of the Code. (h) Place and Medium oj: Payment. 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 calculated on the basis of a year of 360 days and twelve 30-day months. For so long as all Bonds are held by a depository, payments of principal and interest thereon shall be made as provided in accordance with the operational arrangements of DTC referred to in the Letter of Representations. In the event that the Bonds are no longer held by a depository, interest on the Bonds shall be paid by check or draft mailed to the Registered Owners at the addresses for such Registered Owners appearing on the Bond Register on the fifteenth day of the month preceding the interest payment date, or upon the written request of a Registered Owner of more than $1,000,000 of Bonds (received by the Bond Registrar at least 15 days prior to the applicable payment date), such payment shall be made by the Bond Registrar by wire transfer to the account within the United States designated by the Registered Owner. Principal of the Bonds shall be payable upon presentation and surrender of such Bonds by the Registered Owners at the designated office of the Bond Registrar. ORDINANCE NO. 575.._.~4 If any Bond shall be duly presented for payment and funds have not been duly provided by the City on such applicable date, then interest shall continue to accrue thereafter on the unpaid principal thereof at the rate stated on such Bonds until it is paid. Se~ion 4. Redemption Prior to MaturiW and Purchase of Bonds. (a) Mandatory Redemption o.f Term Bonds and Optional Redemption, if any. The Bonds of a series shall be subject to optional redemption on the dates, at the prices and under the terms set forth in the Bond Purchase Contract approved by a Designated Representative pursuant to Section 11. The Bonds of a series shall be subject to mandatory redemption to the extent, if any, set forth in the Bond Purchase Contract and as approved by a Designated Representative pursuant to Section (b) Purchase of Bonds. The City reserves the right to purchase any of the Bonds offered to it at any time at a price deemed reasonable by a Designated Representative. (c) Selection of Bonds for Redemption. For as long as the Bonds are held in book-entry only form, the selection of particular Bonds within a series and a maturity to be redeemed shall be made in accordance with the operational arrangements then in effect at DTC. If the Bonds are no longer held in uncertificated form, the selection of such Bonds to be redeemed and the surrender and reissuance thereof, as applicable, shall be made as provided in the following provisions of this subsection (c). If the City redeems at any one time fewer than all of the Bonds having the same maturity date within a series, the particular Bonds or portions of Bonds of such series and maturity to be redeemed shall be selected by lot (or in such manner determined by the Bond Registrar) in increments of $5,000. In the case of a Bond of a denomination greater than $5,000, the City and the Bond Registrar shall treat each Bond ORDINANCE NO. 575__.~4 of such series as representing such number of separate Bonds each of the denomination of $5,000 as is obtained by dividing the actual principal amount of such Bond by $5,000. In the event that only a portion of the principal sum of a Bond is redeemed, upon surrender of such Bond at the designated office of the Bond Registrar there shall be issued to the Registered Owner, without charge therefor, for the then unredeemed balance of the principal sum thereof, at the option of the Registered Owner, a Bond or Bonds of like series, maturity and interest rate in any of the denominations herein authorized. (d)Notice oJ: Redemption. (1) .Offi~cia!..N.otice; For so long as the Bonds are held in uncertificated form, notice of redemption (which notice may be conditional) shall be given in accordance with the operational arrangements of DTC as then in effect, and neither the City nor the Bond Registrar will provide any notice of redemption to any Beneficial Owners. Thereafter (if the Bonds are no longer held in uncertificated form), notice of redemption shall be given in the manner hereinafter provided. Unless waived by any owner of Bonds to be redeemed, official notice of any such redemption (which redemption may be conditioned by the Bond Registrar on the receipt of sufficient funds for redemption or otherwise) shall be given by the Bond Registrar on behalf of the City by mailing a copy of an official redemption notice by first class mail at least 20 days and not more than 60 days prior to the date fixed for redemption to the Registered Owner of the Bond or Bonds to be redeemed at the address shown on the Register or at such other address as is furnished in writing by such Registered Owner to the Bond Registrar. All official notices of redemption shall be dated and shall state: (A) the redemption date, ORDINANCE NO. 5754 (B)the redemption price, (C)if fewer than all outstanding Bonds are to be redeemed, the identification by series and maturity (and, in the case of partial redemption, the respective principal amounts) of the Bonds to be redeemed, (D)any conditions to redemption; (E)that (unless such notice is conditional) on the redemption date the redemption price will become due and payable upon each such Bond or portion thereof called for redemption, and that interest thereon shall cease to accrue from and after said date, and (F) the place where such Bonds are to be surrendered for payment of the redemption price, which place of payment shall be the desisnated office of the Bond Registrar. On or prior to any redemption date, unless any condition to such redemption has not been satisfied or waived or notice of such redemption has been rescinded, the City shall deposit with the Bond Registrar an amount of money sufficient to pay the redemption price of all the Bonds or portions of Bonds which are to be redeemed on that date. The City retains the right to rescind any redemption notice and the related optional redemption of Bonds by givin8 notice of rescission to the affected registered owners at any time on or prior to the scheduled redemption date. Any notice of optional redemption that is so rescinded shall be of no effect, and the Bonds for which the notice of optional redemption has been rescinded shall remain outstanding, -16- ORDINANCE NO. 5754 (2) Effect of Notice; Bonds Due. If an unconditional notice of redemption has been given and not rescinded, or if the conditions set forth in a conditional notice of redemption have been satisfied or waived, the Bonds or portions of Bonds to be redeemed shall, on the redemption date, become due and payable at the redemption price therein specified, and, if the Bond Registrar then holds sufficient funds to pay such Bonds at the redemption price, then from and after such date such Bonds or portions of Bonds shall cease to bear interest. Upon surrender of such Bonds for redemption in accordance with said notice, such Bonds shall be paid by the Bond Registrar at the redemption price. Installments of interest due on or prior to the redemption date shall be payable as herein provided for payment of interest. All Bonds which have been redeemed shall be canceled by the Bond Registrar and shall not be reissued. (3) .A..dditi.onal Noti,ce. In addition to the foregoing notice, further notice shall be given by the City as set out below, but no defect in said further notice nor any failure to give all or any portion of such further notice shall in any manner defeat the effectiveness of a call for redemption if notice thereof is given as above prescribed. Each further notice of redemption given hereunder shall contain the information required above for an official notice of redemption plus (A) the CUSIP numbers of all Bonds being redeemed; (B) the date of issue of the Bonds as originally issued; (C)the rate of interest borne by each Bond being redeemed; (D) the series and maturity date of each Bond being redeemed; and (E) any other descriptive information needed to identify accurately the Bonds being redeemed. Each further notice of redemption may be sent at least 20 days before the redemption date to each party entitled to receive notice pursuant to Section 12 and with such additional information as the City shall -17- ORDINANCE NO, 575...._~4 deem appropriate, but such mailings shall not be a condition precedent to the redemption of such Bonds. (4) Amendment of Notice Provisions. The foregoing notice provisions of this Section 4, including but not limited to the information to be included in redemption notices and the persons designated to receive notices, may be amended by additions, deletions and changes in order to maintain compliance with duly promulgated regulations and recommendations regarding notices of redemption of municipal securities. Section 5. Form of Bonds. The Bonds shall be in substantially the following form: UNITED STATES OF AMERICA NO. STATE OF WASHINGTON CITY OF RENTON LIMITED TAX GENERAL OBLIGATION REFUNDING BOND, SERIES 2015[.~ INTEREST RATE:% REGISTERED OWNER: PRINCIPAL AMOUNT: MATURITY DATE: CEDE & CO. CUSIP NO.: The City of Renton, Washington (the "City"), hereby acknowledges itself to owe and for value received promises to pay to the Registered Owner identified above, or registered assigns, on the Maturity Date identified above, the Principal Amount indicated above and to pay interest thereon from ¯ 20:15, or the most recent date to which interest has been paid or duly provided for until payment of this bond at the Interest Rate set forth above, payable on ~1, 2015, and semiannually thereafter on the first days of each succeeding and Both principal of and interest on this bond are payable in lawful money of the United States of America. The fiscal agent of the State of Washington has been appointed by the City as the authenticating agent, paying agent and registrar for the bonds of this issue (the "Bond Registrar"). For so long as the bonds of this issue are held in fully immobilized form, payments of principal and interest thereon shall be made as provided in accordance with the operational arrangements of The Depository Trust Company ("DTC") referred to in the Blanket Issuer Letter of Representations (the "Letter of Representations") from the City to DTC. ORDINANCE NO. 575~ The bonds of this issue are issued under and in accordance with the provisions of the Constitution and applicable statutes of the State of Washington and Ordinance No. duly passed by the City Council on April 13, 2015 (the "Bond Ordinance"). Capitalized terms used in this bond have the meanings given such terms in the Bond Ordinance. This bond shall not be valid or become obligatory for any purpose or be entitled to any security or benefit under the Bond Ordinance until the Certificate of Authentication hereon shall have been manually signed by or on behalf of the Bond Registrar or its duly designated agent. This bond is one of an authorized issue of bonds of like series, date, tenor, rate of interest and date of maturity, except as to number and amount in the aggregate principal amount of $~ and is issued pursuant to the Bond Ordinance to provide a portion of the funds necessary (a) to refund and defease certain limited tax general obligation bonds of the City, and (b) to pay costs of issuance. [Pursuant to the Bond Ordinance, the City has also authorized the issuance of its Limited Tax General Obligation Refunding Bonds, Series 2015[.__] in the aggregate principal amount of ~ .. for these purposes.] [The bonds of this issue are not subject to optional redemption.][The bonds of this issue are subject to redemption as provided in the Bond Ordinance and the Bond Purchase Contract.] The City hereby irrevocably covenants and agrees with the owner of this bond that it will include in its annual budget and levy taxes annually, within and as a part of the tax levy permitted to the City without a vote of the electorate, upon all the property subject to taxation in amounts sufficient, together with other money legally available therefor, to pay the principal of and interest on this bond as the same shall become due. The full faith, credit and resources of the City are hereby irrevocably pledged for the annual levy and collection of such taxes and the prompt payment of such principal and interest. [The bonds of this issue have [not] been designated by the City as "qualified tax-exempt obligations" for investment by financial institutions under Section 265(b) of the Code.] The pledge of tax levies for payment of principal of and interest on the bonds may be discharged prior to maturity of the bonds by making provision for the payment thereof on the terms and conditions set forth in the Bond Ordinance. It is hereby certified that all acts, conditions and things required by the Constitution and statutes of the State of Washington to exist and to have happened, been done and performed precedent to and in the issuance of this bond exist and have happened, been done and performed and that the issuance of this bond and the bonds of this issue does not violate any constitutional, statutory or other limitation upon the amount of bonded indebtedness that the City may incur. ORDINANCE NO. 5754 IN WITNESS WHEREOF, the City of Renton, Washington, has caused this bond to be executed by the manual or facsimile signatures of the Mayor and the City Clerk and the seal of the City imprinted, impressed or otherwise reproduced hereon as of this ~ day of ,2015. [SEAL] CITY OF RENTON, WASHINGTON ATTEST: By /s/manual or fa.~[mile Mayor /s/manual or facsimile City Clerk The Bond Registrar’s Certificate of Authentication on the Bonds shall be in substantially the following form: CERTIFICATE OF AUTHENTICATION This bond is one of the bonds described in the within-mentioned Bond Ordinance and is one of the Limited Tax General Obligation Refunding Bonds, Series 2015L___], of the City of Renton, Washington, dated ,2015. WASHINGTON STATE FISCAL AGENT, as Bond Registrar By Section 6. Execution of Bonds. The Bonds shall be executed on behalf of the City with the manual or facsimile signatures of the Mayor and City Clerk of the City and the seal of the City shall be impressed, imprinted or otherwise reproduced thereon. Only such Bonds as shall bear thereon a Certificate of Authentication in the form hereinbefore recited, manually executed by the Bond Registrar, shall be valid or obligatory for any purpose or entitled to the benefits of this ordinance. Such Certificate of Authentication -20- o,~,~ ORDINANCE NO. 575_._..~4 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 of the officers who shall have executed the Bonds shall cease to be an officer or officers of the City before the Bonds so signed shall have been authenticated or delivered by the Bond Registrar, or issued by the City, such Bonds may nevertheless be authenticated, delivered and issued and upon such authentication, delivery and issuance, shall be as binding upon the City as though those who signed the same had continued to be such officers of the City, Any Bond may be signed and attested on behalf of the City by such persons who at the date of the actual execution of such Bond, are the proper officers of the City, although at the original date of such Bond any such person shall not have been such officer of the City. Se~ion 7. Refunding Plan; ~plication of Bond Proceeds. (a) Re.funding Plan. For the purpose of realizing a debt service savings and benefiting the taxpayers of the City, the Council proposes to refund and defease the Refunded Bonds as set forth herein. The Refunded Bonds shall include all or a portion of the Refunding Candidates as designated by a Designated Representative and set forth in the Bond Purchase Contract. Proceeds of the Bonds and other available funds of the City shall be deposited with the Escrow Agent pursuant to the Escrow Agreement to be used immediately upon receipt thereof to defease the Refunded Bonds as authorized by the 2006 Bond Ordinance and to pay costs of issuance of the Bonds. The net proceeds deposited with the Escrow Agent shall be used to defease the Refunded Bonds and discharge the obligations thereon by the purchase of certain Government -21- ORDINANCE NO. 575___.~4 Obligations (which obligations so purchased, are herein called "Acquired Obligations"), bearing such interest and maturing as to principal and interest in such amounts and at such times which, together with any necessary beginning cash balance, will provide for the payment of: (1)interest on the Refunded Bonds due and payable on and prior to the Call Date; and (2) the redemption prices of the Refunded Bonds on the Call Date. Such Acquired Obligations shall be purchased at a yield not greater than the yield permitted by the Code and regulations relating to acquired obligations in connection with refunding bond issues. (b) Escrow Agent/Escrow Agreement. The City hereby appoints U.S. Bank National Association, Seattle, Washington, as the Escrow Agent for the Refunded Bonds (the "Escrow Agent"). A cash balance, if any, and the Acquired Obligations shall be deposited irrevocably with the Escrow Agent in an amount sufficient to defease the Refunded Bonds. The proceeds of the Bonds remaining after acquisition of the Acquired Obligations and provision for the necessary cash balance shall be utilized to pay expenses of the acquisition and safekeeping of the Acquired Obligations and expenses of the issuance of the Bonds. In order to carry out the purposes of this Section 7, each Designated Representative is authorized and directed to execute and deliver to the Escrow Agent the Escrow Agreement. (c) Call ,for Redemption oJ: Re.funded Bonds. The City hereby calls the Refunded Bonds for redemption on their Call Date in accordance with the provisions of the 2006 Bond Ordinance authorizing the redemption and retirement of the 2006 Bonds prior to their fixed maturities. Said defeasance and call for redemption of the Refunded Bonds shall be ORDINANCE NO. 575_.__~4 irrevocable after the issuance of the Bonds and delivery of the Acquired Obligations to the Escrow Agent. The Escrow Agent is hereby authorized and directed to provide for the giving of notices of the redemption of the Refunded Bonds in accordance with the applicable provisions of the 2006 Bond Ordinance. The costs of publication of such notices shall be an expense of the City. The Escrow Agent is hereby authorized and directed to pay to the Finance Director, or, at the direction of the Finance Director, to the paying agent for the Refunded Bonds, sums sufficient to pay, when due, the payments specified in this Section 7. All such sums shall be paid from the money and Acquired Obligations deposited with the Escrow Agent, and the income therefrom and proceeds thereof. All such sums so paid to said Finance Director shall be credited to the Refunding Account. All moneys and Acquired Obligations deposited with the Escrow Agent and any income therefrom shall be held, invested (but only at the direction of the Finance Director) and applied in accordance with the provisions of this ordinance and with the laws of the State of Washington for the benefit of the City and owners of the Refunded Bonds. The City will take such actions as are found necessary to see that all necessary and proper fees, compensation and expenses of the Escrow Agent for the Refunded Bonds shall be paid when due. Section 8. Tax Covenants. The City covenants that it will not take or permit to be taken on its behalf any action that would adversely affect the exemption from federal income taxation of the interest on the Tax-Exempt Bonds and will take or require to be taken such acts as may reasonably be within its ability and as may from time to time be required under -23- o~15 ORDINANCE NO. 575__.~4 applicable law to continue the exemption from federal income taxation of the interest on the Tax-Exempt Bonds. (a) Arbitrage Covenant. Without limiting the generality of the foregoing, the City covenants that it will not take any action or fail to take any action with respect to the proceeds of the sale of the Tax-Exempt Bonds or any other funds of the City which may be deemed to be proceeds of the Tax-Exempt Bonds pursuant to Section 148 of the Code and the regulations promulgated thereunder which, if such use had been reasonably expected on the dates of delivery of the Tax-Exempt Bonds to the initial purchasers thereof, would have caused the Tax- Exempt Bonds to be treated as "arbitrage bonds" within the meaning of such term as used in Section 148 of the Code. The City will comply with the requirements of Section 148 of the Code and the applicable regulations thereunder throughout the term of the Tax-Exempt Bonds. (b) Private Person Use Limitation for Bonds. The City covenants that for as long as the Tax-Exempt Bonds are outstanding, it will not permit: (i) More than 10% of the Net Proceeds of the Tax-Exempt Bonds to be allocated to any Private Person Use; and (2) More than 10% of the principal or interest payments on the Tax-Exempt Bonds in a Bond Year to be directly or indirectly: (A) secured by any interest in property used or to be used for any Private Person Use or secured by payments in respect of property used or to be used for any Private Person Use, or (B) derived from payments (whether or not made to the City)in respect of property, or borrowed money, used or to be used for any Private Person Use. ORDINANCE NO. 575__.__~4 The City further covenants that, if: (3) More than five percent of the Net Proceeds of the Tax-Exempt Bonds are allocable to any Private Person Use; and (4) More than five percent of the principal or interest payments on the Tax- Exempt Bonds in a Bond Year are (under the terms of this ordinance or any underlying arrangement) directly or Indirectly: (A) secured by any interest in property used or to be used for any Private Person Use or secured by payments in respect of property used or to be used for any Private Person Use, or (B) derived from payments (whether or not made to the City) in respect of property, or borrowed money, used or to be used for any Private Person Use, then, (i) any Private Person Use of projects described in subsection (3) hereof or Private Person Use payments described in subsection (4) hereof that is in excess of the five percent limitations described in such subsections (3) or (4) will be for a Private Person Use that is related to the state or local governmental use of the projects refunded by the proceeds of the Tax-Exempt Bonds, and (ii) any Private Person Use will not exceed the amount of Net Proceeds of the Tax- Exempt Bonds allocable to the state or local governmental use portion of the projects to which the Private Person Use of such portion of projects refunded by the proceeds of the Tax-Exempt Bonds relate. The City further covenants that it will comply with any limitations on the use of the projects refunded by the proceeds of the Tax-Exempt Bonds by other than state and local governmental users that are necessae~,, in the opinion of its bond counsel, to preserve the tax exemption of the interest on the Tax-Exempt Bonds. ORDINANCE NO. 575~ (c) Modification o.f Tax Covenants. The covenants of this section are specified solely to assure the continued exemption from regular income taxation of the interest on the Tax- Exempt Bonds. To that end, the provisions of this section may be modified or eliminated without any requirement for formal amendment thereof upon receipt of an opinion of the City’s bond counsel that such modification or elimination will not adversely affect the tax exemption of interest on any Tax-Exempt Bonds. (d) Designation under Section 265(b). In the Federal Tax Certificate the City may designate any Tax-Exempt Bonds as "qualified tax-exempt obligations" under Section 265(b)(3) of the Code for investment by financial institutions if the City does not expect to issue more than $10,000,000 in qualifying tax-exempt obligations in calendar year 2015. Section 9. Bond Fund and Provision for Tax LeWr..Pay~ents. The City hereby authorizes the creation of a fund to be used for the payment of debt service on the Bonds, designated as the "City of Renton Limited Tax General Obligation Bond Debt Service Fund, 20:15" (the "Bond Fund"). No later than the date each payment of principal of or interest on the Bonds becomes due, the City shall transmit sufficient funds, from the Bond Fund or from other legally available sources, to the Bond Registrar for the payment of such principal or interest. Money in the Bond Fund may be invested in legal investments for City funds. The City hereby irrevocably covenants and agrees for as long as any of the Bonds are outstanding and unpaid that each year it will include in its budget and levy an ad vaiorem tax upon all the property within the City subject to taxation in an amount that will be sufficient, together with all other revenues and money of the City legally available for such purposes, to pay the principal of and interest on the Bonds when due. ORDINANCE NO. 575_._.~4 The City hereby irrevocably pledges that the annual tax provided for herein to be levied for the payment of such principal and interest shall be within and as a part of the tax levy permitted to cities without a vote of the people, and that a sufficient portion of each annual levy to be levied and collected by the City prior to the full payment of the principal of and interest on the Bonds will be and is hereby irrevocably set aside, pledged and appropriated for the payment of the principal of and interest on the Bonds. The full faith, credit and resources of the City are hereby irrevocably pledged for the annual levy and collection of said taxes and for the prompt payment of the principal of and interest on the Bonds when due. Section 10. Defeasance. In the event that the City, to effect the payment, retirement or redemption of any Bond, sets aside in the Bond Fund or in another special account, cash or noncallable Government Obligations, or any combination of cash and/or noncallable Government Obligations, in amounts and maturities which, together with the known earned income therefrom, are sufficient to redeem or pay and retire such Bond in accordance with its terms and to pay when due the interest and redemption premium, if any, thereon, and such cash and/or noncallable Government Obligations are irrevocably set aside and pledged for such purpose, then no further payments need be made into the Bond Fund for the payment of the principal of and interest on such Bond. The owner of a Bond so provided for shall cease to be entitled to any lien, benefit or security of this ordinance except the right to receive payment of principal, premium, if any, and interest from the Bond Fund or such special account, and such Bond shall be deemed to be not outstanding under this ordinance. ORDINANCE NO. 575_...~4 The City shall give written notice of defeasance to the owners of all Bonds so provided for within 30 days of the defeasance and to each party entitled to receive notice in accordance with Section 12. Section :~1. Sale of Bonds. (a) Bond Sale. The Bonds shall be sold at negotiated sale to the Underwriter pursuant to the terms of the Bond Purchase Contract. Market conditions are fluctuating and, as a result, the most favorable market conditions may occur on a day other than a regular meeting date of the Council. The Council has determined that it would be in the best interest of the City to delegate to the Designated Representatives for a limited time the authority to approve the final interest rates, aggregate principal amount, principal amounts of each maturity of the Bonds, whether to issue the Bonds in one or more series, whether to designate the Bonds (or the Bonds of a series) as Tax-Exempt or Taxable Bonds, whether to designate the Bonds of a series as "qualified tax-exempt obligations" under Section 265(b)(3) of the Code, selection of the Refunded Bonds, and redemption rights. Each Designated Representative is hereby authorized to determine whether to issue the Bonds in one or more series, whether to designate the Bonds (or the Bonds of a series) as Tax-Exempt or Taxable Bonds, whether to designate the Bonds of a series as "qualified tax- exempt obligations" under Section 265(b)(3) of the Code, and to approve the final interest rates, aggregate principal amount, principal amounts of each maturity of the Bonds, selection of the Refunded Bonds, and redemption rights for the Bonds in the manner provided hereafter so long as: ,28- ORDINANCE NO. 5754 ~;14,000,000, the aggregate principal amount of the Bonds does not exceed (2)the final maturity date for the Bonds is no later than December 1, 2028, (3)the Bonds are sold (in the aggregate) at a price not less than 98% and not greater than 120%, (4) the Bonds are sold for a price that results in a minimum net present value debt service savings over the Refunded Bonds of 8.00%, (5)the true interest cost for the Bonds (in the aggregate) does not exceed 4.00%, and (6)the Bonds conform to all other terms of this ordinance. Subject to the terms and conditions set forth in this Section 11, the Designated Representatives are hereby authorized to execute the Bond Purchase Contract. The signature of one Designated Representative shall be sufficient to bind the City. Following the execution of the Bond Purchase Contract, a Designated Representative or the Finance Director shall provide a report to the Council describing the final terms of the Bonds approved pursuant to the authority delegated in this section. The authority granted to the Designated Representatives by this Section 11 shall expire 120 days after the effective date of this ordinance. If a Bond Purchase Contract for the Bonds has not been executed within 120 days after the effective date of this ordinance, the authorization for the issuance of the Bonds shall be rescinded, and the Bonds shall not be issued nor their sale approved unless such Bonds shall have been re-authorized by ordinance of the Council. The ordinance re-authorizing the issuance and sale of such Bonds may be in the form of a new ordinance repealing this -29- ORDINANCE NO. 575__..~4 ordinance in whole or in part or may be in the form of an amendatory ordinance approving a bond purchase contract or establishing terms and conditions for the authority delegated under this Section 11. (b) Delivery oJ~ Bonds; Documentation. Upon the passage and approval of this ordinance, the proper officials of the City, including the Designated Representatives, are authorized and directed to undertake all action necessary for the prompt execution and delivery of the Bonds to the Underwriter and further to execute all closing certificates and documents required to effect the closing and delivery of the Bonds in accordance with the terms of the Bond Purchase Contract. (c) Preliminary and Final Official Statements. The Finance Director is hereby authorized to ratify and to deem final the preliminary Official Statement relating to the Bonds for the purposes of the Rule. The Finance Director is further authorized to ratify and to approve for purposes of the Rule, on behalf of the City, the final Official Statement relating to the issuance and sale of the Bonds and the distribution of the final Official Statement pursuant thereto with such changes, if any, as may be deemed by her to be appropriate. Section 12. Undertaking to Provide Ongoing Disclosure. (a) Contract/Undertaking. This section constitutes the City’s written undertaking for the benefit of the owners, including Beneficial Owners, of the Bonds as required by Section (b)(5) of the Rule. (b) Financial Statements/Operating Data. The City agrees to provide or cause to be provided to the Municipal Securities Rulemaking Board ("MSRB"), the following annual -30- o~4~ ORDINANCE NO. 575._.._~4 financial information and operating data for the prior fiscal year (commencing in 2015 for the fiscal year ended December 31, 2014): (1) Annual financial statements, which statements may or may not be audited, showing ending fund balances for the City’s general fund prepared in accordance with the Budgeting Accounting and Reporting System prescribed by the Washington State Auditor pursuant to RCW 43.09.200 (or any successor statute) and generally of the type included in the official statement for the Bonds under the heading "Comparative Statement of Revenues, Expenditures and Changes in Fund Balances"; (2)The assessed valuation of taxable property in the City; (3)Ad valorem taxes due and percentage of taxes collected; (4)Property tax levy rate per $1,O00 of assessed valuation; and (5)Outstanding general obligation debt of the City. Items (2)-(5) shallbe required only to the extent that such information is not included in the annual financial statements. The information and data described above shall be provided on or before the end of nine months after the end of the City’s fiscal year. The City’s current fiscal year ends December 31. The City may adjust such fiscal year by providing written notice of the change of fiscal year to the MSRB. In lieu of providing such annual financial information and operating data, the City may cross-reference to other documents available to the public on the MSRB’s internet website or filed with the Commission, If not provided as part of the annual financial information discussed above, the City shall provide the City’s audited annual financial statement prepared in accordance with the ORDINANCE NO. 575__.~4 Budgeting Accounting and Reporting System prescribed by the Washington State Auditor pursuant to RCW 43.09.200 (or any successor statute) when and if available to the MSRB. (c) Listed Events. The City agrees to provide or cause to be provided to the MSRB, in a timely manner not in excess of ten business days after the occurrence of the event, notice of the occurrence of any of the following events with respect to the Bonds: ¯Principal and interest payment delinquencies; ¯Non-payment related defaults, if material; ¯Unscheduled draws on debt service reserves reflecting financial difficulties; ¯Unscheduled draws on credit enhancements reflecting financial difficulties; ¯Substitution of credit or liquidity providers, or their failure to perform; ¯Adverse tax opinions, the issuance by the Internal Revenue Service of proposed or final determinations of taxability, Notices of Proposed Issue (IRS Form 5701- TEB) or other material notices or determinations with respect to the tax status of the Bonds, or other material events affecting the tax status of the Bonds; ¯Modifications to the rights of Bondholders, if material; ¯Optional, contingent or unscheduled Bond calls other than scheduled sinking fund redemptions for which notice is given pursuant to Exchange Act Release 34-23856, if material, and tender offers; ¯Defeasances; ¯Release, substitution, or sale of property securing repayment of the Bonds, if material; Rating changes; ORDINANCE NO. 5754 ¯Bankruptcy, insolvency, receivership or similar eveht of the City; ¯The consummation of a merger, consolidation, or acquisition involving the City or the sale of all or substantially all of the assets of the City, other than in the ordinary course of business, the entry into a definitive agreement to undertake such an action or the termination of a definitive agreement relating to any such actions, other than pursuant to its terms, if material; and ¯Appointment of a successor or additional trustee or the change of name of a trustee, if material. (d) Format ~for Filings with the MSRB. All notices, financial information and operating data required by this undertaking to be provided to the MSRB must be in an electronic format as prescribed by the MSRB. All documents provided to the MSRB pursuant to this undertaking must be accompanied by identifying information as prescribed by the MSRB. (e) NotiJ~ication Upon Failure to Provide Financial Data. The City agrees to provide or cause to be provided, in a timely manner, to the MSRB notice of its failure to provide the annual financial information described in Subsection (b) above on or prior to the date set forth in Subsection (b) above. (f) Termination/Modification. The City’s obligations to provide annual financial information and notices of certain listed events shall terminate upon the legal defeasance, prior redemption or payment in full of all of the Bonds. Any provision of this section shall be null and void if the City (1) obtains an opinion of nationally recognized bond counsel to the effect that the portion of the Rule that requires that provision is invalid, has been repealed ORDINANCE NO. 57S__..~4 retroactively or otherwise does not apply to the Bonds and (2)notifies the MSRB of such opinion and the cancellation of this section. The City may amend this section with an opinion of nationally recognized bond counsel in accordance with the Rule. In the event of any amendment of this section, the City shall describe such amendment in the next annual report, and shall include a narrative explanation of the reason for the amendment and its impact on the type (or in the case of a change of accounting principles, on the presentation) of financial information or operating data being presented by the City. In addition, if the amendment relates to the accounting principles to be followed in preparing financial statements, (A) notice of such change shall be given in the same manner as for a listed event under Subsection (c), and (B) the annual report for the year in which the change is made shall present a comparison (in narrative form and also, if feasible, in quantitative form) between the financial statements as prepared on the basis of the new accounting principles and those prepared on the basis of the former accounting principles. (g) Bond Owner’s Remedies Under This Section. The right of any bondowner or Beneficial Owner of Bonds to enforce the provisions of this section shall be limited to a right to obtain specific enforcement of the City’s obligations under this section, and any failure by the City to comply with the provisions of this undertaking shall not be an event of default with respect to the Bonds. (h) No Default. Except as otherwise disclosed in the City’s official statement relating to the Bonds, the City is not and has not been in default in the performance of its obligations of any prior undertaking for ongoing disclosure with respect to its obligations. ORDINANCE NO, 575~ Section 13. Lost, Stolen or Destroyed Bonds. In case any Bond or Bonds shall be lost, stolen or destroyed, the Bond Registrar may execute and deliver a new Bond or Bonds of like series, date, number and tenor to the Registered Owner thereof upon the Registered Owner’s paying the expenses and charges of the City and the Bond Registrar in connection therewith and upon his/her filing with the City evidence satisfactory to the City that such Bond was actually lost, stolen or destroyed and of his/her ownership thereof, and upon furnishing the City and/or the Bond Registrar with indemnity satisfactory to the City and the Bond Registrar. Section 14. Severabilitv; Ratification. If any one or more of the covenants or agreements provided in this ordinance to be performed on the part of the City shall be declared by any court of competent jurisdiction to be contrary to law, then such covenant or covenants, agreement or agreements, shall be null and void and shall be deemed separable from the remaining covenants and agreements of this ordinance and shall in no way affect the validity of the other provisions of this ordinance or of the Bonds. All acts taken pursuant to the authority granted in this ordinance but prior to its effective date are hereby ratified and confirmed. ORDINANCE NO. 575___~4 Section :15. Effective Date of Ordinance. This ordinance shall go into effect thirty (30) days from the time of final passage as provided by law. PASSED BYTHE CITY COUNCIL this :13th day of April, 20:15. Jason A. APPROVED BY THE MAYOR this 13th day of April, Clerk Approved as to form: Dea Gregory Pacifica Law Group LLP Bond Counsel Date of Publication: 4/17/2015 (Summary) Denis Law, Mayor -36- o4~14~I~ CERTIFICATE I, Jason A. Seth, City Clerk of the City of Renton, Washington (the "City"), do hereby certify that the attached is a true and correct copy of the minutes of the April 6, 2015 regular meeting of the City Council which reflects the first reading of Ordinance No. 5754. Dated as of this 13th day of May, 2015. April 6, 2015 Monday, 7:00 p.m. RENTON CITY COUNCIL Regular Meeting MINUTES Council Chambers Renton City Hall CALL TO ORDER ROLL CALL OF COUNClLMEMBERS CITY STAFF IN ATTENDANCE SPECIAL PRESENTATION Police: Employee Recognition ADMINISTRATIVE REPORT AUDIENCE COMMENT Citizen Comment: McOmber- Volunteer City CONSENT AGENDA Council: Meeting Minutes of 3/23/2015 Appointment: Library Advisory Board Appointment: Municipal Arts Commission Mayor Law called the meeting of the Renton City Council to order and led the Pledge of Allegiance to the flag. ED PRINCE, Council President; DON PERSSON; MARClE PALMER; RANDY CORMAN; GREG TAYLOR; ARMONDO PAVONE; RUTH PEREZ. DENIS LAW, Mayor; JAY COVINGTON, Chief Administrative Officer; ZANETTA FONTES, Senior Assistant City Attorney; JASON SETH, City Clerk; MEGAN GREGOR, Deputy City Clerk; GREGG ZIMMERMAN, Public Works Administrator; PREETI SHRIDHAR, Deputy Public Affairs Administrator; JENNIFER HENNING, Planning Director; CHIEF KEVIN MILOSEVlCH, DEPUTY CHIEF ED VANVALEY, COMMANDER KATIE MCCLINCY, COMMANDER TRACY WILKINSON, and COMMANDER CLARK WILCOX, Police Department. Police Chief Kevin Milosevich recognized the following individuals, chosen by their peers, for outstanding performances in 2014, and recapped each person’s achievements: ¯Specialist Rosa Brito - Employee of the 1st Quarter ¯Evidence Technician Chad Jay - Employee of the 2nd Quarter; Employee of the Year ¯Officer Kevin Lane - Employee of the 2nd Quarter ¯Officer Marty Leverton - Employee of the 3rd Quarter Chief Administrative Officer Jay Covington reviewed a written administrative report summarizing the City’s recent progress towards goals and work programs adopted as part of its business plan for 2015 and beyond. Item noted was: The two tennis courts at Gene Coulon Memorial Beach Park will be closed April 9, 2015 through early June for renovation. Nearby tennis courts at Liberty Park and Highlands Park are available for use during the renovation. Howard McOmber (Renton) expressed appreciation to the City for its support of the current volunteer programs. He also remarked that the volunteers made positive contributions throughout the community. Items listed on the consent ogendo ore odopted by one motion which follows the listing. Approval of Council meeting minutes of 3/23/2015. Council concur. Mayor Law appointed Kimberly Unti to the Library Advisory Board for a term expiring 9/1/2017. Refer to Community Services Committee. Mayor Law appointed the following individuals to the Municipal Arts Commission: Mary Clymer, for a term expiring on 12/31/2015; Kimberly Eshelman, Adrienne LaFaye, and Nell Sheesley for terms expiring on 12/31/2017. Refer to Community Services Committee. CERTIFICATE 1, the undersigned City Clerk of the City of Renton, Washington, certify that 1~is.is a tr~.e and,correct copy of q/If/I.~~ Yl,’i’~,t,l~ ["t’..~. Subscribed April 6, 2015 Renton City Council Minutes Page 63 CAG: 15-025, Riverview Park Bridge Replacement, Rodarte Construction, Inc. CAG: 15-032, Sunset Terrace Regional Stormwater Facility, Olson Bros Excavating, Inc. Appeal: Tiffany Park Preliminary Plat, LUA-13- 001572 Community Services: 2015 Neighborhood Grant Applications Community Services: Purchase & Sale Agreement Amendment, Fawcett property Public Works: Interlocal Cooperative Purchasing Agreement, Kitsap County Transportation: Increase in Staffing Transportation: Airport Sustainability Management Plan Lease: Amendment 015-15, Aerodyne, LLC, LAG-g4-006 Lease: Amendment 2-15, Renton Gateway Center, LAG- 09-006 Lease: Amendment 015-15, Kaynan, Inc., LAG-84-003 Lease: Amendment 09-15, Kaynan, Inc., LAG-85-011 City Clerk reported a bid opening on 3/23/2015 for CAG-15-025, Riverview Park Bridge Replacement; six bids; engineer’s estimate 5800,000; and submitted staff recommendation to award the contract to the low bidder, Rodarte Construction, Inc., in the amount of 5759,628.88. Refer to Finance Committee for discussion of funding. City Clerk reported a bid opening on 3/24/2015 for CAG-15-032, Sunset Terrace Regional Stormwater Facility Project; ten bids; engineer’s estimate 5738,160.09; and submitted staff recommendation to award the contract to the low bidder, Olson Bros Excavating, Inc., in the amount of 5649,550. Council concur. City Clerk Reported appeal of the Hearing Examiner’s final decision upon reconsideration regarding the Reserve at Tiffany Park Preliminary Plat (LUA-13- 001572) by Renate Beedon, Tiffany Park Woods Advocacy Group, accompanied by required fee. Refer to Planninig and Development Committee. Community Services Department reported receipt of five 2015 Neighborhood Grant Program applications and recommended funding all five projects totaling 545,252. Refer to Community Services Committee. Community Services Department recommended approval of an amendment to the Purchase and Sale agreement for the Fawcett property, along May Creek, with an agreed upon price of 5785,000. Refer to Finance Committee. Public Works Department recommended approval of an Interlocal Cooperative Purchasing Agreement with Kitsap County to expedite the purchase of capital Items. Council concur. (See page 65for resolution.) Transportation Systems Division requested authorization to increase a Public Works Department Transportation Systems Division Operations Section Civil Engineer II Position from 0.50 Full Time Equivalent (FTE) to 1.0 FTE. Refer to Finance Committee. Transportation Systems Division recommended approval of a resolution adopting the Renton Municipal Airport Sustainability Management Plan. Refer to Transportation (Aviation) Committee. Transportation Systems Division recommended approval of Amendment 015-15 to LAG-84-006, Aerodyne, LLC, for a land rental rate adjustment from 50.75 to 50.7252 in accordance with a January 2015 lease arbitration decision. Council concur. Transportation Systems Division recommended approval of Amendment 02-15 to LAG-09-006, Renton Gateway Center, for a land rental rate adjustment from 50.57 to 50.7252 in accordance with a January 2015 lease arbitration decision. Council concur. Transportation Systems Division recommended approval of Amendment 015-15 to LAG-84-003, Kaynan, Inc., for a land rental rate adjustment from 50.75 to 50.7252 in accordance with a January 2015 lease arbitration decision. Council concur. Transportation Systems Division recommended approval of Amendment 09-15 to LAG-85-011, Kaynan, Inc., for a land rental rate adjustment from 50.75 to 50.7252 in accordance with a January 2015 lease arbitration decision. Council concur. April 6, 2015 Renton City Council Minutes Pal~e 64 CAG: 14-018, Monterey Terrace Water Main Replacement, Buno Construction, LLC. Utility: 2015-2016 KC Solid Waste Reduction & Recycling, KC Grant UNFINISHED BUSINESS Finance Committee Finance: Vouchers Finance: Bond Refunding, 2006 LTGO Bonds Lease: Amendment #3, 200 Mill Building, King County Sexual Assault Resource Center (KCSARC) Lease: Amendment #5, 4th Floor City Hall, Iron Mountain Information Management, LAG-00-003 Finance: Amended 2015-2016 Fee Schedule Utility Systems Division submitted CAG-14-018, Montery Terrace Water Main Replacement Project; and requested approval of the project, authorization for final pay estimate in the amount of ~13,485.11, commencement of a 60-day lien period, and release the retainage to Buno Construction, LLC., contractor, if all required releases are obtained. Council concur. Utility Systems Division recommended approval to accept ~231,876 for the 2015-2016 King County Solid Waste Division Waste Reduction and Recycling Grant. Council concur. (See page 66for resolution.) MOVED BY PRINCE, SECONDED BY CORMAN, COUNCIL CONCUR TO APPROVE THE CONSENT AGENDA AS PRESENTED. CARRIED. Finance Committee Chair Persson presented a report recommending approval of Claim Vouchers 336582 - 337288, seven wire transfers and two payroll runs with benefit withholding payments totaling ~13,771,079.78 and payroll vouchers including 1,449 direct deposits and 130 payroll checks totaling ~3,129,654.28. MOVED BY PERSSON, SECONDED BY PAVONE, COUNCIL CONCUR IN THE COMMITTEE RECOMMENDATION. CARRIED. Finance Committee Chair Persson presented a report recommending concurrence in the staff recommendation to approve the proposed refinancing plan and adoption of the ordinance authorizing the issuance of up to ~14 million in new bonds, for a true interest cost of approximately 2.59% including underwriter’s discount and issue cost (or 2.34% without), which will replace approximately ~12.4 million of existing 2006 LTGO bonds, maturing between 2017 through 2028 carrying an average interest rate of 5.06%, with a net present value (NPV) saving of ~1.46 million or 11.8% of the refunded debt. MOVED BY PERSSON, SECONDED BY PAVONE, COUNCIL CONCUR IN THE COMMITTEE RECOMMENDATION. CARRIED. (See page 66 J:or ordinance.) Finance Committee Chair Persson presented a report recommending concurrence in the staff recommendation to approve the five-year Lease Amendment with KCSARC for continued tenancy of 7,421 sq. ft. of the ground floor of the 200 Mill Building in Renton, WA, 98057. The Committee further recommended that the Mayor and City Clerk be authorized to sign the Lease Amendment. MOVED BY PERSSON, SECONDED BY PAVONE, COUNCIL CONCUR IN THE COMMII-rEE RECOMMENDATION. CARRIED. Finance Committee Chair Persson presented a report recommending concurrence in the staff recommendation to approve the three-year Lease Amendment with Iron Mountain Information Management, Inc., for continued tenancy of 14,208 sq. ft. of the fourth floor of Renton City Hall, 1055 S. Grady Way, Renton, WA, 98057. The Committee further recommended that the Mayor and City Clerk be authorized to sign the Lease Amendment. MOVED BY PERSSON, SECONDED BY PAVONE, COUNCIL CONCUR IN THE COMMII-~EE RECOMMENDATION. CARRIED. Finance Committee Chair Persson presented a report recommending concurrence in the staff recommendation to amend the 2015-16 Fee Schedule to incorporate the 2015 school impact fees and to correct the omitted changes in development services fees. MOVED BY PERSSON, SECONDED BY PAVONE, COUNCIL CONCUR IN THE COMMITTEE RECOMMENDATION. CARRIED. (See page 66 ~or resolution.) April 6, 2015 Renton City Council Minutes Page 65 Finance: Utility Billing Adjustment Request, 215 S. 4th PI. Finance: 2015 Carry Forward Amendment Transportation (Aviation) Committee Transportation: NE Sunset Blvd. Roadway Improvements; Perteet, Inc. Lease: Amendment 03-15, 800 Building, Rainier Flight Service CAG: 13-149, 800 W Perimeter Rd., Forma Construction Company Planning & Development Committee CED: 2015 Major Comprehensive Plan Work Program & Public Participation Plan RESOLUTIONS AND ORDINANCES RESOLUTION #4247 Public Works: Interlocal Cooperative Purchasing Agreement, Kitsap County Finance Committee Chair Persson presented a report recommending granting the waiver requested for sewer and King County Metro related charges from a water leak at the service address of 215 S 4th PI. (Account #04752-000), as presented for the total amount of 59,116.68. The adjustment includes City Sewer (53,290.86) and King County Metro (55,825.82) charges above their normal usage. MOVED BY PERSSON, SECONDED BY PAVONE, COUNCIL CONCUR IN THE COMMII-FEE RECOMMENDATION. CARRIED. Finance Committee Chair Persson presented a report recommending concurrence in the staff recommendation to approve an amendment in the 2015/2016 Budget appropriations in the amount of 566,949,826 with the total amended budget to be 5552,837,193 for the biennium. The Committee further recommended that the ordinance regarding this matter be presented for first reading. MOVED BY PERSSON, SECONDED BY PAVONE, COUNCIL CONCUR IN THE COMMITTEE RECOMMENDATION. CARRIED. (See page 66for ordinance.) Transportation (Aviation) Committee Chair Palmer presented a report authorizing the Mayor and City Clerk to execute the consultant agreement with Perteet, Inc. in the amount of 5578,048 to proceed with the preliminary design phase of the NE Sunset Blvd. (N Park Dr. to Monroe Ave. NE) Roadway Improvements Project. MOVED BY PALMER, SECONDED BY PEREZ, COUNCIL CONCUR IN THE COMMITTEE RECOMMENDATION. CARRIED. Transportation (Aviation) Committee Chair Palmer presented a report recommending concurrence in the staff recommendation to approve Amendment 03-15 to Rainier Flight Service’s lease agreement (LAG 14-005) for a land rental rate adjustment from 50.75 to 50.7252 in accordance with a January 2015 lease arbitration decision, and authorize the Mayor and City Clerk to sign the lease amendment. MOVED BY PALMER, SECONDED BY PEREZ, COUNCIL CONCUR IN THE COMMITTEE RECOMMENDATION. CARRIED. Transportation (Aviation) Committee Chair Palmer presented a report recommending concurrence in the staff recommendation to approve the Job Order Contract proposal for final improvements to the building at BO0 W. Perimeter Rd. and authorize the Mayor and City Clerk to sign the proposal. MOVED BY PALMER, SECONDED BY PEREZ, COUNCIL CONCUR IN THE COMMITTEE RECOMMENDATION. CARRIED. Planning & Development Committee Chair Corman presented a report recommending that the Critical Areas regulations be amended to ensure the regulations meet Best Available Science in compliance with the State required 2015 Comprehensive Plan Update and to improve functionality and usability. MOVED BY CORMAN, SECONDED BY PAVONE, COUNCIL CONCUR IN THE COMMITTEE RECOMMENDATION. CARRIED. The following resolutions were presented for reading and adoption: A resolution was read authorizing the Mayor and City Clerk to enter into and interlocal cooperative purchasing agreement with Kitsap County. MOVED BY PERSSON, SECONDED BY PALMER, COUNCIL ADOPT THE RESOLUTION AS PRESENTED. CARRIED. April 6, 2015 Renton City Council Minutes Page 66 RESOLUTION #4248 Utility: 2015-2016 KC Solid Waste Reduction & Recycling Grant RESOLUTION #4249 Finance: Amended 2015-2016 Fee Schedule ORDINANCE Finance: Bond Refunding, 2006 LTGO Bonds ORDINANCE Finance: 2015 Carry Forward Amendment ORDINANCE #5753 Utility: Final Sewer Extension, Special Assessment District No. 0047 NEW BUSINESS ADJOURNMENT A resolution was read authorizing the Mayor and City Clerk to enter into an interlocal cooperative agreement with King County entitled "lnteragency Agreement for 2015 and 2016 Between King County and the City of Renton." MOVED BY PERSSON, SECONDED BY PRINCE, COUNCIL ADOPT THE RESOLUTION AS PRESENTED. CARRIED. A resolution was read amending the 2015-16 City of Renton fee schedule. MOVED BY PERSSON, SECONDED BY PAVONE, COUNCIL ADOPT THE RESOLUTION AS PRESENTED. CARRIED. The following ordinances were presented.for.first reading and referred to the 4/13/2015 Council meeting for second and final reading: An ordinance was read providing for the issuance of one or more series of limited tax general obligation refunding bonds of the City in the aggregate principal amount of not to exceed ~14,000,000 to refund certain outstanding limited tax general obligation bonds and to pay costs of issuing the bonds; and delegating the authority to approve the final terms of the bonds. MOVED BY PERSSON, SECONDED BY CORMAN, COUNCIL REFER THE ORDINANCE FOR SECOND AND FINAL READING ON 4/13/2015. An ordinance was read amending the city of Renton fiscal years 2015/2016 Biennial Budget as adopted by Ordinance No. 5737, in the amount of ~66,949,826, for an amended total of 5552,837,193 over the biennium. MOVED BY PERSSON, SECONDED BY PAVONE, COUNCIL REFER THE ORDINANCE FOR SECOND AND FINAL READING ON 4/13/2015. The following ordinance was presented for final reading and adoption: An ordinance was read establishing an assessment district for sanitary sewer service for properties adjacent to S 132nd St., and establishing the amount of the charge upon connection to the facilities. MOVED BY CORMAN, SECONDED BY PALMER, COUNCIL ADOPT THE ORDINANCE AS READ. ROLL CALL: ALL AYES. CARRIED. Please see attached Council Committee Meeting Calendar for updates from Councilmembers on upcoming Council Committee meetings. MOVED BY PERSSON, SECONDED BY PRINCE, COUNCIL ADJOURN. CARRIED. TIME: 7:29 p.m. Megan Gregor, Recorder April 6, 2015 Jason A. Seth, CMC, City Clerk CERTIFICATE I, Jason A. Seth, City Clerk of the City of Renton, Washington (the "City"), do hereby certify that the attached is a true and correct copy of the minutes of the April 13, 2015 regular meeting of the City Council which reflects the second reading and passage of Ordinance No. 5754. Dated as of this 13th day of May, 2015. f ason-A. Seth, CMC, City Clerk City of Renton, Washington April 13, 2015 Monday, 7:00 p.m. RENTON CiTY COUNCIL Regular Meeting MINUTES Council Chambers Renton City Hall CALL TO ORDER ROLL CALL OF COUNCILMEMBERS CITY STAFF IN AI"rENDANCE SPECIAL PRESENTATIONS Communities In Schools of Renton (CISR) Puget Sound Emergency Radio Network (PSERN) - Briefing ADMINISTRATIVE REPORT Mayor Law called the meeting of the Renton City Council to order and led the Pledge of Allegiance to the flag. ED PRINCE, Council President; DON PERSSON; MARCIE PALMER; RANDY CORMAN; GREG TAYLOR; ARMONDO PAVONE; RUTH PEREZ. DENIS LAW, Mayor; JAY COVINGTON, Chief Administrative Officer; LAWRENCE J. WARREN, City Attorney; JASON SETH, City Clerk; MEGAN GREGOR, Deputy City Clerk; GREGG ZIMMERMAN, Public Works Administrator; PETER RENNER, Facilities Director; JENNIFER HENNING, Planning Director; COMMANDER CHARLES KARLEWICZ, Police Department. Sue ParD, Executive Director of Communities in Schools of Renton (CISR), presented updates and changes that have happened in her organization over the past year. She highlighted data supporting the effectiveness of the Communities in Schools (CIS) program, and the benefits of supporting their efforts. She introduced the CIS Model of Integrated Student Supports and explained what CIS does in Renton, who they serve, how they are able to operate, and what partnerships they have within the community. She also shared the 2013-2014 goals and outcomes and expressed their need for volunteers to sign up as mentors to help reduce/eliminate the effects of trauma, disparity, and poverty on learning among the youth of Renton. Marlin Blizinsky, PSERN Governmental Relations Officer, provided a presentation on the replacement project for the existing public safety radio system. Through his presentation, he explained what today’s public safety radio system does, why there is a need for a new system, and how PSERN would improve upon the current system. He also highlighted which cities own/operate the system, the project scope, and the funding sources for the project. Responding to council inquiries, Mr. Blizinsky stated that, if implemented, the new system would provide better coverage, both inside and outside of buildings. Chief Administrative Officer Jay Covington reviewed a written administrative report summarizing the City’s recent progress towards goals and work programs adopted as part of its business plan for 2015 and beyond. Items noted were: The trestle bridge next to Maplewood Roadside Park at the Cedar River Trail will be receiving minor repairs from April 13 through May 22. The contractor will be setting up their work area on the outside of the trestle bridge, so there will be equipment on the trail at times. Please use caution traversing the trail during this time. Due to the 2015 Seahawks 12K Run at The Landing on Sunday, April 19th, there will be road closures along the southeast shore of Lake Washington that morning. The streets involved are Lake Washington BIvd N, Park Ave. N, N. 8th St., and Logan Ave. N. Most streets will close at 8:30 a.m. and reopen at varying times. CERTIFICATE !, the undersigned City Clerk of the City of Renton, Washington, certify that this is a true and correct copy of q/t 7 ]~, ~ ,~~ fl u~~. Subscribed arid s~i~ this~:.~-~y of !g’_nf~, 20~..~_ April 13, 2015 Renton City Council Minutes Page 68 CONSENT AGENDA Council: Meeting Minutes of 4/6/2015 CED: Approval of Quitclaim Deed and Temporary Easement Transportation: Staffing Increase CAG: 14-078, Sewer Radio Panel Relocation and Lift Station Improvements, Equity Builders, LLC Utility: Establish SE 165 St. Sewer Extension SAD UNFINISHED BUSINESS Committee of the Whole Utility: 2016 Solid Waste Collection Contract Community Services Committee Appointment: Library Advisory Board Appointments: Municipal Arts Commission Items listed on the consent agenda are adopted by one motion which follows the listing. Approval of Council meeting minutes of 4/6/2015. Council concur. Community and Economic Development Department recommended authorizing a quitclaim deed and a temporary easement, in favor of the Washington State Department of Transportation, to further regional highway improvements within the City. Council concur. Transportation Systems Division requested authorization of an increase to staffing by adding a 1.0 FTE (Full-time Equivalent) Civil Engineer III and a 1.0 FTE Administrative Secretary, and adjust the budget as necessary. Refer to Finance~ Committee. Utility Systems Division submitted CAG 14-078, Sewer Radio Panel Relocation and Lift Station Improvements; and requested approval of the project, authorization for final pay estimate in the amount of ~6,022.50, commencement of a 60 day lien period, and release the retainage in the amount of $6,708.57 to Equity Builders, LLC, contractor, subject to the receipt of all required authorizations. Council concur. Utility Systems Division requested authorization to establish the SE 165th St. Sewer Extension Special Assessment District (SAD), in the estimated amount of ~143,000, to ensure that project costs are equitably distributed to those who benefit, and direct staff to proceed with the establishment of the final SAD upon completion of the construction of the SE 165th St. Sewer Extension Project. Refer to Utilities Committee. MOVED BY PRINCE, SECONDED BY CARMAN, COUNCIL CONCUR TO APPROVE THE CONSENT AGENDA AS PRESENTED. CARRIED. Council President Prince presented a Committee of the Whole report concurring with the Administration’s intent to pursue a competitive process to procure the 2016 solid waste bollection contract. MOVED BY PRINCE, SECONDED BY CARMAN, COUNCIL CONCUR IN THE COMMITTEE RECOMMENDATION. CARRIED. Community Services Committee Chair Perez presented a report recommending concurrence in the staff recommendation to confirm Mayor Law’s appointment of Kim Unti to the Library Advisory Board for a term expiring September 1, 2017. MOVED BY PEREZ, SECONDED BY PALMER, COUNCIL CONCUR IN THE COMMITTEE RECOMMENDATION. CARRIED. Community Services Committee Chair Perez presented a report recommending concurrence in the staff recommendation to confirm Mayor Law’s appointments to the Renton Municipal Arts Commission: Ms. Mary Clymer for a term expiring December 31, 2015, Ms. Kimberly Eshelman for a term expiring December 31, 2017, Ms. Adrienne LaFaye for a term expiring December 31, 2017, and Mr. Neil Sheesley for term expiring on December 31, 2017. MOVED BY PEREZ, SECONDED BY PALMER, COUNCIL CONCUR IN THE COMMITTEE RECOMMENDATION. CARRIED. Renton City Council Minutes PaRe 69April 13, 20.!5 Community Services: 2015 Neighborhood Grant Applications RESOLUTIONS AND ORDINANCES ORDINANCE #5754 Finance: Bond Refunding, 2006 LGTO Bonds ORDINANCE #5755 Finance: 2015 Carry Forward Amendment NEW BUSINESS AUDIENCE COMMENT Citizen Comment: Della, Waste Management ADJOURNMENT Community Services Committee Chair Perez presented a report recommending concurrence in the staff recommendation to approve and authorize the following 2015 Neighborhood Project Grant awards: 1) South Renton Neighborhood Association- Planting trees within the neighborhood and celebrate Arbor Day. $3,369 2) Starwood Homeowner’s Association - Install a playground in the neighborhood common area. $19,888 3) Sorrento Homeowner’s Association - Install identifying signage at entrance into the neighborhood. $4,111 4) Victoria Park Homeowner’s Association - Install a playground in the neighborhood children’s park. $13,560 5) LaCrosse Homeowner’s Association - Install irrigation into the neighborhood community garden and add a blueberry patch and grape arbor. ~;4,326. MOVED BY PEREZ, SECONDED BY PALMER, COUNCIL CONCUR IN THE COMMITTEE RECOMMENDATION. CARRIED. The /oflowing ordinances were presented.for [inal reading and adoption: An ordinance was read providing for the issuance of one or more series of limited tax general obligation refunding bonds of the City in the aggregate principal amount not to exceed $14,000,000 to refund certain outstanding limited tax general obligation bonds and to pay costs of issuing the bonds; and delegating the authority to approve the final terms of the bonds. MOVED BY PERSSON, SECONDED BY CORMAN, COUNCIL ADOPTTHE ORDINANCE AS READ. ROLL CALL: ALL AYES. CARRIED. An ordinance was read amending the city of Renton fiscal years 2015/2016 Biennial Budget as adopted by Ordinance No. 5737, in the amount of ~;66,949,826, for an amended total of $552,837,193 over the biennium. MOVED BY PERSSON, SECONDED BY CORMAN, COUNCIL ADOPT THE ORDINANCE AS READ. ROLL CALL: ALL AYES. CARRIED. See attached ~ouncil Committee Meeting Calendar. Dave Della, Public Sector Manager with Waste Management, thanked Council for the opportunity to forge a partnership with the City for the past 26 years. He stated that Waste Management serves Renton with pride by ensuring customers’ waste collection service needs are satisfied. He listed accomplishments reached during Waste Management’s tenure with the City, and informed Council that the organization is ready to move forward through the next steps of the procurement process. MOVED BY PERSSON, SECONDED BY PRINCE, COUNCIL ADJOURN. CARRIED. TIME: 7:52 p.m. Megan Gregor, Recorder April 13, 2015 Seth,ity Clerk Council Committee Meeting Calendar April 13, 20:t5 ! 0:00 AM Transportation Committee, Chair Palmer Council Conference Room 1. Sustainability Plan Resolution 2. Kennydale Transportation Concerns 3. Emerging Issues in Transportation CANCELED 4:30 PM 5:30 PM Public Safety Committee, Chair Pavone Council Conference Room Finance Committee, Chair Persson Council Conference Room 1.Riverview Park Bridge Replacement Bid Award 2.May Creek Property Acquisition 3.Transportation Division Staffing Increase (Civil Engineer & Adm. Sec.) 4.Vouchers Committee of the Whole, Chair Prince Council Chambers 1. Eastside Rail Corridor Master Plan Update 2. Regional Issues STATE OF WASHINGTON, COUNTY OF KING } AFFIDAVIT OF PUBLICATION PUBLIC NOTICE Linda M Mills, being first duly sworn on oath that she is the Legal Advertising Representative of the Renton Reporter a weekly newspaper, which newspaper is a legal newspaper of general circulation and is now and has been for more than six months prior to the date of publication hereinafter referred to, published in the English language continuously as a weekly newspaper in King County, Washington. The Renton Reporter has been approved as a Legal Newspaper by order of the Superior Court of the State of Washington for King County. The notice in the exact form annexed was published in regular issues of the Renton Reporter (and not in supplement form) which was regularly distributed to its subscribers during the below stated period. The annexed notice, a: Public Notice was published on April 17, 2015. The full amount of the fee charged for said foregoing publication is the su~f $98.0~,. Legal Advertising Representative, Renton Reporter Subscribed and sworn to me this 17th day of April, 2015. je~~r~~,~~o’t~ Pubhc for the StateofWashlngton,’-’. _ . _ ~ . Residing in Buckley, Washington CITY OF RENTON NOTICE OF ORDINANCES ADOPTED BY THE RENTON CITY COUNCIL Following is a summary of the Ordinances adopted by the Ren- ton City Council on April 13, 2015: ORDINANCE NO. 5754 An Ordinance of tbe City of Renton, Washington, providing for the issuance of one or more series of Limited Tax General Obligation Refunding Bonds of the City in the aggregate princi- pal anaount of not to exceed $14,000,000 to refund certain outstanding Limited Tax General Obligation Bonds and to pay costs of issuing the bonds; and delegating the authority to ap- prove the final t~rms of the bonds. Effective: May 13, 2015 ORDINANCE NO. $755 An Ordinance of the City of Renton, Washington, amending the City of Renton fiscal years 2015/2016 Biennial Budget as adopted by Ordinance No. 5737, in the amount of $66,949,826. Effective: April 22, 2015 Complete text of these ordinanc- es is available at Renton City Hall, 1055 South Grady Way; and posted at the King County Libraries in Renton, 64 Rainier Ave S, Ste A (temporary loca- tion) and 2902 NE 12th Street. Upon request to the City Clerk’s office, (425) 430-6510, copies will also be mailed for a fee. Jason A, Seth, City Clerk Published in the Renton Reporter on April 17, 2015. #129961 I. CITY OF RENTON, WASHINGTON $8,S25,000 LIMITED TAX GENE~L OBLIGATION REFUNDING BONDS, SE~ES 2015A $3,695,000 LIMITED TAX GENE~L OBLIGATION ~FUNDING BONDS, SERIES 2015B (TAXABLE) B:ONDPiURCHASECONTRACT April 16i 2015 City of Rent0n 1055 South GradyWay Renton, W~hin~on 98005 To the City of Renton: Piper Jaffray.& Co. (the "Underwriter") offers to enter into this Bond Purchase Contract (the "Purchase Contract") with the City of Renton, Washington (the "City"), This offer is subject to the City’s acceptance by execution and delivery of this Purchase Contract to the Underwriter at or prior to 11:00 p.m., Pacific Time, on the date first above written. If not so accepted, this offer is subject to withdrawal by the Underwriter upon notice delivered to the City by the Unde~iter at any time prior to the City’s acceptance. Upon the City’s acceptance of this offer in accordance with its terms, this Purchase Contract will be binding on the City and the Underwriter. Any capitalized terms used in this Purchase Contract and not otherwise defined herein have the meanings Oven those terms in the Bond Ordinance (as defined in Section 3 of this Purchase Contract). 1.Purchase and Sale. On the terms and conditions and on the basis of the representations, warranties, covenants and agreements set forth in this Purchase Contract, the Underwriter agrees to purchase from the City for offering to the public, and the City agrees to sell to the Underwriter for that purpose, all of the City’s Limited Tax General Obligation Refunding Bonds. Series 2015A, in the aggregate principal amount of $8,825,000 (the "2015A Bonds"), and the City’s Limited Tax General Obligation Refunding Bonds, Series 2015B (Taxable), in the aggregate principal amount of $3,695,000 (the "2015B Bonds," and together with the 2015A Bonds, the "Bonds"). The Bonds will be dated the date of their delivery to the Underwriter, bear interest payable on December 1, 2015, and semiannually on each June 1 and December 1 thereafter until maturity or earlier redemption (in the case of the 2015A Bonds), at the rates, and mature on December 1 in the years and principal amounts, as set forth on Exhibit A hereto. The purchase price for the 2015A Bonds is $9,945,884.05, which represents the aggregate principal amount of the 2015A Bonds, plus an original issue premium of $1,171,804.30, less an underwriter’s discount of $50,920.25. The purchase price for the 2015B Bonds is $3,673,236.45, which represents the aggregate principal amount of the 2015B Bonds, less an underwriter’s discount of $21,763.55. The City acknowledges and agrees that (i) the purchase and sale of the Bonds pursuant to this Purchase Contract is an ann’s-length commercial transaction between the City and the Underwriter, (ii)in connection with this transaction, the Underwriter is acting solely as a principal and not as an agent or a fiduciary of the City, (iii) the Underwriter has not assumed a fiduciary responsibility in favor of the City with respect to the offering of the Bonds or the process leading thereto (whether or not the Underwriter, or any affiliate of the Underwriter, has advised or is currently advising the City on other matters) or any other obligation to the City except the obligations expressly set forth in thi s Purchase Contract, (iv) the City has consulted with its own legal and financial advisors to the extent it has deemed appropriate in connection with the sale of the Bonds, and (v) the Underwriter has financial and other interests that differ from those of the City. 2. Public Offering. It is a condition to the City’s obligation to sell and to deliver the Bonds to the Underwriter that the entire $12;520,000 aggregate principal amount of the Bonds will be purchased, accepted and paid for by the Underwriter at the Closing(as defined in Section 6~, and it is a condition to the Underwriter’s obligation to purchase, to accept delivery of and to pay for the Bonds that the entire $12,520,000 aggregate principal amount of the Bonds will be issued, sold and delivered by the City at the Closing. The Underwriter intends to make a bona fide initial public offering of all the Bonds, at prices no higher and yields no lower than those shown in the Official Statement (as defined herein). On or prior to the Closing, the Underwriter will provide the City with information regarding the reoffering prices to the public and yields on the 2015A Bonds for purposes of determining the yield on the 2015A Bonds under Section 148 of the Internal Revenue Code of 1986, as amended (the "Code"). The Underwriter reserves the right to lower the initial offering prices as it deems necessary in connection with the marketing of the Bonds. The Underwriter may offer and sell the Bonds to certain dealers (including dealers depositing the Bonds into investment trusts) and others at prices lower than the initial public offering price or prices set forth in the Official Statement. The Underwriter also reserves the right to: (i) over-allot or effect transactions that stabilize or maintain the market price of the Bonds at levels above those that might otherwise prevail in the open market and (ii) discontinue such stabilizing, if commenced, at any time without prior notice. 3. The Bonds; Bond Ordinance. The Bonds will be issued in accordance with chapters 39.36, 39.46, and 39.53 of the Revised Code of Washington ("RCW"), as amended, and Ordinance No. 5754 of the City, passed by the City Council on April 13, 2015 (the "Bond Ordinance"). The Bonds are being issued to refund certain maturities of the City’s outstanding Limited Tax General Obligation Bonds~ 2006 as shown in Exhibit B attached hereto (the "Refunded Bonds") and to pay costs of issuance of the Bonds, all as described in the Bond Ordinance and the Official Statement. -2-P:\2039 ~_D01’~20391 _2UG ,411612~)15 4.Preliminary and Final Official Statements. (a) The City ratifies, approves and confirms the distribution by the Underwriter of the Preliminary Official Statement of the City dated April 9, 2015 (together with the appendices thereto, any documents incorporated therein by reference, and any supplements or amendments thereto, the "Preliminary Official Statement"), in connection with the public offering and sale of the Bonds by the Underwriter prior to the availability of the Official Statement. The City represents and warrants that the Preliminary Official Statement furnished to the Underwriter was deemed final by the City as of its date for purposes of Rule 15c2-12 of the Securities and Exchange Commission ("SEC") promulgated under the Securities Exchange Act of I934, as amended ("Rule 15c2-12"), except for the omission of information permitted to be omitted by Rule ! 5c2-12. (b) The City will provide, or cause to be provided, to the Underwriter within seven business days after the date of this Purchase Contract (or within such shorter period as may be agreed by the City and the Underwriter or required by applicable rule), a final Official Statement, which will be in the form of the Preliminary Official Statement with those changes reflecting the terms of this Purchase Contract and other changes as have been approved by the Underwriter (together with any appendices thereto, any documents incorporated therein by reference, and any supplements or amendments thereto on or prior to the Closing, the "Official Statement"). The City shall provide copies of the Official Statement in sufficient quantity to permit the Underwriter to comply with Rule 15c2-12 and other applicable rules of the SEC and the Municipal Securities Rulemaking Board ("MSRB"). (c) The City authorizes the Underwriter to file, to the extent required by applicable SEC or MSRB rule, and the Underwriter agrees to file or cause to be filed, the Official Statement with (i)the MSRB or its designee (including submission to the MSRB’s Electronic Municipal Market Access system ("EMMA")) or (ii) other repositories approved from time to time by the SEC (either in addition to or in lieu of the filings referred to above). If an amended Official Statement is prepared in accordance with Section 4(e) during the "primary offering disclosure period," and if required by applicable SEC or MSRB rule, the Underwriter will make the required submission of the amended Official Statement to EMMA. (d) The Preliminary Official Statement and the Official Statement may be delivered in printed or electronic form to the extent permitted by applicable rules of the MSRB and as may be agreed by the City and the Underwriter. th(e) During the period ending on the 25 day after the End of the Underwriting Period (as defined herein) (or such other period as may be agreed to by the City and the Underwriter), the City (i)may not supplement or amend the Official Statement or cause the Official Statement to be supplemented or amended without the prior written consent of the Under~0vriter and (ii) must notify the Underwriter promptly if any event occurs, or information comes to the attention of the City, that is reasonably likely to cause the Official Statement (whether or not previously supplemented or amendS) to contain any untrue statement of a material fact or to omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. If, in the opinion of the Underwriter, such event requires the preparation and distribution of a supplement or amendment -3-PA20391 _DOT’~ 039 I_2UG 4116/2015 to the Official Statement, the City shall prepare and furnish to the Underwriter, at the City’s expense, such number of copies of the supplement or anaendment to the Official Statement, in form and substance mutually agreed upon by the City and the Underwriter, as the Underwriter may reasonably request. If such notification is given after the Closing, the City also shall furnish, or cause to be furnished, such additi.onal legal opinions, certificates, instruments and other documents as the Underwriter may reasonably deem necessary to evidence the truth and accuracy of any such supplement or amendment to the Official Statement. (f) For purposes of this Purchase Contract: (i)the "End of the Underwriting Period" is used as defined in Rule 15c2-12 and will occur on the later of (A) the Closing or (B) when the Underwriter no longer retains an unsold balance of the Bonds. Unless otherwise advised in writing by the Underwriter on or prior to the Closing, or otherwise agreed to by the City and the Underwriter, the City may assume that the End of the Underwriting Period is the r~’~’ idate of the Closing, and (ii)the "primary offering disclosure pe ~od s used as defined in MSRB Rule G-32 and en~ on ~e 25t~ day after the Closing. 5. Representations, Warranties, Covenants and Agreements of the City. The City represents and warrants to and (as applicable) covenants with the Underwriter, as follows: (a) The City is duly organized and validly existing as a municipal corporation of the State of Washington (the "State") and, under the Constitution :and laws of the State has full legal right, power and authority to issue the Bonds for the purposes and on the terms described in the Bond Ordinance and the Official Statement. (19) The City has the flail legal right, power and authority to enter into this Purchase Contract; to pass the Bond Ordinance; to enter into the undertaking to provide continuing disclosure as set forth in Section 12 of the Bond Ordinance (the "Undertaking"); to enter into, execute and deliver the Escrow Deposit Agreement dated as of the Closing (the "Escrow Agreement"), by and between the City and U.S. Bank National Association, as escrow agent (the "Escrow Agent"); to observe, perform and consummate the covenants, agreements and transactions contemplated by this Purchase Contract, the Bond Ordinance, the Official Statement, and the Undertaking, and to issue, sell and deliver the Bonds to the Underwriter as provided herein; by all necessary official action of the City prior to or concurrently with the acceptance hereof, the City has duly passed the Bond Ordinance and has duly authorized and approved the Preliminary Official Statement and the Official Statement and the distribution thereof by the Underwriter; the Bond Ordinance is in full force and effect and has not been amended, modified or rescinded; the City has duly authorized and approved the execution and delivery of, and the performance by the City of its obligations contained in, the Bonds, the Official Statement, and this Purchase Contract; the City has duly authorized and approved the performance by the City of its obligations contained in the Bond Ordinance, including the Undertaking, and the consummation by it of all other transactions contemplated by the Official Statement and this Purchase Contract to have been performed or consummated at or prior to the date of Closing; and the City is in compliance with the obligations in connection with the issuance of the Bonds on its part contained in the Bond Ordinance, the Bonds, the Escrow Agreement and this Purchase Contract. .4-P:\20391 _DO’D20391 _2UG 4116t2015 (c) As of the date thereof, the Preliminary Official Statement (except for information regarding The Depository Trust Company ("DTC") and its book-entry only system, and the Underwriter) did not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements made therein, in the light of the circumstances under which they were made, not misleading. (d) As of the date thereof, the Official Statement did not contain, and at all times subsequent thereto up to and including the End of the Underwriting Period, the Official Statement, as supplemented and amended, will .not contain, any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements made therein, in the light of the circumstances under which they were made, not misleading (except that no such representation need be made about information in the Official Statement regarding DTC and its book-entry only system or the Underwriter). (e) If the Official Statement is supplemented or amended pursuant to Section 4(e) hereof, at the time of each supplement or amendment thereto and at a.ll times subsequent thereto up to and including the End of the Underwriting Period, the Official Statement (except for information regarding DTC and its book-entry only system and the Underwriter) as so supplemented or amended will not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements made therein, in the light of the circumstances under which they were made, not misleading. (f) Between the date hereof and the Closing, except as contemplated by the Official Statement, the City will not without the prior written consent of the Underwriter offer or issue any general obligation bonds, notes or other obligations for borrowed money, or incur any material liabilities, direct or contingent, or enter into any material transaction other than in the ordinary course of business. (g) The City is not in violation of, or in breach of or in default under, any applicable constitutional provision, law or administrative order or regulation of the State or the United States of America or any applicable judgment or decree or any loan agreement, indenture, bond, note, resolution, or other agreement or instrument to which the City is a party or to which the City or any of its properties is otherwise subject, and no event has occurred and is continuing that, with the passage of time or the giving of notice, or both, would constitute a default or event of default under any such instrument; and the execution and delivery of this Purchase Contract, the Bonds, the Escrow Agreement and the Undertaking, the passage of the Bond Ordinance, and compliance with the provisions of this Purchase Contract, the Bond Ordinance (including the Undertaking), the Bonds, and the Escrow Agreement will not conflict with or constitute a breach of or default under any constitutional provision, law, administrative order, regulation, judgment, court decree, loan agreement, indenture, bond, note, resolution, agreement or other instrument to which the City is subject, or by which it or any of its properties is bound, nor will any such execution, delivery, passage or compliance result in the creation or imposition of any material lien, charge or other security interest or encumbrance of any nature whatsoever upon any of its properties or under the terms of any such law, regulation or instrument, except as provided b y the Bonds and the Bond Ordinance. -5-P:\20391 _DOT~20391_2UG 4i16/2015 0a) Except as expressly set forth in the Official Statement, there is no action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any court, government agency, public board or body, pending or to the City’s actual knowledge threatened (i) in any way questioning the corporate existence of the City or the titles of the officers of the City to their respective offices; (ii) in any way contesting, affecting or seeking to prohibit, restrain or enjoin the issuance or delivery of any of the Bonds, the collection of taxes pledged to pay the principal of and interest on the Bonds, or the pledge of such taxes, or the application of the proceeds of the Bonds; (iii) in any way contesting or affecting the validity of the Bonds, the Bond Ordinance, or this Purchase Contract or the tax-exempt status of interest on the 2015A Bonds, or contesting the powers of the City or any ,authority for the issuance of the Bonds, the passage of the Bond Ordinance or the execution and delivery by the City of this Purchase Contract; (iv) that may result in any material adverse change relating to the business, operations or financial condition of the City or its ability to pay the Bonds; or (v) contesting the completeness or accuracy of the Preliminary Official Statement or the Official Statement or asserting that the Preliminary Official Statement or the Official Statement contained any untrue statement of a material fact or omitted to state a material fact necessary in order to make the statements made therein, in the light of the circumstances under which they were made, not misleading; and (vi) there is no reasonable basis for any action, suit, proceeding, inquiry or investigation of the nature described in clauses (i) through (v) of this subsection. (i) The City will furnish such information, execute such instruments and take such other action not inconsistent with law or established policy of the City in cooperation with the Underwriter as may be requested (i) to qualify the Bonds for offer and sale under the Blue Sky or other securities laws and regulations of such states and other jurisdictions of the United States of America as may be designated by the Underwriter, and (ii) to determine the eligibility of the Bonds for investment under the laws of such states and other jurisdictions, and will use its best efforts to continue such qualifications in effect so long as required for the distribution of the Bonds; provided, that the City will not be required to execute a general or special consent to service of process or qualify to do business in connection with any such qualification or determination in any jurisdiction. 0) The Bonds and the Bond Ordinance (including the Undertaking) conform in all material respects to the descriptions thereof contained in the Official Statement. (k) The Bonds, when issued and delivered in accordance with the Bond Ordinance and sold to the Underwriter as provided herein, will be legal, valid and binding obligations of the City, enforceable in accordance with their terms, subject to bankruptcy, insolvency, reorganization, moratorium and other laws affecting creditors’ rights generally, and the owners of the Bonds will be entitled to the benefits of the Bond Ordinance; upon such issuance and delivery the Bond Ordinance will provide, for the benefit of the owners from time to time of the Bonds, a legally valid and binding limited tax general obligation pledge under the Bond Ordinance. This Purchase Contract, the Bond Ordinance, and the Escrow Agreement are, or when executed will be. legal, valid and binding obligations of the City enforceable in accordance with their respective terms, subject to bankruptcy, insolvency, reorganization, moratorium and other laws affecting creditors’ rights generally. -6-P:\20391_DOT~20391_2UG 4/16,"2015 Ordinance. (1) The City will apply the proceeds of the Bonds as provided in the Bond (m) All authorizations, approvals, licenses, permits, consents and orders of any governmental authority, legislative body, board, court, agency or commission having jurisdiction of the matter that are required for the due authorization of, that would constitute a condition precedent to, or the absence of which would adversely affect the due performance by the City of, its respective obligations under this Purchase Contract, the Bonds and the Bond Ordinance have been duly obtained or where required for future performance are expected to be obtained, except for such approvals, consents and orders as may be required under the Blue Sky or securities laws of any state in connection with the offering and sale of the Bonds. (n) The financial statements of the City set forth as Appendix C to the Preliminary Official Statement and Official Statement fairly present the financial position of the City as of the dates indicated and the results of its operations, the sources and uses of its cash and the changes in its fund balances for the periods therein specified to the extent included therein, and are in conformity with generally accepted accounting principles applied on a consistent basis, and there has been no material adverse change in the financial condition or results of operations of the City since the respective dates thereof, except as disclosed in the Officia! Statement. (o) .The Underwriter may deem any certificate signed by any official of the City and delivered to the Underwriter as a representation and warranty by the City to the Underwriter as to the statements made therein. of its bonds. The City has not defaulted in the payment of principal of or interest on any (q) As provided in the Bond Ordinance, the City will provide certain annual financial information and notices of the occurrence of certain events in accordance with paragraph (b)(5) of Rule 15c2-12. An accurate description of the Undertaking is set forth in the Preliminary Official Statement and will also be set forth in the Official Statement. Except as disclosed in the Preliminary Official Statement and in the Official Statement, the City has not failed in the prior five years to comply in all material respects with any previous undertakings to provide annual reports and notices of specified events in accordance with Rule 15c2-12. 6. Closing. At 8:30 a.m., Pacific Time, on May 13, 2015, or at such other date or time as may be mutually agreed upon by the City and the Underwriter, subject to the terms and conditions of this Purchase Contract, the City will deliver or cause to be delivered (through DTC’s FAST delivery system) to the Underwriter the Bonds duly executed by the City, together with the other documents described in Section 7(e), and the Underwriter will accept such delivery (through DTC’s FAST delivery system) and pay the purchase price of the Bonds as set forth in Section 1 hereof by wire transfer, m an aggregate amount equal to that purchase price. Payment for the Bonds as aforesaid and delivery of the documents described in Section 7(e) will be made at the offices of Pacifica Law Group LLP in Seattle, Washington, or at such other place as may be mutually agreed upon by the City and the Underwriter. This payment -7-P:k2.039’l ~ DOT~,2.0391 _2 UG 4116/2015 and delivery is herein called the "Closing." The Underwriter will order CUSIP identification numbers and the City will cause those CUSIP identification numbers to be printed on the Bonds, but neither the failure to print such number on any Bond nor any error with respect thereto will constitute cause for a failure or refusal by the Underwriter to accept delivery of and pay for the Bonds in accordance with the terms of this Purchase Contract. The Bonds will be prepared and delivered in registered form and will be registered in the name of Cede & Co., as nominee of DTC. The Bonds will be made available for checking by the Underwriter and its counsel not less than one business day prior to the Closing. 7. Closing Conditions. The obligations of the Underwriter hereunder are subject to the performance by the City of its obligations hereunder at or prior to the Closing and are also subject to the following conditions: (a) The representations of the City contained in this Purchase Contract must be true, complete and correct at the date hereof and on and as of the date of Closing as if made on the date of Closing. (b) At the time of the Closing (i)the Bond Ordinance and the Escrow Agreement must be in full force and effect, and must not have been amended, modified or supplemented since the date hereof, except as may be agreed to in writing by the Underwriter; and (ii) the City must perform or have performed its obligations required under or specified in this Purchase Contract, the Escrow Agreement and the Bond Ordinance to be performed at or prior to the Closing, (c) At the time of the Closing; no material adverse change will have occurred in the business, operations or financial or physical condition .of the City or its properties, or in the status of the licenses, permits, or real property fights of the City. (d) At the time of the Closing, all official action of the City relating to this Purchase Contract, the Official Statement, the Escrow Agreement, the Bonds~ and the Bond Ordinance must be in full force .and effect in accordance with their respective terms and such documents must not have been amended, modified or supplemented in any material respect from the date hereof except as the Underwriter has agreed to in writing. (e) At or prior to the Closing, the Underwriter must receive the following documents, in each case satisfactory in form and substance to the Underwriter and to its counsel, K&L Gates LLP: thereto; (1)The Official Statement and each supplement or amendment, if any, (2) A certificate or opinion of the City, dated the date of Closing, executed by the City’s Finance and Information Services Administrator or other authorized officer of the City, to the effect that, other than as set forth in the Official Statement, no action, suit, proceeding, inquiry or investigation at law or in equity, before or by any court, government agency, public board or body is pending or, to his or her best knowledge after due investigation, threatened (i) in any way questioning the corporate existence of the City or titles of the officers of the City to their respective offices; (ii) in any way contesting, affecting or seeking to prohibit, -8-P:\20391_DOT~20391 _2LIG 411612015 restrain or enjoin the issuance or delivery of any of the Bonds, or the collection of taxes pledged or to be pledged to pay the principal of and interest on the Bonds, or the pledge of such taxes, or the application of the proceeds of sale of the Bonds; (iii) in any way contesting or affecting the validity of the Bonds, the Bond Ordinance, or this Purchase Contract, or the tax-exempt status of interest on the 2015A Bonds or contesting the powers of the City or any authority for the issuance of the Bonds, or the passage of the Bond Ordinance. or the execution and delivery by the City of this Purchase Contract; (iv) that may result in any material adverse change relating to the business, operations or financial condition of the City or its ability to pay the Bonds; or (v) contesting the completeness or accuracy of the Preliminary Official Statement or the Official Statement, or asserting that the Preliminary Official Statement or the Official Statement contained any untrue statement of a material fact or omitted to state a material fact necessary in order to make the statements made therein, in the light of the circumstances under which they were made, not misleading, and to the best of his or her knowledge there is no basis for any such action, suit, proceeding, inquiry or investigation (but in lieu of such certificate, the Underwriter may in its sole discretion accept a letter by General Counsel or Bond Counsel to the City as to matters referred to in clauses (i), (ii), (iii), (iv) and (v) above that in their opinion the issues raised in any such pending or threatened action, suit, proceeding, inquiry or investigation are without substance or that the contentions made therein are without merit); (3) Copies of the Bond Ordinance, certified by the City Clerk as having been duly passed by the City Council and signed by the Mayor, and being in full force and effect, with such changes or amendments as may. have been agreed to in writing by the Underwriter: (4) The final approving legal opinions of Pacifica Law Group LLP, Bond Counsel, dated the date of Closing, in substantially the forms attached to the Official Statement as Appendix A; (5) The opinion of Pacifica Law Group LLP, Bond Counsel, dated the date of Closing, to the effect that the money and obligations set aside in the escrow deposit account pursuant to the Escrow Agreement to defease the Refunded Bonds are irrevocably set aside and pledged Ibr such purpose, that the Refunded Bonds are legally defeased and deemed not to be outstanding under the resolutions under which they were issued, and that such defeasance will not cause interest on the 2015A Bonds or the Refunded Bonds to become included in gross income fbr federal tax purposes; (6) An opinion of K&L Gates LLP, counsel to the Underwriter, dated the date of the Closing and addressed to the Underwriter, to the effect that (i) the Bonds are not subject to the registration requirements of the Securities Act of 1933, as anaended, and the Bond Ordinance is exempt from qualification pursuant to the Trust Indenture Act of 1939, as amended, and (ii)the Undertaking, together with Section 5(q) of this Purchase Contract. satisfies the requirements contained in paragraph (b)(5) of Rule 15c2-12 for an undertaking for the benefit of the owners and beneficial owners of the Bonds to provide the intbrmation at the times and in the manner required by paragraph (b)(5) of Rule 15c2-12; in addition, such counsel shall state in its letter containing the foregoing opinions that although such counsel is not passing upon and does not assume any responsibility for the accuracy, completeness or fairness of any of the statements contained in the Preliminary Official Statement or the Official Statement and makes no -9-P:\2039 I_DOT~2039 I_2UG 4/!6,~2015 representation that such counsel has independently verified the accuracy, completeness or fairness of any such sta.tements, in such counsel’s capacity as Underwriter’s counsel, to assist the Underwriter as part of the Underwriter’s responsibilities with respect to the Preliminary Official Statement and the Official Statement, such counsel participated in conferences with the Underwriter, representatives of the City, the Financial Advisor, Bond Counsel, and others, during which the contents of the Preliminary Official Statement and the Official Statement and related matters were discussed, and based on such counsel’s participation in such conferences and in reliance thereon andon the records, documents, certificates, opinions and matters set forth in such counsel’s opinion, and as a matter of fact and not opinion, during the course of such counsel’s representation of the Underwriter, no facts came to the attention of the attorneys in such counsel’s finn rendering legal services to the Underwriter in connection with the Preliminary Official Statement or the Official Statement that caused such counsel to believe that the Preliminary Official Statement or the Official Statement as of their dates (except for any CUSIP numbers, financial, economic, engineering or demographic data or forecasts, numbers, charts, tables, graphs, estimates, projections, assumptions or expressions of opinion contained therein, information regarding environmental matters; litigation, tax exemption, DTC and its book-entry only system, and except for the appendices thereto, as to which such counsel need express no opinion or view), contained any untrue statement of a material fact or omitted to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided, that such opinion and representation may not be used, circulated~ quoted.or otherwise referred to or relied upon by owners of the Bonds or by any other party to whom it is not specifically addressed; (7) A: certificate of the City, dated the date of Closing, executed by its Finance and Information Services Administrator or other authorized officer of the City acceptable to the Underwriter, to the effect that on the date of the Official Statement and on the date of the certificate (i) the representations and warranties of the City contained in this Purchase Contract were and are true and correct in all material respects, and the City has complied with all agreements and covenants and satisfied all conditions contemplated by this Purchase Contract and the Bond Ordinance on its part to be performed or satisfied at or prior to the date of Closing; (ii) insofar as the City and its affairs, including its financial affairs, are concerned, the Preliminary Official Statement and the Official Statement did not and do not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements made therein, in the light of the circumstances under which they were made, not misleading; and (iii) insofar as the descriptions, statements and data, including financial data, of or pertaining to other bodies and their activities contained in the Preliminary Official Statement and the Official Statement are concerned, such descriptions, statements and data have been obtained from sources the City believes to be reliable, and the City has no reason to believe that they contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in the light of the circumstances under which they were made, not misleading; (8)An incumbency certificate of the Escrow Agent; (9)A written report prepared by Grant Thornton LLP verifying the accuracy of certain mathematical computations with respect to the refunding of the Refunded Bonds; - 10"PA20391_DO’i’~20391_2UG 4/16/20t5 (10) A tax certificate and IRS Form 8038oG for the 2015A Bonds in form satisfactory to Bond Counsel and duly executed by the City; by DTC; (11)The Letter of Representations, executed by the City and accepted (12) A transcript of all proceedings relating to. the authorization and issuance of the Bonds available for review at or prior to the Closing; (13) Evidence satisfactory to the Underwriter that Standard& Poor’s Ratings Services ("Standard & Poor’s’) has assigned a rating of"AA+" to the Bonds; and (14) Such additional legal opinions, certificates, instruments and other documents as the Underwriter may reasonably deem necessary to evidence the truth and accuracy as of the time of the Closing of the representations and warranties of the City contained in Section 5 of this Purchase Contract and the due performance or satisfaction by the City at or prior to such time of all covenants and agreements then to be performed mad all conditions then to be satisfied by the City pursuant to this Purchase Contract. 8. Termination. The Underwriter may terminate this Purchase Contract, without liability therefor, by notice to the Cityif at any time after the date of this Purchase Contract and at or prior to the Closing, in the Underwriter’s sole and reasonable judgment, any of the following events occurs (each a "Termination Event"): (a) the market price or marketability of the Bonds, or the ability of the Underwriter to enforce contracts for the sale of the Bonds, are materially adversely affected by any of the following events: (i) legislation is enacted by the Congress of the United States or the legislature of the State or is favorably reported out of committee of either body or pending in committee of either body, or is recommended to the Congress for passage by the President of the United States or a member of the President’s Cabinet, or a decision is rendered by a court of the United States or the State or the Tax Court of the United States, or a ruling, ordinance, resolution, regulation or temporary regulation, release or announcement is made or proposed to be made by the Treasury Department of the United States or the Internal Revenue Service, or other federal or state authority with appropriate jurisdiction, with respect to federal or state taxation upon interest received on obligations of the general character of the 2015A Bonds; or (ii) there occurs (1)an outbreak or escalation of hostilities or the declaration by the United States of a national emergency or war, (2) any other calamity or crisis in the financial markets of the United States or elsewhere, including but not limited to a calamity or crisis in the financial markets of the United States or elsewhere relating to or arising from the partial or full shutdown of the United States government and/or the failure by the United States Congress to pass legislation increasing the current Federal debt limit, (3)a downgrade of the sovereign debt rating of the United States by any major credit rating agency or a payment default on United States Treasury obligations, or (4) a default with respect to the debt obligations of any state of the United States: or -1 t-P:~0391_DO"~20391 _2UG 4/1&2015 (iii) a general suspension of trading on the New York Stock Exchange or other major exchange, or minimum or maxamum prices for trading are fixed and in force, or maximum ranges for prices for securities are required and in force on any such exchange, whether by virtue of determination by that exchange or by order of the SEC or any other governmental authority having jurisdiction; or (iv) legislation is enacted by the Congress of the United States or is favorably reported out of committee or pending in committee, or is recommended to the Congress for passage by the President of the United States or a member of the President’s Cabinet, or a decision by a court of the United States is rendered, or a ruling, regulation, proposed regulation or statement by or on behalf of the SEC or other governmental agency having jurisdiction of the subject matter is made, to the effect that any obligations of the general character of the Bonds or the Bond Ordinance, or any comparable obligations of the City, are not exempt from the registration, qualification or other requirements of the Securities Act or the Trust Indenture Act or otherwise, or would be in violation of any provision of the federal securities laws; or (v) except as disclosed in or contemplated by the Official Statement, any material adverse change occurs in the affairs of the City; or (vi) any rating of bonds, notes or other obligations of the City (including, without limitation, the Bonds) is downgraded, suspended or withdrawn, or a negative credit watch is publicly amaounced, by Moody’s or Standard & Poor’s; or (b) any event or circumstance exists that either makes untrue or incorrect in any material respect any statement or information in the Official Statement (other than any statement provided by the Underwriter) or is not reflected in the Official Statement but should be reflected therein in order to make the statements therein, in the light of the circumstances under which they were made, not misleading and, in either such event, the City refuses to permit the Official Statement to be supplemented to supply such statement or information, or the effect of the Official Statement as so supplemented materially adversely affects the market price or marketability of the Bonds or the ability of the Underwriter to enforce contracts for the sale of the Bonds; or (c) a general banking moratorium is declared by federal or State authorities having jurisdiction and is in force; or (d) a material disruption occurs in securities settlement, payment or clearance services affecting the Bonds; or (e) any new restriction on transactions in securities materially affecting the market for securities (including the imposition of any limitation on interest rates) or the extension of credit by, or a charge to the net capital requirements of, underwriters is established by the New York Stock Exchange, the SEC, any other federal or State agency or the Congress of the United States, or by Executive Order; (f) a decision by a court of the United States is rendered, or a stop order, release, regulation or no-action letter by or on behalf of the SEC or any other governmental -12-P:\2039~_DO~20391_2UG 4116i2015 agency having jurisdiction of the subject matter is issued or made, to the effect that the issuance, offering or shle of the Bonds, including the underlying obligations as contemplated by this Purchase Contract or by the Official Statement, or any document relating to the issuance, offering or sale of the Bonds, is or would be in violation of any provision of the federal securities laws at the Closing Date, including the Securities Act, the Exchange Act and the Trust Indenture Act; or (g) a petition is filed with the City calling fbr a referendum on the Bond Ordinance and the petition is not withdrawn, dismissed, or otherwise resolved by 5:00 pm Pacific Daylight Time on the earlier of (i) the seventh calendar day after the date of filing or (ii) the seventh calendar day prior to the Closing Date. Upon the occurrence of a Termination Event and the termination of this Purchase Contract by the Underwriter, all obligations of the City and the Underwriter under this Purchase Contract shall terminate, without further liability, except that the City and the Underwriter shall pay their respective expenses as set forth in Section 9. 9. Expenses, The Underwriter is under no obligation to pay and the City will pay or cause to be paid the expenses incident to the performance of the City’s obligations hereunder including but not limited to (a)the cost of preparing the Bond Ordinance; (b)the fees and disbursements of Bond Counsel, the Financial Advisor, and any other experts or consultants retained by the City; (c)the costs of preparing, printing and signing the Bonds and the cost of registration of the Bonds; (d)the cost of preparing and printing the Preliminary Official Statement and the cost of preparing and printing the Official Statement and any supplements or amendments thereto; (e) charges of rating agencies for the ratings of the Bonds; and (f) expenses (included in the expense component of the spread) incurred on behalf of City employees that are incidental to implementing this Purchase Contract, including without limitation meals, transportation and lodging, The Underwriter will pay (1) the cost of preparing any Blue Sky and legal investment memoranda, .(2)all advertising expenses incurred by the Underwriter in connection with the public offering of the Bonds, (3) any fees assessed upon the Underwriter with respect to the Bonds by the MSRB or the Financial Industry Regulatory Authority ("FINRA"), (4) the fees and disbursements of K&L Gates LLP, counsel to the Underwriter, and (5) all other expenses incurred by the Underwriter in comaection with its public offering and distribution of the Bonds. 10. Representations, Warranties and Agreements of Underwriter. The Underwriter represents and warrants to and agrees with the City that the Underwriter is authorized to take any action under this Purchase Contract required to be taken by the Underwriter, The Underwriter represents that it is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization and is licensed by and registered with the FINRA as a broker-dealer and with the MSRB as a municipal bond dealer. 11. Notices. Any notice or other communication to be given to the City under this Purchase Contract (other than the acceptance hereof as specified in Section I hereof) may be given by delivering the same in writing to Iwen Wang, Finance and Information Services Administrator, City of Renton, 1055 South Gradv Way, Renton, Washington 98005; any notice or other communication to be given to the Underwriter under this Purchase Contract may be -13-P:\20391~DOT,.20391.2UG 4;16/20’~5 given by delivering the same in writing to Piper Jaffray & Co., 1420 5th Avenue, Suite 4300, Seattle, Washington 98101, Attention: Lindsay Sovde, Managing Director. 12. Governing Law. The validity, interpretation and performance of this Purchase Contract are governed by the laws of the State of Washington. 13. Parties in Interest. This Purchase Contract when accepted by the City in writing as heretofore specified shall constitute the entire agreement between the City and the Underwriter and is solely for the benefit of the City and the Underwriter (including the successors and assigns thereof). No other person shall acquire or have any right hereunder or by virtue hereof. All representations, warranties and agreements of the City in this Purchase Contract shall remain operative and in full force and effect, regardless of (a) any investigation made by or on behalf of the Underwriter, (b) delivery of and payment for the Bonds hereunder, and (c) any termination of this Purchase Contract. 14. Entire Agreement. This Purchase Contract constitutes the entire agreement between the parties hereto with respect to the matters covered hereby, and supersedes all prior agreements and understandings between the parties. This Purchase Contract shall only be amended, supplemented or modified in a writing signed by both of the parties hereto. 15. Headings. The headings of the Sections of this Purchase Contract are inserted for convenience only and shall not be deemed to be a part hereof. 16. Effectiveness. This Purchase Contract will become effective upon the execution by the Underwriter and the execution of the acceptance hereof by a Designated Representative of the City and will be valid and enforceable at the time of such acceptance. 17. Counterparts. This Purchase Contract may be executed in several counterparts, which together will constitute one and the same instrument. PIPER JAFFRAY & CO., as Underwriter By: Accepted by the CITY OF RENTON, WASHINGTON, in accordance with Ordinance No. 5754, on April 16, 20!5, at Z : o~ p.m. -14-P:~,20391_DO~20391_2UG 4t16/20t5 EXHIBIT A 2015A Bonds Maturity Principal Interest (December 1)Amount Rate 2020 $275,000 4.00% 2021 935,000 4.00 2022 975,000 4.00 2023 1,005,000 4.00 2024 1,045,000 4.00 2025 1,090,000 3.50 2026 1,125,000 3.50 2027 1,170,000 3.50 2028 1,205,000 3.00 *Priced to the call date of 6/1/2025. 2015B Bonds Initial Reoffering Yield 1.43% 1.62 1.72 1.86 1.95 2.08 2.10 2.18 2.40 PAce 113.664 114.733 116.077 116.843 117.783 112.817" 112.624" 111.854" 105.328" Maturity Principal Interest (December 1)Amount Rate 2015 $330,000 0.50% 2016 I00,000 0.85 2017 865,000 1.13 2018 875,000 1.50 2019 890,000 1.81 2020 635,000 2.07 Initial Reoffering Yield 0.50% 0.85 1.13 1.50 1.81 2.07 Price 100.000 100.000 100.000 I00.000 I00.000 t00.000 True Interest Cost for the 2015A Bonds:2.187631% True Interest Cost for the 2015B Bonds:1.831603% Aggregate True Interest Cost:2.141766% Net present value debt service savings over the Refunded Bonds:15.224761% Redemption provisions for the 2015A Bonds: The 2015A Bonds maturing on or prior to December 1, 2024, are not subject to redemption prior to maturity. The 2015A Bonds maturing on and after December 1, 2025, may be redeemed at the option of the City on or aider June 1, 2025. at a price of par plus accrued interest to the date of redemption. Redemption provisions tbr the 2015B Bonds: The 2015B Bonds are not subject to redemption prior to maturity. A-1 EXHIBIT B Description of Refunded Bonds Maturity (December 1) 2017 2019" 2020 2021 2022 2023 2024 2028* * Te~ Bonds~ Principal Interest Amount Rate $775,000 5.00% 1,670,000 5.00 900,000 5.00 945,000 5.00 1,000,000 5.25 1,040,000 5.25 1,095,000 5.25 4,975,000 5.00 Call Date 12/01/2016 12/01/2016 12/01/2016 12/0t/20116 12t01/2016 12101/2016 12/01/2016 12/01/2016 B,1 PRELIMINARY OFFICIAL STATEMENT DATED APRIL 9, 2015 City of Renton, Washington $8,780,000* Limited Tax General Obligation Refunding Bonds, Series 2015A $3,695,000" Limited Tax General Obligation Refunding Bonds; Series 2015B (Taxable) DATED: Date of Delivery DUE: December 1, as shown below STANDARD & POOR’S RATING -- AA+; see "Rating" herein. 2015A BONDS BANK QUALIFIEDmThe City of Renton, Washington (the "City") has designated its Limited Tax General Obligation Refunding Bonds, Series 2015A (the "2015A Bonds") as "qualified tax-exempt obligations" for purposes of Section 265(b)(3)(B) of the Internal Revenue Code of 1986, as amended (the "Code"). BOOK-ENTRY ONLY--The 2015A Bonds and the Limited Tax General Obligation Refunding Bonds, Series 2015B (Taxable) (the "2015B Bonds" and together with the 2015A Bonds, the "Bonds") will be issued as fully registered bonds in denominations of $5,000, or integral multiples thereof within a series and maturity, and will be registered in the name of Cede & Co., as bond owner and nominee for The Depository Trust Company ("DTC’). DTC will act as securities depository for the Bonds. Purchasers will not receive certificates representing their interest in the Bonds purchased. PRINCIPAL AND INTEREST PAYMENTS--Interest on the Bonds will be payable on December 1, 2015, and semiannually thereafter on June I and December I of each year to their maturity or prior redemption, as applicable. Principfil of and interest on the Bonds will be payable by the fiscal agency of the State of Washington (the "Bond Registrar"), as further described herein. For so long as the Bonds remain in a "book-entry only" transfer system, the Bond Registrar will make such payments only to DTC, which in turn is obligated to remit such principal and interest to its Participants for subsequent disbursement to Beneficial Owners of the Bonds as described in Appendix B - "Book-Entry Transfer System." MATURITY SCHEDULE LOCATED ON INSIDE COVER OPTIONAL REDEMPTION--The 2015A Bonds are subject to redemption prior to maturity as further described herein. The 2015B Bonds are not subject to redemption prior to their stated maturities. See "Description of the Bonds - Redemption Provisions." PURPOSE--The Bonds are being issued for the purpose of providing funds (i) to advance refund and defease a portion of the City’s outstanding limited tax general obligation bonds and (ii) to pay costs of issuance for the Bonds. SECURITY--The Bonds are limited tax general obligations of the City. The City has covenanted and agreed irrevocably that it will include in its budget and levy an ad valorem tax upon all the property within the City subject to taxation in an amount that will be sufficient, together with all other revenues and money of the City legally available for such purposes, to pay the principal of and interest on the Bonds as the same become due. The City has irrevocably pledged that such tax will be within and as a part of the tax permitted to cities without a vote of the people. The full faith, credit and resources of the City have been pledged irrevocably for the annual levy and collection of such taxes and for the prompt payment of such principal and interest. The City’s ability to raise taxes is subject to certain limitations as described herein. The Bonds do not constitute a debt or indebtedness of the State of Washington, or any political subdivision thereof other than the City. TAX EXEMPTION--In the opinion of Pacifica Law Group LLP, Seattle, Washington ("Bond Counsel"), assuming compliance with certain covenants of the City, interest on the 2015A Bonds is excludable from gross income for federal income tax purposes under existing law. Interest on the 2015A Bonds is not an item of tax preference for purposes of either individual or corporate alternative minimum tax. Interest on the 2015A Bonds may be indirectly subject to corporate alternative minimum tax and certain other taxes imposed on certain corporations. See "Tax Matters" herein. Interest on the 2015B Bonds is not excludable from gross income for federal income tax purposes. See "Certain Income Tax Consequences" herein. DELIVERY--The Bonds are offered when, as and if issued, subject to the approving legal opinions of Bond Counsel, and certain other conditions. Certain matters will be passed upon for the Underwriter by its counsel, K&L Gates LLP. It is anticipated that the Bonds in definitive book-entry form will be available for delivery through the facilities of DTC in New York, New York, or to the Bond Registrar on behalf of DTC by Fast Automated Securities Transfer on or about May 13, 2015. * Preliminary, subject to change. This cover page contains certain information for quick reference only. It is not a summary of the issue. Investors must read the entire Official Statement to obtain information essential to the making of an informed investment decision. PiperJaffrayo City of Renton, Washington MATURITY SCHEDULE $8,780,000* Limited Tax General Obligation Refunding Bonds, Series 2015A Due Interest Dec. 1 Amounts* Rates Yields Price 2020 $ 220,000 %% 2021 930,000 2022 972,000 2023 1,000,000 2024 1,045,000 CUSIP Due Interest Dec. 1 Amounts* Rates Yields Price 2025 $1,085,000 %% 2026 1,130,000 2027 1,175,000 2028 1,220,000 CUSIP $3,695,000* Limited Tax General Obligation Refunding Bonds, Series 2015B (Taxable) Due Interest Dec. 1 Amounts* Rates Yields Price 2015 $ 325,000 %% 2016 8~000 2017 855,000 CUSIP Due Interest Dec. 1 .Amounts* Rates Yields Price 2018 $ 87~000 %% 2019 88~000 2020 685,000 * Preliminary; subject to change. CUSIP City of Renton, Washington 1055 South Grady Way Renton, Washington 98055 Phone: (425) 430-6400 Fax: (425) 430-6516 www.rentonwa.gov* Denis W. Law Ed Prince Randy Corman Marcie Palmer Armondo Pavone Ruth P6rez Don Persson Greg Taylor Mayor and City Council Mayor Council President Council President Pro Tern Councilmember Councilmember Councilmember Councilmember Councilmember Jay Covington Iwen Wang Jamie Thomas City Officials Chief Administrative Officer Finance and Information Services Administrator Fiscal Services Director Bond Counsel Pacifica Law Group LLP Seattle, Washington (206) 245-1700 Bond Registrar U.S. Bank National Association Seattle, Washington (1)The City’s website is not pdrt of this Official Statement, and investors should not rely on information presented in the City’s website in determining whether to purchase the Bonds. This inactive textual reference to the City’s website is not a hyperlink and does not incorporate the City’s website by reference. This Official Statement does not constitute an offer to sell or a solicitation of an offer to purchase the Bonds in any jurisdiction in which or to a person to whom it is unlawful to make such an offer or solicitation. No dealer, salesperson or other person has been authorized by the City or the Underwriter to give any information or to make any representations, other than those contained herein, in connection with the offering of the Bonds and, if given or made, such information or representations must not be relied upon. The information and expressions of opinion herein are subject to change without notice, and neither the delivery of this Official Statement nor any sale made hereunder will, under any circumstances, create an implication that there has been no change in the affairs of the City since the date hereof. The Underwriter hasprovided the following sentence for inclusion in this Off!’cial Statement. The Underwriter has reviewed the information in this Official Statement in accordance with, and as part oJ, its responsibilities to investors under the federal securities laws as applied to the facts and circumstances of this transaction, but the Underwriter does not guarantee the accuracy or completeness of such information. For the sole purpose of the Underwriter’s compliance with Securities and Exchange Commission ("SEC’) Rule 15c2-12(b)(1), the City has "deemed final" this 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, delivery dates, and other terms of the Bonds dependent on such matters. In connection with this offering, the Underwriter may over-allot or effect transactions that stabilize or maintain the market price of the Bonds at levels above those which might otherwise prevail in the open market. Such stabilizing, if commenced, may be discontinued at any time. The CUSIP numbers herein are provided by CUSIP Global Services. CUSIP is a registered trademark of the American Bankers Association. CUSIP numbers are includedin this Official Statement for convenience of the holders and potential holders of the Bonds. The CUSIP numbers were provided by CUSIP Global Services and are not intended to create a database and do not serve in any way as a substitute for the CUSIP Global Services. No assurance can be given that the CUSIP numbers for the Bonds will remain the same after the date of issuance and delivery of the Bonds. This page left blank intentionally 111 Table of Contents Description of the Bonds ..............................................................................................."~ ...............................................................1 Authorization for Issuance ...................................................................................................................................................1 Principal Amount, Date, Interest Rates and Maturities ....................................................................................................1 Bond Registrar and Registration Features ..........................................................................................................................1 Redemption Provisions .. .......................................................................................................................................................2 Purchase ..................................................................................................................................................................................3 Book-Entry Bonds ..................................................................................................................................................................3 Purpose and Use of Proceeds .......................................................................................................................................................3 Purpose ..................................................................................................................................................................................3 Plan of Refunding ..................................................................................................................................................................3 Verification of Mathematical Calculations .........................................................................................................................4 Estimated Sources and Uses of Funds .................................................................................................................................4 Security for the Bonds ...................................................................................................................................................................5 General ..................................................................................................................................................................................5 Defeasance ..............................................................................................................................................................................5 Bonded Indebtedness ....................................................................................................................................................................6 Summary of Limited Tax General Obligation Bonds Debt Service Requirements ........................................................8 Direct and Overlapping Debt ...............................................................................................................................................9 Debt Payment Record ............................................................................................................................................................9 Future Financings ..................................................................................................................................................................9 Taxing Authority ..........................................................................................................................................................................10 Authorized Property Tax Levies ........................................................................................................................................10 Overlapping Taxing Districts .............................................................................................................................................10 General Property Taxes .......................................................................................................................................................11 Regular Property Tax Limitations ..................................................................................................: ..................................11 Assessed Value .....................................................................................................................................................................12 Property Tax Collection Procedure ...................................................................................................................................12 Tax Collection Record .........................................................................................................................................................13 Major Property Taxpayers ..................................................................................................................................................13 Collection of Other Taxes ....................................................................................................................................................14 Authorized Investments .............................................................................................................................................................16 Local Government Investment Pool ..................................................................................................................................17 Authorized Investments for Bond Proceeds .....................................................................................................................17 Financial Information ..................................................................................................................................................................18 The City .......................................................................................................................................................................................... City Staff ................................................................................................................................................................................21 Labor Relations .....................................................................................................................................................................21 Pension System .....................................................................................................................................................................22 Other Post-Employment Benefits ......................................................................................................................................23 Budgetary Policies ...............................................................................................................................................................24 Risk Management ..........................................................................................................................................: .....................24 Auditing of City Finances .....~ .............................................................................................................................................25 Demographic Information ..........................................................................................................................................................26 Population .............................................................................................................................................................................26 King County .........................................................................................................................................................................26 Initiative and Referendum ..........................................................................................................................................................30 Tax Matters ............................................................................................................... ....................................................................31 Qualified Tax-Exempt Obligations ....................................................................................................................................32 Proposed Tax Legislation; Miscellaneous .........................................................................................................................32 Certain Income Tax Consequences ............................................................................................................................................32 ERISA Considerations .................................................................................................................................................................33 Rating ........................................................................................................................................................................................34 Continuing Disclosure .................................................................................................................................................................34 Legal and Underwriting ..............................................................................................................................................................36 Approval of Counsel ...........................................................................................................................................................36 Litigation ...............................................................................................................................................................................37 Limitations on Remedies .....................................................................................................................................................37 Underwriting .........................................................................................................................................................................37 Potential Conflicts ................................................................................................................................................................38 Concluding Statement .........................................................................................................................................................38 Forms of Opinions of Bond Counsel ........................................................................................................................Appendix A Book-Entry Transfer System ......................................................................................................................................Appendix B 2013 Audited Financial Statements ..........................................................................................................................Appendix C iv This page left blank intentionally V OFFICIAL STATEMENT City of Renton, Washington $8,780,000* Limited Tax General Obligation Refunding Bonds, Series 2015A $3,695,000* Limited Tax General Obligation Refunding Bonds, Series 2015B (Taxable) The City of Renton, Washington (the "City"), a municipal corporation duly organized and existing under and by virtue of the laws of the State of Washington (the "State"), furnishes this Official Statement in connection with the offering of $8,780,000* aggregate principal amount of the above-referenced Limited Tax General Obligation Refunding Bonds, 2015A (the "2015A Bonds") and $3,695,000* aggregate principal amount of the above-referenced Limited Tax General Obligation Refunding Bonds, 2015B (Taxable) (the "2015B Bonds" and together with the 2015A Bonds, the "Bonds"). This Official Statement, which includes the cover page, the inside cover page and appendices, provides information concerning the City and the Bonds. Description of the Bonds Authorization for Issuance The Bonds are issued pursuant to Ordinance No. __ (the "Ordinance"), passed by the City Council (the "Council") on April 13, 2015, pursuant to the authority of chapters 39.36, 39.46 and 39.53 of the Revised Code of Washington ("RCW"). The Bonds do not require voter approval. Principal Amount, Date, Interest Rates and Maturities The Bonds will be dated and bear interest from the date of issuance and delivery. The Bonds will mature on the dates and in the principal amounts and will bear interest (payable semiannually on each December I and June 1, commencing December 1, 2015) until their maturity or prior redemption, as applicable, at the rates set forth on the inside cover of this Official Statement. Interest on the Bonds will be computed on the basis of a 360-day year consisting of twelve 30-day months. The Bonds will be issued in registered form, initially registered in the name Cede & Co., as nominee for The Depository Trust Company, New York, New York ("DTC"). Individual purchases of the Bonds will be made initially in book-entry form only and purchasers will not receive certificates representing their interest in the Bonds purchased. So long as Cede & Co. is the Registered Owner of the Bonds, as nominee of DTC, references herein to the Registered Owners or bond owners will mean Cede & Co. and will not mean the "Beneficial Owners" of the Bonds. In this Official Statement, the term "Beneficial Owner" will mean the person for whom a DTC participant acquires an interest in the Bonds. See Appendix B--"Book-Entry Transfer System." Bond Registrar and Registration Features The City has adopted the system of registration for the Bonds approved, from time to time, by the State Finance Committee (the "Committee"). Pursuant to chapter 43.80 RCW, the Committee designates one or more fiscal agencies for bonds issued within the State. The State’s fiscal agent, currently U.S. Bank National Association (the "Bond Registrar"), will authenticate the Bonds and act as the paying agent and registrar for the purpose of paying the principal of and interest on the Bonds, recording the purchase and registration, exchange or transfer, and payment of Bonds and performing the other respective obligations of the paying agent and registrar. No resignation or removal of the Bond Registrar shall become effective until a successor has been appointed and has accepted the duties of Bond Registrar. To pay the principal of and interest on the Bonds when due, the City will remit money from its Limited Tax General Obligation Bond Debt Service Fund, 2015 (the "Bond Fund") to the Bond Registrar. The Bond Registrar is obligated to remit such payments to DTC participants for subsequent disbursement to the Beneficial Owners of the Bonds as described in Appendix B--"Book-Entry Transfer System." In the event that the Bonds are no longer in fully immobilized form, interest on the Bonds will be paid by check or draft mailed to the Registered Owners at the addresses for such Registered Owners appearing on the Bond Register on the 15th day of the month preceding the interest payment date, and principal of the Bonds shall be payable upon presentation and surrender of such Bonds by the Registered Owners at the designated office of the Bond Registrar; provided, however, that if so requested in writing by the Registered Owner of at least $1,000,000 principal amount of Bonds, interest will be paid by wire transfer on the date due to an account with a bank located within the United States. Redemption Provisions 2015A Bonds. The 2015A Bonds maturing on or prior to December 1, 2024, are not subject to redemption prior to maturity. The 2015A Bonds maturing on December 1, 2025, may be redeemed at the option of the City on or after June 1, 2025, at a price of par plus accrued interest to the date of redemption. 2015B Bonds. The 2015B Bonds are not subject to redemption prior to maturity. Selection of 2015A Bonds for Redemption. For as long as the 2015A Bonds are held in book-entry only form, the selection of particular 2015A Bonds within a maturity to be redeemed will be made in accordance with the operational arrangements then in effect at DTC. If the 2015A Bonds are no longer held in uncertificated form, the selection of such 2015A Bonds to be redeemed and the surrender and reissuance thereof, as applicable, shall be made as provided in the Ordinance. If the City redeems at any one time fewer than all of the 2015A Bonds having the same maturity date, the particular 2015A Bonds or portions of 2015A Bonds of such maturity to be redeemed shall be selected by lot (or in such manner determined by the Bond Registrar) in increments of $5,000. In the case of a 2015A Bond of a denomination greater than $5,000, the City and the Bond Registrar will treat each 2015A Bond as representing such number of separate 2015A Bonds each of the denomination of $5,000 as is obtained by dividing the actual principal amount of such 2015A Bond by $5,000. In the event that only a portion of the principal sum of a 2015A Bond is redeemed, upon surrender of such 2015A Bond at the principal office of the Bond Registrar there shall be issued to the Registered Owner, without charge therefor, for the then unredeemed balance of the principal sum thereof, at the option of the Registered Owner, a 2015A Bond or 2015A Bonds of like maturity and interest rate in any of the denominations authorized in the Ordinance. Notice of Redemption. For so long as the 2015A Bonds are held in uncertificated form, notice of redemption (which notice may be conditional on the receipt of sufficient funds for redemption or otherwise) shall be given in accordance with the operational arrangements of DTC as then in effect, and neither the City nor the Bond Registrar will provide any notice of redemption to any Beneficial Owners. Thereafter (if the 2015A Bonds are no longer held in uncertificated form), notice of redemption shall be given as provided in the Ordinance. Unless waived by any owner of 2015A Bonds to be redeemed, official notice of any such redemption shall be given by mailing a copy of an official redemption notice by first class mail at least 20 days and not more than 60 days prior to the date fixed for redemption to the Registered Owner of the 2015A Bond or Bonds to be redeemed at the address shown on the bond register or at such other address as is furnished in writing by such Registered Owner to the Bond Registrar. On or prior to any redemption date, unless any condition to such redemption has not been satisfied or waived or notice of such redemption has been rescinded, the City will deposit with the Bond Registrar an amount of money sufficient to pay the redemption price of all the 2015A Bonds or portions of 2015A Bonds which are to be redeemed on that date. The City retains the right to rescind any redemption notice and the related optional redemption of 2015A Bonds by giving notice of rescission to the affected registered owners at any time on or prior to the scheduled redemption date. Any notice of optional redemption that is so rescinded shall be of no effect, and the 2015A Bonds for which the notice of optional redemption has been rescinded shall remain outstanding. If an unconditional notice of redemption has been given and not rescinded, or if the conditions set forth in a conditional notice of redemption have been satisfied or waived, the 2015A Bonds or portions of 2015A Bonds to be redeemed shall, on the redemption date, become due and payable at the redemption price therein specified, and, if the Bond Registrar then holds sufficient funds to pay such 2015A Bonds at the redemption price, then from and after such date such 2015A Bonds or portions of 2015A Bonds shall cease to bear interest. Upon surrender of such 2015A Bonds for redemption in accordance with said notice, such 2015A Bonds shall be paid by the Bond Registrar at the redemption price. Installments of interest due on or prior to the redemption date shall be payable as provided in the Ordinance for payment of interest. All 2015A Bonds which have been redeemed will be canceled by the Bond Registrar and will not be reissued Purchase The City reserves the right and option to purchase any or all of the Bonds offered to the City at any time at a price deemed to be reasonable by the City. Book-Entry Bonds DTC will act as securities depository for the Bonds. The ownership of one fully registered Bond for each series and maturity of the Bonds, as set forth on the inside cover of this Official Statement, each in the aggregate principal amount of such maturity, will be registered in the name of Cede & Co., as nominee for DTC. See Appendix B attached hereto for additional information. Procedure in the Event of Termination of Book-Entry Transfer System. In the event that (i) DTC or its successor (or substitute depository or its successor) resigns from its functions as depository, and no substitute depository can be obtained, or (ii) the Finance Director determines that it is in the best interest of the Beneficial Owners of the Bonds that such owners be able to obtain such Bonds in the form of Bond certificates, the ownership of the Bonds may then be transferred to any person or entity as provided in the Ordinance, and will no longer be held in fully-immobilized form. In the event that the Bonds are no longer in fully immobilized form, interest on the Bonds will be paid by check or draft mailed to the registered owners at the addresses for such registered owners appearing on the Bond Register on the fifteenth day of the month preceding the interest payment date, or upon the written request of a registered owner of more than $1,000,000 of Bonds (received by the Bond Registrar at least 15 days prior to the applicable payment date), such payment shall be made by the Bond Registrar by wire transfer to the account within the continental United States designated by the registered owner. Principal of. the Bonds will be payable upon presentation and surrender of such Bonds by the registered owners at the principal office of the Bond Registrar. Purpose and Use of Proceeds Purpose The proceeds from the sale of the Bonds will be used (i) to refund a portion of the City’s outstanding City’s Limited Tax General Obligation Bonds, 2006 (the "LTGO Bonds, 2006") to obtain the benefit of debt service savings and (ii) to pay costs of issuance for the Bonds. Proceeds of the LTGO Bonds, 2006, were used to finance a portion of the costs of constructing transportation, street, and utility infrastructure and improvements as part of the South Lake Washington infrastructure project and the SW 27th Street extension project. Plan of Refunding Depending on market conditions on the day of pricing, a portion of the proceeds from the sale of the Bonds will be used to advance refund and defease all or a portion of the City’s Limited Tax General Obligation Bonds, 2006 maturing on December 1 in the years 2017, 2019, 2020 through 2024, inclusive, and 2028 and currently outstanding in the aggregate principal amount of $12,400,000 (the "Refunding Candidates," and hs selected on the pricing date, the "Refunded Bonds"). Information on the Refunding Candidates is as follows: Refunding Candidates Maturity Years Principal Interest CUSIP (December 1)Amounts Rates Numbers 2017 $ 775,000 5.00%760133QV3 2019"1,670,000 5.00 760133QX9 2020 900,000 5.00 760133QY7 2021 945,000 5.00 760133QZ4 2022 1,000,000 5.25 760133RA8 2023 1,040,000 5.25 760133RB6 2024 1,095,000 5.25 760133RC4 2028*4,975,000 5.00 760133RG5 * Term Bonds. From a portion of the proceeds of the Bonds allocable to the refunding of the Refunded Bonds, the City will acquire certain governmental obligations (as defined herein, "Governmental Obligations") which will irrevocably be set aside to provide payment of: (a)interest on the Refunded Bonds when due up to and including December 1, 2016; and (b)on December 1, 2016, the redemption price (par) of the Refunded Bonds. The funds, interest earned thereon, and necessary cash balance, if any, will irrevocably be pledged to and held in trust for the benefit of the owners of the Refunded Bonds by U.S. Bank National Association (the "Escrow Agent"), pursuant to an escrow deposit agreement to be executed by the City and the Escrow Agent. Verification of Mathematical Calculations Grant Thornton LLP, a firm of independent certified pt~blic accountants, will verify the accuracy of the mathematical computations concerning the adequacy of the maturing principal amounts of and interest earned on the Government Obligations, to be placed together with other escrowed money in the escrow account to pay when due, pursuant to the call for redemption, the principal of and interest on the Refunded Bonds. The verification will also confirm the mathematical computations supporting the conclusion of Bond Counsel that the 2015A Bonds are not "arbitrage bonds" as defined by Section 148 of the Internal Revenue Code of 1986, as amended (the "Code"). Estimated Sources and Uses of Funds The proceeds from the Bonds will be applied as follows: Sources of Funds Par Amount (1) Net Original Issue Premium/(Discount) Total Sources of Funds $ Uses of Funds Escrow Requirements $ Costs of Issuance (2) Additional Proceeds Total Uses of Funds $ 2015A 2015B Total $ 8,780,000 $3,695,000 $12,475,000 $$ (1)Preliminary, subject to change. (2)Includes legal fees, rating fees, escrow costs, Underwriter’s discount, and other costs associated with the issuance of the Bonds and the refunding of the Refunded Bonds. Security for the Bonds General The Bonds are limited tax general obligation bonds of the City. The City, as authorized by law and the Ordinance, has covenanted and agreed irrevocably that it will include in its budget and levy an ad valorem tax upon all the property within the City subject to taxation in an amount that will be sufficient, together with all other revenues and money of the City legally available for such purposes, to pay the principal of and interest on the Bonds as the same become due. The City has irrevocably pledged that such tax will be within and as a part of the tax levy permitted to cities without a vote of the people. The full faith, credit and resources of the City have been pledged irrevocably for the annual levy and collection of such taxes and for the prompt payment of such principal and interest. The City may, subject to applicable laws, apply other funds available to make payments with respect to the Bonds. Bond owners do not have a security interest in particular revenues or assets of the City. The Bonds do not constitute a debt or indebtedness of the State or any political subdivision thereof other than the City. Defeasance In the event that the City, in order to effect the payment or retirement of any Bond, sets aside in the Bond Fund or in another special account, cash or noncallable Government Obligations, as defined below, or any combination of cash and/or noncallable Government Obligations, in amounts and maturities which, together with the known earned income therefrom, are sufficient to pay and retire such Bond in accordance with its terms and to pay when due the interest thereon, and such cash and/or noncallable Government Obligations are irrevocably set aside and pledged for such purpose, then no further payments need be made into the Bond Fund for the payment of the principal of and interest on such Bond. The owner of a Bond so provided for will cease to be entitled to any lien, benefit or security of the Ordinance except the right to receive payment of principal, premium, if any, and interest from the Bond Fund or such special account, and such Bond will be deemed to be not outstanding under the Ordinance. Defeasance of any 2015B Bond may result in a reissuance thereof, in which event a holder will recognize taxable gain or loss equal to the difference between the amount realized from the sale, exchange or retirement (less any accrued qualified stated interest which will be taxable as such) and the holder’s adjusted tax basis in the 2015B Bond. See "Certain Income Tax Consequences" herein. "Government Obligations" is defined in the Ordinance to have the meaning specified in RCW 39.53.010, as it may be amended from time to time, which currently means any of the following: (a) direct obligations of, or obligations the principal of and interest on which are unconditionally guaranteed by, the United States of America, and bank certificates of deposit secured by such obligations; (b) bonds, debentures, notes, participation certificates or other obligations issued by the Banks for Cooperatives, the Federal Intermediate Credit Bank, the Federal Home Loan Bank system, the Export-Import Bank of the United States, Federal Land Banks or the Federal National Mortgage Association; (c) public housing bonds and project notes fully secured by contracts with the United States; and (d) obligations of financial institutions insured by the Federal Deposit Insurance Corporation or the Federal Savings and Loan Insurance Corporation, to the extent insured or to the extent guaranteed as permitted under any other provision of State law. Bonded Indebtedness As prescribed by State statutes, the unlimited tax general obligation indebtedness permitted for cities, subject to a 60 percent majority vote of registered voters, is limited to 2.5 percent of assessed value for general purposes, 2.5 percent for certain utility purposes and 2.5 percent for open space, park facilities and capital facilities associated with economic development. Within the 2.5 percent of assessed value for general purposes, the City may, without a vote of the electors, incur general obligation indebtedness (such as the Bonds) in an amount not to exceed 1.5 percent of assessed value. Additionally, within the 2.5 percent of assessed value for general purposes, the City may, also without a vote of the electors, enter into leases if the total principal component of ¯ the lease payments, together with the other nonvoted general obligation indebtedness of the City, does not exceed 1.5 percent of assessed value. The combination of unlimited tax and limited tax general obligation debt for general purposes, including leases, cannot exceed 2.5 percent of assessed value and for all purposes cannot exceed 7.5 percent of assessed value. Without a vote of the electorate, the City may incur debt as follows: (1) Pursuant to an ordinance specifying the amount and object of the expenditure of the proceeds, the City may borrow money for corporate purposes and issue bonds and notes within the constitutional and statutory limitations on indebtedness. (2)The City may execute conditional sales contracts for the purchase of real or personal property. (3)The City may execute leases with or without an option to purchase. Computation of Debt Capacity (As of May 13, 2015) 2015 Tax Collection Year Assessed Value Nonvoted Debt Capacity 1.5% of Assessed Value Less: Outstanding Nonvoted Debt (1) Less: The 2015A Bonds (2) Less: The 2015B Bonds (2) Remaining Nonvoted Debt Capacity $ 12,876,667,781 $193,150,016 (62,205,753) (8,780,O00) (3,695,000) $118.469.26~3 Voted and Nonvoted Debt Capacity for General Purposes 2.5% of Assessed Value Less: Outstanding Nonvoted Debt (11 Less: The 2015A Bonds (2) Less: The 2015B Bonds (2) Less: Outstanding Voted Debt Total Remaining Voted and Nonvoted Debt Capacity for General Purposes (1) (2) $321,916,694 (62,205,753) (8,780,0O0) (3,695,000) 0 $247.235o94~1 Includes outstanding limited tax general obligation bonds, the SCORE Bonds and Valley Com. Bonds each as defined below), and a promissory note; excludes all of the Refunding Candidates. Preliminary; subject to change. Outstanding General Obligation Debt (As of April 30, 2015) Non-Voted Debt Limited Tax General Obligations LTGO Bonds, 2006 SCORE Bonds, 2009 (2) Valley Com. Bonds, 2010 (3) LTGO & Refunding, 2010 LTGO Bonds, 2011A LTGO Refunding, 2011 LTGO Bond, 2013 The 2015A Bonds (this issue) The 2015B Bonds (this issue) LTGO Bond Total Promissory Note Fire Protection District No. 40 (Purchase of Fire Station No. 13) Non-Voted Debt Total Date of Date of Amount Amount~ Issue Maturity Issued Outstanding 08/08/06 12/01/16 $17,980,000 $ 1,450,000 (1/ 11/04/09 01/01/39 31,044,600 28,936,800 04/05/10 12/01/15 1,065,000 220,000 05/11/10 12/01/21 6,170,000 6,010,000 08/02/11 12/01/22 16,715,000 12,460,000 09/21/11 12/01/17 9,425,000 4,825,000 07/01/13 07/01/28 3,200,000 2,990,000 05/13/15 12/01/28 8,780,000 (4)8,780,000 (4) 05/13/15 12/01/20 3,695,000 (4/3,695,000 (4) 98,074,600 69,366,800 03/01/09 09/01/28 6,798,085 5,313,953 $ 104..872..685 $74.680o75~3 (1)Reflects the redemption of all of the Refunding Candidates. The December 1, 2015 and 2016 principal payments for the LTGO Bonds, 2006 will remain after this refunding. (2)The South Correctional Entity Facility Public Development Authority issued special obligation bonds on November 4, 2009, for a new correctional facility (the "SCORE Bonds") in the total aggregate principal amount of $86,235,000. Pursuant to an interlocal agreement, the City is obligated to pay 36 percent of the debt service on the SCORE Bonds. (3) The Valley Communications Center Development Authority issued special obligation refunding bonds on April 5, 2010, in the total aggregate principal amount of $5,325,000 (the "Valley Com. Bonds"). Pursuant to an interlocal agreement, the City is obligated to pay 20 percent of the debt service on the Valley Com. Bonds. (4) Preliminary, subject to change. [remainder of page intentionally left blank] 7 Summary of Limited Tax General Obligation Bonds Debt Service Requirements Calendar Outstanding LTGO Bonds (2)The 2015A Bonds (3)The 2015B Bonds (4)Total Debt Years Principal Interest Principal Interest Principal Interest Service 2015 $4,200,000 $ ’ 1,974,900 $$193,160 $325,000 $35,106 $6,368,060 2016 4,858,400 2,764,458 351,200 80,000 62,789 7,974,058 2017 4,252,200 2,574,053 351,200 855,000 62,269 7,177,453 2018 4,071,400 2,382,382 351,200 870,000 51,479 6,804,982 2019 4,206,600 2,229,557 351,200 880,000 36,062 6,787,357 2020 4,383,600 2,033,179 220,000 351,200 685,000 16,940 6,987,979 2021 4,562,400 1,832,056 930,000 342,400 7,666,856 2022 1,962,400 1,613,181 975,000 305,200 4,855,781 2023 1,181,600 1,513,237 1,000,000 266,200 3,961,037 2024 1,215,800 1,450,282 1,045,000 226,200 3,937,282 2025 1,253,600 1,381,538 1,085,000 184,400 3,904,538 2026 1,296,800 1,306,593 1,130,000 141,000 3,874,393 2027 1,341,800 1,228,818 1,175,000 95,800 3,841,418 2028 1,388,600 1,148,098 1,220,000 48,800 3,805,498 2029 1,222,200 1,064,318 2,286,518 2030 1,272,600 983,012 2,255,612 2031 1,328,400 896,971 2,225,371 2032 1,384,200 807,238 2,191,438 2033 1,443,600 713,694 2,157,294 2034 1,506,600 616,102 2,122,702 2035 1,571,400 514,282 2,085,682 2036 1,638,000 408,115 2,046,115 2037 1,708,200 297,422 2,005,622 2038 1,782,000 181,966 1,963,966 2039 1,859,400 61,509 1,920,909 Total $ 56,891,800 $ 31,976,960 $ 8,780,000 $ 3,559,160 $ 3,695,000 $264,645 $ 101,207,920 (1)Totals may not foot due to rounding. (2)Principal and interest payments outstanding as of May 13, 2015. Includes the City’s portion of the Valley Com. Bonds and the SCORE Bonds; excludes the promissory note and all of the Refunding Candidates. Assumes gross debt service for the City’s Limited Tax General Obligation Bond, 2013 which was issued as a direct pay Qualified Energy Conservation Bond. (3) Preliminary, subject to change; assumes interest rates of 4.00%. (4) Preliminary, subject to change; assumes interest rates ranging from 0.32% to 2.47%. The following tables set forth the outstanding principal amount of general obligation debt of the City including the Bonds and the outstanding principal amount of general obligation debt incurred by other governmental entities whose taxing jurisdiction includes a part or all of the City and the estimated portion of that debt which is applicable to the property within the City (the "Overlapping Debt"). The estimate of the percentage of a governmental entity’s debt which is applicable to property within the City is based on the proportion of the overlapping jurisdiction that lies within the City. The City has obtained the information regarding the Overlapping Debt from the overlapping taxing districts, King County (the "County") and other sources the City believes to be reliable, but the City has not independently verified the accuracy or completeness of such information. No person should rely upon such information as being accurate or complete. Furthermore, the amounts described below relate only to general obligation bonds issued by the various taxing districts and may not reflect certain leases or other contracts that may constitute indebtedness under State law. The table below does not reflect any special revenue obligations (e.g., utility revenue bonds) issued by any taxing district. The taxing districts listed below may have issued additional general obligation debt since the dates indicated below and may have plans for future general obligation debt issuances. Summary of Overlapping Debt (As of December 31, 2014) Overlapping Taxing District School District No. 403 Fire Protection District No. 40 King County/1/ Port of Seattle School District No. 411 Rural Library District School District No. 415 Fire Protection District No. 10 Estimated 2015 Assessed Percent Outstanding Overlapping Value Overlal~GO Debt Debt $ 17,457,202,087 69.63%$ 288,010,000 $ 200,533,278 2,086,723,428 42.00 6,405,000 2,690,002 388,118,855,592 3.33 840,363,342 28,010,947 388,118,855,592 3.33 225,420,000 7,513,688 22,412,920,719 2.86 366,330,000 10,491,778 241,105,354,992 1.57 119,055,000 1,871,748 18,680,289,494 0.75 161,158,113 1,206,825 5,499,181,980 0.07 4,815,000 3,488 Total $ 252.321o75~5 (1)King County’s debt is estimated; excludes cash available in the debt service fund, proprietary-type debt, debt financed from component unit, and hotel/motel tax debt. Sources: King County Assessor’s and Treasurer’s Offices and individual taxing districts. Direct and Overlapping Debt The following tables present information regarding the City’s direct debt (including the Bonds and excluding the Refunding Candidates) and the estimated portion of the debt of overlapping taxing districts allocated to the City’s residents. ~ Regular Assessed Value (2015 Tax Collection Year) Estimated 2014 Population $ 12,876,667,781 97,130 Debt Information Direct Debt (1) Estimated Overlapping Debt (as previously detailed herein) Total Direct and Overlapping Debt $ 74,680,753 (2) 252,321,755 $327.002.508 (2) (1)Includes the Bonds, limited tax general obligation bonds, the City’s portion of the Valley Com. Bonds and the SCORE Bonds, and a promissory note; excludes all of the Refunding Candidates. (2)Preliminary, subject to change. Bonded Debt Ratios Direct Debt to Assessed Value Direct and Overlapping Debt to Assessed Value Per Capita Assessed Value Per Capita Direct Debt Per Capita Total Direct and Overlapping Debt O.58% 2.54% 132,571 769 3,367 Debt Payment Record The City has promptly met all debt service payments on outstanding obligations. The City has never issued refunding bonds to prevent an impending default. Future Financings Other than the Bonds, the City has no authorized but unissued general obligation bonds outstanding. The City does not have current plans to issue any additional bonds within the next twelve months. Taxing Authority Authorized Property Tax Levies The City is authorized to impose (1) a regular levy (up to $3.60 per $1,000 of assessed value, less the library district levy, which is not to exceed $0.50 per $1,000 of assessed value); (2) a firemen’s pension levy of $0.225 per $1,000 ofAV, so long as total levy does not exceed $3.325; and (3) excess levies (unlimited as to rate or amount). For the 2015 collection year, the City’s regular levy is $2.83283 per $1,000 of assessed value. The regular levy is imposed without a vote of the people for general purposes, including payment of debt service on the Bonds, and is subject to limitations (see "Regular Property Tax Limitations" herein). Excess levies are imposed, upon voter approval, to pay, among other things, debt service on unlimited tax general obligation bonds. An excess levy also may be imposed without a vote to prevent the impairment of the obligation of a contract (RCW 84.52.052). The City does not currently have an excess levy. Overlapping Taxing Districts The overlapping taxing districts within the City have the statutory power to levy regular property taxes at the following rates subject to the limitations provided by chapter 84.55 RCW, and levy excess voter-approved property taxes. For purposes of demonstration, representative levy rates for "levy code 2100" of the County, as well as the statutory levy authority of each type Of potential overlapping district, are listed below. Levy code 2100 is wholly within the City; however it does not include all of the property within the City. As a result, additional taxing districts, not listed below, levy taxes within the City. King County County (Road Levy) Rural Library District Port of Seattle Fire Protection District The City Hospital District No. 1 State Schools School District No. 403 Emergency Medical Services King County Flood Zone Representative Levy Rates Statutory Levy Authority Per $1,000 of Per $1,000 of Assessed Value Assessed Value $ 1.34522 (1)$1.80 (2) n/a (3)2.25 0.44747 0.50 0.18885 0.45 n/a (3)1.50 2.83283 3.10 0.50000 0.75 2.28514 3.60 (6) 4.59301 -- (~ 0.30217 0.50 0.13860 0.50 Total rate for King County levy code 2100:$12.63329 (1)Includes the County’s Transit Levy, Conservation Futures Levy, Ferry District Levy and voter-approved excess levies, which are not counted against the County’s $1.80 per $1,000 of assessed value statutory levy authority. (2)Pursuant to RCW 84.52.043(1), a county may increase its levy from $1.80 per $1,000 of assessed value to a rate not to exceed $2.475 per $1,000 of assessed value for general county purposes if (i) the total leviesfor both the county and any road district within the county do not exceed $4.05 per $1,000 of assessed value and (ii) no other taxing district has its levy reduced as a result of the increased county levy. (3)King County levy Code 2100 is included within the incorporated portion of King County and therefore does not have a road levy; likewise, it does not contain a fire protection district. (4)RCW 41.16.060 allows jurisdictions with firemen’s pension obligation to levy an additional $0.225 to be used for pension funding purposes, if required; otherwise this tax may be levied and used for any other municipal purpose. (5)The City’s levy authority is reduced due to its annexation to the King County Rural Library District. The library district has the authority to levy up to $0.50 per $1,000 of assessed value thereby reducing the City’s levy authority to $3.10, together with the $0.225 fire pension levy, the City has a total levy authority of $3.325 per $1,000 of assessed value currently. (6) RCW 84.52.043(1). The levy by the State may not exceed $3.60 per $1,000 of assessed value adjusted to the State equalized value in accordance with the indicated ratio fixed by the State Department of Revenue to be used exclusively for the support of the common schools. (7) Washington school districts do not have nonvoted regular levy authority. Source: King County Assessor for Levy Code. 10 General Property Taxes The following provides a general description of the City’s authority to levy property taxes and limitations thereon, the method of determining the assessed value of real and personal property, tax collection procedures, and tax collection information. Authorized Property Taxes. The City is authorized to levy both "regular" property taxes and "excess" property taxes. (1) (2) Regular Property Taxes. Regular property taxes are subject to constitutional and statutory limitations as to rates and amounts and commonly are imposed by taxing districts for general municipal purposes, including the payment of debt service on limited tax general obligation indebtedness, such as the Bonds. Regular property taxes do not require voter approval except as described below. Excess Property Taxes. Excess property taxes are not subject to limitation as to rates or amounts but must be authorized by a 60 percent approving popular vote, as provided in Article VII, Section 2 of the State Constitution and RCW 84.52.052. To be valid, such popular vote must have a minimum voter turnout of 40 percent of the number who voted at the last City general election, except that one-year excess tax levies also are valid if the turnout is less than 40 percent and the measure receives a number of affirmative votes equal to or greater than 24 percent of the number who voted at the last City general election. Excess levies may be imposed without a popular vote when necessary to prevent impairment of the obligations of contracts. Regular Property Tax Limitations The authority of a city to levy taxes without a vote of the people for general city purposes, including the payment of debt service on limited tax general obligation indebtedness, such as the Bonds, is subject to the limitations described below. Information relating to regular property tax limitations is based on existing statutes and constitutional provisions. Changes in such laws could alter the impact of other interrelated tax limitations on the City. Maximum Rate Limitation. Title 84 RCW authorizes the imposition of regular tax levies to various statutory maximums (see "Overlapping Taxing Districts" herein). The One Percent Aggregate Regular Levy Limitation. Article VII, Section 2 of the Washington Constitution, as amended in 1973, limits aggregate regular property tax levies by the State and all taxing districts, except port districts and public utility districts, to one percent of the true and fair value of property. RCW 84.52.050 provides the same limitation by statute. $5.90/$1,000 Aggregate Regular Levy Limitation. Within the one percent limitation described above, RCW 84.52.043(2) imposes an aggregate limitation on regular tax levies by all taxing districts, other than the State, of $5.90/$1,000 of assessed value, except levies for any port or public utility district; excess levies authorized in Article VII, Section 2 of the State Constitution; and certain levies for acquiring conservation futures, for emergency medical services or care, to finance affordable housing, for ferry districts, for criminal justice purposes and for transit-related purposes; and certain protected portions of levies for metropolitan park districts, for fire protection districts and for flood control zone districts. Uniformity Requirement. Article VII, Section 1 of the Washington Constitution requires that property taxes be levied at a uniform rate upon the same class of property within the territorial limits of a taxing district levying such taxes. With certain limited exceptions, all real estate constitutes one class of property for purposes of this uniformity requirement. Aggregate property tax levy rates vary within the City due to its different overlapping taxing districts. In the event that the maximum permissible levy rate by a taxing district varies within the taxing district, the lowest permissible rate for any part of the taxing district must be applied throughout the entire taxing district. Prioritization of Levies. RCW 84.52.010 provides that if aggregate levies certified by all taxing districts exceed the aggregate levy limitations described above, levies certified by junior taxing districts are reduced or eliminated in order to bring the aggregate levy into compliance with the statutory maximum prescribed by RCW 84.52.050 and 84.52.043. RCW 84.52.043 defines "junior taxing districts" as all taxing districts other than the state, counties, road districts, cities, towns, port districts, and public utility districts. 11 The tax levy for unlimited tax general obligation bonds is a special excess levy approved by the voters, and as such, is not subject to the limitations on regular levies described above. The Bonds are no~t unlimited tax general obligation bonds. Regular Levy Increase Limitation. The regular property tax increase limitation (chapter 84.55 RCW) limits the total dollar amount of regular property taxes levied by an individual local taxing district, such as the City, to the amount of such taxes levied in the highest of the three most recent years multiplied by a limit factor, plus an adjustment to account for taxes on new construction, annexations, improvements and State-assessed property at the previous year’s rate. The limit factor is the lesser of 101 percent of the highest levy in the three previous years (excluding new construction, improvements, and State-assessed property) or 100 percent plus inflation, unless a greater amount is approved by a simple majority of the voters. With a supermajority vote of the Council, the limit factor is a flat 101 percent. RCW 84.55.092 allows the property tax levy to be set at the amount that would be allowed if the tax levy for taxes due in each year since 1986 had been set at the full amount allowed under chapter 84.55 RCW. This is sometimes referred to as "banked" levy capacity. The City does not currently have any banked levy capacity. Within the rate limitations described above and only after so authorized by a majority vote of its electors, a taxing district may levy, indefinitely or for a limited period or to satisfy a limited purpose, an amount greater than otherwise would be allowed by the tax increase limitation, as allowed by RCW 84.55.050. This is known as a "levy lid lift." A newly created taxing district can initiate its levy at the maximum permitted statutory levy rate, unless that rate would exceed any of the limitations described above. Since the regular property tax increase limitation applies to the total dollar amount levied rather than to levy rates, increases in the assessed value of all property in the taxing district (excluding new construction, improvements and State-assessed property) which exceed the rate of growth in taxes allowed by the limit factor result in decreased regular tax levy rates, unless voters authorize a higher levy or the taxing district uses banked levy capacity. Decreases in the assessed value of all property in the taxing district (including new construction, improvements and State-assessed property) or increases in such assessed value that are less than the rate of growth in taxes imposed, among other events, may result in increased regular tax levy rates. Assessed Value The County Assessor ("Assessor") determines the value of all real and personal property throughout the County that is subject to ad valorem taxation, except certain utility properties which are valued by the State Department of Revenue. The Assessor is an elected official whose duties and methods of determining value are prescribed and controlled by statute and by detailed regulations promulgated by the State Department of Revenue. For tax purposes, the assessed value of property is 100 percent of its true and fair value. Three approaches may be used to determine real property value: market data, replacement cost and income-generating capacity. In the County, all property is subject to an annual property valuation and an on-site revaluation at least once every six years. The property is listed by the Assessor on a roll at its current assessed value and the roll is filed in the Assessor’s office. The Assessor’s determinations are subject to revisions by the County Board of Equalization and, for certain property, subject to further revisions by the State Board of Tax Appeals. Property Tax Collection Procedure Property taxes are levied in specific amounts and the rate for all taxes levied for all taxing districts in the County is determined, calculated and fixed by the Assessor based upon the assessed value of the property within the various taxing districts. The Assessor extends the taxes to be levied within each taxing district on a tax roll which contains the total amount of taxes to be so levied and collected. The tax roll is delivered to the County Treasurer by January 15, who creates a tax account for each taxpayer and is responsible for the collection of taxes due to each account. All such taxes are due and payable on April 30 of each year, but if the amount due from a taxpayer exceeds $50, one-half may be paid then and the balance no later than October 31, of each year. Delinquent taxes are subject to interest at the rate of 12 percent per year computed on a monthly basis from the date of delinquency until paid. In addition, a penalty of three percent is assessed on June I of the 12 year in which the tax was due and eight percent on December 1 of the year due. All collections of interest on delinquent taxes are credited to the County’s current expense fund. The method of giving notice of payment of taxes due, the accounting for the money collected, the division of the taxes among the various taxing districts, notices of delinquency, and collection procedures are all covered by detailed statutes. By law the County Treasurer may not commence foreclosure of a tax lien on real property until three years have passed since the first delinquency. Property taxes levied are secured by a lien on the property assessed. A federal tax lien filed before personal property taxes are levied is senior to the personal property tax lien. In addition, a federal civil judgment lien (but not a federal tax lien) is senior to real property taxes that are incurred after the judgment lien has been recorded. In all other respects, and subject to the possible "homestead exemption" described below, the lien that secures property taxes is senior to all other liens or encumbrances of any kind on real or personal property subject to taxation. The State’s courts have not decided whether the homestead law (chapter 6.13 RCW) gives the occupying homeowner a right to retain the first $125,000 of proceeds of the forced sale of the family residence or other "homestead" property for delinquent general property taxes. (See Algona v. Sharp, 30 Wn. App. 837, 638 P.2d 627 (1982)), holding the homestead right superior to improvement district assessments). The United States Bankruptcy Court for the Western District of Washington has held that the homestead exemption applies to the lien for property taxes, while the State Attorney General has taken the position that it does not. Tax Collection Record Regular Tax Collection Collection Assessed Ad Valorem Ad Valorem Year As of Year Value~1)Levy Rate Tax Levy of Levy 12/31/14 2015 $12,876,667,781 $2.83283 $35,904,446 (2)(2) 2014 11,271,964,301 3.15158 35,392,393 98.7%98.7% 2013 10,518,345,271 3.10000 32,397,515 98.7 99.6 2012 10,752,792,944 3.10000 33,187,663 98.7 99.8 2011 11,415,700,111 2.83207 32,156,965 98.1 100.0 2010 11,821,131,678 2.71184 31,961,519 97.8 100.0 (1)The assessed value of property is calculated in the year prior to taxes being levied and is based upon 100 percent of its true and fair value. (2) In process of collection. Sources: King County Assessor and Treasurer. Taxpayer The Boeing Company CPT The Landing LLC Puget Sound Energy/Gas PACCAR Renton Properties LLC Axis Grand Holdings . Fred Meyer Stores Inc. Black River JV LLC Renton Acquisition LLC Bre Properties Subtotal - Ten Largest Taxpayers All Other City Taxpayers Total City Taxpayers Major Property Taxpayers 2015 Collection Year Type of Business Assessed Valuation Aerospace $850,186,010 Retail center 143,105,600 Utility 136,271,765 Heavy manufacturing 109,618,533 Property management 52,885,800 Apartments 47,080,400 Retail 43,348,000 Property management 36,717,600 Property management 35,028,800 Healthcare 35,000,000 1,489,242,508 11,387,425,273 $ 12.876.667.78~1 Percentage Percent of City’s Total A.V. 6.60% 1.11 1.06 0.85 0.41 0.37 0.34 0.29 0.27 0.27 11.57 88.43 Source: King County Assessor’s Office. 13 Collection of Other Taxes In addition to regular property tax levies, the City is authorized to impose various other taxes, including those described below. Neither the State nor any municipal corporation of the State has the authority to nor has ever collected a tax on net income. Local Sales and Use Tax. The State ’currently imposes a sales and use tax of 6.5 percent. Cities, counties and certain other municipal corporations are authorized to levy incremental local sales and use taxes for various purposes. The sales tax currently is applied to a broad base of tangible personal property and selected services purchased by consumers, including construction (labor and materials), machinery and supplies used by businesses, services and repair of real and personal property, and many other transactions not taxed in other states. The use tax supplements the sales tax by taxing the use of certain services and by taxing the use of certain personal property on which a sales tax has not been paid (such as items purchased in a state that imposes no sales tax). The State Legislature, and the voters through the initiative process, have changed the base of the sales and use tax on occasion, and this may occur again in the future. See "Initiative and Referendum." The State Department of Revenue administers and collects sales and use taxes from sellers, consumers and the County and makes disbursements to the City on a monthly basis. The City is authorized to impose a local sales and use tax of one percent, of which 0.15 percent is required to be remitted to the County. The County also imposes various local sales and use taxes, including 0.1 percent to support criminal justice purposes. The first 10 percent of the revenues generated by the 0.1 percent criminal justice tax is allocated to the County. The remaining 90 percent of the criminal justice tax revenues is allocated to the County and cities within the County based on population. The proceeds of the 0.1 percent criminal justice tax may not be used to replace pre-existing funding. Sales and use taxes currently are imposed in the County at aggregate rates ranging from 8.6 to 9.5 percent. The County imposes additional sales and use taxes on car rentals and the sale of food and beverages at restaurants, taverns and bars. Annexation Sales Tax Credit The City receives additional sales tax revenue as a result of its annexation of the Benson Hill area in 2008. To encourage cities to annex unincorporated urban areas, the State permits the annexing city to receive 0.1% of the State’s sales tax. The tax is credited toward the State’s portion of sales tax, so there is no net impact on taxpayers. The credit lasts ten years and is intended to help cities who annex large urban areas to pay for service costs that exceeded revenue generated in the area. The City’s annexation tax credit for the Benson Hill annexation will end in 2018. The City expects to fund a reserve before the expiration of the credit to mitigate the loss of this sales tax revenue. Streamlined Sales and Use Tax Agreement. In 2003, the State Legislature approved legislation authorizing the State’s membership in the Streamlined Sales and Use Tax Agreement (the "SSUTA’), in an effort to make sales and use taxes in the State more uniform with other states. Congress has required that state sales taxes be more uniform before Congress will permit taxation of interstate catalogue and Internet sales. In 2007, the State Legislature adopted legislation fully conforming to the SSUTA. Effective July 1, 2008, the sales tax system changed in the State from an origin-based system to a destination-based system. Under destination sourcing, sales taxes on goods delivered to customers in the State are credited to the taxing jurisdiction where the goods are delivered (as opposed to the point of sale) and the rate of the tax is determined by the local rate in the destination taxing jurisdiction. The State Legislature enacted certain provisions to mitigate net losses in sales and use tax collections of local taxing jurisdictions resulting from the change to a destination-based system. To qualify, the local taxing jurisdiction must be negatively impacted by the legislation and the local sales tax must be in effect before July 1, 2008, among other requirements. Money for mitigation is subject to appropriation by the State Legislature. Under the mitigation legislation, on each July 1, the State Treasurer is required to transfer an amount determined by the Department to fully mitigate negatively impacted local jurisdictions. The Department is required to determine each local jurisdiction’s annual losses, and distributions are required to be made quarterly representing one-fourth of a jurisdiction’s annual loss less voluntary compliance revenue from the previous quarter. Losses in sales tax revenues are based on a business by business comparison of sales patterns in each jurisdiction before and after the change to destination-based sales tax. "Voluntary compliance revenue" is the local sales tax revenue gain to each local taxing jurisdiction reported to the Department by sellers in other states voluntarily registered through the SSUTA. 14 The City has not been negatively impacted by the SSUTA legislation. As such, the City has never received any mitigation payments. Lodging Tax. The City is authorized to impose a local option tax of one percent on sales of lodging. This tax is credited against the State’s 6.5 percent retail sales tax and results in no net increase to the taxpayer. The uses of lodging tax proceeds are restricted by State law for tourism promotion purposes only. Business and Occupation Tax. As part of the 2015-16 biennium budget, the Council authorized a Business and Occupation Tax at 0.05% on retail activities and 0.085% on all other business classifications to take effect on January 1, 2016. Businesses generate $1.5 million or more in annual income will be subject to the new tax which will replace the per employee business license fee they currently pay to the City. The new tax is expected to generate $3.8 million in 2016 and $5.2 million in 2017. The Council can adjust the tax rates up to 0.2%; or with voters’ approval raise the rate higher than 0.2%. Real Estate Excise Tax. The City is authorized to impose a real estate excise tax on each sale of real property at the rate of 0.50 percent of the selling price. This is in addition to the real estate excise tax imposed by the State at the rate of 1.28 percent. The first 0.25 percent tax ("REET 1") is imposed pursuant to RCW 82.46.010 and currently may be used solely for financing certain "capital projects" specified in a capital facilities plan element of the City’s a comprehensive plan. Eligible "capital projects" for REET 1 include: streets, roads, highways, sidewalks, street and road lighting systems, traffic signals, bridges, domestic water systems, storm and sanitary sewer systems, parks, recreational facilities, taw enforcement facilities, fire protection facilities, trails, libraries, administrative and judicial facilities. In the 2011 legislative session, the Washington Legislature passed House Bill 1953 ("HB 1953") authorizing cities, towns and counties to use the greater of $100,000 or 35 percent of REET 1 revenues, not to exceed $1 million, to pay for maintenance and operation expenses of existing capital facilities through calendar year 2016. The second 0.25 percent tax ("REET 2") is imposed pursuant to RCW 82.46.035(2) and may be used solely for certain capital projects specified in a capital facilities plan element of the City’s a comprehensive plan. Eligible "capital projects" for REET 2 include: streets, roads, highways, sidewalks, street and road lighting systems, traffic signals, bridges, domestic water systems, storm and sanitary sewer systems, and planning, construction, reconstruction, repair, rehabilitation, or improvement of parks. REET 2 excludes the use of funds to acquire land for parks. HB 1953 also authorizes cities, towns and counties to use the greater of $100,000 or 35 percent of REET 2 revenues, not to exceed $1 million, to pay for maintenance and operation expenses of existing capital facilities through calendar year 2016. The City must deposit and account for real estate excise tax proceeds in a separate capital projects fund or account. REET 1 and REET 2 revenues must be tracked separately because the uses to which they may be put are different. RCW 82.46.030(2) and RCW 82.46.035(4). Real estate excise taxes are collected by the County Treasurer of the county within which the property is located and distributed to the City periodically. Distributions may be suspended if the City is in noncompliance under RCW 36.70A.340 (relating to growth management planning). The City currently believes it is in compliance with this statute. 15 Utility Taxes. The City imposes a gross receipts utility business and occupation tax on investor and City-owned utilities, also known as a utility tax. The following table displays the maximum utility tax rate permitted under State law without voter approval and the City’s current utility tax rate. Utility Tax Maximum Statutory Limit Current Rate Investor-owned Telephone 6.0%6.0% Cellular 6.0 6.0 Gas 6.0 6.0 Electric 6.0 6.0 Cable Television 6.0 (1)6.0 Garbage None 6.8 City-owned Water None 6.8 Sewer None 6.0 Storm Drainage None 6.8 (1)The rate must not be unduly discriminatory against cable operators and subscribers and therefore should be consistent with the other utility rates charged. The following table shows the historical General Fund revenues from these taxes. General Fund Tax Revenues General Fund Tax Revenues Fiscal Year Ended December 31,2014(11 2013 2012 2011 2010 Regular property taxes $ 35,271,588 $ 32,461,888 $ 33,409,852 $ 32,404,669 $ 31,235,183 Sales and use taxes 26,926,994 25,296,020 23,419,510 21,797,027 21,395,446 Lodging taxes 257,211 245,952 234,196 211,750 195,930 Utility taxes 16,768,419 16,182,165 17,089,171 16,870,284 16,883,888 Real estate excise taxes 4,348,762 4,265,979 2,811,957 2,064,938 2,402,949 Gambling Tax 1,572,152 1,426,772 1,674,126 1,709,324 1,640,092 Other taxes (2)411,860 421,974 1,239,654 lr208,696 1,470,262 Total Taxes $ 85,556,986 $ 80,300,751 $ 79,878,467 $ 76,266,687 $ 75,223,750 Taxes in General Sub-Fund Taxes in Capital/Special Rev/Debt Service Funds Net General Fund Taxes (3) $74,938,688 $71,294,583 $71,537,019 $71,443,862 $69,857,863 10,618,298 9,006,168 8,341,448 4,822,826 5,365,888 $ 85,556,986 $ 80,300,751 $ 79,878,467 $ 76,266,687 $ 75,223,750 (1)Preliminary. (2)"Other taxes" include leasehold excise tax and admissions tax. The decrease in 2013 was due to the reclassification of the King County Emergency Medical Services levy and the King County Parks and Open Space levy distributions as intergovernmental revenue. (3) Totals may not foot due to rounding. Source: City of Renton. Authorized Investments Chapter 35.39 RCW limits the investment by a city of its inactive funds or other funds in excess of current needs to the following: United States bonds; United States certificates of indebtedness; State bonds or warrants general obligation or utility revenue bonds of its own or of any other city or town in the State; its own bonds or warrants of a local improvement district which are within the protection of the local improvement guaranty fund taw; and any other investment authorized by law for any other taxing district. Under chapter 39.59 RCW, a city also may invest in the following: bonds of any local government in the State that have at the time of investment one of the three highest credit ratings of a nationally recognized rating agency; general obligation bonds of any other state or local government of any other state that have at the time of the investment one of 16 the three highest credit ratings of a nationally recognized rating agency; registered warrants of a local government in the same county; and any investments authorized by law for the State Treasurer or any local government of the State other than a metropolitan municipal corporation (other than bank certificates of deposit of banks or bank branches not located in the State). Under chapter 43.84 RCW, the State Treasurer (and, under chapter 39.59 RCW, a city) may invest in the following; in obligations of the United States or its agencies and of any corporation wholly owned by the government of the United States; State county, municipal or school district general obligation bonds or general obligation warrants of taxing districts of the State, if within the statutory limitation of indebtedness; motor vehicle fund warrants; Federal Home Loan Bank notes and bonds, Federal Land Bank bonds, Fannie Mae notes, debentures and guaranteed certificates of participation and obligation of any other government-sponsored corporation whose obligations are eligible for collateral for advances to Federal Reserve System member banks; bankers’ acceptances purchased in the secondary market; negotiable certificates of deposit of any national or state commercial or mutual savings bank or savings and loan association doing business in the United States; and commercial paper. Money available for investment may be invested on an individual fund basis or may, unless otherwise restricted by law, be commingled within one common investment portfolio. All income derived from such investment may be either apportioned to and used by the various participating funds or for the benefit of the general government in accordance with City ordinances or resolutions. Funds derived from the sale of bonds or other instruments of indebtedness will be invested or used in such manner as the authorizing ordinances, resolutions or bond covenants may lawfully prescribe. Local Government Investment Pool The State Treasurer’s Office administers the Washington State Local Government Investment Pool (the "LGIP"), which invests money on behalf of more than 640 cities, counties and special taxing districts. In its management of LGIP, the State Treasurer is required to adhere, at all times, to the principles appropriate for the prudent investment of public funds. These principles are, in order of priority, (i) the safety of principal; (ii) the assurance of sufficient liquidity to meet cash flow demands; and (iii) the attainment of the highest possible yield within the constraints of the first two goals. Historically, the LGIP has had sufficient liquidity to meet all cash flow demands. The LGIP, authorized by chapter 43.250 RCW, is a voluntary pool which provides its participants the opportunity to benefit from the economies of scale inherent in pooling. It is also intended to offer participants increased safety of principal and the ability to achieve a higher investment yield than would otherwise be available to them. The LGIP is restricted to investments with maturities of one year or less, and the average life typically is less than 90 days. Investments permitted under the guidelines of the LGIP include U.S. government and agency securities, bankers’ acceptances, high quality commercial paper, repurchase and reverse repurchase agreements, motor vehicle fund warrants, and certificates of deposit issued by qualified Washington State depositories. As of December 31, 2014, the City’s investments at cost totaled $112,101,961 of which 53 percent was invested in the LGIP and 16 percent was invested in certificates of deposit. Authorized Investments for Bond Proceeds In addition to the eligible investments discussed above, bond proceeds may also be invested, subject to certain restrictions, in mutual funds with portfolios consisting of (i) only United States government bonds or United States government guaranteed bonds issued by federal agencies with average maturities of less than four years; bonds of the State or of any local government in the State that have at the time of the investment one of the four highest credit ratings of a nationally recognized rating agency; general obligation bonds of any other state or local government of any other state that have at the time of the investment one of the four highest credit ratings of a nationally recognized rating agency; (ii) bonds of state and local governments or other issuers authorized by law for investment by local governments that have at the time of investment one of the two highest credit ratings of a nationally recognized rating agency; or (iii) securities otherwise authorized by law for investment by local governments. 17 Financial Information General Fund Comparative Statement of Revenues, Expenditures and Changes in Fund Balances (Years Ending December 31) Preliminary Audited 2014 2013 2012 2011 2010 Revenues Taxes $74,938,688 $71,294,583 $71,537,019 $71,443,862 $69,857,863 Licenses & permits 5,524,677 4,371,667 3,002,481 2,665,983 2,235,637 Intergovemmental (1)5,205,758 5,130,377 10,982,766 10,534,331 9,484,755 Charges for services 9,404,148 9,208,624 4,280,901 3,860,290 3,794,168 Fines & forfeitures 2,683,662 2,766,403 3,053,938 3,150,326 3,439,926 Interfund revenues 3,106,389 2,460,236 3,324,852 3,057,642 3,244,928 Contributions 84,320 84,383 120,207 192,699 133,806 Investment earnings 957,311 417,389 383,909 366,332 357,417 Miscellaneous 2,023,937 1,708,853 942,680 646,868 76,893 Total Revenues 103,928,890 97,442,515 97,628,753 95,918,333 92,625,393 Expenditures Current: General government 11,564,284 9,340,499 8,223,191 10,598,389 9,853,746 Judicial 1,968,045 2,364,631 2,610,481 2,563,989 2,402,692 Public safety 55,608,751 53,107,483 54,378,422 52,986,589 48,904,653 Utilities (1)437,174 468,442 2,608,369 2,048,971 2,345,459 Transportation 8,445,506 7,822,333 8,376,509 8,018,267 8,499,342 Economic environment 6,200,246 5,840,104 5,804,336 5,876,231 6,531,155 Health & human services 1,842,157 1,827,736 523,577 511,934 787,768 Culture & recreation 10,558,176 10,402,858 10,471,784 10,215,229 11,857,457 Capital outlay 493,059 78,010 26,506 78,089 334,426 Total Expenditures 97,117,398 91,252,096 93,023,175 92,897,688 91,516,698 Excess revenues over (under) expenditures 6,811,492 6,190,419 4,605,578 3,020,645 1,108,695 Other Financing Sources (Uses): Transfers in 204,000 15,420 13,058 Transfers (out)(7,021,630)(4,415,559)(2,085,347)(2,268,329)(119,491 ) Sale of capital asets 9,623 9,821 211,437 500 Total Other Sources (Uses)(7,012,007)(4,405,738)(1,669,910)(2,252,409)(106,433) Excess revenues over (under) expenditures (200,515)1,784,681 2,935,668 768,236 1,002,262 Beginning Fund Balance 20,469,125 18,684,444 15,748,776 14,980,540 (2)13,486,727 Ending Fund Balance $ 20,268,610 $ 20,469,125 $ 18,684,444 $ 15,748,776 $ 14,488,989 (2) (1)The City is required to use a standard chart of accounts as prescribed by the State Auditor’s Office to record its transactions. The chart of accounts was revised in 2013 that required certain reclassifications of revenues and expenditures. The decrease in "intergovernmental" revenue was due to the reclassification of Fire Service Contract revenue to "Charge for Services." The reduction in "utilities" was reclassified into Health & Human Services and General Government.. (2)The 2011 beginning fund balance includes a reclassification of the Leased Facilities Special Revenue Fund from "Other Governmental Funds" to the "General Fund" in the amount of $491,551. Source: City of Renton Audited Financial Statements. 18 General Fund 2015 Budget (Fiscal Years Ended December 31) Revenues Taxes Licenses & permits Intergovernmental Charges for services Fines & forfeitures Interfund revenues Contributions Investment earnings Miscellaneous Total Revenues Expenditures Current: General government Judicial Public safety Utilities Transportation Economic environment Health & human services Culture & recreation Capital outlay Total Expenditures Excess revenues over (under) expenditures Other Financing Sources (Uses): Transfers in Transfers (out) Sale of capital asets Total Other Sources (Uses) Excess revenues over (under) expenditures Beginning Fund Balance Projected 2015 $78,574,232 5,171,417 4,362,242 9,259,029 3,320,500 3,550,785 97,000 875,300 1,961,866 107,172,371 12,567,083 2,111,321 59,133,063 463,587 10,065,711 7,501,532 1,854,359 12,033,602 105,730,258 1,442,113 (1,411,000) (1,411,000) 31,113 20,268,610 Ending Fund Balance Source: City of Renton. $ 2@299,723 19 General Fund Balance Sheet (Years. Ending December 31) Preliminary 2014 Assets Cash & cash equivalents $10,243,402 Cash with fiscal agent 297,471 Investments 7,059,143 Receivables Taxes 2,349,340 Customer accounts 5,368,839 Accrued interest & penalty 48,456 Interfund loans receivable Due from other funds 44,457 Due from other governmental units 5,311,745 Prepayments Advances to other funds (1) Total Assets 30,722,853 Audited 2013 2012 2011 2010 11,365,454 $11,435,445 $7,873,281 237,419 224,837 125,134 4,816,827 3,721,741 4,632,146 6,146,910 5,318,401 3,341,907 2,262,963 2,880,657 2,995,738 4,680,580 4,192,301 3,753,123 3,237,276 39,490 28,817 45,678 14,441 461,810 500,416 358,517 44,457 136,367 44,063 42,517 5,473,170 5,162,769 4,842,807 4,499,497 8,000 1,716,067 1,516,483 29,999,304 27,627,050 26,413,372 24,137,780 Liabilities and Fund Balances Liabilities Accounts payable 1,569,721 1,029,793 605,019 2,656,549 Taxes payable 41,555 37,611 49,776 33,148 Due to other funds/Other gov’t units 56,367 36,857 73,546 Custodial accounts 100,749 86,581 394,868 225,935 Unearned revenues 4,656,476 4,551,685 4,243,630 4,151,414 Deposits 34,739 Accrued employee wages & leave payable 4,085,741 3,768,142 3,612,456 3,489,265 Fund Balances (2) Reserved 438,974 4,539,413 17,257,314 1,936,518 Unreserved 19,829,637 15,929,712 1,427,130 13,812,258 Total Liabilities and Fund Balances $ 30,722,853 $ 29,999,304 $ 27,627,050 $ 26,413,372 (1) (2) "Advances to other funds’~ represent repaid interfund loans. Fund balance designations changed in 2012 with the implementation of GASB (defined herein) 54. portion of the General Fund balance was committed to other funds, which were transferred in 2014. City reassessed its fund balance classification to better align with GASB 54. Source: City of Renton Audited Financial Statements. 1,465,115 14;364 925,165 30,877 3,675,204 34,739 3,503,327 2,468,569 12,020,420 $ 24,137,780 In 2013, a large Also in 2013, the ,20 The City The City was incorporated in 1901 and operates under State laws applicable to a non-charter code city with a mayor-council form of government. The council is comprised of seven members plus the mayor. Councilmembers are elected to four-year terms on a staggered schedule through citywide elections. Councilmembers are part-time elected officials who exercise legislative authority and determine matters of policy for the City. Member Position Term Expires Denis W. Law Mayor December 31, 2015 Ed Prince Council President December 31, 2015 Randy Corman Council President Pro Tem December 31, 2017 Marcie Palmer Councilmember December 31, 2015 Armondo Pavone Councilmember December 31, 2017 Ruth P6rez Councilmember December 31, 2015 Don Persson Councilmember December 31, 2015 Greg Taylor Councilmember December 31, 2015 The City provides a range of municipal services authorized by State law, including police, fire, ambulance service, streets, sanitation, health, recreation, library, public improvements, planning and zoning, water supply treatment and distribution, and sewage collection and treatment services. City Staff Jay Covington, Chief Administrative Officer. Mr. Covington joined City staff in 1990. Prior to joining the City, Mr. Covington served eight years at the City of Vancouver, Washington, in the roles of budget analyst, management analyst and Assistant to the City Manager. Mr. Covington earned a Bachelor’s degree in Business and Masters in Public Administration from Brigham Young University. Mr. Covington is a past President and Board Member of the Washington City/County Management Association as well as a past Board Member of the Association of Washington Cities. In 2005, Mr. Covington received the Public Official of the Year Award from the Seattle Municipal League. Iwen Wang, Finance and.Information Services Administrator. Ms. Wang was originally with the City in 1986 as its Utility Accounting Supervisor and was promoted to the Deputy Finance Director position in 1988, where she was responsible for budget, financial planning, and financial operation functions including accounting, cash management, and coordination of financial audits and banking service contracts. Ms. Wang rejoined the City in 2008 as its Finance and Information Services Administrator, and is now responsible for overall management of the City’s financial and information technology functions. Prior to her original position with the City, Ms. Wang was with the City of Redmond as its enterprise fund accountant. In 1994, Ms. Wang joined the City of Federal Way as its Management Service Director and was appointed to Assistant City Manager in 2007 until she left to rejoin the City. Ms. Wang has a Bachelor of Arts degree in public finance and Master of Business Administration degree in Finance. In addition, Ms. Wang is a Certified Public Accountant and a Certified Management Accountant. JamieThomas, Fiscal Services Director. Ms. Thomas joined the City staff as the Fiscal Services Director in November 2011. Prior to joining the City Ms. Thomas served as the Finance Manager for over three years at Valley Communications Center. Prior to that, she was an Assistant Audit Manager for the Washington State Auditor’s Office. Ms. Thomas has an MBA from the University of Washington. Labor Relations The City currently has approximately 686 full-time equivalent employees. The City enters into written bargaining agreements with represented employees. The agreements contain provisions regarding salaries, vacation~ sick leave, medical and dental insurance, working conditions, and grievance procedures. The City strives to complete agreements with all groups in a timely manner, consistent with all applicable State law, and to promote labor relation policies mutually beneficial to management and employees. The City considers labor relations with its bargaining units to be good. There have been no recent strikes or major labor relations problems. 21 Number of Bargaining Unit Employees AFSCME 286 Renton Police Officers’ Guild 110 Renton Police Officers’ Guild Non-Commissioned 28 Renton Firefighters Local 864 136 Renton Firefighters Local 864 Battalion Chiefs 6 Expiration Date December 31, 2015 December 31, 2015 December 31, 2015 December 31, 2015 December 31, 2015 Pension System Substantially all of the City’s employees are enrolled in cost-sharing multiple-employer pension plans administered by the State Department of Retirement Systems: Public Employees Retirement System ("PERS"), the Law Enforcement Officers and Fire Fighters Retirement System ("LEOFF’) or the Public Safety Employees Retirement System ("PSERS’). Contributions by both employees and employers are based on gross wages. PERS and LEOFF participants who joined the system by September 30, 1977, are Plan 1 members. PERS participants who joined on or after October 1, 1977 and by August 31, 2002, are Plan 2 members, unless they exercise an option to transfer to Plan 3. PERS participants joining on or after September 1~ 2002 have the irrevocable option of choosing membership in Plan 2 or Plan 3. LEOFF participants who joined on or after October 1, 1977, are Plan 2 members. PSERS consists of a single defined benefit plan, Plan 2, that became effective July 1, 2006, and includes all full-time public safety officers. PERS Plans 1 and 2, LEOFF and PSERS are defined-benefit pension plans. PERS Plan 3 is a hybrid defined-benefit and defined-contribution pension plan. The following tables outline the contribution rates of employees and employers under PERS, LEOFF and PSERS. The City contributed $2,417,197 in 2013 and $2,775,032 in 2014 to PERS; $1,357,580 in 2013 and $1,414,095 in 2014 to LEOFF; and $11,925 in 2013 and $13,550 in 2014 to PSERS. The 2014 amounts are unaudited. Below are the contribution rates for the State’s 2013-2015 biennium from July 1, 2013 through June 30, 2015. PERS Contribution Rates PERS Plan I PERS Plan 2 PERS Plan 3 Employee 6.00%4.92%Variable (5% to 15%) Employer (1/9.21%9.21%9.21% (1)Includes a 0.18% administration fee. The Office of the State Actuary has adopted a new employer contribution rate of 11% for PERS effective July 1, 2015 through June 30, 2017. LEOFF Contribution Rates Plan I Plan 2 Employee 0.00%8.41% Employer (1) 0.18%5.23% State 0.00%3.36% (1)Includes a 0.18% administration fee. (1)Includes a 0.18% administration fee. PSERS Contribution Rates Plan 2 Employee 6.36% Employer (~10.52% 22 Information regarding all of these plans is presented in annual financial report of the State Department of Retirement Systems, which may be obtained from: Department of Retirement Systems 1025 East Union Street P.O. Box 48380 Olympia, WA 98504-8380 Internet Address: www.drs.wa.gov (which website is not incorporated herein by reference) While the City’s contributions in 2014 represented its full current liability under PERS, LEOFF and PSERS, any unfunded pension benefit obligations within the systems could be reflected in future years as higher contribution rates. The website of the Office of the State Actuary ("OSA") includes information regarding the values and funding levels of these retirement plans. According to OSA, as of June 30, 2013, PERS Plans 2 and 3 and LEOFF Plans 1 and 2 had no unfunded actuarial accrued liability. However, during the years 2001 through 2010 the rates adopted by the Legislature were lower than those that would have been required to produce actuarially required contributions to PERS Plan 1, a closed plan with a large proportion of the retirees. According to a report issued by OSA in September 2014, and subject to the assumptions therein, the total unfunded actuarial accrued liability of PERS Plan I was $4.831 billion (63% funded on an actuarial basis) as of June 30, 2013. The assumptions used by OSA in calculating the unfunded liability as of June 30, 2013 of PERS and LEOFF are 7.8 percent annual rate of investment return (7.5% for LEOFF Plan 2), 3.75 percent salary increases, 3.0 percent inflation and 0.95 percent growth in membership (1.25% for LEOFF). To report funded status, liabilities were valued using the "Projected Unit Credit" cost method and assets valued using the actuarial value of assets. In July 2014, the Pension Funding Council (the "PFC’) adopted contribution rate increases to be phased in over three biennia, beginning with the 2015-17 biennium. For the 2015-17 biennium employer rates will be 11 percent for PERS Plans 1, 2 and 3 (net of DRS administrative fees) and employee rates for PERS Plan 2 will be 6.12 percent. PERS Plan 1 and 3 remain unchanged from the table above. The LEOFF 2 Board did not adopt a rate increase for the 2015-17 biennium. The rates adopted by the PFC and LEOFF 2 Board are subject to revision by the State legislature. Other than PERS Plans 2 and 3, which are combined for reporting purposes, assets for one plan may not be used to fund benefits for another plan; however, all employers in PERS are required to make contributions at rates (percentage of payroll) determined by the OSA every two years for the purpose of amortizing within a rolling 10-year period the unfunded actuarial accrued liability in PERS Plan 1. The State Legislature in 2009 established certain maximum contribution rates that began in 2009 and continue until 2015 and certain minimum contribution rates that are to become effective in 2015 and remain in effect until the actuarial value of assets in PERS Plan 1 equal 100 percent of actuarial accrued liability of PERS Plan 1. These rates are subject to change by future legislation enacted by the State Legislature to address future changes in actuarial and economic assumptions and investment performance. Other Post-Employment Benefits The City’s annual cost (expense) for other post-employment benefits ("OPEB") is calculated based on the annual required contribution of the employer ("ARC"), an amount actuarially determined in accordance with the parameters of GASB (Governmental Accounting Standards Board) 45. The ARC represents a level of funding that, if paid on an ongoing basis, is projected to cover normal costs each year and amortize any unfunded actuarial liabilities (or funding excess) over a period not to exceed thirty years. The following table shows the components of the City’s annual OPEB cost for 2013, the amount contributed to the LEOFF I Retiree Healthcare Plan (the "Plan"), and changes in the City’s net OPEB obligation to the Plan: Annual OPEB Cost Contributions Made Increase (Decrease) in Net OPEB Obligation Net OPEB Obligation - Beginning of Year Net OPEB Obligation - End of Year $ 1,884,823 (1,039,281) 845,542 3,744,023 $ 4.58~9o565 23 The City’s annual OPEB cost, the percentage of annual OPEB cost contributed to the Plan, and the net OPEB obligation for the years ending December 31 were as follows: Fiscal Contribution as a Year Annual Percentage of Net OPEB Ended OPEB Cost Annual OPEB Cost Obligation 2013 $1,884,823 55.14%$4,589,565 2012 1,873,324 66.98 3,744,023 2011 1,716,970 51.00 3,125,494 Budgetary Policies The City budgets its funds in accordance with chapter 35A.33 RCW. Annual appropriated budgets are adopted for the general, special revenue, debt service, and capital projects funds on the cash basis of accounting and include fund balances. The City provides a reconciliation of the differences between the budgetary basis and GAAP each year in its Comprehensive Annual Financial Report. The City Council adopts a budget by ordinance establishing appropriations for City funds biennially. The biennial budget is required to be reviewed and amended during the mid-biennium. The City Council may also authorizes supplemental appropriations any other time during the biennium. Administrative and legal budgetary control is established at the fund level, i.e., expenditures for a fund may not exceed the total appropriation amount. The Mayor or Chief Administrative Officer may authorize transfers of appropriations within a fund however interfund transfers must be approved by ordinance of the Council. Risk Management The City is a member of the Washington Cities Insurance Authority ("WCIA"). Utilizing chapter 48.62 RCW (self-insurance regulation) and chapter 39.34 RCW (the Interlocal Cooperation Act), nine cities originally formed WCIA on January 1, 1981. WCIA was created for the purpose of providing a pooling mechanism for jointly purchasing insurance, jointly self-insuring, and/or jointly contracting for risk management services. WCIA has 175 members. New members initially contract for a three-year term, and thereafter automatically renew on an annual basis. A one-year withdraw.al notice is required before membership can be terminated. Termination does not relieve a former member from its unresolved loss history incurred during membership. Liability coverage is written on an occurrence basis, without deductibles. Coverage includes general, automobile, police, public officials’ errors or omissions, stop gap, and employee benefits liability. Limits are $4 million per occurrence self-insured layer, and $16 million per occurrence in the re-insured excess layer. The excess layer is insured by the purchase of reinsurance and insurance and is subject to aggregate limits. Total limits are $20 million per occurrence subject to aggregate sublimits in the excess layers. The Board of Directors determines the limits and terms of coverage annually. Insurance coverage for property, automobile physical damage, fidelity, inland marine, and boiler and machinery are purchased on a group basis. Various deductibles apply by type of coverage. Property insurance and auto physical damage are self-funded from the members’ deductible to $750,000, for all perils other than flood and earthquake, and insured above that amount by the purchase of insurance. In-house services include risk management consultation, loss control field services, claims and litigation administration, and loss analyses. WCIA contracts for the claims investigation consultants for personnel issues and land use problems, insurance brokerage, and lobbyist services. WCIA is fully funded by its members, who make annual assessments on a prospectively rated basis, as determined by an outside, independent actuary. The assessment covers loss, loss adjustment, and administrative expenses. As outlined in the Interlocal Cooperation Act, WCIA retains the right to additionally assess the membership for any funding shortfall. 24 An investment committee, using investment brokers, produces additional revenue by investment of WCIA’s assets in financial instruments which comply with all State guidelines. These revenues directly offset portions of the membership’s annual assessment. A Board of Directors governs WCIA, which is comprised of one designated representative from each member. The Board elects an Executive Committee and appoints a Treasurer to provide general policy direction for the organization. The WCIA Executive Director reports to the Executive Committee and is responsible for conducting the day to day operations of WCIA. The City is analyzing potential alternatives to WCIA for insurance coverage. The City has given WCIA the notice required for withdrawal from WCIA, but the City will not withdraw until alternative coverage is in place. The earliest that any such change could occur would be 2016. Auditing of City Finances The Office of the State Auditor, in accordance with RCW 43.09.200 and RCW 43.09.230, prescribes accounting systems and budgetary controls. State statutes require audits for cities to be conducted by the Office of the State Auditor. The City complies with the systems and controls prescribed by the Office of the State Auditor and establishes procedures and records which reasonably assure safeguarding of assets and the reliability of financial reporting. The State Auditor is required to examine the affairs of cities at least once every two years; however the City requests annual audits. The examination must include, among other things, the financial condition and resources of the City, whether the laws and constitution of the State are being complied with, and the methods and accuracy of the accounts and reports of the City. Reports of the auditor’s examinations are required to be filed in the office of the State Auditor and in the finance department of the City. The audited financial statements of the City for the year ended December 31, 2013, are attached as Appendix C to this Official Statement. The 2014 figures included herein are unaudited, preliminary and subject to change. lremainder of page intentionally left blank] 25 Demographic Information The City surrounds the southern end of Lake Washington, southeast of Seattle on Interstate 405. The City is located approximately 11 miles southeast of the City of Seattle and approximately 53 miles northeast of the City of Olympia, the State’s capital. The City had a population of 97,130 in 2014, an increase of approximately 61 percent since early 2008, when the City annexed the Benson Hill-Cascade area. The City ranks fourth in population among cities in the County. Historical population of the City and the County are shown below. Population Population data for the City, the County and Seattle are as follows: Population(1) City of City of Year Renton Seattle 2014 97,130 640,500 2013 95,540 626,600 2012 93,910 616,500 2011 92,590 612,100 2010(2)90,927 608,660 (1) Except as otherwise noted, figures are estimates as of April I of each year. (2) Official U.S. Census figure. Source: Washington State Office of Financial Management, February 2015. King County Washington King County 2,017,250 1,981,900 1,957,000 1,942,600 1,931,249 King County The County is located in the Puget Sound region in Washington and covers more than 2,200 square miles. The County is the largest metropolitan county in the State in terms of number of cities and employment, and includes more than one quarter of the State’s population. The tables in the following section include the most recent information available. Major contributors to the area’s economy are manufacturing, technology-based business, the Port of Seattle, services industry, tourism, fishing and agriculture. Income:Historical personal income and per capita income levels for the County and the State are shown below: King County and State of Washington Total Personal and Per Capita Income Year King County Total Personal Per Capita Income (in thousands)Income 2013 $128,330,859 $ 62,770 2012 124,291,775 61,911 2011 113,153,894 57,400 2010 105,389,106 54,395 2009 102,749,898 53,739 Source: U.S. Department of Commerce, Bureau of Economic Analysis, February 2015. State of Washington Total Personal Per Capita Income (in thousands)Income $332,654,857 $ 47,717 324,458,394 47,055 303,999,485 44,565 286,862,463 42,547 280,943,954 42,137 26 Median Household Income. Median household income estimation is based on 1990 and 2000 Census data, and on the Census Bureau’s American Community Surveys’ estimates for 2009-2010. State of Year King County Washington 2013(1)$ 70,365 $ 58,577 2012(2)68,313 56,444 2011 66,294 55,500 2010 65,383 54,888 2009 65,877 55,458 (1)The Revenue Forecast Council’s November 2013 forecast of the state personal income is used in the projection of 2012 median household income. (2)In addition to the state personal income data published by BEA, the payroll data compiled by the state Employment Security Department are used in the Preliminary estimates of 2010 median household income. Source: Washington State Department of Revenue, February 2015. Taxable Retail Sales. Taxable retail sales reflect only those sales subject to retail sales tax. Historic taxable retail sales for the County and the City are shown below: Taxable Retail Sales King County City of Renton 2014(1/$ 36,236,439,424 $ 1,701,139,247 2013 46,601,198,766 2,242,002,565 2012 43,506,804,227 2,094,900,017 2011 40,846,118,928 1,936,916,285 2010 39,275,353,182 1,914,203,605 2009 39,594,903,520 1,976,222,466 (1)Data from the Quarterly Business Review through third quarter only; through the third quarter of 2013, taxable retail sales for the County and the City were $34,082,121,712 and $1,663,617,404, respectively. Source: Washington State Department of Revenue, February 2015. lremainder of page intentionally left blank] 27 Building Permits. The number and valuation of new single-family and multi-family residential building permits in the County and the City are listed below: King County Residential Building Permits New Single Family Units New Multi Family Units Total Year Number Construction Cost Number Construction Cost Construction Cost 2014(1)4,179 $1,458,799,499 10,428 $1,388,435,517 $2,847,235,016 2013 4,419 1,419,065,243 7,858 1,053,237,846 2,472,303,089 2012 3,864 1,133,343,731 7,750 1,118,023,021 2,251,366,752 2011 2,765 785,840,283 3,378 431,699,572 1,217,539,855 2010 2,578 705,719,017 3,442 325,377,955 1,031,096,972 2009 2,003 538,910,481 1,183 137,161,103 676,071,584 (1) Estimates with imputation for data through December. Source: U.S. Bureau of the Census, February 2015. City of Renton Residential Building Permits New Single Family Units Year Number Construction Cost Number 2014 232 $78,733,474 442 2013 274 87,173,883 147 2012 265 77,718,054 0 2011 245 69,783,888 65 2010 243 62,645,177 9 2009 249 57,572,228 73 Souse: Ci~ofRenton. New Multi Family Units Construction Cost $42,996,586 21,013,029 0 8,201,142 1,215,783 12,096,177 Total Construction Cost $121,730,060 108,186,912 77,718,054 77,985,030 63,860,960 69,668,405 [remainder of page intentionally left blank] 28 Employment. The following table presents State-wide employment data in 2013 for certain major employers in the Puget Sound area. Puget Sound Major Employers Employer The Boeing Company Joint Base Lewis-McChord Microsoft Corp. Navy Region Northwest University of Washington amazon.com Inc. Providence Health & Services Wal-Mart Stores, Inc. Fred Meyer Stores King County Government Franciscan Health System U.S. Postal Service Starbucks Corp. MultiCare Health System Swedish Health Services City of Seattle Costco Wholesale Corp. Nordstrom, Inc. PeaceHealth Group Health Cooperative Alaska Air Group Inc. Virginia Mason Medical Center Fairchild Air Force Base Target Seattle Public Schools (1) Does not include part-time or seasonal employment figures. Source: Puget Sound Business Journal, Book of Lists, 2015. Employees 81,939 56,000 43,031 43,000 30,200 24,700 19,456 19,350 15,450 13,400 12,440 11,672 11,239 10,758 10,726 10,080 9,264 8,982 8,800 7,271 6,139 6,000 5,957 5,773 5,583 City of Renton 2014 Major Employers Employer The Boeing Company Providence Health & Services Valley Medical Center Renton School District Federal Aviation Administration Paccar Inc. City of Renton Kroger QFC/Fred Meyer Wizards of the Coast King County Elections Product/Business Aerospace HMO medical centers Medical services Public education Federal government Heavy manufacturing City government Supermarkets/retail Toy and hobby goods County government Employment 14,698 2,244 2,173 1,507 1,408 1,254 700 446 425 385 Source: City of Renton Business License System. 29 Employment within the County is described in the following tables. Civilian Labor Force data is based on household surveys of residents. NAICS data are estimates based on surveys of employers and benchmarked based on covered employment as reported by all employers. Civilian Labor Force Total Employment Total Unemployment Percent of Labor Force King County Nonagricultural Wage & Salary Workers{2~ and Labor Force and Employment Data Annual Average 2014(1)2013 2012 2011 2010 1,160,020 1,139,610 1,129,670 1,115,790 1,113,290 1,105,120 1,079,950 1,055,000 1,025,070 1,011,940 54,900 59,660 74,670 90,720 101,350 4.7%5.2%6.6%8.1%9.1% NAICS INDUSTRY(3) Total Nonfarm Total Private Goods Producing Mining and Logging Construction Manufacturing Service Providing Trade, Transportation, and Utilities Information Financial Activities Professional and Business Services Educational and Health Services Leisure and Hospitality Other Services Government Federal Government State Government Local Government Workers in Labor/Management Disputes (1) Preliminary data through December. 2014(1) 1,281,617 1,111,742 168,517 425 60,583 107,475 1,113,100 236,117 86 167 72 033 208 717 168 400 125 725 46 067 169 875 20 092 57,242 92,542 0 2013 2012 2011 2010 1,238,500 1,196,042 1,168,100 1,14~642 1,071,258 1,030,608 1,003,183 981,675 162,592 154,283 148,942 148,158 467 425 525 467 55,867 50,625 48,258 49,675 106,258 103,225 100,192 98,017 1,075,908 1,041,758 1,019,158 1,00@483 225,992 216,167 210,850 206,025 82,667 81,017 8@183 79,408 70,883 68,850 68,175 68,750 200,833 192,525 184,567 176,675 163,067 159,275 15Z008 152,817 120,708 114,850 111,083 108,700 44,517 43,642 42,375 41,142 167,242 165,433 164,917 166,967 20,392 20,733 21,158 21,900 56,467 55,483 54,975 55,767 90,383 89,217 88,783 89,300 0 0 0 0 (2)Excludes proprietors, self-employed, members of the armed services, workers in private households, and agriculture. Includes all full- and part-time wage and salary workers receiving pay during the pay period including the 12th of the month. (3) North American Industry Classification System. Source: Washington State Employment Security Department, February 2015. Initiative and Referendum Under the State Constitution, the voters of the State have the ability to initiate legislation and require the Legislature to refer legislation to the voters through the powers of initiative and referendum, respectively. The initiative power in Washington may not be used to amend the State Constitution. Initiatives and referenda are submitted to the voters upon receipt of a petition signed by at least eight percent (initiative) and four percent (referenda) of the number of voters registered and voting for the office of Governor at the preceding regular gubernatorial election. Any law approved in this manner by a majority of the voters may not be amended or repealed by the Legislature within a period of two years following enactment, except by a vote of two-thirds of all the members elected to each house of the Legislature. After two years, the law is subject to amendment or repeal by the Legislature in the same manner as other laws. Under the Renton Municipal Code, City voters may initiate local legislation and City Code amendments, and modify existing legislation, through powers of initiative and referendum. Under Washington law, the 30 Ordinance may not be a proper subject for a referendum petition. Nonetheless, the referendum period will have expired and the Ordinance will become effective on or before the date of issuance and delivery of the Bonds. As of the date of this Preliminary Official Statement, no referendum petition has been filed. In recent years there has been an increase in the number of initiatives and referenda filed in Washington, including state initiatives targeting property taxes imposed by local jurisdictions. The City cannot predict whether this trend will continue, whether any filed initiatives will receive the requisite signatures to be certified to the ballot, and whether such initiatives will be approved by the voters and, if challenged, upheld by the courts. Tax Matters In the opinion of Bond Counsel, interest on the 2015A Bonds is excludable from gross income for federal income tax purposes and is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations; however, interest on the 2015A Bonds is taken into account in determining adjusted current earnings for the purpose of computing the alternative minimum tax imposed on certain corporations. Federal income tax law contains a number of requirements that apply to the 2015A Bonds, including investment restrictions, periodic payments of arbitrage profits to the United States, requirements regarding the use of proceeds of the 2015A Bonds and the facilities refinanced with proceeds of the 2015A Bonds and certain other matters. The City has covenanted to comply with all applicable requirements. Bond Counsel’s opinion is subject to the condition that the City comply with the above-referenced covenants and, in addition, will rely on representations by the City and its advisors with respect to matters solely within the knowledge of the City and its advisors, respectively, which Bond Counsel has not independently verified. If the City fails to comply with such covenants or if the foregoing representations are determined to be inaccurate or incomplete, interest on the 2015A Bonds could be included in gross income for federal income tax purposes retroactively to the date of issuance of the 2015A Bonds, regardless of the date on which the event causing taxability occurs. In rendering its opinion, Bond Counsel has relied on the report of Grant Thornton LLP with respect to the accuracy of certain mathematical calculations. Except as expressly stated above, Bond Counsel expresses no opinion regarding any other federal or state income tax consequences of acquiring, carrying, owning or disposing of the 2015A Bonds. Owners of the 2015A Bonds should consult their tax advisors regarding the applicability of any collateral tax consequences of owning the 2015A Bonds, which may include original issue discount, original issue premium, purchase at a market discount or at a premium, taxation upon sale or other disposition, and various withholding requirements. Prospective purchasers of the 2015A Bonds should be aware that ownership of the 2015A Bonds may result in collateral federal income tax consequences to certain taxpayers, including, without limitation, financial institutions, property and casualty insurance companies, individual recipients of Social Security or Railroad Retirement benefits, certain S corporations with "excess net passive income," foreign corporations subject to the branch profits tax, life insurance companies and taxpayers who may be deemed to have incurred or continued indebtedness to purchase or carry or have paid or incurred certain expenses allocable to the 2015A Bonds. Bond Counsel expresses no opinion regarding any collateral tax consequences. Prospective purchasers of the 2015A Bonds should consult their tax advisors regarding collateral federal income tax consequences. Payments of interest on tax-exempt obligations such as the 2015A Bonds, are in many cases required to be reported to the Internal Revenue Service (the "IRS"). Additionally, backup withholding may apply to any such payments made to any owner who is not an "exempt recipient" and who fails to provide certain identifying information. Individuals generally are not exempt recipients, whereas corporations and certain other entities generally are exempt recipients. Bond Counsel’s opinion is not a guarantee of result and is not binding on the IRS; rather, the opinion represents Bond Counsel’s legal judgment based on its review of existing law and in reliance on the representations made to Bond Counsel and the City’s compliance with its covenants. The IRS has established 31 an ongoing program to audit tax-exempt obligations to determine whether interest on such obligations is includable in gross income for federal income tax purposes. Bond Counsel cannot predict whether the IRS will commence an audit of the 2015A Bonds. Owners of the 2015A Bonds are advised that, if the IRS does audit the 2015A Bonds, under current IRS procedures, at least during the early stages of an audit, the IRS will treat the City as the taxpayer, and the owners of the 2015A Bonds may have limited rights to participate in the audit. The commencement of an audit could adversely affect the market value and liquidity of the 2015A Bonds until the audit is concluded, regardless of the ultimate outcome. Qualified Tax-Exempt Obligations The City has designated the 20i5A Bonds Section 265(b)(3)(B) of the Code. as "qualified tax-exempt obligations" within the meaning of Proposed Tax Legislation; Miscellaneous Tax legislation, administrative actions taken by tax authorities, and court decisions may cause interest on the 2015A Bonds to be subject, directly or indirectly, to federal income taxation or to be subject to or exempted from state income taxation, or otherwise prevent the beneficial owners of the 2015A Bonds from realizing the full current benefit of the tax status of such interest. In addition, such legislation or actions (whether currently proposed, proposed in the future or enacted) could affect the market price or marketability of the 2015A Bonds. For example, proposals have been made that could significantly reduce the benefit of, or otherwise affect, the exclusion from gross income for federal tax purposes of interest on obligations such as the 2015A Bonds. Prospective purchasers of the 2015A Bonds should consult their own tax advisors regarding any pending or proposed federal or state tax legislation, regulations or litigation, and its impact on their individual situations, as to which Bond Counsel expresses no opinion. Certain Income Tax Consequences This advice was written to support the promotion or marketing of the 2015B Bonds. This advice is not intended or written by Pacifica Law Group LLP to be used, and may not be used, by any person or entity for the purpose of avoiding any penalties that may be imposed on any person or entity under the U.S. Internal Revenue Code. Prospective purchasers of the 2015B Bonds should seek advice based on their particular circumstances from an independent tax advisor. The following discussion describes aspects of the principal U.S. federal tax treatment of U.S. persons that are beneficial owners ("Owners") of the 2015B Bonds. This summary is based on the Code, published revenue rulings, administrative and judicial decisions, and existing and proposed Treasury regulations (all as of the date hereof and all of which are subject to change, possibly with retroactive effect). This summary discusses only the 2015B Bonds held as capital assets within the meaning of Section 1221 of the Code. It does not discuss all of the tax consequences that may be relevant to an Owner in light of its particular circumstances or to Owners subject to special rules, such as certain financial institutions, insurance companies, tax-exempt organizations, foreign taxpayers, taxpayers who may be subject to the alternative minimum tax or personal holding company provisions of the Code, dealers in securities or foreign currencies, Owners holding the 2015B Bonds as part of a hedging transaction, "straddle," conversion transaction, or other integrated transaction, or Owners whose functional currency (as defined in Section 985 of the Code) is not the U.S. dollar. Except as stated herein, this summary describes no federal, state or local tax consequences resulting from the ownership of, receipt of interest on, or disposition of, the 2015B Bonds. ACCORDINGLY, INVESTORS WHO ARE OR MAY BE DESCRIBED WITHIN THIS PARAGRAPH SHOULD CONSULT THEIR OWN TAX ADVISORS REGARDING THE UNITED STATES FEDERAL INCOME TAX CONSEQUENCES TO SUCH INVESTORS, AS WELL AS TAX CONSEQUENCES ARISING UNDER THE LAWS OF ANY STATE, LOCAL, OR FOREIGN TAXING JURISDICTION OR UNDER ANY APPLICABLE TAX TREATY, OF PURCHASING, HOLDING, OWNING AND DISPOSING OF THE 2015B BONDS, INCLUDING THE ADVISABILITY OF MAKING ANY OF THE ELECTIONS DESCRIBED BELOW, BEFORE DETERMINING WHETHER TO PURCHASE THE 2015B BONDS. For purposes of this discussion, a "U.S. person" means an individual who, for U.S. federal income tax purposes, is (i) a citizen or resident of the United States, (ii) a corporation, partnership or other entity created or 32 organized in or under the laws of the United States or any political subdivision thereof, (iii) an estate, the income of which is subject to U.S. federal income taxation regardless of its source of income, or (iv) a trust, if either: (A) a United States court is able to exercise primary supervision over the administration of the trust, and one or more United States persons have the authority to control all substantial decisions of the trust or (B) a trust has a valid election in effect to be treated as a United States person under the applicable treasury regulations. The term also includes nonresident alien individuals, foreign corporations, foreign partnerships, and foreign estates and trusts ("Foreign Owners"/to the extent that their ownership of the 2015B Bonds is effectively connected with the conduct of a trade or business within the United States, as well as certain former citizens and residents of the United States who, under certain circumstances, are taxed on income from U.S. sources as if they were citizens or residents. It should also be noted that certain "single member entities" are disregarded for U.S. federal income tax purposes. Such Foreign Owners and Owners who are single member non-corporate entities, should consult with their own tax advisors to determine the U.S. federal, state, local, and other tax consequences that may be relevant to them. In General. Interest derived from a 2015B Bond by an Owner is subject to U.S. federal income taxation. In addition, a 2015B Bond held by an individual who, at the time of death, is a U.S. person is subject to U.S. federal estate tax. Payments of Interest. Interest, including additional amounts of cash and interest, if any, paid on the 2015B Bonds will generally be taxable to Owners as ordinary interest income at the time it accrues or is received, in accordance with the Owner’s method of accounting for U.S. federal income tax purposes. Owners who are cash-method taxpayers will be required to include interest in income upon receipt of such interest income; whereas Owners who are accrual-method taxpayers will be required to include interest as it accrues, without regard to when interest payments are actually received. Disposition or Retirement. Upon the sale, exchange or other disposition of a 2015B Bond, or upon the retirement of a 2015B Bonds, an Owner will recognize capital gain or loss equal to the difference, if any, between the amount realized upon the disposition or retirement (reduced by any amounts attributable to accrued but unpaid interest, which will be taxable as such) and the Owner’s adjusted tax basis in the 2015B Bonds. Any such gain or loss will be United States source gain or loss for foreign tax credit purposes. If the City defeases any 2015B Bonds, such 2015B Bond may be deemed to be retired and "reissued" for federal income tax ¯ purposes as a result of the defeasance. In such event, the Owner of a 2015B Bond would recognize a gain or loss on the 2015B Bonds at the time of defeasance. The Code contains a number of provisions relating to the taxation of securities such as the 2015B Bonds (including, but not limited to the tax treatment of and accounting of interest, premium, original issue discount and market discount thereon, gain from the sale, exchange of other disposition thereof and withholding tax on income therefrom) that may affect the taxation of certain owners, depending on their particular tax situations. The federal tax discussion set forth above is included for general information only and may not be applicable depending upon an owner’s particular situation. Investors should consult their own tax advisors concerning the tax implications of holding and disposing of the 2015B Bonds under applicable state or local laws. Foreign investors should also consult their own tax advisors regarding the tax consequences unique to investors who are not U.S. persons. ERISA Considerations The Employee Retirement Income Security Act of 1974, as amended ("ERISA"), imposes certain requirements on employee plans subject to Title I of ERISA ("ERISA Plans"), and on those persons who are fiduciaries with respect to ERISA Plans. Investments by ERISA Plans are subject to ERISA’s general fiduciary requirements under Title I, Part 4 of ERISA, including, but not limited to, the requirements of investment prudence and diversification and the requirement that an ERISA Plan’s investments be made in accordance with the documents governing the ERISA Plan. Section 406 of ERISA and Section 4975 of the Code prohibit certain transactions involving the assets of an ERISA Plan (as well as those plans that are not subject to Title I of ERISA but are subject to Section 4975 of the Code, such as individual retirement accounts (together with ERISA Plans, "Plans")) and certain persons 33 (referred to as "parties in interest" or "disqualified persons" (each a "Party in Interest")) having certain relationships to such Plans, unless a statutory or administrative exemption is applicable to the transaction. A Party in Interest who engages in a prohibited transaction may be subject to excise taxes and other penalties and liabilities under ERISA and the Code. The fiduciary of a Plan that proposes to purchase and hold any 2015B Bonds should consider, among other things, whether such purchase and holding may involve (a) the direct or indirect extension of credit to a Party in Interest, (b) the sale or exchange of any property between a Plan and a Party in Interest and (c) the transfer to, or use by or for the benefit of, a Party in Interest, of any Plan assets within the meaning of 29 CFR Sec. 2510.3-102 as modified by ERISA Section 3(42). Depending on the identity of the Plan fiduciary making the decision to acquire or hold 2015B Bonds on behalf of a Plan and other factors, U.S. Department of Labor Prohibited Transaction Class Exemption ("PTCE") 75-1 (relating to certain broker-dealer transactions), PTCE 84-14 (relating to transactions effected by independent "qualified professional asset managers"), PTCE 90-1 (relating to investments by insurance company pooled separate accounts), PTCE 91-38 (relating to investments by bank collective investment funds), PTCE 95-60 (relating to investments by an insurance company general account), or PTCE 96-23 (relating to transactions directed by certain "in-house asset managers") (collectively, the "Class Exemptions") could provide an exemption from the prohibited transaction provisions of ERISA and Section 4975 of the Code. In addition, Section 408(b)(17) of ERISA and Section 4975(d)(20) of the Code generally provide for a statutory exemption from the prohibitions of Section 406(a) of ERISA and Section 4975 of the Code for certain transactions between Plans and persons who are Parties in interest solely by reason of providing services to such Plans or that are affiliated with such service providers, provided generally that such persons are not fiduciaries (or affiliates of such fiduciaries) with respect to the "plan assets" of any Plan involved in the transaction and that certain other conditions are satisfied. By its acceptance of a 2015B Bond, each Beneficial Owner will be deemed to have represented and warranted that either (a) no "plan assets" of any Plan have been used to purchase such 2015B Bond, or (b) the Underwriter is not a Party in Interest with respect to the "plan assets" of any Plan used to purchase such 2015B Bond, or (c) the purchase and holding of such 2015B Bonds is exempt from the prohibited transaction restrictions of ERISA and Section 4975 of the Code pursuant to a statutory exemption or an administrative class exemption. Each Plan fiduciary (and each fiduciary for a governmental or church plan subject to the rules similar to those imposed on Plans under ERISA) should consult with its legal advisor concerning an investment in any of the 2015B Bonds. Rating As noted on the cover page of this Official Statement, the City has received a rating for the Bonds from Standard & Poor’s Rating Services, a part of McGraw Hill Financial. Standard & Poor’s has assigned its rating of "AA+" to the Bonds. The rating reflects only the views of the rating agency and an explanation of the significance of the rating may be obtained from the rating agency. There is no assurance that the rating will be retained for any given period of time or that the rating will not be revised downward or withdrawn entirely by the rating agency if, in its judgment, circumstances so warrant. Any such downward revision or withdrawal of the rating will be likely to have an adverse effect on the market price of the Bonds. The City does not have any obligation to take any action, other than file a listed event notification, if the ratings on the Bonds are changed, suspended or withdrawn. Continuing Disclosure In accordance with Section (b)(5) of Securities and Exchange Commission (the "Commission") Rule 15c2-12 under the Securities Exchange Act of 1934, as the same may be amended from time to time (the "Rule"), the City has agreed in the Ordinance for the benefit of the owners of the Bonds to provide or cause to be provided to the Municipal Securities Rulemaking Board ("MSRB") the following annual financial information and operating data for the prior fiscal year (commencing in 2015 for the fiscal year ended December 31, 2014): (i) annual financial statements, which statements may or may not be audited, showing ending fund balances for the City’s general fund prepared in accordance with the Budgeting Accounting and Reporting System ("BARS") prescribed by the State Auditor pursuant to RCW 43.09.200 (or any successor statutes) and generally 34 of the type included in this Official Statement for the Bonds; (ii) the assessed valuation of taxable property in the City; (iii) ad valorem taxes due and percentage of taxes collected; (iv) property tax levy rate per $1,000 of assessed valuation; and (v) outstanding general obligation debt of the City. Items (ii) through (v) need only be provided to the extent such information is not included in the annual financial statements. Such annual information and operating data described above will be so provided on or before the end of nine months after the end of the City’s fiscal year. The City’s current fiscal year ends on December 31. The City may adjust such fiscal year by providing written notice of the change of fiscal year to the MSRB. In lieu of providing such annual financial information and operating data, the City may cross-reference to other documents available to the public on the MSRB’s internet website or filed with the Commission. If not provided as part of the annual financial information discussed above, the City will provide the City’s audited annual financial statement prepared in accordance with BARS prescribed by the Washington State Auditor pursuant to the statute cited above (or any successor statutes) when and if available to the MSRB. Listed Events. The City agrees to provide or cause to be provided to the MSRB, in a timely manner not in excess of 10 business days after the occurrence of the event, notice of the occurrence of any of the following events with respect to the Bonds: (i) principal and interest payment delinquencies; (ii) non-payment related defaults, if material; (iii) unscheduled draws on debt service reserves reflecting financial difficulties; (iv) unscheduled draws on credit enhancements reflecting financial difficulties; (v) substitution of credit or liquidity providers, or their failure to perform; (vi) adverse tax opinions, the issuance by the Internal Revenue Service of proposed or final determinations of taxability, Notices of Proposed Issue (IRS Form 5701-TEB) or other material notices or determinations with respect to the tax status of the Bonds, or other material events affecting the tax status of the Bonds; (vii) modifications to the rights of Bondholders, if material; (viii) optional, contingent or unscheduled Bond calls other than scheduled sinking fund redemptions for which notice is given pursuant to Exchange Act Release 34-23856, if material, and tender offers; (ix) defeasances; (x) release, substitution or sale of property securing repayment of the Bonds, if material; (xi) rating changes; (xii) bankruptcy, insolvency, receivership or similar event of the City; (xiii) the consummation of a merger, consolidation, or acquisition involving the City or the sale of all or substantially all of the assets of the City, other than in the ordinary course of business, the entry into a definitive agreement to undertake such an action or the termination of a definitive agreement relating to any such actions, other than pursuant to its terms, if material; and (xiv) appointment of a successor or additional trustee or the change of name of a trustee, if material. Solely for purposes of disclosure, without any intent to modify the undertaking as set forth above, the City advises that no credit enhancement, credit or liquidity facilities, debt service reserves or property secure payment of the Bonds. 35 Format for Filings with the MSRB. Until otherwise designated by the MSRB or the Commission, any information or notices submitted to the MSRB in compliance with the Rule are to be submitted through the MSRB’s Electronic Municipal Market Access system ("EMMA"), currently located at www.emma.msrb.org (which is not incorporated into this Official Statement by reference). All notices, financial information and operating data required by this undertaking to be provided to the MSRB must be in an electronic format as prescribed by the MSRB. All documents provided to the MSRB pursuant to this undertaking must be accompanied by identifying information as prescribed by the MSRB. Notification Upon Failure to Provide Financial Data. The City also agrees to provide or cause to be provided, in a timely manner, to the MSRB notice of its failure to provide the annual financial information described above on or prior to the date set forth above. Termination/Modification. The City’s obligations to provide annual financial information and notices of listed events will terminate upon the legal defeasance, prior redemption, or payment in full of all of the Bonds. This section, or any provision hereof, will be null and void if the City (i) obtains an opinion of nationally recognized bond counsel to the effect that the portion of the Rule that requires that provision is invalid, has been repealed retroactively or otherwise does not apply to the Bonds and (ii) notifies the MSRB of such opinion and the cancellation of this section. Notwithstanding any other provision of the undertaking, the City may amend the provisions described in this section with an approving opinion of nationally recognized bond counsel and in accordance with the Rule. In the event of any amendment of its undertaking, the City will describe such amendment in the next annual report, and will include a narrative explanation of the reason for the amendment and its impact on the type (or in the case of a change of accounting principles, on the presentation) of financial information or operating data being presented by the City. In addition, if the amendment relates to the accounting principles to be followed in preparing financial statements, (i) notice of such change shall be given in the same manner as for a listed event, as described above, and (ii) the annual report for the year in which the change is made will present a comparison (in narrative form and also, if feasible, in quantitative form) between the financial statements as prepared on the basis of the new accounting principles and those prepared on the basis of the former accounting principles. Bond Owner’s Remedies Under This Section. A Bond Owner’s or Beneficial Owner’s right to enforce the provisions of the City’s undertaking described in this section will be limited to a right to obtain specific enforcement of the City’s obligations, and any failure by the City to comply with the provisions of this undertaking will not be an event of default with respect to the Bonds. For purposes of this section, "Beneficial Owner" means any person who has the power, directly or indirectly, to vote or consent with respect to, or to dispose of ownership of, any bonds, including persons holding bonds through nominees or depositories. Other Continuing Disclosure Undertakings of the City. The City has entered into written undertakings under the Rule with respect to its certain of its outstanding obligations (the "Prior Undertakings"). The City filed its audited financial statements for fiscal year 2010 on time with EMMA, although this filing was not linked to the City’s Limited Tax General Obligation Bonds, Series 2011A. With the exception of the foregoing (to the extent the foregoing constitutes a material failure), the City believes it has complied in all material respects with its continuing disclosure undertakings pursuant to Rule 15c2-12 for the last five years. Legal and Underwriting Approval of Counsel Legal matters incident to the authorization, issuance and sale of the Bonds by the City are subject to the approving legal opinions of Pacifica Law Group LLP, Bond Counsel, the forms of which are attached hereto in Appendix A. Bond Counsel will be compensated only upon the issuance and sale of the Bonds. Bond Counsel has not been retained to review and has not reviewed this Official Statement for completeness or accuracy and will not offer an opinion concerning this Official Statement. 36 Certain legal matters will be passed on for the Underwriter by K&L Gates LLP, Seattle, Washington, Counsel to the Underwriter. Any opinion of such firm will be addressed solely to the Underwriter, will be limited in scope, and cannot be relied upon by investors without the written consent of such firm. Litigation At the time of delivery of and payment for the Bonds, an authorized officer of the City will deliver a certificate stating that there is no litigation or other proceedings pending or, to the best knowledge of the City, threatened in any court in any way seeking to restrain or to enjoin the authorization, issuance, sale or delivery of, or security for, any of the Bonds, or contesting or affecting the validity or enforceability of the Bonds or the Ordinance, or materially affecting the finances of the City. The City is a defendant in various legal actions and claims that arise during the normal course of business, some of which, but not all, are covered by insurance. Although certain lawsuits and claims are significant in amount, the final dispositions are not determinable and, in the opinion of City management, the final outcome of these matters, taken individually or in the aggregate, are not expected to have a material adverse effect on the governmental operations or financial position of the City or its ability to pay debt service on the Bonds. The City has provided for reserves to address these matters. City management believes these reserves and/or insurance are adequate to cover such matters. Limitations on Remedies General. Any remedies available to the owners of the Bonds upon the occurrence of an event of default under the Ordinance are in many respects dependent upon judicial actions, which are in turn often subject to discretion and delay and could be both expensive and time-consuming to obtain. If the City fails to comply with its covenants under the Ordinance or to pay principal of or interest on the Bonds, there can be no assurance that available remedies will be adequate to fully protect the interests of the owners of the Bonds. In addition to the limitations on remedies contained in the Ordinance, the rights and obligations under the Bonds and the Ordinance may be limited by and are subject to bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium, and other laws relating to or affecting creditors’ rights, to the application of equitable principles, and to the exercise of judicial discretion in appropriate cases. The opinions to be delivered by Pacifica Law Group LLP, as Bond Counsel, concurrently with the issuance of the Bonds, will be subject to limitations regarding bankruptcy, insolvency and other laws relating to or affecting creditors’ rights. The various other legal opinions to be delivered concurrently with the issuance of the Bonds will be similarly qualified. Copies of the forms of legal opinions of Bond Counsel are set forth in Appendix A. No Acceleration. The Bonds are not subject to acceleration upon the occurrence of a default. The City is liable for principal and interest payments only as they become due. In the event of multiple defaults in payment of principal of or interest on the Bonds, the registered owners would be required to bring a separate action for each such payment not made. This could give rise to a difference in interests between registered owners of earlier and later maturing Bonds. Bankruptcy. Under current Washington law, local governments, such as the City, may be able to file for bankruptcy under Chapter 9 of the United States Bankruptcy Code (the "Bankruptcy Code"). A creditor, however, cannot bring an involuntary bankruptcy proceeding against a municipality, including the City. The federal bankruptcy courts have broad discretionary powers under the Bankruptcy Code. Taxing districts in the State are expressly authorized to carry out a plan of readjustment if approved by the appropriate court. If the City were to become a debtor in a federal bankruptcy case, owners of the Bonds may not be able to exercise any of their remedies under the Ordinance during the course of a proceeding. Legal proceedings to resolve issues could be time-consuming and expensive, and substantial delays and/or reductions in payments could result. Underwriting The 2015A Bonds are being purchased by Piper Jaffray & Co. (the "Underwriter") at a price of percent of the par value of the 2015A Bonds. The 2015A Bonds will be reoffered at an average price of percent of the par value of the 2015A Bonds. The 2015B Bonds are being purchased by the Underwriter at a price of percent of the par value of the 2015B Bonds. The 2015B Bonds will be reoffered at an average price of percent of the par value of the 2015B Bonds. 37 The purchase of the Bonds by the Underwriter is subject to the terms of a purchase contract between the City and the Underwriter (the "Purchase Contract"). The Purchase Contract provides that the Underwriter must purchase all of the Bonds if any are purchased and that the obligation to make such purchase is subject to certain terms and conditions set forth in the Purchase Contract, the approval of certain legal matters by counsel and certain other conditions. The initial public offering prices set forth on the inside cover hereof may be changed from time to time by the Underwriter. The Underwriter may offer and sell the Bonds into unit investment trusts or money market funds, certain of which may be sponsored or managed by the Underwriter, at prices lower than the public offering prices stated on the inside cover hereof. Piper Jaffray & Co. and Pershing LLC, a subsidiary of The Bank of New York Mellon Corporation, entered into an agreement (the "Agreement") which enables Pershing LLC to distribute certain new issue municipal securities underwritten by or allocated to Piper Jaffray & Co., including the Bonds. Under the Agreement, Piper Jaffray & Co. will share with Pershing LLC a portion of the fee or commission paid to Piper Jaffray & Co. Piper Jaffray & Co. has entered into a distribution agreement ("Distribution Agreement") with Charles Schwab & Co., Inc. ("CS&Co.") for the retail distribution of certain securities offerings at the original issue prices. Pursuant to the Distribution Agreement, CS&Co. may purchase Bonds from Piper Jaffray & Co. at the original issue price less a negotiated portion of the selling concession applicable to any Bonds that CS&Co. sells. Potential Conflicts Some or all of the fees of the Underwriter and Bond Counsel are contingent upon the issuance and sale of the Bonds. Furthermore, Bond Counsel from time to time serves as counsel to the Underwriter with respect to issuers other than the City and in connection with transactions other than the issuance of the Bonds. None of the Council members or other officers of the City have interests in the issuance of the Bonds that are prohibited by applicable law. Concluding Statement So far as any statement herein includes matters of opinion, or estimates of future expenses and income, whether or not expressly so stated, they are intended merely as such and not as representations of fact. The information contained herein should not be construed as representing all conditions affecting the City or the Bonds. Additional information may be obtained from the City. The statements relating to the Ordinance are in summarized form, and in all respects are subject to and qualified in their entirety by express reference to the provisions of such document in its complete form. The agreements of the City are set forth in such documents, and the information assembled herein is not to be construed as a contract with Owners of the Bonds. The preparation and distribution of this Official Statement have been authorized by the City THE CITY OF RENTON, WASHINGTON By: Finance and Information Services Administrator 38 Appendix A Forms of Opinions of Bond Counsel This page left blank intentionally ,2015 City of Renton Renton, Washington Piper Jaffray & Co. Seattle, Washington City of Renton, Washington Limited Tax General Obligation Refunding Bonds, Series 2015A- $ Ladies and Gentlemen: We have acted as bond counsel to the City of Renton, Washington (the "City"), and have examined a certified transcript of all of the proceedings taken in the matter of the issuance by the City of its Limited Tax General Obligation Refunding Bonds, Series 2015A, in the aggregate principal amount of $ (the "Bonds"). The Bonds are issued pursuant to Ordinance No.__ of the City Council, passed April 13, 2015 (the "Bond Ordinance"), to provide a portion of the funds necessary to advance refund and defease prior to maturity certain outstanding limited tax general obligation bonds of the City and to pay costs of issuance for the Bonds. Simultaneously with the issuance of the Bonds, the City is issuing its Limited Tax General Obligation Refunding Bonds, Series 2015B (Taxable). Capitalized terms not otherwise defined herein shall have the meanings given such terms in the Bond Ordinance. The Bonds are subject to redemption prior to their scheduled maturities as provided in the Bond Ordinance and in the Bond Purchase Contract. Regarding questions of fact material to our opinion, we have relied on representations of the City in the Bond Ordinance and in the certified proceedings and on other certifications of public officials and others furnished to us without undertaking to verify the same by independent investigation. Based on the foregoing, we are of the opinion that, under existing law: 1. The Bonds have been legally issued and constitute valid and binding general obligations of the City, except to the extent that the enforcement of the rights and remedies of the holders and owners of the Bonds may be limited by laws relating to bankruptcy, insolvency, moratorium, reorganization or other similar laws of general application affecting the rights of creditors, by the application of equitable principles and the exercise of judicial discretion. City of Renton, Washington Piper Jaffray & Co. ,2015 Page 2 2. The Bond Ordinance is a legal, valid and binding obligation of the City, has been duly authorized, executed and delivered and is enforceable in accordance with its terms, except to the extent that enforcement may be limited by laws relating to bankruptcy, insolvency, moratorium, reorganization or other similar laws of general application affecting the rights of creditors, by the application of equitable principles and the exercise of judicial discretion. 3. Both principal of and interest on the Bonds are payable out of annual levies of ad valorem taxes to be made upon all of the taxable property within the City permitted to be levied without a vote of the electorate in the amounts which, together with other available funds, will be sufficient to pay such principal and interest as the same shall become due. 4. Interest on the Bonds is excludable from gross income for federal income tax purposes and is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations; however, interest on the Bonds is taken into account in determining adjusted current earnings for the purpose of computing the alternative minimum tax imposed on certain corporations. The opinion set forth in the preceding sentence is subject to the condition that the City must comply with all requirements of the Internal Revenue Code of 1986, as amended (the "Code"), that must be satisfied subsequent to the issuance of the Bonds in order that the interest thereon be, and continue to be, excludable from gross income for federal income tax purposes. The City has covenanted to comply with all applicable requirements. Failure to comply with certain of such covenants may cause interest on the Bonds to be included in gross income for federal income tax purposes retroactively to the date of issuance of the Bonds. The Bonds have been designated as "qualified tax-exempt obligations" within the meaning of Section 265(b)(3) of the Code. Except as expressly stated above, we express no opinion regarding any other federal or state income tax consequences of acquiring, carrying, owning or disposing of the Bonds. Owners of the Bonds should consult their tax advisors regarding the applicability of any collateral tax consequences of owning the Bonds, which may include original issue discount, original issue premium, purchase at a market discount or at a premium, taxation upon sale, redemption or other disposition, and various withholding requirements. We have not been engaged nor have we undertaken to review the accuracy, completeness or sufficiency of the official statement or other offering material related to the Bonds (except to the extent, if any, stated in the official statement), and we express no opinion relating thereto, or relating to the undertaking by the City to provide ongoing disclosure pursuant to Securities and Exchange Commission Rule 15c2-12. City of Renton, Washington Piper Jaffray & Co. ,2015 Page 3 This opinion is given as of the date hereof, and we assume no obligation to update, revise or supplement this opinion to reflect any facts or circumstances that may hereafter come to our attention or any changes in law that may hereafter occur. Very truly yours, PACIFICA LAW GROUP LLP This page left blank intentionally .,2015 City of Renton Renton, Washington Piper Jaffray & Co. Seattle, Washington City of Renton, Washington Limited Tax General Obligation Refunding Bonds, Series 201B (Taxable) -- $ Ladies and Gentlemen: We have acted as bond counsel to the City of Renton, Washington (the "City"), and have examined a certified transcript of all of the proceedings taken in the matter of the issuance by the City of its Limited Tax General Obligation Refunding Bonds, Series 2015B (Taxable), in the aggregate principal amount of $ (the "Bonds"). The Bonds are issued pursuant to Ordinance No.__ of the City Council, passed April 13, 2015 (the "Bond Ordinance"), to provide a portion of the funds necessary to advance refund and defease prior to maturity certain outstanding limited tax general obligation bonds of the City and to pay costs of issuance for the Bonds. Simultaneously with the issuance of the Bonds, the City is issuing its Limited Tax General Obligation Refunding Bonds, Series 2015A. Capitalized terms not otherwise defined herein shall have the meanings given such terms in the Bond Ordinance. The Bonds are not subject to redemption prior to their scheduled maturities. Regarding questions of fact material to our opinion, we have relied on representations of the City in the Bond Ordinance and in the certified proceedings and on other certifications of public officials and others furnished to us without undertaking to verify the same by independent investigation. Based on the foregoing, we are of the opinion that, under existing law: 1. The Bonds have been legally issued and constitute valid and binding general obligations of the City, except to the extent that the enforcement of the rights and remedies of the holders and owners of the Bonds may be limited by laws relating to bankruptcy, insolvency, moratorium, reorganization or other similar laws of general application affecting the rights of creditors, by the application of equitable principles and the exercise of judicial discretion. City of Renton, Washington Piper Jaffray & Co. ,2015 Page 2 2. The Bond Ordinance is a legal, valid and binding obligation of the City, has been duly authorized, executed and delivered and is enforceable in accordance with its terms, except to the extent that enforcement may be limited by laws relating to bankruptcy, insolvency, moratorium, reorganization or other similar laws of general application affecting the rights of creditors, by the application of equitable principles and the exercise of judicial discretion. 3. Both principal of and interest on the Bonds are payable out of annual levies of ad valorem taxes to be made upon all of the taxable property within the City permitted to be levied without a vote of the electorate in the amounts which, together with other available funds, will be sufficient to pay such principal and interest as the same shall become due. o purposes. Interest on the Bonds is not excludable from gross income for federal income tax Except as expressly stated above, we express no opinion regarding any other federal or state income tax consequences of acquiring, carrying, owning or disposing of the Bonds. Owners of the Bonds should consult their tax advisors regarding the applicability of any collateral tax consequences of owning the Bonds, which may include original issue discount, original issue premium, purchase at a market discount or at a premium, taxation upon sale, redemption or other disposition, and various withholding requirements. We have not been engaged nor have we undertaken to review the accuracy, completeness or sufficiency of the official statement or other offering material related to the Bonds (except to the extent, if any, stated in the official statement), and we express no opinion relating thereto, or relating to the undertaking by the City to provide ongoing disclosure pursuant to Securities and Exchange Commission Rule 15c2-12.. This opinion is given as of the date hereof, and we assume no obligation to update, revise or supplement this opinion to reflect any facts or circumstances that may hereafter come to our attention or any changes in law that may hereafter occur. Very truly yours, PACIFICA LAW Grtour, LLP Appendix B Book-Entry Tr.ansfer System This page left blank intentionally The Depository Trust Company A subsidiary of The Depository Trust & Clearing Corporation 1. The Depository Trust Company ("DTC"), New York, NY, will act as securities depository for the securities (the "Securities"). The Securities will be issued as fully-registered securities registered in the name of Cede & Co. (DTC’s partnership nominee) or such other name as may be requested by an authorized representative of DTC. One fully-registered Security certificate will be issued for [each issue of] the Securities, [each] in the aggregate principal amount of such issue, and will be deposited with DTC. [If, however, the aggregate principal amount of [any] issue exceeds $500 million, one certificate will be issued with respect to each $500 million of principal amount, and an additional certificate will be issued with respect to any remaining principal amount of such issue.] 2. DTC, the world’s largest securities depository, is a limited-purpose trust company organized under the New York Banking Law, a "banking organization" within the meaning of the New York Banking Law, a member of the Federal Reserve System, a "clearing corporation" within the meaning of the New York Uniform Commercial Code, and a "clearing agency" registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934. DTC holds and provides asset servicing for over 3.5 million issues of U.S. and non-U.S, equity issues, corporate and municipal debt issues, and money market instruments (from over 100 countries) that DTC’s participants ("Direct Participants") deposit with DTC. DTC also facilitates the post-trade settlement among Direct Participants of sales and other securities transactions in deposited securities, through electronic computerized book-entry transfers and pledges between Direct Participants’ accounts. This eliminates the need for physical movement of securities certificates. Direct Participants include both U.S. and non- U.S. securities brokers and dealers, banks, trust companies, cleating corporations, and certain other organizations. DTC is a wholly-owned subsidiary of The Depository Trust & Clearing Corporation ("DTCC"). DTCC is the holding company for DTC, National Securities Clearing Corporation and Fixed Income Clearing Corporation, all of which are registered clearing agencies. DTCC is owned by the users of its regulated subsidiaries. Access to the DTC system is also available to others such as both U.S. and non-U.S, securities brokers and dealers, banks, trust companies, and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly ("Indirect Participants"). DTC has a Standard & Poor’s rating of AA+. The DTC Rules applicable to its Participants are on file with the Securities and Exchange Commission. More information about DTC can be found at www.dtcc.com. DTCCo The Depository T~ust & Clearing Corporation -i- SOL 08-10-11 3. Purchases of Securities under the DTC system must be made by or through Direct Participants, which will receive a credit for the Securities on DTC’s records. The ownership interest of each actual purchaser of each Security ("Beneficial Owner") is in turn to be recorded on the Direct and Indirect Participants’ records. Beneficial Owners will not receive written confirmation from DTC of their purchase. Beneficial Owners are, however, expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the Securities are to be accomplished by entries made on the books of Direct and Indirect Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in Securities, except in the event that use of the book-entry system for the Securities is discontinued. 4. To facilitate subsequent transfers, all Securities deposited by Direct Participants with DTC are registered in the name of DTC’s partnership nominee, Cede & Co., or such other name as may be requested by an authorized representative of DTC. The deposit of Securities with DTC and their registration in the name of Cede & Co. or such other DTC nominee do not effect any change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Securities; DTC’s records reflect only the identity of the Direct Participants to whose accounts such Securities are credited, which may or may not be the Beneficial Owners. The Direct and Indirect Participants will remain responsible for keeping account of their holdings on behalf of their customers. 5. Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. [Beneficial Owners of Securities may wish to take certain steps to augment the transmission to them of notices of significant events with respect to the Securities, such as redemptions, tenders, defaults, and proposed amendments to the Security documents. For example, Beneficial Owners of Securities may wish to ascertain that the nominee holding the Securities for their benefit has agreed to obtain and transmit notices to Beneficial Owners. In the alternative, Beneficial Owners may wish to provide their names and addresses to the registrar and request that copies of notices be provided directly to them.] 6. Redemption notices shall be sent to DTC. If less than all of the Securities within an issue are being redeemed, DTC’s practice is to determine by lot the amount of the interest of each Direct Participant in such issue to be redeemed. 7. Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to Securities unless authorized by a Direct Participant in accordance with DTC’s MMI Procedures. Under its usual procedures, DTC mails an Omnibus Proxy to Issuer as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co.’s consenting or voting rights to those Direct Participants to whose accounts Securities are credited on the record date (identified in a listing attached to the Omnibus Proxy). DTCC The Depository Trust & Clearing Corporation -ii- SOL 08-10-11 8. Redemption proceeds, distributions, and dividend payments on the Securities will be made to Cede & Co., or such other nominee as may be requested by an authorized representative of DTC. DTC’s practice is to credit Direct Participants’ accounts upon DTC’s receipt of funds and corresponding detail information from Issuer or Agent, on payable date in accordance with their respective holdings shown on DTC’s records. Payrrents by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in "street name," and will be the responsibility of such Participant and not of DTC, Agent, or Issuer, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of redemption proceeds, distributions, and dividend payments to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of Issuer or Agent, disbursement of such payments to Direct Participants will be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners will be the responsibility of Direct and Indirect Participants. 9. A Beneficial Owner shall give notice to elect to have its Securities purchased or tendered, through its Participant, to [Tender/Remarketing] Agent, and shall effect delivery of such Securities by causing the Direct Participant to transfer the Participant’s interest in the Securities, on DTC’s records, to [Tender/Remarketing] Agent. The requirement for physical delivery of Securities in connection with an optional tender or a mandatory purchase will be deemed satisfied when the ownership rights in the Securities are transferred by Direct Participants on DTC’s records and followed by a book-entry credit of tendered Securities to [Tender/Remarketing] Agent’s DTC account. 10. DTC may discontinue providing its services as depository with respect to the Securities at any time by giving reasonable notice to Issuer or Agent. Under such circumstances, in the event that a successor depository is not obtained, Security certificates are required to be printed and delivered. 11. Issuer may decide to discontinue use of the system of book-entry-only transfers through DTC (or a successor securities depository). In that event, Security certificates will be printed and delivered to DTC. 12. The information in this section concerning DTC and DTC’s book-entry system has been obtained from sources that Issuer believes to be reliable, but Issuer takes no responsibility for the accuracy thereof. [8/11] DTCCo The Depository Trust & Clearing Corporation SOL 08-10-11 This page left blank intentionally Appendix C 2013 Audited Financial Statements This page left blank intentionally Financial Statements and Federal Single Audit Report City of Renton King County For the period January l, 2013 through December 31, 2013 Published September 22, 2014 Report No. 1012590 Washington State Auditor Troy Kelley September 22, 2014 Mayor City of Renton Renton, Washington Report on Financial Statements and Federal Single Audit Please find attached our report on the City of Renton’s financial statements and compliance with federal laws and regulations. We are issuing this report in order to provide information on the City’s financial condition. Sincerely, TROY KELLEY STATE AUDITOR Insurance Building, P.O Box 40021 I~Olympia, Washington 98504-0021 [](360) 902-0370 I~]TDD Relay (800) 833-6388 [Table of Contents City of Renton King County January 1, 2013 through December 31, 2013 Federal Summary ............................................................................................................................4 Independent Auditor’s Report On Internal Control Over Financial Reporting And On Compliance And Other Matters Based On An Audit Of Financial Statements Performed In Accordance With Government Auditing Standards ....................................................................... 6 Independent Auditor’s Report On Compliance For Each Major Federal Program And On Internal Control Over Compliance In Accordance With OMB Circular A-133 .............................8 Independent Auditor’s Report On Financial Statements ..............................................................11 Financial Section ...........................................................................................................................14 About The State Auditor’s Office .........................................................: .....................................100 Federal Summary City of Renton King County January 1, 2013 through December 31, 2013 The results of our audit of the City of Renton are summarized below in accordance with U.S. Office of Management and Budget Circular A-133. FINANCIAL STATEMENTS An unmodified opinion was issued on the financial statements of the governmental activities, the business-type activities, each major fund and the aggregate remaining fund information. Internal Control Over Financial Reporting: ¯Significant Deficiencies: We reported no deficiencies in the design or operation of internal control over financial reporting that we consider to be significant deficiencies. ¯Material Weaknesses: We identified no deficiencies that we consider to be material weaknesses. We noted no instances of noncompliance that were material to the financial statements of the City. FEDERAL A WARDS Internal Control Over Major Programs: ¯Significant Deficiencies: We reported no deficiencies in the design or operation of internal control over major federal programs that we consider to be significant deficiencies. Material Weaknesses: We identified no deficiencies that we consider to be material weaknesses. We issued an unmodified opinion on the City’s compliance with requirements applicable to each of its major federal program s. We reported no findings that are required to be disclosed under section 510(a) of OMB Circular A-133. Identification of Major Programs: The following were m~jor programs during the period under audit: CFDA No.Program Title 20.205 Highway Planning and Construction Cluster - Highway Planning and Construction 97.036 Disaster Grants - Public Assistance Program The dollar threshold used to distinguish between Type A and Type B programs, as prescribed by OMB Circular A-133, was $393,163. The City qualified as a low-risk auditee under OMB Circular A-133. Independent Auditor’s Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards City of Renton King County January 1, 2013 through December 31, 2013 Mayor City of Renton Renton, Washington We have audited, in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States, the financial statements of the governmental activities, the business-type activities, each major fund and the aggregate remaining fund information of the City of Renton, King County, Washington, as of and for the year ended December 31, 2013, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements, and have issued our report thereon dated June 26, 2014. As discussed in Note 1 to the financial statements, during the year ended December 31, 2013, the City implemented Governmental Accounting Standards Board Statement No. 61, The Financial Reporting Entity: Omnibus - an amendment of GASB Statements No. 14 and No. 34, Statement No. 64, Derivative Instruments: Application of Hedge Accounting Termination Provisions - an amendment of GASB Statement No. 53, Statement No. 65, Items Previously Reported as Assets and Liabilities and Statement No. 66, Technical Corrections - 2012 an amendment of GASB Statements No. 10 and No. 62. INTERNAL CONTROL OVER FINANCIAL REPORTING In planning and performing our audit of the financial statements, we considered the City’s internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the City’s internal control. Accordingly, we do not express an opinion on the effectiveness of the City’s internal control. A deficiency in internal control exists when the design or operation of a control does not allow maiaagement or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control such that there is a reasonable possibility that a material misstatement of the City’s financial statements will not be prevented, or detected and corrected on a timely basis. A significant dqficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. COMPLIANCE AND OTHER MATTERS As part of obtaining reasonable assurance about whether the City’s financial statements are free from material misstatement, we performed tests of the City’s compliance with certain provisions of laws, regulations, contracts and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Governmen! Auditing Standards. PURPOSE OF THIS REPOR T The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the City’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards" in considering the City’s internal control and cornpliance. Accordingly, this communication is not suitable for any other purpose. However, this report is a matter of public record and its distribution is not limited. It also serves to disseminate information to the public as a reporting tool to help citizens assess government operations. TROY KELLEY STATE AUDITOR June 26, 2014 Independent Auditor’s Report on Compliance for Each Major Federal Program and on Internal Control over Compliance in Accordance with OMB Circular A-133 City of Renton King County January 1, 2013 through December 31, 2013 Mayor City of Renton Renton, Washington REPORT ON COMPLIANCE FOR EACH MAJOR FEDERAL PROGRAM We have audited the compliance of the City of Renton, King County, Washington, with the types of complian(e requirements described in the U.S. Office of Management and Budget (OMB) Circular A-133 Compliance Supplement that could have a direct and material effect on each of its major federal programs for the year ended December 31, 2013. The City’s major federal programs are identified in the accompanying Federal Summary. Management’s Responsibility Management is responsible for compliance with the requirements of laws, regulations, contracts and grants applicable to its federal programs. Auditor’s Responsibility Our responsibility is to express an opinion on compliance for each of the City’s major federal programs based on our audit of the types of compliance requirements referred to above. We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and OMB Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations. Those standards and OMB Circular A-133 require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major federal program occurred. An audit includes examining, on a test basis, evidence about the City’s compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion on compliance for each major federal program. Our audit does not provide a legal determination on the City’s compliance. Opinion on Each Major Federal Program In our opinion, the City complied, in all material respects, with the types of compliance requirements referred to above that could have a direct and material effect on each of its major federal programs for the year ended December 31, 2013. REPORT ON INTERNAL CONTROL OVER COMPLIANCE Management of the City is responsible for establishing and maintaining effective internal control over compliance with the types of compliance requirements referred to above. In planning and performing our audit of compliance, we considered the City’s internal control over compliance with the types of requirements that could have a direct and material effect on each major federal program in order to determine the auditing procedures that are appropriate in the circumstances for the purpose of expressing an opinion on compliance for each major federal program and to test and report on internal control over compliance in accordance with OMB Circular A-133, but not for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, we do not express an opinion on the effectiveness of the City’s internal control over compliance. A dq[wiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. A material weakness in internal control over compliance is a deficiency, or combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a federal program will not be prevented, or detected and corrected, on a timely basis. A sign!iicant de:ficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance with a type of compliance requirement of a federal program that is less severe than a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance. Our consideration of internal control over compliance was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. We did not identify any ¯ deficiencies in internal control over compliance that we consider to be material weaknesses¯ However, material weaknesses may exist that have not been identified. PURPOSE OF THIS REPORT The purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal control over compliance and the results of that testing based on the requirements of OMB Circular A-133. Accordingly, this report is not suitable for any other purpose. However, this report is a matter of public record and its distribution is not limited. It also serves to disseminate information to the public as a reporting tool to help citizens assess government operations. TROY KELLEY STATE AUDITOR September I 1, 2014 Washington State ,luditor~ Ojfice Page 9 Washington State Audtto~’~ Office Page I0 I Independent Auditor’s Report on Financial Statements I City of Renton King County January 1, 2013 through December 31, 2013 Mayor City of Renton Renton, Washington REPORT ON THE FINANCIAL STATEMENTS We have audited the accompanying financial statements of the governmental activities, the business-type activities, each major fund and the aggregate remaining fund information of the City of Renton, King County, Washington, as of and for the year ended December 31, 2013, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements as listed on page 11. Management’s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor’s Responsibility Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing StandarcA’, issued by the Cmnptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain aodit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the City’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the City’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe-that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. Opinion In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, each major fund and the aggregate remaining fund information of the City of Renton, as of December 31, 2013, and the respective changes in financial position and, where applicable, cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America. Matters of Emphasis As discussed in Note 1 to the financial statements, in 2013, the City adopted new accounting guidance, Governmental Accounting Standards Board Statement No. 61, The Financial Reporting Entity: Omnibus - an amendment of GASB Statements No. 14 and No. 34, Statement No. 64, Derivative Instruments: Application of Hedge Accounting Termination Provisions - an amendment of GASB Statement No. 53, Statement No. 65, Items Previously Reported as Assets and Liabilities and Statement No. 66, Technical Corrections 2012 - an amendment of GASB Statements No. 10 andNo. 62. Our opinion is not modified with respect to this matter. Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis on pages 15 through 26, budgetary comparison information on page 96, pension trust fund information on page 97 and information on postemployment benefits other than pensions on page 98 be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Supplementary and Other Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City’s basic financial statements. The accompanying Schedule of Expenditures of Federal Awards is presented for purposes of additional analysis as required by U.S. Office of Management and Budget Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations. This schedule is not a required part of the basic financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. The information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the information is fairly stated, in all material respects, in relation to the basic financial statements taken as a whole. OTHER REPORTING REQUIRED BY GOVERNMENT AUDITING STANDARDS In accordance with Government Auditing Standards, we have also issued our report dated June 26, 2014 on our consideration of the City’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City’s internal control over financial reporting and compliance. TROY KELLEY STATE AUDITOR June 26, 2014 Financial Section City of Renton King County January 1, 2013 through December 31, 2013 REQUIRED SUPPLEMENTAR Y INFORMATION Management’ s Discussion and Analysis - 2013 BASIC FINANCIAL STATEMENTS Statement of Net Position - 2013 Statement of Activities - 2013 Balance Sheet - Governmental Funds - 2013 Reconciliation of the Balance Sheet to the Statement of Net Position 2013 Statement of Revenues, Expenditures and Changes in Fund Balance - Governmental Funds - 2013 Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of Activities Governmental Activities - 2013 Statement of Net Position - Proprietary Funds - 2013 Statement of Revenues, Expenses and Changes in Fund Net Position - Proprietary Funds -2013 Statement of Cash Flows - Proprietary Funds - 2013 Statement of Fiduciary Net Position - Fiduciary Funds - 2013 Statement of Changes in Fiduciary Net Position - Fiduciary Funds - 2013 Notes to Financial Statements - 2013 REQUIRED SUPPLEMENTAR Y INFORMATION Statement of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual - General Fund - 2013 Firefighters’ Pension Fund - Schedule of Employer Contribution 2013 LEOFF I Retiree Medical Benefits - Schedule of Funding Progress and Schedule of Employer Contribution 2013 SUPPLEMENTARY AND OTHER INFORMATION Schedule of Expenditures of Federal Awards and Notes - 2013 Washington State luditor’~ Otf!~ e Page 13 Washington State Auditor’,~ Office Page 14 City of Renton, Washington City o[ Renton, Washington MANAGEMENT’S DISCUSSION AND ANALYSIS The City of Renton’s discussion and analysis provides a narrative overview of the City’s financial activities for the fiscal year ended December 31, 20~.3. The intent of the discussion and analysis is to review the City’s financial performance as a whole. This Management’s Discussion and Analysis (MD&A) combined with the Transmittal Letter, the Financial Statements, and the Notes to the Financial Statements represent the complete 2013 financial activities for the City of Renton. These are all intended to help the reader understand the City’s significant financial issues while providing an overview of the City’s financial records. The information in this financial report also identifies any material deviations from the financial plan and the adopted annual budget and will isolate and identify individual fund issues or concerns. FINANCIAL HIGHLIGHTS ¯AS of December 31, 2013, the City’s total assets exceed liabilities by $790 million. This financial net position is an improvement of $45.8 million over 2012. This increase consists of $52.4 million increase in restricted net position and net investments in capital, and a $6.6 million decrease in unrestricted net position. Unrestricted net position is the portion of city resources that does not have externally imposed conditions and disposition is generally at the discretion of the City Council. ¯Two-thirds of the $790 million net position, or $510.8 million, is related to governmental activities. Of this, $469.1 million are restricted monies that are invested in infrastructure or fixed assets that are not spendable or are committed for current capital and other activities. This is a $35.6 million increase from 2012 and is related to unspent GO bond library proceeds. The remaining $41.6 million in net position is "unrestricted". ¯The net position for business type activities totaled $279.~. million, an increase of $22.6 million from 2012. $244.6 million represents the City’s investments in capital assets net of related debt and externally restricted amounts for debt service obligations. An unrestricted balance of $34.5 million remains and includes amounts set aside for future capital projects as well as cash flow to meet day-to-day operating requirements of the utilities and other enterprise funds. ¯The City’s total outstanding long-term debt as of December 31, 2013, was $117.6 million. Of this amount, $44 million is general obligation debt backed by the full faith and credit of the City. $35.9 million are revenue bonds and state Public Works Trust Fund loans backed by the revenues of the Waterworks Utility. The remaining $37.7 million is related to other GO debt backed by the full faith and credit of the City. FINANCIAL INFORMATION The City’s Government-wide Financial Statements were prepared on the full accrual basis of accounting in conformity with Generally Accepted Accounting Principles (GAAP). The City’s Fund Financial Statements for its major and non-major governmental funds were prepared on the modified accrual basis of accounting in conformity with GAAP. The City’s major and non-major enterprise funds, internal service funds, and pension funds were accounted for on the full accrual basis of accounting in conformity with GAAP The City of Renton, along with all cities, counties, and other governmental entities in Washington, must comply with the Budgeting, Accounting, and Reporting System (BARS) as prescribed by the Washington State Auditor’s Office (SAO). The SAO audits the financial records of all cities and other governmental units within the State. In addition to examining financial statements, the SAO also performs compliance audits and reviews internal control procedures. The City of Renton has a financial system that is consistent with BARS and has strong administrative and management controls that are designed to provide: 1.Reasonable assurance that transactions are executed in accordance to management policies and approval authorities; 2.Reasonable assurance that transactions are recorded and reported in accordance to GAAP; 3.Accountability for control of assets and obligations; and 4.Assurance that sufficient reporting and review exists to provide complete information for analysis and comparability of data. The City maintains strong budgetary controls in order to ensure compliance with legal provisions embodied in the appropriated budget as approved by the City Council. The City Council must authorize any budget increase or decrease to any fund. STRUCTURE OF THE FINANCIAL STATEMENTS This discussion and analysis provides an introduction and overview to the City of Renton’s basic financial statements. The basic financial statements are comprised of three components: 1.Government-wide Financial Statements; 2.Fund Financial Statements; and 3.Notes to the Financial Statements. GOVERNMENT-WIDE FINANCIAL STATEMENTS While the fund financial statements present the City’s financial data as a collection of separate financial units, the government-wide finance statements present the entire City’s finances as a single integrated unit. The government-wide financial statements use separate columns to distinguish governmental activities, principally supported by taxes and intergovernmental revenues, from business-type activities that are intended to recover all or a significant portion of their costs through user fees and charges. The governmental activities of the City include a full range of local government services provided to the public such as police and fire protection; road maintenance and construction; community planning and economic development; parks and recreational opportunities; and other community services. All internal service activities are reported under governmental activities. The business-type activities of the City include City of Renton, Washington City of Ran ton, Washington waterworks (water, sewer, and surface water), solid waste management and services, a golf course, and an airport. Fiduciary resources, by definition, are not available to support the City’s programs, therefore are excluded from Government-wide financial statements. The Statement of Net Position presents information on all of the City’s assets and liabilities with the difference between the two reported as net position. This statement combines and consolidates governmental funds’ current financial resources (short-term available resources) with capital assets and long-term obligations, which is primarily debt. The Statement of Net Position serves a purpose similar to that of the Balance Sheet of a private- sector business. Over time, increases or decreases in net position may serve as one indicator of whether the financial position of the City is improving or deteriorating. Other indicators to consider when evaluating the financial position of the City includes changes to the property tax base, general economic conditions as demonstrated through business licenses fees or sales tax revenue, and the condition of the City’s infrastructure (roads, drainage systems, bridges, and water infrastructure). The Statement of Activities focuses upon both the gross and net cost of various activities that are provided by the government’s general tax and other revenues. This is intended to summarize and simplify the user’s analysis of cost to various governmental services and/or subsidies to business-type activities. By separating program revenue from general revenue, users of the financial statements can identify the extent to which each program relies on taxes for funding. The governmental activities reflect the City’s basic functions: General Government, Judicial, Public Safety, Economic Environment, Utilities, Transportation, Health and Human Services, and Culture and Recreation. Property, sales, and utility taxes finance the majority of these functions. All changes in net position are reported using the accrual basis of accounting, which is similar to the accounting used in the private sector. The accrual basis of accounting requires that revenues are reported when earned and expenses are reported when incurred, no matter when the revenue will actually be received or the obligation will be paid: For example, property taxes are shown as a receivable and revenue even though some amount of these taxes will not be available to the City for several years. Unpaid vendor obligations are illustrated as an accounts payable obligation as of December 31. FUND FINANCIAL STATEMENTS The City uses fund structure to ensure and demonstrate fiscal integrity and compliance with finance-related legal requirements. A fund is a group of related accounts used to maintain control over resources that have been segregated for specific activities and objectives. There are three types of funds: governmental, proprietary, and fiduciary. The fund statements focus on major government funds and proprietary funds separately. A Major Fund has three elements as defined by GASB 34, as amended by GASB 65: ¯Total assets and deferred outflows of resources, liabilities and deferred inflows of resources, revenues, or expenditures of that individual governmental or enterprise funds are at least ten percent (10%) of the corresponding total (assets, liabiJities, etc.) for all funds of that category or type (i.e., governmental, proprietary, or fiduciary); and ¯Total assets, liabilities, revenues, or expenditures/expenses of the individual government fund or enterprise funds are at least five percent (5%) of the corresponding total for all governmental and enterprise funds combined; or ¯Any other governmental or enterprise fund that governing officials believe is particularly important. Governmental Funds present most of a government’s tax-supported activities: The Proprietary Funds present the government’s business-type activities where all or part of the activities’ costs are supported by fees and charges that are paid directly by those who benefit from the activities. Fiduciary Funds present resources held by the government as a trustee or agent for parties outside of the government. The resources of Fiduciary Funds cannot be used to support the government’s other programs. Governmental Funds - Balance Sheet and Statement of Revenues, Expenditures and Changes in Fund Balance The Governmental Fund Balance Sheet and Governmental Fund Statement of Revenues, Expenditures, and Changes in Fund Balances present separate columns of financial data for the General Fund, Municipal Facilities ClP Fund and Capital Improvement Fund. These comprise the City’s major governmental funds. Data from the remaining governmental funds are combined and presented in a single column in the fund statements. Individual fund data for each of the nonomajor governmental funds is provided in the form of combining statements. Governmental Funds are used to account for the same functions reported as governmental activities in the Government-wide Financial Statements. The focus of Governmental Fund Financial Statements is on neor-term inflows and outflows of available financial resources and on balances of resources available at the end of the fiscal year. Such information is useful in evaluating whether there are more or less financial resources that can used in the near future to finance City services. Because the focus of Governmental Fund Financial Statements is a narrower view than that of the Government-wide Financial Statements, it is useful to compare similar information in order to gain a better understanding of the long-term impact of the government’s near- term financing decisions. The Reconciliation of the Balance Sheet and Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund reconciles to the differences between the governmental fund statements and the governmental activities column in the government-wide statements. The City maintains budgetary controls over its governmental funds. Budgetary controls City o/ Renton, Washington City o[ Renton, Washington ensure compliance with legal provisions embodied in the annual appropriated budget. Governmental fund budgets are established in accordance with state law and are adopted on a fund level. General fund budget variances are specifically addressed later in this discussion and analysis. Proprietary Funds - Statement of Net Position and Statement of Revenue, Expenses, and Changes in Net Position The proprietary fund statements present information for Enterprise and Internal Service fund types. The funds operate as a business activity. The Enterprise Funds are reported as business-type activities in the Government-wide Financial Statements. Internal Service Funds are used to report activities that provide supplies and services to various City departments and to allocate the associated costs of providing these services to the various governmental and enterprise functions. The revenues and expenses of Internal Service Funds that support governmental activities are eliminated in the government-wide statements. The remaining activity primarily benefits the governmental funds and is combined within the Governmental Activities in the Government-wide Statements. The City of Renton has two major Enterprise Funds: Waterworks Utility (water, wastewater, and storm water) and Solid Waste. The Proprietary Statement of Net Position and the Proprietary Fund Statement of Revenues, Expenses, and Changes in Net Position present separate columns of financial data for the Waterworks Utility and Solid Waste. Information from the remaining Enterprise Funds are combined and presented in a single, aggregated column in the fund statements. Internal Service Funds aggregated and reported separately in this section. Proprietary Fund Statements provide the same type of information as the Government- wide Financial Statements, only in more detail, since both apply the accrual basis of accounting. In comparing the total assets and total liabilities between the two statements, only slight differences will be noticed. One notable difference is that the "due from other funds" (asset) and the "due to other funds" (liability) in the Proprietary Fund Statements are combined in a single line called "internal balances" in the asset section of the Government-wide Statement of Net Position. Fiduciary Funds - Statement of Fiduciary Net Position and Statement of Changes of Fiduciary Net Position Fiduciary Funds are used to account for resources held for the benefit of parties outside the government. Fiduciary funds are not reported in the Government-wide Financial Statements because the resources of those funds are not available to support the City’s own operations. NOTES TO THE FINANCIAL STATEMENTS The notes provide additional information that is essential to a full understanding of the information provided and are an integral part of the Government-wide and Fund Financial Statements. Combining statements for non-major Governmental and Enterprise Funds, as well as Internal Service Funds, are presented immediately following the required supplementary information. OTHER INFORMATION In addition to the basic finance statements and accompanying notes, this report also presents: 1.Required Supplemental Information (RSI) RSI provides budgetary comparisons for the General Fund as well as the City’s funding progress for the Piremen’s Pension Trust Fund and Other Post-Employment Benefits (LEOFF 1 Retiree Medical). 2.Combining Statements The combining statements provide additional detail for other government funds, internal service funds, and fiduciary funds are presented immediately following the required supplementary information. 3. Statistical Information This section includes unaudited trends and demographic information. GOVERNMENT-WIDE FINANCIAL ANALYSIS Statement of Net Position The change in net position is an indicator of a government’s financial situation. Table 1 below shows the condensed Government-wide Net Position as of December 31, 2013, with comparison to 2012. As of December 31, 2013, the City’s overall financial net position was $790 million, a ~45.8 million increase over 2012. $36.5 million of total net position increase reflects the City’s investment in IFa ~hmgton State ,.ludttor’s O./]ice Page 19 Washtngton State Auditor’s Of llce Page 20 City of Renton, Washington City of Renton, Washington capital and 87% of the total net position is attributed to investments in capital, net of related debt¯ The increase in the governmental activities is primarily attributed to grant funded transportation projects and the increase in the business activities is attributed to large additions of developer contributed capital and grant funded projects in the Waterworks Utility Fund. It should be noted that, a~though the investments in capital assets are reported net of related debt, resources needed to repay this debt must be provided from other sources since the capital assets, with limited exception, cannot be liquidated to reduce these liabilities. Total restricted net position accounts for ‘%26.8 million of the City’s net position, which was a 147% increase over 2012. The maiority of the restricted net position is comprised of unspent bond proceeds (‘%16.9 million) and debt service obligations (,%4.2 million). The remaining ‘%76.2 million is unrestricted may be used to meet the government’s ongoing obligations for governmental and business type activities (‘%41.7 million and ‘%34.2 million, respectively). Statement of Activities and Change in Net Position Table 2 is the citywide condensed summary Statement of Activities and Change in Net Position as of December 31, 2013, with comparison to 2012. Citywide revenue grew by ‘%4 m!llion, or 1¯8% Most of this growth is attributed to an increase in charges for services in business type activities (‘%3.3 million), primarily due to utility rate increases. While property tax revenue decreased ‘%1.3 million (as a result of lower 2012 assessed valuations), sales and retail tax increased ‘%1¯8 million over 2012¯ Governmental operating grants and contributions appear to decrease ‘%6¯1 milfion, however due to revenue reclassification; this decrease is offset by a ‘%5.2 million increase in governmental charges for services. Capital related grants and contributions decreased in governmental activities due to the near-completion of two very large, multi-year transportation projects; and increased capital related grants and contributions increased in business type activities due to one large airport proiect and multiple storm water improvement projects. Overall, citywlde capital related grants and contributions increased ‘%.7 million increase over 2012. Combined citywide service expenses totaled ‘%174.5 million for 2013. That is ‘%5.8 million or 3.5% higher than 2012¯ Governmental activities increased by ‘%2.3 million or 2% while business activities increased by ‘%3.5 million or 6%. The resulting change in net position, without prior period adjustments, increased in 2013 by $48.2 million: $23.4 million from governmental activities and ‘%24.8 million from business-type activities. ~evenues: )rogram revenues: Charges for services Ope~ting grants and contributions Capit a~ grants and contributions Faxes and other genera~ revenues: Property taxes Total 2013 2012 32,536,533 33,932,290 32,536,533 33,932,290 2S,541,972 23,653,706 25,541,972 23,653,706 1,845,163 1,768,728 218,358 149,971 2,063,521 1,918,699 133,441,720 143,934,244 89,294,705 74,769,011 222,736,425 218,703,255 1(}.923,530 9,859,550 2,372,115 2,610,481 S3,930,214 58,152,773 964,942 2.643,930 18,842,487 13,571,691 7,146,022 6,330,233 1,873,028 827,802 12,938,$g9 13,011,327 3,411,488 3,087,269 40,333,170 39,419,864 3,300,550 2,251,434 =2,250,748 2,139,847 112,402,415 110,095,056 62,111,325 58,591,792 21,039,305 33,839,188 27,183,380 16,177,219 23,380,465 34,073,149 24,842,220 15,943,258 48,222,685 50,016,407 487,694,926 453,318,266 256,494,g73 240,44~,632 744,189,799 693,762,898 510,832~152 $ 4~7,694,926 $ 279,126,877 $ 256,494,873 S 789,959,029S 744,189,799 Governmental Activities Analysis Governmental activities cost a total of ‘%112.4 million in 2013 against operating revenue (excluding capital grants and contributions) of $110.3 million. $82 million, or 75%, of all governmental activities were funded by taxes and miscellaneous revenues. $28.1 million or 26% were supported by program revenues such as [l’aUlmgtnn St.te .lullito~ ’s O/]~ e Page 21 Washington State Auditor’s Office Page 22 CityofRenton, W~shington City ofRenton, Washtngton permit fees, fines and forfeitures, recreation fees, and facility rental fees. Chart 1 portrays the cost of each of the City’s governmentaI programs along with each program’s generated revenue (fees and intergovernmental revenues specifically related to that program). The program revenues for Transportation Systems Include capital grants for large-scale projects such as Rainier Ave improvements. Chart 2: Revenues by Source - Governmental Activtees Chart 2 depicts the sources of revenue that funds governmental activities. Approximately sixty percent (60%) is from various taxes and general resources. Charges for services, grants and interest earnings generate forty percent (40%) of total revenue for general governmental activities. Business-Type Activities Analysis Chart 3 presents the same information for business-type activities as previously Illustrated for governmental activities. It shows the expense of each of the City’s business-type programs along with each programs’ revenue (fees and intergovernmentaI revenues specifically related to that program). The Waterworks Utility generated $49 million in various fees for services and other sources and had $40.3 million in operating and debt service expenses resulting in an $8.7 miilion increase in net position from operations, in addition, the utility received ~10.3 million in capital grants and facilities contributed by developers for a combined increase in net position of $19 million. The operating balance is necessary for planned system infrastructure replacements. The Solid Waste Utility generated $16.4 million in total revenue and incurred $16.2 million in program expenses, resulting in a positive increase in net position of $0.2 million. The Airport generated a total of $2.4 million in revenue and $3.3 million In expenses 2013. In addition, the airport received $8.6 million in capital grants and contributions. The Golf Course generated a total of $2.1 million In green fees, driving range charges, and other user fees. The total expenses for the Golf Course were $2.2 miIIion. The Golf Course had an operating loss of $108,000 for the year. Chart 4 illustrates the source of revenue for Business-type activities; which are chazt 4: Revenues by Somce Budnest~Type Act~ttes supported primarily from charges for services. Charges for servlces generated $70 million, or 79%, of the total revenue sources, while grant revenue and contributions generated 21% of the total revenue sources. This is a 147% increase over 2012 which generated $7.7 million tn grant revenue and contributions (compared to the $18.9 million in 2013). These grant sources include several State funded surface water improvement grants, totaling $1.4 million, and a Federal Aviation Administration funded airport project, totaIing $8.5 miI~ion. AIse included in this figure are $7.6 million in developer utility contributions and storm water retention ponds deeded to the City by King County and miscellaneous homeowners associations. FU ND FINANCIAL ANALYSIS Governmental Funds The governmental fund statements provide information on near-term inflows, outflows, and balances of spendable resources. Such information is useful in assessing the City’s ability to meet financing requirements in the near term. In particular, unassigned fund balance may serve as a useful measure of a government’s net resources available for spending at the end of the fiscal year. At the end of the fiscaI year, the City’s General Fund had a fund balance of $20.4 million, which is an increase of $1.6 million from a year ago. The increase is partially due to higher sales tax revenues from improving economic conditions, and partially from budget-savings. Approximately $303,000 of this is restricted for specific programs. Another $20.1 million is unrestricted but either committed or reserved to various stabilization funds and financial reserves. The Municipal Facilities Capital Improvement Project (ClP) fund Includes the library development funds as well as general governmental major maintenance fund. The $24 million in fund balance ts restricted, committed, or assigned to capital purposes and will continue to decrease as the library projects move forward. City of Renton, Washington City of Renton, Washington The Capital Improvement fund accounts for the many transportation-related projects in the City. All fund balance is either restricted or committed to capital projects. Proprietary Funds The fund financial statements for the proprietary funds are presented in more detail, but essentially provide the same type of information found within the business-type activities in the Government-wide Financial Statements. The factors concerning the finances of the Waterworks Utility and the Solid Waste Utility funds have been addressed in the discussion of business-type activities. The proprietary fund statements also include a column for internal services fund activities in aggregate. These activities are consolidated with general governmental activities in the government-wide statements. GENERAL FUND BUDGETARY HIGHLIGHTS The City uses a biennial budget process that adopts two one-year budgets at one time. 2013 was the first year of the 2013-14 biennium. The original 2013 adopted budget was $94.1 million and the final adjusted budget was 599.3 million. The increase of 55.2 million was mostly related to 54.3 million in 2012 carry forward items, 5380,000 in additional staffing related to a public safety grant, 5380,000 in the City Attorney’s office move/remodel, and 5178k in a capital park project. CAPITAL ASSET AND DEBT ADMINISTRATION Capital Assets The City of Renton’s investment in capital assets, including construction in progress, for governmental and business-type activities amounts to 5756.3 million as of December 31, 2013 as shown in the following table. The increase of 532.1 million in 2013 is mostly attributed to 528.1 million in additions to Construction in Progress capital. The most significant Construction in Progress additions in 2013 included: Rainier Ave. improvements (510.8 million), Strander Blvd. improvements (55.3 million), NE 3rd/4~h Corridor improvements ($1.9 million), and the airport’s Taxiway Bravo improvements (510.4 million). More detail about the City’s Capital Assets can be found in Note 5 to the financial statements. Debt Administration The City’s total outstanding debt at December 31, 2013, was ~117.7 million as shown in Table 4. This was a 54 million reduction from the prior year which can be attributed to debt service payments towards principal of 55 million in General Obligation Debt, a 51.2 million reduction to Revenue Bonds, and a 50.9 million reduction in Public Works Trust Fund Loans. These principal payments were offset by a 53.2 million new General Obligation Qualified Energy Conservation Bond issue for the conversion of LED street lights throughout the City. The estimated annual energy savings is approximately 5275,000 a year and the annual debt service cost net of rebate from the IRS will average 5215,000 annually. The City does not have other capital financing planned in the near future. More detailed information about the City’s long-term debt can be found in Note 13 to the financial statements. REQUESTS FOR FINANCIAL INFORMATION This financial report is designed to provide our citizens, creditors, investors, and others interested in the City’s finances with a general overview of the City’s finances and to show the City’s accountability for financial resources it receives. If you have any questions about this report or need additional information, please contact Iwen Wang, Administrative Services Administrator, 1055 South Grady Way, Renton, WA 98057 or visit our web site at www.rentonwa.Rov. STATEMENT OF NET POSITION December 31, 2013 ASSETS Cash and cash equivalents Cash with fiscal agent ~nvestments at fair value Receivables (net of allowance for uncollectibles) ~nternal balances Inventories Prepayments Other non current assets Restricted assets: Cash and cash equivalents Capital assets not being depreciated: Land Construction in progress Capita~ assets, net of accumulated depreciation: 9uildings ~nfrastructure Machinery and equipment ~ntangibles Total assets PRIMARY GOVERNMENT GOV~ RNM ENI"AL BUSINESS-TYPE ACTIVITIES ACTIVITIES TOTAL 55,378,478 ~20,607,683 $75,986,161 237,419 237,419 23,204,037 9,824,747 33,028,784 19,566,531 9,358,776 28,925,307 775,092 (779,092) 177,528 .299~269 476,791 53,000 404,459 457,459 40,926,920 60,349 40,987,269 2,909,578 2,909,578 !92,865,483 6,165,321 199,030,804 76,319,894 19,231,838 95,551,732 60,313,676 10,301,335 70,615,011 137,264,607 240,089,592 377,354,199 754,689 1,234,464 1,989,153 619,081,850 320,238,452 939,320,302 DEFERRED OUTFLOWS OF RESOURCES Deferred amount on refunding 277,542 1,024,919 1,302,461 Total deferred outflows of resources 277,542 1,024,919 1,302,461 LIABILITIES Accounts payable and other liabilities 14,284,485 3,970,072 1R,254,557 Interest payable 636,642 119,080 755,722 Unearned revenue 1,835,952 451,699 2,287,651 Non-current liabilities: Due within one year 7,987,421 2,581,556 10,968,977 Due in more than one year 83,782,740 35,014,087 118,796,827 Total liabilities 108,527,24D 42,136,494 150,669,734 DEFERRED INFLOWS OF RESOURCES Total deferred inflows of resources NET POSITION Net investment in capital assets 445,277,657 241,679,585 686,957,242 Restricted for: Judicial 43,763 43,763 Public safety 193,134 193,134 Health and human services 66,154 66,194 Transportation 1,209,902 1,209,902 Economic environment 215,806 215,806 Culture and recreation 674,885 674,885 Debt service 1,279,232 2,909,578 4,188,810 Capital 20,190,283 20,190,283 Unrestricted 41,681,336 34,537,714 76,219,050 Total net position S 510,832,152 ~279,126,877 $789,959,029 The notes to the ]inanciol statements are an integral port of this statement. FUNCTIONS/PROGRAMS Primary government: Governmental activities: General government Judicial Public safety Utilities Transportation Economic and natural environment Health and human services GuRure and recreation Interest on long-term debt Total governmental activities Business-type activities: Waterworks utility Airport Solid waste utility Golf course Total business-type activities Total primary government STATEMENT OF ACTIVITIES For the Year Ended December 31, 2013 Page I of 2 PROGRAM REVENUES OPERATING CHARGES FOR GRANTS AND CAPITAL GRANTS EXPENSES SERVICES CONTRIBUTIONS &CONTRIBUTIONS 10,923,530 ~3,372,595 S 1,276,041 S 29,954 2,372,115 3,011,028 22,796 53,930,214 6,578,528 2,352,488 964,942 3,755 448,148 18,842,487 2,712,137 2,012,960 21,094,384 7,146,022 3,766,499 896,791 1,873,028 12,938,589 2,096,514 70,395 1,511,428 3,411,488 112,402,415 21,541,056 6,621,431 23,077,914 40,333,170 49,024,626 68,575 10,307,827 3,300,550 2,494,436 3,120 8,572,165 16,226,897 16,429,165 34,000 2,250,748 2,142,433 62,111,325 70,090,660 105,695 18,B79,992 S 174,513,740 S 91,631,716 ~6,727,126 S 41,957,906 General revenues: Taxes: Property taxes Retail sales taxes Business taxes Excise taxes Interest and investment earnings Miscellaneous Transfers Total general revenues and transfers ChanBe in net position Net position o January 1 Prior period adjustment Net position - January 1, restated Net position - December 31 The notes to the financial statements are on integral part oJ this statement. STATEMENT OF ACTIVITIES For the Year Ended December 31, 2013 Page 2 of 2 NET (EXPENSE) REVENUE AND CHANGES IN NET POSITION PRIMARY GOVERNMENT GOVERNMENTAL BUSINESS-TYP ACTIVITIES ACTIVITIES TOTAL (6,250,940) 661,709 (44,999,198) (513,039) 6~976,994 (2,492,732) (1,873,028) (9,260,292) (3,411,488) (61,162,014) FUNCTIONS/PROGRAMS Primary 8overnment: Governmental activities: (6,250,940)General government 661,709 Judicial (44,999,198)Public safety (513,039)Physical environment 6,976,994 Transportation (2,492,732)Economic environment (1,B73,028)Health and human services (9,260,292)Culture and recreation (3,411,48B}Interest on long-term debt (61,162,014)Total governmental activities Business-type activities: 19,067,858 19,067,858 Waterworks utility 7,769,171 7,769,171 Airport 236,308 236,308 Solid waste utility (108,315)(108,315)Golf course 26,965,022 26,965,022 Total business-type activities (61,162,014)26,965,022 (34,196,992)Total primary government General revenues: 32,536,533 32,596,533 PropertV taxes 25,541,972 25,541,972 Retaii sales taxes 16,439,502 16,439,502 Business taxes 5,838,149 5,838,149 Excise taxes 613,097 94,077 707,174 Interest and investment earnings 1,232,066 124,281 1,356,347 Miscellaneous 2,341,160 (2,341,160)Transfers 84,542,479 (2,122,802)82,419,677 Total general revenues and transfers 23,380,465 24,842,220 48,222,685 Change in net position 487,694,926 256,494,873 744,189,799 Net position - January 1 (249,239)(2,210,216)(2,453,455)Prior period adjustment 487,451,687 254,284,657 741,736,944 Net position - January 1~ restated 510,832,152 S 279,126,877 S 789,959,029 Net position - December 31 The notes to the financial statements are en integral part of this statement. BALANCESHEET GOVERNMENTALFUNOS December31,2013 Page 1 of 2 ASSETS Cash & cash equivalents Cash with fiscal agent Deposit with fiscal agent investments at fair value Receivables (net of allowances) Taxes Customer accounts Accrued interest & penalty Special assessments Due from other funds Due from other governmental units TOTAL ASSETS MUNICIPAL OTHER TOTAL FACILITIES CAPITAL GOVERNMENTAL GOVERNMENTAL CIP IMPROVEMENT FUNDS FUNDS 11,365,454 $17,714,971 $2,447,794 5 3,291,895 S 34,820,114 237,419 237,419 4,816,827 7,400,739 1,O22,609 1,375,245 14,615,420 3,341,907 3,341,907 4,680,580 46,105 4,726,685 39,490 62,804 2,192 22,690 127,176 13,788 13,788 44,457 44,457 5,473,170 32,230 3,394,383 1,877,178 10,776,961 29,999,304 25,210,744 6,913,083 6,580,796 68,703,927 DEFERRED OUTFLOWS OF RESOURCES TOTAL DEFERRED OUTFLOWS OF RESOURCES TOTAL ASS6TS AND DEFERRED OUTFLOWS OF RE50U RCES $ 29,999,304 $ 25,210,744 6,913,083 $ 6,580,796 $ 68,703,927 LIABILITIES AND FUND BALANCES Accounts payable Taxes payable Due to other funds Due to other governmental units Interfund loans payable Custodial accounts DEFERRED INFLOWS OF RESOURCES Deferred amount of special assessments Unavailable revenues TOTAL DEFERRED INFLOWS OF RESOURCES FUND BALANCES Restricted Committed Capital purposes Operating reserves and carryforwards Assigned Capital purposes Operating reserves and carryforwards Total fund balances TOTAL LIABILITIES, DEFERRED INFLOWS AND FUND BALANCES BALANCESHEET GOVERNMENTALFUNDS December31,2013 Page2of2 MUNICIPAL OTHER FACILITIES CAPITAL GOVERNMENTAL GENERAL CIP IMPROVEMENT FUNDS TOTAL GOVBRNMENTAL FUNDS $1,029,79g ~1,149,996 ~3,705,140 $15,269 $5,900,19B 37,611 137 37,74B 11,330 161,623 172,953 56,367 5,63S 429,309 56,367 5,635 429,309 86,581 1,B35,953 3,768,142 12,292,886 86,581 19B,oTg 1,637,B74 3,76B,142 5,176,573 1,161,326 4,301,707 1,653,2B0 13,788 13,788 4,353,606 34,224 ~,387,ggO 4,353,606 34,224 13,788 4,40E,6EB 303,051 17,063,639 920,524 4,904,714 23,191,928 84,000 6,848,174 1,656,628 9,014 8,597,816 4,152,362 4,152,g62 137,605 137,605 20,469,125 24.049,418 2,577,152 4,913,728 52,009,423 29,999,304 S 25,210,744 ~6,913,OB3 ~ 6,580,796 $ 6B,703,927 RECONCILIATION OF THE BALANCE SHEET TO THE STATEMENT OF NET POSITION FUND BALANCES - TOTAL GOVERNMENTAL FUNDS Amounts reported for governmental activities in the statement of net position are d~fferent because: Other non-current assets used in governmental activities are not financial resources and therefore are not reported in the governmental funds. Investment in Joint Venture-SCORE Investment in Joint Venture-Valley Communications Net Pension Obligation-overfunded Capital assets used in governmental activities are not financial resources and therefore are not repo~ted in the governmental funds. Land Construction in progress Buildings (net of accumulated depreciation) Infrastructure (net of accumulated depreciation) Machinery and equipment (net of accumulated depreciation) Intangible assets (net of accumulated amortization) Other long-term assets are not available to pay for current period expenditures and therefore are reported as unavailable revenue in the funds, 52,009,423 5,672,607 3,041,B51 40,915,877 192,g65,483 76,288,532 59,799,277 137,101,120 1,513,197 142,081 467,709,790 Property tax revenue 569,419 Municipal court revenue 1,171,612 Photo enforcement revenue 2,555,180 Other 105,407 4,401,61g Certain liabilities are not due and payable in the current period and therefore are not reported in the governmental funds. Interest payable (631,OO7} Bonds payable and deferred amounts on refunding (81,796,227) Compensated absences (4,762,ggl) Other post employment benefits (4,589,565)(91,779,130) Internal service funds are used by management to charge the costs of certain activities, such as equipment rental, self-insurance, information technology and facility sen/ices to individual funds. The assets and liabilities of the internal service funds are included in the governmental activities in the statement of net position. NET POSITION OF GOVERNMENTAL ACTIVITIES 37,574,574 510,832,352 Washmgtmz StatL" luditor’s O/}~cL"Page 3l Washington State Auditor~ Office Page 32 STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS For the Year Ended December 31, 2013 Page 1 of 1 GENERAL MUNICIPAL OTHER TOTAL FACILITIES CAPITAL GOVERNMENTAL GOVERNMENTAL ClP IMPROVEMENT FUNDS FUNDS REVENUES Taxes S 71,294,583 ~950,460 ~200,000 S 7,855,709 S B0,300~752 Licenses and permits 4,371,667 435,356 1,972,426 49,348 6,82g~797 Intergovernmental revenues 5,130,377 907,754 15,874,118 966,794 22,879,048 Cbarges for services 9,208,624 433,188 9,641,812 tines and forfeits 2,766,403 22,170 2,788,573 Interfund revenues 294,039 294,039 Contributions 84,383 369,522 230,658 65,000 749,563 Investment earnings 417,389 62,309 236 20,396 500,B30 Miscellaneous revenues 1,708,853 500,000 2,208,853 TOTAL REVENUES 95,276,318 2,725,401 18,799,608 9,390,4B5 126,~.91,762 EXPENDITURES Current: General Eovernment 9,340,499 ?,742 9,348,241 Judicial 2,364,631 2,864,631Public safety 53,E07,483 4,660 53,112,143 Utilities 468,442 468,442 Transportation 7,822,333 3,947,033 11,769,366 Economic environment 5,840,104 572,182 240,307 6,652,593 Health and human services t,827,736 1,B27,736 Culture and recreation 10,402,858 569,422 68,507 11,040,787 Capital outlay 78,010 2,779,497 19,254,595 115,075 22,227,177 Debt service: Principal payments 4,744,439 4,744,439 Interest and fiscal charges 10,942 3,304,069 3,B15,011 TOTAL EXPENDITURES 91,252,096 3,933,503 23,212,570 8,472,397 126,870,566 EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES 4.024,222 (1,208,102)(4,412,962)918,038 (678,804) OTHER FINANCING SOURCES (USES) Transfer in 2,166,197 2,678,367 959,449 56,025 " 5,860,038 Transfer (out)(4,415,559)(277,000)(56,025)(1,354,0001 (6,102~584) GO bonds issued 3,200,000 3,200,000 Sale of capital assets 9,821 9,821 TOTAL OTHER FINANCE SOURCES (USES)(2,239,541)2,401,367 4,103,424 (1,297.975)2,967,275 NET CHANGE IN FUND BALANCE 1,784,681 1,193,265 (309,538)(379,937)2,288,471 FUND BALANCE JANUARY 1 18,684,444 22,856,153 2,886,690 5,293,665 49,720,952 FUND8ALANCE DECEMBER31 ~20,469,125 S 24,049,418 S 2,577~152 $4,913,728 $52,009,423 The notes to the financial statemen ts ore on integral part of this stotement. RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES GOVERNM E NTAL ACTIVITIES For the Year Ended December 31, 2013 NET CHANGES IN FUND BALANCES -TOTAL GOVERNMENTAL FUNDS Amounts reported for governmental activities in the statement of activities are different because: Governmental funds report capital outlays as expenditures. However, in the statement of activities the cost of those assets is allocated over their estimated useful lives and reported as depreciation expense. This is the amount by which capital outlays exceeded depreciation expense in the current period plus extraordinary gains on capital assets from the sale of land and equipment. Capitalexpenditures Depreciation expense Sale ofcapitalassets Donations of property and infrastructure from developers are not reported in the governmental funds. However, in the statement of activities, the fair market value of those assets is recognized as revenue. Revenues in the statement of activities that do not provide current financial resources are not reported as revenue in the funds. Unavailable revenue increased by this amount. The issuance of long-term debt (e.g., bonds, leases) provides current financial resources to governmental funds, while the repayment of the principal of long-term debt consumes the current financial resources of governmental funds. Neither transaction, however, has any effect on net position. Also, governmental funds report the effect of issuance costs, premiums, discounts, and similar items when debt is first issued, whereas these amounts are deferred and amortized in the statement of activities. This amount is the net effect of these differences in the treatment of long-term debt and related items. Increase (decrease) in other non-current assets which include the Net Pension Asset and Investments in Joint Ventures which are not reported in governmental funds. Equity interest-SCORE Equity interest-Valley Communications Net Pension Asset -overfunded Internal service funds are used by management to charge the costs of certain activities to individual funds. The net revenue (expense) of the internal service funds are reported with governmental activities. CHANGE IN NET POSITION OF GOVERNMENTAL ACTIVITIES The notes to the financial statements are an integral part of this statement. 22,227,178 (8,973,852) (7,413) 958,575 178,173 540,041 S 2,2B8,471 13,245,913 3,129,415 245,696 (234,934) 1,676,789 3,029,115 23,380,465 [lashington State ludlt~,~"~ (~[fice Page 33 Washington State Audttor’s Office Page 34 ASSETS Current assets: Cash & cash equivalents Investments at fair vah~e Receivables (net of allowancesl: Customer accounts Special assessments Interest investments Interfund loan receivable Oue from other governmental units Inventory of materials and supplies Prepayments Total current assets Noncurrent assets: Restricted cash & cash equivalents Special assessments-non-current Advances to Other funds Capital assets not being depreciated: land Construction in progress Capital assets, net of accumulated depreciatlon: BuildinEs, improvements and equipment IntanEible assets Total noncurrent assets TOTAL ASSETS DEFERRED OUTFLOWS OF RESOURCES Deferred amount on refundin8 TO~’AL DEFERRED OUTFLOWS OF RESOURCES STATEMENT OF NET POSITION PROPRIETARY FUNDS December 3i, 2013 Page 1 of 2 BUS~NESS-TYPE ACE~VITIES ENTERPRISE FUNDS GOVERNMENTAL OTHER TOTAL ACTIVITIES WATERWORKS SOLID ENTERPRISE ENTERPRISE iNTERNAL SERVICE UTILII~f WASTg EUNDS FUNDS EUNDS 17,246,736 S 1,503,370 $1,857,577 $20,607,683 $20,5S8~364 8,420,653 628,059 776,035 9,824,747 8,588,616 5,648,048 1,924,608 31,303 7,603,959 503,539 102,612 102,612 69,883 7,008 8,938 88,829 87,519 101,646 101,646 523,170 1,022,105 33,850 509,423 1,565,378 234,847 64,417 299,264 177,528 404,459 404,459 53,000 32,846~530 4,501,354 3,246,693 40,596,577 30,491,736 2,909,578 2,909,578 60,349 60,349 681,231 2,698,041 3,467,280 6,165,321 8,753,664 10,478,174 19,231,838 31,262 234,833,634 16,083,431 250,917,065 10,409,185 1,234,464 1,234,464 612,608 250,499,730 30,028,885 280,$18,615 11,734,286 283,336,260 4,501,354 33,277,578 321,115,192 42,226,022 1,024,919 1,024,919 The notes to the financial stn tements ore an integral part of this statement. Current liabilities: Accounts payable Claims incurred but not reported Retalnage payable Due to other funds Interfund loans payable Due to other Eovernments Accrued interest payable Accrued employee wages and benefits payable Accrued taxes payable Custodial accounts Unearned revenue Revenue bonds payable Total current Eabllltles Long-term Eabllitles: Revenue bonds payable Interfund loans payable Accrued employee wages and benefits payable Public works trust fund loan payable Total long-term EabiEties TOTAL LIABILITIES DEFERRED iNFLOWS OF RESOURCES TOTAL DEFERRED INFLOWS OF RESOURCES NET POSITION Net investment in capital assets Restricted -Waterworks utility debt Unrestricted TOTAL NET POSITION STATEMENT OF NET POSITION PROPRIETARY FUNDS December31,2013 Page2of2 BUSINESS-TYPE ACTIVITIES ENTERPRISE FUNDS GOVERNMENTAL OTHER TOTAL ACTIVITIES WATERWORKS SOLID ENTERPRISE ENTERPRISE INTERNAL SERVICE UTILITY WASTE FUNDS FUNDS FUNDS 726,843 $1,197,741 S 1,045,812 S 2,970,396 $802,748 96,545 141,004 237,549 9,586 44,457 484,885 708,613 708,613 116,738 2,341 119,079 402,576 22,083 109,257 529,916 344,056 75,086 55,579 78,842 209,507 87 16,420 184,230 200,650 281,426 6,413 163,860 451,699 1,695,000 1,695,000 4,119,247 1,281,816 2,206,231 7,607,294 4,306,952 30,538,739 30,538,739 391,853 391,853 413,740 17,855 92,083 523,678 344.496 3,951,670 3,951,670 34.904,149 17,855 483,936 35,405.940 344,496 39.023.396 1,299.671 2.690,E67 43,013,234 4,651,449 484,885 211,650,700 30,028,885 241,679,585 11,053,055 2,909,578 2,909,578 30,777,505 3,201,683 558,526 34,537,714 26,521,519 245,337,783 S 3,201,683 ~30,$87,411 $279,126,877 $37,574,574 The notes to the financiol statements are an integral port o/ this statement. IVashmgtlm State ,I udltor’s OJflee Page 35 Washington State A uditor~ Office Page 36 STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET POSITION PROPRIETARY FUNDS For the Year Ended December 31, 2013 WATERWORKS UTILITY BUSINESS-TYPE ACTIVITIES ENTERPRISE FUNDS GOVERNMENTAL OTHER TOTAL ACTIVITIES SOLID ENTERPRISE ENTERPRISE INTERNAL SERVICE WASTE FUNDS FUNDS FUNDS OPERATING REVENUES: Charges for services $48,647,556 ~16,358,815 $1,923,206 $66,929,S77 $16,430,979 Interdepartmental services 121,361 616 121,977 Other services 255.709 69,734 2,713,663 3,039,106 11,317,696TOTAl. OPERATING REVENUES 49,024,626 16,429,165 4,636,869 70,090,660 27,748,675 OPERATING EXPENSES: Supplies 2,029,782 2,020 616,184 2,647,986 2,088,422 Personnel services 6,453,208 444.482 2,046,201 8,943,891 5,741,319 Services 13,055,443 13,902,205 2,050,141 35,007,789 3,900,317 ~nsurance 14,207,692 Taxes 4,321,663 1,878,150 13,003 6,212,816 894 Depreciation 7,474,088 794,490 8,268,578 1,904,421 TOTAL OPERATING EXPENSES 39,334,184 16,226,857 5,520,019 61,081,060 27,843,065 OPERATING INCOME (lOSS)9,690,442 202,308 (883,150)9,009,600 (94,390) NON OPERATING REVENUES(EXPENSES): Intergovernmental revenues 68,575 34,000 3,120 105~695 106,301 Investment earnings 77,995 6,665 9,417 94,077 112,767 Gain (loss) on sale of capital assets 16,627 Other non-operating revenues lexpenses)43,788 3,027 77,466 124,281 280,148 Interest expense (998,986)(31,279)(1,030,265) NON-OPERATING REVENUE NET OF EXPENSE (808,628}43,692 58.724 (706,212)515,843 INCOME (LOSS) BEFORE CONTRIBUTIONS AND TRANSFERS 8,881,814 246,000 (824,426)8,303,388 42!,453 Capitalcontributions 1B,307,B27 8,572,165 18,879,992 23,954 Transfersin 9,821 9,821 2,642,026 Transfersout {1,882,292)(232,518)(236,171((2,350,981)(58,318) CHANGEIN NET POSITION 17,317,170 I3,482 7,511,568 24,842.220 3,029,115 NET POSITION, JANUARY 1 230,230,829 3,188,201 23,075,843 256,494,873 34,506,875 Prior period adjustment 12,210,21BI (2,210,216)38,584 NET POSITION, JANUARY 1 RESTATED 228,020,613 3,188,201 23,075,843 254,284,657 34,545,459 NET POSITION, DECEMBER 31 S 245.337,783 ~3,201,683 ~30,587,411 ~279,126,B77 $37,S74~574 The notes to the financial statements are an integral part of this statement. CASH FLOWS FROM OPERATING ACTIVITIES: Cash received for services Cash received from other funds for services Cash paid to suppliers for 8ODDS & services Cash paid to other funds for goods & services Cash paid to employees Other non-operatin8 receipts NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES Transfers from other funds Transfers to other funds Operatin8 Brants NET CASH PROVIDED (USED) BY NONCAPITAL FiNANCiNG ACTIViTiES CASH FLOWS FROM CAPITAL FINANCING ACTIVITIES: Proceeds from the sale of equipment System development charBes Acquisition & construction of capital assets Special assessments Capital grants Principal payments on debt Interest payments on debt NET CASH PROVIDED IUSED) BY CAPffAL FINANCING ACTIVITIES STATEMENT OF CASH FLOWS PROPRIETARY FUNDS For the Year Ended December 31, 2013 PaRe I of 2 BUSINESS-TYPE ACTIVITIES ENTERPRISE FUNDS GOVERNMENTAL OTHER TOTAL ACTIVITIES WATERWORKS SOLID ENTERPRISE ENTERPRISE INTERNAL SERVICE UTILITY WASTE FUNDS FUNDS FUNDS 147,298 147,298 27,306,147 (25,239,893)(15,777,423)(1,968,238)(42,985,554)(20,127,378) (51,304)(51,304) (6,487,959)(444,076)(2,035,376)(8,967,411)(5,733,187) 43,788 3,027 77,466 124,281 280,148 17,322,247 (48,997)638,027 17,911,277 1,725,730 9,821 9,821 2,642,026 (1,882,292)(232,518)(236,171)(2,350,981)(58,318) 68,575 100,563 3,120 172,258 106,384 (1.803,896)(131,955)(233,051)(2,168,902)2,690,092 1,197,309 (7,462,805) 211,335 504,663 (1,239,908) (1,535,560) 91,259 1,197,309 (9,455,510)(16,918,315)(2,730,607) 211,335 8,594,643 9,099,306 23,954 (473,024)(1,712,932) (32,841)(1,56R,401) (8,324,966)(1,366,732)(9,691,69B)(2,615,394) CASH FLOWS FROM INVESTING ACTIVITIES: Principal proceeds from interfund loans 98,208 98,208 511,666 Proceeds from sale of investments 106,899 106,899 Payments for investments (3,194,340)(60,293)(3,254,633)(2,006,789) Interest on investments and loans 33,984 3,713 5,156 42,883 71,670 NET CASH PROVIDED (USED) BY INVESTING ACTIVITIES (3,062,148)(56,580)112,055 (3,006,673)(1,423,~S3) NET INCREASE (DECREASE) iN CASH & CASH EQUIVALENTS 4,131,237 {237,532)(849,701)3,044,004 376,975 CASH & CASH EQUIVALENTS, JANUARY 1 13,115,499 1,740,902 2,707,2?8 17,563,679 20,181,389 RESTRICTED CASH & CASH EQUIVALENTS, JANUARY 1 2,909,578 2,909,578 TOTAL CASH, RESTRICTED CASH, & CASH EQUIVALENTS, DECEMBER 31 S 20,156,314 $1,503,370 S 1,857,577 S 23,517,261 $20,5S8,364 The notes to the financial statements ore an integral part of this statement. RECONCILIATION OF OPERATING iNCOME (LOSS) TO NET CASH PROVIDED {USED) BY OPERATING ACTIVITIES: Operating income {loss) Adjustments to reconcile operating income (loss) to net cash provided {used) by operatinE activities: Depreciation & amortization of deferred charges Other non-operating revenue {IncreaseJ decrease in accounts receivable Increase (decrease) in due from other funds (Increase) decrease in inventon/ & prepaid items Increase (decrease} in operatin8 accounts payable ~ncrease Idecrease) in due to other funds Increase )decrease) in payables & other short-term liabilities Increase {decrease) in customer deposits Increase {decrease) in unearned revenues Increase Idecrease) in accrued employee leave benefits Total adjustments NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES NONCASH INVESTING, CAPITAL, AND FINANCING ACTIVITIES Prior Period Adjustment Contributions of capital assets Depreciation & amortization STATEMENT OF CASH FLOWS PROPRIETARY FUNDS For the Year Ended December 31, 2013 Page 2 of 2 BUSINESS-TYPE ACTIVITIES GOVERNMENTAL ENTERPRISE FUNDS ACTIVITIES OTHER TOTAL INTERNAL WATERWOF, KS SOLID ENTERPRISE ENTERPRISE SERVICE UTILITY WASTE FUNDS FUNDS FUNDS 9,690,442 ~202,308 ~(gg3,LSO) ~9,009,600 ~(94.390) 7,474,088 794,490 8,268,578 1,904,421 43,788 3,027 77,466 124,281 280,248 (6~450)(259,690)64.242 {263,898)(442,528) 25,937 25,937 28,132 (45,861)3,063 (14,667)(16,886) 139,797 50,472 540,L18 730,387 34,624 )51,304j ($1,304) (933)(6.072)E67.909 160,904 52,209 (1,550)1~053 10,503 77,052 6,413 (148,969)(65,524) (34.7S1)406 10,825 (23.520)8,L32 7,631,805 (251,305)1,521,177 8,901,677 1,820,120 17,322,247 ~(48,997)$638,027 $17,911,277 $1,72S,730 (2,210,2E6)$-~-$(2,220,216)S 38,S84 g,096,072 8,096,072 7.474.088 794.490 8,268,578 1.904,421 STATEMENT OF FIDUCIARY NET POSITION FIDUCIARY FUNDS December 31, 2013 ASSETS Cash and cash equivalents Investments at fair value’. Federal National Mortgage Association US Treasury Strips Certificates of deposit Receivables (net of allowances) Interest on investments TOTAL ASSETS DEFERRED OUTFLOWS OF RESOURCES TOTAL DEFERRED OUTFLOWS OF RESOURCES LIABILITIES Deposits TOTAL LIABILITIES DEFERRED INFLOWS OF RESOURCES TOTAL DEFERRED INFLOWS OF RESOURCES NET POSITIO N Net position held in trust for pension benefits and other purposes PENSION TRUST AGENCY FIREFIGHTER’S SPECIAL PENSION DEPOSITS 1,g66,701 S 633,519 370,398 3,198,267 548,845 3,152,136 9,136,347 633,519 633,519 633,519 S 9,136,347 $ The notes to the finonciol stotements ore on integrol port of this stotement, The notes tO the finoncial stotements ore on integrQI port of this statement, STATEMENT OF CHANGES IN FIDUCIARY NET POSITION City of Renton, Washington FIREMEN’S PENSION FUND For the Year Ended December 31, 2013 PENSION TRUST FIREMEN’S PENSION ADDITIONS: Other contributions: Fire insurance premiums transferred in S 128,g66 ~nvestment earnings: Investment interest 339,084 Net increase / (decrease) in the fair value of investments (642,773) Total investment earnings (303,689) TOTAL ADDITIONS (174,g23} DEDUCTIONS: Benefits 188,943 Administrative expenses 4,475 TOTAL DEDUCTIONS 193,418 Change in net position (368,241) NET POSITION -JANUARY 1 9,504,58g NET POSITION -DECEMBER 31 ~,9,136,347 The notes to the financial statements are an integral part o] this statemen t. NOTES TO THE FINANCIAL STATEMENTS January 1, 2013 through December 31, 2013 NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The City of Renton was incorporated on September 6, 1901, and operates under the laws of the State of Washington applicable to a Non-Charter code city with a Mayor/Council form of government. A full-time Mayor and seven part-time Council members serve the City, all elected at large to four-year terms. The City provides the full range of municipal services authorized by state statues, together with a Municipal Airport, a Waterworks Utility, a Solid Waste Utility, and a Municipal Golf Course. The financial statements of the City have been prepared in conformity with U.S. generally accepted accounting principles (GAAP) as applied to government units. The Governmental Accounting Standards Board (GASB) is the accepted standard-setting body for establishing governmental accounting and financial reporting principles. Effective for fiscal year 2013 reporting, the City implemented the following new accounting and reporting standards issued by the Governmental Accounting Standards Board (GASB): GASB Statement No. 61 - The Financial Reporting Entity: Omnibus This statement modifies certain requirements for inclusion of component units in the financial reporting entity. It also amends criteria for reporting component units as if they were part of the primary government (blending) in certain circumstances. The statement also clarifies the reporting of equity interests in legally separate organizations. GASB Statement No. 64 - Derivative Instruments: Applications of Hedge Accounting Termination Provisions The objective of this statement is to clarify whether an effective hedging relationship continues after the replacement of a swap counterparty or a swap counterparty’s credit support provider. GASB Statement No. 65 - Items Previously Reported as Assets and Liabifities The objective of this statement is to either (a) properly classify certain items that were previously reported as assets and liabilities as deferred outflows of resources or deferred inflows of resources or (b) recognize certain items that were previously reported as assets and liabilities as outflows of resources (expenses or expenditures) or inflows of resources (revenues). These determinations are based on the definitions of those elements in Concepts Statement No. 4, Elements o.f Financial Statements. This statement amends or supersedes the accounting and financial reporting guidance for certain items previously required to be reported as assets or liabilities. In addition, this statement amends or supersedes requirements for the determination of major funds and addresses other statement of net position and governmental funds balance sheet presentation issues. Accounting changes adopted to conform to the provisions of this statement have been applied retroactively and are reported as a restatement of beginning net position or fund balance, as appropriate. GASB Statement No. 66- Technical Corrections-2022 The objective of this statement is to resolve conflicting guidance in GASB Statement No. 54, Fund Balance Reporting and Governmental Fund Type Definitions, and GASB Statement NO. 10, Accounting and Financial Reporting for Risk Financing and Related Insurance Issues, related to reporting of risk financing activities, and to resolve conflicting guidance in GASB Statement No. 62, Codification of Accounting and Financial Reporting Guidance Contained in Pre-November 30, 1989 FASB and AICPA Pronouncements and GASB Statement No. ~.3, Accounting for Operating Leases with Scheduled Rent Increases, regarding the reporting of certain operating lease transactions, and GASB Statement No. 48, 5ales and Pledges of Receivables and Future Revenues and Intra-Entity Transfers of Assets and Future Revenues, concerning the reporting of the acquisition of a loan or a group of loans and the recognition of servicing fees related to mortgage loans that are sold. A. REPORTING ENTITY As required by GAAP the City’s financial statements present the City of Renton - the primary government. The City of Renton’s Mayor appoints the Governing Board for the Renton Housing Authority, which is not considered a component unit of the City. The City is under no obligation to subsidize, nor does it exercise any other prerequisite for inclusion. The City of Renton has no component units (either blended or discretely presented} included in these statements. B. BASIC FINANCIAL STATEMENTS - GASB :t4 PRESENTATION The City’s basic financial statements include both government-wide (reporting the City as a whole) and fund financial statements (reporting the City’s major funds). Both the government- wide and fund financial statements categorize primary activities as either governmental or business-type. GOVERNMENT-WIDE STATEMENTS In the Government-wide Statement of Net Position, both the governmental and business-type activities columns (a) are presented qn a consolidated basis by column, and (b) are reported on a full accrual, economic resource basis, which recognized all long-term assets and receivabies as well as long-term debt and obligations. The City’s net position is reported in three parts - investment in capital assets, net of related debt; restricted net position; and unrestricted net position. The City first utilizes restricted resources to finance qualifying activities. The Government-wide Statement of Activities reports both the gross and net cost of each of the City’s functions and business-type activities (general government, judicial, public safety, utilities, transportation, economic environment, health and human services, culture and recreation, waterworks utility, airport, solid waste utility, and golf course). General government revenues (property taxes, retail sales and use taxes, business taxes, excise taxes, and other taxes) also support the functions. The Statement of Activities reduces gross expenses (including depreciation) by related program revenues, operating and capital grants and contributions. Program revenues must be directly associated with the function or a business- type activity. Operating grants include operating specific and discretionary (either operating or capital) grants while the capital grants column reflects capital specific grants. General revenues normally cover the net cost, by function or business-type activity. The Government-wide focus is more on the sustainability of the City as an entity and the change in the City’s net position resulting from the current year’s activities. The City’s fiduciary funds are presented in the fund financial statements. Since the assets are being held for the benefit of a third party and cannot be used for obligations of the City, they are not included in the Government-wide statements. Interfund fund activity has been eliminated from the Government-wide financial statements. Exceptions are payments in lieu of taxes, external type transactions within the internal service funds (revenue and expenses for interest or services provided to other governmental organizations), and other charges for utilities. Elimination of these charges would distort the direct cost and program revenues for these functions. FUND FINANCIAL STATEMENTS In the fund financial statements, the financial transactions are recorded in individual funds, each accounted for by a separate set of self-balancing accounts that comprise assets, liabilities, reserves, fund equity, revehues, and expenditures or expenses. The presentation is by major funds in either the governmental or business-type categories. GASB Statement 34 sets forth the minimum criteria for the determination of a major fund. The non-major funds are combined in the fund financial statements and are detailed in the combining section. The governmental major fund statements in the fund financial statement are presented on current financial resources and modified accrual basis of accounting. Since governmental fund statements are presented on a different measurement focus and basis of accounting than the Government-wide statements’ governmental column, reconciliation is presented at the end of the statement, which briefly explains the adjustments necessary to transform the fund statements into the Government-wide presentation. City of Renton, Washington City o.f Renton, Washington Internal service funds of a government are presented in summary form as part of the proprietary fund financial statements. Since the principal users of the internal services ate the City’s governmental activities, financial statements for internal service funds are consolidated into the governmental column when presented at the governmental level. These services are reflected in the appropriate functional activity (general government, iudicial, public safety, utilities, transportation, economic environment, health and human services, culture and recreation). The following describes each fund as presented in the fund financial statements. MAJOR FUNDS GOVERNMENTAL FUNDS GENERAL FUND The General Fund is the primary operating fund of the City. ~t is used to account for the resources and disbursements of ordinary City operations that are not required to be accounted for in another fund. These include the costs of legislative and executive departments, court services, finance and legal departments, development services, police and fire departments, human resources and technical services, community services, parks, economic development, streets, property management for City owned leased facilities, library and museum, fire memorial, and fire department’s health and wellness programs. The major sources of revenue are property taxes, utility taxes~ and sales taxes. Licenses and permits, charges for services, and fines and forfeits provide additional support. Community development block grant activities are accounted for within this fund, which is federally funded. MUNICIPAL FACILITIES CIP FUND The Municipal Facilities CIP fund accounts for facility improvements and renovations, property acquisitions for parks and City space needs, parks development and equipment, and major capital requirements. Resources include general and special revenue taxes, grants, and Council- approved general obligation bonds. CAPITAL IMPROVEMENT FUND This fund supports the City of Renton transportation projects and projects linked with various State and Federal funding programs. Many of the projects are dependent on grants, formation of LIDs, and mitigation revenue. ENTERPRISE FUNDS WATERWORKS UTILITY FUND The Waterworks Utility Fund accounts for all operation and capital improvement programs for water, wastewater, and storm water services within the City. The activities primarily supported by user fees include: administration, billings and collections, debt service, engineering and operation, maintenance and repairs. The primary resources for the capital improvement programs are revenue bond proceeds, grants (as available), and utility connection charges. SOLID WASTE FUND Solid waste, recycling, and yard waste collection services for the City are accounted for in this fund, supported entirely by service fees. The expenses include payment to the City’s garbage contractor and other service charges. NON-MAJOR FUNDS SPECIAL REVENUE FUNDS ARTERIAL STREET FUND The Arterial Street Fund was established pursuant to state law allocating the one-half cent State Gasoline Tax revenue to cities and towns for construction, improvements, and major repair of streets. HOTEL/MOTEL TAX FUND Accounts for monies collected through an increase of one percent in hotel/motel taxes for the purpose of increasing tourism in the City of Renton. 1% FOR ART FUND The City of Renton established this fund to account for one percent of construction project actual costs to be used for the selection, acquisition and/or installation of works of art to be placed in, on, or about City public facilities. CABLE COMMUNICATIONS DEVELOPMENT FUND The Cable Communications Development Fund accounts for funding for promotion and development of cable communications as established by City ordinance. SPRINGBROOK WETLANDS BANK FUND The City of Renton established this fund in 2007 for the purpose of providing accounting for the Springbrook Creek Wetland and Habitat Mitigation Bank project. The fund will receive revenue by selling Wetlands Credits to third parties and to the City’s internal departments. ll"ashingto~l Stttte .ludlt~n"x (~lfil’e Page 45 lYashington State Auditor’s Office Page 46 DEBT SERVICE FUNDS GENERAL GOVERNMENTAL MISCELLANEOUS DEBT SERVICE FUND This debt service fund accounts for the following outstanding debt issues: 2006 limited tax general obligation bonds which provided funding for the construction of South Lake Washington infrastructure improvements. 2009 intergovernmental debt related to the Fire District #40 asset transfer as a result of the Benson Hill annexation. 2009 intergovernmental debt related to acquisition, construction, and equipping of the SCORE facility. 2010 intergovernmental refunding debt which refunded a portion of the 2000 intergovernmental debt for the construction of a new facility for Valley Communications Center. 2010 limited tax general obligation refunding bonds which refunded a portion of the 2001 limited tax general obligation bonds for the construction of a downtown parking facility. 2011 limited tax general obligation bonds which funded the development and construction of 2 new libraries. 2011 limited tax general obligation refunding bonds which refunded a portion of the 2001 limited tax general obligation bonds which refunded a portion of the 1997 limited tax general obligation bonds for the purchase of Renton City Hall. 2013 limited tax general obligation qualified energy conservation bonds (QECB) which provided funding for streetlight improvements, CAPITAL PROJECT FUNDS COMMUNITY DEVELOPMENT IMPACT MITIGATION FUND Accounts for monies collected from developers to offset impacts created by their developments to City facilities. FIRE IMPACT MITIGATION FUND Accounts for monies collected from developers to offset impacts created by their developments to City facilities. TRANSPORTATION IMPACT MITIGATION FUND Accounts for monies collected from developers to offset impacts created by their developments to City facilities SOUTH LAKE WASHINGTON INFRASTRUCTURE PROJECT FUND The South Lake Washington Infrastructure Project Fund accounts for the infrastructure improvements at the south end of Lake Washington. Primary resources include: REET, sales tax, grants, and GO Bonds which provide for the design, construction, labor wages and benefits, and equipment required to implement the project. ENTERPRISE FUNDS AIRPORT FUND Provides accounting for revenues and expenses, which provides administration, debt services, operation, capital improvements, and maintenance of the Renton Municipal Airport and Will Rodger-Wily Post Memorial Seaplane Base. Sources of support to the fund are leases, fuel charges, investment interest, and grant funding as available. GOLF COURSE FUND The Golf Course Fund was created after the City acquired the Maplewood Golf Course. The fund accounts for the operation, maintenance, debt service, and capital improvements of the facility. OTHER FUND TYPES INTERNAL SERVICE FUNDS EQUIPMENT RENTAL The Equipment Rental Fund accounts for the costs of maintaining and replacing all City vehicles and auxiliary equipment. In addition, this fund accounts for the City’s information technology, facilities and communications costs. All costs, including depreciation, are factors in calculating the rates that are charged to each user department. iNSURANCE FUND The Insurance Fund provides accounting for self-insurance services to all City departments, including provisions for losses on property, liability, worker’s compensation, unemployment compensation, and the health care program. The Insurance Fund pays expenses and rates are charged to departments based on use and/or coverage requirements. FIDUCIARY FUNDS Fiduciary funds are used to account for assets held by the City in a trustee capacity or as an agent for individuals, private organizations, other governmental units and/or other funds. The City has one Pension Trust Fund and one Agency Fund. IVa ~hmgton State ,luditor’s ()ff~ce Page 47 Washington State Auditor’.~ O~ce Page 48 PENSION TRUST FUND FIREMEN’S PENSION FUND The Firemen’s Pension Fund accounts for the payment of administrative costs and benefits for retired firefighters and their beneficiaries, who were employed prior to Mal:ch ~., ~.970. Primary revenues sources are general property tax allocations in accordance with actuarial calculations, the fire premium tax, and investment income. AGENCY FUND SPECIAL DEPOSIT FUND The Special Deposit Fund was established for the purpose of holding or retaining cash deposits or other securities pending fulfillment of certain conditions and/or requirements by the depositor. Refunds are made when aft obligations have been met and only upon authorization from the transmitting department. C.MEASUREMENT FOCUS AND BASIS OF ACCOUNTING Basis of Accounting refers to the point at which revenues or expenditures/expenses are recognized in the accounts and reported in the financial statements. It relates to the timing of the measurement made regardless of the measurement focus applied: 1. Accrual Both governmental and business-type activities in the Government-wide financial statements and the proprietary and fiduciary fund financial statements are presented on the accrual basis of accounting. Revenues are recognized when earned and expenses are recognized when incurred. Substantially all governmental fund revenues are accrued. Property taxes are billed and collected within the same period in which taxes are levied. Subsidies and grants to proprietary funds, which finance either capital or current operations, are reported as non-operating revenue based on GASB Statement 33. In applying GASB Statement 33 to grant revenues, the provider recognizes liabilities and expenses and the recipient recognizes receivables and revenue when the eligibility requirements, including time requirements, are met. Resources transmitted before the eligibility requirements are met, are reported as advances by the provider and deferred revenue by the recipient. 2. Modified Accrual The governmental funds financial statements are presented on the modified accrual basis of accounting. Under the modified accrual basis of accounting, revenues are recorded when susceptible to accrual: i.e., both measurable and available. "Available" means collectible within the current period or soon enough thereafter to be used to pay liabilities of the current period. The City considers all revenue reported in the governmental funds to be available if the revenues are collected within sixty days after year-end. Expenditures are generally recognized under the modified accrual basis of accounting when the related liability is incurred. The. exception to this general rule is that principal and interest on general obligation long-term debt, if any, is recognized when due. D.ASSETS AND DEFERRED OUTFLOWS OF RESOURCES, LIABILITIES AND DEFERRED INFLOWS OF RESOURCES AND NET POSITION 1. Cash and Cash Equivalents The City has defined cash and cash equivalents as cash on hand, demand deposits, and all highly liquid investments (including restricted assets) with maturity of three months or less when purchased. These amounts are classified on the balance sheet or in the statement of net position as cash and cash equivalents or investments in the various funds. The interest on these investments is prorated to the applicable funds. Included in this category are all funds invested in the Local Government Investment Pool and Municipal Investor Account. Excluded from this category are cash balances held by Fiscal Agents since the City does not have discretionary use of these funds. 2.Investments (refer to Note 3B.) 3.Receivables and Payables - Amounts owed/payable to/by the City at year-end. Taxes receivable consists of property taxes and related interest and penalties (refer to Note 4). Accrued interest receivable consists of amounts earned on investments, notes, and contracts. Accrued interest payable consists of amounts owed on notes, loans, and contracts. Customer accounts receivable/payable consists of amounts owed from/to private individuals or organizations for goods and services. If the transactions are with another governmental unit, it is accounted for within "due from/to other governments." Special assessments are recorded when levied and are liens against the property benefited. Special assessments receivable consist of current and delinquent assessments and related interest and penalties. Deferred amount on special assessments consist of special assessments not due within one year reported as deferred outflows of resources in the governmental funds. Receivables have been reported net of estimated uncollectible accounts. Because property taxes, special assessments, and utility billings are considered liens on property, no estimated uncollectible amounts are established. Activities between funds that are representative of lending/borrowing arrangements outstanding at the end of the fiscal year are referred to as either interfund loans receivable/payable, All other outstanding balances between funds are reported as due to/from other funds. Any residual balances outstanding between the governmental activities and City of Ren ton, Woshington City of Renton, Woshington business-type activities are reported in the government-wide financial statements as internal balances. (Refer to Note ~.0). Noncurrent portions of long-term interfund loans receivable are equally offset by a fund balance amount which indicates that they do not constitute "available’spendable resources" since they are not a component of net position. Current portions of long-term interfund loans receivable are considered "available spendable resources" and are subject to elimination upon consolidation. In the Government-wide financial statements, and proprietary fund types in the fund financial statements, long-term liobilities are reported in applicable governmental activities, business- type activities, or proprietary fund type statement of net position. De.ferred Amount on Re, funding - the difference between the carrying amount of redeemed and/or defeased debt and its reacquisition price. This amount is deferred and amortized over the remaining life of the debt, or the life of the new debt, whichever is shorter. 4. Inventories and prepaid items All City inventories are maintained on a consumption basis of accounting where items are purchased for inventory and charged to the budgetary accounts as the items are consumed. Any material inventories at year-end are included in the balance sheet of the appropriate fund. All inventories are carried at cost on the first in, first out - FIFO basis, with the exception of the Public Works Maintenance shops inventory. The value of this inventory is calculated using the average cost method. Certain payments to vendors reflect costs applicable to future accounting periods and are reported as prepaid items in both the Government-wide and fund statements. 5.Capital Assets and Depreciation (refer to Note 51. 6. Unearned Revenues This account includes amounts collected in advance for services not yet rendered. 7. Unavailable Revenues This account includes amounts recognized as receivables but not revenues in the governmental funds because the revenue recognition criterion of availability has not been met. 8. Custodial Accounts This account reflects the liability for net monetary assets being held by the City in its agency capacity. 9. Compensated Absences The City accrues accumulated unpaid vacation and other leave and associated employee- related costs when earned (or estimated to be earned) by the employee. The non-current portion (the amount estimated to be used in subsequent fiscal years) for governmental funds is maintained separately and represents a reconciling item between the fund and Government- wide presentations. 10. Fund Balance Fund balance is presented in the governmental fund financial statements and represents the difference between assets and deferred outflows of resources and liabilities and deferred inflows of resources reported within the governmental fund. Fund Balance is classified into the following categories: Nonspendoble - items that cannot be spent due to form; inventories, prepaid amounts, long- term loan receivables, or amounts that must be maintained intact legally. Restricted- amounts constrained for specific purposes imposed by external parties or imposed through the judicial process and enabling legislation. Committed - amounts constrained by the City Council. The Council can, by ordinance, establish, modify, or rescind constraints on committed fund balances. Assigned - constraints imposed by the City Council for amounts intended for specific purposes. In governmental funds, excluding the General Fund, assigned fund balance is intended to be used, at a minimum, for the purpose of that fund. tn the General Fund a maximum of 12% and minimum of 8% is assigned per the City’s financial policies and adopted by the City Council in the biennial budget ordinance. Unassigned - any remaining fund balance in the General Fund not classified as nonspendable, restricted, committed or assigned. When multiple categories of fund balance are available for incurred expenditures, it is the City’s policy to consider restricted fund balance to have been depleted before using any of the components of unrestricted fund balance. Further, when the components of unrestricted fund balance can be used for the same purpose, committed fund balance is depleted first, followed by assigned fund balance. Unassigned fund balance is applied last. The following table shows the fund balance classification detail, as of December 31, 2013: Looo,ooo 11. Net Position (refer to Note 11). E.REVENUES, EXPENDITURES, AND EXPENSES ’1. Program Revenues Program revenues include charges for services to customers for goods and services provided, operating grants and contributions, and non-operating grants and contributions within the Government-wide Statement of Activities.Charges for services include business licenses, construction permits, and weapon permits. 2. General Revenues Property taxes, retail taxes, business taxes, excise taxes, and associated penalties and interest, and interest and investment earnings are classified as general revenues within the Government-wide Statement of Activities. 3.Interfund Transfers Permanent reallocations of resources between funds are classified as interfund transfers. For purposes of the Government-wide Statement of Activities, all interfund transfers between individual governmental funds have been eliminated. 4. Expenditures/Expenses Expenses in the Government-wide Statement of Activities are reported by function as a governmental activity (general government, judicial, public safety, utilities, transportation, economic environment, health and human services, culture and recreation), interest on long- term debt, or business-type activity (waterworks utility, airport, solid waste utility, or golf course). In the fund financial statements, expenditures of governmental funds are classified by: function, debt service pr!ncipal and interest payments, or purchases of capital items. Proprietary expenditures are classified as operating or non-operating. In 20~.3, operating expenses were segregated into Supplies, Personnel services, Services, Insurance, Taxes and Depreciation. The other categories reported previously (Operations and maintenance and Administrative and general) were assigned to Supplies, Personnel services, Services, and Insurance, as appropriate. B. Operating and Non-operating Revenues and Expenses Operating revenues and expenses for proprietary funds are those that result from providing services and producing and delivering goods and/or services in connection to the proprietary fund’s principle ongoing operations. All revenue and expenses not related to capital and related financing, non-capital financing, or investing activities are included. Those revenues and expenses not meeting this definition are non-operating revenues and expenses. NOTE 2. COMPLIANCE AND ACCOU NTABILITY The City of Renton budgets its funds under Generally Accepted Accounting Principles (GAAP) at the fund level. Annual appropriated budgets are adopted for governmentai funds on a biennial basis. Budgets for proprietary funds are "management budgets" and are not legally required to be reported. Included in the Required Supplemental Information and Combining Statements sections of the CAFR are Schedules of Revenues, Expenditures, and Changes in Fund Balances (Budget to Actual) reporting the Actual Budgetary GAAP Basis verses Actual GAAP Basis of Accounting for all legally adopted budgets. There have been no material violations of finance- related legal or contractual provisions, and there have been no expenditures exceeding legal appropriations in any of the funds of the City. A. PROCEDURES FOR ADOPTING THE ORIGINAL BUDGET The City of Renton’s biennial budget procedures are mandated by the Chapter 35A,33 of the Revised Code of Washington (RCW). The steps in the budget process are as follows: 1.Prior to November 1, the Mayor submits a proposed budget to the City Council. This budget is based on priorities established by the Council; estimates provided by the City departments during the preceding months; balanced by revenue estimates made by the Mayor. 2.The City Council conducts public hearings on the proposed budget in November and December. 3.The Council makes their adjustments to the proposed budget and adopts, by ordinance, a final balanced budget no later than December 31. 4. The final operating budget, as adopted, is published and distributed within the first four months of the following year. B. AMENDINGTHE BUDGET The budget, as adopted, constitutes the legal authority for expenditures. Budgets are adopted on the GAAP basis of accounting. Any comparisons between budget and actual revenues and expenditures are reported under the GAAP basis. The biennial budget is adopted with budgetary control at the fund level, so expenditures may not legally exceed appropriations at that level of detail. Transfers or revisions within funds are allowed, but only the City Council has the legal authority to increase or decrease a given fund’s annual budget.This is accomplished by City ordinance. The budget was amended three times during 2013. Original budgeted inflows as compared to the final budgeted inflows are as follows: Increase Original Final (Decrease) Budgeted Budgeted Budgeted Fund Inflows Inflows Inflows General Fund ~92,495,099 S 96,664,204 S 4,169,105 Arterial Street Fund 643,000 643,000 Hotel/Motel Tax Fund 245,000 245,000 I% for Art Fund 15,000 16,000 1,000 General Government Miscellaneous Debt Service Fund R,001,433 8,040,433 39,000 Community Development Impact Mitigation Fund 60,000 60,000 Fife Impact Mitigation Fund 25,000 25,000 Transportation Impact Mitigation Fund 40,000 40,000 M u n i ci p a I F a cili tie s Cl P F u n d 2,485,000 6,20g,670 3,723,670 General Government Capital Improvement Fund 25,258,]20 33,586,759 8,328,639 S~ u th La ke w a s hi n gto n I n fra s tru ctu re Proie ct Fu n d 44,874 44,874 Airport Fund 11,74g,935 15,322,540 3,573,605 Solid Waste Utility Fund 15,700,852 15,700,852 Golf Course Fund 2,503,669 2,580,619 76,950 Waterworks Utility Fund 52,161,152 57,36g,442 5,207,290 Equipment Repair and Replacement/Information Technology / Facilities / Communications Fund 13,405,932 13,677,766 271,834 insurance Fund 14,778,812 16,778,812 2,000,000 Fireme n’s Pension 300~000 3001000 - TOTAL ~239tg671004 $ 267,302t971 .~27r435tg67 Original budgeted outflows as compared to the final budgeted outflows are as follows: Increase Original Final (Decrease) Budgeted Budgeted Budgeted Fund Outflows Outflows Outflows General Fund $92,447,466 $99,426,358 ~6,978,892 Arte ria I Stre e t Fu n d 640,000 600,000 (40,000) Hote[/Motel Tax Fund 245,000 291~000 46,000 1% for Art Fund 50,000 50,000 General Government Miscellaneous DebtService Fund 8,001,433 8,073,283 71,g50 Community Development Impact Mitigation Fund 700,000 700,000 Fire Impact Mitigation Fund 250,000 250,000 Transportation Impact Mitigation Fund 183,000 54,000 (129,000) Municipal. Fa cilities ClP Fu nd 2,722,725 28,792,893 26,070,168 General Government Capital Improvement Fund 2S,257,711 33,146,35g 7,ggg,647 South Lake Washington Infrastructure Project Fund 96,947 96,947 Airport Fund 11,729,777 17,492,945 5,773,169 Solid Waste Utility Fund 16,170,067 16,177,073 7,006 Golf Course Fund 2,515,769 2,845,664 329,896 Waterworks Utility Fund 47~912,993 60,491,286 12,57g,293 Equipment Repair and Replacement / IT / Facilities / Communications Fund 13,209,596 15,057~326 1~847~730 insurance Fund 15,698,251 15,702,961 4,710 Firemen’s Pension 240,475 2401475 - TOTAL ~;237t2641263 $ 299,48g,569 $62,224,306 NOTE 3. DEPOSITS AND INVESTMENTS A. Deposits The City’s deposits and certificates of deposit are insured by the Federal Depository Insurance Corporation (FDIC) and the State of Washington Public Deposit Protection Commission (WPDPC) Act of 1969. The City’s deposits with the Local Government Investment Pool (LGIP) are managed by the Washington State Office of the Treasurer. The LGtP is comparable to a Rule 2a7-pool recognized by the Securities and Exchange Commission. A 2a7-1ike-pool is an external investment pool that is not registered with the SEC as an investment company but nevertheless has a policy that it will, and does, operate in a manner consistent with the SEC’s Rule 2a7 of the Investment Company Act of 1940. Rule 2a7 allows SEC-registered mutual funds to use amortized cost, which approximates fair value, to report net assets and compute share prices. Washington State :luditl)r’s ~’e Page 55 Washington State Auditor’s OjJ~ce Page 56 Reconciliation to Statements of Net Position Governmental Fiduciary Total Cash S 66,058,296 $2,500,220 $68,558,516 Restricted Casfi 2,909,578 2,909,578 Cash Equivalents (LGIP)9,927,865 9,927,865 Total Cash & Cosh Equivalents 78,895,739 2,500,220 81,395,959 Investments 33,028,784 4,117,509 37,146,293 Total Investments 33,028,784 4,227,509 37,146,293 Total Cash & Investments $111,924,523 $6,617,729 $118,542,252 B. Investments The City invests excess and inactive funds in accordance with the City’s Investment Policy (last updated and approved on February 23, 2009), which complies with the guidelines within Chapter 35A.40.050 of the Revised Code of Washington (RCW). This allows for investment of excess cash and inactive cash, directs that the responsibility for determining available cash for investment is placed upon the department administering the funds, and allows for pooling of the cash provided that the allocation of income is proportionate to the investment of each fund. Currently, the City invests in obligations of the U.S. Government, U.S. agency issues, and Certificates of Deposit with Washington State banks and savings and loan institutions as allowed by RCW. Investments are shown on the Government-wide Statement of Net Position at fair value. Investments are reported within cash and cash equivalents or investments based on the length of time to maturity when purchased. Custodial Credit Risk Custodial credit risk for investments is the risk that, in the event of the failure of the counter party to a transaction, a government will not be able to recover the value of investment or collateral securities that are in the possession of an outside party. All security transactions, including collateral for repurchase agreements, entered into by the City are conducted on a delivery-versus-payment (DVP) basis and are held in our safekeeping trust account with Bank of New York with terms negotiated by the State of Washington. Investment Schedule As of December 31, 2013, the City of Renton had the following investments: Security Type Weighted unrated Cost Fair Value Ave Maturity Moody’s S&P ICertificates of Deposit (within WPDPC)23,794,006 23,794,006 0,79 unrated unrated F N MA 7,500,000 7,512,550 0,66 Aa a AA+ FHI_MC 2,500,000 2,502,075 0.21 Aa a AA+ US TREASURY ZERO COUPON 2,03g,263 3,198,267 5.97 Aaa AAA FNMA ZERO COUPON 99,556 139,395 0.35 unrated TOTAL INVESTMENTS $350931~825 $37.146.293 Credit risk. Credit Risk is the risk that an issuer or other counterparty to an investment will not fulfill its obligations. Of the bonds held by the City, 44% are rated "Aaa" by Moody’s Investors Service and "AAA" by Standard & Poor and 55% are rated "Aaa" by Moody’s Investors Service and "AA+" by Standard & Poor. All certificates of deposit are insured by the FDIC up to $250,000 and, additionally, are 100% collateralized in the multiple financial institution collateral pool administered by the Washington Public Deposit Protection Commission (WPDPC). The City’s Investment Policy directs that the standard of prudence for investment activities shall be the Prudent Investor Stondord that states: "Investments shall be made with judgment and care, under circumstances then prevailing, which person of prudence, discretion, and intelligence would use in the management of their own affairs, not for speculation, but for investment purposes, consider(ng the probable safety of their capital as well as the probable income to be derived." Interest Rote Risk. Interest rate risk is the risk that changes in interest rates over time, adversely affecting the fair value of an investment. The City’s portfolio is managed within the parameters established by the Investment Policy, which limits the weighted average maturity of the portfolio to five years. The City’s FNMA and FHLMC bonds have call provisions with call dates falling in the first six months of 2014. Secudty Type 0-6 6 months -1-3 3+ 37,146~293 months 1 year years years TotalsICertificates of Deposit (within WPDPC)$ 4,285,082.76 S 7,493,523 $7,015,400 ~5,000,000 ~23,794,006 FHLMC 2,502,075 2,502,075 FNMA 7,512,550 7,512,550 FNMA ZERO COUPON 139,395 139,395 US TREAS ZERO COUPON 193~239 206~959 2,798,069.40 3,198,267 TOTAL INVESTMENTS $ 4F285~083 $ 7e6861762 $ 7,222~359 $ 17f952~090 S Washington State luditor ~ Oj~ee Page 57 Washington State AuditotJs Office Page 58 Concentr(~tion o/Credit Risk. Concentration of credit risk is the risk of loss attributed to the magnitude of a government’s investment in a single issuer. The City diversifies its investment instruments to avoid incurring unreasonable risk inherent with the over-investment of instruments and issuers using the following target distribution as a guide during normal economic times while allowing flexibility when appropriate. The City has certificate of deposits equal to 14% of its total investments with Umpqua Bank; 27% with First Savings Bank Northwest and 13% with Columbia Bank. As stated earlier these are 100% collateralized and guaranteed by the State of Washington Public Deposit Protection Commission. The remaining individual issuers are less than 5% of total investments or are otherwise excluded from this disclosure due to the low risk nature of the investment. Instrument Issuer Maximum’s per Policy Maximum Maximum U .S. Treasuries 100%100% U .S. Agencies 75%50% Certificates of Deposit (within WPDPC}7S%20% Local Governmental Investment Pool (LGIP)75%75% Commercial Paper 2S%S% NOTE 4. PROPERTY TAXES The King County Finance Director acts as an agent to collect property taxes levied in the county for all taxing authorities. Taxes are levied annually, January 1, on property value listed as of the prior August 31. Assessed values are established by the King County Assessor at 100 percent of fair market value. A revaluation of all property is required every two years; however, King County has the ability to revalue annually. Property taxes levied by the King County Assessor and collected by the King County Finance Director become a lien on the first day of the levy year and may be paid in two equal installments if the total amount exceeds $30. The first half of real property taxes is due on April 30 and the balance is due October 31. Delinquent taxes bear interest at the rate of 12 percent and are subject to additional penalties if not paid as scheduled. No allowance for uncollectible taxes is established because delinquent taxes are considered fully collectible. At year-end, property taxes are recorded as a receivable with the portion not expected to be collected within 60 days offset by unavailable revenue. During the year, property tax revenues are recognized when cash is received. The tax rate for general City operations is limited to SB.10 per S1,000 of assessed value (RCW 84.52.043). This reflects a reduction of S0.50 per $1,000 as a result of the annexation to the King County Library System. In addition to this amount, up to S0.225 (22.5 cents) per ~1,000 may be designated for contribution to the Firemen’s Pension Fund. If a report by a qualified actuary on the condition of the Firemen’s Pension Fund establishes that this amount (or portion of) is not necessary to maintain the actuarial soundness of the fund, the amount can be used for any other municipal purpose (RCW 41.16.060). The tax rate limit may be reduced for any of the following reasons: The Levy Limit: the levy limit calculation applies to a taxing district’s budget, and not to increases in the assessed value or tax bill of individual properties. Initiative 747 which restricted individual taxing districts from collecting, in any year, more than a one percent increase in their regular, non-voted, levy over the highest levy amount since 1985 was overturned by the courts. However during 2007, the state legislature reinstated this limit with the passage of HB24!6. New construction, annexations, and excess levies approved by the voters are not included in the levy limit calculation. If the assessed valuation increases by more than one percent due to revaluation, the levy rate will be decreased. The One Percent Constitution Limit: The Washington State Constitution limits the regular (non-voted) combined property tax rate applied to an individual’s property to one percent (~10 per ~;1,000) on the market valuation. Voters may approve special levies that are added to this figure. If the taxes of all districts exceed this amount, each is proportionately reduced until the total is at or below the one percent limit. 3. The City may voluntarily levy taxes below the legal limit. Special levies approved by the voters are not subject to the above limitations. There is currently no excess levy for General Obligation Bond debt. The City’s regular levy per the King County Assessor’s 2013 Annual Report is ~3.10. NOTE B. CAPITAL ASSETS AND DEPRECIATION A. GENERAL POLICIES Major expenditures for capital assets, including capital leases and major repairs that increase the useful life, are capitalized, The capitalization threshold applied to the City’s assets is 55,000. Maintenance, repairs, and minor renewals are accounted for as expenditures or expenses when incurred. All capital assets are valued at historical cost (or estimated cost, where historical cost is not known/or estimated market value for donated assets/or the original historical cost when transferred between proprietary and governmental funds.) Intangible assets, either purchased or internally developed, with a cost of $5,000 or more that are identifiable by meeting one of the following conditions: ¯The asset is capable of being separate or divided and sold, transferred, licensed, rented, exchanged; or ¯The asset arises from contractual or other legal rights, regardless of whether those rights are transferable or separable. The City has acquired certain assets with funding provided by federal financial assistance programs. Depending on the terms of the agreements involved, the federal government could retain an interest in these assets. However, the City has sufficient legal interest to accomplish the purposes for which the assets were acquired, and has included such assets within the applicable statements. The City capitalizes art and historical treasures. Art and historical treasures are expected to be maintained or enhanced over time and thus, are not depreciated. B. GOVERN MENTAL CAPITAL ASSETS Governmental long-lived assets of the City purchased, leased, or constructed are recorded as expenditures in the governmental funds and are capitalized, net of depreciation, in the Government-wide statements. The infrastructure component of GASB 34 for assets acquired after January 1, 3.980 was implemented retroactively in 2004. Donated capital assets are capitalized at estimated fair value of the item at the date of the donation. C. PROPRIETARY FUND CAPITAL ASSETS Capital assets of proprietary funds are capitalized in their respective statement of net position, net of depreciation. Any gain on the sale of capital assets is recorded in the Statement of Activities as General revenues, Miscellaneous. Interest incurred during the construction phase of capital assets of proprietary funds is included as part of the capitalized value of the assets constructed. The amount of interest capitalized is calculated by applying the weighted average borrowing rate to the average cumulative expenditures since inception. For the year ended December 31, 2013, total proprietaW fund interest incurred of $1,331,562 was reduced by capitalized interest in the amount of $301,297. D. DEPRECIATION AND AMORTIZATION Depreciation on all depreciable assets is provided on the straight-line basis over the following useful lives: Estimated Type of Asset Service Life Buildings and structures, except utility plant 10-50 years Other {mprovements !0-80 years Utility plant 25-75 years Machinery and equipment 3-40 years Infrastructure 25-50 years Amortization on all intangible assets is provided on the straight-line basis over the following useful lives: Estimated Type of Asset Service Life Computer Software 3-15 years Land Use Rights 3-12 years Patents, Trademarks, Copyrights 3-50 years Other Intangibles with definite useful lives 3-12 years Depreciation and Amortization Expense was charged to functions/programs of the primary government as follows: S~vernmental Activities General Government Judicial Public Safety Physi~l Environment Transportation Economic Development Culture and f~ecreation Health and Human Se~ices Internal Semite Funds IGeneral Governmental) rotaI-G~emmental A~tlvltles Depreciation Amortization Total 6,926 558 7,434 460,939 35,561 496,500 4,514,014 11,657 4,525,671 493,429 493,429 1,267,o79 4,411 1,271,490 45,292 45,292 275,077 275,077 8,ZZZ,378 $ 46,Z00 $ 8,zGg,Sl~ Washington State ludito,’~ (~lf!t¢Page 61 Waxhington State Audltor’,~ Off~,’e Page 62 E. SUMMARY OF CHANGES Capital asset activity for the year ended December 31, 2013 was as follows: At the end of 20:L3, a total of 43 projects comprise the Construction in Progress. Upon completion, the projects will be capitalized in the Government-wide statements in their appropriate categories and in the fund statements for proprietary funds, if applicable. Construction commitments as of December 31, 2013, are as follows: CitF of Renton, Washington Ciel o~f genton, Washington NOTE 6. PENSION PLANS With the exception of firefighters employed prior to March 1, 1970, substantially all City’s full- time and qualifying part-time employees participate in one of the following statewide retirement systems administered by the Washington State Department of Retirement Systems, under cost-sharing multiple-employer public employee defined benefit and defined contribution retirement plans. The Department of Retirement Systems (DRS), a department within the primary government of the State of Washington, issues a publicly available comprehensive annual financial report (CAFR) that includes financial statements and required supplementary information for each plan. The DRS CAFR may be obtained by writing to: Department of Retirement Systems, Communications Unit, P.O. Box 48380, Olympia, WA 98504-8380; or it may be downloaded from the DRS website at www.drs.wa.gov. The City is the administrator of the Firefighter Pension Plan for all firefighters employed prior to March 1, 1970. The Firefighter Pension Plan is included within the City of Renton’s statements as a pension trust fund. There is no separate GAAP-based audited report. A schedule of employer contributions, prepared by Healthcare Actuaries, is included in the Required Supplemental Information section. Additional information from the actuarial report prepared for the Firefighter Pension Plan, by Healthcare Actuaries, may be obtained by contacting the City of Renton, Finance Division, 1055 South Grady Way, Renton, WA 98057. The following disclosures are made pursuant to GASB Statements No. 27, Accounting for Pensions bF State and Local Government EmploFers and No. 50, Pension Disclosures, and Amendment of GASB No. 25 and No. 27. Public Employees’ Retirement System IPERS) Plans 1~ 2z and 3 Plan Description PERS is a cost-sharing multiple-employer retirement system comprised of three separate plans for membership purposes: Plans 3_ and 2 are defined benefit plans and Plan 3 is a defined benefit plan with a defined contribution component. Membership in the system includes: elected officials; state employees; employees of the Supreme, Appeals, and Superior courts (other than judges currently in a judicia~ retirement system}; employees of legislative committees; community and technical colleges, college and university employees not participating in national higher education retirement programs; iudges of district and municipal courts; and employees of local governments. PERS participants, who joined the PERS system by September 30, 1977, are Plan 3. members. Those who joined on or after October 1, 1977; and by either, February 28, 2002 for state and higher education employees, or August 31, 2002 for local government employees, are Plan 2 members unless they exercise an option to transfer their membership to Plan 3. PERS participants ioining the system on or after March 1, 2002 for state and higher education employees, or September 1, 2002 for local government employees, have the irrevocable option of choosing membership in either PERS Plan 2 or PERS Plan 3. The option must be exercised within 90 days of employment. An employee is reported in Plan 2 until a choice is made. Employees who fail to choose within 90 days default to PERS Plan 3. Notwithstanding, PERS Plan 2 and Plan 3 members may opt out of plan membership if terminally ill, with less than five years to live. PERS defined benefit retirement benefits are financed from a combination of investment earnings and employer and employee contributions. PERS retirement benefit provisions are established in state statute and may be amended only by the State Legislature. PERS Plan 1 members are vested after the completion of five years of eligible service. Plan 1 members are eligible for retirement at any age after 30 years of service, or at age 60 with five years of service, or at age 55 with 25 years of service. The annual benefit is two percent of the average final compensation (AFC) per year of service, capped at 60 percent. (The AFC is based on the greatest compensation during any 24 eligible consecutive compensation months.) Plan 1 members who retire from inactive status prior to the age of 65 may receive actuarially reduced benefits. The benefit is actuarialty reduced to reflect the choice of a survivor option. A cost-of-living allowance (COLA) is granted at age 66 based on years of service credit times the COLA amount, increased by three percent annually. Plan :i members may also elect to receive an additional COLA amount that provides an automatic annual adjustment based on the Consumer Price Index. To offset the cost of this annual adjustment, the benefit is reduced. PERS Plan 2 members are vested after completion of five years of eligible service. Plan 2 members may retire at age 65 with five years of service with an allowance of two percent of the AFC per year of service. (The AFC is based on the greatest compensation during any eligible consecutive 60-month period.) Plan 2 members who retire prior to the age of 65 receive reduced benefits. If retirement is at 55 or older with at least 30 years of service, a three percent per year reduction applies; otherwise an actuarial reduction will apply. The benefit is also actuarially reduced to reflect the choice of a survivor option. There is no cap on years of service credit; and a cost-of-living allowance is granted (based on the Consumer Price Index), capped at three percent annually. PERS Plan 3 has a dual benefit structure. Employer contributions finance a defined benefit component, and member contributions finance a defined contribution component. The defined benefit portion provides a benefit calculation at one percent of the AFC per year of service. (The AFC is based on the greatest compensation during any eligible consecutive 60- month period.) Effective June 7, 2006, Plan 3 members are vested in the defined benefit portion of their plan after ten years of service; or after five years if twelve months were earned after age 44; or after five service credit years earned in PERS 2 prior to June 1, 2003. Plan 3 members are immediately vested in the defined contribution portion of their plan. Vested Plan 3 members are eligible to retire with full benefits at age 65, or at age 55 with 10 years of service. Plan 3 members who retire prior to age 65 receive reduced benefits. If retirement is at age 55 or older with at least 30 years of service, a three percent per year reduction applies; otherwise an actuarial reduction will apply. The benefit is also actuarially reduced to reflect the City o/ Renton, Woshington City a] Renton, Woshingtan choice of a survivor option. There is no cap on years of service credit; and Plan 3 provides the same cost-of-living allowance as Plan 2. The defined contribution portion can be distributed in accordance with an option selected by the member, either as a lump sum or pursuant to other options authorized by the Employee Retirement Benefits Board. Judicial Benefit Multiplier Beginning January 3., 2007 through December 31, 2007 judicial members of PERS were given the choice to participate in the Judicial Benefit Program (3BM). Justices and judges in PERS 3. and 2 may make a one-time irrevocable election to pay increased contributions that would fund a retirement benefit with a 3.5% multiplier. The benefit would be capped at 75% of AFC. Judges in PERS Plan 3 can elect a 1.6% of pay per year of service benefit, capped at 37.5% of average compensation. Members who choose to participate in JBM will accrue service credit at a higher multiplier beginning with the date of their election, be subject to the benefit cap of 75% of AFC, pay higher contributions, stop contributing to the Judicial Retirement Account (JRA}, and be given the option to increase the multiplier on past judicial service. Members who do not choose to participate will: continue to accrue service credit at the regular multiplier; continue to participate in JRA, if applicable; never be a participant in the JBM Program; and continue to pay contributions at the regular PERS rate. Newly elected or appointed justices and judges who chose" to become PERS members on or after January I, 2007, or who have not previously opted into PERS membership, were required to participate in the JBM Program. Members required into the JBM program would: return to prior PERS Plan if membership had previously been established; be mandated into Plan 2 and not have a Plan 3 transfer choice, if a new PERS member; accrue the higher multiplier for all judicial service; not contribute to JRA; and not have the option to increase the multiplier for past judicial service. Membership in PERS consisted of the following as of the latest actuarial valuation date for the plans of June 30, 2012: Retirees and beneficiaries receiving benefits 82,242 Terminated plan members entitled to but not yet receiving benefits 30,915 Active plan members vested 106,317 Active plan members non-vested 44,273 Tota I 263,347 Following is a summary of the number of government employers partidpating in PERS as of June 30, 20~.3. Number of Partlcil}atin~ Employers State School Counties/Other Political Total Plan A~encies Districts Municipalities Subdivisions Members PERS 1 135 216 172 183 706 PERS 2 167 276 491 934 PERS 3 157 209 298 664 Tota I 459 216 ~972 2,3~ FundinR Policy Each biennium, the state Pension Funding Council adopts Plan 1 employer contribution rates, Plan 2 employer and employee contributions rates, and Plan 3 employer contribution rates. Employee contribution rates for Plan 3. are established by statute at six percent for state agencies and local government unit employees, and 7.5 percent for state government elected officials. The employer and employee contribution rates for Plan 2 and the employer contribution rate for Plan 3 are developed by the Office of the State Actuary to fully fund Plan 2 and the defined benefit portion of Plan 3. All employers are required to contribute at the level established by the Legislature. Under PERS 3, employer contributions finance the defined benefit portion of the plan, and member contributions finance the defined contribution portion. The Employee Retirement Benefits Board sets Plan 3 employee contribution rates. Six rate options are available ranging from 5 to 3.5 percent; two of the options are graduated rates dependent on the employee’s age. As a result of the implementation of the Judicial Benefit Multiplier Program in January 2007, a second tier of employer and employee rates was developed to fund, along with investment earnings, the increased retirement benefits of those justices and judges that particip,~e in the program. The methods used to determine the contribution requirements are established under state statute in accordance with Chapters 41.40 and 41.45 RCW. The required contribution rates expressed as a percentage of current-year covered payroll, as of December 31, 203.3, were as follows: Members not participating in JBM: Contributor PERS Plan I PERS Plan 2 PERS Plan 3 Employer*9.21%9.21%9.21% Employee 6.00%4.92%*** The employer rates include the employer administrative expense fee currently set at 0.18%. **Pin n 3 defined benefit portion only. ***Variable from 5% to 15% based on rate selected bythe member. IYashhlgtml State A ud~tor’s O.l]ice Page 67 Washington State Auditor’s Ojfice /’age 68 Members participating in JBM: Contributor PERS Plan 1 PgRS Plan 2 PERS Plan 3 Emptoyer-Sta te Agency*11.71%11.71%11.71%** Employer-Local Govt.*9.21%9.21%9.21%** ~Zmployee-Sta te Agency 9.76%9.80%7.50%*** Employee-Loca t Govt.]2.26%12.30%7.50%*** The employer rates include the employer administrative expense fee currently set at 0.18%. **Plan g defined benefit portion only. ***Minimum rate. Both the City and the employees made the required contributions.The City’s required contributions for years ended December 31, were as follows: Year PERS Plan 1 PERS Plan 2 PERS Plan 3 2013 S 37,139 S 2,033,876 $346,182 2012 42,163 1,773,371 313,631 2011 44,457 1,496,892 261,528 Law Enforcement Officers’ and Firefil~hters’ Retirement System (LEOFF) Plans 1 and 2 Plan Description LEOFF is a cost-sharing multiple-employer retirement system comprised of two separate defined benefit plans. LEOFF participants who joined the system by September 30, 1977, are Plan 1 members. Those who joined on or after October 1, 1977, are Plan 2 members. Membership in the system includes all full-time, fully compensated; local law enforcement officers, firefighters and as of July 24, 2005, those emergency medical technicians who were given the option and chose LEOFF Plan 2 membership. LEOFF membership is comprised primarily of non-state employees, with the Department of Fish and Wildlife enforcement officers, who were first included prospectively effective July 27, 2003, being an exception. Effective July 1, 2003, the LEOFF Plan 2 Retirement Board was established by Initiative 790 to provide governance of LEOFF Plan 2. The Board’s duties include adopting contribution rates and recommending policy changes to the Legislature for the LEOFF Plan 2 retirement plan. LEOFF defined benefit retirement benefits are financed from a combination of investment earnings, employer and employee contributions, and a special funding situation in which the state pays through state legislative appropriations. LEOFF retirement benefit provisions are established in state statute and may be amended by the State Legislature. LEOFF Plan 1 members are vested after the completion of five years of eligible service. Plan 1 members are eligible for retirement with five years of service at the age of 50. The benefit per year of service calculated as a percent of final average salary (FAS) is as follows: Percent of Final Term of Service Average Salary 20 or more years 2.0% 10 but less than 20 years 1.5% 5 but less than 10 years 1 0% The FAS is the basic monthly salary received at the time of retirement, provided a member has held the same position or rank for 12 months preceding the date of retirement. Otherwise, it is the average of the highest consecutive 24 months’ salary within the last ten years of service. A cost-ofqiving allowance is granted (indexed to the Consumer Price Index). LEOFF Plan 2 members are vested after the completion of five years of eligible service. Plan 2 members may retire at the age of 50 with 20 years of service, or at age 53 with five years of service, with an allowance of two percent of the FAS per year of service. The FAS is based on the highest consecutive 60 months. Plan 2 members who retire prior to age 53 receive reduced benefits. Benefits are actuarially reduced for each year that the benefit commences prior to age 53 and to reflect the choice of a survivor option. If the member has at least 20 years of service credit and is age 50, the reduction is three percent for each year prior to age 53. There is no cap on years of service credit; and a cost-of-living allowance is granted (indexed to the Consumer Price Index), capped at three percent annually. Membership in LEOFF consisted of the following as of the latest actuarial valuation date for the plans of June 30, 2012: Retirees and beneficiaries receiving benefits 10,189 Terminated plan members entitled to but not yet receiving benefits 689 Active plan members vested 14,273 Active plan members non-vested 2~633 Total 27,784 Following is a summary of the number of government employers participating in LEOFF as of June 30, 2013. Number of Parndpatln~ Employers State School Counties/ Other Political Total Plan Al~encies Districts Municipalities Subdivisions Members LEOFF I 41 10 51 LEOFF 2 g 212 154 374 Total ~253 1~425 Washington State :luditm’~ Q/file Page 69 Wa.~hington State Auditor’s Office Page 70 City oJ Renton, Washington City of Renton, Washington Funding Policy Starting on July 1, 2000, LEOFF Plan 1 employers and employees will contribute zero percent as long as the plan remains fully funded. Employer and employee contribution rates are developed by the Office of the State Actuary to fully fund the plan. LEOFF Plan 2 employer and ¯ employees are required to pay at the level adopted by the LEOFF Plan 2 Retirement Board. All employers are required to contribute at the level required by state law. The Legislature, by means of a special funding arrangement, appropriated money from the state General Fund to supplement the current service liability and fund the prior service cost of LEOFF Plan 2 in accordance with the requirements of the Pension Funding Council and the LEOFF Plan 2 Retirement Board. However, this special funding situation is not mandated by the state constitution and this funding requirement could be returned to the employers by a change in statute. The required contribution rates expressed as a percentage of current-year covered payroll, as of December 31, 2013, were as follows: Contributor LEOFF Plan 1 LEOFF Plan 2 Employer*0.18%5.23% Employee 0.00%8.41% The employer rates include the employer admin- istrative expense fee currentlyset at 0.18%. 8oth the City and the employees made the required contributions.The City’s required contributions for years ended December 31, were as follows: Year LEOFF Plan 1 L[OFF Plan 2 2013 S ~’~ S 1,357,292 2012 395 1,364,670 2011 494 1,334,049 Public Safety Employee’s Retirement System (PSERS) Plan 2 Plan Description PSERS is a cost-sharing multiple-employer retirement system comprised of a single defined benefit plan, PSERS Plan 2. PSERS was created by the 2004 legislature and became effective July 1, 2006. PSERS Plan 2 membership includes full-time employees of a covered employer on or before July 1, 2006, who met at least one of the PSERS eligibility criteria, and elected membership during the election period of July 1, 2006 to September 30, 2006; and those full-time employees, hired on or after July 1, 2006 by a covered employer, that meet at least one of the PSERS eligibility criteria. A "covered employer" is one that participates in PSERS. Covered employers include: State of Washington agencies: Department of Corrections, Department of Natural Resources, Parks and Recreation Commission, Gambling Commission, Washington State Patrol, Liquor Control Board; Washington state counties; and Washington state cities except for Seattle, Tacoma and Spokane. To be eligible for PSERS, an employee must work on a full-time basis and: have completed a certified criminal justice training course with authority to arrest, conduct criminal investigations, enforce that criminal laws of Washington, and carry a firearm as part of the job; or ¯have primary responsibility to ensure the custody and security of incarcerated or probational/individuals; or ¯function as a limited authority Washington peace officer, as defined in RCW 10.93.020; or ¯have primary responsibility to supervise eligible members who meet the above criteria. PSERS defined benefit retirement benefits are financed from a combination of investment earnings and employer and employee contributions. PSERS retirement benefit provisions are established in state statue and may be amended only by the State Legislature. PSERS Plan 2 members are vested after the completion of five years of eligible service. Plan 2 members may retire at the age of 65 with five years of service, or at the age of 60 with at least ten years of PSERS service credit, with an allowance of two percent of the average final compensation (AFC) per year of service. The AFC is the monthly average of the member’s 60 consecutive highest-paid service credit months, excluding any severance pay such as lump-sum payments for deferred sick leave, vacation or annual leave. Plan 2 retirees who retire prior to the age of 60 receive reduced benefits. If retirement is at age 53 or older with at least 20 years of service, a three percent per year reduction for each year between the age at retirement and age 60 applies. There is no cap on years of service credit; and a cost-of-living allowance is granted (based on the Consumer Price Index), capped at three percent a~lnually. Membership is PSERS consisted of the following as of the latest actuarial valuation date for the plan of June 30, 2012: Retirees and beneficiaries receiving benefits 27 Terminated plan members entitled to but not yet receiving benefits 60 Active plan members vested 2,083 Active plan members non-vested 2,167 Total 4,337 Following is a summary of the number of government employers participating in PSERS as of June 30, 20~.3. NumberofPaRicipati~EmpIoyers State School Counties/ OtherPolitical Total Plan A~en¢ies Oistricts Municipalities Subdivisions Members PSERS 9 6S 1 75 Funding Policy Each biennium, the state Pension Funding Council adopts PSERS Plan 2 employer and employee contribution rates. The employer and employee contribution rates for Ptan 2 are developed by the Office of the State Actuary to fully fund Plan 2. All employers are required to contribute at the level established by the Legislature. The methods used to determine the contribution requirements are established under state statute in accordance with Chapters 4~..37 and 4L45 RCW. The required contribution rates expressed as a percentage of current year covered payroll, as of December 3:]., 2013 were as follows: Contributor PSERS Plan 2 Employer*10.54% Employee 6.36% The employer rates include the employer administrative expense fee currently set at 0.18%. Both the City and the employees made the required contributions.The City’s required contributions for years ended December 31, were as follows: Year PSERS Plan 2 2013 $11,925 2012 16,854 2011 21,518 Firefighter’s Pension Summary of Significant Accounting Policies investments are reported at fair value. Plan Description The Firefighter’s Pension Plan (Plan) is a closed, single-employer defined benefit pension plan administered by the City of Renton through the firefighter’s pension board. The plan provides pensions for firefighters that were employed prior to March 3_, 1970, when the LEOFF retirement system was established. The firefighters’ pension board consists of five members: the Mayor who serves as chair the board, the chairperson of the Council Finance Committee, and three members elected by secret ballot of the retired firefighters. At December 31, 2013 FPF membership consisted of the following: Retirees and beneficiaries receiving benefits 22 Retirees and beneficiaries currently receiving full retirement through LEOFF9 Active plan members vested Active plan members non-vested Total 33_ All members are retired and drawing benefits. Benefit terms provide for cost-of-living adjustments to each member’s retirement benefit. There are two types of increases: escalation by salary in proportion to current salary of rank from which the firefighter retired or increase proportionate to the increas~e in the Seattle-area consumer price index, with the change computed annually. Regardless of the change in the consumer price index, such increase shall be at least two percent each year. The former applies to firefighters who retired from service after 1969, their survivors, and to firefighters who retired for duty disability (but not their survivors) after 1961. The latter applies to alt other types of monthly benefits. Benefits. All benefit terms are in statutes RCW 41.16, 41.18, and 41.26. FPF provides retirement, disability, and death benefits. Each firefighter in service on March 3, 1970 receives the greater ~f the benefit payable under the Washington Law Enforcement Officers’ and Firefighters’ Retirement (LEOFF) System and the benefits available under the provisions of prior law. Where benefits under the old law exceed those under the new law for any firefighter, the excess benefits are paid from the FPF of the city employing the member on March 3., 1970. Contributions. As long as the FPF provides for benefits to covered members, the City will be eligible to receive a share of the State’s distribution of the fire insurance premium taxes. The amount the City receives is 25% of all monies received by the State from taxes on fire insurance premiums. Contributions can also come from taxes paid pursuant to the provisions of RCW 41.16.060. This stature requires that each municipality levy up to $0.45 (only $0.225 of which can be in excess of the property tax limit pursuant to Rcwg4.52.O43) per $1,000 of assessed valuation, based on reports by a qualified actuary, to maintain the fund. Investments Investment Policy. The pension fund holds laddered treasury-strip investments with annual maturities to meet cash-flow requirements. The City is currently assessing options to deploy the growing cash b~lance. [Va~hington State A udttor ’~ Oj]i~ e Page 73 Washington State Audltor!~ Office Page 74 Rate o] Return. For the year ended December 31, 2013, the annual money-weishted rate of return on pension plan investments, net of pension plan investment expense, was 3.13%. The money-weishted rate of return expresses investment performance, net of investment expense, adjusted for the changin8 amount actually invested. Actuarial Assumptions The total pension liability was determined by an actuarial valuation as of December 31, 2012, using the following actuarial assumptions, applied to all periods included in the measurement: Inflation:2.75% Salary increases:3.00% Investment rate of return:4.00% Mortality rates were based on the RP-2000 Healthy Annuitant Mortality Table for Males or Females, as appropriate, with adjustments for mortality improvement based on 50% of Scale AA. The long-term expected rate of return on pension plan investments was determined using a building-block method in which best estimate ranges of expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed. We used the weighted expected returns of the City’s portfolio of cash, US Treasuries (to be held to maturity), and receivables to develop the long-term expected rate of return. Discount rate. The discount rate used to measure the total pension liability was 4.00%. The projection of cash flows used to determine the discount rate assumed City contributions were equal to revenue received from Fire Insurance premiums and the amount received would increase at the inflation rate of 2.75%. Based on this assumption, the pension plan’s fiduciary net position was projected to be available to make all projected future benefit payment of current plan members. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability. Sensitivity of the net pension liability to changes in the discount rate. The following presents the net pension liability of the City, calculated using the discount rate of 4.0%, as well as what the City’s net pension liability would be if it were calculated using a discount rate that is one percentage point lower, 3.0%, or one percentage point higher, 5.0%, than the current rate: Current Discount City’s net pension liability 1% Decrease Rate 1% Increase $3,039,213 $2,787,814 $2,569,559 An actuarial valuation is done every two years and was completed as of January 1, 2013. The Actuarial Valuation of Firefighters’ Pension Fund table is reported in the Required Supplemental Information section, and a recap of the Schedule of Funding Progress for the last five valuations is as follows: IS in thousands} Unfunded Valuation Actuarial Actuarial Actuarial UAAL as a Date Value of Accrued Accrued Funded Covered Percentage of Janua r,/1 Assets Liabilities Liabilities Ratio Payroll Covered Payroll 2009 8,941 6,517 (2,424)137%n/a 2011 8,940 3,914 *(4,576)217%n/a 2013 9,501 2,788 **(6,713)341%n/a "The reduction in Actuarial Accrued Lia bi~Tty in 2011 is made up oia 10% decrease in demographic experience~higherm~rtaIa~rate)a~da25%decreaseinactuaibene~tam~unts¢~mparedt~expectat~ns~ Changes in economic assumptions had minimal im pact on the liabilities. The following Annual Pension Cost and Net Pension Obligation table presents the Annual Required Contribution (ARC) as of December 31, 2013. The Annual Required Contribution (ARC) is the sum of the Normal Cost for the year plus amortization of the Unfunded Actuarial Accrued Liability (UAAL}. The Normal Cost is the portion of the Actuarial Present Value (APV} of benefits attributable to current year services rendered, and Actuarial Accrued Liability (AAL) is the APV of future benefit costs, including projected benefit cost increase caused by projected future pay increases, attributable to prior services. The Unfunded Actuarial Accrued Liability (UAAL) is the portion of Actuarial Accrued Liability minus the actuarial value of the Plan’s assets. Since all members have already retired, the Plan has no Normal Cost. The UAAL is amortized over a closed 30-year period beginning January 1, 2000 using the level dollar amortization method. Annual Development of Pension Cost (1 of 2) Annual Total FiscalYear Interest ARC Pension Employer Changein Endin~ ARC at EOY on NPO Adjustment Cost Contributions NPO [1][2][3=pyrT/9]14=1+2-31 [5J 12/31/2007 (109,968)(38,658)(54,591)(94,035)59,777 (!53,812) 12/31/2008 (109,968)(46,349)(67,070)(89,247)66,055 (155,302) 12/31/2009 (172,788)(43,291)(74,178)(141,901)70,327 (212,228) 12/31/2010 (172,788)(51,780)(91,589)(132,979)107,06g (240,047) 12/31/2011 {348,495)(61,382)(112,345)(297,472)102,354 (399,826) 12/31/2012 (530,282)(77,375)(159,003)(448,654)118,775 (567,429) 12/31/2013 (530,282)(100,072)(214,705)(415,650)124,391 (540,041) Washington State Auditor’.* Office Page 76 Annual Development of Pension Cost (2 of 2) Fiscal Year NPO Am ort.Am ort. Of Endin3 Endin~ Balance IGainl/Loss Factor**IGain)/Loss Balance [7=6+pryrY]!3-1-5][91 ~10=pyrl]/9]111-7] 12/31/2007 (926,973}(169,745)14.16300 (54,591)(926,978) 12/31/2008 (1,032,2g0)(176,023)13.82120 (67,069)(1,082,280} 12/31/2009 {1,294,503)(243,115)14.59030 (74,173)(1,294,503) 12/31/2010 (1,534,555)(279,856)14.33390 (91,539)(I,534,555) 12/31/2011 (i,934,331)(450,789)13.65930 {I12,345)(1,934,381) 12/31/2012 (2,501,810)(649,057)12.16567 (159,003)(2,501,810) 12/31/2013 (3,041,351)(654,673)11.65230 (224,705)(3,041,851) Annual Required Pension Contribution and Net Pension Obligation Fiscal Year Ending 12/31/2Oll 12/31/2012 Annual required contribution (ARC) 1 Annual Normal Cost S ~ 2 + Amortization of UAAL Beginning of Year *(335,034)(509,887) 3 + Interest on UAAL to £nd of Year*113,401)(20,395) 4 = ARC a t End of Year [1+2+3](348,43S)(530,282) 5 + Interest on Net Pension ObliBation (63,382}(77,375) 6 ~ Adjustment to ARC (112,345)(1591003) 7 = Annual pension cost (APC)[4+5-61 {297,472)(448,654) Employer Contributions**102,354 118,775 Change in Net Pension ObliBation [7 8I (399,826)(567,429) t)+ Net Pension Obligation at Beginning of Year (1,534,555)(lt934f381) 11 = Net Pension Obligation at End of Year [9+10] ~(1,934,381~)$(2t501t810) 12/31/2013 (509,887) (20,395) (530,282) (100,072} (214,705) (415,650) (540,041) (2,SOZ,B~O) *,Assumed interest/discount rate of 4.0%, amortized with level dollar method. **Employer contributions for pensions are total contributions to the fund net of disbursements for medical and administrative expenses. Three year trend information is recapped as follows: Annual Contribution as a Net Pension Fiscal Year Endin~Pension Cost IAPC)Percentage of APC Obligation (NPO} Decembe r 31, 2011 (297,472)N/A (1,934,381) Decembe r 31, 2012 (448,654)N/A (2,501,310) Decembe r 31, 2013 (415,650)N/A (3,041,351) Employees are not required to make contributions under this Plan. The employer contributions to the Plan for 2013 include $128,866 from fire insurance premiums and $339,083 in investment income from Plan assets. Benefits and refunds of the Plan are recognized when due and payable in accordance with the terms of the Plan. For 2013, $188,943 was paid for pension benefit payments. The Net Pension Obligation decreased by $540,041 to ($3,041,851) and is included as a non- current asset in the City of Renton’s Government-wide Statement of Net Position. NOTE 7. OTHER POST EMPLOYMENT BENEFITS During the year ended December 31, 2008, the City elected to adopt the provisions of GASB Statement No. 45, "Accounting and Financial Reporting by Employers for Postemployment Benefits Other Than Pensions" (GASB No. 45), which required the City to accrue other postemployment benefits (OPEB) expense related to its postretirement healthcare plan based on a computed annual required contribution (ARC) that includes the current period’s service cost and an amount to amortize unfunded actuarial accrued liabilities. Instead of recording expense on a "pay-as-you-go" basis, the City, under GASB No. 45, has recorded a liability of $3,744,023 for the difference between the actuarially calculated ARC and the contributions made since the adoption of GASB No. 45. This liability is included in noncurrent liabilities in the accompanying December 31, 2013 Government-wide Statement of Net Position. The effect of GASB No. 45 for the current fiscal year was to decrease the City’s excess of revenue over expenses before capital contributions and the City’s increase in net OPEB obligation for the year ended December 31, 2013 by $845,542. Plan Description The City of Renton’s LEOFF Plan 1 (the Health Plan) is a single-employer defined benefit healthcare plan administered by the City. The Health Plan provides medical, prescription drug, dental, Medicare Part B premiums, long-term care, and vision expenses for LEOFF Plan 3. retirees. Dependent spouses and children are not covered. The Health Plan’s actuary is Healthcare Actuaries. The Health Plan does not issue a separate standalone financial report. Funding Policy The City does not require retiree contributions. All benefits are paid in full by the City. For the fiscal year ended December 31, 2013, the City contributed $1,039,281 to the Health Plan. There were no retiree contributions. Annual OPEB Cost and Net OPEB Obligation The basis for the City’s annual other postemployment benefit (OPEB) cost (expense) is the annual required contribution (ARC). The ARC represents a level of funding that, if paid on an ongoing basis, is projected to cover the normal cost each year and to amortize any unfunded actuarial liabilities (or funding excess) over a period not to exceed ten years. The following displays the components of the City’s annual OPEB cost, the estimated amount contributed to the Health Plan, and changes in the City’s net OPEB obligation to the Health Plan. Annual Required Contribution and Net OPEB Obligation Fiscal Year Endin[~ 12131/2011 12/31/2012 12/31/2013 Annual required contribution (ARC) Annual Normal Cost S 54.262 ~S - ÷ Amortization of UAAL 1,704,544 1.972.502 2,009,362 + Interest to End of Year = ARC at end of year 1,758,806 1,972,502 2,009,362 + Interest on Net O PEB Obligation 78,799 46,882 56,160 + Adj ustment to ARC (120,635)(146,060)(180,699) = Annual OPE8 cost 1,716,970 1,873,324 1,884,823 -Employer Contributions 875,699 1~254~795 le039e281 : Change in Net OPEB Obligation 841,271 618,529 845,542 + Net OPEB Obligation beginnln8 of year 2,284~223 3~1251494 3e744e023 = Net OPEB Obligation-end of year ~3,125.494 $3 744,023 ~41589,565 *Unfunded Actuarial Accrued Liability (UAAL) The City’s annual OPEB cost, the percentage of annual OPE8 cost contributed to the Health Plan, and the net OPEB obligation for 2013 and the two preceding years were as follows: Three year trend information is recapped as follows: Percentage of Annual Employer OPEB Cost Net OPEB Year OPEB Cost Contribution Contributed Obli{ation 20tl 1,716.970 875,699 51.00%3,125,494 2012 1,873,324 1~254,795 66.98%3,744,023 2013 1,g84,823 1,039,281 55.14%4,589,565 Funded Status and Funding Progress The funded status of the Health Plan as of December 31, 2013: (5 in thousandsl Unfunded Actuarial Actuaria!Actuarial Accrued UAAL as a Valuation Date Value of Accrued Liabilities Funded Covered Percentage of January I Assets Liabilities (UAAI)Ratio Payroll Covered Payroll 2011 27,835 27,835 0%434 6412% 2012 42,209 42,209 0%305 13841% 2013 41,633 41,633 0%300 1386S% Actuarial valuations involve estimates of the value of reported amounts and assumptions about the probability of occurrence of events far into the future. Actuarially determined amounts regarding the funded status of the plan and the annual required contributions of the employer are subject to continual revision as actual results are compared with past expectations and new estimates are made about the future. Net position of $6,360,269 is reported as unrestricted in the insurance fund, however the City intends to utilize net position for the purpose of funding a portion of the UAAL. The schedule of funding progress, presented as required supplementary information following the notes to the financial statements, presents multi-year trend information that shows whether the actuarial value of Health Plan assets is increasing or decreasing over time relative to the actuarial liabilities for benefits. Actuarial Methods and Assumptions Projections of benefits for financial reporting purposes are based on the substantive plan (the plan as understood by the employer and plan members) and include the types of benefits provided at the time of each valuation. The actuarial methods and assumptions used include techniques that are designed to reduce the effects of short-term volatility in actuarial accrued liabilities and the actuarial value of assets, consistent with the long-term perspective of the calculations. The December 31, 2012 valuation used the projected unit credit actuarial cost methods. The actuarial assumptions included a 1,5% investment rate of return (net of administ[ative expenses) and an initial annual healthcare cost trend rate of 10.0% for pre-Medicare expenses, " to an ultimate rate of 4.2% after 72 years. The Medicare trend assumption is 6.5%, to an ultimate rate of 4.2% after g years. The dental trend assumption is 5.5%, to an ultimate rate of 4.0% after 4 years. The Medicare premium trend rate is 8.5% for all years, except for the first year, which has a 0% trend rate. The long-term care trend rate is 5.0% for all years. The trend for the Excise Tax threshold is 0% until 2018, when a trend rate of 4.24% is used. The trend for all future years is 3.24%. All trend rates include a 3.0% inflation assumption. The UAAL at transition is being amortized as a level dollar amount on a closed basis. The remaining amortization period at December 33., 203.3 was 24.0 years. The UAAL is recalculated each year and amortized as a level dollar amount over 25 years for 203.3. Trend Rates Pre-PartB Long-Term ExciseTax Year Medicare Medicare Dental Vision Premiums Care Threshold 2014 10.0%6.5%5.5%4.0%8.5%5.0%0.00% 2015 9,5%6.5%5,0%4.0%8.5%5.0%0.00% 2016 9,0%6.0%4 3%4.0%8,5%5,0%0,00% 2017 8.5%6.0%4.0%4.0%8.5%5.0%0.00% 2018 8.0%53%4.0%4.0%8.5%5.0%4.24% 2019 7.5%5.0%4.0%4.0%8.5%5.0%3.24% 2020 7.0%4.5%4.0%4,0%8,5%5.0%3.24% 2021 6.4%4.2%4.0%4.0%8.5%5.0%3.24% 2022÷2084 ......4.0%4.0%8.5%5.0%3.24% 2095 +4.2%4,2%4.0%4.0%83%5.0%3.24% Note: The trend rales include assumed inflation of 50% for all future years. NOTE 8. CONTINGENCIES tn the opinion of management, the City’s insurance policies and/or self-insurance reserves are adequate to pay all known or pending claims. Contingencies under Grant Provisions The City participates in a number of federal and state assisted programs. These grants are subject to audit by the grantors of their representatives. Such audits could result in requests for reimbursement to grantor agencies for expenditures disallowed under the terms of the grants. The City’s management believes that such disallowances, if any, will be immaterial. Bond Indentures The City is in compliance with all significant bond indentures and restrictions. Construction Commitments Refer to Note S. NOTE 9. RISK MANAGEMENT The City of Renton is exposed to various risks of loss related to tort; theft of, damage to, and destruction of assets; errors and omissions; injuries to employees; and natural disasters. The City of Renton protects itself against unforeseen losses by utilizing a three-pronged risk management approach. First, the City self-funds first level losses through its Insurance Fund. Second, insurance and excess insurance is purchased to cover medium and large losses. Third, the City reserves the right to utilize the provisions of Chapter 35A.31.060 RCW to fund catastrophic or uninsured losses. This State statute allows cities to levy a non-voted property tax increase to pay for uninsured claims. There were no settlements in excess of the insurance coverage in any of the three prior fiscal years. An analysis of the insurance deductibles and self-insured retention levels, limits of insurance, and carriers for the major types of coverage are as follows: Risk Retention Type of Coverage Occurrence Aggregate Amount Carrier Property -$25,000 $300,000,000 Iper WA Cities Ins Expires 1/O1/2014 occurrence subject to Authority annual aggregate & sub-limits) Liability -S250,000 $20,000,000 WA Cities Ins Expires 01/01/2014 (per occurrence)Authority Auto Physical Damage -ACV or Replacement WA Cities Ins Expires 01/01/2014 $25,000 Cost; per Occurrence Authority Equipment Breakdown -$5,000"SS0,000,O00 Zurich Expires 1/01/2014 Employee Fidelity/Crime -$10,000 $2,500,000 National Union Expires 12/31/2013 Fire Airport Liability-0 $I00,000,000 Ace Property & Expires 1/01/2014 Casualty Underground Storage Tank-$2,500 $1,o00,000 Expires 1/01/2014 Excess Workers’ Comp -$500,000 Statutory Safety National Expires 1/01/2014 Excess Employee Health -$175,000 N/A Sun Life Expires 1/01/2014 *There is a 4-hour utility interruption clause, prior to the deductible becoming opplinoble. The City of Renton is a member of the Washington Cities Insurance Authority (WClA). Utilizing Chapter 48.62 8CW (self-insurance regulation) and Chapter 39.34 RCW (Interlocal Cooperation Act), nine cities originally formed WClA on January 1, 1981. WClA was created for the purpose of providing a pooling mechanism for jointly purchasing insurance, jointly self- insuring, and / or jointly contracting for risk management services. WClA has a total of 167 Members. New members initially contract for a three-year term, and thereafter automatically renew on an annual basis. A one-year withdrawal notice is required before membership can be terminated. Termination does not relieve a former member from its unresolved loss history incurred during membership. City o.f Renton, Woshington City of Renton, Washington WCIA’s Liability coverage is written on an occurrence basis, without deductibles. Coverage includes general, automobile, police, public officials’ errors or omissions, stop gap, employment practices, and employee benefits liability. Limits are $4 million per occurrence self-insured layer, and ~16 million per occurrence in the re-insured excess layers. The excess layers are insured by the purchase of reinsurance and insurance and are subject to aggregate limits. Total limits are $20 million per occurrence subject to aggregate sub-limits in the excess layers. The Board of Directors determines the limits and terms of coverage annually. Insurance coverage for property, automobile physical damage, fidelity, and inland marine are purchased on a group basis. Various deductibles apply by type of coverage. Property insurance and auto physical damage are self-funded from the members’ deductible to $750,000, for all perils other than flood and earthquake, and insured above that amount by the purchase of insurance. In-house services include risk management consultation, loss control field services, claims and litigation administration, and loss analyses. WCIA contracts for the claims investigation consultants for personnel issues and land use problems, insurance brokerage, and lobbyist services. WCIA is fully funded by its members, who make annual assessments on a prospectively rated basis, as determined by an outside, independent actuary. The assessment covers loss, loss adjustment, and administrative expenses. As outlined in the Interlocal, WCIA retains the right to additionally assess the membership for any funding shortfall. An investment committee, using investment brokers, produces additional revenue by investment of WClA’s assets in financial instruments which comply with all State guidelines. A Board of Directors governs WCIA, which is comprised of one designated representative from each member. The Board elects an Executive Committee and appoints a Treasurer to provide general policy direction for the organization. The WCIA Executive Director reports to the Executive Committee and is responsible for conducting the day to day operations of WClA. The City’s Risk Management Program is administered under the authority of the Human Resources and Risk Management Administrator, with claims being processed by the carriers shown above. As of December 31, 2013, the City had accrued the following amounts for outstanding claims: Total Claims Payable Coverage 12/31/2013 Property& liability $508,904 Workers’ compensation 937,114 Employee health 1f6601000 TOTAL $31106t018 Prope~’~/&Workers’Employee 2013 tlablllt~Comllensatlon Health Totals 18NR claims at beginning of the year $537,571 $827,147 ~1,389,400 S 2,754,118 Current year and changes in estimates 1,399,646 1,291,558 11,815,150 14~506,354 Claims payments 11,428,313)!1,181,591)(11,544,550)(14,154,454) IBNR claims at end of the ’/ear ~5081804 $937t114 $l166etooo $3,106,018 Property &Worke~’Employee 2012 Lial0111ty Compensation Health Totals IBNRclaimsatbeginningoftheyear ~641,640 $613,685 $1,186,9oo S 2,442,195 Current year and changes in estimates 946,936 1,362,079 11,898,851 14,207,866 Claims payments (1,051,005)!1,]48,587)(11,696,351)( 13,895,943} IBNR claims at endof theyear ~5371571 ~827~147 $11389f400 $21754,118 NOTE 10. INTERFUND TRANSACTIONS lnterfund transactions are classified as follows: ¯Services Provided - Transact(ons that would be treated as revenues, expenditures, or expenses if they involve external organizations, such as buying goods and services or payments in lieu of taxes, are similarly treated when they involve other funds of the City of Renton. ¯Transfers - Transactions to support the operations of other funds are recorded as "Transfers" and classified with "Other Financing Sources or Uses" in the fund statements. Transfers between governmental or proprietary funds are netted as part of the reconciliation to the Government-wide financial statements. ¯Contributions - Contributions to the capital of enterprise or internal service funds, transfers of capital assets between proprietary and governmental funds, transfers to establish or reduce working capital in other funds, and transfers remaining balances when funds are closed are classified non-operating revenue. ¯Loans - Activities between funds that are representative of lending/borrowing arrangements outstanding at the end of the fiscal year are referred to as interfund loans receivable/payable. Any residual balances outstanding between the governmental activities and business-type activities are reported in the government- wide financial statements as internal balances. The following is a summary of interfund transfers. Transfers into the General Fund, Other Governmental Funds, and Internal Service Funds account for administrative support and debt service contributions; whereas transfers into the Municipal CIP and Capital Improvement Funds account for capital contributions towards the construction/acquisition of library land and improvements and park construction and improvements. Fund Ti’ansfers In Transfers Out General Fund $2,166,197 $4,415,959 Municipal Facilities OP 2,678,367 277,000 Capital improvement 959,449 56,025 Other Governmental Funds 56,029 1,354,000 Subtotal Governmental Funds $5,860,038 $6,102,584 Waterworks Utility Fund 9,821 1,882,293 Solid Waste 232,518 Other Enterprise Funds 236,171 Subtotal Enterprise Funds $9,82~$2,350,982 SubtotallnternaIServlce Funds $2,642,02-=$58,318 The following is a summary of three outstanding interfund loans outstanding made for capital improvement purposes, as of December 31, 2013: Fund Due From Other Funds Due To Other Funds Capital Improvement Fund 429,306 Subtotal Governmental Funds $$429,309 Airport 101,646 Golf Course 775,093 Waterworks Utility 101,646 Subtotal Enterprise Funds $101,646 $876,73E Insurance Fund 1,204,401 Subtotal Internal Sei~ice Funds $1,204,401 $ TOTAL $1,306,O47 ~;1,306,047 NOTE 11. NET POSITION The Government-wide and business type fund financial statements utilize a net position presentation. Net position is the difference between (a) assets and deferred outflows of resources and (b) liabilities and deferred inflows of resources. Net position is categorized as investments in capital assets (net of related debt), restricted, and unrestricted. Investment in Capital Assets (net of related debt) is intended to reflect the portion of net position associated with non-liquid, capital assets less outstanding capital asset related debt. The net related debt is the debt less the outstanding liquid assets and any associated unamortized costs. Restricted net position is comprised of liquid assets which have third party (statutory, bond covenant, or granting agency) limitations on their use. The restricted component of net position is reduced by liabilities and deferred inflows related to those assets. The restricted component of net position of governmental activities may not equal to restricted fund balances in the governmental funds due to a different measurement focus and different basis of accounting. The City would typically use restricted net position first, as appropriated opportunities arise, but reserve the right to selectively defer the use thereof to a future project or replacement equipment acquisition. Unrestricted net position represents unrestricted liquid assets. Unrestricted Governmental Activities have committed and assigned designations that reflect the City Council and ¯ management’s plans and commitments to expend resources for certain purposes in future periods. Funds with committed designations reflect amounts constrained by the City Council, either through formal budget adoption or other purposes formally approved by the Council. Amounts with assigned designations reflect all amounts remaining in governmental funds, other than the general fund, not classified as nonspendable, restricted or committed. Assigned amounts also include year-end encumbrances that have received approval from the City Council and re-appropriated in the following year’s carry forward budget. The City’s financial policies require a maximum amount of 12% and minimum of 8% fund balance to remain in the general fund for cash flow purposes. NOTE 12. PRIOR PERIOD ADJUSTMENTS Governmental Activities To conform to the accounting changes outlined in GASB Statement No. 65, Items Previously Reported as Assets and Liabilities, prior period adjustment in the amount of $(333,364) was required to remove previously capitalized debt issuance costs. Additionally, prior period adjustments in the amount of $90,125 were required to record construction-in-progress assets improperly expensed in prior years. Business-Type Activities To conform to the accounting changes outlined in GASB Statement No. 65, Items Previously Reported as Assets and Liabilities, prior period adjustment in the amount of $(386,149) was required to remove previously capitalized debt issuance costs. ...................................................................................................................................................................................................................jjjj.I!!.!L!L!(I i i !1! ....................................................................................................................................................................................................................................................................... A developer contribution from 2009 and the related asset in the amount of $724,918 (net of depreciation) was not properly recorded in prior years. A prior period adjustment was necessary in 20~.3 to properly record the capital asset. The value of certain developer contributions from 2012 were improperly calculated. Prior period adjustments in the amount of $(~.,777,905) were necessary in 2013 to properly record the assets. Additionally, prior period adjustments in the amount of $(771,080) were required to dispose of construction-in-progress assets improperly capitalized in prior years. NOTE 13. LONGTERM DEBT The City of Renton’s long-term debt consists of General Obligation Debt, repaid mainly from general governmental revenue sources, Proprietary Debt, repaid from proprietary revenues and compensated absences/other post-employment benefits. These debts are accounted for in the following areas: 1) The outstanding general obligation debt is reported in the Government- wide financial statements; 2) The repayment, or debt service of the same, is recorded in the Debt Service Funds; and, 3) The proprietary debt liability and repayment of the same are reported in individual Proprietary Funds. Compensated absences and other post-employment benefits are generally liquidated mainly from the general fund and to a lesser extent, the internal service funds. Outstanding debt issues as of December 31, 2013 are as follows: Type of Debt GOVERNMENTAL DEBT: General Obligation Bonds: Limited: 2006 GO Bonds 2010 GO Refunding Bonds 201E GO Library Bonds 2011 GO Refunding Bonds 2013 GO Qualified Energy Conservation Bonds SUBTOTAL LIMITED GO Other Miscellaneous debt - Intergovemmental~ Bacged by full faith and credit of the City: 2009 FD 80 Loa n for acquisition of FS13 2009 (A) SCORE Tax Exempt 2009 (B) SCORE BAES 2010 GO Valley Comm RefundinG Bonds SUBTOTAL MISCELLANEOUS TOTAL GOVERNMENTAL-TYPE DEBT ISSUANCE BUSINESS-TYPE DEBT: Revenue Bonds: 2003 Water/Sewer Refunding 2004 Water/Sewer 2007 Water/Sewer 2007 Water/Sewer Refunding 102) 2008 Ware r/Sewer la 2008 Water/Sewer 2012 Water/Sewer Refunding TOTAL REVENUE BONDS PublB: Works Trust Fund Loans: Central Renton Sewer Replacement East Renton Interceptor Dayton Avenue NE NE 27th/Aberdeen Drainage Improvements East Kennydale interceptor Honeycreek Interceptor Corrosion Control Treatment Facilities Maplewood Water Treatment Improvement Construct CT Pipeline for Wells Maplewood Water Treatment Improvement TOTAL PUBLIC WORKS TRUST FUND LOANS TOTAL BUSINESS-TYPE DEBT ISSUANCE Issued Matudty Original IssuedInterest Rates Date Date Amount 4,25%-5.00%8/8/2006 12/1/2028 17,9g0,000 3.00%-4.50%5/11/2010 12/1/2021 6,170,000 2.00%-5,00%6/2/2011 12/1/2022 16,715,000 2.00%-5.00%9/21/2011 12/1/2017 9,425,000 3.22%7/1/2013 7/1/2028 3,200,000 $3,490,000 3.75%3/1/2009 9/1/2028 6,798,085 4.00%-5.00%11/4/2009 1/1/2022 2,953,800 3100%-6.62%1114/2009 1/1/2039 28,090,800 3.00%-4.00%"4/5/2010 12/1/2015 1,065,000 38,907,685 92,397,685 3.20%9/15/2003 6/1/2013 8,035,000 4.33%11/1/2004 12/1/2027 10,335,000 4.00%-5.00%11/6/2007 12/1/2022 1,430,000 4.00%-5.00%11/6/2007 12/1/2022 8,320,000 4.17%1/4/200B 12/1/2027 9,975,000 4.17%1/4/2008 12/1/2016 2,035,000 2.00%-3.00%12/7/2012 12/1/2027 9,190,000 49,320.00E 1.00%5/4/1993 7/1/2015 1,631,800 1.00%6/7/1993 7/1/2013 2,542,704 2.00%5/12/1994 7/1/2014 96,958 1.00%5/15/1995 7/1/2015 731,00~ 2.00%1/24/1998 7/1/2016 2,093,740 2.00%12/4/1995 7/1/2016 1,840,66E 1.00%1/6/1997 7/1/2017 1,106,00E 0.50%1/22/2002 7/1/2021 567,831 0.50%11/5/2002 7/1/2022 814,527 0.50%6/3/2004 7/1/2024 5,]S0,00E 16,575,128 65,a95,128 $158,292,813TOTAL AMOUNT ISSUED ON OUTSTANDING DEBT AS OF DECEMBER 31, 2013 Outstanding debt additions and retirements are summarized as follows: General Governmental Debt Limited General Obligation Debt 2006 GO Bonds 201.B GO RefundinB Bonds 2021 GO Libra ry Bonds 2011 GO RefundinB Bonds 2013 GO Qualified EnergyConse~ation Bonds Unamortized Idiscountl/premium/re fundin~ Total LImiled GO Bonds Other Misce 9aneous debt - InterBovemmental, Backed with full faith and credit of the City 2009 FD 40 Loa n for a cquisition of FS13 2009 (A) SCORE Tax Exempt 2009 (B) SCORE BABS 2020 GO Valley Comm. Refundin~ Bonds Total Miscella ne~s Total General Obligation Debt Beginning Balance Ending Balance Due Within One 01/01/2B]3 Additions Deductions 12/31/2013 Year 1B,160.000 S ~ 640,B00 ~ 14,520.000 ~670,000 6,020,000 5,000 6,015,000 5,000 25,340.000 1,420,000 13,920,000 1,460.000 7,B15,000 1,480,000 6,335,000 1.510,000 3,200,000 3,200,000 210,000 2r40B~67B 294r731 2~113,944 46,743,675 3~200~000 3e999f731 46~303t944 3tgss~0BO 5,889,522 282,439 %607,083 293,130 2,953,B00 2,953,B00 716,400 27,401,400 702,000 26,699,400 B47~000 215~C00 432~000 212~000 36,891~722 -1~199~439 35~692~2B3 lt881tS30 83t635t398 3~200~000 5~039~170 81~796e227 5~076~530 Other: Employee Leave Benefits (Comp. Absences) Othe r post-employment bene fits payable 5,231,645 2,B57,219 2,982,038 5,106,B27 2,910,891 3,744,023 1,884,823 1,039,2B1 4,589,565 921611~066 ~ 7t942t042 ~ 9tOB0t4g9 ~911492t629 ~71987142:Total Governmental Obligation Outstanding debt additions and retirements are summarized as follows (continued): Business-Type Debt Revenue Bonds: 2003 Water/Sewer Refunding Bond $415,000 2004 Wa ter/Sewer Bond 1,290,000 2007 Water/Sewer Bond 1,430,000 2007 Water/Sewer Refunding Bond (021 8,260,000 2008 Water/Sewer Bond {a)9,97B,(X~O 2008 Wa ter/Sewer Bond (b)2,035,000 2012 Water/Sewer Refundi ng Bond 9,190,000 UnamorOzed (dis cou nt)/pre mium/re fu ndi n.~(102r198) total Revenue Bonds 32,492,802 Public Works Trust Fund Loans; Central Renton Sewer Replacement 191,518 East Renton Interceptor 134,570 Dayton Avenue NE 10,206 NE 27th/Aberdeen Drainage Improvement 127,769 East Kennydale Interceptor 467,422 Honeycreek Interceptor 387,4B8 Corrosion Control Treatment Facilities 246,7B5 Ma ptewood Water Improvement 272,7B9 ~onst. CT Pipeline for Wells 428,699 Maplewood Water Improvements 3~271~765 total Public Work Trust Fund Loan gtS38tg2g ~ther: .=mployee Leave Benefits {Comp.Absences)725,392 total Business-Type Debt 38~757f123 gRAND TOTALS ~13113Bg~189 Beginning Balance Ending Balance Due Within One 01/01/B013 Additi~s Deductions 12/31/2013 Year 4iS,O00 $ 205,000 1,0BB,000 235,000 1,430,000 95,000 20,000 B,240,000 730,000 9,975,000 610,000 1,425,000 600,000 40.000 9.1S0.000 35,000 1,283,983 31,208,819 1,695,000 87.483 104,034 52,01B 134,570 5,103 5,103 5,103 42,590 85,180 42.590 116,855 350,567 116,855 96,872 290,616 96.872 49,357 197,428 49,357 30,301 242,40B 30~301 42,870 385,829 42,B70 272~647 2~999~11g 272r647 878t648 4~660~282 708~612 150,209 173,978 701,622 177,944 1SO~209 2~336~608 361570~723 2~g81~556 ~ 8fO921291 ~Elt397t097 ~ 128rO63t342 ~ 101568t977 DEEP DISCOUNT DEBT AS of December 31, 2013, the City of Renton has no deep discount debt outstanding. SPECIAL ASSESSMENT DEBT WITH GOVERNMENTAL COMMITMENT As of December 31, 2013, the City of Renton has no special assessment debt outstanding. DEBT LIMIT CAPACITIES State law provides that debt cannot be incurred in excess of the following percentages of the value of the taxable property of the City: 1.5 percent without a vote of the people provided the indebtedness with a vote is 1 percent or less; 2.S percent with a vote of the people; 5.0 percent with a vote of the people, provided the indebtedness in excess of 2.S percent is for utilities; and 7.5 percent with a vote of the people provided the indebtedness in excess of S.0 percent is for open space development and parks facilities. Table 12 in the Statistical Section shows the computation of legal debt margin for general and special purpose capacities for the City of Renton. ARBITRAGE The City engages an outside agency to calculate its’ arbitrage rebate liability on outstanding tax- exempt bonds and certificates of participation under Section ].48(f) of the Internal Revenue Code. No additional rebate was found due for any revenue or general obligation bonds for 2013. ISSUED/REFUNDED DEBT On July 1, 2013 the City issued $3,200,000 in taxable direct-pay Qualified Energy Conservation Bonds (QECB) with an average interest rate of 3.22% to finance streetlight improvements. PRIOR YEAR DEFEASANCE OF DEBT In prior years the City defeased certain bond issues by placing the proceeds of new bonds in an irrevocable trust to provide for all future debt service payments on the old bonds. Accordingly, the trust account assets and the liability for the defeased bonds are not included in the City’s financial statements. The schedule of assets, liabilities, and net assets of the City’s escrow account as of December 31, 2013 is provided in the following table. US Bank Corporate Trust 12012 Revenue Bonds) kssets Cash with Trustee ~2 Investments with Trustee 9,474,821 Estimated interest Receivable Fotal Assets 9,474,823 Re~unded Bonds Payable 9,474,B21 total liabilities 9,474,B21 Earnings with Trustee 2 ANNUAL DEBT SERVICE REQUIREMENTS The annual debt service requirements to maturity, including principal and interest, for long- term debt as of December 31, 2013, are as follows: Year 2014 2015 2016 2017 2018 2019-2023 2024-2028 2029-2033 2034-2038 2039+ Totals Governmental Activities Business-Type Activities Principal Interest Principal Interest 5,076,530 3,330,849 2,403,612 1,243,751 5,247,625 3,151,431 2,468,509 1,165,996 5,389,072 2,773,566 2,325,175 991,301 5,251,675 2,542,068 2,365,818 900,578 23,108,857 9,327,422 12,995,617 3,199,705 14,911,707 5,315,330 10,952,647 954,631 6,935,400 2,760,i86 79,6821283 33,32412~2 35,965,279 9,539,678 AMOUNT AVAILABLE FOR DEBT SERVICE Fund balances that have been reserved for debt repayment are $445,410, reported other non- major governmental funds. OPERATING LEASES As of December 31, 2013, the City of Renton has no operating leases outstanding. NOTE 14. DEFERRED CHARGES IN PROPRIETARY FUNDS As of December 31, 2013, the total amount of deferred charges and other assets reported in the proprietary funds is ~0. Per GASB Statement No. 65 - Items Previously Reported as Assets and Liabilities, the City is required to recognize debt issuance costs as an expense in the period incurred. NOTE 15. SEGMENT INFORMATION An identifiable activity (or grouping of activities) required to be accounted for separately, which (a) is reported as or within an enterprise fund; (b) for which one or more revenue bonds are outstanding; and, (c) where the revenue stream is pledged for payment of, are required to disclose segment information. The City of Renton has no required segment information to disclose for 2013. NOTE 16. JOINTVENTURES A joint venture is a legal entity or other organization that results from a contractual agreement and that is owned, operated, or governed by two or more participants as a separate and IVa~h~ngton State .,I udito~’~ Offk’e Page 91 Washington State A uditor~.~ Office Page 92 City of Renton, Washington City of genton, Washington specific activity subject to joint control in which the participants retain (a) an on-going financial interest or (b) an on-going financial responsibility. The City participates in two joint ventures. VALLEY COMMUNICATIONS CENTER The Valley Communications Center (Valley Corn) was established August 20, :].976, when an Interlocal Agreement was entered into by four original participating municipal corporations, including the cities of Renton, Kent, Auburn, and Tukwila. Federal Way was formally admitted in 2000. The agreement is sanctioned by the provisions and terms of the Interlocal Cooperation Act pursuant to Chapter 39.34 RCW. The initial duration of the agreement was five years, and thereafter is automatically extended for consecutive five-year periods. The purpose of the joint operation, hereafter referred to as Valley Corn, is to provide improved consolidated emergency communications (dispatch) services for police, fire, and medical aid, to the five participating cities and to several subscribing agencies that include: King County Fire Districts 2, 17 (Black Diamond), 20, 26, 40, 43, 44, 47; City of Pacific Police and Fire Departments; City of Black Diamond Police Department; City of Des Moines Police Department; SeaTac Fire Department; North Highline Fire Department; King County EMS Units; and Vashon Island Fire Department. Separate agreements between Valley Com and the subscribing agencies have been executed, which set forth conditions of services and rates charged. The City of Renton reports its share of equity interest in the Governmental Activities column w{thin the Government-wide financial statements under non-current assets. The following ~s condensed financial information as of December 31,203,3 related to Valley Communications Center: Valley Communications Center 2013 Owner Cities EquRy Allocation Member CRy Percent o| Equity 2012 Equity Balance 2013 Distribution 2013 Equity Balance Auburn 19.43%$4,783,577 $176,069 $4,959,646 Federa~ Way 22.00%3,324,584 183,886 3,508,470 Kent 27.57%7,139,778 239,013 7,378,791 Tukwila 9.61%2~8431407 831751 219271158 Grand Tota)s 100.00%$23,153,780 ~86Ot892 ~24~014,672 Completed Financial Statements for Valley Corn can be obtained from the Valleyt~Communications Center, 23807 -98 Avenue South, Kent, WA 98031. SOUTH CORRECTIONAL ENTITY (SCORE) The South Correctional Entity (SCORE) consolidated correctional facility was established February 25, 2009, when an Interlocal Agreement (the "Original Interlocal Agreement") was entered into by seven participating municipal governments, the "Member Cities" of Auburn, Burien, Des Moines, Federal Way, Renton, SeaTac and Tukwila, under the authority of the "Enterlocal Cooperation Act" (RCW 39.34). This "Original Interlocal Agreement" was amended and restated October 1, 2009 and named the City of Des Moines as the "Host City" and the remaining Member Cities as "Owner Cities". This interlocal agreement is known as the "Formation Interlocal Agreement". Pursuant to a separate "Host City Agreement" dated October 1, 2009, the Host City will not enjoy the same equity position as the Owner Cities until all debts issued are paid and the Host City fulfills all of its obligations as outlined in the Agreement. SCORE, a governmental administrative agency pursuant to RCW 39.34.030 (3), has the power to acquire, construct, own, operate, maintain, equip, and improve a correctional facility known as the "SCORE Facility" and to provide correctional services and functions incidental thereto, for the purpose of detaining arrestees and sentenced offenders in the furtherance of public safety and emergencies within the jurisdiction of the Member Cities. The SCORE Facility may serve the Member Cities and Subscribing Agencies which are in need of correctional facilities. Any agreement with a Subscribing Agency shall be in writing and approved by SCORE as provided within the SCORE Formation Interlocal Agreement. Financing for the acquisition, construction, equipping, and improvement of the SCORE Facility will be provided by bonds issued by the South Correctional Entity Facility Public Development Authority (the "SCORE PDA"), a public development authority chartered by the City of Renton pursuant to RCW 35.21.730 through 35.21.755 and secured by the full faith and credit of the Cities of Auburn, Burien, Federal Way, Renton, 5eaTac, and Tukwila (the "Owner Cities"). The SCORE PDA issued $86 million in special obligation bonds in 2009 to carry out the facility development project. The following a summary of the debt service requirements for the bond issue: 3S% 8Aes Year Principal Interest SubsTd¥Total 2014 $1,950,000 S 5,066,S66 $(1,654,975) S 5,361,591 2015 1,990,000 4,995,069 (1,632,787)5,352,282 2016 2,~65,000 4,911,886 (1,632,297)5,344,099 2017 2.145.000 4,820,241 {1,621,980)5,343,261 2018 2,240,000 4,715,979 (1,621,980)5,333,999 2019 2023 12,435,000 21.771,988 (7,S83,953)26,623,035 2024-2028 %5,060.000 17,809,677 (6.398,978)26.470,699 2029-2033 18,475,000 12,403,424 (4.553,914)26,324,510 2034-2038 22,795,000 5,605,241 (2,225,255)26,174,486 2039 5,165,000 170,85~Ii19~601)5~216~2S7 Fotals $ 84~320~000 $ ~2r270~929 ~129,046,7101 S 137,544,219 Washington State A uditor!~ Ojfil e Page 93 Washington State Audttor’.~ Office Page 94 City of Renfon, Woshington The following is the debt service allocation to each Owner City: Burien Federal Way 4% The City of Renton reports its share of equity interest in the Governmental Activities column within the Government-wide financial statements under non-current assets. The following is condensed financial information as of December 31, 2013 related to SCORE: South Correctional Entity (SCORE) 2013 Owner Cities Equity Allocation Member City Percent of Equity 2012 Equity Balance 2013 Distribution 2013 Equity Balance Auburn 31,00%S 1,368,859 $1,148,378 S 2,517,237 Burien 4.00%176,627 117,696 294,323 Des Moi nes 1.00%107,970 107,970 Se a Ta c 4 00%132,469 199,239 331,708 Tu kwil a 7.00%353,254 248,680 6011934 Grand Totals 100.00% $4,415,673 S 3,806,6S8 $81222,331 Completed financial statements for SCORE and SCORE PDA can be obtained at SCORE, 20817 17th Avenue South, Des Moines, WA 98198. NOTE 17. SUBSEC~UENT EVENTS There were no significant subsequent events that occurred after the end of the reporting period and before the issuance of the financial statements. REQUIRED SUPPLEMENTARY INFORMATON SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES BUDGET TO ACTUAL - GENERAL FUND For the Year Ended December 31. 2013 REVENUES Taxes Licenses and permits InterBovernmental revenues Charges for services Fines and folfeits lnterfund revenues Contributions Interest Miscellaneous revenues TOTAL REVENUES BUDGETARY TO GAAP BUDGETED AMOUNTS ACTUAL AMOUNTS ACTUAL AMOUNTS DIFFERENCES ORIGINAL FINAL BUDGETARY BASIS VARIANCE GAAP BASIS OVER (UNDER) 75.701.208 $77,151,208 $78,864.340 ~1,713,132 ~71,294,583 ~7,569,757 (1),(2) 4,153,828 4,353.828 4,371,667 17.839 4,371.667 (2) 2.975.860 4,371.757 5,470,027 1,098,270 5,E30,377 339,650 (1) 8,738,037 9,081,262 9,208,624 127,362 9,208,624 3.058,S00 3,058,500 2,766,403 (292.G97)2,766,403 3,004,214 3,313.830 294,039 (3,o19.791)294,o39 87,000 94,665 84,383 (10,282(84.383 645.300 74S,300 424.390 (320,910)417,389 7,001 999,622 992,622 1,036,150 43,528 1.708.BS3 (672,703) (2) 99.363.569 103,162,972 102,520,023 1642.949)95,276,318 7,243,705 BXPENDITURES Current: General government 8,458.185 8.945.669 8,710.377 (235,292)9,340,499 (630,122) Judicial 2,459,664 2,476,149 2,364,631 (111.518)2,364,631 Public safety 52.220.989 53.156,839 53,107.483 (49,356)53,107,483 Utilities 547,223 550,755 468,442 (82,313)468,442 Transportation 8,790.731 8.852.491 7,822.333 (1.030,1S8)7,822,333 Economic environment 6,131,558 6,562,196 5,840,104 (722,092)5,840.104 Health and human services 1,753,834 1,981,087 1,827,736 (153.3S1)1,827,736 Culture and recreation 10.853.042 11,062,0S0 10,402.858 (659,192)10,402,858 Capital outlay 236.910 273.251 78,010 (195,241)78,010 Debt service: Principal payment 4,705.439 4.744,439 4,744,439 4,744~439 Interest payment 3,295,994 3.328,844 3,304,069 (24,775(3,304,069 TOTAL EXPENDITURES 99.453,569 101.933,770 98,670,482 {3,263.288)91,252,O96 7,418,386 EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES (90.000)1,229,202 3,~49,541 2,620,339 4,024,222 (174,681} OTHER FINANCING SOURCES (USES( Transfer in 250,000 270,000 2,416,197 2,146,197 2,166,197 250,000 (1) Transfer (out)(160.000)(4,344,351)(4,363.988)19,637 {4,415,559)51,$71 (2) Sale of capital assets 4,868 9,821 4,953 9,821 TOTAL OTHER FINANCING SOURCES (USES)90,000 (4,069,483}(1,937.970)2.170,787 (2,239,541)301,571 NET CHANGE IN FUND BALANCE J.2,840,281) 1,911,571 4.791,126 1,784,681 126,890 FUND BALANCE JANUARY 1 10,751,945 16,461,047 19,314,308 2,053,261 18,684,444 629,864 FUND BALANCEDECEMBER31 ~10,751,945 ~13.620,766 ~21.225.879 S 7.605,1t3 ~20,469,125 ~756,754 (1),(2} NOTES TO THE REQUIRED SUPPLEMENTARY INFORMATION (1) General Governmental Debt Fund is included in the Actual Amounts Budgetary Basis column. (2) Leased City Property Fund is included in the Actual Amounts GAAP Basis ¢olum n IV~zshmgtun State A udmMs Office Page 95 Washington State A uditor’s Office Page 96 REQUIRED SUPPLEMENTARY INFORMATION FIREFIGHTERS’ PENSION FUND SCHEDULE OF EMPLOYER CONTRIBUTION December 31, 2013 ANNUAL FIRE TOTAL REQUIRED EMPLOYER INSURANCE EMPLOYER CONTRIBUTION YEAR ENDING 12/31 CONTRIBUTIONS*PREMIUMS CONTRIBUTIONS (ARC) PERCENTAGE OF ARC CONTRIBUTED 2006 S (18,753)$77,821 ~59,068 S (113,541)N/A 2007 (25,285)85,062 59,777 (109,9681 N/A 2008 (19,894)85,949 66,055 (109,968)N/A 2009 (36,296)106,623 70,327 (172,788)N/A 2010 {5,618)112,686 107,068 (172,788)N/A 2011 (12,700)115,054 102,354 (348,435)N/A 2012 (893)119,668 118,775 (530,282)N/A 2013 (4~475)128,866 124,391 (530,282)N/A The information presented is derived from the actuarial valuation performed April 1, 2013. *Negative Employer Contributions rep?esent disbursements from the Fund for administration and non-pension medical benefit expenses as allowed by RCW 4L26.150. REQUIRED SUPPLEMENTARY INFORMATION LEOFF 1 RETIREE MEDICAL BENEFITS SCHEDULE OF FUNDING PROGRESS December 31, 2013 UNFUNDED ACTUARIAL ACTUARIAL ACTUARIAL YEAR ENDING VALUE OF ACCRUED ACCRUED 12/31 ASSETS LIABILITES LIABILITIES 2008 ~~32,331,107 ~32,331,107 2009 27,985,358 27,985,358 2010 27,835,211 27,835,211 2011 27,835,211 27,835,211 2012 41,633,198 41,633,198 2013 41,633,198 41,633,198 UAAL AS A PERCENTAGE FUNDED COVERED OFCOVERED RATIO PAYROLL PAYROLL 0%$471,470 6857.51% 0%411,952 6793.35% 0%414,264 6719.20~ 0%434,132 6411.70% 0%304,951 13652.42% 0%300,273 13865.12% LEOFF I RETIREE MEDICAL BENEFITS SCHEDULE OF EMPLOYER CONTRIBUTION December 31, 2013 YEAR ENDING Annual Employer % of OPEB Net OPEB 12/31 OPEB Cost Contributions Cost Obligation 2008 ~2,024,068 $1,266,192 63%~757,B76 2009 1,912,147 1,104,351 58%1,565,672 2010 1,702,419 983,868 58%2,284,223 2Oll 1,716,970 875,699 51%3,125,494 2012 1,873,324 1,254,795 67%3,744,023 2013 1,884,823 1,039,281 55%4,589,565 Page 97 Washington State Auditor’s Office Page 98 MCAG NO. 0428 CITY OF RENTON SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS FOR THE YEAR ENDED DECEMBER 31, 2013 SCHEDULE 16 CFDA NUMBER 14.218 14.218 14.218 14.218 14.218 FEDERAL AGENCY NAME U.S Dept of Housing and Urban Development U.S Dept of Housing and Urban Development U.S Dept of Housing and Urban Development U.S Dept of Housin8 and Urban Development U.S Dept of Housing and Urban Development SUBTOTAL CFDA 14.218 16,606 U.S. Dept of Justice 16.607 U.S. Dept of Justice 16.738 U.S. Dept of Justice 16.738 U.S. Dept of Justice SUBTOTAL CFDA 16.738 20.106 U,S. Dept of Transportation 20.106 U.S. Dept of Transportation SUBTOTAL CFDA 20.106 20.205 U.S. Dept of Transportation 20.205 U.S. Dept of Transportation 20.205 U.S. Dept of Transportation 20.205 U.S. Dept of Transportation 20.205 U.S. Dept of Transportation 20.205 U.S. Dept of Transportation SUBTOTAL CFDA 20.205 20.600 U.S. Dept of Transportation 20.600 U.S. Dept of Transportation 20.600 U.S. Dept of Transportation 20.600 U.S. Dept of Transportation SUBTOTAL CFDA 20.600 20.602 U.S. Dept of Transportation 45.025 National Endowment for the Arts 97.025 U.S. Dept of Homeland Security 97.036 U.S. Dept of Homeland Security 97.042 U.S. Dept of Homeland Security 97.042 U.S. Dept of Homeland Security SUBTOTAL CFDA 97.042 97.044 U.S. Dept of Homeland Security 97.067 U.S. Dept of Home and Security TOTAL FEDERAL AWARDS EXPENDED PASS THROUGH AGENCY King County King County King County King County King County NA NA NA City of Seattle NA :NA IWashington State Dept of Transportation Nashington State Dept of Transportation Nashington State Dept of Transportation Nashington State Dept of Transportation Nashington State Dept of Transportation Nashington State Dept of Transportation Nashington Traffic Safety Commission Nashington Traffic Safety Commission Nashington Traffic Safety Commission Nashington Traffic Safety Commission FEDERAL PROGRAM NAME Community Development Block Grant Community Development Block Grant Community Development Block Grant Community Development Block Grant Community Development Block Grant State Criminal Alien Assistance Program Bullet Proof Vest Partnership Program Edward Byrne Memorial Justice Assistance Grant Edward Byrne Memorial Justice Assistance Grant Airport Improvement Program Airport Improvement Program Highway Planning and Construction Highway Planning and Construction Highway Planning and Construction Highway Planning and Construction Highway Planning and Construction Highway Planning and Construction State and Community Highway Safety State and Community Highway Safety State and Community Highway Safety State and Community Highway Safety PROJECT NAME 9AWN ~efugee Womens Alliance Vlulti-Service Center ~lanning and Admin ~CAAP 3uget Proof Vest t011 JAG ~012 JAG faxiway Bravo and Lower Blast Fence raxiway Bravo ~trander Btvd / SW 27TH St South 7TH ~ainer Ave South (SR167} .ogan Ave :art Rd -lighlands to Landing Pedestrian Conn. ~VTSC DUI Mobilization dVTSC DUI Mobilization ~/TSC Target Zero ~VTSC Distracted Driving FROM PASS- OTHER ID NUMBER THROUGH,I AWARDS :13-507 2013-AP-BX-078 2011oDJ-BX-2524 3-53-0055-024 3-53-0055-023 ~TPUL-1276(004) :M-1292(002) ~TPUL-CM-0167(048) ~TPUL-1131(002) HSIP-000S(306) :M-1070(007) Nashington Traffic Safety Commission Occupant Protection Incentive Grants ~VTSC Seat Belt Mobilization CAG-12-155 Nashington State Arts Commission Promotion of the Arts Partnership Agreement :VI Pilot Project ~WAC 2012-047 ~ierce County National Urban Search and Rescue (US&R) Response SystemUS&R Enhanced Ops CAG-08-174 Nashington State Military Disaster Grants o 3abion Baskets FEMA 033-57745-00 D09-044 Nashington State Military Emergency Management Performance Grants 2012 EMPG 2012-E12-342 Nashington State Military Emergency Management Performance Grants 2013 EMPG 2013-E14-077 ~IA Assistance to Firefighters ~AFER EMW-2010-FH-00026 ~eattle Fire Department Homeland Security Grant Program Fire/EMS/HAZMAT Training and Exercise FFYll-SHSP-TE-001 EXPENDITURES FROM DIRECT AWARDS 18,853 8,080 34,586 61,519 181,695 304,733 14,251 7,000 1,325,274 302,121 24,085 12,237 3,385,200 3,504 3,130 14,169 2,341 23,145 1,386 1,000 6,512 79,391 35,000 8,283 6,902 14,835 25,696 25,696 2,318,976 8,338,490 731,573 9,117,496 TOTAL 18,853 8,080 34,586 61,519 181,695 304,733 6,902 14,835 25,696 14,25I 39,947 6,019,514 2,318,976 8,338,490 1,714,484 7,000 1,325,274 302,121 24,085 12,237 3,385,200 3,504 3,130 14,169 2,341 23,145 1,386 1,000 6,512 129,050 79,391 35,000 114,391 731,573 8,283 13,105,447 NOTE 1 - BASIS OF ACCOUNTING The schedule is prepared on the same basis of accounting as the City’s financial statements. The City uses the modified accrual basis of accounting for governmental funds and agency funds. The accrual basis of accounting is followed in all Proprietary Funds and Pension Trust Funds. NOTE 2 - PROGRAM COSTS The amounts shown as current year expenditures represent only federal grant portion of the program costs. Entire program costs, including the City’s portion may be more than shown. NOTE 3 - INDIRECT COST RATE The amount expended includes ~1,521.3g claimed as an indirect cost recovery using an approved indirect cost rate of 34.52 percent. FOOT NOTE REF. The State Auditor’s Office is established in the state’s Constitution and is part of the executive branch of state government. The State Auditor is elected by the citizens of Washington and serves four-year terms. We work with our audit clients and citizens to achieve our vision of government that works for citizens, by helping governments work better, cost less, deliver higher value, and earn greater public trust. In fulfilling our mission to hold state and local governments accountable for the use of public resources, we also hold ourselves accountable by continually improving our audit quality and operational efficiency and developing highly engaged and committed employees. As an elected agency, the State Auditor’s Office has the independence necessary to objectively perform audits and investigations. Our audits are designed to comply with professional standards as well as to satisfy the requirements of federal, state, and local laws. Our audits look at financial information and compliance with state, federal and local laws on the part of all local governments, including schools, and all state agencies, including institutions of higher education. In addition, we conduct performance audits of state agencies and local governments as well as frau~d, state whistleblower and citizen hotline investigations. The results of our work are widely distributed through a variety of reports, which are available on our .~..e.l~fiB_e. and through our free, electronic ._su__b_.s.c..!-±l~j o_.n. service. We take our role as partners in accountability seriously, and provide training and technical assistance to governments, and have an extensive quality assurance program. Contact information for the State Auditor’s Office Deputy Director for Communications Thomas Shapley Th~.~.~.~.b.~p.!.~@.~ ..~.~g~.~ (360) 902-036T Publie Records requests (360) 725-561T Mai~telephune (360)~02-0370 Toll-free Citizen Hotline (866) 902-3900 Website www.sao.wa.gov_ OFFICIAL STATEMENT DATED APRIL 17, 2015 City of Renton, Washington $8,825,000 Limited Tax General Obligation Refunding Bonds, Series 2015A $3,695,000 Limited Tax General Obligation Refunding Bonds, Series 2015B (Taxable) DATED: Date of Delivery DUE: December 1, as shown below STANDARD ~ POOR’S RATING-- AA+; see "Rating" herein. 2015A BONDS BANK QUALIFIED mThe City of Renton, Washington (the "City") has designated its Limited Tax General Obligation Refunding Bonds, Series 2015A (the "2015A Bonds") as "qualified tax-exempt obligations" for purposes of Section 265(b)(3)(B) of the Internal Revenue Code of 1986, as amended (the "Code"). BOOK-ENTRY ONLY--The 2015A Bonds and the Limited Tax General Obligation Refunding Bonds, Series 2015B (Taxable) (the "2015B Bonds" and together with the 2015A Bonds, the "Bonds") will be issued as fully registered bonds in denominations of $5,000, or integral multiples thereof within a series and maturity, and will be registered in the name of Cede & Co., as bond owner and nominee for The Depository Trust Company ("DTC’). DTC will act as securities depository for the Bonds. Purchasers will not receive certificates representing their interest in the Bonds purchased. PRINCIPAL AND INTEREST PAYMENTS--Interest on the Bonds will be payable on December 1, 2015, and semiannually thereafter on June I and December I of each year to their maturity or prior redemption, as applicable. Principal of and interest on the Bonds will be payable by the fiscal agency of the State of Washington (the "Bond Registrar"), as further described herein. For so long as the Bonds remain in a "book-entry only" transfer system, the Bond Registrar will make such payments only to DTC, which in turn is obligated to remit such principal and interest to its Participants for subsequent disbursement to Beneficial Owners of the Bonds as described in Appendix B - "Book-Entry Transfer System." MATURITY SCHEDULE LOCATED ON INSIDE COVER OPTIONAL REDEMPTION--The 2015A Bonds are subject to redemption prior to maturity as further described herein. The 2015B Bonds are not subject to redemption prior to their stated maturities. See "Description of the Bonds - Redemption Provisions." PURPOSE--The Bonds are being issued for the purpose of providing funds (i) to advance refund and defease a portion of the City’s outstanding limited tax general obligation bonds and (ii) to pay costs of issuance for the Bonds. SECURITY--The Bonds are limited tax general obligations of the City. The City has covenanted and agreed irrevocably that it will include in its budget and levy an ad valorem tax upon all the property within the City subject to taxation in an amount that will be sufficient, together with all other revenues and money of the City legally available for such purposes, to pay the principal of and interest on the Bonds as the same become due. The City has irrevocably pledged that such tax will be within and as a part of the tax permitted to cities without a vote of the people. The full faith, credit and resources of the City have been pledged irrevocably for the annual levy and collection of such taxes and for the prompt payment of such principal and interest. The City’s ability to raise taxes is subject to certain limitations as described herein. The Bonds do not constitute a debt or indebtedness of the State of Washington, or any political subdivision thereof other than the City. TAX EXEMPTION--In the opinion of Pacifica Law Group LLP, Seattle, Washington ("Bond Counsel"), assuming compliance with certain covenants of the City, interest on the 2015A Bonds is excludable from gross income for federal income tax purposes under existing law. Interest on the 2015A Bonds is not an item of tax preference for purposes of either individual or corporate alternative minimum tax. Interest on the 2015A Bonds may be indirectly subject to corporate alternative minimum tax and certain other taxes imposed on certain corporations. See "Tax Matters" herein. Interest on the 2015B Bonds is not excludable from gross income for federal income tax purposes. See "Certain Income Tax Consequences" herein. DELIVERY--The Bonds are offered when, as and if issued, subject to the approving legal opinions of Bond Counsel, and certain other conditions. Certain matters will be passed upon for the Underwriter by its counsel, K&L Gates LLP. It is anticipated that the Bonds in definitive book-entry form will be available for delivery through the facilities of DTC in New York, New York, or to the Bond Registrar on behalf of DTC by Fast Automated Securities Transfer on or about May 13, 2015. This cover page contains certain information for quick reference only. It is not a summary of the issue. Investors must read the entire Official Statement to obtain information essential to the making of an informed investment decision. PiperJaffrayo City of Renton, Washington MATURITY SCHEDULE Due Dec. 1 2020 2021 2022 2023 2024 $8,825,000 Limited Tax General Obligation Refunding Bonds, Series 2015A Interest CUSIP Amounts Rates Yields Price 760133 $ 275,000 4.00%1.43%113.664 TA6 935,000 4.00 1.62 114.733 TB4 975,000 4.00 1.72 116.077 TC2 1,005,000 4.00 1.86 116.843 TD0 1,045,000 4.00 1.95 117.783 TE8 Due Interest Dec. 1 Amounts Rates Yields Price 2025 $1,09~000 3.50%2.08%112.817" 2026 1,125,000 3.50 2.10 112.624" 2027 1,17~000 3.50 2.18 111.854" 2028 1,205,000 3.00 2.40 105.328" CUSIP 760133 TF5 TG3 TH1 TJ7 $3,695,000 Limited Tax General Obligation Refunding Bonds, Series 2015B (Taxable) Due Interest CUSIP Dec. 1 Amounts Rates Yields Price 760133 2015 $ 330,000 0.50%0.50%100.000 TMO 2016 100,000 0.85 0.85 100.000 TN8 2017 865,000 1.13 1.13 100.000 TP3 Due Interest CUSIP Dec. 1 Amounts Rates Yields Price 760133 2018 $ 875,000 1.50%1.50%100.000 TQ1 2019 890,000 1.81 1.81 100.000 TR9 2020 635,000 2.07 2.07 100.000 TS7 * Priced to the par call date of June 1, 2025. City of Renton, Washington 1055 South Grady Way Renton, Washington 98055 Phone: (425) 430-6400 Fax: (425) 430-6516 www.rentonwa.gov* Denis W. Law Ed Prince Randy Corman Marcie Palmer Armondo Pavone Ruth P6rez Don Persson Greg Taylor Mayor and City Council Mayor Council President Council President Pro Tern Councilmember Councilmember Councilmember Councilmember Councilmember Jay Covington Iwen Wang Jamie Thomas City Officials Chief Administrative Officer Finance and Information Services Administrator Fiscal Services Director Bond Counsel Pacifica Law Group LLP Seattle, Washington (206) 245-1700 Bond Registrar U.S. Bank National Association Seattle, Washington (1)The City’s website is not part of this Official Statement, and investors should not rely on information presented in the City’s website in determining whether to purchase the Bonds. This inactive textual reference to the City’s website is not a hyperlink and does not incorporate the City’s website by reference. This Official Statement does not constitute an offer to sell or a solicitation of an offer to purchase the Bonds in any jurisdiction in which or to a person to whom it is unlawful to make such an offer or solicitation. No dealer, salesperson or other person has been authorized by the City or the Underwriter to give any information or to make any representations, other than those contained herein, in connection with the offering of the Bonds and, if given or made, such information or representations must not be relied upon. The information and expressions of opinion herein are subject to change without notice, and neither the delivery of this O/ficial Statement nor any sale made hereunder will, under any circumstances, create an implication that there has been noct~ange in the affairs of the City since the date hereof. The Underwriter hasprovided the following sentence for inclusion in this Official Statement. The Underwriter has reviewed the information in this Official Statement in accordance with, and as part oJ, its responsibilities to investors under the federal securities laws as applied to the facts and circumstances of this transaction, but the Underwriter does not guarantee the accuracy or completeness of such information. In connection with this offering, the Urzderwriter may over-allot or effect transactions that stabilize or maintain the market price of the Bonds at levels above those which might otherwise prevail in the open market. Such stabilizing, if commenced, may be discontinued at any time. The CUSIP ....... numbers herein are providedznclude~znb CUSIP Global Services. CUSIP is a. registered trademarkof ~o the American. Bankers Assoc,at~on. CUSIP numbers are th~s Offic,al Statement for convemence of the holders and potentzal holders of the Bonds. The CUSIP numbers were provided by CUSIP Global Services and are not intended to create a database and do not serve in any way as a substitute for the CUSIP Global Services. No assurance can be given that the CUSIP numbers for the Bonds will remain the same after the date of issuance and delivery of the Bonds. This page left blank intentionally iii Table of Contents Description of the Bonds ...............................................................................................................................................................1 Authorization for Issuance ...................................................................................................................................................1 Principal Amount, Date, Interest Rates and Maturities ....................................................................................................1 Bond Registrar and Registration Features ..........................................................................................................................1 Redemption Provisions .........................................................................................................................................................2 Purchase ..................................................................................................................................................................................3 Book-Entry Bonds ..................................................................................................................................................................3 Purpose and Use of Proceeds .......................................................................................................................................................3 Purpose ..................................................................................................................................................................................3 Plan of Refunding ...........................................: ......................................................................................................................3 Verification of Mathematical Calculations ..................~ ......................................................................................................4 Estimated Sources and Uses of Funds .................................................................................................................................4 Security for the Bonds ...................................................................................................................................................................5 General ..................................................................................................................................................................................5 Defeasance ..............................................................................................................................................................................5 Bonded Indebtedness ....................................................................................................................................................................6 Summary of Limited Tax General Obligation Bonds Debt Service Requirements .......................................................8 Direct and Overlapping Debt ...............................................................................................................................................9 Debt Payment Record ............................................................................................................................................................9 Future Financings ..................................................................................................................................................................9 Taxing Authority ..........................................................................................................................................................................10 Authorized Property Tax Levies ........................................................................................................................................10 Overlapping Taxing Districts .............................................................................................................................................10 General Property Taxes .......................................................................................................................................................11 Regular Property Tax Limitations .....................................................................................................................................11 Assessed Value .....................................................................................................................................................................12 Property Tax Collection Procedure ...................................................................................................................................12 Tax Collection Record .........................................................................................................................................................13 Major Property Taxpayers ..................................................................................................................................................13 Collection of Other Taxes ....................................................................................................................................................14 Authorized Investments .............................................................................................................................................................16 Local Government Investment Pool ..................................................................................................................................17 Authorized Investments for Bond Proceeds .....................................................................................................................17 Financial Information ..................................................................................................................................................................18 The City ......................................: .................................................................................................................................................21 City Staff ................................................................................................................................................................................21 Labor Relations .....................................................................................................................................................................21 Pension System .....................................................................................................................................................................22 Other Post-Employment Benefits ......................................................................................................................................23 Budgetary Policies ...............................................................................................................................................................24 Risk Management ................................................................................................................................................................24 Auditing of City Finances ...................................................................................................................................................25 Demographic Information ..........................................................................................................................................................26 Population ............................~ ................................................................................................................................................26 King County .........................................................................................................................................................................26 Initiative and Referendum ..........................................................................................................................................................30 Tax Matters ...................................................................................................................................................................................31 Qualified Tax-Exempt Obligations ....................................................................................................................................32 Proposed Tax Legislation; Miscellaneous .........................................................................................................................32 Premium Bonds ....................................................................................................................................................................32 Certain Income Tax Consequences ............................................................................................................................................32 ERISA Considerations .................................................................................................................................................................34 Rating ...............................................................~ ........................................................................................................................34 Continuing Disclosure .................................................................................................................................................................35 Legal and Underwriting ..............................................................................................................................................................37 Approval of Counsel ...........................................................................................................................................................37 . Litigation ...............................................................................................................................................................................37 Limitations on Remedies .....................................................................................................................................................37 Underwriting ........................................................................................................................................................................38 Potential Conflicts ................................................................................................................................................................38 Concluding Statement .........................................................................................................................................................38 Forms of Opinions of Bond Counsel ........................................................................................................................Appendix A Book-Entry Transfer System ......................................................................................................................................Appendix B 2013 Audited Financial Statements ..........................................................................................................................Appendix C iv This page left blank intentionally OFFICIAL STATEMENT City of Renton, Washington $8,825,000 Limited Tax General Obligation Refunding Bonds, Series 2015A $3,695,000 Limited Tax General Obligation Refunding Bonds, Series 2015B (Taxable) The City of Renton, Washington (the "City"), a municipal corporation duly organized and existing under and by virtue of the .laws of the State of Washington (the "State"), furnishes this Official Statement in connection with the offering of $8,825,000 aggregate principal amount of the above-referenced Limited Tax General Obligation Refunding Bonds, 2015A (the "2015A Bonds") and $3,695,000 aggregate principal amount of the above-referenced Limited Tax General Obligation Refunding Bonds, 2015B (Taxable) (the "2015B Bonds" and together with the 2015A Bonds, the "Bonds"). This Official Statement, which includes the cover page, the inside cover page and appendices, provides information concerning the City and the Bonds. Description of the Bonds Authorization for Issuance The Bonds are issued pursuant to Ordinance No. 5754 (the "Ordinance"), passed by the City Council (the "Council") on April 13, 2015, pursuant to the authority of chapters 39.36, 39.46 and 39.53 of the Revised Code of Washington ("RCW’). The Bonds do not require voter approval. Principal Amount, Date, Interest Rates and Maturities The Bonds will be dated and bear interest from the date of issuance and delivery. The Bonds will mature on the dates and in the principal amounts and will bear interest (payable semiannually on each December I and June 1, commencing December 1, 2015) until their maturity or prior redemption, as applicable, at the rates set forth on the inside cover of this Official Statement. Interest on the Bonds will be computed on the basis of a 360-day year consisting of twelve 30-day months. The Bonds will be issued in registered form, initially registered in the name Cede & Co., as nominee for The Depository Trust Company, New York, New York ("DTC"). Individual purchases of the Bonds will be made initially in book-entry form only and purchasers will not receive certificates representing their interest in the Bonds purchased. So long as Cede & Co. is the Registered Owner of the Bonds, as nominee of DTC, references herein to the Registered Owners or bond owners will mean Cede & Co. and will not mean the "Beneficial Owners" of the Bonds. In this Official Statement, the term "Beneficial Owner" will mean the person for whom a DTC participant acquires an interest in the Bonds. See Appendix B--"Book-Entry Transfer System:" Bond Registrar and Registration Features The City has adopted the system of registration for the Bonds approved, from time to time, by the State Finance Committee (the "Committee"). Pursuant to chapter 43.80 RCW, the Committee designates one or more fiscal agencies for bonds issued within the State. The State’s fiscal agent, currently U.S. Bank National Association (the "Bond Registrar"), will authenticate the Bonds and act as the paying agent and registrar for the purpose of paying the principal of and interest on the Bonds, recording the purchase and registration, exchange or transfer, and payment of Bonds and performing the other respective obligations of the paying agent and registrar. No resignation or removal of the Bond Registrar shall become effective until a successor has been appointed and has accepted the duties of Bond Registrar. To pay the principal of and interest on the Bonds when due, the City will remit money from its Limited Tax General Obligation Bond Debt Service Fund, 2015 (the "Bond Fund") to the Bond Registrar. The Bond Registrar is obl.igated to remit such payments to DTC participants for subsequent disbursement to the Beneficial Owners of the Bonds as described in Appendix B--"Book-Entry Transfer System.!’ In the event that the Bonds are no longer in fully immobilized form, interest on the Bonds will be paid by check or draft mailed to the Registered Owners at the addresses for such Registered Owners appearing on the Bond Register on the 15th day of the month preceding the interest payment date, and principal of the Bonds shall be payable upon presentation and surrender of such Bonds by the Registered Owners at the designated office of the Bond Registrar; provided, however, that if so requested in writing by the Registered Owner of at least $1,000,000 principal amount of Bonds, interest will be paid by wire transfer on the date due to an account with a bank located within the United States. Redemption Provisions 2015A Bonds. The 2015A Bonds maturing on or prior to December 1, 2024, are not subject to redemption prior to maturity. The 2015A Bonds maturing on December 1, 2025, may be redeemed at the option of the City on or after June 1, 2025, at a price of par plus accrued interest to the date of redemption. 2015B Bonds. The 2015B Bonds are not subject to redemption prior to maturity. Selection of 2015A Bonds for Redemption. For as long as the 2015A Bonds are held in book-entry only form, the selection of particular 2015A Bonds within a maturity to be redeemed will be made in accordance with the operational arrangements then in effect at DTC. If the 2015A Bonds are no longer held in uncertificated form, the selection of such 2015A Bonds to be redeemed and the surrender and reissuance thereof, as applicable, shall be made as provided in the Ordinance. If the City redeems at any one time fewer than all of the 2015A Bonds having the same maturity date, the particular 2015A Bonds or portions of 2015A Bonds of such maturity to be redeemed shall be selected by lot (or in such manner determined by the Bond Registrar) in increments of $5,000. In the case of a 2015A Bond of a denomination greater than $5,000, the City and the Bond Registrar will treat each 2015A Bond as representing such number of separate 2015A Bonds each of the denomination of $5,000 as is obtained by dividing the actual principal amount of such 2015A Bond by $5,000. In the event that only a portion of the principal sum of a 2015A Bond is redeemed, upon surrender of such 2015A Bond at the principal office of the Bond Registrar there shall be issued to the Registered Owner, without charge therefor, for the then unredeemed balance of the principal sum thereof, at the option of the Registered Owner, a 2015A Bond or 2015A Bonds of like maturity and interest rate in any of the denominations authorized in the Ordinance. Notice of Redemption. For so long as the 2015A Bonds are held in uncertificated form, notice of redemption (which notice may be conditional on the receipt of sufficient funds for redemption or otherwise) shall be given in accordance with the operational arrangements of DTC as then in effect, and neither the City nor the Bond Registrar will provide any notice of redemption to any Beneficial Owners. Thereafter (if the 2015A Bonds are no longer held in uncertificated form), notice of redemption shall be given as provided in the Ordinance. Unless waived by any owner of 2015A Bonds to be redeemed, official notice of any such redemption shall be given by mailing a copy of an official redemption notice by first class mail at least 20 days and not more than 60 days prior to the date fixed for redemption to the Registered Owner of the 20i5A Bond or Bonds to be redeemed at the address shown on the bond register or at such Other address as is furnished in writing by such Registered Owner to the Bond Registrar. On or prior to any redemption date, unless any condition to such redemption has not been satisfied or waived or notice of such redemption has been ~escinded, the City will deposit with the Bond Registrar an amount of money sufficient to pay the redemption price of all the 2015A Bonds or portions of 2015A Bonds which are to be redeemed on that date. The City retains the right to rescind any redemption notice and the related optional redemption of 2015A Bonds by giving notice of rescission to the affected registered owners at any time on or prior to the scheduled redemption date. Any notice of optional redemption that is so rescinded shall be of no effect, and the 2015A Bonds for which the notice of optional redemption has been rescinded shall remain outstanding. If an unconditional notice of redemption has been given and not rescinded, or if the conditions set forth in a conditional notice of redemption have been satisfied or waived, the 2015A Bonds or portions of 2015A Bonds to be redeemed shall, on the redemption date, become due and payable at the redemption price therein specified, and, if the Bond Registrar then holds sufficient funds to pay such 2015A Bonds at the redemption price, then from and after such date such 2015A Bonds or portions of 2015A Bonds shall cease to bear interest. Upon surrender of such 2015A Bonds for redemption in accordance with said notice, such 2015A Bonds shall be paid by the Bond Registrar at the redemption price. Installments of interest due on or prior to the redemption date shall be payable as provided in the Ordinance for payment of interest. All 2015A Bonds which have been redeemed will be canceled by the Bond Registrar and will not be reissued Purchase The City reserves the right and option to purchase any or all of the Bonds offered to the City at any time at a price deemed to be reasonable by the City. Book-Entry Bonds DTC will act as securities depository for the Bonds. The ownership of one fully registered Bond for each series and maturity of the Bonds, as set forth on the inside cover of this Official Statement, each in the aggregate principal amount of such maturity, will be registered in the name of Cede & Co., as nominee for DTC. See Appendix B attached hereto for additional information. Procedure in the Event of Termination of Book-Entry Transfer System. In the event that (i) DTC or its successor (or substitute depository or its successor) resigns from its functions as depository, and no substitute depository can be obtained, or (ii) the Finance Director determines that it is in the best interest of the Beneficial Owners of the Bonds that such owners be able to obtain such Bonds in the form of Bond certificates, the ownership of the Bonds may then be transferred to any person or entity as provided in the Ordinance, and will no longer be held in fully-immobilized form. In the event that the Bonds are no longer in fully immobilized form, interest on the Bonds will be paid by check or draft mailed to the registered owners at the addresses for such registered owners appearing on the Bond Register on the fifteenth day of the month preceding the interest payment date, or upon the written request of a registered owner of more than $1,000,000 of Bonds (received by the Bond Registrar at least 15 days prior to the applicable payment date), such payment shall be made by the Bond , Registrar by wire transfer to the account within the continental United States designated by the registered owner. Principal of the Bonds will be payable upon presentation and surrender of such Bonds by the registered owners at the principal office of the Bond Registrar. Purpose and Use of Proceeds Purpose The proceeds from the sale of the Bonds will be used (i) to refund a portion of the City’s outstanding City’s Limited Tax General Obligation Bonds, 2006 (the "LTGO Bonds, 2006") to obtain the benefit of debt service savings and (ii) to pay costs of issuance for the Bonds. Proceeds of the LTGO Bonds, 2006, were used to finance a portion of the costs of constructing transportation, street, and utility infrastructure and improvements as part of the South Lake Washington infrastructure project and the SW 27th Street extension project. Plan of Refunding A portion of the proceeds from the sale of the Bonds will be used to advance refund and defease all of the City’s Limited Tax General Obligation Bonds, 2006 maturing on December 1 in the years 2017, 2019, 2020 through 2024, inclusive, and 2028 and currently outstanding in the aggregate principal amount of $12,400,000 (the "Refunded Bonds"). Information on the Refunded Bonds is as follows: Refunded Bonds Maturity Years Principal Interest CUSIP (December 1)Amounts Rates Numbers 2017 $ 775,000 5.00%760133QV3 2019"1,670,000 5.00 760133QX9 2020 900,000 5.00 760133QY7 2021 945,000 5.00 760133QZ4 2022 1,000,000 5.25 760133RA8 2023 1,040,000 5.25 760133RB6 2024 1,095,000 5.25 760133RC4 2028*4,975,000 5.00 760133RG5 * Term Bonds. From a portion of the proceeds of the Bonds allocable to the refunding of the Refunded Bonds, the City will acquire certain governmental obligations (as defined herein, "Governmental Obligations") which will irrevocably be set aside to provide payment of: (a)interest on the Refunded Bonds when due up to and including December 1, 2016; and (b)on December 1, 2016, the redemption price (par) of the Refunded Bonds. The funds, interest earned thereon, and necessary cash balance, if any, will irrevocably be pledged to and held in trust for the benefit of the owners of the Refunded Bonds by U.S. Bank National Association (the "Escrow Agent"), pursuant to an escrow deposit agreement to be executed by the City and the Escrow Agent. Verification of Mathematical Calculations Grant Thornton LLP, a firm of independent certified public accountants, will verify the accuracy of the mathematical computations concerning the adequacy of the maturing principal amounts of and interest earned on the Government Obligations, to be placed together with other escrowed money in the escrow account to pay when due, pursuant to the call for redemption, the principal of and interest on the Refunded Bonds. The verification will also confirm the mathematical computations supporting the conclusion of Bond Counsel that the 2015A Bonds are not "arbitrage bonds" as defined by Section 148 of the Internal Revenue Code of 1986, as amended (the "Code"). Estimated Sources and Uses of Funds The proceeds from the Bonds will be applied as follows: 2015A 2015B $8,825,000 $3,695,000 1,1710804 0 $ 9.996.80~4 $ 3.695.000 Sources of Funds Par Amount Premium Total Sources of Funds (1/ Uses of Funds Escrow Requirements Costs of Issuance (2) Additional Proceeds Total Uses of Funds (1) (1) Totals may not foot due to rounding. Total $ 12,520,000 1,171,804 $ 13.691.80~44 (2)Includes legal fees, rating fees, escrow costs, Underwriter’s discount, and other costs associated with the issuance of the Bonds and the refunding of the Refunded Bonds. $9,916,039 $3,657,302 $13,573,341 80,296 34,063 114,359 469 3,635 4,105 $9.996.80~4 $3.695.00_______~0$ 13.691o80~4 Security for the Bonds General The Bonds are limited tax general obligation bonds of the City. The City, as authorized by law and the Ordinance, has covenanted and agreed irrevocably that it will include in its budget and levy an ad valorem tax upon all the property within the City subject to taxation in an amount that will be sufficient, together with all other revenues and money of the City legally available for such purposes, to pay the principal of and interest on the Bonds as the same become due. The City has irrevocably pledged that such tax will be within and as a part of the tax levy permitted to cities without a vote of the people. The full faith, credit and resources of the City have been pledged irrevocably for the annual levy and collection of such taxes and for the prompt payment of such principal and interest. The City may, subject to applicable laws, apply other funds available to make payments with respect to the Bonds. Bond owners do not have a security interest in particular revenues or assets of the City. The Bonds do not constitute a debt or indebtedness of the State or any political subdivision thereof other than the City. Defeasance In the event that the City, in order to effect the payment or retirement of any Bond, sets aside in the Bond Fund or in another special account, cash or noncallable Government Obligations, as defined below, or any combination of cash and/or noncallable Government Obligations, in amounts and maturities which, together with the known earned income therefrom, are sufficient to pay and retire such Bond in accordance with its terms and to pay when due the interest thereon, and such cash and/or noncallable Government Obligations are irrevocably set aside and pledged for such purpose, then no further payments need be made into the Bond Fund for the payment of the principal of and interest on such Bond. The owner of a Bond so provided for will cease to be entitled to any lien, benefit or security of the Ordinance except the right to receive payment of principal, premium, if any, and interest from the Bond Fund or such special account, and such Bond will be deemed to be not outstanding under the Ordinance. Defeasance of any 2015B Bond may result in a reissuance thereof, in which event a holder will recognize taxable gain or loss equal to the difference between the amount realized from the sale, exchange or retirement (less any accrued qualified stated interest which wilt be taxable as such) and the holder’s adjusted tax basis in the 2015B Bond. See "Certain Income Tax Consequences" herein. "Government Obligations" is defined in the Ordinance to have the meaning specified in RCW 39.53.010, as it may be amended from time to time, which currently means any of the following: (a) direct obligations of, or obligations the principal of and interest on which are unconditionally guaranteed by, the United States of America, and bank certificates of deposit secured by such obligations; (b) bonds, debentures, notes, participation certificates or other obligations issued by the Banks for Cooperatives, the Federal Intermediate Credit Bank, the Federal Home Loan Bank system, the Export-Import Bank of the United States, Federal Land Banks or the Federal National Mortgage Association; (c) public housing bonds and project notes fully secured by contracts with the United States; and (d) obligations of financial institutions insured by the Federal Deposit Insurance Corporation or the Federal Savings and Loan Insurance Corporation, to the extent insured or to the extent guaranteed as permitted under any other provision of State law. Bonded Indebtedness As prescribed by State statutes, the unlimited tax general obligation indebtedness permitted for cities, subject to a 60 percent majority vote of registered voters, is limited to 2.5 percent of assessed value for general purposes, 2.5 percent for certain utility purposes and 2.5 percent for open space, park facilities and capital facilities associated with economic development. Within the 2.5 percent of assessed value for general purposes, the City may, without a vote of the electors, incur general obligation indebtedness (such as the Bonds) in an amount not to exceed 1.5 percent of assessed value. Additionally, within the 2.5 percent of assessed value for general purposes, the City may, also without a vote of the electors, enter into leases if the total principal component of the lease payments, together with the other nonvoted general obligation indebtedness of the City, does not exceed 1.5 percent of assessed value. The combination of unlimited tax and limited tax general obligation debt for general purposes, including leases, cannot exceed 2.5 percent of assessed value and for all purposes cannot exceed 7.5 percent of assessed value. Without a vote of the electorate, the City may incur debt as follows: (1) Pursuant to an ordinance specifying the amount and object of the expenditure of the proceeds, the City may borrow money for corporate purposes and issue bonds and notes within the constitutional and statutory limitations on indebtedness. (2)The City may execute conditional sales contracts for the purchase of real or personal property. (3)The City may execute leases with or without an option to purchase. Computation of Debt Capacity (As of May 13, 2015) 2015 Tax Collection Year Assessed Value Nonvoted Debt Capacity 1.5% of Assessed Value Less: Outstanding Nonvoted Debt (1) Less: The 2015A Bonds Less: The 2015B Bonds Remaining Nonvoted Debt Capacity $ 12,876,667,781 $193,150,016 (62,205,753) (8,825,O00) (3,695,000) $118..424..263 Voted and Nonvoted Debt Capacity for General Purposes 2.5% of Assessed Value Less: Outstanding Nonvoted Debt (1) Less: The 2015A Bonds Less: The 2015B Bonds Less: Outstanding Voted Debt Total Remaining Voted and Nonvoted Debt Capacity for General Purposes (1) $321,916,694 (62,205,753) (8,825,000) (3,695,000) 0 $247o190.~..941 Includes outstanding limited tax general obligation bonds, the SCORE Bonds and Valley Com. Bonds (each as defined below), and a promissory note; excludes all of the Refunded Bonds. Outstanding General Obligation Debt (As of April 30, 2015) Non-Voted Debt Limited Tax General Obligations LTGO Bonds, 2006 SCORE Bonds, 2009 (2) Valley Com. Bonds, 2010 LTGO & Refunding, 2010 LTGO Bonds, 2011A LTGO Refunding, 2011 LTGO Bond, 2013 The 2015A Bonds (this issue) The 2015B Bonds (this issue) LTGO Bond Total Promissory Note Fire Protection District No. 40 (Purchase of Fire Station No. 13) Non-Voted Debt Total Date of Date of Amount Amount Issue Maturity.Issued Outstanding 08/08/06 12/01/16 $17,980,000 $ 1,450,000 (1/ 11/04/09 01/01/39 31,044,600 28,936,800 04/05/10 12/01/15 1,065,000 220,000 05/11/10 12/01/21 6,170,000 6,010,000 08/02/11 12/01/22 16,715,000 12,460,000 09/21/11 12/01/17 9,425,000 4,825,000 07/01/13 07/01/28 3,200,000 2,990,000 05/13/15 12/01/28 8,825,000 8,825,000 05/13/15 12/01/20 3,695,000 3,695,000 98,119,600 69,411,800 03/01/09 09/01/28 6,798,085 5,313,953 $ 10_~__4.917.68~5 $ 74.72~5o753 (1)Reflects the redemption of all of the Refunded Bonds. The December 1, 2015 and 2016 principal payments for the LTGO Bonds, 2006 will remain after this refunding. (2)The South Correctional Entity Facility Public Development Authority issued special obligation bonds on November 4, 2009, for a new correctional facility (the "SCORE Bonds") in the total aggregate principal amount of $86,235,000. Pursuant to an interlocal agreement, the City is obligated to pay 36 percent of the debt service on the SCORE Bonds. (3) The Valley Communications Center Development Authority issued special obligation refunding bonds on April 5, 2010, in the total aggregate principal amount of $5,325,000 (the "Valley Com. Bonds"). Pursuant to an interlocal agreement, the City is obligated to pay 20 percent of the debt service on the Valley Com. Bonds. [remainder of page intentionally left blank] 7 Summary of Limited Tax General Obligation Bonds Debt Service Requirements Calendar Outstanding LTGO Bonds (2)The 2015A Bonds The 2015B Bonds Total Debt Years Principal Interest Principal Interest Principal Interest Service 2015 $4,200,000 $1,974,900 $$178,214 $330,000 $30,059 $6,713,173 2016 4,858,400 2,764,458 324,025 100,000 53,003 8,099,886 2017 4,252,200 2,574,053 324,025 865,000 52,153 8,067,431 2018 4,071,400 2,382,382 324,025 875,000 42,379 7,695,185 2019 4,206,600 2,229,557 324,025 890,000 29,254 7,679,436 2020 4,383,600 2,033,179 275,000 324,025 635,000 13,145 7,663,949 2021 4,562,400 1,832,056 935,000 313,025 7,642,481 2022 1,962,400 1,613,181 975,000 275,625 4,826,206 2023 1,181,600 1,513,237 1,005,000 236,625 3,936,462 2024 1,215,800 1,450,282 1,045,000 196,425 3,907,507 2025 1,253,600 1,381,538 1,090,000 154,625 3,879,763 2026 1,296,800 1,306,593 1,125,000 116,475 3,844,868 2027 1,341,800 1,228,818 1,170,000 77,100 3,817,718 2028 1,388,600 1,148,098 1,205,000 36,150 3,777,848 2029 1,222,200 1,064,318 2,286,518 2030 1,272,600 983,012 2,255,612 2031 1,328,400 896,971 2,225,371 2032 1,384,200 807,238 2,191,438 2033 1,443,600 713,694 2,157,294 2034 1,506,600 616,102 2,122,702 2035 1,571,400 514,282 2,085,682 2036 1,638,000 408,115 2,046,115 2037 1,708,200 297,422 2,005,622 2038 1,782,000 181,966 1,963,966 2039 1,859,400 61,509 1,920,909 Total $ 56,891,800 $ 31,976,960 $ 8,825,000 $ 3,204,389 $ 3,695,000 $ 219,992 $ 104,813,141 (1) (2) Totals may not foot due to rounding. Principal and interest payments outstanding as of May 13, 2015. Includes the City’s portion of the Valley Com. Bonds and the SCORE Bonds; excludes the promissory note and all of the Refunded Bonds. Assumes gross debt service for the City’s Limited Tax General Obligation Bond, 2013 which was issued as a direct pay Qualified Energy Conservation Bond. The following tables set forth the outstanding principal amount of general obligation debt of the City including the Bonds and the outstanding principal amount of general obligation debt incurred by other governmental entities whose taxing jurisdiction includes a part or all of the City and the estimated portion of that debt which is applicable to the property within the City (the "Overlapping Debt"). The estimate of the percentage of a governmental entity’s debt which is applicable to property within the City is based on the proportion of the overlapping jurisdiction that lies within the City. The City has obtained the information regarding the Overlapping Debt from the overlapping taxing districts, King County (the "County") and other sources the City believes to be reliable, but the City has not independently verified the accuracy or completeness of such information. No person should rely upon such information as being accurate or complete. Furthermore, the amounts described below relate only to general obligation bonds issued by the various taxing districts and may not reflect certain leases or other contracts that may constitute indebtedness under State law. The table below does not reflect any special revenue obligations (e.g., utility revenue bonds) issued by any taxing district. The taxing districts listed below may have issued additional general obligation debt since the dates indicated below and may have plans for future general obligation debt issuances. Summary of Overlapping Debt (As of December 31, 2014) Overlapping Taxing District School District No. 403 Fire Protection District No. 40 King County (1) Port of Seattle School District No. 411 Rural Library District School District No. 415 Fire Protection District No. 10 Estimated 2015 Assessed Percent Outstanding Overlapping Value Overlap GO Debt Debt $ 17,457,202,087 69.63%$ 288,010,000 $ 200,533,278 2,086,723,428 42.00 6,405,000 2,690,002 388,118,855,592 3.33 840,363,342 28,010,947 388,118,855,592 3.33 225,420,000 7,513,688 22,412,920,719 2.86 366,330,000 10,491,778 241,105,354,992 1.57 119,055,000 1,871,748 18,680,289,494 0.75 161,158,113 1,206,825 5,499,181,980 0.07 4,815,000 3,488 Total $ 252.321.75~5 (1)King County’s debt is estimated; excludes cash available in the debt service fund, proprietary-type debt, debt financed from component unit, and hotel/motel tax debt. Sources: King County Assessor’s and Treasurer’s Offices and individual taxing districts. Direct and Overlapping Debt The following tables present information regarding the City’s direct debt (including the Bonds and excluding the Refunded Bonds) and the estimated portion of the debt of overlapping taxing districts allocated to the City’s residents. Regular Assessed Value (2015 Tax Collection Year) Estimated 2014 Population $ 12,876,667,781 97,130 Debt Information Direct Debt (1) Estimated Overlapping Debt (as previously detailed herein) Total Direct and Overlapping Debt $ 74,725,753 252,321,755 $327.047.508 (1)Includes the Bonds, limited tax general obligation bonds, the City’s portion of the Valley Com. Bonds and the SCORE Bonds, and a promissory note; excludes all of the Refunded Bonds. Bonded Debt Ratios Direct Debt to Assessed Value Direct and Overlapping Debt to Assessed Value’ Per Capita Assessed Value Per Capita Direct Debt Per Capita Total Direct and Overlapping Debt 0.58% 2.54% $132,571 -$769 $ 3,367 Debt Payment Record The City has promptly met all debt service payments on outstanding obligations. The City has never issued refunding bonds to prevent an impending default. Future Financings Other than the Bonds, the City has no authorized but unissued general obligation bonds outstanding. The City does not have current plans to issue any additional bonds within the next twelve months. 9 Taxing Authority Authorized Property Tax Levies The City is authorized to impose (1) a regular levy (up to $3.60 per $1,000 of assessed value, less the library district levy, which is not to exceed $0.50 per $1,000 of assessed value); (2) a firemen’s pension levy of $0.225 per $1,000 of AV, so long as total levy does not exceed $3.325; and (3) excess levies (unlimited as to rate or amount). For the 2015 collection year, the City’s regular levy is $2.83283 per $1,000 of assessed value. The regular levy is imposed without a vote of the people for general purposes, including payment of debt service on the Bonds, and is subject to limitations (see "Regular Property Tax Limitations" herein). Excess levies are imposed, upon voter approval, to pay, among other things, debt service on unlimited tax general obligation bonds. An excess levy also may be imposed without a vote to prevent the impairment of the obligation of a contract (RCW 84.52.052). The City does not currently have an excess levy. Overlapping Taxing Districts The overlapping taxing districts within the City have the statutory power to levy regular property taxes at the following rates subject to the limitations provided by chapter 84.55 RCW, and levy excessvoter-approved property taxes. For purposes of demonstration, representative levy rates for "levy code 2100" of the County, as well as the statutory levy authority of each type of potential overlapping district, are listed below. Levy code 2100 is wholly within the City; however it does not include all of the property within the City. As a result, additional taxing districts, not listed below, levy taxes within the City. King County County (Road Levy) Rural Library District Port of Seattle Fire Protection District The City Hospital District No. 1 State Schools School District No. 403 Emergency Medical Services King County Flood Zone Total rate for King County levy code 2100: Representative Levy Rates Statutory Levy Authority Per $1,000 of Per $1,000 of Assessed Value Assessed Value $ 1.34522 (1)$1.80 (2) n/a (3)2.25 0.44747 0.50 0.18885 0.45 n/a (3)1.50 2.83283 3.10 (4)(5) 0.50000 0.75 2.28514 3.60 (6) 4.59301 -- (~ 0.30217 0.50 0.13860 0.50 $12.63329 (7) Source: (1)Includes the County’s Transit Levy, Conservation Futures Levy, Ferry District Levy and voter-approved excess levies, which are not counted against the County’s $1.80 per $1,000 of assessed value statutory levy authority. (2)Pursuant to RCW 84.52.043(1), a county may increase its levy from $1.80 per $1,000 of assessed value to a rate not to exceed $2.475 per $1,000 of assessed value for general county purposes if (i) the total levies for both the county and any road district within the county do not exceed $4.05 per $1,000 of assessed value and (ii) no other taxing district has its levy reduced as a result of the increased county levy. (3)King County levy code 2100 is included within the incorporated portion of King County and therefore does not have a road levy; likewise, it does not contain a fire protection district. (4)RCW 41.16.060 allows jurisdictions with firemen’s pension obligation to levy an additional $0.225 to be used for pension funding purposes, if required; otherwise this tax may be levied and used for any other municipal purpose. (5) The City’s levy authority is reduced due to its annexation to the King County Rural Library District. The library district has the authority to levy up to $0.50 per $1,000 of assessed value thereby reducing the City’s levy authority to $3.10, together with the $0.225 fire pension levy, the City has a total levy authority of $3.325 per $1,000 of assessed value currently. (6) RCW 84.52.043(1). The levy by the State may not exceed $3.60 per $1;000 of assessed value adjusted to the State equalized value in accordance with the indicated ratio fixed by the State Department of Revenue to be used exclusively for the support of the common schools. Washington school districts do not have nonvoted regular levy authority. King County Assessor for Levy Code. 10 General Property Taxes The following provides a general description of the City’s authority to levy property taxes and limitations thereon, the method of determining the assessed value of real and personal property, tax collection procedures, and tax collection information. Authorized Property Taxes. The City is authorized to levy both "regular" property taxes and "excess" property taxes. (1) (2) Regular Property Taxes. Regular property taxes are subject to constitutional and statutory limitations as to rates and amounts and commonly are imposed by taxing districts for general municipal purposes, including the payment of debt service on limited tax general obligation indebtedness, such as the BOnds. Regular property taxes do not require voter approval except as described below. Excess Property Taxes. Excess property taxes are not subject to limitation as to rates or amounts but must be authorized by a 60 percent approving popular vote, as provided in Article VII, Section 2 of the State Constitution and RCW 84.52.052. To be valid, such popular vote must have a minimum voter turnout of 40 percent of the number who voted at the last City general election, except that one-year excess tax levies also are valid if the turnout is less than 40 percent and the measure receives a number of affirmative votes equal to or greater than 24 percent of the number who voted at the last City general election. Excess levies may be imposed without a popular vote when necessary to prevent impairment of the obligations of contracts. Regular Property Tax Limitations The authority of a city to levy taxes without a vote of the people for general city purposes, including the payment of debt service on limited tax general obligation indebtedness, such as the Bonds, is subject to the limitations described below. Information relating to regular property tax limitations is based on existing statutes and constitutional provisions. Changes in such laws could alter the impact of other interrelated tax limitations on the City. Maximum Rate Limitation. Title 84 RCW authorizes the imposition of regular tax levies to various statutory maximums (see "Overlapping Taxing Districts" herein). The One Percent Aggregate Regular Levy Limitation. Article VII, Section 2 of the Washington Constitution, as amended in 1973, limits aggregate regular property tax levies by the State and all taxing districts, except port districts and public utility districts, to one percent of the true and fair value of property. RCW 84.52.050 provides the same limitation by statute. $5.90/$1,000 Aggregate Regular Levy Limitation. Within the one percent limitation described above, RCW 84.52.043(2) imposes an aggregate limitation on regular tax levies by all taxing districts, other than the State, of $5.90/$1,000 of assessed value, except levies for any port or public utility district; excess levies authorized in Article VII, Section 2 of the State Constitution; and certain levies for acquiring conservation futures, for emergency medical services or care, to finance affordable housing, for ferry districts, for criminal justice purposes and for transit-related purposes; and certain protected portions of levies for metropolitan park districts, for fire protection districts and for flood control zone districts. Uniformity Requirement. Article VII, Section 1 of the Washington Constitution requires that property taxes be levied at a uniform rate upon the same class of property within the territorial limits of a taxing district levying such taxes. With certain limited exceptions, all real estate constitutes one class of property for purposes of this uniformity requirement. Aggregate property tax levy rates vary within the City due to its different overlapping taxing districts. In the event that the maximum permissible levy rate by a taxing district varies within the taxing district, the lowest permissible rate for any part of the taxing district must be applied throughout the entire taxing district. Prioritization of Levies. RCW 84.52.010 provides that if aggregate levies certified by all taxing districts exceed the aggregate levy limitations described above, levies certified by junior taxing districts are reduced or eliminated in order to bring the aggregate levy into compliance with the statutory maximum prescribed by RCW 84.52.050 and 84.52.043. RCW 84.52.043 defines "junior taxing districts" as all taxing districts other than the state, counties, road districts, cities, towns, port districts, and public utility districts. 11 The tax levy for unlimited tax general obligation bonds is a special excess levy approved by the voters, and as such, is not subject to the limitations on regular levies described above. The Bonds are no.__~t unlimited tax general obligation bonds. Regular Levy Increase Limitation. The regular property tax increase limitation (chapter 84.55 RCW) limits the total dollar amount of regular property taxes levied by an individual local taxing district, such as the City, to the amount of such taxes levied in the highest of the three most recent years multiplied by a limit factor, plus an adjustment to account for taxes on new construction, annexations, improvements and State-assessed property at the previous year’s rate. The limit factor is the lesser of 101 percent of the highest levy in the three previous years (excluding new construction, improvements, and State-assessed property) or 100 percent plus inflation, unless a greater amount is approved by a simple majority of the voters. With a supermajority vote of the Council, the limit factor is a flat 101 percent. RCW 84.55.092 allows the property tax levy to be set at the amount that would be allowed if the tax levy for taxes due in each year since 1986 had been set at the full amount allowed under chapter 84.55 RCW. This is sometimes referred to as "banked" levy capacity. The City does not currently have any banked levy capacity. Within the rate limitations described above and only after so authorized by a majority vote of its electors, a taxing district may levy, indefinitely or for a limited period or to satisfy a limited purpose, an amount greater than otherwise would be allowed by the tax increase limitation, as allowed by RCW 84.55.050. This is known as a "levy lid lift." A newly created taxing district can initiate its levy at the maximum permitted statutory levy rate, unless that rate would exceed any of the limitations described above. Since the regular property tax increase limitation applies to the total dollar amount levied rather than to levy rates, increases in the assessed value of all property in the taxing district (excluding new construction, improvements and State-assessed property) which exceed the rate of growth in taxes allowed by the limit factor result in decreased regular tax levy rates, unless voters authorize a higher levy or the taxing district uses banked levy capacity. Decreases in the assessed value of all property in the taxing district (including new construction, improvements and State-assessed property) or increases in such assessed value that are less than the rate of growth in taxes imposed, among other events, may result in increased regular tax levy rates. Assessed Value The County Assessor ("Assessor") determines the value of all real and personal property throughout the County that is subject to ad valorem taxation, except certain utility properties which are valued by the State Department of Revenue. The Assessor is an elected official whose duties and methods of determining value are prescribed and controlled by statute and by detailed regulations promulgated by the State Department of Revenue. For tax purposes, the assessed value of property is 100 percent of its true and fair value. Three approaches may be used to determine real property value: market data, replacement cost and income-generating capacity. In the County, all property is subject to an annual property valuation and an on-site revaluation at least once every six years. The property is listed by the Assessor on a roll at its current assessed value and the roll is filed in the Assessor’s office. The Assessor’s determinations are subject to revisions by the County Board of Equalization and, for certain property, subject to further revisions by the State Board of Tax Appeals. Property Tax Collection Procedure Property taxes are levied in specific amounts and the rate for all taxes levied for all taxing districts in the County is determined, calculated and fixed by the Assessor based upon the assessed value of the property within the various taxing districts. The Assessor extends the taxes to be levied within each taxing district on a tax roll which contains the total amount of taxes to be so levied and collected. The tax roll is delivered to the County Treasurer by January 15, who creates a tax account for each taxpayer and is responsible for the collection of taxes due to each account. All such taxes are due and payable on April 30 of each year, but if the amount due from a taxpayer exceeds $50, one-half may be paid then and the balance no later than October 31, of each year. Delinquent taxes are subject to interest at the rate of 12 percent per year computed on a monthly basis from the date of delinquency until paid. In addition, a penalty of three percent is assessed on June 1 of the 12 year in which the tax was due and eight percent on December 1 of the year due. All collections of interest on delinquent taxes are credited to the County’s current expense fund. The method of giving notice of payment of taxes due, the accounting for the money collected, the division of the taxes among the various taxing districts, notices of delinquency, and collection procedures are all covered by detailed statutes. By taw the County Treasurer may not commence foreclosure of a tax lien on real property until three years have passed since the first delinquency. Property taxes levied are secured by a lien on the property assessed. A federal tax lien filed before personal property taxes are levied is senior to the personal property tax lien. In addition, a federal civil judgment lien (but not a federal tax lien) is senior to real property taxes that are incurred after the judgment lien has been recorded. In all other respects, and subject to the possible "homestead exemption" described below, the lien that secures property taxes is senior to all other liens or encumbrances of any kind on real or personal property subject to taxation. The State’s courts have not decided whether the homestead law (chapter 6.13 RCW) gives the occupying homeowner a right to retain the first $125,000 of proceeds of the forced sale of the family residence, or other "homestead" property for delinquent general property taxes. (See Algona v. Sharp, 30 Wn. App. 837, 638 P~2d 627 (1982)), holding the homestead right superior to improvement district assessments). The United States Bankruptcy Court for the Western District of Washington has held that the homestead exemption applies .to the lien for property taxes, while the State Attorney General has taken the position that it does not. Tax Collection Record Regular Tax Collection Collection Assessed Ad Valorem Ad Valorem Year As of Year Value~1)Levy Rate Tax Levy_of Levy 12/31/14 2015 $12,876,667,781 $2.83283 $35,904,446 (2)(2) 2014 11,271,964,301 3.15158 35,392,393 98.7%98.7% 2013 10,518,345,271 3.10000 32,397,515 98.7 99.6 2012 10,752,792,944 3.10000 33,187,663 98.7 99.8 2011 11,415,700,111 2.83207 32,156,965 98.1 100.0 2010 11,821,131,678 2.71184 31,961,519 97.8 100.0 (1)The assessed value of property is calculated in the year prior to taxes being levied and is based upon 100 percent of its true and fair value. (2) In process of collection. Sources: King County Assessor and Treasurer. Taxpayer The Boeing Company CPT The Landing LLC Puget Sound Energy/Gas PACCAR Renton Properties LLC Axis Grand Holdings Fred Meyer Stores Inc. Black River JV LLC Renton Acquisition LLC Bre Properties Subtotal - Ten Largest Taxpayers All Other City Taxpayers Total City Taxpayers Source: King County Assessor’s Office. Major Property Taxpayers 2015 Collection Year Type of Business Assessed Valuation Aerospace $850,186,010 Retail center 143,105,600 Utility 136,271,765 Heavy manufacturing 109,618,533 Property management 52,885,800 Apartments 47,080,400 Retail 43,348,000 Property management 36,717,600 Property management 35,028,800 Healthcare 35,000,000 1,489,242,508 11,387,425,273 $ 12.876.667.781 Percentage Percent of City’s Total A.V. 6.60% 1.11 1.06 0.85 0.41 0.37 0.34 0.29 0.27 0.27 11.57 88.43 13 Collection of Other Taxes In addition to regular property tax levies, the City is authorized to impose various other taxes, inclt~ding those described below. Neither the State nor any municipal corporation of the State has the authority to nor has ever collected a tax on net income. Local Sales and Use Tax. The State currently imposes a sales and use tax of 6.5 percent. Cities, counties and certain other municipal corporations are authorized to levy incremental local sales and use taxes for various purposes. The sales tax currently is applied to a broad base of tangible personal property and selected services purchased by consumers, including construction (labor and materials), machinery and supplies used by businesses, services and repair of real and personal property, and many other transactions not taxed in other states. The use tax supplements the sales tax by taxing the use of certain services and by taxing the use of certain personal property on which a sales tax has not been paid (such as items purchased in a state that imposes no sales tax). The State Legislature, and the voters through the initiative process, have changed the base of the sales and use tax on occasion, and this may occur again in the future. See "Initiative and Referendum." The State Department of Revenue administers and collects sales and use taxes from sellers, consumers and the County and makes disbursements to the City on a monthly basis. The City is authorized to impose a local sales and use tax of one percent, of which 0.15 percent is required to be remitted to the County. The County also imposes various local sales and use taxes, including 0.1 percent to support criminal justice purposes. The first 10 percent of the revenues generated by the 0.1 percent criminal justice tax is allocated to the County. The remaining 90 percent of the criminal justice tax revenues is allocated to the County and cities within the County based on population. The proceeds of the 0.1 percent criminal justice tax may not be used to replace pre-existing funding. Sales and use taxes currently are imposed in the County at aggregate rates ranging from 8.6 to 9.5 percent. The County imposes additional sales and use taxes on car rentals and the sale of food and beverages at restaurants, taverns and bars. Annexation Sales Tax Credit The City receives additional sales tax revenue as a result of its annexation of the Benson Hill area in 2008. To encourage cities to annex unincorporated urban areas, the State permits the annexing city to receive 0.1% of the State’s sales tax. The tax is credited toward the State’s portion of sales tax, so there is no net impact on taxpayers. The credit lasts ten years and is intended to help cities who annex large urban areas to pay for service costs that exceeded revenue generated in the area. The City’s annexation tax credit for the Benson Hill annexation will end in 2018. The City expects to fund a reserve before the expiration of the credit to mitigate the loss of this sales tax revenue. Streamlined Sales and Use Tax Agreement. In 2003, the State Legislature approved legislation authorizing the State’s membership in the Streamlined Sales and Use Tax Agreement (the "SSUTA’), in an effort to make sales and use taxes in the State more uniform with other states. Congress has required that state sales taxes be more uniform before Congress will permit taxation of interstate catalogue and Internet sales. In 2007, the State Legislature adopted legislation fully conforming to the SSUTA, Effective July 1, 2008, the sales tax system changed in the State from an origin-based system to a destination-based system. Under destination sourcing, sales taxes on goods delivered to customers in the State are credited to the taxing jurisdiction where the goods are delivered (as opposed to the point of sale) and the rate of the tax is determined by the local rate in the destination taxing jurisdiction. The State Legislature enacted certain provisions to mitigate net losses in sales and use tax collections of local taxing jurisdictions resulting from the change to a destination-based system. To qualify, the local taxing jurisdiction must be negatively impacted by the legislation and the local sales tax must be in effect before July 1, 2008, among other requirements. Money for mitigation is subject to appropriation by the State Legislature. Under the mitigation legislation, on each July 1, the State Treasurer is required to transfer an amount determined by the Department to fully mitigate negatively impacted local jurisdictions. The Department is required to determine each local jurisdiction’s annual losses, and distributions are required to be made quarterly representing one-fourth of a jurisdiction’s annual loss less voluntary compliance revenue from the previous quarter. Losses in sales tax revenues are based on a business by business comparison of sales patterns in each jurisdiction before and after the change to destination-based sales tax. "Voluntary compliance revenue" is the local sales tax revenue gain to each local taxing jurisdiction reported to the Department by sellers in other states voluntarily registered through the SSUTA. 14 The City has not been negatively impacted by the SSUTA legislation. As such, the City has never received any mitigation payments. Lodging Tax. The City is authorized to impose a local option tax of one percent on sales of lodging. This tax is credited against the State’s 6.5 percent retail sales tax and results in no net increase to the taxpayer. The uses of lodging tax proceeds are restricted by State law for tourism promotion purposes only. Business and Occupation Tax. As part of the 2015-16 biennium budget, the Council authorized a Business and Occupation Tax at 0.05% on retail activities and 0.085% on all other business classifications to take effect on January 1, 2016. Businesses generate $1.5 million or more in annual income will be subject to the new tax which will replace the per employee business license fee they currently pay to the City. The new tax is expected to generate $3.8 million in 2016 and $5.2 million in 2017. The Council can adjust the tax rates up to 0.2%; or with voters’ approval raise the rate higher than 0.2%. Real Estate Excise Tax. The City is authorized to impose a real estate excise tax on each sale of real property at the rate of 0,50 percent of the selling price. This is in addition to the real estate excise tax imposed by the State at the rate of 1.28 percent. The first 0.25 percent tax ("REET 1") is imposed pursuant to RCW 82.46.010 and currently may be used solely for financing certain "capital projects" specified in a capital facilities plan element of the City’s a comprehensive plan. Eligible "capital projects" for REET 1 include: streets, roads, highways, sidewalks, street and road lighting systems, traffic signals, bridges, domestic water systems, storm and sanitary sewer systems, parks, recreational facilities, law enforcement facilities, fire protection facilities, trails, libraries, administrative and judicial facilities. In the 2011 legislative session, the Washington Legislature passed House Bill 1953 ("HB 1953") authorizing cities, towns and counties to use the greater of $100,000 or 35 percent of REET 1 revenues, not to exceed $1 million, to pay for maintenance and operation expenses of existing capital facilities through calendar year 2016. The second 0.25 percent tax ("REET 2") is imposed pursuant to RCW 82.46.035(2) and may be used solely for certain capital projects specified in a capital facilities plan element of the City’s a comprehensive plan. Eligible "capital projects" for REET 2 include: streets, roads, highways, sidewalks, street and road lighting systems, traffic signals, bridges, domestic water systems, storm and sanitary sewer systems, and planning, construction, reconstruction, repair, rehabilitation, or improvement of parks. REET 2 excludes the use of funds to acquire land for parks. HB 1953 also authorizes cities, towns and counties to use the greater of $100,000 or 35 percent of REET 2 revenues, not to exceed $1 million, to pay for maintenance and operation expenses of existing capital facilities through calendar year 2016. The City must deposit and account for real estate excise tax proceeds in a separate capital projects fund or account. REET 1 and REET 2 revenues must be tracked separately because the uses to which they may be put are different. RCW 82.46.030(2) and RCW 82.46.035(4). Real estate excise taxes are collected by the County Treasurer of the county within which the property is located and distributed to the City periodically. Distributions may be suspended if the City is in noncompliance under RCW 36o70A.340 (relating to growth management planning). The City currently believes it is in compliance with this statute. 15 Utility Taxes. The City imposes a gross receipts utility business and occupation tax on investor and City-owned utilities, also known as a utility tax. The following table displays the maximum utility tax rate permitted under State law without voter approval and the City’s current utility tax rate. Utility Tax Maximum Statutory Limit Current Rate Investor-owned Telephone 6.0%6.0% Cellular 6.0 6.0 Gas 6.0 6.0 Electric 6.0 6.0 Cable Television 6.0 (1)6.0 Garbage None 6.8 City-owned Water None 6.8 Sewer None 6.0 Storm Drainage None 6.8 (1)The rate must not be unduly discriminatory against cable operators and subscribers and therefore should be consistent with the other utility rates charged. The following table shows the historical General Fund revenues from these taxes. General Fund Tax Revenues General Fund Tax Revenues Fiscal Year Ended December 31,2014(1)2013 2012 2011 2010 Regular property taxes $ 35,271,588 $ 32,461,888 $ 33,409,852 $ 32,404,669 $ 31,235,183 Sales and use taxes 26,926,994 25,296,020 23,419,510 21,797,027 21,395,446 Lodging taxes 257,211 245,952 234,196 211,750 195,930 Utility taxes 16,768,419 16,182,165 17~089,171 16,870,284 16,883,888 Real estate excise taxes 4,348,762 4,265,979 2,811,957 2,064,938 2,402,949 Gambling Tax 1,572,152 1,426,772 1,674,126 1,709,324 1,640,092 Other taxes (2)411,860 421,974 1,239,654 1,208,696 1,470,262 Total Taxes $ 85,556,986 $ 80,300,751 $ 79,878,467 $ 76,266,687 $ 75,223,750 Taxes in General Sub-Fund Taxes in Capital/Special Rev/Debt Service Funds Net General Fund Taxes $74,938,688 $71,294,583 $71,537,019 $71,443,862 $69,857,863 10,618,298 9,006,168 8,341,448 4,822,826 5,365,888 $ 85,556,986 $ 80,300,751 $ 79,878,467 $ 76,266,687 $ 75,223,750 (1)Preliminary. (2)"Other taxes" include leasehold excise tax and admissions tax. The decrease in 2013 was due to the reclassification of the King County Emergency Medical Services levy and the King County Parks and Open Space levy distributions as intergovernmental revenue. (3) Totals may not foot due to rounding. Source: City of Renton. Authorized Investments Chapter 35.39 RCW limits the investment by a city of its inactive funds or other funds in excess of current needs to the following: United States bonds; United States certificates of indebtedness; State bonds or warrants general obligation or utility revenue bonds of its own or of any other city or town in the State; its own bonds or warrants of a local improvement district which are within the protection of the local improvement guaranty fund law; and any other investment authorized by law for any other taxing district. Under chapter 39.59 RCW, a city also may invest in the following: bonds of any local government in the State that have at the time of investment one of the three highest credit ratings of a nationally recognized rating agency; general obligation bonds of any other state or local government of any other state that have at the time of the investment one of 16 the three highest credit ratings of a nationally recognized rating agency; registered warrants of a local government in the same county; and any investments authorized by law for the State Treasurer or any local government of the State other than a metropolitan municipal corporation (other than bank certificates of deposit of banks or bank branches not located in the State). Under chapter 43.84 RCW, the State Treasurer (and, under chapter 39.59 RCW, a city) may invest in the following; in obligations of the United States or its agencies and of any corporation wholly owned by the government of the United States; State county, municipal or school district general obligation bonds or general obligation warrants of taxing districts of the State, if within the statutory limitation of indebtedness; motor vehicle fund warrants; Federal Home Loan Bank notes and bonds, Federal Land Bank bonds, Fannie Mae notes, debentures and guaranteed certificates of participation and obligation of any other government-sponsored corporation whose obligations are eligible for collateral for advances to Federal Reserve System member banks; bankers’ acceptances purchased in the secondary market; negotiable certificates of deposit of any national or state commercial or mutual savings bank or savings and loan association doing business in the United States; and commercial paper. Money available for investment may be invested on an individual fund basis or may, unless otherwise restricted by law, be commingled within one common investment portfolio. All income derived from such investment may be either apportioned to and used by the various participating funds or for the benefit of the general government in accordance with City ordinances or resolutions. Funds derived from the sale of bonds or other instruments of indebtedness will be invested or used in such manner as the authorizing ordinances, resolutions or bond covenants may lawfully prescribe. Local Government Investment Pool The State Treasurer’s Office administers the Washington State Local Government Investment Pool (the "LGIP"), which invests money on behalf of more than 640 cities, counties and special taxing districts. In its management of LGIP, the State Treasurer is required to adhere, at all times, to the principles appropriate for the prudent investment of public funds. These principles are, in order of priority, (i) the safety of principal; (ii) the assurance of sufficient liquidity to meet cash flow demands; and (iii) the attainment of the highest possible yield within the constraints of the first two goals. Historically, the LGIP has had sufficient liquidity to meet all cash flow demands. The LGIP, authorized by chapter 43.250 RCW, is a voluntary pool which provides its participants the opportunity to benefit from the economies of scale inherent in pooling. It is also intended to offer participants increased safety of principal and the ability to achieve a higher investment yield than would otherwise be available to them. The LGIP is restricted to investments with maturities of one year or less, and the average life typically is less than 90 days. Investments permitted under the guidelines of the LGIP include U.S. government and agency securities, bankers’ acceptances, high quality commercial paper, repurchase and reverse repurchase agreements, motor vehicle fund warrants, and certificates of deposit issued by qualified Washington State depositories. As of December 31, 2014, the City’s investments at cost totaled $112,101,961 of which 53 percent was invested in the LGIP and 16 percent was invested in certificates of deposit. Authorized Investments for Bond Proceeds In addition to the eligible investments discussed above, bond proceeds may also be invested, subject to certain restrictions, in mutual funds with portfolios consisting of (i) only United States government bonds or United States government guaranteed bonds issued by federal agencies with average maturities of less than four years; bonds of the State or of any local government in the State that have at the time of the investment one of the four highest credit ratings of a nationally recognized rating agency; general obligation bonds of any other state or local government of any other-state that have at the time of the investment one of the four highest credit ratings of a nationally recognized rating agency; (ii) bonds of state and local governments or other issuers authorized by law for investment by local governments that have at the time of investment one of the two highest credit ratings of a nationally recognized rating agency; or (iii) securities otherwise authorized by law for investment by local governments. 17 Financial Information General Fund Comparative Statement of Revenues, Expenditures and Changes in Fund Balances (Years Ending December 31) Preliminary Audited 2014 2013 2012 2011 2010 Taxes $74,938,688 $71,294,583 $71,537,019 $71,443,862 $69,857,863 Licenses & permits 5,524,677 4,371,667 3,002,481 2,665,983 2,235,637 Intergovernmental I1~5,205,758 5,130,377 10,982,766 10,534,331 9,484,755 Charges for services 9,404,148 9,208,624 4,280,901 3,860,290 3,794,168 Fines & forfeitures 2,683,662 2,766,403 3,053,938 3,150,326 3,439,926 Interfund revenues 3,106,389 2,460,236 3,324,852 3,057,642 3,244,928 Contributions 84,320 84,383 120,207 192,699 133,806 Investment earnings 957,311 417,389 383,909 366,332 357,417 Miscellaneous 2,023,937 1,708,853 942,680 646,868 76,893 Total Revenues 103,928,890 97,442,515 97,628,753 95,918,333 92,625,393 Expenditures Current: General government 11,564,284 9,340,499 8,223,191 10,598,389 9,853,746 Judicial 1,968,045 2,364,631 2,610,481 2,563,989 2,402,692 Public safety 55,608,751 53,107,483 54,378,422 52,986,589 48,904,653 Utililies (1)437,174 468,442 2,608,369 2,048,971 2,345,459 Transportation 8,445,506 7,822,333 8,376,509 8,018,267 8,499,342 Economic environment 6,200,246 5,840,104 5,804,336 5,876,231 6,531,155 Health & human services 1,842,157 1,827,736 523,577 511,934 787,768 Culture & recreation 10,558,176 10,402,858 10,471,784 10,215,229 11,857,457 Capital outlay 493,059 78,010 26,506 78,089 334,426 Total Expenditures 97,117,398 91,252,096 93,023,175 92,897,688 91,516,698 Excess revenues over (under) expenditures 6,811,492 6,190,419 4,605,578 3,020,645 1,108,695 Other Financing Sources (Uses): Transfers in 204,000 15,420 13,058 Transfers (out)(7,021,630)(4,415,559)(2,085,347)(2,268,329)(119,491) Sale of capital asets 9,623 9,821 211,437 500 Total Other Sources (Uses)(7,012,007)(4,405,738)(1,669,910)(2,252,409)(106,433) Excess revenues over (under) expenditures (200,515)1,784,681 2,935,668 768,236 1,002,262 Beginning Fund Balance 20,469,125 18,684,444 15,748,776 14,980,540 (2)13,486,727 Ending Fund Balance $ 20,268,610 $ 20,469,125 $ 18,684,444 $ 15,748,776 $ 14,488,989 (2) (1)The City is required to use a standard chart of accounts as prescribed by the State Auditor’s Office to record its transactions. The chart of accounts was revised in 2013 that required certain reclassifications of revenues and expenditures. The decrease in "intergovernmental" revenue was due to the reclassification of Fire Service Contract revenue to "Charge for Services." The reduction in "utilities" was reclassified into Health & Human Services and General Government.. (2)The 2011 beginning fund balance includes a reclassification of the Leased Facilities Special Revenue Fund from "Other Governmental Funds" to the "General Fund" in the amount of $491,551. Source: Cihy of Renton Audited Financial Statements. 18 General Fund 2015 Budget (Fiscal Years Ended December 31) Revenues Taxes Licenses & permits Intergovernmental Charges for services Fines & forfeitures Interfund revenues Contributions Investment earnings Miscellaneous Total Revenues Expenditures Current: General government Judicial Public safety Utilities Transportation Economic environment Health & human services Culture & recreation Capital outlay Total Expenditures Excess revenues over (under) expenditures Other Financing Sources (Uses): Transfers in Transfers (out) Sale of capital asets Total Other Sources (Uses) Excess revenues over (under) expenditures Beginning Fund Balance Projected 2015 $78,574,232 5,171,417 4,362,242 9,259,029 3,320,500 3,550,785 97,000 875,300 1,961,866 107,172,371 12,567,083 2,111,321 59,133,063 463,587 10,065,711 7,501,532 1,854,359 12,033,602 105,730,258 1,442,113 (1,411,000) (1,411,000) 31,113 20,268,610 $ 20,299,723Ending Fund Balance Source: City of Renton. 19 General Fund Balance Sheet (Years Ending December 31) Preliminary Audited 2014 2013 2012 2011 Assets Cash & cash equivalents $10,243,402 $11,365,454 $11,435,445 $7,873,281 Cash with fiscal agent 297,471 237,419 224,837 125,134 Investments 7,059,143 4,816,827 3,721,741 4,632,146 Receivables Taxes 2,349,340 3,341,907 2,262,963 2,880,657 Customer accounts 5,368,839 4,680,580 4,192,301 3,753,123 Accrued interest & penalty 48,456 39,490 28,817 45,678 Interfund loans receivable 461,810 500,416 Due from other funds 44,457 44,457 136,367 44,063 Due from other governmental units 5,311,745 5,473,170 5,162,769 4,842,807 Prepayments Advances to other funds (1)1,716,067 Total Assets 30,722,853 29,999,304 27,627,050 26,413,372 2010 6,146,910 5,318,401 2,995,738 3,237,276 14,441 358,517 42,517 4,499,497 8,000 1,516,483 24,137,780 Liabilities and Fund Balances Liabilities Accounts payable 1,569,721 1,029,793 605,019 2,656,549 Taxes payable 41,555 37,611 49,776 33,148 Due to other funds/Other gov’t units 56,367 36,857 73,546 Custodial accounts 100,749 86,581 394,868 225,935 Unearned revenues 4,656,476 4,551,685 4,243,630 4,151,414 Deposits 34,739 Accrued employee wages & leave payable 4,085,741 3,768,142 3,612,456 3,489,265 Fund Balances (2) Reserved 438,974 4,539,413 17,257,314 1,936,518 Unreserved 19,829,637 15,929,712 1,427,130 13,812,258 Total Liabilities and Fund Balances $ 30,722,853 $ 29,999,304 $ 27,627,050 $ 26,413,372 (1) "Advances to other funds" represent repaid interfund loans. (2) Fund balance designations changed in 2012 with the implementation of GASB (defined herein) 54. portion of the General Fund balance was committed to other funds, which were transferred in 2014. City reassessed its fund balance classification to better align with GASB 54. Source: City of Renton Audited Financial Statements. 1,465,115 14,364 925,165 30,877 3,675,204 34,739 3,503,327 2,468,569 12,020,420 $ 24,137,780 In 2013, a large Also in 2013, the 20 The City The City was incorporated in 1901 and operates under State laws applicable to a non-charter code city with a mayor-council form of government. The council is comprised of seven members plus the mayor. Councilmembers are elected to four-year terms on a staggered schedule through citywide elections. Councilmembers are part-time elected officials who exercise legislative authority and determine matters of policy for the City. Member Position Term Expires Denis W. Law Mayor December 31, 2015 Ed Prince Council President December 31, 2015 Randy Corman Council President Pro Tem December 31, 2017 Marcie Palmer Councilmember December 31, 2015 Armondo Pavone Councilmember December 31, 2017 Ruth P~rez Councilmember December 31, 2015 Don Persson Councilmember December 31, 2015 Greg Taylor Councilmember December 31, 2015 The City provides a range of municipal services authorized by State law, including police, fire, ambulance service, streets, sanitation, health, recreation, library, public improvements, planning and zoning, water supply treatment and distribution, and sewage collection and treatment services. City Staff Jay Covington, Chief Administrative Officer. Mr. Covington joined City staff in 1990. Prior to joining the City, Mr. Covington served eight years at the City of Vancouver, Washington, in the roles of budget analyst, management analyst and Assistant to the City Manager. Mr. Covington earned a Bachelor’s degree in Business and Masters in Public Administration from Brigham Young University. Mr. Covington is a past President and Board Member of the Washington City/County Management Association as well as a past Board Member of the Association of Washington Cities. In 2005, Mr. Covington received the Public Official of the Year Award from the Seattle Municipal League. Iwen Wang, Finance and Information Services Administrator. Ms. Wang was originally with the City in 1986 as its Utility Accounting Supervisor and was promoted to the Deputy Finance Director position in 1988, where she was responsible for budget, financial planning, and financial operation functions including accounting, cash management, and coordination of financial audits and banking service contracts. Ms. Wang rejoined the City in 2008 as its Finance and Information Services Administrator, and is now responsible for overall management of the City’s financial and information technology functions. Prior to her original position with the City, Ms. Wang was with the City of Redmond as its enterprise fund accountant. In 1994, Ms. Wang joined the City of Federal Way as its Management Service Director and was appointed to Assistant City Manager in 2007 until she left to rejoin the City. Ms. Wang has a Bachelor of Arts degree in public finance and Master of Business Administration degree in Finance. In addition, Ms. Wang is a Certified Public Accountant and a Certified Management Accountant. Jamie Thomas, Fiscal Services Director. Ms. Thomas joined the City staff as the Fiscal Services Director in November 2011. Prior to joining the City Ms. Thomas served as the Finance Manager for over three years at Valley Communications Center. Prior to that, she was an Assistant Audit Manager for the Washington State Auditor’s Office. Ms. Thomas has an MBA from the University of Washington. Labor Relations The City currently has approximately 686 full-time equivalent employees. The City enters into written bargaining agreements with represented employees. The agreements contain provisions regarding salaries, vacation, sick leave, medical and dental insurance, working conditions, and grievance procedures. The City strives to complete agreements with all groups in a timely manner, consistent with all applicable State law, and to promote labor relation policies mutually beneficial to management and employees. The City considers labor relations with its bargaining units to be good. There have been no recent strikes or major labor relations problems. 21 Number of Bargaining Unit Employees AFSCME 286 Renton Police Officers’ Guild 110 Renton Police Officers’ Guild Non-Commissioned 28 Renton Firefighters Local 864 136 Renton Firefighters Local 864 Battalion Chiefs 6 Expiration Date December 31, 2015 December 31, 2015 December 31, 2015 December 31, 2015 December 31, 2015 Pension System Substantially all of the City’s employees are enrolled in cost-sharing multiple-employer pension plans administered by the State Department of Retirement Systems: Public Employees Retirement System ("PERS"), the Law Enforcement Officers and Fire Fighters Retirement System ("LEOFF’) or the Public Safety Employees Retirement System ("PSERS"). Contributions by both employees and employers are based on gross wages. PERS and LEOFF participants who joined the system by September 30, 1977, are Plan 1 members. PERS participants who joined on or after October 1, 1977 and by August 31, 2002, are Plan 2 members, unless they exercise an option to transfer to Plan 3. PERS participants joining on or after September 1, 2002 have the irrevocable option of choosing membership in Plan 2 or Plan 3. LEOFF participants who joined on or after October 1, 1977, are Plan 2 members. PSERS consists of a single defined benefit plan, Plan 2, that became effective July 1, 2006, and includes all full-time public safety officers. PERS Plans 1 and 2, LEOFF and PSERS are defined-benefit pension plans. PERS Plan 3 is a hybrid defined-benefit and defined-contribution pension plan. The following tables outline the contribution rates of employees and employers under PERS, LEOFF and PSERS. The City contributed $2,417,197 in 2013 and $2,775,032 in 2014 to PERS; $1,357,580 in 2013 and $1,414,095 in 2014 to LEOFF; and $11,925 in 2013 and $13,550 in 2014 to PSERS. The 2014 amounts are unaudited. Below are the contribution rates for the State’s 2013-2015 biennium from July 1, 2013 through June 30, 2015. PERS Contribution Rates (1) PERS Plan I PERS Plan 2 PERS Plan 3 Employee 6.00%4.92%Variable (5% to 15%) Employer (1)9.21%9.21%9.21% Includes a 0.18% administration fee. The Office of the State Actuary has adopted a new employer contribution rate of 11% for PERS effective July 1, 2015 through June 30, 2017. LEOFF Contribution Rates Plan I Plan 2 Employee 0.00%8.41% Employer (1) 0.18%5.23% State 0.00%3.36% (1)Includes a 0.18% administration fee. (1)Includes a 0.18% administration fee. PSERS Contribution Rates Plan 2 Employee 6.36% Employer (1)10.52% 22 Information regarding all of these plans is presented in annual financial report of the State Department of Retirement Systems, which may be obtained from: Department of Retirement Systems 1025 East Union Street P.O. Box 48380 Olympia, WA 98504-8380 Internet Address: www.drs.wa.gov (which website is not incorporated herein by reference) While the City’s contributions in 2014 represented its full current liability under PERS, LEOFF and PSERS, any unfunded pension benefit obligations within the systems could be reflected in future years as higher contribution rates. The website of the Office of the State Actuary ("OSA’) includes information regarding the values and funding levels of these retirement plans. According to OSA, as of June 30, 2013, PERS Plans 2 and 3 and LEOFF Plans I and 2 had no unfunded actuarial accrued liability. However, during the years 2001 through 2010 the rates adopted by the Legislature were lower than those that would have been required to produce actuarially required contributions to PERS Plan 1, a closed plan with a large proportion of the retirees. According to a report issued by OSA in September 2014, and subject to the assumptions therein, the total unfunded actuarial accrued liability of PERS Plan I was $4.831 billion (63% funded on an actuarial basis) as of June 30, 2013. The assumptions used by OSA in calculating the unfunded liability as of June 30, 2013 of PERS and LEOFF are 7.8 percent annual rate of investment return (7.5% for LEOFF Plan 2), 3.75 percent salary increases, 3.0 percent inflation and 0.95 percent growth in membership (1.25% for LEOFF). To report funded status, liabilities were valued using the "Projected Unit Credit" cost method and assets val~aed using the actuarial value of assets. In July 2014, the Pension Funding Council (the "PFC’) adopted contribution rate increases to be phased in over three biennia, beginning with the 2015-17 biennium. For the 2015-17 biennium employer rates will be 11 percent for PERS Plans 1, 2 and 3 (net of DRS administrative fees) and employee rates for PERS Plan 2 will be 6.12 percent. PERS Plan 1 and 3 remain unchanged from the table above. The LEOFF 2 Board did not adopt a rate increase for the 2015-17 biennium. The rates adopted by the PFC and LEOFF 2 Board are subject to revision by the State legislature. Other than PERS Plans 2 and 3, which are combined for reporting purposes, assets for one plan may not be used to fund benefits for another plan; however, all employers in PERS are required to make contributions at rates (percentage of payroll) determined by the OSA every two years for the purpose of amortizing within a rolling 10-year period the unfunded actuarial accrued liability in PERS Plan 1. The State Legislature in 2009 established certain maximum contribution rates that began in 2009 and continue until 2015 and certain minimum contribution rates that are to become effective in 2015 and remain in effect until the actuarial value of assets in PERS Plan 1 equal 100 percent of actuarial accrued liability of PERS Plan 1. These rates are subject to change by future legislation enacted by the State Legislature to address future changes in actuarial and economic assumptions and investment performance. Other Post-Employment Benefits The City’s annual cost (expense) for other post-employment benefits ("OPEB") is calculated based on the annual required contribution of the employer ("ARC"), an amount actuarially determined in accordance with the parameters of GASB (Governmental Accounting Standards Board) 45. The ARC represents a level of funding that, if paid on an ongoing basis, is projected to cover normal costs each year and amortize any unfunded actuarial liabilities (or funding excess) over a period not to exceed thirty years. The following table shows the components of the City’s annual OPEB cost for 2013, the amount contributed to the LEOFF.I Retiree Healthcare Plan (the "Plan"), and changes in the City’s net OPEB obligation to the Plan: Annual OPEB Cost Contributions Made Increase (Decrease) in Net OPEB Obligation Net OPEB Obligation - Beginning of Year Net OPEB Obligation - End of Year $ 1,884,823 (1,039,281) 845,542 3,744,023 $ 4.58~9.565 23 The City’s annual OPEB cost, the percentage of annual OPEB cost contributed to the Plan, and the net OPEB obligation for the years ending December 31 were as follows: Fiscal Contribution as a Year Annual Percentage of Net OPEB Ended OPEB Cost Annual OPEB Cost Obligation 2013 $1,884,823 55.14%$4,589,565 2012 1,873,324 66.98 3, 744, 023 2011 1,716,970 51.00 3,125,494 Budgetary Policies The City budgets its funds in accordance with chapter 35A.33 RCW. Annual appropriated budgets are adopted for the general, special revenue, debt service, and capital projects funds on the cash basis of accounting and include fund balances. The City provides a reconciliation of the differences between the budgetary basis and GAAP each year in its Comprehensive Annual Financial Report. The City Council adopts a budget by ordinance establishing appropriations for City funds biennially. The biennial budget is required to be reviewed and amended during the mid-biennium. The City Council may also authorizes supplemental appropriations any other time during the biennium. Administrative and legal budgetary control is established at the fund level, i.e., expenditures for a fund may not exceed the total appropriation amount. The Mayor or Chief Administrative Officer may authorize transfers of appropriations within a fund however interfund transfers must be approved by ordinance of the Council. Risk Management The City is a member of the Washington Cities Insurance Authority ("WCIA"). Utilizing chapter 48.62 RCW (self-insurance regulation) and chapter 39.34 RCW (the Interlocal Cooperation Act), nine cities originally formed WCIA on January 1, 1981. WCIA was created for the purpose of providing a pooling mechanism for jointly purchasing insurance, jointly self-insuring, and/or jointly contracting for risk management services. WCIA has 175 members. New members initially contract for a three-year term, and thereafter automatically renew on an annual basis. A one-year withdrawal notice is required before membership can be terminated. Termination does not relieve a former member from its unresolved loss history incurred during membership. Liability coverage is written on an occurrence basis, without deductibles. Coverage includes general, automobile, police, public officials’ errors or omissions, stop gap, and employee benefits liability. Limits are $4 million per occurrence self-insured layer, and $16 million per occurrence in the re-insured excess layer. The excess layer is insured by the purchase of reinsurance and insurance and is subject to aggregate limits. Total limits are $20 million per occurrence subject to aggregate sublimits in the excess layers. The Board of Directors determines the limits and terms of coverage annually. Insurance coverage for property, automobile physical damage, fidelity, inland marine, and boiler and machinery are purchased on a group basis. Various deductibles apply by type of coverage. Property insurance and auto physical damage are self-funded from the members’ deductible to $750,000, for all perils other than flood and earthquake, and insured above that amount by the purchase of insurance. In-house services include risk management consultation, loss control field services, claims and litigation administration, and loss analyses. WCIA contracts for the claims investigation consultants for personnel issues and land use problems, insurance brokerage, and lobbyist services. WCIA is fully funded by its members, who make annual assessments on a prospectively rated basis, as determined by an outside, independent actuary. The assessment covers loss, loss adjustment, and administrative expenses. As outlined in the Interlocal Cooperation Act, WCIA retains the right to additionally assess the membership for any funding shortfall. 24 An investment committee, using investment brokers, produces additional revenue by investment of WCIA’s assets in financial instruments which comply with all State guidelines. These revenues directly offset portions of the membership’s annual assessment. A Board of Directors governs WCIA, which is comprised of one designated representative from each member. The Board elects an Executive Committee and appoints a Treasurer to provide general policy direction for the organization. The WCIA Executive Director reports to the Executive Committee and is responsible for conducting the day to day operations of WCIA. The City is analyzing potential alternatives to WCIA for insurance coverage. The City has given WCIA the notice required for withdrawal from WCIA, but the City will not withdraw until alternative coverage is in place. The earliest that any such change could occur would be 2016. Auditing of City Finances The Office of the State Auditor, in accordance with RCW 43.09.200 and RCW 43.09.230, prescribes accounting systems and budgetary controls. State statutes require audits for cities to be conducted by the Office of the State Auditor. The City complies with the systems and controls prescribed by the Office of the State Auditor and establishes procedures and records which reasonably assure safeguarding of assets and the reliability of financial reporting. The State Auditor is required to examine the affairs of cities at least once every two years; however the City requests annual audits. The examination must include, among other things, the financial condition and resources of the City, whether the laws and constitution of the State are being complied with, and the methods and accuracy of the accounts and reports of the City. Reports of the auditor’s examinations are required to be filed in the office of the State Auditor and in the finance department of the City. The audited financial statements of the City for the year ended December 31, 2013, are attached as Appendix C to this Official Statement. The 2014 figures included herein are unaudited,.preliminary and subject to change. lremainder of page intentionally left blank] 25 Demographic Information The City surrounds the southern end of Lake Washin.gton, southeast of Seattle on Interstate 405. The City is located approximately 11 miles southeast of the City of Seattle and approximately 53 miles northeast of the City of Olympia, the State’s capital. The City had a population of 97,130 in 2014, an increase of approximately 61 percent since early 2008, when the City annexed the Benson Hill-Cascade area. The City ranks fourth in population among cities in the County. Historical population of the City and the County are shown below. Population Population data for the City, the County and Seattle are as follows: Population(1) City of City of King Year Renton Seattle County 2014 97,130 640,500 2,017,250 2013 95,540 626,600 1,981,900 2012 93,910 616,500 1,957,000 2011 92,590 612,100 1,942,600 2010(2)90,927 608,660 1,931,249 (1) Except as otherwise noted, figures are estimates as of April I of each year. (2) Official U.S. Census figure. Source: Washington State Office of Financial Management, February 2015. King Coun~ Washington King County The County is located in the Puget Sound region in Washington and covers more than 2,200 square miles, The County is the largest metropolitan county in the State in terms of number of cities and employment, and includes more than one quarter of the State’s population. The tables in the following section include the most recent information available. Major contributors to the area’s economy are manufacturing, technology-based business, the Port of Seattle, Services industry, tourism, fishing and agriculture. Income.Historical personal income and per capita income levels for the County and the State are shown below: King County and State of Washington Total Personal and Per Capita Income Year King County Total Personal Per Capita Income (in thousands)Income 2013 $ 128,330,859 $ 62,770 2012 124,291,775 61,911 2011 113,153,894 5Z400 2010 105,389,106 54,395 2009 102,749,898 53,739 Source: U.S. Department of Commerce, Bureau of Economic Analysis, February 2015. State of Washington Total Personal Per Capita Income (in thousands)Income $332,654,857 $ 47,717 324,458,394 4Z055 303,999,485 44,565 286,862,463 42,547 280,943,954 42,137 26 Median Household Income. Median household income estimation is based on 1990 and 2000 Census data, and on the Census Bureau’s American Community Surveys’ estimates for 2009-2010. (1) (2) Source: State of Year King County Washington 2013(1)$ 70,365 $ 58,577 2012(2)68,313 56,444 2011 66,294 55,500 2010 65,383 54,888 2009 65,877 55,458 The Revenue Forecast Council’s November 2013 forecast of the state personal income is used in the projection of 2012 median household income. In addition to the state personal income data published by BEA, the payroll data compiled by the state Employment Security Department are used in the Preliminary estimates of 2010 median household income. Washington State Department of Revenue, February 2015. Taxable Retail Sales. Taxable retail sales reflect only those sales subject to retail sales tax. Historic taxable retail sales for the County and the City are shown below: Taxable Retail Sales King County City of Renton 2014(1)$ 36,236,439,424 $ 1,701,139,247 2013 46,601,198,766 2,242,002,565 2012 43,506,804,227 2,094,900,017 2011 40,846,118,928 1,936,916,285 2010 39,275,353,182 1,914,203,605 2009 39,594,903,520 1,976,222,466 (1)Data from the Quarterly Business Review through third quarter only; through the third quarter of 2013, taxable retail sales for the County and the City were $34,082,121,712 and $1,663,617,404, respectively. Source: Washington State Department of Revenue, February 2015. [remainder of page intentionally left blank] 27 Building Permits. The number and valuation of new single-family and multi-family residential building permits in the County and the City are listed below: King County Residential Building Permits New Single Family Units New Multi Family Units Total Year Number Construction Cost Number Construction Cost Construction Cost 2014(1)4,179 $1,458,799,499 10,428 $1,388,435,517 $2,847,235,016 2013 4,419 1,419,065,243 7,858 1,053,237,846 2,472,303,089 2012 3,864 1,133,343,731 7,750 1,118,023,021 2,251,366,752 2011 2,765 785,840,283 3,378 431,699,572 1,217,539,855 2010 2,578 705,719,017 3,442 325,377,955 1,031,096,972 2009 2,003 538,910,481 1,183 137,161,103 676,071,584 (1) Estimates with imputation for data through December. Source: U.S. Bureau of the Census, February 2015. City of Renton Residential Building Permits New Single Family Units Year Number Construction Cost Number 2014 232 $78,733,474 442 2013 274 87,173,883 147 2012 265 77,718,054 0 2011 245 69,783,888 65 2010 243 62,645,177 9 2009 249 57,572,228 73 Source: City of Renton. New Multi Family Units Construction Cost $42,996,586 21,013,029 0 8,201,142 1,215,783 12,096,177 Total Construction Cost $121,730,060 108,186,912 77,718,054 77,985,030 63,860,960 69,668,405 lremainder of page intentionally left blank] 28 Employment. The following table presents State-wide employment data in 2013 for certain major employers in the Puget Sound area. Puget Sound Major Employers Employer The Boeing Company Joint Base Lewis-McChord Microsoft Corp. Navy Region Northwest University of Washington Amazon.com Inc. Providence Health & Services Wal-Mart Stores, Inc. Fred Meyer Stores King County Government Franciscan Health System U.S. Postal Service Starbucks Corp. MultiCare Health System Swedish Health Services City of Seattle Costco Wholesale Corp. Nordstrom, Inc. PeaceHealth Group Health Cooperative Alaska Air Group Inc. Virginia Mason Medical Center Fairchild Air Force Base Target Seattle Public Schools (1) Does not include part-time or seasonal employment figures. Source: Puget Sound Business Journal, Book of Lists, 2015. Employees 81,939 56,000 43,031 43,000 30,200 24,700 19,456 19,350 15,450 13,400 12,440 11,672 11,239 10,758 10,726 10,080 9,264 8,982 8,800 7,271 6,139 6,000 5,957 5,773 5,583 City of Renton 2014 Major Employers Employer The Boeing Company Providence Health & Services Valley Medical Center Renton School District Federal Aviation Administration Paccar Inc. City of Renton Kroger QFC/Fred Meyer Wizards of the Coast King County Elections Source: City of Renton Business License System. Product/Business Aerospace HMO medical centers Medical services Public education Federal government Heavy manufacturing City government Supermarkets/retail Toy and hobby goods County government Employment 14,698 2,244 2,173 1,507 1,408 1,254 700 446 425 385 29 Employment within the County is described in the following tables. Civilian Labor Force data is based on household surveys of residents. NAICS data are estimates based on surveys of employers and benchmarked based on covered employment as reported by all employers. Civilian Labor Force Total Employment Total Unemployment Percent of Labor Force King County Nonagricultural Wage & Salary Workers~2) and Labor Force and Employment Data Annual Average 2014(1~2013 2012 2011 2010 1,160,020 1,139,610 1,129,670 1,115,790 1,113,290 1,105,120 1,079,950 1,055,000 1,025,070 1,011,940 54,900 59,660 74,670 90,720 101,350 4.7%5.2%6.6%8.1%9.1% NAICS INDUSTRy(3/ Total Nonfarm Total Private Goods Producing Mining and Logging Construction Manufacturing Service Providing Trade, Transportation, and Utilities Information Financial Activities Professional and Business Services Educational and Health Services Leisure and Hospitality Other Services Government Federal Government State Government Local Government Workers in Labor/Management Disputes (1) Preliminary data through December. 2014~1~2013 1,281,617 1,238,500 1,111,742 1,071,258 168,517 162,592 425 467 60,583 55,867 107,475 106,258 1,113,100 1,075,908 236,117 225,992 86,167 82,667 72,033 70,883 208,717 200,833 168,400 163,067 125,725 120,708 46,067 44,517 169,875 167,242 20,092 20,392 57,242 56,467 92,542 90,383 0 0 2012 1,19~042 1,03@608 154,283 425 50,625 103,225 1,041,758 216,167 81~017 68~850 192.525 159~275 114.850 43.642 165.433 20,733 55,483 89,217 0 2011 1,168,100 1,003,183 148,942 525 48,258 100,192 1,019,158 210,850 80 183 68 175 184 567 157 008 111 083 42 375 164 717 21,158 54,975 88,783 0 2010 1,148,642 981,675 148,158 467 49,675 98,017 1,00~483 206,025 79,408 68,750 176,675 152,817 108,700 41,142 166,967 21,900 55,767 89,300 0 (2)Excludes proprietors, self-employed, members of the armed services, workers in private households, and agriculture. Includes all full- and part-time wage and salary workers receiving pay during the pay period including the 12th of the month. (3) North American Industry Classification System. Source: Washington State Employment Security Department, February 2015. Initiative and Referendum Under the State Constitution, the voters of the State have the ability to initiate legislation and require the Legislature to refer legislation to the voters through the powers of initiative and referendum, respectively. The initiative power in Washington may not be used to amend the State Constitution. Initiatives and referenda are submitted to the voters upon receipt of a petition signed by at least eight percent (initiative) and four percent (referenda) of the number of voters registered and voting for the office of Governor at the preceding regular gubernatorial election. Any law approved in this manner by a majority of the voters may not be amended or repealed by the Legislature within a period of two years following enactment, except by a vote of two-thirds of all the members elected to each house of the Legislature. After two years, the law is subject to amendment or repeal by the Legislature in the same manner as other laws. Under the Renton Municipal Code, City voters may initiate local legislation and City Code amendments, and modify existing legislation, through powers of initiative and referendum. Under Washington law, the 30 Ordinance may not be a proper subject for a referendum petition. Nonetheless, the referendum period will have expired and the Ordinance will become effective on or before the date of issuance and delivery of the Bonds. As of the date of this Official Statement, no referendum petition has been filed. In recent years there has been an increase in the number of initiatives and referenda filed in Washington, including state initiatives targeting property taxes imposed by local jurisdictions. The City cannot predict whether this trend will continue, whether any filed initiatives will receive the requisite signatures to be certified to the ballot, and whether such initiatives will be approved by the voters and, if challenged, upheld by the courts. Tax Matters In the opinion of Bond Counsel, interest on the 2015A Bonds is excludable from gross income for federal income tax purposes and is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations; however, interest on the 2015A Bonds is taken into account in determining adjusted current earnings for the purpose of computing the alternative minimum tax imposed on certain corporations. Federal income tax law contains a number of requirements that apply to the 2015A Bonds, including investment restrictions, periodic payments of arbitrage profits to the United States, requirements regarding the use of proceeds of the 2015A Bonds and the facilities refinanced with proceeds of the 2015A Bonds and certain other matters. The City has covenanted to comply with all applicable requirements. Bond Counsel’s opinion is subject to the condition that the City comply with the above-referenced covenants and, in addition, will rely on representations by the City and its advisors with respect to matters solely within the knowledge of the City and its advisors, respectively, which Bond Counsel has not independently verified. If the City fails to comply with such covenants or if the foregoing representations are determined to be inaccurate or incomplete, interest on the 2015A Bonds could be included in gross income for federal income tax purposes retroactively to the date of issuance of the 2015A Bonds, regardless of the date on which the event causing taxability occurs. In rendering its opinion, Bond Counsel has relied on the report of Grant Thornton LLP with respect to the accuracy of certain mathematical calculations. Except as expressly stated above, Bond Counsel expresses no opinion regarding any other federal or state income tax consequences of acquiring, carrying, owning or disposing of the 2015A Bonds. Owners of the 2015A Bonds should consult their tax advisors regarding the applicability of any collateral tax consequences of owning the 2015A Bonds, which may include original issue discount, original issue premium, purchase at a market discount or at a premium, taxation upon sale or other disposition, and various withholding requirements. Prospective purchasers of the 2015A Bonds should be aware that ownership of the 2015A Bonds may result in collateral federal income tax consequences to certain taxpayers, including, without limitation, financial institutions, property and casualty insurance companies, individual recipients of Social Security or Railroad Retirement benefits, certain S corporations with "excess net passive income," foreign corporations subject to the branch profits tax, life insurance companies and taxpayers who may be deemed to have incurred or continued indebtedness to purchase or carry or have paid or incurred certain expenses allocable to the 2015A Bonds. Bond Counsel expresses no opinion regarding any collateral tax consequences. Prospective purchasers of the 2015A Bonds should consult their tax advisors regarding collateral federal income tax consequences. Payments of interest on tax-exempt obligations such as the 2015A Bonds, are in many cases required to be reported to the Internal Revenue Service (the "IRS"). Additionally, backup withholding may apply to any such payments made to any owner who is not an "exempt recipient" and who fails to provide certain identifying information. Individuals generally are not exempt recipients, whereas corporations and certain other entities generally are exempt recipients. Bond Counsel’s opinion is not a guarantee of result and is not binding on the IRS; rather, the opinion represents Bond Counsel’s legal judgment based on its review of existing law and in reliance on the representations made to Bond Counsel and the City’s compliance with its covenants. The IRS has established 31 an ongoing program to audit tax-exempt obligations to determine whether interest on such obligations is includable in gross income for federal income tax purposes. Bond Counsel cannot predict whether the IRS will commence an audit of the 2015A Bonds. Owners of the 2015A Bonds are advised that, if the IRS does audit the 2015A Bonds, under current IRS procedures, at least during the early stages of an audit, the IRS will treat the City as the taxpayer, and the owners of the 2015A Bonds may have limited rights to participate in the audit. The commencement of an audit could adversely affect the market value and liquidity of the 2015A Bonds until the audit is concluded, regardless of the ultimate outcome. Qualified Tax-Exempt Obligations The City has designated the 2015A Bonds Section 265(b)(3)(B) of the Code. as "qualified tax-exempt obligations" within the meaning of Proposed Tax Legislation; Miscellaneous Tax legislation, administrative actions taken by tax authorities, and court decisions may cause interest on the 2015A Bonds to be subject, directly or indirectly, to federal income taxation or to be subject to or exempted from state income taxation, or otherwise prevent the beneficial owners of the 2015A Bonds from realizing the full current benefit of the tax status of such interest. In addition, such legislation or actions (whether currently proposed, proposed in the future or enacted) could affect the market price or marketability of the 2015A Bonds. For example, proposals have been made that could significantly reduce the benefit of, or otherwise affect, the exclusion from gross income for federal tax purposes of interest on obligations such as the 2015A Bonds. Prospective purchasers of the 2015A Bonds should consult their own tax advisors regarding any pending or proposed federal or state tax legislation, regulations or litigation, and its impact on their individual situations, as to which Bond Counsel expresses no opinion. Premium Bonds An amount equal to the excess of the purchase price of a 2015A Bond over its stated redemption price at maturity constitutes premium on that 2015A Bond. A purchaser of a 2015A Bond must amortize any premium over that 2015A Bond’s term using constant yield principles, based on the 2015A Bond’s yield to maturity. As premium is amortized, the purchaser’s basis in the 2015A Bond and the amount of tax-exempt interest received will be reduced by the amount of amortizable premium properly allocable to the purchaser. This will result in an increase in the gain (or decrease in the loss) to be recognized for federal income tax purposes on sale or disposition of the 2015A Bond prior to its maturity. Even though the purchaser’s basis is reduced, no federal income tax deduction is allowed. Purchasers of 2015A Bonds at a premium, whether at the time of initial issuance or subsequent thereto, should consult their tax advisors with respect to the determination and treatment of premium for federal income tax purposes and the state and local tax consequences of owning such 2015A Bonds. Certain Income Tax Consequences This advice was written to support the promotion or marketing of the 2015B Bonds. This advice is not intended or written by Pacifica Law Group LLP to be used, and may not be used, by any person or entity for the purpose of avoiding any penalties that may be imposed on any person or entity under the U.S. Internal Revenue Code. Prospective purchasers of the 2015B Bonds should seek advice based on their particular circumstances from an independent tax advisor. The following discussion describes aspects of the principal U.S. federal tax treatment of U.S. persons that are beneficial owners ("Owners") of the 2015B Bonds. This summary is based on the Code, published revenue rulings, administrative and judicial decisions, and existing and proposed Treasury regulations (all as of the date hereof and all of which are subject to change, possibly with retroactive effect). This summary discusses only the 2015B Bonds held as capital assets within the meaning of Section 1221 of the Code. It does not discuss all of the tax consequences that may be relevant to an Owner in light of its particular circumstances or to Owners subject to special rules, such as certain financial institutions, insurance companies, tax-exempt organizations, foreign taxpayers, taxpayers who may be subject to the alternative minimum tax or personal holding company provisions of the Code, dealers in securities or foreign currencies, Owners holding 32 the 2015B Bonds as part of a hedging transaction, "straddle," conversion transaction, or other integrated transaction, or Owners whose functional currency (as defined in Section 985 of the Code) is not the U.S. dollar. Except as stated herein, this summary describes no federal, state or local tax consequences resulting from the ownership of, receipt of interest on, ,or disposition of, the 2015B Bonds. ACCORDINGLY, INVESTORS WHO ARE OR MAY BE DESCRIBED WITHIN THIS PARAGRAPH SHOULD CONSULT THEIR OWN TAX ADVISORS REGARDING THE UNITED STATES FEDERAL INCC~ME TAX CONSEQUENCES TO SUCH INVESTORS, AS WELL AS TAX CONSEQUENCES ARISING UNDER THE LAWS OF ANY STATE, LOCAL, OR FOREIGN TAXING JURISDICTION OR UNDER ANY APPLICABLE TAX TREATY, OF PURCHASING, HOLDING, OWNING AND DISPOSING OF THE 2015B BONDS, INCLUDING THE ADVISABILITY OF MAKING ANY OF THE ELECTIONS DESCRIBED BELOW, BEFORE DETERMINING WHETHER TO PURCHASE THE 2015B BONDS. For purposes of this discussion, a "U.S. person" means an individual who, for U.S. federal income tax purposes, is (i) a citizen or resident of the United States, (ii) a corporation, partnership or other entity created or organized in or under the laws of the United States or any political subdivision thereof, (iii) an estate, the income of which is subject to U.S. federal income taxation regardless of its source of income, or (iv) a trust, if either: (A) a United States court is able to exercise primary supervision over the administration of the trust, and one or more United States persons have the authority to control all substantial decisions of the trust or (B) a trust has a valid election in effect to be treated as a United States person under the applicable treasury regulations. The term also includes nonresident alien individuals, foreign corporations, foreign partnerships, and foreign estates and trusts ("Foreign Owners") to the extent that their ownership of the 2015B Bonds is effectively connected with the conduct of a trade or business within the United States, as well as certain former citizens and residents of the United States who, under certain circumstances, are taxed on income from U.S. sources as if they were citizens or residents. It should also be noted that certain "single member entities" are disregarded for U.S. federal income tax purposes. Such Foreign Owners and Owners who are single member non-corporate entities, should consult with their own tax advisors to determine the U.S. federal, state, local, and other tax consequences that may be relevant to them. In General. Interest derived from a 2015B Bond by an Owner is subject to U.S. federal income taxation: In addition, a 2015B Bond held by an individual who, at the time of death, is a U.S. person is subject to U.S. federal estate tax. Payments of Interest. Interest, including additional amounts of cash and interest, if any, paid on the 2015B Bonds will generally be taxable to Owners as ordinary interest income at the time it accrues or is received, in accordance with the Owner’s method of accounting for U.S. federal income tax purposes. Owners who are cash-method taxpayers will be required to include interest in income upon receipt of such interest income; whereas Owners who are accrual-method taxpayers will be required to include interest as it accrues, without regard to when interest payments are actually received. Disposition or Retirement. Upon the sale, exchange or other disposition of a 2015B Bond, or upon the retirement of a 2015B Bonds, an Owner will recognize capital gain or loss equal to the difference, if any, between the amount realized upon the disposition or retirement (reduced by any amounts attributable to accrued but unpaid interest, which will be taxable as such) and the Owner’s adjusted tax basis in the 2015B Bonds. Any such gain or loss will be United States source gain or loss for foreign tax credit purposes. If the City defeases any 2015B Bonds, such 2015B Bond may be deemed to be retired and "reissued" for federal income tax purposes as a result of the defeasance. In such event, the Owner of a 2015B Bond would recognize a gain or toss on the 2015B Bonds at the time of defeasance. The Code contains a number of provisions relating to the taxation of securities such as the 2015B Bonds (including, but not limited to the tax treatment of and accounting of interest, premium, original issue discount and market discount thereon, gain from the sale, exchange of other disposition thereof and withholding tax on income therefrom) that may affect the taxation of certain owners, depending on their particular tax situations. The federal tax discussion set forth above is included for general information only and may not be applicable depending upon an owner’s particular situation. Investors should consult their own tax advisors concerning the tax implications of holding and disposing of the 2015B Bonds under applicable state or local laws. Foreign investors should also consult their own tax advisors regarding the tax consequences unique to investors who are not U.S. persons. 33 ERISA Considerations The Employee Retirement Income Security Act of 1974, as amended ("ERISA"), imposes certain requirements on employee plans subject to Title I of ERISA ("ERISA Plans"), and on those persons who are fiduciaries with respect to ERISA Plans. Investments by ERISA Plans are subject to ERISA’s general fiduciary requirements under Title I, Part 4 of ERISA, including, but not limited to, the requirements of investment prudence and diversification and the requirement that an ERISA Plan’s investments be made in accordance with the documents governing the ERISA Plan. Section 406 of ERISA and Section 4975 of the Code prohibit certain transactions involving the assets of an ERISA Plan (as well as those plans that are not subject to Title I of ERISA but are subject to Section 4975 of the Code, such as individual retirement accounts (together with ERISA Plans, "Plans")) and certain persons (referred to as "parties in interest" or "disqualified persons" (each a "Party in Interest")) having certain relationships to such Plans, unless a statutory or administrative exemption is applicable to the transaction. A Party in Interest who engages in a prohibited transaction may be subject to excise taxes and other penalties and liabilities under ERISA and the Code. The fiduciary of a Plan that proposes to purchase and hold any 2015B Bonds should consider, among other things, whether such purchase and holding may involve (a) the direct or indirect extension of credit to a Party in Interest, (b) the sale or exchange of any property between a Plan and a Party in Interest and (c) the transfer to, or use by or for the benefit of, a Party in Interest, of any Plan assets within the meaning of 29 CFR Sec. 2510.3-102 as modified by ERISA Section 3(42). Depending on the identity of the Plan fiduciary making the decision to acquire or hold 2015B Bonds on behalf of a Plan and other factors, U.S. Department of Labor Prohibited Transaction Class Exemption ("PTCE’) 75-1 (relating to certain broker-dealer transactions), PTCE 84-14 (relating to transactions effected by independent "qualified professional asset managers"), PTCE 90-1 (relating to investments by insurance company pooled separate accounts), PTCE 91-38 (relating to investments by bank collective investment funds), PTCE 95-60 (relating to investments by an insurance company general account), or PTCE 96-23 (relating to transactions directed by certain "in-house asset managers") (collectively, the "Class Exemptions") could provide an exemption from the prohibited transaction provisions of ERISA and Section 4975 of the Code. In addition, Section 408(b)(17) of ERISA and Section 4975(d)(20) of the Code generally provide for a statutory exemption from the prohibitions of Section 406(a) of ERISA and Section 4975 of the Code for certain transactions between Plans and persons who are Parties in interest solely, by reason of providing services to such Plans or that are affiliated with such service providers, provided generally that such persons are not fiduciaries (or affiliates of such fiduciaries) with respect to the "plan assets" of any Plan involved in the transaction and that certain other conditions are satisfied. By its acceptance of a 2015B Bond, each Beneficial Owner will be deemed to have represented and warranted that either (a) no "plan assets" of any Plan have been used to purchase such 2015B Bond, or (b) the Underwriter is not a Party in Interest with respect to the "plan assets" of any Plan used to purchase such 2015B Bond, or (c) the purchase and holding of such 2015B Bonds is exempt from the prohibited transaction restrictions of ERISA and Section 4975 of the Code pursuant to a statutory exemption or an administrative class exemption. Each Plan fiduciary (and each fiduciary for a governmental or church plan subject to the rules similar to those imposed on Plans under ERISA) should consult with its legal advisor concerning an investment in any of the 2015B Bonds. Rating As noted on the cover page of this Official Statement, the City has received a rating for the Bonds from Standard & Poor’s Rating Services, a part of McGraw Hill Financial. Standard & Poor’s has assigned its rating of "AA+" to the Bonds. The rating reflects only the views of the rating agency and an explanation of the significance of the rating may be obtained from the rating agency. There is no assurance that the rating will be retained for any given period of time or that the rating will not be revised downward or withdrawn entirely by the rating agency if, in its judgment, circumstances so warrant. Any such downward revision or withdrawal of the rating will be likely to have an adverse effect on the market price of the Bonds. The City does not have any obligation to take any action, other than file a listed event notification, if the ratings on the Bonds are changed, suspended or withdrawn. 34 Continuing Disclosure In accordance with Section (b)(5) of Securities and Exchange Commission (the "Commission") Rule 15c2-12 under the Securities Exchange Act of 1934, as the same may be amended from time to time (the "Rule"), the City has agreed in the Ordinance for the benefit of the owners of the Bonds to provide or cause to be provided to the Municipal Securities Rulemaking Board ("MSRB") the following annual financial information and operating data for the prior fiscal year (commencing in 2015 for the fiscal year ended December 31, 2014): (i) annual financial statements, which statements may or may not be audited, showing ending fund balances for the City’s general fund prepared in accordance with the Budgeting Accounting and Reporting System ("BARS") prescribed by the State Auditor pursuant to RCW 43.09.200 (or any successor statutes) and generally of the type included in this Official Statement for the Bonds; (ii) the assessed valuation of taxable property in the City; (iii) ad valorem taxes due and percentage of taxes collected; (iv) property tax levy rate per $1,000 of assessed valuation; and (v) outstanding general obligation debt of the City. Items (ii) through (v) need only be provided to the extent such information is not included in the annual financial statements. Such annual information and operating data described above will be so provided on or before the end of nine months after the end of the City’s fiscal year. The City’s current fiscal year ends on December 31. The City may adjust such fiscal year by providing written notice of the change of fiscal year to the MSRB. In lieu of providing such annual financial information and operating data, the City may cross-reference to other documents available to the public on the MSRB’s internet website or filed with the Commission. If not provided as part of the annual financial information discussed above, the City will provide the City’s audited annual financial statement prepared in accordance with BARS prescribed by the Washington State Auditor pursuant to the statute cited above (or any successor statutes) when and if available to the MSRB. Listed Events. The City agrees to provide or cause to be provided to the MSRB, in a timely manner not in excess of 10 business days after the occurrence of the event, notice of the occurrence of any of the following events with respect to the Bonds: (i) principal and interest payment delinquencies; (ii) non-payment related defaults, if material; (iii) unscheduled draws on debt service reserves reflecting financial difficulties; (iv) unscheduled draws on credit enhancements reflecting financial difficulties; (v) substitution of credit or liquidity providers, or their failure to perform; (vi) adverse tax opinions, the issuance by the Internal Revenue Service of proposed or final determinations of taxability, Notices of Proposed Issue (IRS Form 5701-TEB) or other material notices or determinations with respecf to the tax status of the Bonds, or other material events affecting the tax status of the Bonds; (vii) modifications to the rights of Bondholders, if material; (viii) optional, contingent or unscheduled Bond calls other than scheduled sinking fund redemptions for which notice is given pursuant to Exchange Act Release 34-23856, if material, and tender offers; (ix) defeasances; (x) release, substitution or sale of property securing repayment of the Bonds, if material; (xi) rating changes; (xii) bankruptcy, insolvency, receivership or similar event of the City; 35 (xiii) the consummation of a merger, consolidation, or acquisition involving the City or the sale of all or substantially all of the assets of the City, other than in the ordinary course of business, the entry into a definitive agreement to undertake such an action or the termination of a definitive agreement relating to any such actions, other than pursuant to its terms, if material; and (xiv) appointment of a successor or additional trustee or the change of name of a trustee, if material. Solely for purposes of disclosure, without any intent to modify the undertaking as set forth above, the City advises that no credit enhancement, credit or liquidity facilities, debt service reserves or property secure payment of the Bonds. Format for Filings with the MSRB. Until otherwise designated by the MSRB or the Commission, any information or notices submitted to the MSRB in compliance with the Rule are to be submitted through the MSRB’s Electronic Municipal Market Access system ("EMMA"), currently located at www.emma.msrb.org (which is not incorporated into this Official Statement by reference). All notices, financial information and operating data required by this undertaking to be provided to the MSRB must be in an electronic format as prescribed by the MSRB. All documents provided to the MSRB pursuant to this undertaking must be accompanied by identifying information as prescribed by the MSRB. Notification Upon Failure to Provide Financial Data. The City also agrees to provide or cause to be provided, in a timely manner, to the MSRB notice of its failure to provide the annual financial information described above on or prior to the date set forth above. Termination/Modification. The City’s obligations to provide annual financial information and notices of listed events will terminate upon the legal defeasance, prior redemption, or payment in full of all of the Bonds. This section, or any provision hereof, will be null and void if the City (i) obtains an opinion of nationally recognized bond counsel to the effect that the portion of the Rule that requires that provision is invalid, has been repealed retroactively or otherwise does not apply to the Bonds and (ii) notifies the MSRB of such opinion and the cancellation of this section. Notwithstanding any other provision of the undertaking, the City may amend the provisions described in this section with an approving opinion of nationally recognized bond counsel and in accordance with the Rule. In the event of any amendment of its undertaking, the City will describe such amendment in the next annual report, and will include a narrative explanation of the reason for the amendment and its impact on the type (or in the case of a change of accounting principles, on the presentation) of financial information, or operating data being presented by the City. In addition, if the amendment relates to the accounting principles to be followed in preparing financial statements, (i) notice of such change shall be given in the same manner as for a listed event, as described above, and (ii) the annual report for the year in which the change is made will present a comparison (in narrative form and also, if feasible, in quantitative form) between the financial statements as prepared on the basis of the new accounting principles and those prepared on the basis of the former accounting principles. Bond Owner’s Remedies Under This Section. A Bond Owner’s or Beneficial Owner’s right to enforce the provisions of the City’s undertaking described in this section will be limited to a right to obtain specific enforcement of the City’s obligations, and any failure by the City to comply with the provisions of this undertaking will not be an event of default with respect to the Bonds. For purposes of this section, "Beneficial Owner" means any person who has the power, directly or indirectly, to vote or consent with respect to, or to dispose of ownership of, any bonds, including persons holding bonds through nominees or depositories. Other Continuing Disclosure Undertakings of the City. The City has entered into written undertakings under the Rule with respect to its certain of its outstanding obligations (the "Prior Undertakings"). The City filed its audited financial statements for fiscal year 2010 on time with EMMA, although this filing was not linked to the City’s Limited Tax General Obligation Bonds, Series 2011A. With the exception of the foregoing (to the extent the foregoing constitutes a material failure), the City believes it has complied in all material respects with its continuing disclosure undertakings pursuant to Rule 15c2-12 for the last five years. 36 Legal and Underwriting Approval of Counsel Legal matters incident to the authorization, issuance and sale of the Bonds by the City are subject to the approving legal opinions of Pacifica Law Group LLP, Bond Counsel, the forms of which are attached hereto in Appendix A. Bond Counsel wilt be compensated only upon the issuance and sale of the Bonds. Bond Counsel has not been retained to review and has not reviewed this Official Statement for completeness or accuracy and will not offer an opinion concerning this Official Statement. Certain legal matters will be passed on for the Underwriter by K&L Gates LLP, Seattle, Washington, Counsel to the Underwriter. Any opinion of such firm will be addressed solely to the Underwriter, will be limited in scope, and cannot be relied upon by investors without the written consent of such firm. Litigation At the time of delivery of and payment for the Bonds, an authorized officer of theCity will deliver a certificate stating that there is no litigation or other proceedings pending or, to the best knowledge of the City, threatened in any court in any way seeking to restrain or to enjoin the authorization, issuance, sale or delivery of, or security for, any of the Bonds, or contesting or affecting the validity or enforceability of the Bonds or the Ordinance, or materially affecting the finances of the City. The City is a defendant in various legal actions and claims that arise during the normal course of business, some of which, but not all, are covered by insurance. Although certain lawsuits and claims are significant in amount, the final dispositions are not determinable and, in the opinion of City management, the final outcome of these matters, taken individually or in the aggregate, are not expected to have a material adverse effect on the governmental operations or financial position of the City or its ability to pay debt service on the Bonds. The City has provided for reserves to address these matters. City management believes these reserves and/or insurance are adequate to cover such matters. Limitations on Remedies General. Any remedies available to the owners of the Bonds upon the occurrence of an event of default under the Ordinance are in many respects dependent upon judicial actions, which are in turn often subject to discretion and delay and could be both expensive and time-consuming to obtain. If the City fails to comply with its covenants under the Ordinance or to pay principal of or interest on the Bonds, there can be no assurance that available remedies will be adequate to fully protect the interests of the owners of the Bonds. In addition to the limitations on remedies contained in the Ordinance, the rights and obligations under the Bonds and the Ordinance may be limited by and are subject to bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium, and other laws relating to or affecting creditors’ rights, to the application of equitable principles, and to the exercise of judicial discretion in appropriate cases. The opinions to be delivered by Pacifica Law Group LLP, as Bond Counsel, concurrently with the issuance of the Bonds, will be subject to limitations regarding bankruptcy, insolvency and other laws relating to or affecting creditors’ rights. The various other legal opinions to be delivered concurrently with the issuance of the Bonds will be similarly qualified. Copies of the forms of legal opinions of Bond Counsel are set forth in Appendix A. No Acceleration. The Bonds are not subject to acceleration upon the occurrence of a default. The City is liable for principal and interest payments only as they become due. In the event of multiple defaults in payment of principal of or interest on the Bonds, the registered owners would be required to bring a separate action for each such payment not made. This could give rise to a difference in interests between registered owners of earlier and later maturing Bonds. Bankruptcy. Under current Washington law, local governments, such as the City, may be able to file for bankruptcy under Chapter 9 of the United States Bankruptcy Code (the "Bankruptcy Code"). A creditor, however, cannot bring an involuntary bankruptcy proceeding against a municipality, including the City. The federal bankruptcy courts have broad discretionary powers under the Bankruptcy Code. Taxing districts in the State are expressly authorized to carry out a plan of readjustment if approved by the appropriate court. If the City were to become a debtor in a federal bankruptcy case, owners of the Bonds may not be able to exercise any 37 of their remedies under the Ordinance during the course of a proceeding. Legal proceedings to resolve issues could be time-consuming and expensive, and substantial delays and/or reductions in payments could result. Underwriting The 2015A Bonds are being purchased by Piper Jaffray & Co. (the "Underwriter") at a price of 112.701 percent of the par value of the 2015A Bonds. The 2015A Bonds will be reoffered at an average price of 113.278 percent of the par value of the 2015A Bonds. The 2015B Bonds are being purchased by the Underwriter at a price of 99.411 percent of the par value of the 2015B Bonds. The 2015B Bonds will be reoffered at an average price of 100 percent of the par value of the 2015B Bonds. The purchase of the Bonds by the Underwriter is subject to the terms of a purchase contract between the City and the Underwriter (the "Purchase Contract"). The Purchase Contract provides that the Underwriter must purchase all of the Bonds if any are purchased and that the obligation to make such purchase is subject to certain terms and conditions set forth in the Purchase Contract, the approval of certain legal matters by counsel and certain other conditions. The initial public offering prices set forth on the inside cover hereof may be changed from time to time by the Underwriter. The Underwriter may offer and sell the Bonds into unit investment trusts or money market funds, certain of which may be sponsored or managed by the Underwriter, at prices lower than the public offering prices stated on the inside cover hereof. Piper Jaffray & Co. and Pershing LLC, a subsidiary of The Bank of New York Mellon Corporation, entered into an agreement (the "Agreement") which enables Pershing LLC to distribute certain new issue municipal securities underwritten by or allocated to Piper Jaffray & Co., including the Bonds. Under the Agreement, Piper Jaffray & Co. will share with Pershing LLC a portion of the fee or commission paid to Piper Jaffray & Co. Piper Jaffray & Co. has entered into a distribution agreement ("Distribution Agreement") with Charles Schwab & Co., Inc. ("CS&Co.") for the retail distribution of certain securities offerings at the original issue prices. Pursuant to the Distribution Agreement, CS&Co. may purchase Bonds from Piper Jaffray & Co. at the original issue price less a negotiated portion of the selling concession applicable to any Bonds that CS&Co. sells. Potential Conflicts Some or all of the fees of the Underwriter and Bond Counsel are contingent upon the issuance and sale of the Bonds. Furthermore, Bond Counsel from time to time serves as counsel to the Underwriter with respect to issuers other than the City and in connection with transactions other than the issuance of the Bonds. None of the Council members or other officers of the City have interests in the issuance of the Bonds that are prohibited by applicable law. Concluding Statement So far as any statement herein includes matters of opinion, or estimates of future expenses and income, whether or not expressly so stated, they are intended merely as such and not as representations of fact. The information contained herein should not be construed as representing all conditions affecting the City or the Bonds. Additional information may be obtained from the City. The statements relating to the Ordinance are in summarized form, and in all respects are subject to and qualified in their entirety by express reference to the provisions of such document in its complete form. The agreements of the City are set forth in such documents, and the information assembled herein is not to be construed as a contract with Owners of the Bonds. The preparation and distribution of this Official Statement have been authorized by the City THE CITY OF RENTON, WASHINGTON By: /s/Iwen Wang Finance and Information Services Administrator 38 Appendix A Forms of Opinions of Bond Counsel This page left blank intentionally May13,2015 City of Renton Renton, Washington Piper Jaffray & Co. Seattle, Washington City of Renton, Washington Limited Tax General Obligation Refunding Bonds, Series 2015A- $8,825,000 Ladies and Gentlemen: We have acted as bond counsel to the City of Renton, Washington (the "City"), and have examined a certified transcript of all of the proceedings taken in the matter of the issuance by the City of its Limited Tax General Obligation Refunding Bonds, Series 2015A, in the aggregate principal amount of $8,825,000 (the "Bonds"). The Bonds are issued pursuant to Ordinance No. 5754 of the City Council, passed April 13, 2015 (the "Bond Ordinance"), to provide a portion of the funds necessary to advance refund and defease prior to maturity certain outstanding limited tax general obligation bonds of the City and to pay costs of issuance for the Bonds. Simultaneously with the issuance of the Bonds, the City is issuing its Limited Tax General Obligation Refunding Bonds, Series 2015B (Taxable). Capitalized terms not otherwise defined herein shall have the meanings given such terms in the Bond Ordinance. The Bonds are subject to redemption prior to their scheduled maturities as provided in the Bond Ordinance and in the Bond Purchase Contract. Regarding questions of fact material to our opinion, we have relied on representations of the City in the Bond Ordinance and in the certified proceedings and on other certifications of public officials and others furnished to us without undertaking to verify the same by independent investigation. Based on the foregoing, we are of the opinion that, under existing law: 1. The Bonds have been legally issued and constitute valid and binding general obligations of the City, except to the extent that the enforcement of the rights and remedies of the holders and owners of the Bonds may be limited by laws relating to bankruptcy, insolvency, moratorium, reorganization or other similar laws of general application affecting the rights of creditors, by the application of equitable principles and the exercise of judicial discretion. City of Renton, Washington Piper Jaffray & Co. May 13, 2015 Page 2 2. The Bond Ordinance is a legal, valid and binding obligation of the City, has been duly authorized, executed and delivered and is enforceable in accordance with its terms, except to the extent that enforcement may be limited by laws relating to bankruptcy, insolvency, moratorium, reorganization or other similar laws of general application affecting the rights of creditors, by the application of equitable principles and the exercise of judicial discretion. 3. Both principal of and interest on the Bonds are payable out of annual levies of ad valorem taxes to be made upon all of the taxable property within the City permitted to be levied without a vote of the electorate in the amounts which, together with other available funds, will be sufficient to pay such principal and interest as the same shall become due. 4. Interest on the Bonds is excludable from gross income for federal income tax purposes and is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations; however, interest on the Bonds is taken into account in determining adjusted current earnings for the purpose of computing the alternative minimum tax imposed on certain corporations. The opinion set forth in the preceding sentence is subject to the condition that the City must comply with all requirements of the Internal Revenue Code of 1986, as amended (the "Code"), that must be satisfied subsequent to the issuance of the Bonds in order that the interest thereon be, and continue to be, excludable from gross income for federal income tax purposes. The City has covenanted to comply with all applicable requirements. Failure to comply with certain of such covenants may cause interest on the Bonds to be included in gross income for federal income tax purposes retroactively to the date of issuance of the Bonds. The Bonds have been designated as "qualified tax-exempt obligations" within the meaning of Section 265(b)(3) of the Code. Except as expressly stated above, we express no opinion regarding any other federal or state income tax consequences of acquiring, carrying, owning or disposing of the Bonds. Owners of the Bonds should consult their tax advisors regarding the applicability of any collateral tax consequences of owning the Bonds, which may include original issue discount, original issue premium, purchase at a market discount or at a premium, taxation upon sale, redemption or other disposition, and various withholding requirements. We have not been engaged nor have we undertaken to review the accuracy, completeness or sufficiency of the official statement or other offering material related to the Bonds (except to the extent, if any, stated in the official statement), and we express no opinion relating thereto, or relating to the undertaking by the City to provide ongoing disclosure pursuant to Securities and Exchange Commission Rule 15c2-12. City of Renton, Washington Piper Jaffray & Co. May 13, 2015 Page 3 This opinion is given as of the date hereof, and we assume no obligation to update, revise or supplement this opinion to reflect any facts or circumstances that may hereafter come to our attention or any changes in law that may hereafter occur. Very truly yours, PACIFICA LAW Gl~ou~, LLP This page left blank intentionally May13,2015 City of Renton Renton, Washington Piper Jaffray & Co. Seattle, Washington City of Renton, Washington Limited Tax General Obligation Refunding Bonds, Series 201B (Taxable) -- $3,695,000 Ladies and Gentlemen: We have acted as bond counsel to the City of Renton, Washington (the "City"), and have examined a certified transcript of all of the proceedings taken in the matter of the issuance by the City of its Limited Tax General Obligation Refunding Bonds, Series 2015B (Taxable), in the aggregate principal amount of $3,695,000 (the "Bonds"). The Bonds are issued pursuant to Ordinance No. 5754 of the City Council, passed April 13, 2015 (the "Bond Ordinance"), to provide a portion of the funds necessary to advance refund and defease prior to maturity certain outstanding limited tax general obligation bonds of the City and to pay costs of issuance for the Bonds. Simultaneously with the issuance of the Bonds, the City is issuing its Limited Tax General Obligation Refunding Bonds, Series 2015A. Capitalized terms not otherwise defined herein shall have the meanings given such terms in the Bond Ordinance. The Bonds are not subject to redemption prior to their scheduled maturities. Regarding questions of fact material to our opinion, we have relied on representations of the City in the Bond Ordinance and in the certified proceedings and on other certifications of public officials and others furnished to us without undertaking to verify the same by independent investigation. Based on the foregoing, we are of the opinion that, under existing law: 1. The Bonds have been legally issued and constitute valid and binding general obligations of the city, except to the extent that the enforcement of the rights and remedies of the holders and owners of the Bonds may be limited by laws relating to bankruptcy, insolvency, moratorium, reorganization or other similar laws of general application affecting the rights of creditors, by the application of equitable principles and the exercise of judicial discretion. City of Renton, Washington Piper Jaffray & Co. May 13, 2015 Page 2 2. The Bond Ordinance is a legal, valid and binding obligation of the City, has been duly authorized, executed and delivered and is enforceable in accordance with its terms, except to the extent that enforcement may be limited by laws relating to bankruptcy, insolvency, moratorium, reorganization or other similar laws of general application affecting the rights of creditors, by the application of equitable principles and the exercise of judicial discretion. 3. Both principal of and interest on the Bonds are payable out of annual levies of ad valorem taxes to be made upon all of the taxable property within the City permitted to be levied without a vote of the electorate in the amounts which, together with other available funds, will be sufficient to pay such principal and interest as the same shall become due. o purposes. Interest on the Bonds is not excludable from gross income for federal income tax Except as expressly stated above, we express no opinion regarding any other federal or state income tax consequences of acquiring, carrying, owning or disposing of the Bonds. Owners of the Bonds should consult their tax advisors regarding the applicability of any collateral tax consequences of owning the Bonds, which may include original issue discount, original issue premium, purchase at a market discount or at a premium, taxation upon sale, redemption or other disposition, and various withholding requirements. We .have not been engaged nor have we undertaken to review the accuracy, completeness or sufficiency of the official statement or other offering material related to the Bonds (except to the extent, if any, stated in the official statement), and we express no opinion relating thereto, or relating to the undertaking by the City to provide ongoing disclosure pursuant to Securities and Exchange Commission Rule 15c2-12, This opinion is given as of the date hereof, and we assume no obligation to update, revise or supplement this opinion to reflect any facts or circumstances that may hereafter come to our attention or any changes in law that may hereafter occur. Very truly yours, PACIFICA LAW GROUP LLP Appendix B Book-Entry Transfer System This page left blank intentionally The Depository Trust Company A subsidiary of The Depository Trust & Clearing Corporation 1. The Depository Trust Company ("DTC"), New York, NY, will act as securities depository for the securities (the "Securities"). The Securities will be issued as fully-registered securities registered in the name of Cede & Co. (DTC’s partnership nominee) or such other name as may be requested by an authorized representative of DTC. One fully-registered Security certificate will be issued for [each issue of] the Securities, [each] in the aggregate principal amount of such issue, and will be deposited with DTC. [If, however, the aggregate principal armunt of [any] issue exceeds $500 million, one certificate will be issued with respect to each $500 million of principal amount, and an additional certificate will be issued with respect to any remaining principal amount of such issue.] 2. DTC, the world’s largest securities depository, is a limited-purpose trust company organized under the New York Banking Law, a "banking organization" within the meaning of the New York Banking Law, a member of the Federal Reserve System, a "clearing corporation" within the meaning of the New York Uniform Commercial Code, and a "clearing agency" registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934. DTC holds and provides asset servicing for over 3.5 million issues of U.S. and non-U.S, equity issues, corporate and municipal debt issues, and money market instruments (from over 100 countries) that DTC’s participants ("Direct Participants") deposit with DTC. DTC also facilitates the post-trade settlement among Direct Participants of sales and other securities transactions in deposited securities, through electronic computerized book-entry transfers and pledges between Direct Participants’ accounts. This eliminates the need for physical movement of securities certificates. Direct Participants include both U,S. and non- U.S. securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is a wholly-owned subsidiary of The Depository Trust & Clearing Corporation ("DTCC"). DTCC is the holding company for DTC, National Securities Clearing Corporation and Fixed Income Clearing Corporation, all of which are registered clearing agencies. DTCC is owned by the users of its regulated subsidiaries. Access to the DTC system is also available to others such as both U.S. and non-U.S, securities brokers and dealers, banks, trust companies, and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly ("Indirect Participants"). DTC has a Standard & Poor’s rating of AA+. The DTC Rules applicable to its Participants are on file with the Securities and Exchange Commission. More information about DTC can be found at www.dtcc.com. DTCC The Depository Trust & Clearing Corporation -i- SOL 08-10-11 3. Purchases of Securities under the DTC system must be made by or through Direct Participants, which will receive a credit for the Securities on DTC’s records. The ownership interest of each actual purchaser of each Security ("Beneficial Owner") is in turn to be recorded on the Direct and Indirect Participants’ records. Beneficial Owners will not receive written confirmation from DTC of their purchase. Beneficial Owners are, however, expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the Securities are to be accomplished by entries made on the books of Direct and Indirect Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in Securities, except in the event that use of the book-entry system for the Securities is discontinued. 4. To facilitate subsequent transfers, all Securities deposited by Direct Participants with DTC are registered in the name of DTC’s partnership nominee, Cede & Co., or such other name as may be requested by an authorized representative of DTC. The deposit of Securities.with DTC and their registration in the name of Cede & Co. or such other DTC nominee do not effect any change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Securities; DTC’s records reflect only the identity of the Direct Participants to whose accounts such Securities are credited, which may or may not be the Beneficial Owners. The Direct and Indirect .Participants will remain responsible for keeping account of their holdings on behalf of their customers. 5. Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. [Beneficial Owners of Securities may wish to take certain steps to augment the transmission to them of notices of significant events with respect to the Securities, such as redemptions, tenders, defaults, and proposed amendments to the Security documents. For example, Beneficial Owners of Securities may wish to ascertain that the nominee holding the Securities for their benefit has agreed to obtain and transmit notices to Beneficial Owners. In the alternative, Beneficial Owners may wish to provide their names and addresses to the registrar and request that copies of notices be provided directly to them.] 6. Redemption notices shall be sent to DTC. If less than all of the Securities within an issue are being redeemed, DTC’s practice is to determine by lot the amount of the interest of each Direct Participant in such issue to be redeemed. 7. Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to Securities. unless authorized by a Direct Participant in accordance with DTC’s MMI Procedures. Under its usual procedures, DTC mails an Omnibus Proxy to Issuer as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co.’s consenting or voting rights to those Direct Participants to whose accounts Securities are credited on the record date (identified in a listing attached to the Omnibus Proxy). DTCCo The Depository Trust & Clearing Corporation -ii- SOL 08-10-11 8. Redemption proceeds, distributions, and dividend payments on the Securities will be made to Cede & Co., or such other nominee as may be requested by an authorized representative of DTC. DTC’s practice is to credit Direct Participants’ accounts upon DTC’s receipt of funds and corresponding detail information from Issuer or Agent, on payable date in accordance with their respective holdings shown on DTC’s records. Payrrents by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in "street name," and will be the responsibility of such Participant and not of DTC, Agent, or Issuer, subject to any statutory or regulatory requirements as may be in effect from time tO time. Payment of redemption proceeds, distributions, and dividend payments to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of Issuer or Agent, disbursement of such payments to Direct Participants will be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners will be the responsibility of Direct and Indirect Participants. 9. A Beneficial Owner shall give notice to elect to have its Securities purchased or tendered, through its Participant, to [Tender/Remarketing] Agent, and shall effect delivery of such Securities by causing the Direct Participant to transfer the Participant’s interest in the Securities, on DTC’s records, to [Tender/Remarketing] Agent. The requirement for physical delivery of Securities in connection with an optional tender or a mandatory purchase will be deemed satisfied when the ownership rights in the Securities are transferred by Direct Participants on DTC’s records and followed by a book-entry credit of tendered Securities to [Tender/Remarketing] Agent’s DTC account. 10. DTC may discontinue providing its services as depository with respect to the Securities at any time by giving reasonable notice to Issuer or Agent. Under such circumstances, in the event that a successor depository is not obtained, Security certificates are required to be printed and delivered. 11. Issuer may decide to discontinue use of the system of book-entry-only transfers through DTC (or a successor securities depository). In that event, Security certificates will be printed and delivered to DTC. 12. The information in this section concerning DTC and DTC’s book-entry system has been obtained from sources that Issuer believes to be reliable, but Issuer takes no responsibility for the accuracy thereof. [8/~1] DTCCo The Depositop/ Trust & Clearing Corporation SOL 08-10-11 This page left blank intentionally Appendix C 2013 Audited Financial Statements This page left blank intentionally Washington State Auditor Troy Kelley Financial Statements and Federal Single Audit Report City of Renton King County For the period January 1, 2013 through December 31, 2013 September 22, 2014 Mayor City of Renton Renton, Washington Report on Financial Statements and Federal Single Audit Please find attached our report on the City of Renton’s financial statements and compliance with federal laws and regulations. We are issuing this report in order to provide information on the City’s financial condition. Sincerely, TROY KELLEY STATE AUDITOR Published September 22, 2014 Report No. 1012590 Insurance Building, PO Box 40021 LlOlympia, Washlnglon 98504-0021 ~](360) 9()2-037() ~’[’DD Relay (8(10) 833-6388 Table of Contents I City of Renton King County January 1,2013 through December 31, 2013 Federal Summary ............................................................................................................................4 Independent Auditor’s Report On Internal Control Over Financial Reporting And On Compliance And Other Matters Based On An Audit Of Financial Statements Performed In Accordance With Govermnent Auditing Standards .......................................................................6 Independent Auditor’s Report On Compliance For Each Major Federal Program And On Internal Control Over Compliance In Accordance With OMB Circular A-133 .............................8 Independent Auditor’s Report On Financial Statements ..............................................................11 Financial Section ...........................................................................................................................14 About The State Auditor’s Office ...............................................................................................100 Federal Summary City of Renton King County January 1, 2013 through December 31, 2013 The results of our audit of the City of Renton are summarized below in accordance with U.S. Office of Management and Budget Circular A-133. FINANCIAL STATEMENTS An unmodified opinion was issued on the financial statements of the governmental activities, the business-type activities, each major fund and the aggregate remaining fund information. Internal Control Over Financial Reporting: ¯Significant Deficiencies: We reported no deficiencies in the design or operation of internal control over financial reporting that we consider to be significant deficiencies. ¯Material Weaknesses: We identified no deficiencies that we consider to be material weaknesses. We noted no instances of noncompliance that were material to the financial statements of the City. FEDERAL AWARDS Internal Control Over Major Programs: ¯Significant Deficiencies: We reported no deficiencies in the design or operation of internal control over major federal programs that we consider to be significant deficiencies. ¯Material Weaknesses: We identified no deficiencies that we consider to be material weaknesses. We issued an unmodified opinion on the City’s compliance with requirements applicable to each of its major federal programs. We reported no findings that are required to be disclosed under section 510(a) of OMB Circular A-133. IYa.~hmgton State Auditor’s OJ]fce Page 3 Washington State Auditor’s Office Page 4 Ideatification of Major Programs: The following were major programs during the period under audit: CFDA No. 20.205 97.036 Program Title Highway Planning and Construction Cluster - Highway Planning and Construction Disaster Grants - Public Assistance Program The dollar threshold used to distinguish between Type A and Type B programs, as prescribed by OMB Circular A-133, was $393,163. The City qualified as a low-risk auditee under OMB Circular A-133. Independent Auditor’s Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government A uditing Standards City of Renton King County January 1, 2013 through December 31, 2013 Mayor City of Renton Renton, Washington We have audited, in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States, the financial statements of the governmental activities, the business-type activities, each major fund and the aggregate remaining fund information of the City of Renton, King County, Washington, as of and for the year ended December 31, 2013, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements, and have issued our report thereon dated June 26, 2014. As discussed in Note 1 to the financial statements, during the year ended December 31, 2013, the City implemented Governmental Accounting Standards Board Statement No. 61, The Financial Reporting Entity: Omnibus - an amendment of GASB Statements No. 14 and No. 34, Statement No. 64, Derivative Instruments’: Application of Hedge Accounting Termination Provisions - an amendment of GASB Statement No. 53, Statement No. 65, Hems Previously Reported as Assets and Liabilities and Statement No. 66, Technical Corrections 2012 an amendment of GASB Statements No. 10 and No. 62. INTERNAL CONTROL OVER FINANCIAL REPORTING In planning and performing our audit of the financial statements, we considered the City’s internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the City’s internal control. Accordingly, we do not express an opinion on the effectiveness of the City’s internal control. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control such that there is a reasonable possibility that a material misstatement of the City’s financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be rnaterial weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. COMPLIANCE AND OTHER MA TTERS As part of obtaining reasonable assurance about whether the City’s financial statements are free from material misstatement, we performed tests of the City’s compliance with certain provisions of laws, regulations, contracts and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. PURPOSE OF THIS REPORT The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the City’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards’ in considering the City’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose. However, this report is a matter of public record and its distribution is not limited. It also serves to disseminate information to the public as a reporting tool to help citizens assess government operations. TROY KELLEY STATE AUDITOR June 26, 2014 Independent Auditor’s Report on Compliance for Each Major Federal Program and on Internal Control over Compliance in Accordance with OMB Circular A-133 City of Renton King County January 1, 2013 through December 31, 2013 Mayor City of Renton Renton, Washington REPORT ON COMPLIANCE FOR EACH MAJOR FEDERAL PROGRAM We have audited the compliance of the City of Renton, King County, Washington, with the types of compliance requirements described in the U.S. Office of Management and Budget (OMB) Circular A-133 Comt~liance Supplement that could have a direct and material effect on each of its major federal programs for the year ended December 31, 2013. The City’s major federal programs are identified in the accompanying Federal Summary. Management’s Responsibility Management is responsible for compliance with the requirements of laws, regulations, contracts and grants applicable to its federal programs. Auditor’s Responsibility Our responsibility is to express an opinion on compliance for each of the City’s major federal programs based on our audit of the types of compliance requirements referred to above. We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and OMB Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations. Those standards and OMB Circular A-133 require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major federal program occurred. An audit includes examining, on a test basis, evidence about the City’s compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion on compliance for each major federal program. Our audit does not provide a legal determination on the City’s compliance. Opinion on Each Major Federal Program In our opinion, the City complied, in all material respects, with the types of compliance requirements referred to above that could have a direct and material effect on each of its major federal programs for the year ended December 31, 2013. REPORT ON INTERNAL CONTROL OVER COMPLIANCE Management of the City is responsible for establishing and maintaining effective internal control over compliance with the types of compliance requirements referred to above. In planning and performing our audit of compliance, we considered the City’s internal control over compliance with the types of require~nents that could have a direct and material effect on each major federal program in order to determine the auditing procedures that are appropriate in the circumstances for the purpose of expressing an opinion on compliance for each major federal program and to test and report on internal control over compliance in accordance with OMB Circular A-133, but not for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, we do not express an opinion on the effectiveness of the City’s internal control over compliance. A de:ficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. A material weakness in internal control over compliance is a deficiency, or combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a federal program will not be prevented, or detected and corrected, on a timely basis. A sign!ficant d~ficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance with a type of compliance requirement of a federal program that is less severe than a material weakness in internal control over compliance, yet i~nportant enough to merit attention by those charged with governance. Our consideration of internal control over compliance was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. PURPOSE OF THIS REPORT The purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal control over compliance and the results of that testing based on the requirements of OMB Circular A-133. Accordingly, this report is not suitable for any other purpose. However, this report is a matter of public record and its distribution is not limited. It also serves to disseminate information to the public as a reporting tool to help citizens assess government operations. TROY KELLEY STATE AUDITOR September 11, 2014 Washhlgton State Auditor’s Q~]~ee Page 9 Washington State Auditor’s Office Page 10 Independent Auditor’s Report on Financial Statements City of Renton King County January 1, 2013 through December 31, 2013 Mayor City of Renton Renton, Washington REPORT ON THE FINANCIAL STATEMENTS We have audited the accompanying financial statements of the governmental activities, the business-type activities, each major fund and the aggregate remaining fund information of the City of Renton, King County, Washington, as of and for the year ended December 31, 2013, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements as listed on page 11. Management’s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor’s Responsibility Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the City’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the City’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. Opinion In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, each major fund and the aggregate remaining fund information of the City of Renton, as of December 31, 2013, and the respective changes in financial position and, where applicable, cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America. Matters of Emphasis As discussed in Note 1 to the financial statements, in 2013, the City adopted new accounting guidance, Governmental Accounting Standards Board Statement No. 61, The Financial Reporting Entity: Omnibus - an amendment of GASB Statements No. 14 and No. 34, Statement No. 64, Derivative Instruments: Application of Hedge Accounting Termination Provisions - an amendment of GASB Statement No. 53, Statement No. 65, 1terns Previously Reported as Assets and Liabilities and Statement No. 66, Technical Corrections - 2012 - an amendment of GASB Statements No. 10 andNo. 62. Our opinion is not modified with respect to this matter. Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis on pages 15 through 26, budgetary comparison information on page 96, pension trust fund information on page 97 and information on postemployment benefits other than pensions on page 98 be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Supplementary and Other Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City’s basic financial statements. The accompanying Schedule of Expenditures of Federal Awards is presented for purposes of additional analysis as required by U.S. Office of Management and Budget Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations. This schedule is not a required part of the basic financial statements. Such information is the responsibility of management and was derived from and I~’a~Inngton grate ludttor’s (~l)~c~Page I 1 Washington State Audttor’s Office Page 12 relates directly to the underlying accounting and other records used to prepare the basic financial statements. The information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the information is fairly stated, in all material respects, in relation to the basic financial statements taken as a whole. OTHER REPORTING REQUIRED BY GOVERNMENT AUDITING STANDARDS In accordance with Government Auditing Standards, we have also issued our report dated June 26, 2014 on our consideration of the City’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City’s internal control over financial reporting and compliance. TROY KELLEY STATE AUDITOR June 26, 2014 Financial Section ] City of Renton King County January 1, 2013 through December 31, 2013 REQUIRED SUPPLEMENTAR Y INFORMATION Management’s Discussion and Analysis - 2013 BASIC FINANCIAL STATEMENTS Statement of Net Position - 2013 Statement of Activities - 2013 Balance Sheet - Governmental Funds - 2013 Reconciliation of the Balance Sheet to the Statement of Net Position - 2013 Statement of Revenues, Expenditures and Changes in Fund Balance - Governmental Funds - 2013 Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of Activities - Governmental Activities - 2013 Statement of Net Position - Proprietary Funds - 2013 Statement of Revenues, Expenses and Changes in Fund Net Position - Proprietary Funds -2013 Statement of Cash Flows - Proprietary Funds - 2013 Statement of Fiduciary Net Position - Fiduciary Funds - 2013 Statement of Changes in Fiduciary Net Position - Fiduciary Funds - 2013 Notes to Financial Statements - 2013 REQUIRED SUPPLEMENTAR Y 1NFORMA T10N Statement of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual - General Fund - 2013 Firefighters’ Pension Fund - Schedule of Employer Contribution - 2013 LEOFF I Retiree Medical Benefits - Schedule of Funding Progress and Schedule of Employer Contribution - 2013 SUPPLEMENTARY AND OTHER INFORMATION Schedule of Expenditures of Federal Awards and Notes 2013 City of Renton, Washington City oJ: Renton, Washington MANAGEMENT’S DISCUSSION AND ANALYSIS The City of Renton’s discussion and analysis provides a narrative overview of the City’s financial activities for the fiscal year ended December 31, 2013. The intent of the discussion and analysis is to review the City’s financial performance as a whole. This Management’s Discussion and Analysis (MD&A) combined with the Transmittal Letter, the Financial Statements, and the Notes to the Financial Statements represent the complete 2013 financial activities for the City of Renton. These are all intended to help the reader understand the City’s significant financial issues while providing an overview of the City’s financial records. The information in this financial report also identifies any material deviations from the financial plan and the adopted annual budget and will isolate and identify individual fund issues or concerns. FINANCIAL HIGHLIGHTs ¯As of December 31, 2013, the City’s total assets exceed liabilities by $790 million. This financial net position is an improvement of $45.8 million over 2012. This increase consists of $52.4 million increase in restricted net position and net investments in capital, and a $6.6 million decrease in unrestricted net position. Unrestricted net position is the portion of city resources that does not have externally imposed conditions and disposition is generally at the discretion of the City Council. ¯Two-thirds of the $790 million net position, or $510.8 million, is related to governmental activities. Of this, $469.1 million are restricted monies that are invested in infrastructure or fixed assets that are not spendable or are committed for current capital and other activities. This is a $35.6 million increase from 2012 and is related to unspent GO bond library proceeds. The remaining $41.6 million in net position is "unrestricted". ¯The net position for business type activities totaled $279.1 million, an increase of $22.6 million from 2012. $244.6 million represents the City’s investments in capital assets net of related debt and externally restricted amounts for debt service obligations. An unrestricted balance of $34.5 million remains and includes amounts set aside for future capital projects as well as cash flow to meet day-to-day operating requirements of the utilities and other enterprise funds. ¯The City’s total outstanding long-term debt as of December 31, 2013, was $117.6 million. Of this amount, $44 million is general obligation debt backed by the full faith and credit of the City. $35.9 million ar~ revenue bonds and state Public Works Trust Fund loans backed by the revenues of the Waterworks Utility. The remaining $37.7 million is related to other GO debt backed by the full faith and credit of the City. FINANCIAL INFORMATION The City’s Government-wide Financial Statements were prepared on the full accrual basis of accounting in conformity with Generally Accepted Accounting Principles (GAAP). The City’s Fund Financial Statements for its major and non-major governmental funds were prepared on the modified accrual basis of accounting in conformity with GAAP. The City’s major and non-major enterprise funds, internat service funds, and pension funds were accounted for on the full accrual basis of accounting in conformity with GAAP The City of Renton, along with all cities, counties, and other governmental entities in Washington, must comply with the Budgeting, Accounting, and Reporting System (BARS) as prescribed by the Washington State Auditor’s Office (SAO). The SAO audits the financial records of all cities and other governmental units within the State. In addition to examining financial statements, the SAO also performs compliance audits and reviews internal control procedures. The City of Renton has a financial system that is consistent with BARS and has strong administrative and management controls that are designed to provide: 1.Reasonable assurance that transactions are executed in accordance to management policies and approval authorities; 2.Reasonable assurance that transactions are recorded and reported in accordance to GAAP; 3.Accountability for control of assets and obligations; and 4.Assurance that sufficient reporting and review exists to provide complete information for analysis and comparability of data. The City maintains strong budgetary controls in order to ensure compliance with legal provisions embodied in the appropriated budget as approved by the City Council. The City Council must authorize any budget increase or decrease to any fund. STRUCTURE OF THE FINANCIAL STATEMENTS This discussion and analysis provides an introduction and overview to the City of Renton’s basic financial statements. The basic financial statements are comprisec~ of three components: 1.Government-wide Financial Statements; 2.Fund Financial Statements; and 3.Notes to the Financial Statements. GOVERNMENT-WIDE FINANCIAL STATEMENTS While the 1und linancial statements p.resent the City’s financial data as a collection of separate financial units, the government-wide ~inance statements present the entire City’s finances as a single integrated unit. The government-wide financial statements use separate columns to distinguish governmental activities, principally supported by taxes and intergovernmental revenues, from business-type activities that are intended to recover all or a significant portion of their costs through user fees and charges. The governmental activities of the City include a full range of local government services provided to the public such as potice and fire protection; road maintenance and construction; community planning and economic development; parks and recreational opportunities; and other community services. All internal service activities are reported under governmental activities. The business-type activities of the City include City Of Renton, Washington City of Renton, Washington waterworks (water, sewer, and surface water), solid waste management and services, a golf course, and an airport. Fiduciary resources, by definition, are not available to support the City’s programs, therefore are excluded from Government-wide financial statements. The Statement of Net Position presents information on all of the City’s assets and liabilities with the difference between the two reported as net position. This statement combines and consolidates governmental funds’ current financial resources (short-term available resources) with capital assets and long-term obligations, which is primarily debt. The Statement of Net Position serves a purpose similar to that of the Balance Sheet of a private- sector business. Over time, increases or decreases in net position may serve as one indicator of whether the financial position of the City is improving or deteriorating. Other indicators to consider when evaluating the financial position of the City includes changes to the property tax base, general economic conditions as demonstrated through business licenses fees or sales tax revenue, and the condition of the City’s infrastructure (roads, drainage systems, bridges, and water infrastructure). The Statement of Activities focuses upon both the gross and net cost of various activities that are provided by the government’s general tax and other revenues. This is intended to summarize and simplify the user’s analysis of co.st to various governmental services and/or subsidies to business-type activities. By separating program revenue from general revenue, users of the financial statements can identify the extent to which each program relies on taxes for funding. The governmental activities reflect the City’s basic functions: General Government, Judicial, Public Safety, Economic Environment, Utilities, Transportation, Health and Human Services, and Culture and Recreation. Property, sales, and utility taxes finance the majority of these functions. All changes in net position are reported using the accrual basis of accounting, which is similar to the accounting used in the private sector. The accrual basis of accounting requires that revenues are reported when earned and expenses are reported when incurred, no matter when the revenue will actually be received or the obligation will be paid. For example, property taxes are shown as a receivable and revenue even though some amount of these taxes will not be available to the City for several years. Unpaid vendor obligations are illustrated as an accounts payable obligation as of December 31. FUND FINANCIAL STATEMENTS The City uses fund structure to ensure and demonstrate fiscal integrity and compliance with finance-related legal requirements. A fund is a group of related accounts used to maintain control over resources that have been segregated for specific activities and objectives. There are three types of funds: governmental, proprietary, and fiduciary. The fund statements focus on major government funds and proprietary funds separately. A Major Fund has three elements as defined by GASB 34, as amended by GASB 65: ¯Total assets and deferred outflows of resources, liabilities and deferred inflows of resources, revenues, or expenditures of that individual governmental or enterprise funds are at least ten percent (3.0%) of the corresponding total (assets, liabilities, etc.) for all funds of that category or type (i.e., governmental, proprietary, or fiduciary); and ¯Total assets, liabilities, revenues, or expenditures/expenses of the individual government fund or enterprise funds are at least five percent (5%) of the corresponding total for all governmental and enterprise funds combined; or Any other governmental or enterprise fund that governing officials believe is particularly important. Governmental Funds present most of a government’s tax-supported activities. The Proprietary Funds present the government’s business-type activities where all or part of the activities’ costs are supported by fees and charges that are paid directly by those who benefit from the activities. Fiduciary Funds present resources held by the government as a trustee or agent for parties outside of the government. The resources of Fiduciary Funds cannot be used to support the government’s other programs. Governmental Funds - Balance Sheet and Statement of Revenues, Expenditures and Changes in Fund Balance The Governmeetal Fund Balance Sheet and Governmental Fund Statement of Revenues, Expenditures, and Changes in Fund Balances present separate columns of financial data for the General Fund, Municipal Facilities CIP Fund and Capital improvement Fund. These comprise the City’s major governmental funds. Data from the remaining governmental funds are combined and presented in a single column in the fund statements, individual fund data for each of the non-major governmental funds is provided in the form of combining statements. Governmental Funds are used to account for the same functions reported as governmental activities in the Government-wide Financial Statements. The focus of Governmental Fund Financial Statements is on near-term inflows and outflows of available financial resources and on balances of resources available at the end of the fiscal year. Such information is useful in evaluating whether there are more or less financial resources that can used in the near future to finance City services. Because the focus of Governmental Fund Financial Statements is a narrower view than that of the Government-wide Financial Statements, it is useful to compare similar information in order to gain a better understanding of the long-term impact of the government’s near- term financing decisions. The Reconciliation of the Balance Sheet and Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund reconciles to the differences between the governmental fund statements and the governmental activities column in the government-wide statements. The City maintains budgetary controls over its governmental funds. Budgetary controls Washington Stale ludito~ !~ Office Page 17 Washington State Auditor’s Office Page 18 City of Renton, Washington City of Renton, Washington ensure compliance with legal provisions embodied in the annual appropriated budget. Governmental fund budgets are established in accordance with state law and are adopted on a fund level. General fund budget variances are specifically addressed later’in this discussion and analysis. Proprietary Funds - Statement of Net Position and Statement of Revenue, Expenses~ and Changes in Net Position The proprietary fund statements present information for Enterprise and Internal Service fund types. The funds operate as a business activity. The Enterprise Funds are reported as business-type activities in the Government-wide Financial Statements. Internal Service Funds are used to report activities that provide supplies and services to various City departments and to allocate the associated costs of providing these services to the various governmental and enterprise functions. The revenues and expenses of Internal Service Funds that support governmental activities are eliminated in the government-wide statements. The remaining activity primarily benefits the governmental funds and is combined within the Governmental Activities in the Government-wide Statements. The City of Renton has two major Enterprise Funds: Waterworks Utility (water, wastewater0 and storm water) and Solid Waste. The Proprietary Statement of Net Position and the Proprietary Fund Statement of Revenues, Expenses, and Changes in Net Position present separate columns of financial data for the Waterworks Utility and Solid Waste. Information from the remaining Enterprise Funds are combined and presented in a single, aggregated column in the fund statements. Internal Service Funds aggregated and reported separately in this section. Proprietary Fund Statements provide the same type of information as the Government- wide Financial Statements, only in more detail, since both apply the accrual basis of accounting. In comparing the total assets and total liabilities between the two statements, only slight differences will be noticed. One notable difference is that the "due from other funds" (asset) and the "due to other funds" (liability) in the Proprietary Fund Statements are combined in a single line called "internal balances" in the asset section of the Government-wide Statement of Net Position. Fiduciary Funds - Statement of Fiduciary Net Position and Statement of Changes of Fiduciary Net Position Fiduciary Funds are used to account for resources held for the benefit of parties outside the government. Fiduciary funds are not reported in the Government-wide Financial Statements because the resources of those funds are not available to support the City’s own operations. NOTES TO THE FINANCIAL STATEMENTS The notes provide additional information that is essential to a full understanding of the information provided and are an integral part of the Government-wide and Fund Financial Statements. Combining statements for non-major Governmental and Enterprise Funds, as well as Internal Service Funds, are presented immediately following the required supplementary information. OTHER INFORMATION In addition to the basic finance statements and accompanying notes, this report also presents: 1.Required Supplemental Information (RSI) RSI provides budgetary comparisons for the General Fund as well as the City’s funding progress for the Firemen’s Pension Trust Fund and Other Post-Employment Benefits (LEOFF 1 Retiree Medical). 2.Combining Statements The combining statements provide additional detail for other government funds, internal service funds, and fiduciary funds are presented immediately following the required supplementary information. 3. Statistical Information This section includes unaudited trends and demographic information. GOVERNMENT-WIDE FINANCIAL ANALYSIS Statement of Net Position The change in net position is an indicator of a government’s fi.nancial situation. Table I below shows the condensed Government-wide Net Position as of December 3:1, 20:13, with comparison to 2012. As of December 31, 2013, the City’s overall financial net position was $790 million, a $4S.8 million increase over 2012. $36.5 million of total net position increase reflects the City’s investment in Washington ,grate ,,I uthtor’s ()jfice Page 19 Wal~hinglon State A ud~tor’.~ Office Page 20 City of Renton, Washington City of Renton, Washington capital and 87% of the total net position is attributed to investments in capital, net of related debt. The increase in the governmental activities is primarily attributed to grant funded transportation projects and the increase in the business activities is attributed to large additions of developer contributed capital and grant funded projects in the Waterworks Utility Fund. It should be noted that, although the investments in capital assets are reported net of related debt, resources needed to repay this debt must be provided from other sources since the capital assets, with limited exception, cannot be liquidated to reduce these liabilities. Total restricted net position accounts for $26.8 million of the City’s net position, which was a 147% increase over 2012. The majority of the restricted net position is comprised of unspent bond proceeds ($16.9 million) and debt service obligations ($4.2 million). The remaining $76.2 million is unrestricted may be used to meet the government’s ongoing obligations for governmental and business type activities ($41.7 million and $34.2 million, respectively). Statement of Activities and Change in Net Position Table 2 is the citywide condensed summary Statement of Activities and Change in Net Position as of December 31, 2013, with comparison to 2012. Citywide revenue grew by $4 million, or 1.8%. Most of this growth is attributed to an increase in charges for services in business type activities {$3.3 million), primarily due to utility rate increases. While property tax revenue decreased $1.3 million (as a result of lower 2012 assessed valuations), sales and retail tax increased $1.8 million over 2012. Governmental operating grants and contributions appear to decrease $6.1 million, however due to revenue reclassification; this decrease is offset by a $5.2 million increase in governmental charges for services. Capital related grants and contributions decreased in governmental activities due to the near-completion of two very large, multi-year transportation projects; and increased capital related grants and contributions increased in business type activities due to one large airport project and multiple storm water improvement projects. Overall, citywide capital related grants and contributions increased $.7 million increase over 2012. Combined citywide service expenses totaled $174.5 million for 2013. That is $5.8 million or 3.5% higher than 2012. Governmental activities increased by $2.3 million or 2% while business activities increased by $3.5 million or 6%. The resulting change in net position, without prior period adjustments, increased in 2013 by $48.2 million: $23.4 million from governmental activities and $24.8 million from business-type activities. Revenues: P~gram revenues: Charges for se~ic~ Operating g~nts and contributions CaoItal grants and cont ributio~ taxes and other general revenues: Property taxes Governmental Activities Analysis Governmental activities cost a total of $112.4 million in 2013 against operating revenue (excluding capital grants and contributions) of $110.3 million. $82 million, or 75%, of all governmental activities were funded by taxes and miscellaneous revenues. $28.1 million or 26% were supported by program revenues such as Total 2013 2012 6,621,431 12,794,132 105,695 165,164 6,727,126 12,959,296 23,077,914 33,529,033 18,879,992 7,668,558 41,957,906 41,197,591 32,S36.533 33,932,290 32,536,533 33,932,290 25,$41,972 23,653,706 25,541,972 23,653,706 22,277,651 21,929,128 22,277,651 21,929,128 1,845,163 1,768,728 218,358 149,971 2,063,521 1,918,699 133,~41,720 143,934,244 89,294,705 74,769,011 222,736,425 218,703,255 10,923,530 9,859,550 53,930,214 $g,152,773 964,942 2,643,930 18,842,487 13,571,691 7,146,022 6,330,233 1,873,028 827,802 3,411,488 3,087,269 112,402,415 110,095,056 21,039,305 33,839,188 2,341,160 233,962__ 23,380,465 34,073,149 487,694,926 453,318,266 (243,239)303,$I1 510,832,152 $ 487,694,926 9,859,550 2,610.481 58,152,773 2,643,930 6,330,233 g27,802 13,011,327 3,087,269 39,419,864 2,251,434 14,780,647 2,139,847 168,686,848 50,016,407 so,o16,ao7 693,762,898 41o,494 744,189,799 Wa~llmgton State ,luduor’s ()j)}~e Page 21 Washington State Auditor’s Office Page 22 City of Renton, Washington City o.f Renton, washington permit fees, fines and forfeitures, recreation fees, and facility rental fees. Chart 1 portrays the cost of each of the City’s governmental programs a[ong with each program’s generated revenue (fees and intergovernmental revenues specifically related to that program). The program revenues for Transportation Systems include capital grants for large-scale projects such as Rainier Ave improvements. cha~ Z: Revenues by Source -aovemmental Act~l~es .Chart 2 depicts the sources of revenue that funds governmentaI activities. Approximately sixty percent (60%) is from various taxes and general resources. Charges for services, grants and interest earnings generate forty percent {40%) of total revenue for general governmental activities. Business-Type Activities Analysis Chart 3 presents the same information for business-type activities as previously illustrated for governmental activities. It shows the expense of each of the City’s business-type programs along with each programs’ revenue (fees and Intergovernmentai revenues specifically related to that program). The Waterworks Utility generated $49 mJIllon in various fees for services and other sources and had $40.3 million in operating and debt service expenses resulting in an $8.7 milIion increase in net position from operations. In addition, the utiIity received $10.3 million in capital grants and facilities contributed by developers for a combined increase in net position of $19 million. The operating balance is necessary for planned system ir~f~l~r~’~:~" ~’i~ ..................................................................................................... The Solid Waste Utility generated $16.4 million in total revenue and Incurred $16.2 million in program expenses, resulting in a positive increase in net position of $0.2 million. The Airport generated a total of $2.4 million in revenue and $3.3 million In expenses 2013. In addition, the airport received $8.6 million in capital grants and contributions. The Golf Course generated a total of $2.1 million In green fees, driving range charges, and other user fees. The total expenses for the Golf Course were $2.2 milIion. The Golf Course had an operating loss of $108,000 for the year. Chart 4 Illustrates the source of revenue for Business-type activities; which are supported primarily from charges for services. Charges for services generated $70 million, or 79%, of the total revenue contributions generated 21% of the total revenue sources. This is a 147% increase over 2012 which generated $7.7 million in grant revenue and contributions (compared to the ~18.9 million in 2013}. These grant sources include several State funded surface water improvement grants, totaling $1.4 million, and a Federal Aviation Administration funded airport project, totaling $8.5 miIlion. Also Included tn this figure are $7.6 million tn developer uUIity contributions and storm water retention ponds deeded to the City by King County and miscellaneous homeowners associations. FUND FINANCIAL ANALYSIS Governmental Funds The governmental fund statements provide Information on near-term inflows, outflows, and balances of spendable resources. Such Information ts useful in assessing the City’s ability to meet financing requirements in the near term. In particular, unassigned fund balance may serve as a useful measure of a government’s net resources available for spending at the end of the fiscal year. At the end of the fiscal year, the City’s General Fund had a fund balance of $20.4 million, which is an Increase of $:1.6 million from a year ago. The Increase is partially due to higher sales tax revenues from Improving economic conditions, and partially from budget-savings. Approximately $303,000 of this is restricted for specific programs. Another $20.2 mlIIion is unrestricted but either committed or reserved to various stabilization funds and financial reserves. The Municipal Facilities Capital Improvement Project (ClP) fund includes the Iibrary development funds as well as general governmental major maintenance fund. The $24 million in fund balance is restricted, committed, or assigned to capital purposes and will continue to decrease as the Iibrary projects move forward. City o[ Renton, Washington City of Renton, Washington The Capital improvement fund accounts for the many transportation-related projects in the City. All fund balance is either restricted or committed to capital projects. Proprietary Funds The fund financial statements for the proprietaW funds are presented in more detail, but essentially provide the same type of information found within the business-type activities in the Government-wide Financial Statements. The factors concerning the finances of the Waterworks Utility and the Solid Waste Utility funds have been addressed in the discussion of business-type activities. The proprietaW fund statements also include a column for internal services fund activities in aggregate. These activities are consolidated with general governmental activities in the government-wide statements. GENERAL FUND BUDGETARY HIGHLIGHTS The City uses a biennial budget process that adopts two one-year budgets at one time. 2013 was the first year of the 2013-14 biennium. The original 2013 adopted budget was $94.1 million and the final adjusted budget was $99.3 million. The increase of $5.2 million was mostly related to $4.3 million in 2012 carry forward items, $380,000 in additional staffing related to a public safety grant, $380,000 in the City Attorney’s office move/remodel, and $178k in a capital park project. CAPITAL ASSET AND DEBT ADMINISTRATION Capital Assets The City of Renton’s investment in capital assets, including construction in progress, for governmental and business-type activities amounts to $756.3 million as of December 31, 2013 as shown in the following table. TABLE 3 CAPITAL ASSETS (Net of Depreciation/Amortization) Governmental Activities Business-Type Activities Total ~ -- ~2013 2012 2013 2012.and and Land Improvements ~ 19~"~ ~,494 S 6,165,321 $ 7,943,225 $ 199,O30,804 $ 199,237,719]u~ldings and Structures 60.313.676 62,180,126 10,301,335 10,744,~.52 70,615.011 72,924,2783thor Improvements 137,264,607 140,587,042 240,089,592 231,688,960 377,354,199 372,276,002vlachine~’ and Equipment 11.244.496 10,794,514 526,139 544,519 11,770,635 11,339,033 ntangible A~e~s 754,689 432,3B6 1,234,464 323,531 1,989,153 955,917:ons~ruction in Progress 76,319,g94 56,257,272 19,23~,838 11,180,617 95,551,732 67,437,889Total$ 478,762,B45 S 461,54S,834 $ 277,548,689 $ 262,625,004 $ 756,311,534 S 724,170,83~--------’~ The increase of $32.1 million in 2013 is mostly attributed to $28.1 million in additions to Construction in Progress capital. The most significant Construction in Progress additions in 2013 included: Rainier Ave. improvements ($10.8 million), Strander Blvd. improvements ($5.3 million), NE 3rd/4th Corridor improvements ($1.9 million), and the airport’s Taxiway Bravo improvements ($10.4 million). More detail about the City’s Capital Assets can be found in Note S to the financial statements. Debt Administration The City’s total outstanding debt at December 31, 2013, was $117.7 million as shown in Table 4. This was a $4 million reduction from the prior year which can be attributed to debt service payments towards principal of $5 million in General Obligation Debt, a $1.2 million reduction to Revenue Bonds, and a $0.9 million reduction in Public Works Trust Fund Loans. These principal payments were offset by a $3.2 million new General Obligation Qualified Energy Conservation Bond issue for the conversion of LED street lights throughout the City. The estimated annual energy savings is approximately $275,000 a year and the annual debt service cost net of rebate from the IRS will average $215,000 annually. The City does not have other capital financing planned in the near future. More detailed information about the City’s.long-term debt can be found in Note 13 to the financial statements. IG eneral Obligation Bonds Revenue Bonds OGler Lon~-Te~ Debt Unamor tized P~mium {Discount) LONG*TERM DEBT G ~er n.~ment a_l Actlvitle~s Business-Type Activities Tolal REQUESTS FOR FINANCIAL INFORMATION This financial report is designed to provide our citizens, creditors, investors, and others interested in the City’s finances with a general overview of the City’s finances and to show the City’s accountability for financial resources it receives. If you have any questions about this report or need additional information, please contact Iwen Wang, Administrative Services Administrator, 1055 South Grady Way, Renton, WA 98057 or visit our web site at www.rentonwa.gov. STATEMENT OF NET POSITION December 31, 2013 ASSETS Cash and cash equivalents Cash with fiscal agent Investments at fair value Receivables (net of allowance for unco]lectibles) Internal balances Inventories Prepayments Other non-current assets Restricted assets: Cash and cash equivalents Capital assets not bein8 depreciated: Land Construction in progress Capital assets, net of accumulated depreciation: Buildings Infrastructure Machinery and equipment Intangibles Total assets PRIMARY GOVERNMENT GOVERNMENTAL BUSINESS-TYPE ACTIVITIES ACTIVITIES TOTAL 55,37R,47R $20,607,683 ~7S,986,161 237,419 237,419 23,204,037 9,824,747 33,02B,784 19,566,531 9,358,776 28,925,307 775,092 {775,092) 177,52R 299,263 476.791 53,000 404,459 457,459 40,926,920 60,349 40,987,269 2,909,578 2,909,578 192,865,433 6,165,321 199,030,804 76,319,894 19,231,838 95,551,732 60,313,676 10,301,335 70,615,011 137,264,607 240,089,592 377,354,199 11,244.496 526,139 11,770,635 754,689 1,234,464 1,989,153 619,081,850 320,238,452 939.320,302 DEFERRED OUTFLOWS OF RESOURCES Deferred amount on refunding 277,542 1,024,919 1,302,461 Total deferred Outflows of resources 277,542 1,024,919 1,302,461 LIABILITIES Accounts payable and other liabilities 14,284,485 3,970,072 18,254,557 interest payable 636,642 119,O80 755,722 Unearned revenue 1,R35,95g 451,699 2,287,651 Non-current liabilities; Due within one year 7,987,421 2,581,556 10,568,977 Due in more than one year 83,782,740 35,014,087 118,796,827 Total liabilities 108,527,240 42,136,494 150,663,734 DEFERRED INFLOWS OF RESOURCES Total deferred inflows of resources NET POSITION Net investment in capital assets 445,277,657 241,679,585 686,957,242 Restricted for: Judicial 43,763 43,763 Public safety 193,134 193,134 HeaRh and human services 66,154 66,154 Transportation 1,209,902 1,209,902 Economic environment 215,806 215,806 Culture and recreation 674,885 674,885 Debt service 1,279,232 2,909,578 4,188~810 Capital 20,190,283 20,190,283 Unrestricted 41,681,336 34,537,714 76,219,O50 Total net position $510,832,152 ~279,126,877 $789,959,029 The notes to the financial statements are on integral part of this statement, FUNCTIONS/PROGRAMS Primary government: Governmental activities: General government Judicial Public safety Utilities Transportation Economic and natural environment Health and human services CuRure and recreation Interest on long-term debt Total governmental activities Business-type activities: Waterworks utility Airport Solid waste utility Golf course Total business-type activities ¥otal primary government STATEM ENT OF ACTIVITIES For the Year Ended Oecember 31, 2013 Page 1 of 2 PROGRAM REVENUES OPERATING CHARGES FOR GRANTS AND CAPITAL GRANTS EXPENSES SERVICES CONTRIBUTIONS & CONTRIBUTIONS 10,923,530 ~3,372,595 S 1,276,041 S 23,954 2,372,115 3,011,028 22,796 53,930,214 6,578,528 2,352,488 964,942 3,755 448,148 18,842,487 2,712,137 2,012,960 21,O94,384 7,E46,022 3,766,499 886,791 1,873,02B 12,938,589 2,096,514 70,355 1,511,428 3,411,488 112,402,415 21,541,O56 6,621,431 23,077,914 40,333,170 49,024,626 68,575 10,307,327 3,300,550 2,494,436 3,120 8,572,165 16,226,857 16,429,165 34,O00 2,250,748 2,142,433 62,111,325 70,090,660 105,695 18,879,992 174,513,740 S 91,631,7E6 $6,727,126 $41,957,906 General revenues: Taxes: Property taxes Retail sales taxes Business taxes Excise taxes interest and investment earnings Miscellaneous Transfers Total general revenues and transfers Change in net position Net position - January 1 Prior period adjustment Net position - January 1, restated Net position - December 31 STATEMENT OF ACTIVITIES For the Year Ended December 31, 2013 Page 2 of 2 NET (EXPENSE) REVENUE AND CHANGES IN NET POSITION PRIMARY GOVERNMENT GOVERNMENTAL BUSINESS-TYPE ACTIVITIES ACTIVITIES TOTAL (6,250,940) 661,709 (44,999,198) (513,039) 6,976,994 (2,492,732) (1,873,028) (9,260,292) (61,162,014) FUNCTIONS/PROGRAMS Primary government: Governmental activities: (6,250,940)General government 661,709 Judicial (44,999,198)Public safety (513,039(Physical environment 6,976,994 Transportation {2,492,732)Economic environment (1,873,02g)Health and human services (9,260,292)Culture and recreation (3,411,488)Interest on long-term debt (61,E62,014)Total governmental activities Business-type activities: 19,067,858 19,067,g56 Waterworks utility 7,769,171 7,769,171 Airport 236,308 236,308 Solid waste utility (i08,315)(I08,315)Golf course 26,965,022 26,965,022 Total business-tvpe activities (61,162,014)26,965,022 (34,196,992)Total primary government General revenues: Taxes: 32,536,533 32,536,533 Propertv taxes 25,541,972 25,541,972 Retail sales taxes 16,439,502 16,439,502 Business taxes 5,838,149 5,838,149 Excise taxes 613,097 94,077 707,174 Interest and investment earnings 1,232,066 124,281 1,356,347 Miscellaneous 2,341,160 (2,341,160)Transfers 84,542,479 (2,122,802)82,419,677 Total general revenues and transfers 23,380,465 24,842,220 4g,222,685 Change in net position 487,694,926 256,494,873 744,189,799 Net position ÷ January 1 (243,239)(2,210,216)(2,453,455)Prior period adjustment 487,451,687 254,284,657 741,736,344 Net position -January 1, restated S 510,832,152 S 279,126,877 S 789,959,029 Net position - December 31 The notes to the finonciol stetement$ ore an integral pert o[ this statement. ASSETS Cash & cash equivalents Cash with fiscal agent Deposit with fiscal agent Investments at fair value Receivables (net of allowances) Taxes Customer accounts Accrued interest & penaRy Special assessments Due from other funds Due from other governmental units TOTAL ASSETS DEFERRED OUTFLOWS OF RESOURCES TOTAL DEFERRED OUTFLOWS OF RESOURCES TOTAL ASSETS AND DEFERRED OUTFLOWS OF RESOURCES BALANCE SHEET GOVERNMENTALFUNDS December31,2013 Page 1 of 2 MUNICIPAL OTHER TOTAL FACILITIES CAPITAL GOVERNMENTAL GOVERNMENTAL CIP IMPROVEMENT FUNDS FUNDS 11,365,454 $17,714,971 $2,447,794 $3,291,895 $34,820,114 237,419 237,419 4,R16,827 7,460,739 1,O22,609 1,375,245 14,615,420 3,341,907 3,341,907 4,680,580 46,105 4,726,685 39,490 62,804 2,192 22,690 127,176 13,788 13,788 44,457 44,457 5,473,170 32,230 3,394,3g3 1,877,178 10,776,961 29,999,304 25,210,744 6,913,083 6,$80,796 68,703,927 29,999,304 ~25,210,744 $6,913,083 $6,580,796 $6g,703,927 The notes to the financial statements ore on integral port of this stotement. Washington St~tte .[luhto~’~ O])~ce Page 29 Washington State Auditor!~ Office Page 30 LIABILITIES AND FUND BALANCES Liabilities Accounts payable Taxes payable Retainage payable Due to other funds Due to other governmental units Matured interest payable Interfund loans payable Custodial accounts Unearned revenues Accrued employee wages and leave payable Total liabilities DEFERRED INFLOWS OF RESOURCES Deferred amount of special assessments Unavailable revenues TOTAL DEFERRED INFLOWS OF RESOURCES FUND BALANCES Restricted Commitled Capital purposes OperatinB reserves and carryforwards Assigned Capital purposes Operating reserves and carryforwards Total fund balances TOTAL LIABILITIES, DEFERRED INFLOWS AND FUND BALANCES BALANCESHEET GOVERNMENTALFUNDS December32,2023 PaRe2 of 2 MUNICIPAL OTHER FACILITIES CAPITAL GOVERNMENTAL GENERAL CiP IMPROVEMENT FUNDS TOTAL GOVERNMENTAL FUNDS 1,029,793 $1,L49,996 $3,705.140 $15,269 $5,9OO, Lgg 37,611 137 37,748 11.330 161.623 172.953 56,367 5,635 429,309 56,367 5,63S 429,309 B6,582 1,835,953 3,76g,142 12,292,g86 86,581 198,079 1.637,874 3.768.142 5,176,573 1,161,326 4,301,707 1,653,280 13.788 13,788 4,353,606 34,224 4,387,g30 4,353,606 34,224 13,788 4,401.618 303,051 17,063.639 920,524 4,904,714 23,191,928 84,000 6,848,174 1,656,628 9,014 R,S97,R16 4,152,362 4,152,362 137,605 137,605 15,929,712 1S,929,712 20,469,125 24,049,418 2,577,152 4,g13,72g 52,009,423 29,999,304 S 25,210,744 $ 6,913,083 $ 6,580,796 $ 68,703,927 The notes to the/inanciol statements are on integral part of this statement. RgCONCILIATION OF THE BALANCE SHEET TO THE STATEMENT OF NET POSITION December 31, 2013 FUND BALANCES - TOTAL GOVERNMENTAL FUNDS Amounts reported for governmental activities in the statement of net position are different because: Other non-current assets used in governmental activities are not financial resources and therefore are not reported in the governmental funds. Investment in Joint Venture-SCORE Investment in Joint Venture-Valley Communications Net Pension Obligation-overfunded Capital assets used in governmental activities are not financial resources and therefore are not repor~ed in the governmental funds, $ 52,009,423 32,201,419 5,672,607 3,041,851 40.915,B77 Land 292,865,483 Construction in progress 76,288,632 Buildings (net of accumulated depreciation)59,799,277 infrastructure (net of accumulated depreciation)137,101,120 Machinery and equipment Jnet of accumulated depreciation)1,513,197 Intangible assets (net of accumulated amortization)142,081 467,709,790 Other long-term assets are not available to pay for current period expenditures and therefore are reported as unavailable revenue in the funds. Properly tax revenue 569,419 M unicipal court revenue 1,171,612 Photo enforcement revenue 2~555,1B0 Other 105,407 4.401,618 Certain liabilities are not due and payable in the current period and therefore are not reported in the governmental funds. Interest payable 1631,007) Bonds payable and deferred amounts on refunding (81,796,227) Compensated absences 14,762,331) Other post employment benefits [4,Egg,SEE)~91,779,130) Internal service funds are used by management to charge the costs of certain activities, such as equipment rental, self-insurance, information technology and facility services to individual funds. The assets and liabilities of the internal service funds are included in the governmental activities in the statement of net position. NET POSITION OF GOVERNMENTAL ACTIVITIES 37,574,574 $510,832,152 Washblgton Start" ,4uditor’s Q/)~ce Page 31 Washington State Auditork Office Page 32 STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS For the Year Ended December 31, 2013 Page 1 of 1 GENERAL REVENUES Taxes ~71,294,583 Licenses and permits 4,371,667 Intergovernmental revenues 5,130,377 Charges for services 9,208,624 Fines and forfeits 2,766,403 Interfund revenues 294,039 Contributions 84,383 Investment earnings 417,389 Miscellaneous revenues 1,708,853 TOTAL REVENUES 95,276,328 MUNICIPAL OTHER TOTAL FACILITIES CAPITAL GOVERNMENTAL GOVERNMENTAL ClP IMPROVgMENT FUNDS FUNDS 950,460 $200,000 ~7,855,709 435,356 1,972,426 49,348 907,754 15,g74,11B 966,794 433,188 22,170 369,522 230,658 65,000 62,309 236 20,396 500,000 2~725,401 18,799,608 9,390,435 EXPENDITURES Current: General government 9,340,499 7,742 Judicial 2,364,631 Public safety 53,107,483 4,660 Utilities 468,442 Transportation 7,822,333 Economic environment 5,840,104 572,182 Health and human services 1,827,736 Culture and recreation 10,402,858 569,422 Capital outlay 78,010 2,779,497 Debt service: Principal payments Interest and fiscal charges TOTAL EXPENDITURES 91,252,096 3,933,503 80,300,752 6,828,797 22,879,043 9,641,812 2,788,573 294,039 749,563 500,330 2,208,853 126,191,762 3,947,033 240,307 68,507 4,744,439 10,942 3,304,069 9,348,241 2,364,631 53,112,143 468,442 11,769,366 6,652,593 1,827,736 11,040,787 22,227,177 4,744,439 3,315,011 23,212,570 8,472,397 126,870,566 EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES 4,024,222 (1,208,102)(4,412,962)918,038 (678,804) OTHER RNANCING SOURCES (USES) Transfer in 2,166,197 2,678,367 959,449 56,025 5,860,038 Transfer (out)(4,415,559)(277,000)(56,025)(1,354,000)(6,102,584) GO bonds issued 3,200,000 3,200,000 Sale of capital assets 9,821 9,821 TOTAL OTHER FINANCE SOURCES (USES)(2,239,541)2,401,367 4,103,424 (1,297,975)2,967,275 NET CHANGE IN FUND BALANCE 1,784,681 1,193,265 (309,538)(379,937)2,288,471 FUND BALANCE JANUARY 1 18,684,444 22,856,153 2,886,690 5,293,665 49,720,952 FUND BALANCE DECEMBER31 ~20,469,125 S 24,049,418 S 2,577,152 ~4,913,728 ~52,009,423 The notes to the financiol statements are an integral part o[ this statement. RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES GOVERNMENTAL ACTIVITIES For the Year Ended December 31, 2013 NET CHANGES IN FUND BALANCES - TOTAL GOVERNMENTAL FUNDS Amounts reported for governmental activities in the statement of activities are different because: Governmental funds report capital outlays as expenditures. However, in the statement of activities the cost of those assets is allocated over their estimated useful lives and reported as depreciation expense, This is the amount by which capital outlays exceeded depreciation expense in the current period plus extraordinary gains on capita~ assets from the sale of land and equipment. Capital expenditures Depreciation expense Sale of capital assets Donations of property and infrastructure from developers are not reported in the governmental funds. However, in the statement of activities, the fair market value of those assets is recognized as revenue. Revenues in the statement of activities that do not provide current financial resources are not reported as revenue in the funds. Unavailable revenue increased . by this amount. The issuance of long-term debt (e.g., bonds, leases) provides current financial resources to governmental funds, while the repayment of the principal of ’ long-term debt consumes the current financial resources of governmental funds. Neither transaction, however, has any effect on net position. Also, governmental funds report the effect of issuance costs, premiums, discounts, and similar ~tems when debt is first issued, whereas these amounts are deferred and amortized in the statement of activities. This amount is the net effect of these differences in the treatment of long-term debt and related items. Increase (decrease) in other non-current assets which include the Net Pension Asset and investments in Joint Ventures which are not reported in governmental funds. Equity interest-SCORE Equity interest-Valley Communications Net Pension Asset -overfunded Internal service funds are used by management to charge the costs of certain activities to individual funds. The net revenue {expense) of the internal service funds are reported with 8overnmental activities. CHANGE IN NET POSITION OF GOVERNMENTAL ACTIVITIES The notes to the financial statements ore an integral port of this statement. 22,227,17g (8,973,852) (7,413) 958,575 178,173 540,041 13,245,913 3,129,415 245,696 (234,934) 1,676,789 23,3gO,465 IVasi~m~ton State Audilm"~ Ojfice Page 33 Washington State Aflditor’s Office Page 34 ASSETS Current assets: Cash & cash equivalents investments at fair value Receivables Inet of aUowancesl: Customer accounts Special assessments interest investments lnterfund loan receivable Due from other governmenta~ units Inventon/of materials and supplies Prepayments Total current assets Noncurrent assets: Restricted cash & cash equivalents Specia~ assessments-non-current Advances to other funds Capital assets not being depreciated: hand Construction in progress Capital assets, net of accumulated depreciation: Buildings, improvements and equipment Intangible assets Total noncurrent assets TOTAL ASSETS DEFERRED OUTFLOWS OF RESOURCES Deferred amount on refundinR TOTAL DEFERRED OUTFLOWS OF RESOURCES STATEMENT OF NET POSITION PROPRIETARY FUNDS December 31, 2013 Page 1 of 2 BUSINESS-TYPE ACTIVITIES ENTERPRISE FUNDS GOVERNMENTAL OTHER TOTAL ACTIVITIES WATERWORKS SOLID ENTERPRISE ENTERPRISE INTERNAL SERVICE UTILITY WASTE FUNDS FUNDS FUNDS 17,246,736 S 3,503,370 S 1,g57,577 S 20,607,683 S 20,558,364 8,420,653 628,059 776,035 9,824,747 8,$8~616 5,648,048 1,924,608 31,303 7,603,9S9 503,539 102,612 102,612 69,883 7,008 9,938 86,829 87,519 101,646 101,646 523,170 1,022,105 33,850 509,423 1,565,378 234,847 64,417 299,264 177,528 404,459 404,459 53,000 32,846,530 4,501,354 3,248,693 40,596,577 30,491,736 2,909,57g 2,909,578 60,349 60,349 681,231 2,698,041 3,467,280 6,165,321 g,753,664 10,478,174 19,231,838 31,262 234,833,634 16,O83,431 250,917,065 10,409,165 1,234,464 1,234,464 612,608 2S0,489,730 30,028,88S 280,518,615 11,734,286 263,336,260 4,501,3S4 33,277,578 321,115,192 42,226,022 1,024,919 1,024,919 The notes to the finon¢iel s¢gtements ore an integrol pert of this stotement. LIABILITIES Current liabilities: Accounts payable Claims incurred but not reported Retainase payable Due to other funds Interfund loans payable Due to other governments Accrued interest payable Accrued employee wages and benefits payable Accrued taxes payable Custodial accounts Unearned revenue Revenue bonds payable Total current lia billtles Long-term liabilities: Revenue bonds payable Interfund loans payable Accrued employee wages and benefits payable Public works trust fund loan payable Total Ions-term liabilities TOTAL LIABILITIES DEFERRED INFLOWS OF RESOURCES TOTAL DEFERRED iNFLOWS OF RESOURCES NET POSITION Net investment in capital assets Restricted -Waterworks utility debt Unrestricted TOTAL NET POSITION STATEMENT OF NET POSITION PROPRIETARY FUNDS December 31, 2013 Page 2 of 2 BUSINESS-TYPE ACTIVITIES ENTERPRISE FUNDS GOVERNMENTAL OTHER TOTAL ACTIVITIES WATERWORKS SOLID ENTERPRISE ENTERPRISE INTERNAL SERVICE UTILITY WASTE FUNDS FUNDS FUNDS 726,843 $1.197,741 $1,045,812 $2,970,396 S 802,748 96,545 141,004 237,549 9,586 44,457 484,885 708,613 708,613 116,738 2,341 119,079 402.576 22,083 105,257 529.916 344,056 75,086 55,579 78,842 209,S07 g7 16,420 184,230 200,650 281,426 6,413 163,860 451.699 1,695,000 1,69S,000 4.119,247 1,281.816 2.206.231 7,607,294 4.306,952 30,538.739 30.538.739 391,8S3 391,g53 413,740 17,855 92.083 523,678 344,496 3.951,670 3,951,670 34,904,149 17,855 483,936 35,405,940 344,496 39.023,396 1.299,671 2.690,167 43,013,234 4,651.448 484,885 211.650,700 30.02g.g85 241.679,585 11.053,055 2,909,578 2,909,578 30,777,505 3,201.683 558,526 34,537,714 26,521,519 245,337,793 $ 3,201,683S 30.$g7.411 ~279.126,877 $37,574,S74 The notes to the financial statements are an integral part of this statement. STATEMENT OF REVENUES, EXPENSES, AND CHANGES iN NET POSITION PROPRIETARY FUNDS For the Year Ended December 31,20L3" BUSINESS-TYPE ACTIVITIES ENTERPRISE FUNDS GOVERNMENTAL OTHER TOTAL ACTIVITIES WATERWORKS SOLID ENTERPRISE ENTERPRISE INTERNAL SERVICE UTILITY WASTE FUNDS FUNDS FUNDS OPERATING REVENUES: Charges for services S 48,647,556 S 16,358,815 $1,923,206 S 66,929,577 Interdepartmenta~ services 121,361 616 121,977 Other services 255,709 69,734 2,713,663 3,O39,106 TOTAL OPERATING REVENUES 49,024,626 L6,429,165 4,636,869 70,090,660 OPERATING EXPENSES: Supplies 2,029,782 2,020 616,184 2,647,986 Personnelservices 6,453,208 444,482 2,046,201 8,943,891 Services 19,055,443 13,902,205 2,050,141 35,007,789 Insurance Taxes 4,321,663 1,878,150 E3,003 6,2E2,816 Depreciation 7,474,088 794,490 8,268~57g TOTAL OPERATING EXPENSES 39,334,184 16,226,857 5,520~019 61,081,060 OPERATING INCOME (LOSS)9,690,442 202,308 {883,150)9,009,600 NON*OPERATING REVENUES(EXPENSES): Intergovernmental revenues 68,575"34,000 3,120 105,695 Investment earnings 77,995 6,665 9,417 94,077 Gain (loss) on sale of capital assets Other non-operating revenues (expenses)43,788 3,027 77,466 124,281 Interest expense -- (99g,986~)(31,279).(1,030,~65) NON-OPERATING REVENUE NETOF EXPENSE -- (808,628)43.692 58,724.(706,212) INCOME (LOSS) BEFORE CONTRIBUTIONS AND TRANSFERS 16,430,979 11,317,696 27,748,675 2,088,422 3,900,317 14,207,692 894 1,904,421 27,R43.065 (94,390) 106,301 112,767 16,627 280,148 515,843 421,4538,881,814 246,000 (824,426)8,303,388 Capital contributions 10,307,827 8,572,165 1B,g79,992 23,954 Transfers in 9,821 9,821 2~642,026 Transfers out (1,8R2,292)(232,518)(236,171)(2,350,981)(58,318) CHANGE IN NET POSITION I7,317,170 13,482 7,511,568 24,842,220 3,029,115 NET POSITION, JANUARY 1 230,230,829 3,188,201 23,075,R43 256,494,873 34,506,875 Prior period adjustment (2,210,216)(2,210,216)38,584 NET POSITION, JANUARY 1 RESTATED 228,020,613 3,188,201 23,075,g43 254,284,657 34,S45,459 NET POSITION, DECEMBER31 ~245,337,783.~3,201,683 S 30,587,411 ~279,126,877 ~37,574,974 The notes to the financiol stotements ore an integro/ port o/ this statement CASH FLOWS FROM OPERATING ACTIVITIES: Cash received for services Cash received from other funds for services Cash paid to suppliers for goods & services Cash paid to other funds for goods & services Cash paid to employees Other non-operating receipts NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES Transfers from other funds Transfers to other funds Operating grants NET CASH PROVIDED (USED) BY NONCAPITAL FINANCING ACTIVITIES CASH FLOWS FROM CAPITAL FINANCING ACTIVITIES: Proceeds from the sale of equipment System development charges Acquisition & construction of capltai assets Special assessments Capital grants Principal payments on debt Interest payments on debt NET CASH PROVIDED (USED) BY CAPITAL FINANCING ACTIVITIES STATEMENT OF CASH FLOWS PROPRIETARY FUNDS Eor the Year Ended December 31, 2013 Page 1 of 2 BUSINESS-TYPE ACTIVITIES ENTERPRISE FUNDS GOVERNMENTAL OTHER TOTAL ACTIVITIES WATERWORKS SOLID ENTERPRISE ENTERPRISE INTERNAL SERVICE UTILITY WASTE FUNDS FUNDS FUNDS 48,910,317 $16,169,475 ~4.564,175 ~69,643,967 $ 147,298 147,29B 27,306,147 (25,239,893)(15,777,423)(1,968,238)(42,985,554)(20,127,378) (51,304)(51,3041 (6,487,959)(444,076)(2,035,376)(8,967,411)(5,733,187) 43,788 3,027 77,466 124,281 280,148 17,322,247 (48,997)638,027 17,911,277 1,725,730 9,821 9~821 2,642,026 (1,882,292)(232,51B)(236,171) (2,350,981)(58,318) 68,575 100,563 3,120 172,258 106,384 (1,803,g96)(131,955)(233,051)(2,168,902)2,690,092 (7~462,805) 504,663 (1,239,908) (1,S3S,S60) 91,259 (9,455,510)(16,918,315){2,730,607) 8,$94,643 9,099,306 23,954 {473,024)(1,712,932) (32,841)(1,568,401) (g,324,966)(1,366,732)(9,691,698)(2,615,394) CASH FLOWS FROM INVESTING ACTIVITIES: Principal proceeds from interfund loans 98,208 98,20B 511,666 Proceeds from sate of investments 106,899 106,899 Payments for investments (3,194,340)(60,293)(3,254,633)(2,006,789) interest on investments and loans 33,984 3,713 5,156 42,gS3 71,670 NET CASH PROVIDED (USED) BY INVESTING ACTIVITIES (3,062,148)(56,$80)112,055 {3,006,673)(1,423,453) NET INCREASE (DECREASE) IN CASH & CASH EQUIVALENTS 4,131,237 (237,532)(849,701)3,044,004 376,975 CASH & CASH EQUIVALENTS, JANUARY 1 13,115,499 1,740,902 2,707,278 17,56~,679 20,181,389 RESTRICTED CASH & CASH EQUIVALENTS, JANUARY 1 2,909,578 2,909,578 TOTAL CASH, RESTRICTED CASH, & CASH EQUIVALENTS, DECEMBER31 S 20,156,314 $1,503,370 S 1,857.577 ~23,517,261 S 20,558,364 The notes to the ~nancial statements are an integrol part of this statement. RECONCILIATION OF OPERATING INCOME (LOSS) TO NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES: Operating income (loss} Adjustments to reconcile operating income IIoss) to net cash provided (used) by operating activities: Depreciation & amortization of deferred charges Other non-operatiog revenue {Increase) decrease in accounts receivable Increase {decrease) in due from other funds (increase} decrease in inventow & prepaid items Increase Idecrease) in operating accounts payable Increase (decreasel in due to other funds Increase (decreasel in payables & other short-term liabilities Increase (decreasel in customer deposits ~ncrease (decrease) in unearned revenues Increase (decrease) in accrued employee leave benefits Total adjustments NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES NONCASH INVESTING, CAPITAL, AND FINANCING ACTIVITIES Prior Period Adjustment Contributions of capital assets Depreciation & amortization STATEMENT OF CASH FLOWS PROPRIETARY FUNDS Fo~ the Year Ended December 31, 2033 Page 2 of 2 BUSINESS-TYPE ACTIVITIES GOVERNMENTAL ENTERPRISE FUNDS ACTIVITIES OTHER TOTAL iNTERNAL WATERWORKS SOLID ENTERPRISE ENTERPRISE SERVICE UTILITY WASTE FUNDS FUNDS FUNDS S 9,690,442 ~202,308 ~(883fl.50)S 9,009,600 ~(94,390) 7.474.088 794,490 8,268,57g 1,904,421 43.788 3.027 77,466 124.281 28~348 (68,450)(259,690)64,242 {263,898)(442,$28) 25,937 25,937 28,131 (45,861)3,063 (14,667)(16,886) 139,797 50,472 540,118 730,387 34,624 (51,304)(51,304) (933)(6,072)167,909 160,904 52,209 (1,550)12,053 10,503 77,052 6,413 (14~989)(65,524) (34,751)406 30,g25 (23,$2D)8,192 7,631,805 (251,305)1.521,177 g,9OE,677 1,820,120 17,322,247 ~(4~997) $638,027 ~17,911,277 S 1,725,730 8,096,072 8,096,072 7,474,088 794,490 8,268,578 1,904,421 STATEMENT OF FiDUCiARY NET POSITION FIDUCIARY FUNDS December 31, 2013 ASSETS Cash and cash equivalents Investments at fair value: Federal National Mortgage Association US Treasury Strips Certificates of deposit Receivables (net of allowances) Interest on investments TOTAL ASSETS DEFERRED OUTFLOWS OF RESOURCES TOTAL DEFERRED OUTFLOWS OF RESOURCES LIABILITIES Deposits TOTAL LIABILITIES DEFERRED INFLOWS OF RESOURCES TOTAL DEFERRED INFLOWS OF RESOURCES NET POSITION Net position held in trust for pension benefits and other purposes PENSION TRUST AGENCY FIREFIGHTER’S SPECIAL PENSION DEPOSITS 1,866,701 S 633,519 370,398 3,198,267 548,845 3,152,136 9,136,347 633,519 633,519 633,519 9,136,347 The notes to the ~inancial statements are an integral part o[ this statement. The notes to the [inoncial statements are an integrQI part o~ this statement. ~Pashington State A uditor’s Office Page 40 STATEMENT OF CHANGES IN FIDUCIARY NET POSITION City of Renton, Washington FIREMEN’S PENSION FUND For the Year Ended December 31, 2013 PENStON TRUST FIREMEN’S PENSION ADDITIONS: Other contributions: Fire insurance premiums transferred in S 128,866 Investment earnings: Investment interest 339,084 Net increase / (decrease} in the fair value of investments (642,773) Total Investment earnings (303,689) TOTAL ADDITIONS (174,823) DEDUCTIONS: Benefits 188,943 Administrative expenses 4,475 TOTAL DEDUCTIONS 193,418 Change in net position (368,241) NET POSITION - JANUARY 1 9,504,58g NET POSITION -DECEMBER 31 $9,136,347 The notes to the financial statements are an inte~lral part of this statement. NOTES TO THE FINANCIAL STATEMENTS January 1, 2013 through December 31, 2013 NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The City of Renton was incorporated on September 6, 1901, and operates under the laws of the State of Washington applicable to a Non-Charter code city with a Mayor/Council form of government. A full-time Mayor and seven part-time Council members serve the City, all elected at large to four-year terms. The City provides the full range of municipal services authorized by state statues, together with a Municipal Airport, a Waterworks Utility, a Solid Waste Utility, and a Municipal Golf Course. The financial statements of the City have been prepared in conformity with U.S. generally accepted accounting principles (GAAP) as applied to government units. The Governmental Accounting Standards Board {GASB) is the accepted standard-setting body for establishing governmental accounting and financial reporting principles. Effective for fiscal year 2013 reporting, the City implemented the following new accounting and reporting standards issued by the Governmental Accounting Standards Board (GASB): GASB Statement No. 61 - The Financial Reporting Entity: Omnibus This statement modifies certain requirements for inclusion of component units in the financial reporting entity, it also amends criteria for reporting component units as if they were part of the primary government (blending) in certain circumstances. The statement also clarifies the reporting of equity interests in legally separate organizations. GASB Statement No. 64 - Derivative Instruments: Applications of Hedge Accounting Terminatian Provisions The objective of this statement is to clarify whether an effective hedging relationship continues after the replacement of a swap counterparty or a swap counterparty’s credit support provider. GASB Statement No. 65 - Items Previously Reported as Assets and Liabilities The objective of this statement is to either (a) properly classify certain items that were previously reported as assets and liabilities as deferred outflows of resources or deferred inflows of resources or (b) recognize certain items that were previously reported as assets and liabilities as outflows of resources (expenses or expenditures) or inflows of resources (revenues). These determinations are based on the definitions of those elements in Concepts Statement No. 4, Elements afFinancialStatements. This statement amends or supersedes the accounting and financial reporting guidance for certain items previously required to be reported as assets or liabilities. In addition, this statement amends or supersedes requirements for the determination of maior funds and addresses other statement of net position and governmental funds balance sheet presentation issues. Accounting changes adopted to conform to the provisions of this statement have been applied retroactively and are reported as a restatement of beginning net position or fund balance, as appropriate. GASB Statement No. 66 - Technical Corrections-2012 The objective of this statement is to resolve conflicting guidance in GASB Statement No. 54, Fund Balance Reporting and Governmental Fund Type DeJ=initions, and GASB Statement NO. 10, Accounting and Financial Reporting ‘for Risk Financing and Related Insurance Issues, related to reporting of risk financing activities, and to resolve conflicting guidance in GASB Statement No. 62, Codification o, fAccounting and Financial Reporting Guidance Contained in Pre-November 30, 1989 FASB and AICPA Pronouncements and GASB Statement No. 13, Accounting ‘for Operating Leases with Scheduled Rent Increases, regarding the reporting of certain operating lease transactions, and GASB Statement No. 48, Sales and Pledges o,f Receivables and Future Revenues and Intro-Entity Trans,fers o,f Assets and Future Revenues, concerning the reporting of the acquisition of a loan or a group of loans and the recognition of servicing fees related to mortgage loans that are sold. A. REPORTING ENTITY As required by GAAP the City’s financial statements present the City of Renton - the primary government. The City of Renton’s Mayor appoints the Governing Board for the Renton Housing Authority, which is not considered a component unit of the City. The City is under no obligation to subsidize, nor does it exercise any other prerequisite for inclusion. The City of Renton has no component units (either blended or discretely presented) included in these statements. BASIC FINANCIAL STATEMENTS - GASB 34 PRESENTATION The City’s basic financial statements include both government-wide (reporting the City as a whole) and fund financial statements (reporting the City’s major funds). Both the government- wide and fund financial statements categorize primary activities as either governmental or business-type. GOVERNMENT-WIDE STATEMENTS In the Government-wide Statement of Net Position, both the governmental and business-type activities columns (a) are presented on a consolidated basis by column, and (b) are reported on a full accrual, economic resource basis, which recognized all long-term assets and receivables as well as long-term debt and obligations. The City’s net position is reported in three parts - investment in capital assets, net of related debt; restricted net position; and unrestricted net position. The City first utilizes restricted resources to finance qualifying activities. The Government-wide Statement of Activities reports both the gross and net cost of each of the City’s functions and business-type activities (general government, judicial, public safety, utilities, transportation, economic environment, health and human services, culture and recreation, waterworks utility, airport, solid waste utility, and golf course). General government revenues (property taxes, retail sales and use taxes, business taxes, excise taxes, and other taxes) also support the functions. The Statement of Activities reduces gross expenses (including depreci.ation) by related program revenues, operating and capital grants and contributions. Program revenues must be directly associated with the function or a business- type activity. Operating grants include operating specific and discretionary (either operating or capital) grants while the capital grants column reflects capital specific grants. General revenues normally cover the net cost, by function or business-type activity. The Government-wide focus is more on the sustainability of the City as an entity and the change in the City’s net position resulting from the current year’s activities. The City’s fiduciary funds are presented in the fund financial statements. Since the assets are being held for the benefit of a third party and cannot be used for obligations of the City, they are not included in the Government-wide statements. Interfund fund activity has been eliminated from the Government-wide financial statements. Exceptions are payments in lieu of taxes, external type transactions within the internal service funds (revenue and expenses for interest or services provided to other governmental organizations), and other charges for utilities. Elimination of these charges would distort the direct cost and program revenues for these functions. FUND FINANCIAL STATEMENTS In the fund financial statements, the financial transaction~ are recorded in individual funds, each accounted for by a separate set of self-balancing accounts that comprise assets, liabilities, reserves, fund equity, revenues, and expenditures or expenses. The presentation is by major funds in either the governmental or business-type categories. GASB Statement 34 sets forth the minimum criteria for the determination of a major fund. The non-major funds are combined in the fund financial statements and are detailed in the combining section. The governmental major fund statements in the fund financial statement are presented on current financial resources and modified accrual basis of accounting. Since governmental fund statements are presented on a different measurement focus and basis of accounting than the Government-wide statements’ governmental column, reconciliation is presented at the end of the statement, which briefly explains the adjustments necessary to transform the fund statements into the Government-wide presentation. Washingtan Stltte Auditor ~ ()j}~ce Page 43 Wa.*hington State Auditor~ Office Page 44 Internal service funds of a government are presented in summary form as part of the proprietary fund financial statements. Since the principal users of the internal services are the City’s governmental activities, financial statements for internal service funds are consolidated into the governmental column when presented at the governmental level. These services are reflected in the appropriate functional activity (general government, judicial, public safety, utilities, transportation, economic environment, health and human services, culture and recreation). The following describes each fund as presented in the fund financial statements. MAJOR FUNDS GOVERNMENTAL FUNDS GENERAL FUND The General Fund is the primary operating fund of the City. It is used to account for the resources and disbursements of ordinary City operations that are not required to be accounted for in another fund. These include the costs of legislative and executive departments, court services, finance and legal departments, development services, police and fire departments, human resources and technical services, community services, parks, economic development, streets, property management for City owned leased facilities, library and museum, fire memorial, and fire department’s health and wellness programs. The maior sources of revenue are property taxes, utility taxes, and sales taxes. Licenses and permits, charges for services, and fines and forfeits provide additional support. Community development block grant activities are accounte~ for within this fund, which is federally funded. MUNICIPAL FACILITIES CIP FUND The Municipal Facilities CIP fund accounts for facility improvements and renovations, property acquisitions for parks and City space needs, parks development and equipment, and major capital requirements. Resources include general and special revenue taxes, grants, and Council- approved general obligation bonds. CAPITAL IMPROVEMENT FUND This fund supports the City of Renton transportation projects and projects linked with various State and Federal funding programs. Many of the projects are dependent on grants, formation of LIDs, and mitigation revenue. ENTERPRISE FUNDS WATERWORKS UTILITY FUND The Waterworks Utility Fund accounts for all operation and capital improvement programs for water, wastewater, and storm water services within the City. The activities primarily supported by user fees include: administration, billings and collections, debt service, engineering and operation, maintenance and repairs. The primary resources for the capital improvement programs are revenue bond proceeds, grants (as available), and utility connection charges. SOLID WASTE FUND Solid waste, recycling, and yard waste collection services for the City are accounted for in this fund, supported entirely by service fees. The expenses include payment to the City’s garbage contractor and other service charges. NON-MAJOR FUNDS SPECIAL REVENUE FUNDS ARTERIAL STREET FUND The Arterial Street Fund was established pursuant to state law allocating the one-half cent State Gasoline Tax revenue to cities and towns for construction, improvements, and major repair of streets. HOTEL/MOTEL TAX FUND Accounts for monies collected through an increase of one percent in hotel/motel taxes for the purpose of increasing tourism in the City of Renton. 1% FOR ART FUND The City of Renton established this fund to account for one percent of construction project actual costs to be used for the selection, acquisition and/or installation of works of art to be placed in, on, or about City public facilities. CABLE COMMUNICATIONS DEVELOPMENT FUND The Cable Communications Development Fund accounts for funding for promotion and development of cable communications as established by City ordinance. SPRINGBROOK WETLANDS BANK FUND The City of Renton established this fund in 2007 for the purpose of providing accounting for the Springbrook Creek Wetland and Habitat Mitigation Bank project. The fund will receive revenue by selling Wettands Credits to third parties and to the City’s internal departments. W~l~hmgton State A udtto~"~ ()]]i~ e Page 45 Washington State Audttor~s Office Page 46 DEBT SERVICE FUNDS GENERAL GOVERNMENTAL MISCELLANEOUS DEBT SERVICE FUND This debt service fund accounts for the following outstanding debt issues: ¯2006 limited tax general obligation bonds which provided funding for the construction of South Lake Washington infrastructure improvements. ¯2009 intergovernmental debt related to the Fire District #40 asset transfer as a result of the Benson Hill annexation. 2009 intergovernmental debt related to acquisition, construction, and equipping of the SCORE facility. 2010 intergovernmental refunding debt which refunded a portion of the 2000 intergovernmental debt for the construction of a new facility for Valley Communications Center. ¯2010 limited tax general obligation refunding bonds which refunded a portion of the 2001 limited tax general obligation bonds for the construction of a downtown parking facility. ¯2011 limited tax general obligation bonds which funded the development and construction of 2 new libraries. 2011 limited tax general obligation refunding bonds which refunded a portion of the 2001 limited tax general obligation bonds which refunded a portion of the 1997 limited tax general obligation bonds for the purchase of Renton City Hall. ¯2013 limited tax general obligation qualified energy conservation bonds (QECB) which provided funding for streetlight improvements. CAPITAL PROJECT FUNDS COMMUNITY DEVELOPMENT IMPACT MITIGATION FUND Accounts for monies collected from developers to offset impacts created by their developments to City facilities. FIRE IMPACT MITIGATION FUND Accounts for monies collected from developers to offset impacts created by their developments to City facilities. TRANSPORTATION IMPACT MITIGATION FUND Accounts for monies collected from developers to offset impacts created by their developments to City facilities SOUTH LAKE WASHINGTON INFRASTRUCTURE PROJECT FUND The South Lake Washington Infrastructure Project Fund accounts for the infrastructure improvements at the south end of Lake Washington. Primary resources include: REET, sales tax, grants, and GO Bonds which provide for the design, construction, labor wages and benefits, and equipment required to implement the project. ENTERPRISE FUNDS AIRPORT FUND Provides accounting for revenues and expenses, which provides administration, debt services, operation, capital improvements, and maintenance of the Renton Municipal Airport and Will Rodger-Wily Post Memoriai Seaplane Base. Sources of support to the fund are leases, fuel charges, investment interest, and grant funding as available. GOLF COURSE FUND The Golf Course Fund was created after the City acquired the Mapiewood Golf Course. The fund accounts for the operation, maintenance, debt service, and capital improvements of the facility. OTHER FUND TYPES INTERNAL SERVICE FUNDS EQUIPMENT RENTAL The Equipment Rental Fund accounts for the costs of maintaining and replacing all City vehicles and auxiliaW equipment. In addition, this fund accounts for the City’s information technology, facilities and communications costs. All costs, including depreciation, are factors in calculating the rates that are charged to each user department. INSURANCE FUND The Insurance Fund provides accounting for self-insurance services to all City departments, including provisions for losses on property, liability, worker’s compensation, unemployment compensation, and the health care program. The Insurance Fund pays expenses and rates are charged to departments based on use and/or coverage requirements. FIDUCIARY FUNDS Fiduciary funds are used to account for assets held by the City in a trustee capacity or as an agent for individuals, private organizations, other governmental units and/or other funds. The City has one Pension Trust Fund and one Agency Fund. PENSION TRUST FUND FIREMEN’S PENSION FUND The Firemen’s Pension Fund accounts for the payment of administrative costs and benefits for retired firefighters and their beneficiaries, who were employed prior to March 3., 3.970. Primary revenues sources are general property tax allocations in accordance with actuarial calculations, the fire premium tax, and investment income. AGENCY FUND SPECIAL DEPOSIT FUND The Special Deposit Fund was established for the purpose of holding or retaining cash deposits or other securities pending fulfillment of certain conditions and/or requirements by the depositor. Refunds are made when all obligations have been met and only upon authorization from the transmitting department. C.MEASUREMENT FOCUS AND BASIS OF ACCOUNTING Basis of Accounting refers to the point at which revenues or expenditures/expenses are recognized in the accounts and reported in the financial statements. It relates to the timing of the measurement made regardless of the measurement focus applied: 1. Accrual Both governmental and buslness-type activities in the Government-wide financial statements and the proprietary and fiduciary fund financial statements are presented on the accrual basis of accounting. Revenues are recognized when earned and expenses are recognized when incurred. Substantially all governmental fund revenues are accrued. Property taxes are billed and collected within the same period in which taxes are levied. Subsidies and grants to proprietary funds, which finance either capital or current operations, are reported as non-operating revenue based on GASB Statement 33. In applying GASB Statement 33 to grant revenues, the provider recognizes liabilities and expenses and the recipient recognizes receivables and revenue when the eligibility requirements, including time requirements, are met. Resources transmitted before the eligibility requirements are met, are reported as advances by the provider and deferred revenue by the recipient. 2. Modified Accrual The governmental funds financial statements are presented on the modified accrual basis of accounting. Under the modified accrual basis of accounting, revenues are recorded when susceptible to accrual: i.e., both measurable and available. "Available" means collectible within the current period or soon enough thereafter to be used to pay liabilities of the current period. The City considers all revenue reported in the governmental funds to be available if the revenues are collected within sixty days after year-end. Expenditures are generally recognized under the modified accrual basis of accounting when the related liability is incurred. The exception to this general rule is that principal and interest on general obligation long-term debt, if any, is recognized when due. D.ASSETS AND DEFERRED OUTFLOWS OF RESOURCES, LIABILITIES AND DEFERRED INFLOWS OF RESOURCES AND NET POSITION 3.. Cash and Cash Equivalents The City has defined cash and cash equivalents as cash on hand, demand deposits, and all highly liquid investments (including restricted assets) with maturity of three months or less when purchased. These amounts are classified on the balance sheet or in the statement of net position as cash and cash equivalents or investments in the various funds. The interest on these investments is prorated to the applicable funds. Included in this category are all funds invested in the Local Government Investment Pool and Municipal Investor Account. Excluded from this category are cash balances held by Fiscal Agents since the City does not have discretionary use of these funds. 2.Investments (referto Note 3B.) 3.Receivables and Payables - Amounts owed/payable to/by the City at year-end. Taxes receivable consists of property taxes and related interest and penalties (refer to Note 4). Accrued interest receivable consists of amounts earned on investments, notes, and contracts. Accrued interest payable consists of amounts owed on notes, loans, and contracts. Customer accounts receivable/payable consists of amounts owed from/to private individuals or organizations for goods and services. If the transactions are with another governmental unit, it is accounted for within "due from/to other governments." Special assessments are recorded when levied and are liens against the property benefited. Special assessments receivable consist of current and delinquent assessments and related interest and penalties. Deferred amount on special assessments consist of special assessments not due within one year reported as deferred outflows of resources in the governmental funds. Receivables have been reported net of estimated uncollectible accounts. Because property taxes, special assessments, and utility billings are considered liens on property, no estimated uncollectible amounts are established. Activities between funds that are representative of lending/borrowing arrangements outstanding at the end of the fiscal year are referred to as either interfund loans receivable/payable. All other outstanding balances between funds are reported as due to/from other funds. Any residual balances outstanding between the governmental activities and Washington Sl*lte Auduo~ ~ OJ]~ce Page 49 Washington State Auditor’s Office Page 50 business-type activities are reported in the government-wide financial statements as internal balances. (Refer to Note 3,0). Noncurrent portions of long-term interfund loans receivable are equally offset by a fund balance amount which indicates that they do not constitute "available spendable resources" since they are not a component of net position. Current portions of long-term interfund loans receivable are considered "available spendable resources" and are subiect to elimination upon consolidation. In the Government-wide financial statements, and proprietary fund types in the fund financial statements, long-term liabilities are reported in applicable governmental activities, business- type activities, or proprietary fund type statement of net position. Deferred Amount on Refunding - the difference between the carrying amount of redeemed and/or defeased debt and its reacquisition price. This amount is deferred and amortized over the remaining life of the debt, or the life of the new debt, whichever is shorter. 4. Inventories and prepaid items All City inventories are maintained on a consumption basis of accounting where items are purchased for inventory and charged to the budgetary accounts as the items are consumed. Any material inventories at year-end are included in the balance sheet of the appropriate fund. All inventories are carried at cost on the first in, first out - FIFO basis, with the exception of the Public Works Maintenance shops inventory. The value of this inventory is calculated using the average cost method. Certain payments to vendors reflect costs applicable to future accounting periods and are reported as prepaid items in both the Government-wide and fund statements. 5.Capital Assets and Depreciation (refer to Note 5). 6. Unearned Revenues This account includes amounts collected in advance for services not yet rendered. 7. Unavailable Revenues This account includes amounts recognized as receivables but not revenues in the governmental funds because the revenue recognition criterion of availability has not been met. 8. Custodial Accounts This account reflects the liability for net monetary assets being held by the City in its agency capacity. 9. Compensated Absences The City accrues accumulated unpaid vacation and other leave and associated employee- related costs when earned (or estimated to be earned} by the employee. The non-current portion (the amount estimated to be used in subsequent fiscal years) for governmental funds is maintained separately and represents a reconciling item between the fund and Government- wide presentations. 3.0. Fund Balance Fund balance is presented in the governmental fund financial statements and represents the difference between assets and deferred outflows of resources and liabilities and deferred inflows of resources reported within the governmental fund. Fund Balance is classified into the following categories: Nonspendable - items that cannot be spent due to form; inventories, prepaid amounts, long- term loan receivables, or amounts that must be maintained intact legally. Restricted - amounts constrained for specific purposes imposed by external parties or imposed through the judicial process and enabling legislation. Committed - amounts constrained by the City Council. The Council can, by ordinance, establish, modif3/, or rescind constraints on committed fund balances. Assigned - constraints imposed by the City Council for amounts intended for specific purposes. In governmental funds, excluding the General Fund, assigned fund balance is intended to be used, at a minimum, for the purpose of that fund. In the General Fund a maximum of 12% and minimum of 8% is assigned per the City’s financial policies and adopted by the City Council in the biennial budget ordinance. Unossigned - any remaining fund balance in the General Fund not classified as nonspendable, restricted, committed or assigned. When multiple categories of fund balance are available for incurred expenditures, it is the City’s policy to consider restricted fund balance to have been depleted before using any of the components of unrestricted fund balance. Further, when the components of unrestricted fund balance can be used for the same purpose, committed fund balance is depleted first, followed by assigned fund balance. Unassigned fund balance is applied last. Washington Sutte Audito~ ~ Oj]~l’e Page 51 Wa.~hington State Audito~’~ ()]rice Page 52 The following table shows the fund balance classification detail, as of December 31, 2013: 11. Net Position (refer to Note 11). E.REVENUES, EXPENDITURES, AND EXPENSES 1. Program Revenues Program revenues include charges for services to customers for goods and services provided, operating grants and contributions, and non-operating grants and contributions within the Government-wide Statement of Activities.Charges for services include business licenses, construction permits, and weapon permits. 2. General Revenues Property taxes, retail taxes, business taxes, excise taxes, and associated penalties and interest, and interest and investment earnings are classified as general revenues within the Government-wide Statement of Activities. 3.Interfund Transfers Permanent reallocations of resources between funds are classified as interfund transfers. For purposes of the Government-wide Statement of Activities, all interfund transfers between individual governmental (unds have been eliminated. 4. Expenditures/Expenses Expenses in the Government-wide Statement of Activities are reported by function as a governmental activity (general government, judicial, public safety, utilities, transportation, economic environment, health and human services, culture and recreation), interest on long- term debt, or business-type activity (waterworks utility, airport, solid waste utility, or golf course). In the fund financial statements, expenditures of governmental funds are classified by: function, debt service principal and interest payments, or purchases of capital items. Proprietary expenditures are classified as operating or non-operating. In 2013, operating expenses were segregated into Supplies, Personnel services, Services, Insurance, Taxes and Depreciation. The other categories reported previously (Operations and maintenance and Administrative and general) were assigned to Supplies, Personnel services, Services, and Insurance, as appropriate. 5. Operating and Non-operating Revenues and Expenses Operating revenues and expenses for proprietary funds are those that result from providing services and producing and delivering goods and/or services in connection to the proprietary fund’s principle ongoing operations. All revenue and expenses not related to capital and related financing, non-capital financing, or investing activities are included. Those revenues and expenses not meeting this definition are non-operating revenues and expenses. NOTE 2. COMPLIANCE AND ACCOUNTABILITY The City of Renton budgets its funds under Generally Accepted Accounting Principles (GAAP) at the fund level. Annual appropriated budgets are adopted for governmental funds on a biennial basis. Budgets for proprietary funds are "management budgets" and are not legally required to be reported. Included in the Required Supplemental Information and Combining Statements sections of the CAFR are Schedules of Revenues, Expenditures, and Changes in Fund Balances (Budget to Actual) reporting the Actual Budgetary GAAP Basis verses Actual GAAP Basis of Accounting for all legally adopted budgets. There have been no material violations of finance- related legal or contractual provisions, and there have been no expenditures exceeding legal appropriations in any of the funds of the City. A. PROCEDURES FOR ADOPTING THE ORIGINAL BUDGET The City of Renton’s biennial budget procedures are mandated by the Chapter 35A.33 of the Revised Code of Washington (RCW). The steps in the budget process are as follows: 1.Prior to November 1, the Mayor submits a proposed budget to the City Council. This budget is based on priorities established by the Council; estimates provided by the City departments during the preceding months; balanced by revenue estimates made by the Mayor. 2.The City Council conducts public hearings on the proposed budget in November and December. Oty n.f Renton, Wosh~ngton City o[ Renton, Washington 3.The Council makes their adiustments to the proposed budget and adopts, by ordinance, a final balanced budget no later than December 31. 4. The final operating budget, as adopted, is published and distributed within the first four months of the following year. B. AMENDING THE BUDGET The budget, as adopted, constitutes the legal authority for expenditures. Budgets are adopted on the GAAP basis of accounting. Any comparisons between budget and actual revenues and expenditures are reported under the GAAP basis. The biennial budget Js adopted with budgetary control at the fund level, so expenditures may not legally exceed appropriations at that level of detail. Transfers or revisions within funds are allowed, but only the City Council has the legal authority to increase or decrease a given fund’s annual budget.This is accomplished by City ordinance. The budget was amended three times during 2013. Original budgeted inflows as compared to the final budgeted inflows are as follows: Increase Original Final (Decrease) Budgeted Budgeted Budgeted Fund Inflows Inflows Inflows General Fund ~92,495,099 S 96~664,204 ~4,169,105 Arterial Street Fund 643,000 643,000 H o te I/Mo te I ma x Fu n d 245,000 245,000 1% for Art Fund 15,000 16,000 1,000 General Government Miscellaneous Debt Service Fund 8,001,433 8,040,433 39,000 Community Development Impact Mitigation Fund 60,000 60,000 Fire Impact Mitigation Fund 25,000 25,000 Transportation Impact M~tigation Fund 40,000 40,000 Municipal Facilities CIP Fund 2,485,000 6,208,670 3,723,670 General Government Capital Improvement Fund 25,258,120 33,586,759 8,328,639 South lake Washington Infrastructure Project Fund 44,874 44,g74 Airport Fund 11,748,935 15,322,540 3,573,605 Solid Waste Utility Fund 15,700,852 15,700,852 Golf Course Fund 2,503,669 2,580,619 76,950 Waterworks Utility Fund 52,161,152 57,368,442 5,207,200 Equipment Repa ir and Repla cement / Information Technology / Facilities / Communica tions Fund 13,405,932 13,677,766 271,834 Insurance Fund 14,778,812 16,778,812 2,000,000 Firemen’s Pension 300,000 300f000 TOYAL $ 239,867,004 $ 267.3021971 $ 2714351967 Original budgeted outflows as compared to the final budgeted outflows are as follows: Increase Original Final (Decrease) Budgeted Budgeted Budgeted Fund Outflows Outflows Outflows General Fund S 92,447,466 S 00,426,358 ~6,978,892 Arterial Street Fund 640,000 600,000 (40,000) Hotel/Motel Tax Fund 245,000 291,000 46,000 1% for Art Fu nd 50,000 50,000 General Government Miscellaneous Debt Service Fund 8,001,433 8,073,283 71,850 Community Development Impact Mitigation Fund 700,000 700,000 Fire Impact Mitigation Fund 250,000 250,000 Transportation Impact Mitigation Fund 183,000 54,000 (129,000) Municipal facilities CIP Fund 2,722,725 28,792,893 26,070,168 General Government Capital Improvement Fund 25,257,711 33,146,358 7,gBg,647 South Lake Washington Infrastructure Project Fund 96,947 96,947 Airport Fund 11,719,777 17,492,945 5,773,168 Solid Waste UtilityFund 16,170,067 16,177,073 7,006 Golf Course Fund 2,515,769 2,845,664 329,896 Waterworks Utility Fund 47,912,993 60,491,286 12,578,293 Equipment Repair and Replacement / IT / Facilities / Communications Fund 13,209,596 15,057,326 1,847,730 insurance Fund 15,698,251 15,702,961 4,710 Firemen’s Pension 240,475 240,475 TOYAL $ 23712641263$ 299~4881569 $62f2241306 NOTE 3. DEPOSITS AND INVESTMENTS A. Deposits The City’s deposits and certificates of deposit are insured by the Federal Depository Insurance Corporation (FDIC) and the State of Washington Public Deposit Protection Commission (WPDPC) Act of 1969. The City’s deposits with the Local Government Investment Pool (LGIP) are managed by the Washington State Office of the Treasurer. The LGIP is comparable to a Rule 2a7-pool recognized by the Securities and Exchange Commission. A 2a7-1ike-pool is an external investment pool that is not registered with the SEC as an investment company but nevertheless has a policy that Jt will, and does, operate in a manner consistent with the SEC’s Rule 2a7 of the Investment Company Act of ~.940. Rule 2a7 allows SEC-registered mutual funds to use amortized cost, which approximates fair value, to report net assets and compute share prices. IYashmgton State/[ttditor ’~ (~l)iee Page 55 Washington State Auditor’s OJ~ce Page 56 Reconciliation to Statements of Net Position Governmental Fiduciary Total Cash $66,058,296 S 2,500,220 S 68,55R,516 Restricted Cash 2,909,578 2,909,578 Cash Equivalents (LGIP)9,927,865 9,927,865 Total Cash & Cash Equivalents 78,895,739 2,500,220 81,395,959 Investments 33,028,784 4,117,509 37,146,293 Total Investments 33,028,784 4,117,509 37,146,293 Total Cash & Investments $ 111,924,523 $6,617,729 $ 118,542,252 B. Investments The City invests excess and inactive funds in accordance with the City’s Investment Policy (last updated and approved on February 23, 2009), which complies with the guidelines within Chapter 35A.40.050 of the Revised Code of Washington {RCW). This allows for investment of excess cash and inactive cash, directs that the responsibility for determining available cash for investment is placed upon the department administering the funds, and allows for pooling of the cash provided that the allocation of income is proportionate to the investment of each fund. Currently, the City invests in obligations of the U.S. Government, U.S. agency issues, and Certificates of Deposit with Washington State banks and savings and loan institutions as allowed by RCW. Investments are shown on the Government-wide Statement of Net Position at fair value. Investments are reported within cash and cash equivalents or investments based on the length of time to maturity when purchased. Custodial Credit Risk Custodial credit risk for investments is the risk that, in the event of the failure of the counter party to a transaction, a government will not be able to recover the value of investment or collateral securities that are in the possession of an outside party. All security transactions, including collateral for repurchase agreements, entered into by the City are conducted on a delivery-versus-payment (DVP) basis and are held in our safekeeping trust account with Bank of New York with terms negotiated by the State of Washington. Investment Schedule As of December 31, 2013, the City of Renton had the following investments: Security Type Weighted Cost Fair Value Ave Maturity Moody’s S&P ICertificates of Deposit (within WPDPC)23,794,006 23,794,006 0.79 unrated unrated FNMA 7,500,000 7,512,550 0.66 Aaa AA+ FHLMC 2,500,000 2,502,075 0.21 Aaa AA+ US TREASURY ZERO COUPON 2,038,263 9,198,267 5.97 Aaa AAA FNMA ZERO COUPON 99,556 139,395 035 unrated unrated TOTAl INVESTMENTS $35,931,825 $37,148,293 Credit risk. Credit Risk is the risk that an issuer or other counterparty to an investment will not fulfill its obligations. Of the bonds held by the City, 44% are rated "Aaa" by Moody’s Investors Service and "AAA" by Standard & Poor and 55% are rated "Aaa" by Moody’s Investors Service and "AA+" by Standard & Poor. All certificates of deposit are insured by the FDIC up to ~250,000 and, additionally, are 100% collateralized in the multiple financial institution collateral pool administered by the Washington Public Deposit Protection Commission (WPDPC). The City’s Investment Policy directs that the standard of prudence for investment activities shall be the Prudent Investor Standard that states: "Investments shall be made with judgment and care, under circumstances then prevailing, which person of prudence, discretion, and intelligence would use in the management of their own affairs, not for speculation, but for investment purposes, considering the probable safety of their capital as well as the probable income to be derived." Interest Rate Risk. Interest rate risk is the risk that changes in interest rates over time, adversely affecting the fair value of an investment. The City’s portfolio is managed within the parameters established by the Investment Policy, which limits the weighted average maturity of the portfolio to five years. The City’s FNMA and FHLMC bonds have call provisions with call dates falling in the first six months of 2014. I 0-6 6 m onth~ -1-3 3+|1 Security Type months 1 year years years Totals IICertificates of Deposit (within WPDPC)$ 4,285,082.76 $7,493,523 $7,015,400 $S,O00,O00 $23,794,006 IFH LMC 2,502,075 2,502,075 FNMA 7,512,550 7,512,550 FNMA ZERO COUPON 139,395 139,395 US TREAS ZERO COUPON 193~239 206~959 2~798~069.40 3,196,267 TOTAL INVESTMENTS $ 4F285r083 $ 7r6861762 $ 7,222~359 $ 17,952,090 $ 371146~293 Washington State A uditor ~ OJ)~ce Page 57 Washington State Auditor’s Office Page 58 Concentration of Credit Risk. Concentration of credit risk is the risk of loss attributed to the magnitude of a government’s investment in a single issuer. The City diversifies its investment instruments to avoid incurring unreasonable risk inherent with the over-investment of instruments and issuers using the following target distribution as a guide during normal economic times while allowing flexibility when appropriate. The City has certificate of deposits equal to 3.4% of its total investments with Umpqua Bank; 27% with First Savings Bank Northwest and 3.3% with Columbia Bank. As stated earlier these are 3.00% collateralized and guaranteed by the State of Washington Public Deposit Protection Commission. The remaining individual issuers are less than 5% of total investments or are otherwise excluded from this disclosure due to the low risk nature of the investment. Instrument Issuer Maximum’s per Policy Maximum Maximum U.S. Treasuries 100%100% U.S. Agencies 7S%50% Certificates of Deposit (within WPDPC)75%20% Local Governmental Investment Pool (LG~P)75%75% Commercial Paper 25%5% NOTE 4. PROPERTY TAXES The King County Finance Director acts as an agent to collect property taxes levied in the county for all taxing authorities. Taxes are levied annually, January 1, on property value listed as of the prior August 31. Assessed values are established by the King County Assessor at 1OO percent of fair market value. A revaluation of all property is required every two years; however, King County has the ability to revalue annually. Property taxes levied by the King County Assessor and collected by the King County Finance Director become a lien on the first day of the levy year and may be paid in two equal installments if the total amount exceeds $30. The first half of real property taxes is due on April 30 and the balance is due October 31. Delinquent taxes bear interest at the rate of 12 percent and are subject to additional penalties if not paid as scheduled. No allowance for uncollectible taxes is established because delinquent taxes are considered fully collectible. At year-end, property taxes are recorded as a receivable with the portion not expected to be collected within 60 days offset by unavailable revenue. During the year, property tax revenues are recognized when cash is received. The tax rate for general City operations is limited to $3.10 per $3.,000 of assessed value (RCW 84.52.043). This reflects a reduction of $0.50 per $1,000 as a result of the annexation to the King County Library System. In addition to this amount, up to $0.225 (22.5 cents) per $3.,000 may be designated for contribution to the Firemen’s Pension Fund. If a report by a qualified actuary on the condition of the Firemen’s Pension Fund establishes that this amount (or portion of) is not necessary to maintain the actuarial soundness of the fund, the amount can be used for any other municipal purpose (RCW 41.16.060). The tax rate limit may be reduced for any of the following reasons: The Levy Limit: the levy Emit calculation applies to a taxing district’s budget, and not to increases in the assessed value or tax bill of individual properties. Initiative 747 which restricted individual taxing districts from collecting, in any year, more than a one percent increase in their regular, non-voted, levy over the highest levy amount since 1985 was overturned by the courts. However during 2007, the state legislature reinstated this limit with the passage of HB2416. New construction, annexations, and excess levies approved by the voters are not included in the levy limit calculation. If the assessed valuation increases by more than one percent due to revaluation, the levy rate will be decreased. The One Percent Constitution Limit: The Washington State Constitution limits the regular (non-voted) combined property tax rate applied to an individual’s property to one percent ($3.0 per $~.,000) on the market valuation. Voters may approve special levies that are added to this figure. If the taxes of all districts exceed this amount, each is proportionately reduced until the total is at or below the one percent limit. 3. The City may voluntarily levy taxes below the legal limit. Special levies approved by the voters are not subject to the above limitations. There is currently no excess levy for General Obligation Bond debt. The City’s regular levy per the King County Assessor’s 203.3 Annual Report is $3.10. NOTE 5. CAPITAL ASSETS AND DEPRECIATION A. GENERAL POLICIES Major expenditures for capital assets, including capital leases and major repairs that increase the useful life, are capitalized. The capitalization threshold applied to the City’s assets is $5,000. Maintenance, repairs, and minor renewals are accounted for as expenditures or expenses when incurred. All capital assets are valued at historical cost (or estimated cost, where historical cost is not known/or estimated market value for donated assets/or the original historical cost when transferred between proprietary and governmental funds.) Intangible assets, either purchased or internally developed, with a cost of $5,000 or more that are identifiable by meeting one of the following conditions: ¯The asset is capable of being separate or divided and sold, transferred, licensed, rented, exchanged; or ¯The asset arises from contractual or other legal rights, regardless of whether those rights are transferable or separable. The City has acquired certain assets with funding provided by federal financial assistance programs. Depending on the terms of the agreements involved, the federal government could retain an interest in these assets. However, the City has sufficient legal interest to accomplish the purposes for which the assets were acquired, and has included such assets within the applicable statements. The City capitalizes art and historical treasures. Art and historical treasures are expected to be maintained or enhanced over time and thus, are not depreciated. B. GOVERNMENTAL CAPITAL ASSETS Governmental long-lived assets of the City purchased, leased, or constructed are recorded as expenditures in the governmental funds and are capitalized, net of depreciation, in the Government-wide statements. The infrastructure component of GASB 34 for assets acquired after January 1, 1980 was implemented retroactively in 2004. Donated capital assets are capitalized at estimated fair value of the item at the date of the donation. C. PROPRIETARY FUND CAPITAL ASSETS Capital assets of proprietary funds are capitalized in their respective statement of net position, net of depreciation. Any gain on the sale of capital assets is recorded in the Statement of Activities as General revenues, Miscellaneous. Interest incurred during the construction phase of capital assets of proprietary funds is included as part of the capitalized value of the assets constructed. The amount of interest capitalized is calculated by applying the weighted average borrowing rate to the average cumulative expenditures since inception. For the year ended December 31, 2013, total proprietary fund interest incurred of $1,331,562 was reduced by capitalized interest in the amount of $301,297. D. DEPRECIATION AND AMORTIZATION Depreciation on all depreciable assets is provided on the straight-line basis over the following useful lives: Estimated Type of Asset Service Life Buildings and structures, except utility plant 10-50 years Other improvements 3O-8O years Utility plant 25-75 years Machinery and equipment 3-40 years Infrastructure 25-50 years Amortization on all intangible assets is provided on the straight-line basis over the following useful lives: Estimated Type of Asset Service Life Computer Software 3-15 years Land Use Rights 3o12 years Patents, Trademarks, Copyrights 3-50 years Other Intangibles with definite useful lives 3-12 years Depreciation and Amortization Expense was charged to functions/programs of the primary government as follows: 3ovemmental ActiviUes General Government Judicial Public 5a fety Physical Environment Transportation Economic Dewlopment ¯ Culture and Recreation Health and Human Ser~ces Internal Se~ice Funds (General Governmental) rotaloG~emmental A~tlvlties 6,926 553 7,484 943,343 255 945,596 460,939 35,561 496,500 493,429 493,429 1,267,079 4,411 1,271,490 45,292 43,292 L,717,282 187,139 1,904,421 519,413 519,413 275,077 275,077 ~uslness-Type Activities Wate~orks Airpo~ Golf Course W~lshmgton St.te Auditm’t~ O]fi~ e Page 61 W~shington State Auditor’s Office P~ge 62 City of Renton, Woshington City of Renton, Woshington E. SUMMARY OF CHANGES Capital asset activity for the year ended December 31, 203_3 was as follows: At the end of 2013, a total of 43 projects comprise the Construction in Progress. Upon completion, the proiects will be capitalized in the Government-wide statements in their appropriate categories and in the fund statements for proprietary funds, if applicable. Construction commitments as of December 3"1, 2013, are as follows: NOTE 6. PENSION PLANS With the exception of firefighters employed prior to March 1, 1970, substantially all City’s full- time and qualifying part-time employees participate in one of the following statewide retirement systems administered by the Washington State Department of Retirement Systems, under cost-sharing multiple-employer public employee defined benefit and defined contribution retirement plans. The Department of Retirement Systems (DRS), a department within the primary government of the State of Washington, issues a publicly available comprehensive annual financial report (CAFR) that includes financial statements and required supplementary information for each plan. The DRS CAFR may be obtained by writing to: Department of Retirement Systems, Communications Unit, P.O. Box 48380, Olympia, WA 98504-8380; or it may be downloaded from the DRS website at www.drs.wa.gov. The City is the administrator of the Firefighter Pension Plan for all firefighters employed prior to March 1, 1970. The Firefighter Pension Plan is included within the City of Renton’s statements as a pension trust fund. There is no separate GAAP-based audited report. A schedule of employer contributions, prepared by Healthcare Actuaries, is included in the Required Supplemental Information section. Additional information from the actuarial report prepared for the Firefighter Pension Plan, by Healthcare Actuaries, may be obtained by contacting the City of Renton, Finance Division, 1055 South Grady Way, Renton, WA 98057. The following disclosures are made pursuant to GASB Statements No. 27, Accounting for Pensions by State and Local Government Emplovers and No. 50, Pension Disclosures, and Amendment of GASB No. 25 and No. 27. Public Employees’ Retirement System (PERS) Plans 1~ 2~ and 3 Plan Description PERS is a cost-sharing multiple-employer retirement system comprised of three separate plans for membership purposes: Plans 1 and 2 are defined benefit plans and Plan 3 is a defined benefit plan with a defined contribution component. Membership in the system includes: elected officials; state employees; employees of the Supreme, Appeals, and Superior courts (other than judges currently in a judicial retirement system); employees of legislative committees; community and technical colleges, college and university employees not participating in national higher education retirement programs; judges of district and municipal courts; and employees of local governments. PERS participants, who joined the PERS system by September 30, 1977, are Plan 1 members. Those who joined on or after October 1, 1977; and by either, February 28, 2002 for state and higher education employees, or August 31, 2002 for local government employees, are Plan 2 members unless they exercise an option to transfer their membership to Plan 3. PERS participants joining the system on or after March 1, 2002 for state and higher education employees, or September 1, 2002 for local government employees, have the irrevocable option of choosing membership in either PERS Plan 2 or PERS Plan 3. The option must be exercised within 90 days of employment. An employee is reported in Plan 2 until a choice is made. Employees who fail to choose within 90 days default to PERS Plan 3. Notwithstanding, PERS Plan 2 and Plan 3 members may opt OUt of plan membership if terminally ill, with less than five years to live. PERS defined benefit retirement benefits are financed from a combination of investment earnings and employer and employee contributions. PERS retirement benefit provisions are established in state statute and may be amended only by the State Legislature. PERS Plan 1 members are vested after the completion of five years of eligible service. Plan 1 members are eligible for retirement at any age after 30 years of service, or at age 60 with five years of service, or at age 55 with 25 years of service. The annual benefit is two percent of the average final compensation (AFC) per year of service, capped at 60 percent. (The AFC is based on the greatest compensation during any 24 eligible consecutive compensation months.) Plan 1 members who retire from inactive status prior to the age of 65 may receive actuarially reduced benefits. The benefit is actuarially reduced to reflect the choice of a survivor option. A cost-of-living allowance (COLA) is granted at age 66 based on years of service credit times the COLA amount, increased by three percent annually. Plan 1 members may also elect to receive an additional COLA amount that provides an automatic annual adjustment based on the Consumer Price Index. To offset the cost of this annual adjustment, the benefit is reduced. PERS Plan 2 members are vested after completion of five years of eligible service. Plan 2 members may retire at age 65 with five years of service with an allowance of two percent of the AFC per year of service. (The AFC is based on the greatest compensation during any eligible consecutive 60-month period.) Plan 2 members who retire prior to the age of 65 receive reduced benefits. If retirement is at 55 or older with at least 30 years’of service, a three percent per year reduction applies; otherwise an actuarial reduction will apply. The benefit is also actuarially reduced to reflect the choice of a survivor option. There is no cap on years of service credit; and a cost-of-living allowance is granted (based on the Consumer Price Index), capped at three percent annually. PERS Plan 3 has a dual benefit structure. Employer contributions finance a defined benefit component, and member contributions finance a defined contribution component. The defined benefit portion provides a benefit calculation at one percent of the AFC per year of service. {The AFC is based on the greatest compensation during any eligible consecutive 60- month period.) Effective June 7, 2006, Plan 3 members are vested in the defined benefit portion of their plan after ten years of service; or after five years if twelve months were earned after age 44; or after five service credit years earned in PERS 2 prior to June ~., 2003. Plan 3 members are immediately vested in the defined contribution portion of their plan. Vested Plan 3 members are eligible to retire with full benefits at age 65, or at age 55 with 10 years of service. Plan 3 members who retire prior to age 65 receive reduced benefits. ~f retirement is at age 55 or older with at least 30 years of service, a three percent per year reduction applies; otherwise an actuarial reduction will apply. The benefit is also actuarially reduced to reflect the IFltshington State .,ludito~"s Oj)~ce Page 65 lgashington ,~’tate Auditor’s Office Page 66 choice of a survivor option. There is no cap on years of service credit; and Plan 3 provides the same cost-of-living allowance as Plan 2. The defined contribution portion can be distributed in accordance with an option selected by the member, either as a lump sum or pursuant to other options authorized by the Employee Retirement Benefits Board. Judicial Benefit Multiplier Beginning January 1, 2007 through December 31, 2007 judicial members of PERS were given the choice to participate in the Judicial Benefit Program (JBM). Justices and judges in PERS 1 and 2 may make a one-time irrevocable election to pay increased contributions that would fund a retirement benefit with a 3.5% multiplier. The benefit would be capped at 75% of AFC. Judges in PERS Plan 3 can elect a 1.6% of pay per year of service benefit, capped at 37.5% of average compensation. Members who choose to participate in JBM will accrue service credit at a higher multiplier beginning with the date of their election, be subject to the benefit cap of 75% of AFC, pay higher contributions, stop contributing to the Judicial Retirement Account (JRA), and be given the option to increase the multiplier on past judicial service. Members who do not choose to participate will: continue to accrue service credit at the regular multiplier; continue to participate in JRA, if applicable; never be a participant in the JBM Program; and continue to pay contributions at the regular PERS rate. Newly elected or appointed justices and judges who chose to become PERS members on or after January 3_, 2007, or who have not previously opted into PERS membership, were required to participate in the JBM Program. Members required into the JBM program would: return to prior PERS Plan if membership had previously been established; be mandated into Plan 2 and not have a Plan 3 transfer choice, if a new PERS member; accrue the higher multiplier for all judicial service; not contribute to JRA; and not have the option to increase the multiplier for past judicial service. Membership in PERS consisted of the following as of the latest actuarial valuation date for the plans of June 30, 203_2: Retirees and beneficiaries receiving benefits 82,242 Terminated plan members entitled to but not yet receiving benefits 30,5t5 Active plan members vested 106,317 Active plan members non-vested 44e273 Total 263~347 Following is a summary of the number of government employers participating in PERS as of June 30, 2013. Number of Paredpatin~ Employers State School Counties/Other Political Total Plan A~encles Districts Municipalities Subdivisions Members PERS I 135 216 172 183 706 PERS 2 167 276 491 934 PERS 3 157 209 298 664 Tota I 459 216 657 972 2,304 Funding Policy Each biennium, the state Pension Funding Council adopts Plan 1 employer contribution rates, Plan 2 employer and employee contributions rates, and Plan 3 employer contribution rates. Employee contribution rates for Plan I are established by statute at six percent for state agencies and local government unit employees, and 7.5 percent for state government elected officials. The employer and employee contribution rates for Plan 2 and the employer contribution rate for Plan 3 are developed by the Office of the State Actuary to fully fund Plan 2 and the defined benefit portion of Plan 3. All employers are required to contribute at the level established by the Legislature. Under PERS 3, employer contributions finance the defined benefit portion of the plan, and member contributions finance the defined contribution portion. The Employee Retirement Benefits Board sets Plan 3 employee contribution rates. Six rate options are available ranging from 5 to 15 percent; two of the options are graduated rates dependent on the employee’s age. As a result of the implementation of the Judicial Benefit Multiplier Program in January 2007, a second tier of employer and employee rates was developed to fund, along with investment earnings, the increased retirement benefits of those justices and judges that participate in the program. The methods used to determine the contribution requirements are established under state statute in accordance with Chapters 43_.40 and 41.45 RCW. The required contribution rates expressed as a percentage of current-year covered payroll, as of December 31, 2013, were as follows: Members not participating in JBM: Contributor PERS Plan 1 PERS P~an 2 PERS Plan 3 Employer*9.21%9.21%9.21% ¯Employee 6.00%4,92%"*= The employer rates include the employer administrative expense fee currentlyset at 0.18%. **Pla n 3 defined benefit portion only. ***Variable from 5% to 15% based on rate selected bythe member, Washington State ,luditor’,s Ojfice Page 67 Washington State Auditor’s Office Page 68 City o.f Renton, Washington City oJ genton, Washington Members participating in JBM: Contributor PEgS Plan 1 PERS Plan 2 PERS Plan 3 Employer-State Agency*11.71%11.71%11.71%** Employer-Local Govt.*9.21%9.21%9.21%** Employee-State Agency 9.76%9.80%7.50%* ** Employee-Loca t Govt.12.26%12.30%7,S0%* ** The employer rates include the employer administrative expense fee currently set at 0 lg%. **Plan 3 defined benefit portion only. ***Minimum rate. Both the City and the employees made the required contributions.The City’s required contributions for years ended December 31, were as follows: Year PERS Plan 1 PERS Plan 2 PERS Plan 3 2013 $37,139 S 2,033,876 $346,182 2012 42,163 1,773,371 313,631 2011 44,457 1,496,892 261,528 Law Enforcement Officers’ and Firefighters’ Retirement System (LEOFF) Plans 1 and 2 Plan Description LEOFF is a cost-sharing multiple-employer retirement system comprised of two separate defined benefit plans. LEOFF participants who joined the system by September 30, 1977, are Plan 1 members. Those who joined on or after October 1, 1977, are Plan 2 members. Membership in the system includes all full-time, fully compensated; local law enforcement officers, firefighters and as of July 24, 2005, those emergency medical technicians who were given the option and chose LEOFF Plan 2 membership. LEOFF membership is comprised primarily of non-state employees, with the Department of Fish and Wildlife enforcement officers, who were first included prospectively effective July 27, 2003, being an exception. Effective July 1, 2003, the LEOFF Plan 2 Retirement Board was established by Initiative 790 to provide governance of LEOFF Plan 2. The Board’s duties include adopting contribution rates and recommending policy changes to the Legislature for the LEOFF Plan 2 retirement plan. LEOFF defined benefit retirement benefits are financed from a combination of investment earnings, employer and employee contributions, and a special funding situation in which the state pays through state legislative appropriations. LEOFF retirement benefit provisions are established in state statute and may be amended by the State Legislature. LEOFF Plan 1 members are vested after the completion of five years of eligible service. Plan 1 members are eligible for retirement with five years of service at the age of 50. The benefit per year of service calculated as a percent of final average salary (FAS) is as follows: Percent of Final Average Salaryl"erm of Service 20 or more years 2.0% 10 but less than 20 years 1,5% 5 but less than 10 years 1.0% The FAS is the basic monthly salary received at the time of retirement, provided a member has held the same position or rank for 12 months preceding the date of retirement. Otherwise, it is the average of the highest consecutive 24 months’ salary within the last ten years of service. A cost-of-living allowance is granted (indexed to the Consumer Price ~ndex). LEOFF Plan 2 members are vested after the completion of five years of eligible service. Plan 2 members may retire at the age of 50 with 20 years of service, or at age 53 with five years of service, with an allowance of two percent of the FAS per year of service. The FAS is based on the highest consecutive 60 months. Plan 2 members who retire prior to age 53 receive reduced benefits. Benefits are actuarially reduced for each year that the bene~fit commences prior to age 53 and to reflect the choice of a survivor option. If the member has at least 20 years of service credit and is age 50, the reduction is three percent for each year prior to age 53. There is no cap on years of service credit; and a cost-of-living allowance is granted (indexed to the Consumer Price Index), capped at three percent annually. Membership in LEOFF consisted of the following as of the latest actuarial valuation date for the plans of June 30, 2012: Retirees and beneficiaries receiving benefits 10,189 Terminated plan members entitled to but not yet receiving benefits 689 Active plan members vested 14,273 Active plan members non-vested 2,633 Total 27~784 Following is a summary of the number of government employers participating in LEOFF as of June 30, 2013. Number of Palttcipatin~ Employers State School Counties/ Other Political Total Plan A~enctes Districts Municipalities Subdivisions Members LEOFF 1 41 10 51 LEOFF 2 8 212 154 374 Total ~"253 164 425 Washington State ,luthlor’.s Q[/?ce Page 69 Wa,*hington State Auditor’s OJy~ce Page 70 Funding Policy Starting on July 1, 2000, LEOFF P~an 1 employers and employees will contribute zero percent as long as the plan remains fully funded. Employer and employee contribution rates are developed by the Office of the State Actuary to fully fund the plan. LEOFF Plan 2 employer and employees are required to pay at the level adopted by the LEOFF Plan 2 Retirement Board. All employers are required to contribute at the level required by state law. The Legislature, by means of a special funding arrangement, appropriated money from the state General Fund to supplement the current service liability and fund the prior service cost of LEOFF Plan 2 in accordance with the requirements of the Pension Funding Council and the LEOFF Plan 2 Retirement Board. However, this special funding situation is not mandated by the state constitution and this funding requirement could be returned to the employers by a change in statute. The required contribution rates expressed as a percentage of current-year covered payroll, as of December 31, 2013, were as follows: Contributor LEOFF Plan 1 LEOFF Plan 2 ~mp~over"~I~--~ Employee 0.00%8.41% The employer rates include the employer admin- istrative expense fee currentlyset at 0.18%, Both the City and the employees made the required contributions.The City’s required contributions for years ended December 31, were as follows: Year LEOFF Plan 1 LEOF~FPla~n~ 2013 $288 ~1,357,292 2012 395 1,364,670 2011 494 1,334,049 Public Safety Employee’s Retirement System (PSERS) Plan 2 Plan Description PSERS is a cost-sharing multiple-employer retirement system comprised of a single defined benefit plan, PSERS Plan 2. PSERS was created by the 2004 legislature and became effective July I, 2006. PSERS Plan 2 membership includes full-time employees of a covered employer on or before July 1, 2006, who met at least one of the PSER5 eligibility criteria, and elected membership during the election period of July 1, 2006 to September 30, 2006; and those full-time employees, hired on or after July 1, 2006 by a covered employer, that meet at least one of the PSERS eligibility criteria. A "covered employer" is one that participates in PSERS. Covered employers include: State of Washington agencies: Department of Corrections, Department of Natural Resources, Parks and Recreation Commission, Gambling Commission, Washington State Patrol, Liquor Control Board; Washington state counties; and Washington state cities except for Seattle, Tacoma and Spokane. To be eligible for PSERS, an employee must work on a full-time basis and: ¯have completed a certified criminal justice training course with authority to arrest, conduct criminal investigations, enforce that criminal laws of Washington, and carry a firearm as part of the job; or ¯have primary responsibility to ensure the custody and security of incarcerated or probationary individuals; or ¯function as a limited authority Washington peace officer, as defined in RCW 10.93.020; or ¯have primary responsibility to supervise eligible members who meet the above criteria. PSERS defined benefit retirement benefits are financed from a combination of investment earnings and employer and employee contributions. PSERS retirement benefit provisions are established in state statue and may be amended only by the State Legislature. PSERS Plan 2 members are vested after the completion of five years of eligible service. Plan 2 members may retire at the age of 65 with five years of service, or at the age of 60 with at least ten years of PSER5 service credit, with an allowance of two percent of the average final compensation {AFC) per year of service. The AFC is the monthly average of the member’s 60 consecutive highest-paid service credit months, excluding any severance pay such as lump-sum payments for deferred sick leave, vacation or annual leave. Plan 2 retirees who retire prior to the age of 60 receive reduced benefits. If retirement is at age 53 or older with at least 20 years of service, a three percent per year reduction for each year between the age at retirement and age 60 applies. There is no cap on years of service credit; and a cost-of-living allowance is granted (based on the Consumer Price Index), capped at three percent annually. Membership is PSERS consisted of the following as of the latest actuarial valuation date for the plan of June 30, 2012: Retirees and beneficiaries receiving benefits 27 Terminated plan members entitled to but not vet receiving benefits 60 Active plan members vested 2,083 Active plan members nonwested 2,167 Total 4~337 Following is a summary of the number of government employers participating in PSERS as of June 30, 2013. Number of Participatin~ Employers State Scho’ol Counties/ Other Polincal Total Plan A~encies Districts Municipalities Subdivisions Members PSERS 9 65 1 75 Fundin~ Policy Each biennium, the state Pension Funding Council adopts PSERS Plan 2 employer and employee contribution rates. The employer and employee contribution rates for Plan 2 are developed by the Office of the State Actuary to fully fund Plan 2. All employers are required to contribute at the level established by the Legislature. The methods used to determine the contribution requirements are established under state statute in accordance with Chapters 41.37 and 41.45 RCW. The required contribution rates expressed as a percentage of current year covered payroll, as of December 31, 2013 were as follows: Contributor PSERS Plan 2 Employer"10.S4% Employee 6.36% The employer rates include the employer administrative expense fee currentlyset at 0.18%. Both the City and the employees made the required contributions.The City’s required contributions for years ended December 31, were as follows: Year PSERS Plan 2 2013 $11,925 2012 16,854 2011 21,518 Firefighter’s Pension Summary of Significant Accountin~ Policies Investments are reported at fair value. Plan Description The Firefighter’s Pension Plan (Plan) is a closed, single-employer defined benefit pension plan administered by the City of Renton through the firefighter’s pension board. The plan provides pensions for firefighters that were employed prior to March ~., 1970, when the LEOFF retirement system was established. The firefighters’ pension board consists of five members: the Mayor who serves as chair the board, the chairperson of the Council Finance Committee, and three members elected by secret ballot of the retired firefighters. At December 31, 2013 FPF membership consisted of the following: Retirees and beneficiaries receiving benefits 22 Retirees and beneficiaries currently receiving full retirement through LEOFF 9 Active plan members vested Active plan members non-vested Total 31 All members are retired and drawing benefits. Benefit terms provide for cost-of-living adjustments to each member’s retirement benefit. There are two types of increases: escalation by salary in proportion to current salary of rank from which the firefighter retired or increase proportionate to the increase in the Seattle-area consumer price index, with the change computed annually. Regardless of the change in the consumer price index, such increase shall be at least two percent each year. The former applies to firefighters who retired from service after 1969, their survivors, and to firefighters who retired for duty disability (but not their survivors) after 1961. The latter applies to all other types of monthly benefits. Benefits. All benefit terms are in statutes RCW 41.16, 41.18, and 41.26. FPF provides retirement, disability, and death benefits. Each firefighter in service on March 1, 1970 receives the greater of the benefit payable under the Washington Law Enforcement Officers’ and Firefighters’ Retirement (LEOFF) System and the benefits available under the provisions of prior law. Where benefits under the old law exceed those under the new law for any firefighter, the excess benefits are paid from the FPF of the city employing the member on March 1, 1970. Contributions. As long as the FPF provides for benefits to covered members, the City will be eligible to receive a share of the State’s distribution of the fire insurance premium taxes. The amount the City receives is 25% of all monies received by the State from taxes on fire insurance premiums. Contributions can also come from taxes paid pursuant to the provisions of RCW 41.16.060. This stature requires that each municipality levy up to ~;0.45 (only ~0.225 of which can be in excess of the property tax limit pursuant to RCW84.52.043) per ~1,000 of assessed valuation, based on reports by a qualified actuary, to maintain the fund. Investments Investment Policy. The pension fund holds laddered treasury-strip investments with annual maturities to meet cash-flow requirements. The City is currently assessing options to deploy the growing cash balance. Rate of Return. For the year ended December 31, 2013, the annual money-weighted rate of return on pension plan investments, net of pension plan investment expense, was 3.13%. The money-weighted rate of return expresses investment performance, net of investment expense, adjusted for the changing amount actually invested. Actuarial Assumptions The total pension liability was determined by an actuarial valuation as of December 33., 203.2, using the following actuarial assumptions, applied to all periods included in the measurement: Inflation:2.75% Salary increases:3.00% Investment rate of return:4.00% Mortality rates were based on the RP-2000 Healthy Annuitant Mortality Table for Males or Females, as appropriate, with adjustments for mortality improvement based on 50% of Scale AA. The long-term expected rate of return on pension plan investments was determined using a building-block method in which best estimate ranges of expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed. We used the weighted expected returns of the City’s portfolio of cash, US Treasuries (to be held to maturity), and receivables to develop the long-term expected rate of return. Discount rate. The discount rate used to measure the total pension liability was 4.00%. The projection of cash flows used to determine the discount rate assumed City contributions were equal to revenue received from Fire Insurance premiums and the amount received would increase at the inflation rate of 2.75%. Based on this assumption, the pension plan’s fiduciary net position was projected to be available to make all projected future benefit payment of current plan members. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability. Sensitivity o]~ the net pension liability to changes in the discount rate. The following presents the net pension liability of the City, calculated using the discount rate of 4.0%, as well as what the City’s net pension liability would be if it were calculated using a discount rate that is one percentage point lower, 3.0%, or one percentage point higher, 5.0%, than the current rate: Current Discount City’s net pension liability 1% Decrease Rate 3.% Increase $3,039,213 $2,787,814 $2,569,559 An actuarial valuation is done every two years and was completed as of January 1, 203.3. The Actuarial Valuation of Firefighters’ Pension Fund table is reported in the Required Supplemental Information section, and a recap of the Schedule of Funding Progress for the last five valuations is as follows: ($ in thousands} Unfunded Valuation Actuarial Actuarial Actuarial UAAL as a Date Value of Accrued Accrued Funded Covered Percentage of January I Assets Liabilities Liabilities Ratio Payroll Covered Payroll 2009 g,941 6,517 (2,424)137%n/a 2011 8,940 3,914 *(4,576)217%n/a 2013 9,501 2,788 **{6,713)341%n/a The reduction in Actua rial Accrued Liability in 2011 is made up of a 10% decrease in demographic experience (higher mortality rate) and a 25% decrease in actual benefit amounts compared to expectations. Changes in economic assumptions had minimal impact on the ~a bllities, The following Annual Pension Cost and Net Pension Obligation table presents the Annual Required Contribution (ARC) as of December 31, 2013. The Annual Required Contribution (ARC) is the sum of the Normal Cost for the year plus amortization of the Unfunded Actuarial Accrued Liability (UAAL). The Normal Cost is the portion of the Actuarial Present Value (APV) of benefits attributable to current year services rendered, and Actuarial Accrued Liability (AAL) is the APV of future benefit costs, including projected benefit cost increase caused by projected future pay increases, attributable to prior services. The Unfunded Actuarial Accrued Liability (UAAL) is the portion of Actuarial Accrued Liability minus the actuarial value of the Plan’s assets. Since all members have already retired, the Plan has no Normal Cost. The UAAL is amortized over a closed 30-year period beginning January 1, 2000 using the level dollar amortization method. Annual Development of Pension Cost (1 of 2) Annual Total Fiscal Year Interest ARC Pension Employer Change in Endin~ ARC at EOY on NPO Ad{ustment Cost Contributions NPO Ill 121 {3=pyrT/gl [4=1+2-3][51 16=4-5J 12/31/2007 (109.968)(98,658)(54.591)(94,O35)59,777 (153,812) 12/31/2008 (109.968)(46,349)(67.070)(89,247)66,055 (155,302) 12/31/2009 (172,788)(43,291)(74.178)(141,901)70,327 (212,228) 12/31/2010 (172.788)($1,780)(91.S89){132,979)107,068 (240,O47) 12/31/2011 (348,435)(61,382){112,34S)(297,472)102,354 (399,826) 12/31/2012 (530,282)(77,375)(159,003)(448,654)118,775 {567,429) 12/31/2013 ($30,282)(100,O72)(214,705)(415,650)124,391 (540,O41) Wa,~hmgton State A uditor~ Office Page 76 City of Renton, Washington City of Renton, Washington Annual Development of Pension Cost (2 of 2) Fiscat Year NPO Amort Am art. Of Ending Endin~ Balance (Gain(/Loss Factor**IGainl/Loss Oalance (7=6+pryr7][8=1-5]191 [10=pyr13/9][11=7] 12/31/2007 (926,978)(169,745)1416300 (54,591)(926,978) 12/31/2008 (1,082,2B0)(176,02g}13.82120 {67,069}(1,082,280) 12/31/2009 (1,294,S08}(243,115}14.59030 (74,17g)(1,294,508I 12/31/2010 (!,534,555)(279,856)1413390 (91,589)(1,534,555) 12/31/2012 (2,501,810)(649,0S7)12.16567 {159,003)(2.501,810) 12/31/2013 (3,041,851)(654,673)11,65230 {214,705)(3,041,g51) Annual Required Pension Contribution and Net Pension Obii~ation Annual required contribution /ARC) t Annual Normal Cost 2 + Amortization of UAAI Beginning of Yea r * 3 + Interest on UAAL to End of Yea r* 7 = ARCat End of Year [1+2+3] +Interest on Net Pension Obligation Adjustment to ARC = Annua~ pension cost IAPC) [4+5-6] Fiscal Year Ending 12/31/2011 12/31/2012 S S (335,034)(509,887) (13,401)(20,395) (348,435)(530,282) (61,382)(77,375) (112,345)(lS9,003) (297,472)(448,654) Employer Contributions **102t354 118,775 Change in Net Pension Obligation [7 8](399,826)(567,429) + Net Pension Obligation at Beginning of Year (1,534,555) (1,934,381) Net Pension Obligation at End of Year [9+10] ~; (11934,381~) ~ 12/31/2013 (509,gg7) (go,39s} (530,282) Ooo,072) (214,705) 124,391 1540,041) Assumed interest/discount rate of 4.0%, amortized with level dollarmethod. **Employer contributions for pensions are total contributions to the fund net of disbursements for medical and administrative expenses, Three year trend information is recapped as follows: Annual Contribution as a Net Pension Fiscal Year Bndin~Pension Cost IAPC)Percentage of APC Obligation (NPOI December 31, 2011 (297,472)N/A (1,934,381) December 31, 2012 (448,654)N/A (2,501,810) December 31, 2013 (415,650)N/A (3,041.851) Employees are not required to make contributions under this Plan. The employer contributions to the Plan for 2033 include $328,866 from fire insurance premiums and $339,083 in investment income from Plan assets. Benefits and refunds of the Plan are recognized when due and payable in accordance with the terms of the Plan. For 2013, $188,943 was paid for pension benefit payments. The Net Pension Obligation decreased by $540,041 tO (S3,041,851) and is included as a non- current asset in the City of Renton’s Government-wide Statement of Net Position. NOTE 7. OTHER POST EMPLOYMENT BENEFITS During the year ended December 33., 2008, the City elected to adopt the provisions of GASB Statement No. 45, "Accounting and Financial Reporting by Employers for Postemployment Benefits Other Than Pensions" (GAS8 No. 45), which required the City to accrue other postemployment benefits (OPEB) expense related to its postretirement healthcare plan based on a computed annual required contribution (ARC) that includes the current period’s service cost and an amount to amortize unfunded actuarial accrued liabilities. Instead of recording expense on a "pay-as-you*go" basis, the City, under GASB No. 45, has recorded a liability of $3,744,023 for the difference between the actuarially calculated ARC and the contributions made since the adoption of GASB No. 45. This liability is included in noncurrent liabilities in the accompanying December 33., 203.3 Government-wide Statement of Net Position. The effect of GASB No. 45 for the current fiscal year was to decrease the City’s excess of revenue over expenses before capital contributions and the City’s increase in net OPEB obligation for the year ended December 33., 203.3 by $845,542. Plan Description The City of Renton’s LEOFF Plan 3. (the Health Plan) is a single-employer defined benefit healthcare plan administered by the City. The Health Plan provides medical, prescription drug, dental, Medicare Part B premiums, long-term care, and vision expenses for LEOFF Plan 1 retirees. Dependent spouses and children are not covered. The Health Plan’s actuary is Healthcare Actuaries. The Health Plan does not issue a separate standalone financial report. Funding Policy The City does not require retiree contributions. All benefits are paid in full by the City. For the fiscal year ended December 31, 2013, the City contributed $1,039,281 to the Health Plan. There were no retiree contributions. Annual OPEB Cost and Net OPEB Obligation The basis for the City’s annual other postemployment benefit (OPEB) cost (expense) is the annual required contribution (ARC). The ARC represents a level of funding that, if paid on an ongoing basis, is projected to cover the normal cost each year and to amortize any unfunded actuarial liabilities (or funding excess) over a period not to exceed ten years. The following displays the components of the City’s annual OPEB cost, the estimated amount contributed to the Health Plan, and changes in the City’s net OPEB obligation to the Health Plan. City of Renton, Woshington City of Renton. Woshington Annual Required Contribution and Net OPEB Obligation Fiscal Year Endin~ 12/31/2011 12/31/2012 t g/3~./g013 Annual required contribution (ARC) Annual Normal Cost S 54,262 $$- + Amortization of UAAL 1,704,544 1,972,502 2,009,362 + Interest to End of Yea r = ARC at end of year 1,758,806 1,972,502 2,O09,362 + Interest on Net OPEB Obligation 78,799 46,g82 56,160 + Adjustment to ARC (120,635)(146,060)(180,699) =Annual OPEB cost 1,716,970 1,g73,324 1,884,823 -Employer Contributions g75~699 1~254~795 1~O39~281 =Change in Net OPEg Obligation g41,271 618,529 845,542 + Net OPEg Obligation-beginning of year 2,284t223 311251494 317441023 = Net O PEg Obligation-end of yea r $3,125,494 ~3,744f023 $4t589t565 *Unfunded Actuarial Accrued Liability (UAAL) The City’s annual OPEB cost, the percentage of annual OPEB cost contributed to the Health Plan, and the net OPEB obligation for 2013 and the two preceding years were as follows: Three year trend information is recapped as follows: Percentage of Annual Employer OPEB Cost Net OPEg Year OPEB Cost Contribution Contributed Obligation 2011 ],716,R70 875,699 51,00%3,125,494 2012 1,g73,324 1,254,795 66.98%3,744,023 2013 1,884,823 1,039,2gl 55.14%4,589,565 Funded Status and Funding Progress The funded status of the Health Plan as of December 31, 2013: I$ in thousands) Unfunded Actuarial Actuarial Actuarial Accrued UAAL as a Valuation Date Value of Accrued Liabilities Funded Covered Percentage of January 1 Assets Liabilities IUAAL)Ratio Payroll Covered Payroll 2011 27,R35 27,835 0%434 6412% 2012 42,209 42,209 0%305 13841% 2013 41,633 41,633 O%30O 13865% Actuarial valuations involve estimates of the value of reported amounts and assumptions about the probability of occurrence of events far into the future. Actuarially determined amounts regarding the funded status of the plan and the annual required contributions of the employer are subject to continual revision as actual results are compared with past expectations and new estimates are made about the future. Net position of $6,360,269 is reported as unrestricted in the insurance fund, however the City intends to utilize net position for the purpose of funding a portion of the UAAL. The schedule of funding progress, presented as required supplementary information following the notes to the financial statements, presents multi-year trend information that shows whether the actuarial value of Heatth Plan assets is increasing or decreasing over time relative to the actuarial liabilities for benefits. Actuarial Methods and Assumptions Projections of benefits for financial reporting purposes are based on the substantive plan (the plan as understood by the employer and plan members) and include the types of benefits provided at the time of each valuation. The actuarial methods and assumptions used include techniques that are designed to reduce the effects of short-term volatility in actuarial accrued liabilities and the actuarial value of assets, consistent with the long-term perspective of the calculations. The December 31, 2012 valuation used the projected unit credit actuarial cost methods. The actuarial assumptions included a 1.5% investment rate of return (net of administrative expenses) and an initial annual healthcare cost trend rate of 10.0% for pre-Medicare expenses, to an ultimate rate of 4.2% after 72 years. The Medicare trend assumption is 6.5%, to an ultimate rate of 4.2% after 8 years. The dental trend assumption is 5.5%, to an ultimate rate of 4.0% after 4 years. The Medicare premium trend rate is 8.5% for all years, except for the first year, which has a 0% trend rate. The long-term care trend rate is 5.0% for all years. The trend for the Excise Tax threshold is 0% until 2018, when a trend rate of 4.24% is used. The trend for all future years is 3.24%. All trend rates include a 3.0% inflation assumption. The UAAL at transition is being amortized as a level dollar amount on a closed basis. The remaining amortization period at December 31, 2013 was 24.0 years. The UAAL is recalculated each year and amortized as a level dollar amount over 25 years for 2013. IFtlshhlgton Slaw ;luditor’~ ()/]~ct"Page 79 Wa,~hington State Auditor’s Office Page 80 Pro-PartB Long-Term Excise Tax Year Medicare Medicare Dental Vision Premiums Care Threshold 2014 10.0%6.5%S.5%4.0%8.5%5.0%0,00% 2015 9.5%6,5%5.0%4.0%8.5%5.0%0.00% 2016 9.0%6,0%4.5%4,0%8.5%5.0%0.00% 2017 8.5%6.0%4.0%4,0%8.5%5.0%0.00% 2018 g.0%5,5%4,0%4.0%8.5%5.0%4.24% 2019 7.5%5.0%4.0%4.0%8.5%8.0%3.24% 2020 7.0%4.5%4.0%4.0%8.5%5.0%3.24% 2021 6.4%4.2%4,0%4.0%8.5%S.0%3.24% 2022-2084 ......4.0%4.0~8.5%5.0%3.24% 20g5 +4.2%4.2%4.0%4.0%8.5%5.0%3.24% Note: The trend rates include assumed inflation of 3.0% for all futureyears. NOTE 8. CONTINGENCIES In the opinion of management, the City’s insurance policies and/or self-insurance reserves are adequate to pay all known or pending claims. Contingencies under Grant Provisions The City participates in a number of federal and state assisted programs. These grants are subject to audit by the grantors of their representatives. Such audits could result in requests for reimbursement to grantor agencies for expenditures disallowed under the terms of the grants. The City’s management believes that such disallowances, if any, will be immaterial. Bond Indentures The City is in compliance with all significant bond indentures and restrictions. Construction Commitments Refer to Note 5. NOTE 9. RISK MANAGEMENT The City of Renton is exposed to various risks of loss related to tort; theft of, damage to, and destruction of assets; errors and omissions; injuries to employees; and natural disasters. The City of Renton protects itself against unforeseen losses by utilizing a three-pronged risk management approach. First, the City self-funds first level losses through its Insurance Fund. Second, insurance and excess insurance is purchased to cover medium and large losses. Third, the City reserves the right to utilize the provisions of Chapter 35A.31.060 RCW to fund catastrophic or uninsured losses. This State statute allows cities to levy a non-voted property tax increase to pay for uninsured claims. There were no settlements in excess of the insurance coverage in any of the three prior fiscal years. An analysis of the insurance deductibles and self-insured retention levels, limits of insurance, and carriers for the major types of coverage are as follows: Risk Retention Type of Coverage Occurrence Aggregate Amount Carrier Property -525,000 5300,000,000 (per WA Cities Expires 1/01/2014 occurrence subject to Authority annual aggregate & subqimits) Liability -$250,000 $20,000,000 WA Cities Ins Expires 01/01/2014 (per occurrence)Authority Auto Physical Damage -ACV or Replacement WA Cities Ins Expires 01/01/2014 525,000 Cost; per Occurrence Authority Equipment Breakdown -55,000"550,000,000 Zurich Expires 1/01/2014 Employee Fidelity/Crime -510,000 52,500,000 National Union Expires 12/91/2013 Fire Airport Liabgitv -0 5100,000,000 Ace Property & Expires 1/01/2014 Casualty Underground Storage Tank -52,500 51,000,000 Expires 110112014 Excess Workers’ Camp -5500,000 Statutory Safety National Expires 1/01/2014 Excess Employee Health -5175,000 N/A Sun Life Expires 1/01/2014 ~ There is o 4-hour utility interruption clause, prior to the deductible becoming applicable. The City of Renton is a member of the Washington Cities Insurance Authority (WCIA). Utilizing Chapter 48.62 RCW (self-insurance regulation) and Chapter 39.34 RCW (Interlocal Cooperation Act), nine cities originally formed WClA on January 1, 1981. WClA was created for the purpose of providing a pooling mechanism for jointly purchasing insurance, jointly self- insuring, and / or jointly contracting for risk management services. WCIA has a total of 167 Members. New members initially contract for a three-year term, and thereafter automatically renew on an annual basis. A one-year withdrawal notice is required before membership can be terminated. Termination does not relieve a former member from its unresolved loss history incurred during membership. WC~A’s Liability coverage is written on an occurrence basis, without deductibles. Coverage includes general, automobile, police, public officials’ errors or omissions, stop gap, employment practices, and employee benefits liability. Limits are $4 million per occurrence self-insured layer, and $16 million per occurrence in the re-insured excess layers. The excess layers are insured by the purchase of reinsurance and insurance and are subiect to aggregate limits. Total limits are $20 million per occurrence subject to aggregate sub-limits in the excess layers. The Board of Directors determines the limits and terms of coverage annually. Insurance coverage for property, automobile physical damage, fidelity, and inland marine are purchased on a group basis. Various deductibles apply by type of co~erage. Property insurance and auto physical damage are self-funded from the members’ deductible to $750,000, for all perils other than flood and earthquake, and insured above that amount by the purchase of insurance. In-house services include risk management consultation, loss control field services, claims and litigation administration, and ~oss analyses. WCIA contracts for the claims investigation consultants for personnel issues and land use problems, insurance brokerage, and lobbyist services. WCIA is fully funded by its members, who make annual assessments on a prospectively rated basis, as determined by an outside, independent actuary. The assessment covers loss, loss adjustment, and administrative expenses. As outlined in the Interlocal, WClA retains the right to additionally assess the membership for any funding shortfall. An investment committee, using investment brokers, produces additional revenue by investment of WCIA’s assets in financial instruments which comply with all State guidelines. A Board of Directors governs WCIA, which is comprised of one designated representative from each member. The Board elects an Executive Committee and appoints a Treasurer to provide general policy d~rection for the organization. The WCIA Executive Director reports to the Executive Committee and is responsible for conducting the day to day operations of WCIA. The City’s Risk Management Program is administered under the authority of the Human Resources and Risk Management Administrator, with claims being processed by the carriers shown above. As of December 31, 2013, the City had accrued the following amounts for outstanding claims: Total Claims Payable Coverage 12/31/2013 Pro pe rty & li a bill ty $50g,904 Workers’ compensation 937,114 Employee health 1,660,000 TOTAL $3,1061018 ProperW &Workers’Employee 2013 Liabillt~Compensation Health Totals IBNR claims at beginning of the year $537,571 $827,147 $1,389,400 $2,754,118 Current year a nd cha nges in estimates 1,399,646 t,291,558 11,glS,150 14,506,354 Claims payments (1,428,313)!1,181,591)(11,S44,550)(14,154,454) IBNR claims at end of the year ~5081904 $9371114 $ lt660~000 ~31106fola Property &Workers’Employee 2012 Uabillty Compensation Health Totals 18NR claims at beginning of the year $641,640 ~613,655 ~1,186,900 $2,442,195 Current year and changes in estimates 946,936 1,362,079 11,898,851 14,207,866 Claims payments (1,051,005)11,148,587~(11,696,351)( 13,g951943) IBNR claims at endof the year ~537tS71 $827r147 ~113891400 $g~754,11g NOTE 10. INTERFUND TRANSACTIONS Interfund transactions are classified as follows: ¯Services Provided - Transactions that would be treated as revenues, expenditures, or expenses if they involve external organizations, such as buying goods and services or payments in lieu of taxes, are similarly treated when they involve other funds of the City of Renton. ¯Transfers - Transactions to support the operations of other funds are recorded as "Transfers" and classified with "Other Financing Sources or Uses" in the fund statements. Transfers between governmental or proprietary funds are netted as part of the reconciliation to the Government-wide financial statements. ¯Contributions - Contributions to the capital of enterprise or internal service funds, transfers of capital assets between proprietary and governmental funds, transfers to establish or reduce working capital in other funds, and transfers remaining balances when funds are closed are classified non-operating revenue. ¯Loans - Activities between funds that are representative of lending/borrowing arrangements outstanding at the end of the fiscal year are referred to as interfund loans receivable/payable. Any residual balances outstanding between the governmental activities and business-type activities are reported in the government- wide financial statements as internal balances. The following is a summary of interfund transfers. Transfers into the General Fund, Other Governmental Funds, and Internal Service Funds account for administrative support and debt service contributions; whereas transfers into the Municipal CIP and Capital Improvement Funds account for capital contributions towards the construction/acquisition of library land and improvements and park construction and improvements. Fund Transfers In Transfers Out General Fund S 2,166,197 $4,415,559 Municipal Facilities C]P 2,678,367 277,000 Ca pital Improvement 959,449 56,025 Other Governmental Funds 56,025 1,354,000 Subtotal Governmental Funds $5,860,098 $6,102,584 Waterworks Utility Fund 9,821 1,882,293 Solid Waste 232,5L8 Other Enterprise Funds Subtotal Enterprise Funds $9,821 $1,350,98:~ SubtotatlnternaIService Funds $2,642~02-~$58,318 TOTAL . $8,511,88~$8,511,884 The following is a summary of three outstanding interfund loans outstanding made for capital improvement purposes, as of December 31, 2013: Fund Due From Other Funds Due To Other Funds Capital Improvement Fund 429,30~ Subtotal Governmental Funds $$429,30~ Airport 101,64~ Golf Course 775,093 Waterworks Utility 101,646 Subtotal Enterprise Funds $101,646 $876,739 Insurance Fund 1,204,401 Subtotal Internal Sen/ice Funds ~1,204,401 $ TOTAL ~1,306,047 ~;1,306,047 NOTE 11. NET POSITION The Government-wide and business type fund financial statements utilize a net position presentation. Net position is the difference between (a) assets and deferred outflows of resources and (b) liabilities and deferred inflows of resources. Net position is categorized as investments in capital assets (net of related debt), restricted, and unrestricted. Investment in Capital Assets (net of related debt) is intended to reflect the portion of net position associated with non-liquid, capital assets less outstanding capital asset related debt. The net related debt is the debt less the outstanding liquid assets and any associated unamortized costs. Restricted net position is comprised of liquid assets which have third party (statutory, bond covenant, or granting agency) limitations on their use. The restricted component of net position is reduced by liabilities and deferred inflows related to those assets. The restricted component of net position of governmental activities may not equal to restricted fund balances in the governmental funds due to a different measurement focus and different basis of accounting. The City would typically use restricted net position first, as appropriated opportunities arise, but reserve the right to selectively defer the use thereof to a future project or replacement equipment acquisition. Unrestricted net position represents unrestricted liquid assets. Unrestricted Governmental Activities have committed and assigned designations that reflect the City Council and management’s plans and commitments to expend resources for certain purposes in future periods. Funds with committed designations reflect amounts constrained by the City Council, either through formal budget adoption or other purposes formally approved by the Council. Amounts with assigned designations reflect all amounts remaining in governmental funds, other than the general fund, not classified as nonspendable, restricted or committed. Assigned amounts also include year-end encumbrances that have received approval from the City Council and re-appropriated in the following year’s carry forward budget. The City’s financial policies require a maximum amount of 12% and minimum of 8% fund balance to remain in the general fund for cash flow purposes. NOTE 12. PRIOR PERIOD ADJUSTMENTS Governmental Activities To conform to the accounting changes outlined in GASB Statement No. 65, Items Previously Reported as Assets and Liabilities, prior period adjustment in the amount of S(333,364) was required to remove previously capitalized debt issuance costs. Additionally, prior period adjustments in the amount of ~90,125 were required to record construction-in-progress assets improperly expensed in prior years. Business-Type Activities To conform to the accounting changes outlined in GASB Statement No. 65, Items Previously Reported as Assets and Liabilities, prior period adjustment in the amount of 5(386,149) was required to remove previously capitalized debt issuance costs. City of Renton, Woshington City o/ Renton, Woshington A developer contribution from 2009 and the related asset in the amount of $724,918 (net of depreciation) was not properly recorded in prior years. A prior period adjustment was necessary in 2013 to properly record the capital asset. The value of certain developer contributions from 2012 were improperly calculated. Prior period adjustments in the amount of ~;{1,777,905) were necessary in 2013 to properly record the assets. Additionally, prior period adjustments in the amount of S(771,080) were required to dispose of construction-in-progress assets improperly capitalized in prior years. NOTE 13, LONG TERM DEBT The City of Renton’s long-term debt consists of General Obligation Debt, repaid mainly from general governmental revenue sources, Proprietary Debt, repaid from proprietary revenues and compensated absences/other post-employment benefits. These debts are accounted for in the following areas: 1) The outstanding general obligation debt is reported in the Government- wide financial statements; 2) The repayment, or debt service of the same, is recorded in the Debt Service Funds; and, 3) The proprietary debt liability and repayment of the same are reported in individual Proprietary Funds. Compensated absences and other post-employment benefits are generally liquidated mainly from the general fund and to a lesser extent, the internal service funds. Outstanding debt issues as of December 31, 2013 are as follows: Issued MaturlW Original IssuedType Of Debt Interest Rates Date Date Amount GOVERNMENTAL DEBT: General Obligation Rohds: Limited: 2006 GO Bonds 4.25%-5.00%8/8/2006 12/1/2028 17,9B0,000 2010 GO Refunding Bonds 3.00%-4,50%5/11/2010 12/1/2021 6,170,000 2011 GO Li bra ry Bonds 2.00%-5.00%8/2/2011 12/1/2022 16,715,000 2011 GO Refunding Bonds 2,00%-5.00%9/21/2011 12/1/2017 9~425,000 2013 GO Qua li fled Energy Conserva tion Bond s 3.22%7/1/2013 7/1/2028 3,200,000 SUBTOTAL LIMITED GO 63,490,000 Other Miscellaneous debt - InterBovernmental, Backed by full faith and credlt of the City: 2009 FD 40 Loan for acquisition of FS13 3.75%3/1/2009 9/1/2028 6,798,085 2009 (A) SCORE Tax Exempt 4.00%-5,00%11/4/2009 1/1/2022 2,953,800 2009 (B) SCORE BARS 3,00%-6.62%11/4/2009 1/1/2039 2B,OBO,80B 2010 GO Valley Comm Re fundin/~ Bonds 3.00%-4.00%4/5/2010 12/1/2015 1,065,000 SUBTOTAL MISCELLANEOUS 38,907,685 TOTAL GOVERNMENTAL-TYPE DEBT ISSUANCE 92,397,685 BUSINESS-TYPE DEBT: Revenue Bonds: 2003 Wate r/Sewer Refunding 3.20%9/15/2003 6/1/2013 8,035,000 2004 Water/Sewer 4.33%11/1/2004 12/1/2027 10,335,000 2007 Water/Sewer 4.00%-5,00%11/6/2007 12/1/2022 1,430,000 2007 Water/Sewer Refunding (02)4.00%-5,00%11/6/2007 12/1/2022 8,320,000 2008 Water/Sewer (a }4.17%1/4/2008 12/1/2027 9,975,000 2008 Water/Sewer (b)4.17%1/4/2008 12/1/2016 2,035,006 2012 Wa ter/Sewer Re funding 2.00%-3.00%12/7/2012 12/1/2027 9,190,000 TOTAL REVENUE BONDS 4R,320,00~ Public Works Trust Fund Loans: Central Renton Sewer Replacement 1.00%5/4/1993 7/1/2015 1,631,800 East Renton Interceptor 1,00%6/7/1993 7/1/2013 2,542,704 Dayton Avenue NE 2,00%5/12/1994 7/1/2014 96,858 NE 27*h/Aberdeen Drainage Improvements 1.00%5/15/1995 7/1/2015 731,00C East Kennydale &nterceptor 2.00%1/24/1998 7/1/2016 2,093,74~ Honeycreek Interceptor 2.00%12/4/1995 7/1/2016 1,840,568 Corrosion Control Treatment Facilities 1.00%1/6/1997 7/1/2017 1,106,00(~ Maplewood Water Treatment Improvement 0.50%1/22/2002 7/1/2021 567,83] 6onstruct CT Pipeline for Wells 0.50%11/5/2002 7/1/2022 814,527 Ma plewood Water Trea tment Improvement 0.50%6/3/2004 7/1/2024 5,150,00C TOTAL PUBLIC WORKS TRUST FUND LOANS 16,575,12~ TOTAL BUSINESS-TYPE DEBT ISSUANCE 68,895,12~ TOTAL AMOUNT ISSUED ON OUTSTANDING DEBT AS OF DECEMBER 31, 2013 $158,292,813 City o[ Renton, WashingtOn City of Renton, Washington Outstanding debt additions and retirements are summarized as follows: Beginning Balance Ending Balance Due Within One General Governmental Debt 01/01/2013 Additions Deductions 12/31/2013 Year Limited General Obligation Debt 2006 GO Bonds S 15,160,000 ~~ 640,000 ~ 14.820,000 ~670,000 2010 G O R e fu n d i n B Bo n d s6,020,000 5,000 6,015,000 5,000 2011 00 Library Bonds 18,340,000 1,420,000 13,920,000 1,460,000 2011 GO Refunding Ponds 7,615,000 1,400,000 6,335,000 1,510,000 2013 GO Qualified EnergyConse~ation Bonds 3,200,000 3,200,000 210,000 Unamortized (discountl/premium/re fundin~2~408~675 294~731 2~113~944 Total Umlted GO Bonds 46~743~678 3~200t000 3~839~731 46tlO3zg44 31855~000 Other Misce0aneous debt - Intergovemmental, Backed with full faith and credit of the City 2009 FD 40 Loan for acquisition of FSL3 5,889,522 282,439 5,607,083 293,130 2009 (A) SCOPE Tax Exempt 2,951,800 2,953,800 716,400 2009 (B) SCORE BAgS 27,401,400 702,000 26,699,400 2010 GO Valley Comm Refundin~ Bonds 647,000 219~OO0 432,000 212~000 Total Miscellaneous 36~891~722 -111991439 35~692~283 lt221~530 Total General Obligation Debt 83~635~398 3~20Ot000 S~039~170 81~796~227 5~076~530 Other: Employee Leave Benefits (Comp Absences)5,231,645 2,657,219 2,982,038 5,106,827 2,910,091 Other pos~ employment benefits payable 3,744,023 1,884,823 1,039,281 4,589,565 Total Governmental Obli~ation $921611t066 ~ Tt942t042 $ 9t0601489 ~9114921819 ~7e9871421 Outstanding debt additions and retirements are summarized as follows (continued): 3usiness*T’/pe Debt ~evenue Bonds: f003 Water/Sewer Refunding Bond ~415,0OO ~004 Water/Sewer Bond 1,290,000 !007 Water/Sewer Bond 1,430,000 !00T Water/Sewer Refundin8 Bond {O2)8,260,000 !008 Water/Sewer Bond (a) !008 Water/Sewer Bond {b)2,03S,OO0 !012 Water/Sewer Refundi ng Bond 9,190,000 JnamorDzed (dis cou nt)/premium/re fundi nl~(302~198) rotal Revenue Bonds 32,492~802 Public Works Trust Fund Loans: Central Renton Sewer Replacement 191,518 East Renton Interceptor 134,870 Damon Avenue NE 10,206 NE 27th/Aberdeen Drainage Improvement 127,769 East Kennydale interceptor 467,422 Honeycreek Interceptor 387,488 Corrosion Control Treatment Facilities 246,785 Maplewood Water improvement 272,709 Const. CT Pipeline for Wells 428,699 Maplewood Water Improvements 3t271~765 Total Public Work Trust Fund Loan 5~5381929 Other: Employee Leave Benefits (Comp.Absences) Total Business-Type Debt GRAND TOTALS Beginning Balance 01/01/2013 Additions Deductions 205,000 20,000 40,OO0 (6,017) Ending Balance Due Within One 12/31/2013 Year 1,085,000 235,000 1,430,000 95,000 8,240,000 730,000 9,975,0OO 1,425,000 600,BOO 9,150,000 35,000 31,208,619 1,695,000 87,483 104,034 52,018 134,570 5,103 5,103 5,103 42,590 85,160 42,590 116,855 350,567 116,855 96,872 290,616 96,872 49,357 197,420 49,357 30,301 242,408 30,301 42,870 385,829 42,070 272f!47 2~999t118 272,647 -878~648 4~660~282 708~612 725,392 150,209 173,970 701,622 177,944 38t757~123 1501209 21336~608 36~70~723 2f581fS56 131t308t189 $ 8tO92tB$1 $11t397t097 ~ 128t063f342 ~ 10t568t979 DEEP DISCOUNT DEBT As of December 31, 2013, the City of Renton has no deep discount debt outstanding. SPECIAL ASSESSMENT DEBT WITH GOVERNMENTAL COMMITMENT As of December 31, 2013, the City of Renton has no special assessment debtoutstanding. DEBT LIMIT CAPACITIES State law provides that debt cannot be incurred in excess of the following percentages of the value of the taxable property of the City: 1.5 percent without a vote of the people provided the indebtedness with a vote is 1 percent or less; 2.5 percent with a vote of the people; S.0 percent with a vote of the people, provided the indebtedness in excess of 2.5 percent is for uti)ities; and 7.5 percent with a vote of the people provided the indebtedness in excess of 5.0 percent is for open space development and parks facilities. Table 12 in the Statistical Section shows the computation of legal debt margin for general and special purpose capacities for the City of Renton. IVashmgton State/ludito~N O.[j~ce Page 89 Washington Stare Auditor’s Office Page 90 Cify oJ Renton, Washington City o.f Renton, Washington ARBITRAGE The City engages an outside agency to calculate its’ arbitrage rebate liability on outstanding tax- exempt bonds and certificates of participation under Section 148(f) of the Internal Revenue Cede. No additional rebate was found due for any revenue or general obligation bonds for 2013. ISSUED/REFUNDED DEBT On July 1, 2013 the City issued ~3,200,000 in taxable direct-pay Qualified Energy Conservation Bonds (QECB) with an average interest rate of 3.22% to finance streetlight improvements. PRIOR YEAR DEFEASANCE OF DEBT In prior years the City defeased certain bond issues by placing the proceeds of new bonds in an irrevocable trust to provide for all future debt service payments on the old bonds. Accordingly, the trust account assets and the liability for the defeased bonds are not included in the City’s financial statements. The schedule of assets, liabilities, and net assets of the City’s escrow account as of December 31, 2013 is provided in the following table. US Bank Corporate Trust 12012 Revenue 8ondsl Assets Cash with Trustee ~2 ~nvestments with Trustee 9,474,82 ~ Estimated Interest Receivable Total Assets 9,474,823 Liabilities Refunded Bonds Payable 9,474.821 Total Liabilities 9,474.821 Net Assets Earnings with Trustee 2 Total Net Assets S ~" ANNUAL DEBT SERVICE REQUIREMENTS The annual debt service requirements to maturity, including principal and interest, for long- term debt as of December 31, 2013, are as follows: Year 2014 2015 2016 2017 2018 2019-2023 2024-2028 2029-2033 2034-2038 2039+ Totals Governmental Activities Business-TypeActivities Principal Interest Principal Interest 5,076,530 3,330,849 2,403,612 1,243,751 5,247,625 3,151,431 2,468,509 1,165,996 5,202,416 2,978,183 2,453,901 1,083,517 5,389,072 2,773,566 2,325,175 991,301 5,251,675 2,542,068 2,365,818 900,578 23,108,857 9,327,422 12,995,617 3,199,705 14,911,707 5,315,330 10,952,647 954,831 6,935,400 2,760,186 7916821283 33f314~212 35~965,278 91539~678 AMOUNT AVAILABLE FOR DEBT SERVICE Fund balances that have been reserved for debt repayment are ~445,410, reported other non- major governmental funds. OPERATING LEASES As of December 31, 2013, the City of Renton has no operating leases outstanding. NOTE 14. DEFERRED CHARGES IN PROPRIETARY FUNDS As of December 31, 2013, the total amount of deferred charges and other assets reported in the proprietary funds is ~0. Per GASB Statement No. 65 - Items Previously Reported as Assets and Liabilities, the City is required to recognize debt issuance costs as an expense in the period incurred. NOTE 15. SEGMENT INFORMATION An identifiable activity (or grouping of activities) required to be accounted for separately, which (a) is reported as or within an enterprise fund; (b) for which one or more revenue bonds are outstanding; and, (c) where the revenue stream is pledged for payment of, are required to disclose segment information. The City of Renton has no required segment information to disclose for 2013. NOTE 16. JOINTVENTURES A joint venture is a legal entity or other organization that results from a contractual agreement and that is owned, operated, or governed by two or more participants as a separate and City o/ Renton, Washington City o/ Renton, Washington specific activity subject to joint control in which the participants retain (a) an on-going financial interest or (b} an on-going financial responsibility. The City participates in two joint ventures. VALLEY COMMUNICATIONS CENTER The Valley Communications Center (Valley Com) was established August 20, 1976, when an Interlocal Agreement was entered into by four original participating municipal corporations, including the cities of Renton, Kent, Auburn, and Tukwila. Federal Way was formally admitted in 2000. The agreement is sanctioned by the provisions and te~’ms of the Interlocal Cooperation Act pursuant to Chapter 39.34 RCW. The initial duration of the agreement was five years, and thereafter is automatically extended for coesecutive five-year periods. The purpose of the joint operation, hereafter referred to as Valley Com, is to provide improved consolidated emergency communications (dispatch) services for police, fire, and medical aid, to the five participating cities and to several subscribing agencies that include: King County Fire Districts 2, 17 (Black Diamond), 20, 26, 40, 43, 44, 47; City of Pacific Police and Fire Departments; City of Black Diamond Police Department; City of Des Moines Police Department; 5eaTac Fire Department; North Highline Fire Department; King County EMS Units; and Vashon island Fire Department. Separate agreements between Valley Corn and the subscribing agencies have been executed, which set forth conditions of services and rates charged. The City of Renton reports its share of equity interest in the Governmental Activities column within the Government-wide financial statements under non-current assets. The following is condensed financial information as of December 31, 2013 related to Valley Communications Center: Valley Communications Center 2013 Owner Cities Equity Allocation Member City Percent of Equity 2012 Equity Balance 2013 Distribution 2013 Equity Balance Auburn 19.43%S 4,783,577 $176,069 $4,959,646 ~ederal Way 22.00%3,324,584 183,886 3,508,470 Kent 27.57%7,139,778 239,013 7~378,791 Tu kwil a 9.61%2~843~407 831751 2~927~158 GrandTotals 100.00%$2311531780 ~B60t892 $24,014,672 Completed Financial Statements for Valley Com can be obtained from the Valley Communications Center, 23807 - 98th Avenue South, Kent, WA 98031. SOUTH CORRECTIONAL ENTITY (SCORE) The South Correctional Entity (SCORE) consolidated correctional facility was established February 25, 2009, when an Interlocal Agreement (the "Original Interlocal Agreement") was entered into by seven participating municipal governments, the "Member Cities" of Auburn, Burien, Des Moines, Federal Way, Renton, SeaTac and Tukwila, under the authority of the "lnterlocal Cooperation Act" (RCW 39.34). This "Original Interlocal Agreement" was amended and restated October 1, 2009 and named the City of Des Moines as the "Host City" and the remaining Member Cities as "Owner Cities". This interlocal agreement is known as the "Formation Interlocal Agreement". Pursuant to a separate "Host City Agreement" dated October 1, 2009, the Host City will not enjoy the same equity position as the Owner Cities until all debts issued are paid and the Host City fulfills all of its obligations as outlined in the Agreement. SCORE, a governmental administrative agency pursuant to RCW 39.34.030 (3), has the power to acquire, construct, own, operate, maintain, equip, and improve a correctional facility known as the "SCORE Facility" and to provide correctional services and functions incidental thereto, for the purpose of detaining arrestees and sentenced offenders in the furtherance of public safety and emergencies within the jurisdiction of the Member Cities. The SCORE Facility may serve the Member Cities and Subscribing Agencies which are in need of correctional facilities. Any agreement with a Subscribing Agency shall be in writing and approved by SCORE as provided within the SCORE Formation Interlocal Agreement. Financing for the acquisition, construction, equipping, and improvement of the SCORE Facility will be provided by bonds issued by the South Correctional Entity Facility Public Development Authority (the "SCORE PDA"), a public development authority chartered by the City of Renton pursuant to RCW 35.2:1.730 through 35.21.755 and secured by the full faith and credit of the Cities of Auburn, Burien, Federal Way, Benton, SeaTac, and Tukwila (the "Owner Cities"). The SCORE PDA issued $86 million in special obligation bonds in 2009 to carry out the facility development project. The following is a summary of the debt service requirements for the bond issue: Debt Se~ce Schedule 35% 8ABs Year P~ncipal Interest Subsidy Total 2014 ~ 1,950.O00 $ 5,O66,566 $ (1,654,975) ~ 5,361,591 2015 1,990,0(~04,995,069 (1,632,787)5,352,282 2016 2,065,000 4,911,886 (1,632,787)5,344,099 2017 2,14%000 4.820,241 (1.621,980)5,343,261 2018 2.240,000 4,716,979 (1,621.980)5,333,999 2019-2023 12,435,000 21,771,988 (7,583,953)26,623,035 2024-2028 15,060,0OO 17,809,677 (6,398,978)26,470,699 2028-2033 18,475,~00 12,403,424 (4,553,914)26,324,310 2034-2038 22,795,000 5,605,241 (2,225,755)26,174,486 Totals ~ 84f320,000 $ 82,27Or929 $ 129rO46~7101 ~ 137,544,219 IVttshington State A udilor’s ()J)ic~,Page 93 Washington State Auditor~ Office Page 94 The followin8 is the debt service allocation to each Owner City: Auburn Burien Year 31%4% 2014 $1,662,093 S 214,464 2015 1,659,207 214,092 2016 1,656,671 213,764 2017 1,656,411 213,730 2018 2,653,540 213,360 2019-2023 8,253,141 2,064,921 202d-2028 B,205,917 1,058,828 2029 2033 8,160,598 3,052,980 2034-203B g,114,091 1,046,979 Federal Way SeaTac Tukwila 160,B48 $428.927 160,B68 428,183 260,323 427.528 160,298 427,461 260,020 426,720 798,691 2,]29,843 789,735 2,]o5,96] 735,235 2.093.959 412261327 ~11t0031539 The City of Renton reports its share of equity interest in the Governmental Activities column within the Government-wide financial statements under non-current assets. The fol!owing is condensed financial information as of December 31, 2013 related to SCORE: South Correctional Entity (SCORE) 2013 owner cities Equity Allocation Member City Percent of Equity 2012 Equity Balance 2013 Distribution 2013 Equity Balance Auburn 31.00%$1,368,859 ~1,148,378 ~2,517,237 8urien 4.00%176,627 117,696 294,323 Des Moines 1.00%107,970 107,970 Se a Ta c 4.00%132,469 199,239 331,708 Tu kwil a 7.00%353,254 248,680 601,934 Grand Totals 100.00% $4.415,673 $3tB06tDS8 $8t222t331 Completed financial statements for SCORE and SCORE PDA can be obtained at SCORE, 20817 17th Avenue South, Des Moines, WA 98198. NOTE 17. SUBSEQUENT EVENTS There were no significant subsequent events that occurred after the end of the reporting period and before the issuance of the financial statements. REQUIRED SUPPLEMENTARY ~NFORMATON SCHEDULE OF REVENUES. EXPENDITURES, AND CHANGES IN FUND BALANCES BUDGET TO ACTUAL - GENERAL FUND For the Year Ended December 31, 2013 REVENUES Taxes Licenses and permits Intergovernmental revenues Charges for services Fines and forfeits Interfund revenues Contributions Interest EXPENDITURES Current: General government Judicial Public safety Utilities Transportation Economic environment Health and human services Culture and recreatiun Capital outlay Debt service: Principal payment Interest payment TOTAL EXPENDITURES BUDGETARY TO GAAP OUDGETED AMOUNTS ACTUAL AMOUNTS ACTUAL AMOUNTS DIFFERENCES ORIGINAL FINAL BUDGETARY BASIS VARIANCE GAAP BASIS OVER (UNDER) 75,701,208 $77.151,203 $78,364,340 $1.713.132 $71.294.583 $7,569,7S7 (1), (2) 4,153,828 4,353,823 4,371,667 17,839 4,371,667 {2) 2.975,B60 4,37L,757 5,470,027 1.098,270 5,130,377 339,650 8,738,037 9,031.262 9,208,624 127,362 9,208,624 3,058,500 3,058,500 2.766,403 (292,097)2,766,403 3,OO4,224 3,323,830 294,039 (3,029,791)294,039 87,000 94,665 84,383 (20.282)84,383 645,300 745,300 424,390 (320.930)417,389 7,OO1 (1), (2} 999,622 992,622 1,036,150 43,523 1,708,853 (672,703) (2} 99,363,569 203,162,972 303,520,023 ~.642,949)95,276,31B 7,243,705 8.45R.185 8,94S,669 8,720,377 (235,292)9,340,499 2,459,664 2,476,149 2,364,631 (111,518)2,364,631 52,220,989 53,156,839 B3,107.483 (49,356)53,107,433 547,223 550,755 468,442 (82,313)468,442 8,790,731 R,852.491 7,822,333 (1,030,258}7,B22,333 6,131,558 6,562,196 5,840,104 (722,092)5,840.104 10,853.042 11,062,050 10,402,858 (659,192)10,402,853 236,910 273,251 78,010 (195,242)78,010 {G30,222) (2) 4,705,439 4,744,439 4,744,439 4,744,439 {2) 3,295,994 3,32B,844 3,304,069 (24,775)3,304,069 {1) 99,453,569 101,933,770 98,670,482 (3,263,288)91,252,O96 7,418,386 (90,000)1,22%202 3,849,541 2,620,339 4,024,222 (174,681) EXCESS (DEFICIENCY( OF REVENUES OVER EXPENDITURES OTHER FINANCING SOURCES (USES( Transfer in 250,000 270.000 2,416.197 2.246,197 2,166,197 250.OOO (1) Transfer(out)(160,000)(4.344.35 I)(4,363.983)19,637 (4,415,559}51,571 (2) Sale of capital assets 4,868 9,821 4,953 9,821 TOTAL OTHER FINANCING SOURCES (USES)90,BOO (4.069,483}(1,937.970)2,170,787 {2,239,541)301,571 NET CHANGE IN FUND BALANCE (2,340,281)1,911,571 4,791,126 1,784,681 ]26,890 FUND BALANCE JANUARY 1 FUND BALANCE DECEMBER 33 10,751,945 16.461,047 29,314,30B 2,833,261 1S,684,444 629,864 (1), (2) S 10,751,945 $13.620,766 $21,225,879 $7.605,113 $20,469,125 $756,754 (1),(2) NOTES TO THE REQUIRED SUPPLEMENTARY INFORMATION (1) Genera[ Governmental Debt Fund is included in the Actual Amounts DudBetar~ Basis odium n, (2) Leased City Property Fund is included in the Actual Amounts GAAP Basis co)umn REQUIRED SUPPLEMENTARY INFORMATION FIREFtGHTERS’ PENSION FUND SCHEDULE OF EMPLOYER CONTRIBUTION December 31, 2013 ANNUAL FIRE TOTAL REQUIRED EMPLOYER INSURANCE EMPLOYER CONTRIBUTION YEAR ENDING 12/31 CONTRIBUTIONS*PREMIUMS CONTRIBUTIONS (ARC) PERCENTAGE OF ARC CONTRIBUTED 2006 S (18,753}S 77,821 S 59,068 ~(113,541)N/A 2007 (25,285)85,062 59,777 (109,968)N/A 2008 (19,894)85,949 66,055 (109,968)N/A 2009 (36,296)106,623 70,327 (172,788)N/A 2010 (5,618)112,686 107,068 (172,7BB)N/A 2011 (12,700)115,054 102,354 (348,435)N/A 2012 (893)119,668 118,775 (530,282)N/A 2013 (4,475)128,866 124,391 (530,282)N/A The information presented is derived from the actuarial valuation performed April 1, 2013. *NeBative Employer Contributions represent disbursements from the Fund for administration and non-pension medical benefit expenses as allowed by RCW 41.26.150. REQUIRED SUPPLEMENTARY INFORMATION LEOFF 1 RETIREE MEDICAL BENEFITS SCHEDULE OF FUNDING PROGRESS December 31, 2013 UNFUNDED ACTUARIAL ACTUARIAL ACTUARIAL YEAR ENDING VALUE OF ACCRUED ACCRUED 12/31 ASSETS LIABILITES LIABILITIES 2008 ~,~32,331,107 $32,331,107 2009 27,985,358 27,985,358 2010 27,835,211 27,835,211 2011 27,835,211 27,835,211 2012 41,633,198 41,633,198 2013 41,633,198 41,633,198 UAAL AS A PERCENTAGE FUNDED COVERED OF COVERED RATIO PAYROLL PAYROLL 0%~471,470 6857.51% 0%411,952 6793.35% 0%414,264 6719.20% 0%434,132 6411.70% 0%304,951 13652.42% 0%300,273 13865.12% LEOFF 1 RETIREE MEDICAL BENEFITS SCHEDULE OF EMPLOYER CONTRIBUTION December 31, 2013 YEAR ENDING Annual Employer % of OPEB Net OPEB 12/31 OPEB Cost Contributions Cost Obligation 2008 $2,024,068 ~1,266,192 63%~757,876 2009 1,912,147 I,I04,351 58%1,565,672 2010 1,702,419 983,868 58%2,284,223 2011 1,716,970 875,699 51%3,125,494 2012 1,873,324 1,254,795 67%3,744,023 2013 1,884,823 1,039,281 55%4,589,565 Washington State/I udttm"s Oj)ice Page 97 Washington State Audttor~ Office /’age 98 MCAG NO. 0428 CITY OF RENTON SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS FOR THE YEAR ENDED DECEMBER 31, 2013 SCHEDULE16 CFDA I FEDERAL AGENCY NAMENUMBER I IU.S Dept of Housing and Urban Development14.218 14.218 IU.S Dept of Housing and Urban Development 14.218 IU.S Dept of Housing and Urban Development 14.218 IU.S Dept of Housing and Urban Development 14.218 IU.S Dept of Housing and Urban Development PASS THROUGH AGENCY King County King County King County King County King County FEDERAL PROGRAM NAME ~.ommunity Development Block Grant ~ommunity Development Block Grant "ommunity Development Block Grant .~ommunity Development Block Grant :ommunity Development Block Grant PROJ EC’I" NAME DAWN Refugee Womens Alliance Multi-Service Center Planning and Admin HRAP OTHER ID NUMBER C13-152 C13-507 C13-751 EXPENDITURES FROM PASS- THROUGH AWARDS 18,853 8,080 34,586 61,519 181,695 FROM DIREC’r AWARDS SUBTOTAL CFDA 14.218 16.606 U.S. Dept of Justice 16.607 U.S. Dept of Justice 16.738 U.S. Dept of Justice 16.738 U.S. Dept of Justice SUBTOTAL CFDA 16.738 20.106 U.S. Dept of Transportation 20.106 U.S. Dept of Transportation SUBTOTAL CFDA 20.106 20.205 U.S. Dept of Transportation 20.20S U.S. Dept of Transportation 20.205 U.S. Dept of Transportation 20.20S U.S. Dept of Transportation 20.205 U.S. Dept of Transportation 20.205 U.S. Dept of Transportation SUBTOTAL CFDA 20.205 20.600 U.S. Dept of Transportation 20.600 U.S. Dept of Transportation 20.600 U.S. Dept of Transportation 20.600 U.S. Dept of Transportation SUBTOTAL CFDA 20.600 20.602 IU.S. Dept of Transportation 45.025 INational Endowment for the Arts 97.025 IU.S. Dept of Homeland Security 97.036 IU.S. Dept of Homeland Security 97.042 U.S. Dept of Homeland Security 97.042 U.S. Dept of Home and Security SUBTOTAL CFDA 97.042 97.044 U.S. Dept of Homeland Security 97.067 U.S. Dept of Homeland Security TOTAL FEDERAl. AWARDS EXPENDED lily of Seattle NA NA State Criminal Alien Assistance Program Bullet Proof Vest Partnership Program Edward Byrne Memorial Justice Assistance Grant Edward Byrne Memor al Just ce ASS stance Grant SCAAP 2013-AP-BX-078 Bullet Proof Vest NA 2011JAG NA2011-DJ-BX-25242012JAG Airport Improvement Program Taxiway Bravo and Lower Blast Fence 3-53-0055-024 A rport mprovement Program Tax way Bravo 3-53-0055-023 Washington State Dept of Transportation Highway Planning and Construction Washington State Dept of Transportation Highway Planning and Construction Washington State Dept of Transportation Highway Planning and Construction Washington State Dept of Transportation Highway Planning and Construction Washington State Dept of Transportation Highway Ptanning and Construction Washington State Dept of Transportation Highway Ptanning and Construction Strander Blvd / SW 27TH St South 7TH Rainer Ave South (SR167) Logan Ave Carr Rd Highlands to Landing Pedestrian Conn. STPUL-1276(004) CM-1292(002) STPUL-CM-0167(048) STPUL-1131(002) HSIP-000S(306) CM-1070(007) Washington Traffic Safety Commission Washington Traffic Safety Commission Washington Traffic Safety Commission Washington Traffic Safety Commission ~tate and Community Highway Safety ~tate and Community Highway Safety ~tate and Community Highway Safety ~tate and Community Highway Safety WTSC DUI Mobilization CAG-12-155 WTSC Target Zero CAGo12-146 WTSC Distracted Dr v ng CAG-13-146 Washington Traffic Safety Commission I~i:::~ncg:2~tSytate Arts Commission Washington State Military Washington State Military Wash ngton State M I taw Occupant Protection incentive Grants Promotion of the Arts Partnership Agreement National Urban Search and Rescue (US&R) Response System Disaster Grants Emergency Management Performance Grants Emergency Management Performance Grants ¯ WTSC Seat Belt Mobilization CAG-12-155 CVl Pilot Project SWAC 2012-047 US&R Enhanced Ops CAG-08-174 Gabion Baskets FEMA 033-57745-00 D09-044 2012 EMPG 2012-E12-342 2013 EMPG 2013-E14-077 ~Aattle Assistance to Firefighters SAFER EMW-2010-FH-O0026 Fire Department Homeland Secur ty Grant Program F re/EMS/HAZMAT Tra n ng and Exerc se FFY11-SHSP-TE-O01 304,733 7,000 1,325,274 302,121 24,085 12,237 3,385,200 3,504 3,130 14,169 2,341 23,145 1,386 1,000 129,050 79,391 35,000 8,283 6,902 14,835 25,696 25,696 6,019,514 2,318,976 8,338,490 731,$73 TOTAL 18,853 8,080 34,586 61,519 181,695 304,733 6,902 14,835 25,696 14,251 39,947 6,019,514 2,318,976 8,338,490 1,714,484 7,000 1,325,274 302,121 24,085 12,237 3,385,200 3,504 3,130 14,169 2,341 23,145 1,386 1,000 6,512 129,050 79,391 35,000 731,573 8,283 NOTE 1 - BASIS OF ACCOUNTING The schedule is prepared on the same basis of accounting as the City’s financial statements. The City uses the modified accrual basis of accounting for governmental funds and agency funds. The accrual basis of accounting is followed in all Proprietary Funds and Pension Trust Funds. NOTE 2 - PROGRAM COSTS The amounts shown as current year expenditures represent only federal grant portion of the program costs. Entire program costs, including the City’s portion may be more than shown. NOTE 3 - INDIRECT COST RATE The amount expended includes $1,521.38 claimed as an indirect cost recovery using an approved indirect cost rate of 34.52 percent. FOOT NOTE 3 The State Auditor’s Office is established in the state’s Constitution and is part of the executive branch of state government. The State Auditor is elected by the citizens of Washington and serves four-year term s. We work with our audit clients and citizens to achieve our vision of government that works for citizens, by helping governments work better, cost less, deliver higher value, and earn greater public trust. In fulfilling our mission to hold state and local governments accountable for the use of public resources, we also hold ourselves accountable by continually improving our audit quality and operational efficiency and developing highly engaged and committed employees. As an elected agency, the State Auditor’s Office has the independence necessary to objectively perform audits and investigations. Our audits are designed to comply with professional standards as well as to satisfy the requirements of federal, state, and local laws. Our audits look at financial information and compliance with state, federal and local laws on the part of all local governments, including schools, and all state agencies, including institutions of higher education. In addition, we conduct performance audits of state agencies and local governments as well as fraud, state whistleblower and citizen hotline investigations. The results of our work are widely distributed through a variety of reports, which are available on our _w..g~jt_e.. and through our free, electronic subscri_otion service. We take our role as partners in accountability seriously, and provide training and technical assistance to governments, and have an extensive quality assurance program. Contact information for the State Auditor’s Office Deputy Director for Communications Thomas Shapl¢y (360) 902-0367 Public Records requests (360) 725-5617 Main telephone (360) 902-0370 Toll-free Citizen Hotline (866) 902-3900 Website www.sao.wa.gov Denis Law Finance and Information Technology April 8, 2015 Lindsay Sovde Piper Jaffray & Co. 1420 Fifth Avenue, Suite 4300 Seattle, Washington 98101 R.e:City of Renton, Washington Limited Tax General Obligation Refunding Bonds, Series 2015A Limited Tax General Obligation Refunding Bonds, Series 2015B (Taxable) Preliminary Official Statement Dear Ms. Sovde: Piper Jaffray & Co. is serving as underwriter on the above captioned issue. As Finance and Information Services Administrator for the City of Renton, Washington (the "Issuer"), I hereby certify as follows: a)To the best of my knowledge and belief, after due review, the Preliminary Official Statement, except for matters relating to DTC, as of the date hereof does not contain any untrue statement of a material fact or omit any statement or information which is necessary to make the statements therein, in the light of the circumstances under which made, not misleading; b)The copy of the Preliminary Official Statement attached hereto is hereby "deemed final" (except for the omission of the following information: offering price(s), interest rate(s), selling compensation, aggregate principal amount, principal amount per maturity, delivery dates, ratings, other terms of the securities depending on such matters), for purposes of Securities and Exchange Commission Rule 15c2-12(b)(1); and c)Piper Jaffray & Co. is authorized to distribute and otherwise utilize the Preliminary Official Statement in connection with the marketing of the Bonds. Sincerely, Finance and Information Services Administrator Renton City Hall ¯ 1055 South Grady Way ¯ Renton, Washington 98057 ¯ rentonwa,gov "SSTANDARD&POOR RMINGS SERVICES McGRAW HILL FINANCIAL One California Street, 31st Floor San Francisco, CA 94111-5432 tel 415 371-5000 reference no.:759650 March 31, 2015 City of Renton Renton City Hall - 5th Floor 1055 South Grady Way Renton, WA 98057 Attention: Ms. Iwen Wang, Administrator - Finance Division Re:US$8~ 780,000 City of Renton, Washington, Limited Tax General Obligation Refunding Bonds, Series 2015A, dated: May 13, 2015, due: December 01, 2028 US$3,695,000 City of Renton, Washington, Limited Tax General Obligation Refunding Bonds, Series 2015B, dated: May 13, 2015, due: December 01, 2020 Dear Ms. Wang: Pursuant to your request for a Standard & Poor’s Ratings Services ("Ratings Services") rating on the above-referenced obligations, Ratings Services has assigned a rating of"AA+". 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No person is intended as a third party beneficiary of any credit rating engagement or of a credit rating when issued. PF Ratings U.S. (02/16/13) ESCROW DEPOSIT AGREEMENT CITY OF RENTON, WASHINGTON LIMITED TAX GENERAL OBLIGATION REFUNDING BONDS, SERIES 2015A and LIMITED TAX GENERAL OBLIGATION REFUNDING BONDS, SERIES 2015B (TAXABLE) THIS ESCROW AGREEMENT, dated as of May 13, 2015 (herein, together with any amendments or supplements hereto, called the "Agreement") is entered into by and between the City of Renton, Washington (the "City") and U.S. Bank National Association, Seattle, Washington, as escrow agent (herein, together with any successor in such capacity, called the "Escrow Agent"). The notice addresses of the City and the Escrow Agent are shown on Exhibit A attached hereto and made a part hereof. WITNESSETH: WHEREAS, the City heretofore has issued and there presently remain outstanding the obligations described in Exhibit B attached hereto (the "Refunded Bonds"); and WHEREAS, pursuant to Ordinance No. 5754 passed on April 16, 2015 (the "Bond Ordinance"), the City has determined to issue its Limited Tax General Obligation Refunding Bonds, Series 2015A and its Limited Tax General Obligation Refunding Bonds, Series 2015B (Taxable) (together, the "Bonds"); and WHEREAS, a portion of the proceeds of the Bonds will be used for the purpose of providing funds to pay the costs of refunding the Refunded Bonds; and WHEREAS, Grant Thornton LLP has prepared a report dated May 13, 2015 (the "Verification Report") relating to the source and use of funds available to accomplish the refunding of the Refunded Bonds, the investment of such funds in Government Obligations (as defined herein) and the adequacy of such funds and investments to provide for the payment of the debt service due on the Refunded Bonds; and WHEREAS, pursuant to the Bond Ordinance, the Refunded Bonds have been designated for redemption prior to their scheduled maturity dates and, after provision is made for such redemption, the Refunded Bonds will come due in such years, bear interest at such rates, and be payable at such times and in such amounts as are set forth in Exhibit C attached hereto and made a part hereof; and WHEREAS, when Escrowed Securities have been deposited with the Escrow Agent for the payment of all principal and interest of the Refunded Bonds when due, then the Refunded Bonds shall be legally defeased; and 1 08131/15 WHEREAS, the issuance, sale, and delivery of the Bonds have been duly authorized to be issued, sold, and delivered for the purpose of obtaining the funds required to provide for the payment of the principal of, interest on and redemption premium (if any) on the Refunded Bonds when due as shown on Exhibit C attached hereto; NOW, THEREFORE, in consideration of the mutual undertakings, promises and agreements herein contained, the sufficiency of which hereby are acknowledged, and to secure the full and timely payment of principal of and the interest on the Refunded Bonds, the City and the Escrow Agent mutually undertake, promise and agree for themselves and their respective representatives and successors, as follows: Article 1. Definitions Section 1.1. Definitions. Unless the context clearly indicates otherwise, the following terms shall have the meanings assigned to them below when they are used in this Agreement: Escrow Fund means the fund created by this Agreement to be established, held and administered by the Escrow Agent pursuant to the provisions of this Agreement. Escrowed Securities means the noncallable Government Obligations described in Exhibit D attached to this Agreement, or cash or other noncallable obligations substituted therefor pursuant to Section 4.2 of this Agreement. Government Obligations means direct, noncallable (a)United States Treasury Obligations, (b)United States Treasury Obligations - State and Local Government Series, (c) non-prepayable obligations which are unconditionally guaranteed as to full and timely payment of principal and interest by the United States of America or (d)REFCORP debt obligations unconditionally guaranteed by the United States. Paying Agent means U.S. Bank National Association, as the fiscal agency of the State of Washington, and as the paying agent for the Refunded Bonds. Section 1.2. Other Definitions. The terms "Agreement," "City," "Escrow Agent, .... Bond Ordinance, .... Verification Report," "Refunded Bonds," and "Bonds" when they are used in this Agreement, shall have the meanings assigned to them in the preamble to this Agreement. Section 1.3. Interpretations. The titles and headings of the articles and sections of this Agreement have been inserted for convenience and reference only and are not to be considered a part hereof and shall not in any way modify or restrict the terms hereof. This Agreement and all of the terms and provisions 2 08/31/15 hereof shall be liberally construed to effectuate the purposes set forth herein and to achieve the intended purpose of providing for the refunding of the Refunded Bonds in accordance with applicable law. Article 2. Deposit of Funds and Escrowed Securities Section 2.1. Deposits in the Escrow Fund. Concurrently with the sale and delivery of the Bonds, the City shall deposit, or cause to be deposited, with the Escrow Agent, for deposit in the Escrow Fund (as defined below), the funds (from the proceeds of the Bonds and a cash contribution by the City, if necessary) sufficient to purchase the Escrowed Securities and pay costs of issuance described in Exhibit D, and the Escrow Agent shall, upon the receipt thereof, acknowledge such receipt to the City in writing. Article 3. Creation and Operation of Escrow Fund Section 3.1. Escrow Fund. The Escrow Agent has created on its books a special trust fund and irrevocable escrow account to be known as the Refunding Account (the "Escrow Fund"). The Escrow Agent hereby agrees that upon receipt thereof it will deposit to the credit of the Escrow Fund the funds and the Escrowed Securities described in Exhibit D attached hereto. Such deposit, all proceeds therefrom, and all cash balances from time to time on deposit therein (a) shall be the property of the Escrow Fund, (b) shall be applied only in strict conformity with the terms and conditions of this Agreement, and (c) are hereby irrevocably pledged to the payment of the principal of and interest on the Refunded Bonds as set forth in Ordinance No. 5215 adopted by the City Council of the City on July 17, 2006 (the "2006 Bond Ordinance"), which payment shall be made by timely transfers of such amounts at such times as are provided for in Section 3.2 hereof. When the final transfers have been made for the payment of such principal of and interest on the Refunded Bonds, any balance then remaining in the Escrow Fund shall be transferred to the City, and the Escrow Agent shall thereupon be discharged from any further duties hereunder. Section 3.2. Payment of Principal and Interest. The Escrow Agent is hereby irrevocably instructed to transfer to the Paying Agent from the cash balances from time to time on deposit in the Escrow Fund, the amounts required to pay the principal of the Refunded Bonds at their respective redemption dates and interest thereon to such redemption dates in the amounts and at the times shown in Exhibit C attached hereto. Section 3.3. Sufficiency of Escrow Fund. The City represents that, based upon the information provided in the Verification Report, the successive receipts of the principal of and interest on the Escrowed Securities will assure that the cash balance on deposit from time to time in the Escrow Fund will be at all times sufficient to provide moneys for transfer to the Paying Agent at the times and in the amounts required to pay 3 08/31/15 the interest on the Refunded Bonds as such interest comes due and the principal of the Refunded Bonds as the Refunded Bonds are paid on an optional redemption date prior to maturity, all as more fully set forth in Exhibit E attached hereto and as required for the legal defeasance of the Refunded Bonds under the terms of the 2006 Bond Ordinance. If, for any reason, at any time, the cash balances on deposit or scheduled to be on deposit in the Escrow Fund shall be insufficient to transfer the amounts required by the Paying Agent to make the payments set forth in Section 3.2. hereof, the City shall timely deposit in the Escrow Fund, from any funds that are lawfully available therefor, additional funds in the amounts required to make such payments. Notice of any such insufficiency shall be given promptly as hereinafter provided, but the Escrow Agent shall not in any manner be responsible for any insufficiency of funds in the Escrow Fund or the City’s failure to make additional deposits thereto. Section 3.4. Trust Fund. The Escrow Agent or its affiliate, shall hold at all times the Escrow Fund, the Escrowed Securities and all other assets of the Escrow Fund, wholly segregated from all other funds and securities on deposit with the Escrow Agent; it shall never allow the Escrowed Securities or any other assets of the Escrow Fund to be commingled with any other funds or securities of the Escrow Agent; and it shall hold and dispose of the assets of the Escrow Fund only as set forth herein. The Escrowed Securities and other assets of the Escrow Fund shall always be maintained by the Escrow Agent as trust funds for the benefit of the owners of the Refunded Bonds; and a special account thereof shall at all times be maintained on the books of the Escrow Agent. The owners of the Refunded Bonds shall be entitled to the same preferred claim and first lien upon the Escrowed Securities, the proceeds thereof, and all other assets of the Escrow Fund to which they are entitled as owners of the Refunded Bonds as set forth in the 2006 Bond Ordinance. The amounts received by the Escrow Agent under this Agreement shall not be considered as a banking deposit by the City, and the Escrow Agent shall have no right to title with respect thereto except as a trustee and Escrow Agent under the terms of this Agreement. The amounts received by the Escrow Agent under this Agreement shall not be subject to warrants, drafts or checks drawn by the City or, except to the extent expressly herein provided, by the Paying Agent. Article 4. Limitation on Investments Section 4.1. Investments. Except for the initial investment in the Escrowed Securities the Escrow Agent shall not have any power or duty to invest or reinvest any money held hereunder, or to make substitutions of the Escrowed Securities, or to sell, transfer, or otherwise dispose of the Escrowed Securities. Section 4.2. Substitution of Securities. [Reserved] 4 08/31/15 Article 5. Application of Cash Balances Section 5.1. In General. Except as provided in Section 2.1, 3.2 and 4.2 hereof, no withdrawals, transfers or reinvestment shall be made of cash balances in the Escrow Fund. Cash balances shall be held by the Escrow Agent in United States currency as cash balances as shown on the books and records of the Escrow Agent and, except as provided herein, shall not be reinvested by the Escrow Agent; provided, however, a conversion to cun’ency shall not be required (i) for so long as the Escrow Agent’s internal rate of return does not exceed 20%, or (ii) if the Escrow Agent’s internal rate of return exceeds 20%, the Escrow Agent receives a letter of instructions, accompanied by the opinion of nationally recognized bond counsel, approving the assumed reinvestment of such proceeds at such higher yield. Article 6. Redemption of Refunded Bonds Section 6.1. Call for Redemption. The City hereby irrevocably calls the Refunded Bonds for redemption on their earliest redemption dates, as shown in the Verification Report and on Appendix A attached hereto. Section 6.2. Notice of Redemption/Notice of Defeasance. The Escrow Agent agrees to give a notice of defeasance and a notice of the redemption of the Refunded Bonds pursuant to the terms of the Refunded Bonds and in substantially the forms attached hereto as Appendices A and B attached hereto and as described on said Appendices A and B to the Paying Agent for distribution as described therein. The notice of defeasance shall be given immediately following the execution of this Agreement, and the notice of redemption shall be given in accordance with the ordinance authorizing the Refunded Bonds. The Escrow Agent hereby certifies that provision satisfactory and acceptable to the Escrow Agent has been made for the giving of notice of redemption of the Refunded Bonds. Article 7. Records and Reports Section 7.1. Records. The Escrow Agent will keep books of record and account in which complete and accurate entries shall be made of all transactions relating to the receipts, disbursements, allocations and application of the money and Escrowed Securities deposited to the Escrow Fund and all proceeds thereof, and such books shall be available for inspection during business hours and after reasonable notice by the parties hereto and by the owners of the Refunded Bonds. Section 7.2. Reports. While this Agreement remains in effect, the Escrow Agent monthly shall prepare and send to the City a written report summarizing all transactions relating to the Escrow Fund during 5 08/31/15 the preceding financial month, including, without limitation, credits to the Escrow Fund as a result of interest payments on or maturities of the Escrowed Securities and transfers from the Escrow Fund for payments on the Refunded Bonds or otherwise, together with a detailed statement of all Escrowed Securities and the cash balance on deposit in the Escrow Fund as of the end of such period. Article 8. Concerning the Paying Agents and Escrow Agent Section 8.1. Representations. The Escrow Agent hereby represents that it has all necessary power and authority to enter into this Agreement and undertake the obligations and responsibilities imposed upon it herein, and that it will carry out all of its obligations hereunder. Section 8.2. Limitation on Liability. The liability of the Escrow Agent to transfer funds for the payment of the principal of and interest on the Refunded Bonds shall be limited to the proceeds of the Escrowed Securities and the cash balances from time to time on deposit in the Escrow Fund. Notwithstanding any provision contained herein to the contrary, the Escrow Agent shall have no liability whatsoever for the insufficiency of funds from time to time in the Escrow Fund or any failure of the obligors of the Escrowed Securities to make timely payment thereon, except for the obligation to notify the City promptly of any such occurrence. The recitals herein and in the proceedings authorizing the Bonds shall be taken as the statements of the City and shall not be considered as made by, or imposing any obligation or liability upon, the Escrow Agent. The Escrow Agent is not a party to the proceedings authorizing the Bonds or the Refunded Bonds and is not responsible for nor bound by any of the provisions thereof. In its capacity as Escrow Agent, it is agreed that the Escrow Agent need look only to the terms and provisions of this Agreement. The Escrow Agent makes no representations as to the value, conditions or sufficiency of the Escrow Fund, or any part thereof, or as to the title of the City thereto, or as to the security afforded thereby or hereby, and the Escrow Agent shall not incur any liability or responsibility in respect to any of such matters. It is the intention of the parties hereto that the Escrow Agent shall never be required to use or advance its own funds or otherwise incur personal financial liability in the performance of any of its duties or the exercise of any of its rights and powers hereunder. The Escrow Agent shall not be liable for any action taken or neglected to be taken by it in good faith in any exercise of reasonable care and believed by it to be within the discretion or power conferred upon it by this Agreement, nor shall the Escrow Agent be responsible for the consequences of any error of judgment; and the Escrow Agent shall not be answerable except for 6 08/31/15 its own neglect or willful misconduct, nor for any loss unless the same shall have been through its negligence or bad faith. Unless it is specifically otherwise provided herein, the Escrow Agent has no duty to determine or inquire into the happening or occurrence of any event or contingency or the performance or failure of performance of the City with respect to arrangements or contracts with others, with the Escrow Agent’s sole duty hereunder being to safeguard the Escrow Fund, to dispose of and deliver the same in accordance with this Agreement. If, however, the Escrow Agent is called upon by the terms of this Agreement to determine the occurrence of any event or contingency, the Escrow Agent shall be obligated, in making such determination, only to exercise reasonable care and diligence, and in event of error in making such determination the Escrow Agent shall be liable only for its own willful misconduct or its negligence. In determining the occurrence of any such event or contingency the Escrow Agent may request from the City or any other person such reasonable additional evidence as the Escrow Agent in its discretion may deem necessary to determine any fact relating to the occurrence of such event or contingency, and in this connection may make inquiries of, and consult with, among others, the City at any time. Section 8.3. Compensation. The City shall pay to the Escrow Agent fees for performing the services hereunder and for the expenses incurred or to be incurred by the Escrow Agent in the administration of this Agreement pursuant to the terms of the Fee Schedule dated May 13, 2015. The Escrow Agent hereby agrees that in no event shall it ever assert any claim or lien against the Escrow Fund for any fees for its services, whether regular or extraordinary, as Escrow Agent, or in any other capacity, or for reimbursement for any of its expenses as Escrow Agent or in any other capacity. Section 8.4. Successor Escrow Agents. Any corporation, association or other entity into which the Escrow Agent may be converted or merged, or with which it may be consolidated, or to which it may sell or otherwise transfer all or substantially all of its corporate trust assets and business or any corporation, association or other entity resulting from any such conversion, sale, merger, consolidation or other transfer to which it is a party, ipso facto, shall be and become successor escrow agent hereunder, vested with all other matters as was its predecessor, without the execution or filing of any instrument or any further act on the part of the parties hereto, notwithstanding anything herein to the contrary. If at any time the Escrow Agent or its legal successor or successors should become unable, through operation or law or otherwise, to act as escrow agent hereunder, or if its property and affairs shall be taken under the control of any state or federal court or administrative body because of insolvency or bankruptcy or for any other reason, a vacancy shall forthwith exist in the office of Escrow Agent hereunder. In such event, the City, by appropriate action, promptly shall appoint an Escrow Agent to fill such vacancy. If no successor Escrow Agent shall have been appointed by the City within 60 days, a successor may be appointed by the owners of a majority in principal amount of the Refunded Bonds then outstanding by an instrument or 7 08/31/15 instruments in writing filed with the City, signed by such owners or by their duly authorized attomeys-in-fact. If, in a proper case, no appointment of a successor Escrow Agent shall be made pursuant to the foregoing provisions of this section within three months after a vacancy shall have occurred, the owner of any Refunded Bond may apply to any court of competent jurisdiction to appoint a successor Escrow Agent. Such court may thereupon, after such notice, if any, as it may deem proper, prescribe and appoint a successor Escrow Agent. Any successor Escrow Agent shall be a corporation organized or doing business under the laws of the United States or the State of Washington, authorized under such laws to exercise corporate trust powers, having a combined capital and surplus of at least $100,000,000 and subject to the supervision or examination by federal or state authority. Any successor Escrow Agent shall execute, acknowledge and deliver to the City and the Escrow Agent an instrument accepting such appointment hereunder, and the Escrow Agent shall execute and deliver an instrument transferring to such successor Escrow Agent, subject to the terms of this Agreement, all the rights, powers and trusts of the Escrow Agent hereunder. Upon the request of any such successor Escrow Agent, the City shall execute any and all instruments in writing for more fully and certainly vesting in and confirming to such successor Escrow Agent all such rights, powers and duties. The obligations assumed by the Escrow Agent pursuant to this Agreement may be transferred by the Escrow Agent to a successor Escrow Agent if (a) the requirements of this Section 8.4 and the 2006 Bond Ordinance are satisfied; (b)the successor Escrow Agent has assumed all the obligations of the Escrow Agent under this Agreement; and (c)all of the Escrowed Securities and money held by the Escrow Agent pursuant to this Agreement have been duly transferred to such successor Escrow Agent. Article 9. Costs of Issuance Section 1. Costs of Issuance Fund. The Escrow Agent has created on its books a special trust fund and escrow fund to be known as the Costs of Issuance Fund. The Escrow Agent agrees that upon receipt it will deposit to the credit of the Costs of Issuance Fund the amount shown on Exhibit D to pay those costs of issuance set forth in such exhibit. Such deposit, all proceeds therefrom, and all cash balances on deposit therein shall be the property of the Costs of Issuance Fund to pay those costs of issuance set forth on Exhibit D upon receipt of invoices. If any of the deposit allocated for costs of issuance for the Bonds remains unspent 60 days after the date of this Agreement, the Escrow Agent shall transfer such unspent amount to the City. Section 2. Investments. The Escrow Agent shall not have any power or duty to invest or reinvest any money held in the Costs of Issuance Fund. Article 10. Miscellaneous 8 08/31/15 Section 10.1. Notice. Any notice, authorization, request, or demand required or permitted to be given hereunder shall be in writing and shall be deemed to have been duly given when mailed by registered or certified mail, postage prepaid addressed to the City or the Escrow Agent at the address shown on Exhibit A attached hereto. The United States Post Office registered or certified mail receipt showing delivery of the aforesaid shall be conclusive evidence of the date and fact of delivery. Any party hereto may change the address to which notices are to be delivered by giving to the other parties not less than 10 days prior notice thereof. Section 10.2. Termination of Responsibilities. Upon the taking of all the actions as described herein by the Escrow Agent, the Escrow Agent shall have no further obligations or responsibilities hereunder to the City, the owners of the Refunded Bonds or to any other person or persons in connection with this Agreement. Section 10.3. Binding Agreement. This Agreement shall be binding upon the City and the Escrow Agent and their respective successors and legal representatives, and shall inure solely to the benefit of the owners of the Refunded Bonds, the City, the Escrow Agent and their respective successors and legal representatives. Section 10.4. Severability. In case any one or more of the provisions contained in this Agreement shall for any reason be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provisions of this Agreement, but this Agreement shall be construed as if such invalid or illegal or unenforceable provision had never been contained herein. Section 10.5. Washington Law Governs. This Agreement shall be governed exclusively by the provisions hereof and by the applicable laws of the State of Washington. Section 10.6. Time of the Essence. Time shall be of the essence in the performance of obligations from time to time imposed upon the Escrow Agent by this Agreement. Section 10.7. Notice to Standard & Poor’s and Fitch. In the event that this Agreement or any provision thereof is severed, amended or revoked, the City shall provide written notice of such severance, amendment or revocation to Standard & 9 08/31/15 Poor’s at 38th Floor, 55 Water Street, New York, New York, 10041, Attention: Public Finance Surveillance and Fitch Ratings, 33 Whitehall Street, New York, NY 10004, Attention: Public Finance Rating Desk/Refunded Bonds. Section 10.8. Amendments. This Agreement shall not be amended except to cure any ambiguity or formal defect or omission in this Agreement. No amendment shall be effective unless the same shall be in writing and signed by the parties thereto. No such amendment shall adversely affect the rights of the holders of the Refunded Bonds. No such amendment shall be made without first receiving written confirmation from the rating agencies (if any) which have rated the Refunded Bonds that such administrative changes will not result in a withdrawal or reduction of its rating then assigned to the Refunded Bonds. If this Agreement is amended, prior written notice and copies of the proposed changes shall be given to the rating agencies which have rated the Refunded Bonds. EXECUTED as of the date first written above. CITY OF RENTON, WASHINGTON F ina’n~imd~n f~rm atio n~"~e s Administrator U.S. BANK NATIONAL ASSOCIATION Exhibit A Exhibit B Exhibit C Exhibit D Exhibit E Appendix A Appendix B Authorized Officer Addresses of the City and the Escrow Agent Description of the Refunded Bonds Schedule of Debt Service on Refunded Bonds Description of Beginning Cash Deposit (if any) and Escrowed Securities Escrow Fund Cash Flow Notice of Redemption for the 2006 Bonds Notice of Defeasance for the 2006 Bonds 10 05106115 Poor’s at 38t~ Floor, 55 Water Street, New York, New York, 10041, Attention: Public Finance Surveillance and Fitch Ratings, 33 Whitehall Street, New York, NY 10004, Attention: Public Finance Rating Desk/Refunded Bonds. Section 10.8. Amendments. This Agreement shall not be amended except to cure any ambiguity or formal defect or omission in this Agreement. No amendment shall be effective unless the same shall be in writing and signed by the parties thereto. No such amendment shall adversely affect the rights of the holders of the Refunded Bonds. No such amendment shall be made without first receiving written confirmation from the rating agencies (if any) which have rated the Refunded Bonds that such administrative changes will not result in a withdrawal or reduction of its rating then assigned to the Refunded Bonds. If this Agreement is amended, prior written notice and copies of the proposed changes shall be given, to the rating agencies which have rated the Refunded Bonds. EXECUTED as of the date first written above. CITY OF RENTON, WASHINGTON Finance and Information Services Administrator 7 Exhibit A Exhibit B Exhibit C Exhibit D Exhibit E Appendix A Appendix B U.S. BANK NATIONAEASSOCIATION Authorized Officer Addresses of the City and the Escrow Agent Description of the Refunded Bonds Schedule of Debt Service on Refunded Bonds Description of Beginning Cash Deposit (if any) and Escrowed Securities Escrow Fund Cash Flow Notice of Redemption for the 2006 Bonds Notice of Defeasance for the 2006 Bonds 10 05/07115 EXHIBIT A Addresses of the City and Escrow Agent The City:City of Renton, Washington 1055 S. Grady Way Renton, Washington 98057 Attention: Finance and Information Services Administrator Escrow Agent:U.S. Bank National Association Global Corporate Trust Services PD-WA-T7CT 1420 Fifth Avenue, 7th Floor Seattle, WA 98101 Attention: Greg E. Skutnik A- 1 08/31/15 EXHIBIT B Description of the Refunded Bonds City of Renton, Washington Limited Tax General Obligation Bonds, 2006 Maturity Dates (December 1) 2017 2019" 2020 2021 2022 2023 2024 2028* Principal $ 775,000 1,670,000 900,000 945,000 1,000,000 1,040,000 1,095,000 4,975,000 Interest Rates 5.00% 5.00 5.00 5.00 5.25 5.25 5.25 5.00 * Term Bonds. B- 1 08/31/15 EXHIBIT C Schedule of Debt Service on the Refunded Bonds Principal/ Date Interest Redemption Price 06/01/2015 $313,918.75 -- 12/01/2015 313,918.75 -- 06/01/2016 313,918.75 -- 12/01/2016 313,918.75 $12,400,000.00 $1,255,675.00 $12,400,000.00 Total $313,918.75 313,918.75 313,918.75 12,713,918.75 $13,655,675.00 C- 1 08/31/15 EXHIBIT D Escrow Deposit I.Cash: $834.75 II.Other Obligations: Principal Description Maturity Date Amount TBill 05/28/2015 $ 75,000 TBill 05/28/2015 205,000 TNote 11/30/2015 279,000 TNote 05/31/2016 279,000 TNote 11/30/2016 3,420,000 TNote 11/30/2016 9,262,000 $13,520,000 III.Costs of Issuance (1): Escrow Agent Fee (U.S. Bank) Bond Counsel Fee (Pacifica Law Group LLP) Rating Agency (Standard & Poor’s) Verification Agent Fee (Grant Thornton LLP) TOTAL: (1)Net of Purchaser’s fee of $72,683.80. Interest Rate 0.25% 1.75 0.50 0.50 Total Cost $ 75,006.85 205,018.71 279,523.20 285,427.27 3,432,278.20 9,295,251.63 $13,572,505.86 1,000.00 25,300.00 12,375.00 3,000.00 41,675.00 D- 1 08/31/15 EXHIBIT E Escrow Fund Cash Flow Date 05/13/2015 05/28/2015 05/31/2015 06/01/2015 11/30/2015 12/01/2015 05/31/2016 06/01/2016 11/30/2016 12/01/2016 Escrow Requirement $313,918.75 313,918.75 313,918.75 12,713,918.75 $13,655,675.00 Net Escrow Receipts $ 834.75 280,000.00 34,495.00 313,495.00 313,146.25 12,713,705.00 $ 13,655,676.00 Excess Receipts $ 834.75 280,000.00 34,495.00 (313,918.75) 313,495.00 (313,918.75) 313,146.25 (313,918.75) 12,713,705.00 (12,713,918.75) $ 1.00 Cash Balance $ 834.75 280,834.75 315,329.75 1,411.00 314,906.00 987.25 314,133.50 214.75 12,713,919.75 1.00 E- 1 08/31/15 APPENDIX A-1 NOTICE OF REDEMPTION* City of Renton, Washington Limited Tax General Obligation Bonds, 2006 NOTICE IS HEREBY GIVEN that the City of Renton, Washington (the "City") has called for redemption on December 1, 2016, a portion of its outstanding Limited Tax General Obligation Bonds, 2006 (the "Bonds"). The Bonds to be refunded will be redeemed at a price of one hundred percent (100%) of their principal amount, plus interest accrued to December 1, 2016. The redemption price of the Bonds is payable on presentation and surrender of the Bonds at the office of: U.S. Bank National Association Global Corporate Trust Services 111 Fillmore Ave E St. Paul, MN 55107 Interest on the Bonds to be refunded or portions thereof which are redeemed shall cease to accrue on December 1, 2016. The following Bonds are being redeemed: Maturity Dates Principal Interest CUSIP (December 1)Amounts Rates Numbers 2017 $ 775,000 5.00%760133QV3 2019’1,670,000’5.00 760133QX9 2020 900,000 5.00 760133QY7 2021 945,000 5.00 760133QZ4 2022 1,000,000 5.25 760133RA8 2023 1,040,000 5.25 760133RB6 2024 1,095,000 5.25 760133RC4 2028*4,975,000*5.00 760133RG5 Term Bonds. This notice shall be given not more than 60 nor less than 30 days prior to December 1, 2016 by first class mail to each registered owner of the Refunded Bonds. In addition notice shall be mailed to The Depository Trust Company of New York, New York; MBIA Insurance Corporation (or its successor in interest); Standard & Poor’s, Fitch Ratings; and to the Municipal Securities Rulemaking Board. A-i 08/31/15 By Order of the City of Renton, Washington U.S. Bank National Association, as Paying Agent Dated: Withholding of 28% of gross redemption proceeds of any payment made within the United States may be required by the Jobs and Growth Tax Relief Reconciliation Act of 2003 (the "Act") unless the Paying Agent has the correct taxpayer identification number (social security or employer identification number) or exemption certificate of the payee. Please furnish a properly completed Form W-9 or exemption certificate or equivalent when presenting your Bonds. APPENDIX B Notice of Defeasance* City of Renton, Washington Limited Tax General Obligation Bonds, 2006 NOTICE IS HEREBY GIVEN to the owners of that portion of the above-captioned bonds with respect to which, pursuant to an Escrow Deposit Agreement dated May 13, 2015, by and between the City of Renton, Washington (the "City") and U.S. Bank National Association, Seattle, Washington (the "Escrow Agent"), the City has deposited into an escrow account, held by the Escrow Agent, cash and non-callable direct obligations of the United States of America, the principal of and interest on which, when due, will provide money sufficient to pay each year, to and including the respective maturity or redemption dates of such bonds so provided for, the principal thereof and interest thereon (the "Defeased Bonds"). The Defeased Bonds will be called on December 1, 2016, at a price of 100% plus accrued interest. Such Defeased Bonds are therefore deemed to be no longer outstanding pursuant to the provisions of Ordinance No. 5215 of the City, authorizing the issuance of the Defeased Bonds, but will be paid by application of the assets of such escrow account. The Defeased Bonds are described as follows: Limited Tax General Obligation Bonds, 2006 (Dated August 1, 2006) M~urity D~es CUSIP (December l)Principal Interest Rmes Numbers 2017 $ 775,000 5.00 760133QV3 2019"1,670,000 5.00 760133QX9 2020 900,000 5.00 760133QY7 2021 945,000 5.00 760133QZ4 2022 1,000,000 5.25 760133RA8 2023 1,040,000 5.25 760133RB6 2024 1,095,000 5.25 760133RC4 2028*4,975,000 5.00 760133RG5 Term Bonds. * This notice shall be given immediately by first class mail to each registered owner of the Defeased Bonds. In addition notice shall be mailed to The Depository Trust Company of New York, New York; MBIA Insurance Corporation (or its successor in interest); Standard & Poor’s, Fitch Ratings; and to the Municipal Securities Rulemaking Board. Information for Individual Registered Owner The addressee of this notice is the registered owner of Bond Certificate No. __ Defeased Bonds described above, which certificate is in the principal amount of $ All of which has been defeased as described above. of the CERTIFICATE OF AND RECEIPT ESCROW AGENT I, the undersigned authorized officer of U.S. Bank National Association, Seattle, Washington (the "Escrow Agent"), DO HEREBY CERTIFY, with respect to the defeasance and refunding of the City of Renton, Washington’s (the "City") Limited Tax General Obligation Bonds, 2006 (the "Refunded Bonds"), identified in the Escrow Deposit Agreement of even date herewith (the "Escrow Deposit Agreement") between the City and the Escrow Agent, and more particularly described in a bond ordinance of the City adopted on April 13, 2015 (the "Bond Ordinance") authorizing the issuance by the City of its Limited Tax General Obligation Refunding Bonds, Series 2015A (the "2015A Bonds") and its Limited Tax General Obligation Refunding Bonds, Series 2015B (Taxable) (the "2015B Bonds" and, together with the 2015A Bonds, the "Refunding Bonds") being issued to advance refund and defease a portion of the Refunded Bonds, as follows: 1. The Escrow Agent has established the Escrow Fund and the Costs of Issuance Fund pursuant to the Escrow Deposit Agreement. The Escrow Agent has received the sum of $13,615,015.61 from the following sources of funds: From Piper Jaffray & Co. 2015A Bonds Par Amount Plus: Premium on the 2015A Bonds 2015B Bonds Par Amount Less: Underwriter’s Discount Less: Additional Proceeds wired to the City Total Sources of Funds $8,825,000.00 1,171,804.30 3,695,000.00 (72,683.80) (4,104.89) $ 13,615,015.61 From such amount, $834.75 was deposited as the cash deposit in the Escrow Fund, $13,572,505.86 was used to acquire Government Obligations, and $41,675.000) was deposited into the Costs of Issuance Fund and was used to pay costs of issuance of the Refunding Bonds, as follows: Escrow Agent Fee .........................................$ Bond Counsel Fee ......................................... Verification Agent Fee ................................. Rating Agency Fee ....................................... Total: ........................................................$ 1,000.00 25,300.00 3,000.00 12,375.00 41,675.00 2. The Cash described in paragraph (1) of this Certificate will be deposited in the Refunding Account and the Government Obligations described in Exhibit D of the Escrow Agreement will be deposited in the Refunding Account as of their respective dates of purchase and to be held in trust for the security and benefit of the owners of the Refunded Bonds and will be applied, together with interest thereon, as provided in the Bond Resolution and the Escrow Deposit,Agreement to the payment of a portion of: a. Interest on the Refunded Bonds that will become due and payable on and prior to December 1, 2016 (to be paid as the same becomes due and payable); and (1) Amount remaining after all costs of issuance have been paid will be wired to the City. b. The redemption price of the Refunded Bonds (100% of the principal amount thereof) on December 1, 2016. 3. Attached to this certificate is evidence of the authority of the undersigned to execute this certificate and the Escrow Deposit Agreement on behalf of the Escrow Agent. Dated as of this 13th day of May, 2015. U.S.By B~S~OCIATION. A~thorized OliVer -2- E bank Corporate Trust 1420 Fifth Ave, 7th Floor PD-WA-T7CT Seattle, WA 98101 AUTHORIZED SIGNATURES Ihereby certify that the following is a true and exact extract from Article VI of the Bylaws presently in effect for U.S. Bank National Association, a national banking association organized and existing under the laws of the United States: Article VI CONVEYANCES, CONTRACTS, ETC. All transfers and conveyances of real estate, mortgages, and transfers, endorsements or assignments of stock, bonds, notes, debentures or other negotiable instruments, securities or personal property shall be signed by any elected or appointed officer. All checks, drafts, certificates of deposit and all funds of the Association held in its own or in a fiduciary capacity may be paid out by an order, draft or check bearing the manual or facsimile signature of any elected or appointed officer of the Association. All mortgage satisfactions, releases, all types of loan agreements, all routine transactional documents of the Association, and all other instruments not specifically provided for, whether to be executed in a fiduciary capacity or otherwise, may be signed on behalf of the Association by any elected or appointed officer thereof. The Secretary or any Assistant Secretary of the Association or other proper officer may execute and certify that required action or authority has been given or has taken place by resolution of the Board under this Bylaw without the necessity of further action by the Board. I further certify that the following officers of U.S. Bank National Association have been duly elected and qualified and now hold their respective offices, and that the signatures of such officers are authentic: Deborah Kuykendall Vice President Greg E. Skutnik Assistant Vice President Ryan P. Brennan Trust Officer Morrison Vice President Christine Ok Vice President Zrust Vice President IN WITNESS WHEREOF, I have hereunto set my hand this __~day of l~r’~,~Tt" U.S.~SOCIATION, ,2015. By: Senior Vice President usbank,com AMENDED ~D ..~.STATED BYLAWS ’:’" "’ ’~’ OF U.S. BANK NATIONAL ASSOCIATION" ;’~ " ARTICLE L MEETINGS OF SHAREHOLDERS S~ztion 3. ’ Quorum The Board of Directors may, and in the event of its failure ~o k~ d6, the Chairmah Ofthe Bq~..d.. ~.y...appg, .’.m...t.:~pc, ctg...,rs:gf ..E. ,1.?qtion w...h9 ..s..,h~...d.et .ermi~....e...~.. e. pr.gs..en..c..e.0f...qu.om~..., the ¯ valid..i,~.qfiS~bm’.~s,.~ ~e ~s.ul~ 6~’~ ddct.i..onsantt @1 o.the~ in.atte~s V.ot~it UlSon b~ ;’. . :~ . fi’"".’...2.: :.::°" ." ", ......"..: ¯.~... ".: "’.., .. : ~:, . ..’..’.;:,: "".. . .’....: :,,::.~..:~ SectionS. Voting .......’ "~" ’’" : ’ : In deciding on questions at meetings of shareholders, except in the ~l~tibn ofdireetd~S~’ each shareholder shall be entitled to one.vote for.each share of stock held.- A majori.ty of votes require& In all eleotions of airectors, each shareholder shall have the right td shares owned by him for as many persons as there are directors to be e.leo.t:e..d, or t.o ~umd. ~e, S.U..eh shares and gi;ce.one candidate as many votes as the number of direetois mtfliiplied by the i~t~aber ofhis shares equal, or,to .distribtrte .them on the.same principle among as. many .e .~didates as he shall-thhak.fitSeetion 6,. ’ .,Waiver and:iGorisent. ....... ;... .,.......~: The shareholders may act without notice or a meeting by a unanimous writte~i cOn~ Joy all shareholders .... . .- Page i of 9’ ARTICLE II. Section 1.Term of Office The directors of this Association shall hold office for one year and until their successors are duly elected and qualified. Section 2. Number ¯ As.provided in the Articles of Association, the Board of this Association shall consist of not less than five nor more than twenty-five members. At any meeting 6~the’shareholders held for the purpose of electing directors, or changing the number thereof, the number of directors may be. dctermin.ed by ’a majority ofthe votes cast by the shai’ehold~rs in person or by proxy. . Any vacancy occurring in the Board shMl be filled by the remaining directors. Between ¯ meetings ofthe shareholders held for the purpose of electing directors, the Bo.ard by a majority ¯ .. w~te of the full Board may increase the size of the Board by not more than four directors in any one but,not to more than a total of twenty-five directors, and fill any vacancy so created in the Board. All direA:fors shall hold oflide until their suc~ssors are el~d and.qu.ali~ed. Section 3. Regular Meetings . The o.rgani.’zatiqnal .m.e~ng of the Board of Directors shall be held as soon as practicable Presider may d.esi ..g~: 0~e} re.gtflai meeting# of the Board 6f~nli~eei6m)~! b6 held qiiaiteilya! sdch ti~iie andpliice ~hmay b~ designated ini/ie n6tide’bfthe ifie~tllig~ Wl~er~ any regularmeeting of the Board falls on a holiday, the meeting shall tie °held 6nthdneXfbmi!dn~: business day, unless the Board shall designate some other day. Section .4. Special Meetings ..’- of the Assodiiti6n; oe ~the i~qi~e~ 0f three 6i? ni&e.Dire~i0r~. N0ti~e df til.d, t~b;l~lhce a~d":: purposes, of.such meetings shall be electronic mail or other reasonable manner to every Director. ~. :- ~.....- Section 5. Ouorum .’..." ...; ~’..’-:..:.":.:,. ".~..:, ":-;~- i :’,.:. :f..,.:.." :;: ::: Aiii~0iity of those Dird~tor~ pr~sent.and-,oting af anymee~iri~ 6fffie B0iird :of Dir~dfbr~ shall decide each matter considered, except where othemfse requited by Bylaws of this Association. Page 2 o~ 9 Directors, exehding full-time employees of the Bank,’shall reCeivesuch ~easonableeoml~..nsat..ign" ~.may b.e .fix.e.d...fi?qm time.to time. by the Board of Directors. ARTICLE IIl. o c as Section 1. Who Shall Constitute Officer, a President, a Secretary, arid other officbrs shch a~Vite Chairmdu ofth~ Bo~xl, . : . Executive Vice Presidents, Senior Vice P~esidents, Vice Presidents, Assistant VicePreSidents, Assistant Secretaries, Trust Officers, Assistant Trust Officers, Controller, and Assistan~ Controller, as the Board may appoint from:time to.time. The Board may choose to delegate authority to elect., officers other than the Ch .’.~. au,..ChiefE~eeutive Officer, President, Secretary, Vice Chairman=mad Executive Vice P~sidentb, t~ ffi~’.ChiefExeeufive Officer or President. Any person.may.hold two offices. The Chief Executive Officer and the Pres.ident shall at all times be. members of the Board of Directors. All officers shal! be elected for and shall ho!d office un~ their re.speotive successors are elected and qualified or matil their earlier death, resignation, refi~tm~n~,d~sq~fication or " remov.~ from office, subject to the fight of the Board of Directors in its sole discretion to Section 3.Chairman of the Board ~:.C~a.’..~. an ~the.....Board S .hal=l have g.eneral.exe.cutive po.w..ers and duties a~.d shall¯perform, s.u.e..h.o .~. er du..tie.s ~....may b..e ass.igned .from ".thn..e ~t0 time by..the Board of Dk.e. c~ors.. He.shall., when Eresen.~ preside at all ineefings 9fthe shar.e/~0.11.d~e~...~.~.d:~re.cto.rs and. shal! b...e.ex.: .:. officio a m ..embe.r.:ofall c.ommhtees:ofthe Bbard. Section Chief Executive Office~"= :"" ’ :’ .....’ .Th~ ChiefExeeutive Officer, Who may also. be thd chairman or the President, sh.allha~~. general executive powers and duties and shall perform such other duties as may be assigned frtm time to time by the Board of Directors... Section 5. president .. The President shall have general executive powers and duties and shall perform such other duties as may be assigned fromtime to time by the board of Directors. In addition, ~ designated by the Board of Directors, the President shall be the Chief Executive Officer and shall have all the powers and duties of the Chief Executive Officer, inehding the same power to name temporarily a Chief Executive Officer to serve in the absence of the President if there is a vacancy in the position of the chairman or in the event of the absence or incapacity of the Chairman. Page 3 of 9 Section 6. Vice Chairmen of the Board The Board of Directors ~hall have the p~w~:t0 e!~e~ ofleor more Vide Chairmen bfthe Board of Directors. Any such Vice Chairman of the Board shall participate in the formation of the policies of the Association and shall have such. 0~er duties as may be assigned to him from time to time by the Chairman of the Board o.r.by ff~e Board of Directors. Section 7. Other Officers The Secretary and all other Officers appointed by the Board of Directo.rs shall have such duties as defined by law and as may from time to tini4 be a~si~aed to theni by the CMef Exeeufi~ce Officer or abe Bo.ard of Directors. ARTICLE IV. COMMITTEES Section 1. Compensation Commiltee The duties ofihe Compensation Committee of the Association shall be carried out by the . Compensation Committee of the financial holding company that is the parentofthis Association. Section 2. ,Committee on Audit The duties of the Audi~t Commi~ee of the Association shall be carried o~ by the Audit Committee of the financial holding company that is the parent of this Association. Section 3. Trust Risk Management Committee The Board of Directors 0fthis Association shall appoint a Trust Risk Management Committee to provide oversight ofthefi .d.uci .a2y aetivitiea Of the Association. The Trust Risk ...-Management Committee shall detei’mine policies go~ce.rni~g fiduciary ~ctivifie~: The Trust Risk --Management Committee or such sub-committees, offiee~s or oth~rs~ may be duly:designated by the Trust Risk Management Committee shall oversee the pro.eesses related tO. fiduciary activities to assure conformity with. fiduciary policies it establishes:,’ifieluding r~tif36ng the ae.eeptane..e and the.dos’.m, g out or.~.I.inquis ..h~ncnt.of.all .~..s.ts...Ail.aeti,0ns 0f:the Trus.t Risk Cbfi~mit~e sh~i~b.~ reported tb the i~oard 0fDireeto~. " ’ ’ ’ " . ......." ’ " "’. ": :’"’..’~""": .~.’.;..~ ...."".’..’::.~.:’~.. ~"..:2"::’.~.. .......-:. .Section4.Other Committees " : " ::: : : ::" ’ ’"" ’ ":"~ :" :~"’ The Board of Directors may appoint, from time to l~ne, other eomi~ttees for such purposes and with such powers, as the Board may direct. ¯:.,-’:.:.... .. ::. . .. :.. -. :.. ....... ¯ ........:. ~’: .... . . : ,. ....’.. :,. ,,...-:- -.. Page. 4 0f 9 ¯ ARTICLE V. MINUTE BOOK ¯ : Th~ o~ganization papers of this A~so~iation, the Bylaws as revised or amended fi~om time to tim~ and .th~ proceedings of.all-regular mad Special meetings of the ~l~eholders andthe directors ~hall berecorded inaminute bo6k 6r books. All reports of committees’required to’ be ¯ made to the Board shall be re~6rded in a minute book or shall be fil&l by ther~iording 6fficer. The minutes ’6.f each m.~.eting of the shareholders and the Board shall be signM by the.r~ording.. ARTICLE VL CONVEYANCES, CONTRACTS, ETC. :.All t~ansfers and bbn+ceyances: bfreal ¯estate, mortgages, and tmmfers,ei3dorseinerits or assigning." t~ of fit0~lg’b0hdS, notd~,del~efi.iure~ Or bther negbtiable imtrdinents, se~uriti~ or pers0tml:property shall be signed.by ~my ele~d or appointed officer. ’ ~ ’. -’ :’~ ~ ’ ":".: .."All checks, drafts, certhq, cares of deposit and all fimds of the Association held in its own orin a fiduciar~ capacity may be l~aid out by an brder, draft or check bearing the manuM or .: facsimile signatureof.any elected or.~ippoiuted officer of the Association. .......... ¯ All-mortgag~ satisfactions, .releases, all types of loan a~eements, all routine transactional documents of the Association; :and all other insmm~ents not.specifically provided for, whether to be executed,in .afiduciary c~acity or otherwise, may be signed on behalf:of the Association by any elected or appointed officer thereof. : ¯ - .. - ¯ .:.: - " The Secretary or any Assistant Secretary of the Association or other proper officer may execute and certify that required action or authority has been given or has taken place by resolution of the Board under this Bylaw without the necessity of further action by the Board. The Association shall have no corporate seal. ARTICLE VIIL :._ INDEMNIFICATION OF DIRECTORS, . OFFICERS, AND EMPLOYEES The Association shall.indemnify to the full extent permitted by and in the maimer. permissible .under the Delaware General Cqrporation Law, as amended from time to time (but, in the ease of auy-such amendment, only to the extent that such amendment permits the Association to provide broader indemnification rights than said law permitted the Association to provide. Page 5 of 9 prior to such amendment), any person made, or threatened to be made, a party to any action, suit, or proceeding, whether criminal, civil, administrative, or, investigative, by reason of the fact that such person (i) is or was a director, advisory director, or officer of the Association or any predecessor of the Association, or (ii) is or was a director, advi.sory director or officer of the Association or any predecessor of the Association and served any o~h~rc0rpomtioh:.part~ers .hip, joint v.enture, trust, employee benefit plan or other enterpris~ as a d~ec~or, advisory ...director, officer, par~n, er, trustee, employee or agent at the request of.the Association or any predece~or of the Association; provided, however, that the Association shallindemnify any such pe, r~on seeking.indemnification in connection with a proceeding (or part thereof) initiated by such person, except for a proceeding contemplated by Sectio~ 4 of this Article VIII, only if such proceeding (or part thereo0 was authorized by the Board of Directors. Section 2. Advancement of Expenses. :~ The fight to indemnification conferred in this Article VIII shall be a conWact fight and shall -include the-right to be paid by the Association the expenses, incurred in defending any such ~.proceeding .or .threatened proceeding in advance of its final disposition, such advances tO be paid by the Association within 20 days a~r the receipt by the Association of a statement or ¯ statements from the claimant requesting such advance or advances from time to. time; provided, howe~ger, that if the General Corporation Law of the State of Delaware requires, the payment of .. such expenses incurred by a director, advisory director or officer inMs or her capacity as a director, advisory director or officer (and not in any other capacity in which service was or is rendered by such person while a director, advisory director or officer, including, without limitation, service to an employee benefit plan) in advance of the final disposition of a proceeding, shall be made only upon delivery to the Association of an undertaking by or on behalf of such director, advisory director or officer, to repay all amounts so advanced if.it shall ultimately be determined that such director, advisory director or officer is not entitled to be indemnified under this Article VIII or otherwise ......... -.-" Section 3... Procedure for Indemnification: .... . .... To obtain indemnification under this Article VIII, a claimant shall submit to the Association a written request, including thereinor therewith such documentation and information as is reasonably available to the claimant and is reasonably necessary to determine whether and to what extent the claimant is entitled to indemnification. Upon written request by a claimant for indemnification pttrsuant to the first sentence of.this Section 3,a determination, ffr~qui~d by . applicable law, with respect to the claimant’s entitlement thereto shall be made as follows: (1) if requested by the claimant, by Independent Counsel (as hereinafter defined), or (2) if no request is made by.the, cIaimant for a determination l~y .Independent Counse!, (i) by a majority vote of the Disinterested Directors (as hereinafter defined); even though less than a quorum, or by a majority vote of a committe~.0f Disinterested Directors designated~by a majority vote of Disinterested Directors, even though less than a quorum,0r (ii) if there are no Disinterested Directors or if the Disinterested Directors so direct, by Independent Counsel in a written opinion, to.the Board of. ,. Directors, a copy of which shall be delivered to the clalxnant. In the event the determination of entitlement to indemnification.is to be made by Independent Counsel at the request of the claimant, the Independent CounseI shall be selected by the Board of Directors..If iris so :o determined that the claimant is entitled to indemnification, payment to the claimant shall be:. made Within l0 days a~er such determination .... - ..... " :... ......: ¯. ~.... Page 6 o~ 9 Section 4. Certain Remedies. if a claim under Section 1 of this Article VIII is not paid in full by the Association within thirty days after a written claim pursuant to Section 3 of this Article VIII has been received by the’Assbeiati0n, or if a claim tnider Section 2 of this Article VIII is not pMd in full by the Association within twenty .days after a written o!aim.pursuant to Section 2 of this Artiole VIII has been received by the ASsociation, the claimant may at any time thereafter bring suit against the i~s~o~’.uition to r~eover the unpaid, amount of the claim and, if successful in whole orin part, the el~t shallbe entitled to be paid also the expense of prosecuting such claim. It shall be a defer~.e.;to. ~y such action (other than’art action brought to enfore.e a claim for expenses inenrred in d~£erid~g any proceeding in advance of its final disposition where the required undertaking; if any is:rSq.uired, ha~ been tendered to the Association) that the claimant has not met the standard of eoMtte.t.Whieh makes it permissible under the General Corporation Law of the State of " . - Delaw~e for the Ass0eiation to indemnify the olain4_ant for the amount claimed, but the burden’ of proving such defense shall be on the Association. Neither the failure of the Assooiation (inel!~xling its Board of Directors or Independent Counsel) to have made a determination prior to" the,commencement of such action that indemnification.of the claimant is proper in the eireumstarr~s because he or she has met the applicable standard of conduct set forth in the Gen6ral Corporation Law of the State of Delaware, nor an aetuai determination by the ~issoeiation (including its Board of Directors or Independent Counsel) that the claimant has n6t me.t.sudio ap.’plicable standard of ~onduet, shall be a defense to the action or create a presumption tl~t the claimant ~ not met the applicable standard of eonduet. Section 5. Binding Effect. !f a.determination shall have been made pursuant to Section 3 of this Article VIII that the elalrri~t is entitled to irtdemnifieation, the Assoeiation.shatl be bound by such determination inany judi~i,31" proceeding commenced pursuant to Section 4 of this Article VIII. Section 6.Validity of this Article VIII. The Association shall be precluded from asserting in any judioial proceeding commenced pursuant to Seetlon 4 of this Article VIII that the procedures and presumptions of this Article VIIi are not valid, binding and enforceable and shall stipulate in such proceeding that the Ass64iation is bound by all the provisions of this Article VIII. Section 7. Nonexclusivi _ty, etc. ¯ The right to indemnification and the payment of expenses incurred in defendiag a proceeding or threatened proceeding in advance of its final disposition conferred in this Article VIII shall not be exclusive of any other fight which any person may have or hereafter acquire uniter any ~tatute, provision of the Articles of Association, Bylaws, agreement, vote of shareholders or Disinterested Directors or otherwise. No repeal or modification of this Article VIII, or adoption of any provision inconsistent herewithshall in any way diminish or adversely affect the rights of any present or former director, advisory director, officer, employee or agent of the Assoei.ation or any predecessor thereof hereunder in respect of any occurrence or matter Page 7 of 9 ,(" arising, or of any claim involving allegations of acts or omissions occurring or arising, prior to any such repeal or modification. Section 8. Insurance. The Association may m..~intain.i .nsurance, at’its expense,, t.o prote~ itself and any direbt0r, officer, employee or agent of.the Assoeiation or another eorpora.tion, partnership, joint venture., trust or other .enterprise against mY expe.nse,..lia...bility.0r loss, whether or not the Association .:.. wotfld, have .the power to inde .nmify such. personagainst such exp.ense, liability or loss under .the General Corporation Law of the State of Delaware..To the .extent that the Association maintains .arty policy or polidies providing such ’ -rosin’moo, each.such director o.r offieer,.and eae .h .~U~h. : agent or employee to whomfights to inde..nmifieation have been ganted as provided in Sectiol~ 91 of this Arti’ele VIII, shall be covered by such policy or policies in aeeordane, e with i~s or their ~ temas to themaximum extent of the coverage thereunder for any such director, officer, employee or agent. . Section 9.Indemnification of Other Persons. .2.The Association may grant fights tO. indenmi~eation, and rights to be paid by the Association the e:~penses incurred in defending any proceeding in advance of its final ..disposition, to any.present or former employee or agent of the Association or any predecessor Of the Association to the fullest extent of the p.rovisions of this A~. "cle VIII.with respect to the indemnification and advancement of expenses of .directors, advisory directors and.offiCers of .the Association. Section 10. Severabili _ty. If any provision or provisions of.~s Articl.e VIII shall be held to be invalid, .ill.~gal or. unenforceable for any reason whatsoever: (1) the validity, leg.ali.ty and enforc .eability of the.:. " remaining provisions of this Article VIII (including, without limitation, each portion of any paragraph of this Article VIII containing any such provision held to be invalid,, illegal or .. ... tmenforeeable, that is not itself held to be invalid, illegal or tm~nfore~abie) shall not in any way be ~ffeeted. or impaired thereby; and (2) to the tidiest extent possible, the p.rgvisions of this Article VI~ (including, without l.ii~ta.ti".o.n, ~aeh s.uch po~o~ 0~.any i~ara~ph:0f~.~. i ...... :... .Arf!.’cle VIII qontairting, any s.uch provision held .tq,be in .vali.~l,: il.l.egal or ,u0.e.nforeea.b!e) shall construed seas to give effect to the intent manifested by the pro~.ision held iny.~id, i..lleg~..o.r.’....i: . unenforeeable. Section 1 1.Certain Definitions. ~ ~ ¯ " :" . .:. ,:..-~’.:[ ..:’....’.: ." .:...~ . : .. .,..’ :.. .... ,., - : :.(1) D~sinterested~.Direetor" means a d~ect~ of ~ Associa~o’n wfi0 iswas not a party to .the matter.in re.spect" of which ".mdemnifiea.tion is sought by.t.h.e.. ’ laimant. .., . ~ :.... .... ... ,.....: ...... .... : . .~...-....~. :. :, :. ::... ’: i-(~) "Ind~e~r~~umgi~; ~a:eaiida Ik(v ~~t memb6r ~ai"a"ff ~~, Oi:~: ’::: independent p~aetit~onerth~tt is ~xi~e~ieri~d in m~itterhof eo~0rationlawa~d sl~a~l Page 8 of 9 include any such person who, under the applicable standards of professional conduct then prevailing, would not have a conflict of interest in representing either the Association or .the claimaut in an action to determine the claimant’s rights under this Article VIII. Section 12. Notices. Any notice, request or other communication required or permitted to be given to the .Association under this Article VIII shall be in writing and either delivered in person or sent by tetecopy,-~elex, telegram, ovemightmail or courier service, or certified or registered mail, postage prepaid, return receipt requested,, to the Secret~ry of the Association and shall be effective only upon receiptby the Secretary. Section 13. Pa_~aaents Notwithstanding any other provision of this Article VIII, however, (a) any indemnification payments to an institution-aff’fliated party, as defined at 12 USC 1813(u), for an administrative proceeding or civil action initiated by a federal banking agency, shall be -reasonable and consistent with the requirements of 1.2 USC 1828(k) and the associated regulations; and (b) any indemnification payments and advancement of costs and expenses to an .~on-affiliated party, as defined at 12 USC 1813(u), in eases involving an administrative .proceeding or.civil action not initiated by a federal banking agency, shall be consistent with safe and sound banking practices. ARTICLE IX. AMENDMENTS These Bylaws, or any of them, may be added to, altered, amended or repealed by the Board at any regular or special meeting of the Board. ARTICLE X. GOVERNING LAW This Association desigrmtes the Delaware General Corporation Law, as amended from time to time~ as the governing law for its corporate governance procedures, to the extent not inconsistent.with Federal banking statutes and regulations. March 4, 2009 Page 9 of 9 City of Renton, Washington -REQUEST FOR BIDS- CITY OF RENTON, WASHINGTON Security Portfolio Causey Demgen & Moore P.C., on behalf of the City of Renton, Washington (the "Issuer"), is soliciting bids to provide Eligible Securities (defined below) to fund the escrow requirements set forth in Exhibit A hereto (the "Defeasance Escrow"). The Defeasance Escrow will be established by the Issuer in connection with the issuance of its Limited Tax General Obligation Refunding Bonds, 2015A and Limited Tax General Obligation Refunding Bonds, Series 2015B (Taxable) (collectively, the "Bonds"). Bid Date:April 16, 2015 Bid Time:12:40 p.m. Eastern Time Bid Award:12:50 p.m. Eastern Time Settlement Date:May 13, 2015 (on the Settlement Date~ the Winning Bidder (as defined herein) shall be required to guarantee delivery of the Eligible Securities (as defined herein) by 11:00 a.m. Eastern Time) Bid Submittal:Bids are to be emailed to Causey Demgen & Moore P.C., Bidding Agent, at investmentbids@cause¥cpas.com by 12:40 p.m. EDT on April 16, 2015 and followed up by a fax of the bid form provided as Exhibit B attached hereto, to (303) 468-8233. A fax copy of the bid form must be received promptly following the email bid by the bidder. Bids will be considered firm for 10 minutes after the Bid Time. Conditional bids will not be accepted. Eligible Securities:Eligible Securities shall consist of non-callable United States Treasury securities. Substitution of Eligible Securities Prior to Settlement:If the Winning Bidder (defined below) cannot deliver the Eligible Securities on the Settlement Date as outlined in its proffered portfolios, the Winning Bidder will have the right to deliver other Eligible Securities for the Defeasance Escrow. Any such substitution must be determined and the details of which must be provided to the Bidding Agent at least 5 business days prior to the Settlement Date. The cost of the new portfolio must not exceed the cost of the original portfolio and the other Eligible Securities shall provide sufficient cash-flow to meet the cash-flow requirements set forth in Exhibit A herein. Additional professional fees incurred by the Issuer due to any such substitution will be at the expense of the Winning Bidder. Structure:The Issuer is seeking to purchase Eligible Securities for the Defeasance Escrow to provide sufficient cash-flow to defease certain debt service of the Issuer’s Limited Tax General Obligation Bonds, 2006. The Defeasance Escrow must be funded with Eligible Securities, plus an initial cash deposit, if any, made by the Issuer. The Issuer’s required initial cash deposit, if any, and the bidding agent fee must be included in each bidder’s Cost of CAUSEY DEMGEN & MOORE P.C.PAGE City of Renton, Washington Basis of Award: Ties: Identifying Escrow: Escrow Agent: Bidding Agent: Verification Agent: Underwriter: Bond Counsel: Confirm Information Funding (as defined herein) in order to allow direct comparisons between bids. Each bidder will specify a dollar amount required for the Defeasance Escrow, which will be produced by adding the following: (1) the one-time sale by such bidder to the Issuer of Eligible Securities, (2) any initial cash deposit made by the Issuer and (3) the bidding agent fee (herein collectively referred to as the "Cost of Funding"). The Escrow Agent will deliver cash, equal to the purchase price of the Eligible Securities, to the Winning Bidder upon receipt of the Eligible Securities (on a delivery versus payment basis), that together with any initial cash deposit made by the Issuer, will be sufficient to fund the Defeasance Escrow. The final maturity of the Eligible Securities must occur on or before the final payment date of the cash flow requirements set forth in Exhibit A. The award shall be made to the bidder who provides the lowest overall Cost of Funding for funding the Defeasance Escrow (the "Winning Bidder"). Each bidder’s Cost of Funding must include the cost of the Eligible Securities, the bidding agent fee and the Issuer’s initial cash deposit, if any, required to fund the Defeasance Escrow. The Issuer reserves the right to reject any and all bids in its sole discretion if it determines it is in its best interest to do so. In the event of a tie in bids, the Winning Bidder will be determined by the time the bids were submitted, with award being made to the bidder who submitted its bid first. Within one hour of award, the Winning Bidder must detail the specific Eligible Securities to be delivered to the Escrow Agent on the Settlement Date. Portfolio details must be provided to Causey Demgen & Moore, P.C. Failure to provide portfolio details within the allotted time period may result in the rescission of the Bid Award to the non-complying bidder. U.S. Bank National Association Causey Demgen & Moore P.C. Grant Thornton LLP Piper Jaffray & Co. Pacifica Law Group LLP Tax ID#: Issuer Legal Name: Issuer Contact: Issuer Address: Escrow Contact 91-6001271 City of Renton, Washington Iwen Wang, Finance and Information Services Administrator 1055 South Grady Way, Renton, Washington 98058 Carolyn Morrison (206) 344-4678 CAUSEY DEMGEN & MOORE P.C.PAGE 2 City of Renton, Washington DVP Instructions:Tobe provided Enclosures:Exhibit A - Cashflow Requirement Exhibit B - Bid Form Exhibit C - Certificate of the Winning Bidder Comments:If for any reason issuance of the Bonds is not completed or the purchase of the Eligible Securities does not take place or is delayed, the Winning Bidder will have no recourse against the Issuer, Underwriter, Bidding Agent, Escrow Agent, Verification Agent or Bond Counsel for any expenses incurred or damages sustained. Award will be subject to escrow verification. Any questions regarding this bid may be directed to Bill Glasso at (303) 672-9886. Other Requirements and Provisions: o o o The Winning Bidder must sign and deliver the certification regarding administrative costs, yield and other matters, so as to satisfy the "safe harbor" regulations promulgated by the Treasury Department in Treas. Reg. § 1.148-5(d)(6)(iii). This certificate is set forth as Exhibit C hereto and must be delivered on or prior to the Settlement. Date and dated the Settlement Date. All bidders are hereby notified that submission of a bid is a representation that (A) the potential bidder did not consult with any other potential bidder about its bid, (B) the bid was determined without regard to any other formal or informal agreement that the potential bidder has with the Issuer or any other person (whether or not in connection with the bond issue), and (C) the bid is not being submitted solely as a courtesy to the Issuer or any other person for the purpose of satisfying the requirement that (a) at least three bids be obtained from disinterested bidders solicited under a bona fide solicitation, and (b) at least one of the three bids is from a reasonably competitive bidder. All payments are to be made in same day funds and will be conducted on a delivery versus payment basis. No fees will be paid and no expenses reimbursed by the Issuer. No exceptions to the terms herein will be permitted. As Bidding Agent in this transaction, Causey Demgen & Moore P.C. will receive a fee payable by the Winning Bidder in the amount of $4~000.00. All potential bidders will have an equal opportunity to bid. No potential bidder will have the opportunity to review other bids ("last-look") before submitting a bid. The Winning Bidder will guarantee delivery of Eligible Securities and in the event of a failure to deliver the Eligible Securities, shall be required to deliver, at the option of the Issuer, (at a cost not to exceed the original portfolio) cash and/or other Eligible Securities necessary to provide sufficient cash-flow to meet the cash-flow requirements as set forth in Exhibit A herein and shall pay any and all additional professional fees and other costs incurred by the Issuer or the Borrower due to any such substitution. In the event that the Winning Bidder is required to deliver cash, the Winning Bidder will retain the right, for a period of thirty (30) calendar days beginning on the Settlement Date, to deliver the failed securities on a daily basis (business days only) in full or in part to the Escrow Agent at the original applicable price offered using the original settlement date and will be credited back in whole or on a pro-rated basis, as applicable, the cash deposit for any or all portions of the failed securities. In the event that the Winning Bidder delivers the failed securities in part, such delivery must occur on the last business day during the thirty (30) day period in which the Winning Bidder retains the right to deliver the failed securities. CAUSEY DEMGEN & MOORE P.C.PAGE 3 City of Renton, Washington EXHIBIT A CITY OF RENTON, WASHINGTON CASHFLOW REQUIREMENTS Payment Date Total 01-Jun-15 $313,918.75 01-Dec- 15 313,918.75 01-Jun-16 313,918.75 01-Dec-16 12,713,918.75 $13,655,675.00 Key Dates: 1.April 16,2015 2.May 13, 2015 3.December 1,2016 Bid Date Closing/Settlement Date Cashflow Requirement Maturity CAUSEY DEMGEN & MOORE P.C.PAGE 4 City of Renton, Washington EXHIBIT B CITY OF RENTON, WASHINGTON Security Portfolio BID FORM April 16, 2015 Fax: 003) 468-8233 For the Defeasance Escrow evidenced as Exhibit A in the Request for Bids, which is hereby made a part of this bid, we hereby offer to provide Eligible Securities sufficient to fund the Defeasance Escrow, meeting the requirements on the respective dates as reflected in Exhibit A. The bidder acknowledges that if it is the Winning Bidder it must sign and deliver the certificate in the form attached to the Request for Bids as Exhibit C on or prior to the Settlement Date and dated the Settlement Date. The bidder hereby represents that it did not consult with any other potential bidder about its bid, that the bid was determined without regard to any other formal or informal agreement that the potential bidder has with the Issuer or any other person and that the bid is not being submitted solely as a courtesy to the Issuer or any other person for purposes of satisfying the requirements that (a) at least three bids be obtained from disinterested bidders solicited under a bona fide solicitation, and (b) at least one of the three bids is from a reasonably competitive bidder. Terms used but not defined herein shall have the meaning provided in the Request for Bid to which this Bid Form is attached as Exhibit B. By submitting this bid, we certify that the security or securities provided will be Eligible Securities that--subject to verification--will be sufficient in amount to meet the Cash Flow Requirement as indicated in Exhibit A. Name of Bidder: Contact: Phone: Signature: Cost of Funding:* Bids will be accepted by email at investmentbids@causeycpas.com by 12:40 p.m. Eastern Time and must be followed promptly by a faxed bid form. Please fax bid responses to Bill Glasso at Causey Demgen & Moore P.C. at (303) 468-8233. *Cost of Funding must include the cost of the Eligible Securities as well as any initial cash deposit to be made by the Issuer and the bidding agent fee. CAUSEY DEMGEN & MOORE P.C.PAGE 5 City of Renton, Washington EXHIBIT C CITY OF RENTON, WASHINGTON CERTIFICATE OF THE WINNING BIDDER The undersigned hereby states and certifies to the City of Renton, Washington (the "Issuer") as follows: o o o The undersigned is a of (the "Winning Bidder"), and is authorized to execute and deliver this certificate on behalf of the Winning Bidder and is knowledgeable with respect to the matters set forth herein. Reference is made to the Solicitation (defined in Section 4 below) for definitions of capitalized terms used and not otherwise defined herein. The Winning Bidder is a reasonably competitive bidder of securities of the type comprising the Eligible Securities, and the Winning Bidder has no material financial interest (within the meaning of Treasury Regulations Section 1.148-5(d)(6)(iii)(B)(1)) in the Limited Tax General Obligation Refunding Bonds, 2015A and Limited Tax General Obligation Refunding Bonds, 2015B (Taxable) (collectively, the "Bonds") other than as a bidder to provide Eligible Securities to satisfy the cash flow requirements set forth as Exhibit A to the Solicitation. The Winning Bidder is, on the date hereof, delivering securities to U.S. Bank National Association (the "Escrow Agent") as escrow agent to the Issuer against payment for such securities. The Winning Bidder received a request for bids (the "Solicitation") with respect to the cash flow requirements and submitted its bid to provide Eligible Securities for the cash flow requirements in compliance with the terms of such solicitation. The Winning Bidder represents that the bid was: (1) determined without consultation with any other bidder, (2) determined without regard to any other formal or informal agreement with the Issuer or any other person (whether or not in connection with the issuance of the Bonds described herein), and (3) not submitted solely as a courtesy to the Issuer or any other person for purposes of satisfying the requirement that (a) at least three bids be obtained from disinterested bidders solicited under a bona fide solicitation and (b) at least one of the three bids is from a reasonably competitive bidder. The Winning Bidder had no opportunity to review other bids submitted by other potential bidders before providing its bid. The Solicitation included all material terms of the bid, and the terms of the Solicitation are commercially reasonable. Other than a bidding agent fee of $4~000.00 paid to Causey Demgen & Moore P.C., the Winning Bidder is not paying, and does not expect to pay, any administrative costs to third parties, including any brokerage or selling commissions, legal and accounting fees, investment advisory fees, recordkeeping, safekeeping, custody and similar costs or expenses, in connection with supplying the Eligible Securities. Dated: May 13, 2015 By: Name: Title: CAUSEY DEMGEN & MOORE P.C.PAGE 6 Payment Date 1-Jun- 15 1-Dec-15 1-Jun- 16 1-Dec-16 Total $313,918.75 313,918.75 313,918.75 12,713,918.75 $13,655,675.00 WINNING PORTFOLIO Delivery Date Issuer maturfty DATE osf13r2015 05/31/2015 11f30f2015 o6/01t2016 Renton WA 83375 280,000 O0 279,00000 279,00000 12,582,000 DO Requir~merds Securities Cost Cash Total C~st $13,655,675.00 $13,572,505.86 912796EC9 O (Y~% 0250% 1 750% 0500% 280,000 279,000 Accrued Int TRADE TICKETS Hisam K Derani From: Sent: To: Subject: Brian.Warden@wellsfargo.com Thursday, April 16, 2015 3:04 PM Brian.Warden@wellsfargo.com Trade Confirmation *TRADE TICKET *As Of: 04/16/15 ISIN: US912828QP82 TICKET NUMBER: 35759365 ENTRY DATE TIME: 04/16/15 10:05 MATURITY DATE : 05/31/16 SALES PERSON: DOUG SAFFORD (DATED: 05/31/I1) CUSTOMER ACCOUNT: POQ PENDING WFS Broadridge #: xxxx0014 SELLS: 279 (M) of UST 1.75 5/31/16 CUSIP: 912828QP8 PRICE: 101.51522000, YIELD: .30273420, SPREAD: .0000 SETTLEMENT on 05/13/15 NOTES: Renton **PRINCIPAL: ** ACCRUED (days): ** ADDITIONAL FEE: ** TOTAL: ISSUER: US TREASUR {912828QP8 Govt DES} $283,227.46 2,199.8i $.oo $285,427.27 FINRA Rule 4515.01 requires that all accepted orders with the intent to allocate complete that allocation by 12 p.m. EST on the next business day following the trading session. In order to comply with this new rule, we ask for your help to provide your allocations to us with enough time to execute before the noon deadline. Wells Fargo Securities is the trade name for the capital markets and investment banking services of Wells Fargo & Company and its subsidiaries, including Wells Fargo Securities, LLC, member FINRA and SIPC. If this communication relates to an offering of US registered securities (i) a registration statement has been filed with the SEC, (ii) before investing you should read the prospectus and other documents the issuer has filed with the SEC, and (iii) you may obtain these documents from your sales representative, by calling 1-800-326-5897 or visiting ¯ If this communication relates to a securities offering exempt from US registration, you should contact your sales representative for the complete disclosure package. In Japan, see: htt~s:!/www.wellsfarqo.com/com/disclaimer/wfsjbl. "~hs emaii is subject Io a disciaimer, please clck on li~e following ii~k or cut £and p~:~ste the !ink ir~to the address bar oJ your browser ht~ps ilwww, wellsfargo~comlcom/disclaimer!cied5 Hisam K Derani From: Sent: To: Subject: Brian.Warden@wellsfargo.com Thursday, April 16, 2015 3:04 PM Brian,Warden@wellsfargo,com Trade Confirmation I[ *TRADE TICKET *As Of: 04/16/15 ISIN: US912828A263 TICKET NUMBER: 35759364 ENTRY DATE TIME: 04/16/15 10:05 MATURITY DATE : 11/30/15 SALES PERSON: DOUG SAFFORD (DATED: 12/02/13) CUSTOMER ACCOUNT: POQ PENDING WFS Broadridge #: xxxx0014 SELLS: 279 (M) of UST 0.25 11/30/2015 CUSIP: 912828A26 PRICE: 100.07489000, YIELD: .11361320, SPREAD: .0000 SETTLEMENT on 05/13/15 NOTES:Renton **PRINCIPAL: **ACCRUED ( days): **ADDITIONAL FEE: **TOTAL: ISSUER: UNITED STA $ {912828A26 Govt DES} 279,208.94 314,26 .00 279,523.20 FINRA Rule 4515.01 requires that all accepted orders with the intent to allocate complete that allocation by 12 p.m. EST on the next business day following the trading session. In order to comply with this new rule, we ask for your help to provide your allocations to us with enough time to execute before the noon deadline. Wells Fargo Securities is the trade name for the capital markets and investment banking services of Wells Fargo & Company and its subsidiaries, including Wells Fargo Securities, LLC, member FINRA and SIPC. If this communication relates to an offering of US registered securities (i) a registration statement has been filed with the SEC, (ii) before investing you should read the prospectus and other documents the issuer has filed with the SEC, and (iii) you may obtain these documents from your sales representative, by calling 1-800-326-5897 or visiting www.sec.~. If this communication relates to a securities offering exempt from US registration, you should contact your sales representative for the complete disclosure package. In Japan, see: ~s://www.wellsfar~.com/com/disclaimer/wfs~. 7his email is subject 1:o a disclaime~, please click on ti~e follo,,,ving link or cu( and pas~e U~e !ink into the address bar ol your browser, httpsJtwww, wellsfar~o :comlcomldts~aimer,~ed5 Hisam K Derani From: Sent: To: Subject: Brian.Warden@wellsfargo.com Thursday, April 16, 2015 3:04 PM Brian.Warden@wellsfargo.com Trade Confirmation *TRADE TICKET *AS Of: 04/16/15 ISIN: usg12828G468 TICKET NUMBER: 35759367 ENTRY DATE TIME: 04/16/15 10:05 MATURITY DATE : 11/30/16 SALES PERSON: DOUG SAFFORD (DATED: 12/01/14) CUSTOMER ACCOUNT: POQ PENDING WFS Broadridge #: xxxx0014 SELLS: 12682 (M) of UST 0.5 11/30/2016 CUSIP: 912828G46 PRICE: 100.13373670, YIELD: .41330690, SPREAD: .0000 SETTLEMENT on 05/13/15 NOTES: Renton **PRINCIPAL: **ACCRUED ( days): **ADDITIONAL FEE: **TOTAL: ISSUER: UNITED STA {912828G46 Govt DES} $12,698,960.49 28,569.34 $.oo $12,727,529.83 FINP3% Rule 4515.01 requires that all accepted orders with the intent to allocate complete that allocation by 12 p.m. EST on the next business day following the trading session. In order to comply with this new rule, we ask for your help to provide your allocations to us with enough time to execute before the noon deadline. Wells Fargo Securities is the trade name for the capital markets and investment banking services of Wells Fargo & Company and its subsidiaries, including Wells Fargo Securities, LLC, member FINRA and SIPC. If this communication relates to an offering of US registered securities (i) a registration statement has been filed with the SEC, (ii) before investing you should read the prospectus and other documents the issuer has filed with the SEC, and (iii) you may obtain these documents from your sales representative, by calling 1-800-326-5897 or Visiting ~w.sec.~. If this communication relates to a securities offering exempt from US registration, you should contact your sales representative for the complete disclosure package. In Japan, see: .wellsfar~p.com!com/disclaimer/wfs~. ",,’his amail is subiect to ~ discl;~ime~, please clck on t! ,~ ~o~,ow ng link or cut and paste the link into i,~e address bm of your browser h~ps:llwww, wellsfar,qo.com~comldl~aimerl~d5 Hisam K Derani From: Sent: To: Subject: Brian.Warden@wellsfargo.com Thursday, April 16, 2015 3:04 PM Brian.Warden@wellsfargo.com Trade Confirmation *TRADE TICKET *As Of: 04/16/15 ISIN: US912796EC97 TICKET NUMBER: 35759362 ENTRY DATE TIME: 04/16/15 10:05 MATURITY DATE : 05/28/15 SALES PERSON: DOUG SAFFORD (DATED: 05/29/14) CUSTOMER ACCOUNT: POQ PENDING WFS Broadridge #: xxxx0014 SELLS: 280 (M) of UST TBILL 05/28/2015 CUSIP: 912796EC9 PRICE: 100.00913000, YIELD: -.22214305, DISCOUNT: -.2191 SETTLEMENT on 05/13/15 NOTES: Renton **PRINCIPAL: **ACCRUED ( days): **ADDITIONAL FEE: **TOTAL: ISSUER: UNITED STA {912796EC9 Govt DES} $280,025.56 .00 $.oo $280,025.56 FINRA Rule 4515.01 requires that all accepted orders with the intent to allocate complete that allocation by 12 p.m. EST on the next business day following the trading session. In order to comply with this new rule, we ask for your help to provide your allocations to us with enough time to execute before the noon deadline. Wells Fargo Securities is the trade name for the capital markets and investment banking services of Wells Fargo & Company and its subsidiaries, including Wells Fargo Securities, LLC0 member FINP~A and SIPC. If this communication relates to an offering of US registered securities (i) a registration statement has been filed with the SEC, (ii) before investing you should read the prospectus and other documents the issuer has filed with the SEC, and (iii) you may obtain these documents from your sales representative, by calling 1-800-326-5897 or visiting ~.sec...~. If this communication relates to a securities offering exempt from US registration, you should contact your sales representative for the complete disclosure package. In Japan, see: ~s:!/www.wellsfar~o.com/com/disclaimer/wfs~. his ermdl is suhiect ~o a disc!aimer, please ctck on the fo~lo,~.,,’ing ~i.~k or cu! and paste the iink }n~o ihe address ba~ of you~ b owse~ https:/lwWW we Isfar~o~,mtcomtdisclaimer/.qed5 TO: FROM: SUBJECT: DATE: CC: MEMORANDUM IWEN WANG, CITY OF RENTON, WASHINGTON BILL GLASSO, CAUSEY DEMGEN & MOORE P.C. SUMMARY OF OFFERS FOR THE PURCHASE OF SECURITIES - DEFEASANCE ESCROW APRIL 16, 2015 LINDSAY SOVDE, PIPER JAFFRAY & CO. JUSTIN MONWAI, PIPER JAFFRAY & CO. STACEY LEWIS, PACIFICA LAW GROUP LLP DEANNA GREGORY, PACIFICA LAW GROUP LLP KRISTIN PATTERSON, PACIFICA LAW GROUP LLP The table below contains the complete list of firms who were solicited to provide securities and the offers they submitted on April 16, 2015 for the sale of securities. ,I PROVIDER NAME BID AMOUNT TIME RECEIVED ] Cantor Fitzgerald Chris Cercy $13,579,663.91 12:39 p.m. EDT BOK Financial Jason Glidden Commerzbank Brian Nevel Wells Fargo Securities (1) Doug Safford Lowest Bid SLG Cost $13,573,339.61 $13,573,339.61 $13,585,983.00 12:39 p.m. EDT Open Market Savings $12,643.39 (1) Winning Bidder BIDS RECEIVED AND RESULTS MEMORANDUM TO: FROM: SUBJECT: DATE: CC: IWEN WANG, CITY OF RENTON, WASHINGTON BILL GLASSO, CAUSEY DEMGEN & MOORE P.C. SUMMARY OF OFFERS FOR THE PURCHASE OF SECURITIES - DEFEASANCE ESCROW APRIL 16, 2015 LINDSAY SOVDE, PIPER JAFFRAY & CO. JUSTIN MONWAI, PIPER JAFFRAY & CO. STACEY LEWIS, PACIFICA LAW GROUP LLP DEANNA GREGORY, PACIFICA LAW GROUP LLP KRISTIN PATTERSON, PACIFICA LAW GROUP LLP The table below contains the complete list of firms who were solicited to provide securities and the offers they submitted on April 16, 2015 for the sale of securities. [,PROVIDER NAME BID AMOUNT TIME RECEIVED Cantor Fitzgerald Credit-Suisse BOK Financial PNC Capital Markets Commerzbank BB&T Debt Capital Markets Wells Fargo Securities Chris Cercy Chris Patronis Jason Glidden Robert DiPasquale Brian Nevel Will Ferrell (1) Doug Sat’ford $13,579,663.91 $13,575,049.57 $13,575,392.45 $13,573,339.61 12:39 p.m. EDT 12:38 p.m. EDT 12:35 p.m. EDT 12:39 p.m. EDT Lowest Bid $13,573,339.61 SLG Cost $13,585,983.00 Open Market Savings $12,643.39 (1) Winning Bidder William D Glasso From: Sent: To: Cc: Subject: safford@wellsfargo.com Thursday, April 16, 2015 10:39 AM Investmentbids Joseph.P.Celentano@we!lsfargo.com; Brian.Warden@wellsfargo.com Request for Bids - City of Renton - THURS, APR 16 @ 12:40 EDT 13,573,339.61 Portfolio Cost (including cash and $4,000 bidders fee): Settlement Date: 5/13/15 Total Draws: 13,655,675.oo Firm Time: lo Minutes RFP/RFQ Required Disclosure Statement This proposal is submitted in response to your Request for [Proposals/Qualifications/Bids] dated 4/16/15. The contents of this proposal and any subsequent discussions between us, including any and all information, recommendations, opinions, indicative pricing, quotations and analysis with respect to any municipal financial product or issuance of municipal securities, are provided to you in reliance upon the exemption provided for responses to requests for proposals or qualifications under the municipal advisor rules (the "Muni Advisor Rules") of the Securities and Exchange Commission (the "SEC")(the "Municipal Advisor Rule").[,,, 240 CFR 15Bal- let seq..,~ The Staff of the SEC’s Office of Municipal Securities has issued guidance which provides that, in order for a request for proposals to be consistent with this exemption, it must (a) identify a particular objective, (b) be open for not more than a reasonable period of time (up to six months being generally considered as reasonable), and (c) involve a competitive process by (such as by being provided to at least three reasonably competitive service providers or by being publicly posted to your official website). In submitting this proposal, we have relied upon your compliance with this guidance. In submitting this proposal (a) Wells Fargo Securities is not acting as your Municipal Advisor, providing you with municipal advisory services and does not owe a fiduciary duty to you pursuant to Section 15B of the Securities Exchange Act of 1934 to you with respect to the information and material contained in this proposal in the event you are a municipal entity; (b) Wells Fargo Securities is acting for its own interests; and (c) you should discuss any information and material contained in this proposal with any and all internal or external advisors and experts that you deem appropriate before acting on this information or material. Doug Safford, CFA Director Fixed Income Sales and Trading Wells Fargo Securities, LLC 100 West Washington, MAC $4101-17L Phoenix, AZ 85003 602-3 78-4002-Phone 800-218-3125 602-3 78-4001-Fax We cannot accept trades submitted by e-mail or fax. Investments: NOT FDIC insured I May lose value l No bank guarantee h~si!~w, well~, far~Q_9: co~lcomldisc!a!!ned egg.~d5 City of Ronton, Washington EXHIBIT B CITY OF RENTON, WASHINGTON Security Portfolio BID FORM April 16, 2015 Fax: 003) q68-SZ33 For the Defeasance Escrow evidenced as Exhibit A ha the Request for Bids, which is hereby made a part of this bid, we hereby offer to provide Eligible Securities sufficient to fund the Defeasance Escrow, meethag (lie requh’ements on the respective dates as reflected in Exhibit A. The bidder acknowledges that if it is the Winning Bidder it must sign mid deliver the certificate in the fo~ attadled to the Request for Bids as Exhibit C on or prior to the Settlement Date and dated the Settlement Date. The bidder hereby represenls that it did not consult with any other potential bidder about its bid, that the bid was detetanlned without regard to any other format or informal agreement that the potential bidder has with the Issuer or any other person and that the bid is not being submitted solely as it courtesy to lhe Issuer or any other person for purposes of satisfying the requirements that (a) at least three bids be obtained from disinterested bidders solicited under a bona fide solicitation, and (b) at least one of the three bids is from a reasonably competitive bidder, Terms used but not defined herein shall have the meaning provided in the Request for Btd to which this Bid Fol~ is attached as Exhibtt B. By submitting this bid, we certify that the security or securities provided will be Eligible Securities that--subject to verification~will be sufficient in amount to meet the Cash Flow Requirement as indicated in Exhibit A. Name of Bidder: Contact: Phone: Signature: Cost of Funding:* Bids will be accepted by email at jnvestmentbids@causeycoas.~m by 12:40 p.m. Eastern Time and must be followed promptly by a faxed bid form. Please fax bid responses to Bill Glasso at Cansey Demgen & Moore P.C. at (303) 468-8233. *Cost of Funding must include the eost of the Eligible Securities as w~ll as any initial cash deposit to be made by the Issuer and the bidding agent fee. CAUSEY DEMGEN & MOORE P.C, PAGE 6 William D Glasso _ From: Sent: To: Subject: Fabrizio, Stephen <SFabrizio@cantor.com> Thursday, April 16, 2015 10:39 AM Investmentbids Fabrizio, Stephen; Ciresi, Gregory Renton v9. 13,579,663.9:~ CONFIDENTIAL: This e-mail, including its contents and attachments, if any, are confidential. If you are not the named recipient please notify the sender and immediately delete it. You may not disseminate, distribute, or forward this e-mail message or disclose its contents to anybody else. 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Reliance may not be placed on trade confirmations issued other than by the Operations Department. This e-mail was issued by Cantor Fitzgerald. Cantor Fitzl~erald Europe ("CFE") is rel~ulated by the Financial Conduct Authority ("FCA"). CFE is an unlimited liability company incorporated under the laws of Enl~land (company number 2505767) and VAT registration (number 577 406809). CFE’s registered office is at One Churchill Place, London E14 5RB. For any issues arising from this email please reply to the sender. CFE appears on the FCA register under no ~.49380. The FCA register appears at http://www.fca.orl~.uk/reRister!. The FCA is a financial services industry regulator in the United KinBdom and is located at 25 The North Colonnade, Canary Wharf, London, E14 5HS. City of Rertton, Wash|ngto. EXtlmtT B CITY OF RENTON, WASHINGTON Security Portfolio April For the Dofeastmce ~scrow evider~od as Exhibit A in t~ R~t ~r Bl~, which is ~ m~ a gsh~lt C on or prior m ~he S~mom Dm ~d dm~ tho S~le~m D~. ~, bi~er h~by r~ ~ ~ d~d not c~ ~ ~y oth~ ~¢n~ bidd~ ~m i~ bld~ ~ ~ bM ~ d~in~ ~om ~ ~ ~y bid is ~t ~ submi~d ~lely ~ a ~u~y W ~ ~ssuor ~ ~ ot~ p~ ~ p~o~ o~ ~ng ~ solic~ion~ ~d (b) ~ I~ on, o~ ~ ~r~ bi~ is f~ a r~y ~,tlti~ bidd~, T~s ~ b~ n~ d,~mod be~ sh~I h~ve ~ m~ pmvid~ in ~c ~q~ ~or Bid W which ~is B~d F~ is m~ ~ EthlbR B. By submitting tMs bld, we ¢mtify ~at the security or seourtttes provldsd will be that---subJ~’t to v~flcatlon.-wiI] be sufl~ci~t in ~mount to rn~ Exhibit A, Name of Bidder: Contact:Creator Fi~ge~ld Phone: Signature: Cost of Funding:* Bids will be acee~ted by ematl at _i.nv..es~mentbldst~,tm~eycxms,eoxo by ~ 2:40 p.m, ~ T~e ~d m~t ~ followed ~pfly by a ~ bid fo~. PI~ ~ bid ~po~ to Bill Gl~so m ~ey ~mg~ & M~e P,O. m (303) ~8-~33. *Co~I of Fun~ing mum t~lude ~e ~m of~¢ Elt#bl~ ~fl~ ~ w~ll ~ ~y ifl~l~l ~ depos~ m ~ m~dc by tM lss~ ~d ~e ~dfling ~ent William D Glasso ,,, , From: Sent: To: Cc: Subject: Attachments: Patronis, Chris <chris.patronis@credit-suisse.com> Thursday, April 16, 2015 10:38 AM William D Glasso Investmentbids 12:40: Request for Bids - City of Renton - THURS, APR ;16 @ 12:40 EDT Scan O01.pdf Here it is Bill-thank you Chris Patronis CREDIT SUISSE CREDIT SUISSE I PB USA ISG New York, SAEV 2 Eleven Madison Avenue I 10010-3629 New York I United States Phone +12:12 538 6264 I Fax +1 212 322 1145 chris,Patronis@credit-suisse.com I www.credit-suisse.com From: William D Glasso [mailto:.Wglasso@causeycpas.com] Sent: Wednesday, April 15, 2015 6:47 PM To= stacey.lewis@pacificalawgroup.com; "(deanna.l~regory@pacificalawgroup.com); ’Kristin.Patterson@pacificalawgroup.com’; lindsay.a.sovde@pjc.com~ justin.w.monwai@pjc.com; ’carolyn.morrison@usbank.com’; ’greg.skutnik@usbank.com’; ’ryan.brennan@usbank.com’ Cc: Hisam K Derani; Teow Lira Goh; Justin M Greaser Subject: Request for Bids - City of Renton - THURS, APR 16 @ 12:40 EDT Attached, please find a Request for Bids form for the City of Renton. The City will be accepting bids until 12:40 p.m. EDT, Thursday, April 16th. Eligible securities will consist of Treasury securities only as more fully described in the attached bid form. Thank you and we look forward to receiving your bid. Bill Bill Glasso Causey Demgen & Moore P.C. 1125 Seventeenth Street, Suite 1450 / Denver, CO 80202 Phone (303) 672-9886 / Fax (303) 468-8233 www.causevcl~as.com This electronic transmission contains information from Causey Demgen & Moore P.C. which is intended for the use of the individual to whom it is addressed, and which may contain information that is confidential. If the reader of this message is not the intended recipient any disclosure, dissemination, distribution, copying or other use of this communication or its substance is prohibited. If you have received this communication in error, please notify us and destroy the original transmission. Thank you. City of Renton, Washington EXHIBIT B CITY OF RENTON, WASHINGTON Security Portfolio BID FORM April 16, 2015 Fax: (303) 468-8233 For the Defeasance Escrow evidenced as Exhibit A in the Request for Bids, which is hereby made a pat~ of this bid, we hereby offer to provide Eligible Securities sufficient to fund the Defeasance Escrow, meeting the requirements on the respective dates as reflected in Exhibit A. The bidder acknowledges that if it is the Wimaing Bidder it must sign and deliver the certificate in the foma attached to the Request for Bids as Exhibit C on or prior to the Settlement Date and dated the Settlement Date. The bidder hereby represents that it did not consult with any other potential bidder about its bid, that the bid was determined without regard to any other formal or informal agreement that the potential bidder has with the Issuer or any other person and that the bid is not being submitted solely as a courtesy to the Issuer or any other person for purposes of satisfying the requirements that (a) at least three bids be obtained from disinterested bidders solicited under a bona fide solicitation, and (b) at least one of the three bids is from a reasonably competitive bidder. Terms used but not defined herein shall have the meaning provided ila the Request for Bid to which this Bid Form is attached as Exhibit B. By submitting this bid, we certify that the security or securities provided will be Eligible Securities that--subject to verificationwwili be sufficient in amount to meet the Cash Flow Requirement as indicated in Exhibit A. Name of Bidder: Contact: Phone: Signature: Cost of Funding:* Bids will be accepted by email at investmentbid~causeyepas,eom by 12:40 p.m. Eastern Time and must be followed promptly by a faxed bid form. Please fax bid responses to Bil! Glasso at Causey Demgen & Moore P.C. at (303) 468-8233. *Cost of Funding must include the cost of the Eligible Securities as well as any initial c~sh deposit to be made by the Issuer and the bidding agent fee. CAUSEY DEMGEN & MOORE P.C. PAGE William D Glasso . From: Sent: To: Subject: Ferrell, Will <wferrell@bbandtcm.com> Thursday, April 16, 2015 10:34 AM Investmentbids BB&T CDM RENTON 5/13/15 WITH S4K FEE DRAWS 13,655,675.00 COST $13,575,392.45 Will Ferrell Senior Vice President BB&T Debt Capital Markets 901 East Byrd Street Suite 300 Richmond, Va 23219 Phone - 804-649-3919 Toll Free 800-834-8644 Cell 804-874-6656 Fax - 804-644-7682 E- Mail iwferretl@bbandtcm.com This message is intended only for the addressee. BB&T Capital Markets, a division of BB&T Securities, LLC, member FINRA/SIPC, is a wholly-owned nonbank subsidiary of BB&T Corporation. The securities sold, offered or recommended are not a deposit, not FDIC insured, not guaranteed by a bank, not guaranteed by any federal government agency and may go down in value. Please be aware that since the confidentiality of Internet email cannot be guaranteed, do not include private or confidential information such as passwords, account numbers, social security numbers, etc., in emails to us. Additionally, instructions having financial consequences such as trade orders, funds transfer, etc., should not be included in your email communications to us as we cannot act on such instructions received by email. For a list of full disclosures relating to the firm and this communication, please click here http://bbtscottstringfellow.com/aboutus/disclosures ¯ If you no longer wish to receive commercial messages from our organization through electronic means, please email the following address (donotemailcommercial@BBandTCM.com) with the word "stop" in the subject line. City of Renton, Washington EXHIBIT B CITY OF RENTON, WASHINGTON Security Portfolio BID FORM April 16, 2015 ,Fax:, (303) 468-8233 For the Defeasance Escrow evidenced as Exhibit A in the Request tbr Bids, which is hereby made a part of this bid, we hereby offer to provide Eligible Securities sufficien! to limd the Defeasauce Escro\v, meeting the requirements on the respective dates as reflected in Exhibit A. The bidder acknowledges that il: it is the Winning Bidder it must sign and deliver the certificate in the fbrm attached to the Request fbr Bids as Exhibit C on or prior to the Setllement Date and dated the Settlement Date. The bidder hereby represents that it did not consult with any other potential bidder about its bid, that the bid was determined without regard to any other Ibrmal or informal agreement that the potential bidder has with the Issuer or any olher person and lhat the bid is not being submitted solely as a courtesy to the Issuer or any other person tbr purposes of satisl~,ing the requirements that (a) at least three bids be obtained from disinterested bidders solicited under a bona fide solicitation, and (b) at least one of the three bids is from a reaso,ably competitive bidder. Terms used but not defined herein shall have the meaning provided in the Request for Bid to which this Bid Form is attached as Exhibit B. By submitting this bid, we certify, that the security or sccurilies provided will be Eligible Securities that~subject to verification--will be sufficient in amoun! to meet the Cash Flow Requirement as indicated in Exhibit A. Name of Bidder:7~" ~ Cost of Funding:* Bids will be accepted by email at investmenlbids@~at,seycpas.com by 12:40 p.m. Eastern Time and must be [bllowcd promptly by a [’axed bid form. Please fax bid responses to Bill Glasso at Causey Demgen & Moore P.C. at (303) 468-8233. *Cost of I:uqding musl include the cost of Ihe Eligible Securities as well as any initial cash deposit to be rna~Jc by the Issuer and tht: bidding agent fee, CAUSEY DEMGEN & MOORE P.C.PAGE 5 Cash Flow and Yield Verification Report City of Renton, Washington May 13, 2015 Contents Letter Exhibit A Exhibit B Exhibit B-1 Exhibit B-2 Exhibit C Exhibit C-1 Exhibii C-2 Exhibit D Exhibit D-1 Exhibit D-2 Appendix I Schedule of Sources and Uses of Funds Tax-Exempt EscrowAccount Cash Flow Cash Receipts From and Yield on the Open-Market Securities in the Tax~Exempt Escrow A~ount Debt Service Payments on the Refunded Bonds Allocated to the Tax-Exempt Escrow Account Taxable Escrow Account Cash Flow Cash Receipts From and Purchase Price of the Open-Market Securities in the Taxable Escrow Account Debt Se~ice Payments on the Refunded Bonds Allocated to the Taxable Escrow Account Debt Service Payments and Yield on the 2015A BOnds Original Issue Premium on the 2015A Bonds Debt Service Payments on the 20t5B Bonds Applicable schedules provided by Piper Jaffray & Co. Report of Independent Certified Public Accountants On Applying Agmed4Jpon Procedures City of Renton Grant Thornton LLP 200 S 6th Street, Suite 1400 Minneapolis, MN 55402-1434 T 612o332.0001 F 612,332.8361 GrantThornton.com linkd,in/GrantThomtonUS twitter.com/Gra ntThorntonUS Renton, Waskington Pacifica Law G~oup LLP 1191 Second Avenue, Suite 2100 Seattle, Washington U.S. Bank National Association 1420 Fifth Avenue, Seventh Floor Seattle, Washington Piper Jaffzay & Co. 1420 Fifth Avenue, Suite 4300 Seattle, Washington City of Renton, Washington $8,825,000 Limited Tax General Obligation Refunding Bonds, Series 2015A $3,695,000 Limited Tax General Obligation Refunding Bonds, Series 2015B (Taxable) Dated May 13, 2015 We have performed the procedures described in this report, which were agreed to by the City of Renton, Washington (the "City") and Piper Jaffray & Co. (the "Underwriter"), to verify the mathematical accuracy of certain computauons contained in the schedules attached in Appendix I provided by the Underwriter. The Underwriter is responsible for these schedules. These procedures were performed solely to.assist you in the issuance of the above-captioned bond issues (the "2015A Bonds" and the "2015B Bonds", collectively referred to as the "Bonds") for the purpose of refunding a portion of the City’s outstanding Limited Tax General Obligation Bonds, 2006 (the "Refunded Bonds") as summarized on the next page. This agreed-upon procedures engagement was conducted in accordance with attestation standards established by the American Institute of Certified Public Accountants. The sufficiency of these procedures is solely the responsibility of the addressees of this report who are dae specified parties. Consequently, we make no representation regarding the sufficiency of the procedures described in this report either for the purpose for which this report has been requested or for any other purpose. G~ant Thornton LLP Page 2 Principal Pmlcipal Issue ~Da{¢d,Refunded. Tax-Exempt EsCrOw Account: 2006 $17,980,000 August I, 2006 $9,055,000 T.a~able Escrow Account: 2006 $17,980,000 August I, 2~6 $3,345,000 Maturities Redemption Redemption Date Price , 12-1-21 m t2-1-24 and 12-1-28 12-1-16 100% 12-1-17, 12-1-19 and 12-1-20 12-1-16 100% ~VERIFICA~ON OF ESCROW, A, CCOUNTS CASH FLOW SUFFICIENCY The Underwriter provided us ~th schedules (Appendix I) summarizing future escrow accounts available (i) in the Tax-Exempt= Es~ow Account to pay the principal and interest on the Refunded Bonds allocated to the Tax-Exempt Escrow Account assuming the Refunded Bonds allocated to the Tax~Exempt Es~ow Account will be redeemed on December 1, 2016 at 100 percent of par plus accru~ ~terest, and (h) in theTaxable Escrow Account to pay the prindpal and interest on the Refund~ Bonds allocated to the Taxable Escrow Account assuming the Refunded Bonds allocated to the Taxable Escrow Account ~ be redeemed on December 1, 2016 at 100 percent of par plus accrued interest. The attac~ed Exhibit A (Schedule of Sources and Uses of Funds) was compiled based upon information provided by the Undetnvriter. As part of our engagement to recalculate the schedules attached as Appendix I we prepared schedules attach~ hereto as B through B-2 and C through (;-2 independently calculating future escrow accounts cash recdpts mad disbursements and compared the information used in our ~lculafions to the information listed brow contained in applicable pages of the following docents: Trade conftrma~s pr ed by the Underwriter use~ to acquire certain United States Treasury B~ls (me "T-B~") anti Notes (the ’~g-Notes ’) (collectively referrect to as the "Open-Market Securities") insofar as the Open-Market Securities are described’as to the principal amounts, interest rates, purchase prices and maturity dates; and Official Statement and Ordnance for the Refunded Bonds provided by the Underwriter insofar as the Refunded Bonds are described as to the maturity and interest payment dates, prindpal amounts, interest rates and optional redemption date and price. Our procedures, as summarized in Exhibits B through B-2 and C through C-2, prove the mathematical accuracy of the schedules provided by the Underwriter summarizing future escrow accounts cash receipts and disbursements. The schedules provided by the Underwriter and those prepared by us reflect that (i) the anticipated receipts from the Open-Market Securities in the Tax-Exempt Escrow Account, together with an initial cash deposit of $661.75 to be deposited into the Tax-Exempt Escrow Account on May 13, 2015, will be sufficient to pay, when due, the principal and interest related to the Refunded Bonds allocated to the Tax- Exempt Escrow Account assuming the Refunded Bonds allocated to the Tax-Exempt Escrow Account will be redeemed on December ~, 2016 at 100 percent of par plus accrued interest, and (ii) the antidpated receipts from the Open-Market Securities in the Taxable Escrow Page 3 Account, together with an initial cash deposk of $t 73.00 to be deposited into the Taxable Escrow Account on May 13, 2015, ~ be sufficient to pay, when due, the principal and interest related to the Rended Bonds allocated to the Taxable Escrow Account assuming the Refunded Bonds allocated to theTaxable Escrow Account Hill be redeemed on December 1, 2016 at 100 percent of par plus accrued interest. VERIFICATION OF YIELDS The Under,a~iter provided us with schedules (Appendix I) which indicate that the field on the cash receipts from the Open-Market Securities in the Tax-Exempt Escrow Account is less than The term."yield", as used herein, means that ~eld ~ch, when used in computing the present value of all payments of p~cipal and interest to be paid or received on an obligation produces an amount equal to, in the case of the cash receipts from the Open-Market Securities in the Tax-Exempt Escrow Account, the purchase price, and in the case of the 2015A Bonds, the Issue price. In addition, we found that the schedules provided by the Underwriter, which assume the redemption of the December 1, 2025 through December 1, 2028 matxtrities of the 2015A Bonds identifmd on Exhibits D and D-1 at par on June 1, 2025 plus accrued interest, correctly treat those 2015A Bonds as yield-to-call 2015A Bonds as retired on the respective date that for each 2015A Bond produces the lowest yield for the issue that includes the 2015A Bonds. Those 2015A Bonds as yield-to-call 2015A Bonds on the attached Exhibits D and D-1 are those 2015A Bonds that are s~ject to optional redemption and that are issued at an issue price that exceeds the stated ~demp~n price at maturity of such 2015A Bonds by more than one-fourth of one percent by the product of the stated redemption price at maturity of such 2015A Bonds and the number of complete years to the ftrst optional redemption date.for the 2015A BondS. We found that there are no other yield-to-call 2015A Bonds other than those identified on the at~ched Exhibits D and D-1. As part of our e to recalculate the schedules, attached as Appendix I we prepared schedules attached hereto as Exhibits B-1 and D independently calculating the yields on ~) the cash ts from the Open~ et Securities in the Tax- t Escrow Account calculated on Exhibit B-I, and (ii) the 2015A BondS using the Official Statement provided by the Underwriter insofar as the 2015A Bonds are described as to the maturity and interest payment dates, dated date, principal amounts, interest rates, optional redemption date and price, and issue price to the public. The results of our calculations, based on the aforementioned assumptions, are summarized below: Yield Exhibit ¯Yield on the cash receipts from the Open-Market Securities in the Tax-Exempt Escrow Account 0,409583%B-1 ¯Yield on the 2015A Bonds 2.018864%D Our procedures, as summarized in Exhibits B-1 and D, prove the mathematical accuracy of the schedules provided by the Underwriter summarizing the yields. The schedules provided by the Underwriter and those prepared by us reflect that the yield on the cash receipts from the Open- Market Securities in the Tax-Exempt Escrow Account is less than the yield on the 2015A Bonds. Page 4 In addition, we have prepared schedules not attached hereto, which indicate that the yield on the cash receipts from the Open-Market Securities in the Tax-Exempt Escrow Account, assuming reinvestment of the cash balances in the Tax-Exempt Escrow Account at an interest rate of 20%, is less than the yield on the 2015A Bonds. We were not engaged to, and did not, conduct an examLrmdon or a review in acco~:dance with attestation standards established by the American Insdmte of Certified Public Accountants, the objective of which would be the expression of an examination opinion or limited assurance on the items referred to above. Accordingly we do not express ~ach an opinion or limited assurance. Had we performed additional procedures, other matters rmght have come to our attention that would have been reported to you. specified parues. Minneapolis, Minnesota May 13, 2015 City of Renton, Washington SCHEDULE OF SOURCES AND USES OF FUNDS May 13, 2015 Exhibit A SOURCES: Principal amount of the Bonds Original issue premium 2015A Bonds $8,825,000.00 1,171,804.30 $9,996,804.30 2015B Bonds $3,695,000.00 $3,695,000.00 Total $12,520,000.00 1,171,804.30 $13,691,804.30 USES: Purchase price of the Open-Market Securities Beginning cash deposit to escrow account Costs of issuance Underwriter’s discount Contingency $9,915,377.32 661.75 29,375.55 50,920.25 469.43 $3,657,128.54 173.00 12,299.45 21,763.55 3,635.46 $13,572,505.86 834.75 41,675.00 72,683.80 4,104.89 $9,996,804.30 $3,695,000.00 $13,691,804.30 City of Renton, Washington TAX-EXEMPT ,ESCROW ACCOUNT CASH FLOW Exhibit B ,Dates 05-28-15 05-31-15 06-01-15 11-30-15 12-01-15 05-31-16 06-01-16 11-30-16 12-01-16 Cash receipts from Open-Market Securities in the Tax-Exempt Escrow Account @xhibit B-l) $205,000.00 25,205.00 230,205.00 229,948.75 9,285,155.00 ...............~g975,513.75 Debt service payments on Refunded Bonds allocated to the Escrow Account (Exhibit B-2) ..... $230,293.75 230,293.75 230,293.75 9,285,293.75 $9,976,175.00 Cazh balance $661.75 205,661.75 573.00 230,778.00 484.25 0.50 City of Renton, Washington CASH RECEIPTS FROM AND YIELD ON THE OPEN-MARKET SECURITIES IN THE TAX-EXEMPT ESCROW ACCOUNT Exhibit B-1 Cash receipts from Open-Market Present value on Securities in May 13, 2015 Receipt Interest the Tax-Exempt using a yield of date Principal rate Interest Escrow Account 0.409583% 05-28-15 $205,000 0.000%$205,000.00 $204,965.05 11-30-15 205,000 O.250%$25:205.00 230,205.00 229,690.14 05-31-16 205,000 1.750%24,948.75 229,948.75 228,962.96 11-30-16 9,262,000 0.500%23,155.00 9,285,155.00 9,226,559.33 $9,877,000 $98,513.75 $9,975,513.75 $9,915,377.32 The sum of the present values of the cash receipts from the Open-Market Securities in the Tax-Exempt Escrow Account on May 13, 2015, using a yield of 0.409583%, is equal to the purchase price of the Open-Market Securities in the Tax-Exempt Escrow Account as shown below: Maturity Principal Interest Accrued Purchase Type date amount rate Price Cost interest price T-Bills 05-28-15 $205,000 0.000%100.009130%$205,018.71 $205,018.71 T-Notes 11-30-15 205,000 0.250%100.074890%205,153.52 $230.91 205,384.43 T-Notes 05-31-16 205,000 1.750%101.515220%208,106.20 1,616.35 209,722.55 T-Notes 11-30-16 9,262,000 0.500%100.133737%9,274,386.68 20,864.95 9,295,251.63 $9,877,000 $9,892,665.11 $22,712.21 $9,915,377.32 Ci~ of Renton, Washington DEBT SERVICE PAYMENTS ON THE REFUNDED BONDS ALLOCATED TO THE ESCROW ACCOUNT Exhibit Date 06-01-15 12-01-15 06-01-16 12-01-16 Interest Principal rate Interest $230,293.75 $9,o55,ooo (I) $9,055,000 $921,175.00 Debt service payments $230,293.75 230,293.75 230,293.75 (1) Maturity date 12-01-21 12-01-22 12-01-23 12-01-24 12-01-28 Principal Interest amount rate $945,000 5.000% 1,000,000 5.250% 1,040,000 5.250% 1,095,000 5.250% 4,975,000 5.000% $9,055,000 City of Renton, Washington ESCROW ACCOUNT CASH FLOW Exhibit C Dates Cash deposit on May 13. 2015 05-28-15 05-31-15 06-01-15 11-30-15 12-01-15 05-31-16 06-01-16 11-30-16 12-01-16 Cash Debt service payments on Open-Market Refunded Bonds Securities ~allocated to the Taxable the Taxable Escrow Account Escrow Account (Exhibit C-l),,. (F~hibit C-2) $75,000.00 $9,290,00 83 9o.oo $83,625.00 83,625.00 83,t97.50 83,625.00 3,428,550.00 3,428,625.00 Cash balance $I73.00 75,i73.00 84,463.00 838.00 84,128.00 503.00 83,700.50 75.50 3,428:625.50 0.50 Exhibit C-1 City of Renton, Washington CASH RECEIPTS FROM AND PURCHASE PRICE OF THE OPEN-MARKET SECURITIES IN THE TAXABLE ESCROW ACCOUNT Receipt Interest date Principal rate Interest 05-28-15 $75,000 0.000% 05-31-15 $9,290.00 11-30-15 74,000 0.250%9,290.00 05-31-16 74,000 1.750%9,197.50 11-30-16 3,420,000 0.500%8,550.00 $3,643,000 $36,327.50 Cash receipts from Open-Market Securities in the Taxable Escrow Account $75,000.00 9,290.00 83,290.00 83,197.50 3,428,550.00 $3,679,327.50 Purchase price of the Open-Market Securities m the Taxable. Escrow Account: Maturity Principal Interest .~y_pe date amount rate Price T-Bills 05-28-15 $75,000 0.000%100.009130% T-Notes 11-30-15 74,000 0.250%100.074890% T-Notes 05-31-16 74,000 1.750%101.515220% T-Notes 11-30-16 3,420,000 0.500%100.133737% $3,643,000 Cost $75,006.85 74,055.42 75,121.26 3,424,573.80 $3,648,757.33 Accrued interest $83.35 583.46 7,704.40 $8,371.21 Purchase price $75,OO6.85 74,138.77 75,704.72 3,432,278.20 $3,657,128.54 Ci~ of Renton, Washington DEBT SERVICE PAYMENTS ON THE REFUNDED BONDS ALLOCATED TO THE LE ESCROW ACCOUNT Exhibit C-2 Date 06-01-15 12-01-15 06-01-16 12-01-16 Interest Principal rate Interest $3,345,000 (1) $3,345,000 $83,625.00 83,625.00 83,625.00 83,625.00 $334,500.00 Debt service payments $83,625.00 83,625.00 3,428,625.00 $3,679,500.00 (1) Actual malty dates, prindpal amounts and interest rate are as follows: Maturity Principal date amount 12-01-17 $775,000 12-01-19 1,670,000 12-01-20 900,000 $3,345,000 Interest rate 5.000% 5.000% 5.000°/0 ExNbit D Ci~ of Renton, Washington DEBT’ SERVICE PAYMENTS AND YIELD ON THE 2015A BONDS ~8,825,000 issue dated Ma)~ 13, 2015 Interest Date Pfi~.~, al rate Interest 12-01-15 $178,213.75 06-01-16 162,012.50 12-01-16 162,012.50 06-01-17 162,012.50 12-01-17 162,012.50 06-01-18 162,012.50 12-01-18 162,012.50 06-01-19 162,012.50 12-01-19 162,012.50 06-01-20 162,012.50 12-01-20 $275,000 4.000 ~A 162,012.50 06-01-21 156,512.50 12-01-21 935,000:4,000%156,512.50 06-01-22 137,812.50 4.000%137,812.50 118,312.50 12-01-23 1,005,000 4.000%118,312.50 06-01~24 12-01-24 1,045~000 4.000% 06-01-25. 12-01-25 1,090,000 3.500% 06-01-26 I2-01-26 06-01-27 I2-01-27 06-01-28 12-01-28 1,125,000 3.500% 1,170,000 3.500% 1,205,000 3.000% $8,825,000 98,212.50 98,212.50 77,312.50 77,312.50 58,237.50 58,237.50 38,550.00 38,550.00 18,D75.00 18,075.00 $3,204,388.75 Present value on (1)May I3, 2015 Total debt Adjusted service debt service 2.018864% $178,213.75 $178,213.75 $I76~5.67 162,012.50 162,012.50 162,012.50 162,012.50 I57,045.88 162,012.50 I62,012.50 162,012.50 1.62,012.50 153,922.70 162,012.50 162,012.50 162,012.50 162, 0 t 2.50 150,861.64 162,012.50 1.62,012.50 I49,354.01 162,012.50 162,012.50 147,861.45 162,012.50 162,01’2.50 146,383.81 437,012.50 437,012.50 390,909.70 156,512.50 156,512.50 1,091,512.50 1,091,512.50 137,812.50 137,812.50 119,614.93 1,112,812.50 1,112,812.50 956,217.88 118,312.50 118,312.50 100~647.63 1,123,312.50 1,123,312.50 946,044.57 98,212.50 98,212.50 81,887.17 1,143,212.50 1,143,212.50 77,312.50 4,667,312.50 3~814,!00.21 1,167,312.50 58,237.50 1,183,237.50 38,550.00 1,208,550.00 18,075.00 1,223,075.00 $12,029,388.75 $11,722,351.25 $9,996,~4.30 The present value of the future payments is equal to: Principal amount of the Bonds Original issue premium $8,825,000.00 1,171,804.30 $9,996,804.30 ~he sum of the present values of the adjusted debt service payments of the 2015A Bonds on May 13, 2015, using a yield of 2.018864%, is equal to the issue price of the 2015A Bonds. (1)Assumes that the December 1, 2025 through December 1, 2028 maturities are called on June 1, 2025 at 100 percent of par plus accrued interest. City of Renton, Washington ORIGINAL ISSUE P~MIUM ON THE 2015A BONDS Exhibit D-l,, initial public Maturity Interest offering date Prindpal rate Yield price 12-01-20 $275,000 4.000%1.430%113.664% 12-01-21 935,000 4.000%1.620°/o 114.733% 12-01-22 975,000 4.000%1.720%116.077% 12-01-23 1,005,000 4.000%1.860%116.843% 12-01-24 1,045,000 4.000%1.950°/o 117.783% 12-01-25 1,090,000 3.500%2.080°/o 112.817% (1) (2) 12.-01-26 1,125,000 3.500%2.100%112.624% (1) (2) 12-01-27 1,170,000 3.500%2.180°/o 111.854% (1) (2) 3.000%2.400°/0 105.328% (1) (2) $8,825,000 Original iSSUe $37,576.00 137,753~55 156~750;75 139;705.30 142,020.00 138,69L8064,202.40.. $1,17!,804.30 (!~ Marries were: priced to call on June 1, 2025 at 100 percent of par. (2)Represents ~e yid&to-call 2015A Bonds included for p~oses of computing yield on ¯ e 20I 5A Bonds. Exhibit I)-2 City of Renton, Washington DEBT SERVICE PAYME~S ON THE 2015B BONDS Date 12-01-15 06-01-16 12-01-16 06-01-17 12-01-17 06-01-18 12-01-18 06-01-19 12-01-19 06-01-20 12-01-20 $330,000 100,000 865,000 $3,695,000 issue dated Ma.v 13, 20t5 Interest rate Interest 0.500%$30,059.15 26,501.50 0.850%26,501.50 26,076.50 1.130%26,076.50 875,000 890,ooo 1.500% 1.810% 14,626.75 635,000 2.070% Total debt service $360,059.15 26,501.50 126,501.50 26,076.50 891,076.50 21,189.25 14,626.75 904,626.75 Applicable schedules provided by SOURCES AND USES OF FUNDS City of Renton Limited Tax General Obligation Refunding Bonds, 2015A (BQ) & 2015B (Taxable) (Ref 06) FINAL NUMBERS Dated Date 05/1312015 Delivery Date 05113/2015 Limited Tax Limited Tax General General Obligation Obligation Refunding Refunding Bonds, 2015A Bonds, 2015B Sources:(BQ)(Taxable)Total Bond Proceeds: Par Amount 8,825,000.00 3,695,000.00 12,520,000.00 Premium 1,17t,804.30 1,171,804.30 9,996,804.30 3,695,000.00 13,691,804.30 Limited Tax Limited Tax General General Obligation Obligation Refunding Refunding Bonds, 2015A Bonds, 2015B Uses:(BQ)(Taxable)Total Refunding Escrow Deposits: Cash Deposit Open Market Purchases 661.75 173.00 834.75 9~915~377.32 3~65~128 54 .!3~572~505.86 9,916,039~07 3,657,301.54 13,573,340.61 Delivery Date Expenses: Cost of Issuance Underwriter’s Discount 29,375.55 12,299.45 50,920.25 21,763,55 80,29~.80 34,063.00 41,675.00 72~683.80 114,358.80 Other Uses of Funds: Additional Proceeds 469.43 3,635.46 4,104.89 9,996,804.30 3,695,000.00 13,691,804.30 Apr 16, 2015 11:48 am Prepared by Piper J affray & Co.(k:\analysis\dbc\city\RENTON:R06LTGO) Page 8 Date 05/13/2015 05/28/2015 05/31/2015 06/01/2015 11/3012015 12101/2015 05/31~016 06101/2016 11/30/2016 12/01/2016 ESCROW SUFFICIENCY City of Renton Limited Tax General Obligation Refunding Bonds, 2015A (BQ) & 2015B (Taxable) (Ref 06) FINAL ~MBERS Escrow Net Escrow Exce~s Excess Requirement Receipts Receipts Balance 834.75 834.75 834.75 280.000.00 280,000,00 280,834.75 34,495.00 34,495.00 315,329.75 313,918.75 -313,91:8.75 1,411 313,495.00 313,495.00 314,906.00 313,918. 75 -313,918.75 987.25 313,146.25 313,146.25 314,133.50 313,918.75 -313,918.75 214.75 12,713,705. O0 12,713,705.00 12,713,919.75 12,713,918.75 -12,713,918.75 1.00 13,655,675.00 13,655,676.00 1.00 Apr 16, 2015 11:48 am Prepared by Piper Jaffray & Co.(k:\analysis\dbc\city\RENTON:R06LTGO) Page 28 ESCROW COST City of Renton Limited Tax General Obligation Refunding Bonds, 2015A (BQ) FINAL NUMBERS Type of Maturity Security Date TBill 05/28/2015 TNote 11/30/2015 TNote 05/31/2016 TNote 11/30/2016 Par Amount Rate Yield Price Cost 205,000 --0.220269%100.0091280 205,018.71 205,000 0.250%0.113613%100.0748900 205,t53.52 205,000 1.750%0.302734%101.5152200 208,106.20 9,262,000 0.500%0.413307%100.1337366 9,274,386.68 Accrued Interest 230.91 1,616.35 20,864.95 Total Cost 205,018.71 205,384.43 209,722.55 9,295,251,63 9,877,000 9,892,665.11 22,712.2t 9,915,377.32 Purchase Cost of Cash Total Date Securities Deposit Escrow Cost Yield 05/I3/2015 9,915,377.32 661.75 9,916,039.07 0.409583% 9,915,377.32 661.75 9,916,039.07 Apr 16, 2015 11:48 am Prepared by Piper Jaffmy & Co.(k:\analysis\dbc\city\RENTON:R06LTGO) Page 24 ESCROW REQUIREMENTS City of Renton Limited Tax General Obligation Refunding Bonds, 2015A (BQ) FINAL NUMBERS Period Principal Ending Interest R~eemed Total 06101/2015 230,293.75 230,293.75 1210112015 230,293.75 230,293.75 06/01/2016 230,293.75 230,293.75 12/01/2016 230,293.75 9,055,000.00 9,285,293.75 921,175.00 9,055,000.00 9,976,175.00 Apr 16, 2015 11:48 am Prepared by Piper Jaffray & Co.(k:\analysis\dbc\city\RENTON:R06LTGO) Page 32 SUMMARY OF BONDS REFUNDED City of Renton Limited Tax General Obligation Refunding Bonds, 2015A (BQ) FINAL NUMBERS Maturity lntorest Par Call Bond Date Rate Amount Date LTGO Bonds, 2006, 06LTGO: SERIAL 12/01/2021 5.000% 945,000.00 12/01/2016 12/01/2022 5.250%1,000,000.00 12/01/2016 12/01/2023 5.250%1,040,000.00 12/01/2016 12/01/2024 5.250%1,095,000.00 12/01/2016 2028TERM 12/01/2025 5.000%1,155,000,00 12/01/2016 12/0112026 5.000%1,210,000.00 12/01/2016 12/01/2027 5.000%1,275,000.00 12/01/2016 12/01/2028 5,000%1,335,000.00 12/01/2016 9,055,000.00 Call Price 100.000 100.000 100,000 100,000 I00,000 100.000 100,000 100.000 Apr 16, 2015 11:48 am Prepared by Piper Jaffray & Co.(k:\analysis\dbc\city\RENTON:R06LTGO) Page 35 ESCROW COST City of Renton Limited Tax General Obligation Refunding Bonds, 2015B (Taxable) FINAL NUMBERS Type of Maturity Par Accrued Total Security Date Amount Rate Yield Price Cost Interest.Cost TBill 05/28/20t5 75,000 - -0.220317%100.0091300 75,006.85 75,006.85 TNote 11/30/2015 74,000 0,250% 0.113613%100.0748900 74.055.42 83.35 74,138.77 TNote 05/31/2016 74~000 1.750% 0.302734%101.5152200 75,121,26 583.46 75,704.72 TNote 11/30/2016 3,420,000 0.500% 0.413307%100.1337367 3,424,573.80 7,704.40 3,432,278.20 3,643~000 3,648,757.33 8,371.21 3,657,128.54 Purchase Cost of Date Securities 05/13/2015 3,657,128.54 3,657,128,54 Cash Total Deposit Escrow Cost Yield 173.00 3,657,301.54 0.409673% 173.00 3,657,301.54 Apr 16. 2015 11:48 am Prepared by Piper Jaffray & Co.(k:\analysis\dbc\city\RENTON:R06LTGO) Page 25 ESCROW REQUIREMENTS City of Renton Limited Tax General Obligation Refunding Bonds, 2015B (Taxable) FINAL NUMBERS Period Principal Ending lmerest Redeemed Total 06/01!2015 83,625.00 83,625.00 12/01/2015 83,625.00 83,625.00 06/01/2016 83,625.00 83,625.00 12/01/2016 83,625.00 3,345,000.00 3,428,6.25.00 334,500.00 3,345,000.00 3,679,500.00 Apr 16, 2015 11:48 am Prepared by Piper Jaffray & Co.(k:\analysis\dbc\citykRENTON:R06LTGO) Page 33 SUMMARY OF BONDS REFUNDED City of Renton Limited Tax General Obligation I~.efunding Bonds, 2015B (Taxable) FINAL NUMBERS Bond Maturity Interest Par Call Date Rate Amount Date Call Price LTGO Bonds, 2006, 06LTGO: SERIAL 12/01/2017 5.000%775,000.00 12/01/2016 100.000 2019TERM 12/01/2018 5.000%815,000.00 12/01/2016 I00,000 12/01/2019 5.000%.855,000.00 12/01/2016 100.000 SERIAL 12/01/2020 5.000%900,000.00 12/01/2016 t00.000 3,345,000.00 Apr 16, 2015 11:48 am Prepared by Piper Jaffray & Co.(k:\analysis\dbc\city\RENTON:R06LTGO) Page 36 Period Ending 12/01/2015 06/01/2016 12/01/2016 06/01/2017 12/01/2017 06/01/2018 12/01/2018 06/01/2019 12/01/2019 06/01/2020 12/01/2020 06/01/2021 12/01/2021 06/01/2022 12/01/2022 06/01/2023 12/01/2023 06/01/2024 12/01/2024 06/01/2025 12/01/2025 06/01/2026 12/01/2026 06/01/2027 12/01/2027 06/01/2028 12/01/2028 BOND DEBT SERVICE City of Renton Limited Tax General Obligation Refunding Bonds, 2015A (BQ) FINAL NUMBERS Principal Coupon Interest Debt Ser~,iee 275,000 935,000 975,000 1,005,000 1,045~000 1,090,000 4.000% 4.000% 4.000% 4.000% 4.000% 3.500% Annual Debt Servi¢o 178,213.75 I78,213.75 178,213.75 162,012.50 162,012.50 162,012.50 162,012.50 324,025.00 162,012.50 162,012.50 162,012.50 162,012.50 324:025.00 162,012.50 162,012.50 162,012.50 162,012.50 324,025.00 162,012.50 162,012.50 162,012.50 162,012.50 324,025.00 162,012.50 162,012.50 162,012.50 437,012.50 599,025~00 156,512.50 156,5t2.50 156,512.50 1,091,512.50 1,248,025.00 137,812.50 I37,812.50 - 137,812 50 1,112,812.50 1,250,625.00 ll8,312.50 118,312.50 - 118,312 50 1,1231312.50 1,241,625,00 98,212.50 98,212.50 - 98,212.50 1,143,212.50 1,241,425.00 77,312 50 77,312.50 77,312.50 1,167,312.50 I.244,625.00 L125,000 1,170,000 1,205,000 8,825,000 3.500% 3.500% 3.000% 38,550.00 38,550.00 - 38,550.00 1,208,550.00 1,247,100.00 18,075.00 18,075.00 - 18,075.00 1,223,075.00 1,241,150.00 3,204,388.75 12,029,388.75 12,029~88.75 Apr 16, 2015 11:48 am Prepared by Piper Jaffray & Co.(k:\analysis\dbc\cfty\RENTON:R06LTGO) Page 13 BOND PRICING Bond Compon~m Serial Bonds (BQ): City of Renton Limited Tax General Obligation Refunding Bonds, 2015A (BQ) FINAL NUMBERS Maturity Yield to Call Call Premium Date Amount Rate Yield Price Maturity Date Price (-Discount) 12/01/2020 275,000 4.000%1.430%113.664 37,576.00 12/0112021 935,000 4.000"/,L620%114~733 137,753,55 12/01/2022 975,000 4.000%1.720%116.077 156,750.75 12/01/2023 1,005,000 4.000%1.860%116.843 -~[69,272.15 12/01/2024 1,045,000 4.000%1.950%117.783 --185~832.35 12/01/2025 1,090,000 3.500%2.080%112,817 C 2.137%06/01/2025 1110.000 139,705.30 1~1/2026 1,125,000 3.500%2.100’.,$112.624 C 2.252%06/01/2025 100.000 142,1~20.00 12/01/2027 1,170,000 3~500%2.180%111.854 C 2.40~/,06/01/2025 1130.000 138,691.80 12/01/2028 1,205,000 3.000%2.400%105.328 C 2.533%06/01/2025 100.000 64,202.40 8.825,000 1,I7t ,804.30 Dated Date 05/13/2015 Delivery Date 05/13/2015 First Coupon 12/01/2015 Par Amount 8,825,000.00 Premium 1,171,804.30 Production 9,996,804.30 I 13.278236% 1.~nderwriter’s Discount -50,920.25 -0.577000% Pure~se Price Accrued Interest 9,945,884.05 112.701236% Net Proceeds 9,945,884~05 Apr 16, 2015 11:48 am Prepared by Piper Jaffray & Co,(k:\analysis\dbc\eity\RENTON:R06LTGO) Page I0 PROOF OF A~ITRAGE YIELD City of Renton Limited Tax General Obligation Refunding Bonds, 2015A (BQ) & 2015B (Taxable) (Ref 06) FINAL NUMBERS Date Debt S~vice Present Value to 05/13/2015 Total @ 2.0188641968% 178,213.75 178,213,75 162,012.50 162,012.50 162,012.50 162,012.50 162,012.50 162,012.50 162,012.50 162,01Z50 162,012.50 162,012.50 162,012.50 162,012.50 162,012.50 162,012.50 162,012.50 162,012.50 162,012.50 162,012.50 437,012.50 437,012.50 156,512,50 156,512.50 1,091,512.50 1,091,512.50 137,812.50 137;812.50 1,112~812.50 1,112,812.50 118,312.50 118,312.50 1,I23,3"12.50 1,123,312.50 98,212.50 98~12~50 12101/2015 176,255.67 06/01/2016 158,631.15 12/01/2016 157,045.88 06/01/2017 155,476.45 t2/01/2017 153,922.70 06/01/2018 152,384.49 t2/01/2018 150,861.64 06/01/2019 149,354.01 12101/2019 147,86 ! .45 06/01/2020 146,383.81 12/01/2020 390,909.70 06/01/2021 138,602.06 12/01/2021 956,946.02 06/01/2022 119,614.93 12/01/2022 956,217.88 06/01/2023 100,647.63 12/01/2023 946,044.57 06/01/2024 81,887.17 12/01/2024 1, I43,212.50 t, 143,212.50 943,656.89 06/01/2025 4,667,31ZSO 4,667,312.50 3,814,100.21 I1,722~351.25 1/,722,35~.25 9,996,804.30 ProeevdsSummarv 05/13/2015 Par Value 8,825,000.00 Premium (Diseotmt)!, 171,804.30 Target for yield calculation 9,996,804.30 Apr 16, 2015 l 1:48 am Prepared by Piper Jaffray & Co.(k:\analysis\dbc\city\RENTON:R06LTGO) Page 18 PROOF OF ARBITRAGE YIELD City of Renton Limited Tax General Obligation Refunding Bonds, 2015A (BQ) & 2015B (Taxable) (Ref 06) FINAL ~ERS Assumed Call!Com~utation Dates for Premium Bonds Bond Maturity Call Component Date Rate Yield Date Present Value Call to 05/13/2015 Price @ 2.0188641968% SERIALBQ 12/0112025 3.500%2.080%06t01/2025 100.000 SERIALBQ 12/01/2026 3.500%2.100%06/01/2025 100.000 SERIALBQ 12/01/2027 3.500%2.180%06f01/2025 100.000 SERIALBQ 12/01/2028 3.000%2.400%06/01/2025 100.000 6,469.82 8,848.82 18,211.77 42,840.82 Reject~ Call!cOmputatiOn~ Dates for Premium Bonds Bond Component Present Value Maturity Call Call to 05/13/2015 Date Rate Yield Date Price @ 2.0188641968% Increase to NTV SERIALBQ 12/01/2025 3.500%2.080% SERIALBQ 12/01/2026 3,500%2.100% SERIALBQ 12/01/2027 3.500%2.180% SERIALB(12/01/2028 3.000%2.400% 13,000.45 6,530.63 28,868.39 20,019.57 52,567.88 34,356.11 75,330,79 32,489.97 Apr 16, 2015 11:48 am Prepared by Piper Jaffray & Co.(k:\analysis\dbc\city~RENTON:R06LTGO) Page 19 BOND DEBT SERVICE City of Renton Limited Tax General Obligation Refunding Bonds, 2015B (Taxable) FINAL NUMBERS Period Annual Ending Principal Coupon Interest Debt Service Debt Service 12/01/2015 330,000 0.500%30,059.15 360,059.15 360,059.15 06/01/2016 26,501.50 26,501.50 12/01/2016 100,000 0.850%26,501.50 126,501.50 153,003.00 06/01/2017 26,076.50 26,076.50 12/01/2017 865,000 1.130%26,076.50 891,076.50 917,153.00 06/01/2018 21,189.25 21,189.25 12/01/2018 875,000 1.500%21,189.25 896,189.25 917,378,50 06/01/2019 14,626.75 14,626.75 12/01/2019 890,000 1.810%14,626,75 .........919,253.50 06/01/2020 6,572225 6,572.25 12/01/2020 635,000 2.070%6,572.25 641,572,25 648,144.50 3,695,000 219,991.65 3,914,991.65 3,914,991.65 Apr 16, 2015 11:48 am Prepared by Piper Jaffray & Co.(kAanalysis\dbc\city\RENTON:R06LTGO) Page 14 BOND PRICING City of Renton Limited Tax General Obligation Refunding Bonds, 2015B (Taxable) FINAL NUMBERS Bond Component Maturity Date Amoum Rate Yield Serial Bonds (Taxable): 12/01/2015 330,000 0.500%0.500% 12/01/2016 100,000 0.850%0.850% 12101/2017 865~000 1.130%1.130% 12/01/2018 875,000 1,500%1.500% 12/01/2019 890,000 1.810%1.810% 12/01/2020 635~000 2.070%2,070% 3,695,000 Price 100.000 100.000 t00.000 100.000 100.000 100.000 Dated Date Delivery Date First Coupon Par Amount Original Issue Discount Production Underwritor’s Discount Pumhase Price Accrued Interest 05/13/2015 05/13/2015 12/01/2015 3,695,000.00 3,695,000.00 -21,763.55 3,673,236.45 3,673,236.45 100.000000% -0.589000% 99,411000% Net Proceeds Apr 16, 2015 11:48 am Prepared by Piper Jaffray & Co.(k:\analysis\dbc\city\RENTON.’R06LTGO) Page CERTIFICATE OF MAN~L SIGNATURE STATE OF WASHINGTON ) COUNTY OF KING ) I, the undersign~ ~t, being first duly sworn, on oath depos~ ~i say: My name is ....Denis.Law ..... I have been duly chosen and m’n qmdifled e~d ecl~g ~ ....Ciw of Renton. Waddn~on The signature appc~ng above is my true manual $ignatme. This affidavit is made to omply with Ch. 86, Wash. Sess. Laws of 1969. cnTmCsT~ ov M~LmG of’ hmto :~’md ~ ~i~: following CERTIFICATE OF MANUAL SIGNATURE STATE OF WASHINGTON ) ) SS: COUNTY OF K1NG ) I, the undersigned affiant, being first duly swom, on oath depose and say: My name is Jason A. Seth (print or type) I have been duly chosen and am qualified and acting as City Clerk (title or position) for Ci_ty of Renton, Washington (name of municipality) The signature appearing above is my true manual signature. This affidavit is made to comply with 39.62.020 Revised Code of Washington (Ch. 86, Wash. Sess. Laws of 1969). SUBSCRIBED AND CERTIFICATE OF MAILING I,Kristin Patterson the duly chosen (PRINT OR TYPE NAME) qualified and acting Paralegal (POSITION) of the law firm of Pacifica Law Group LLP DO HEREBY CERTIFY that on the 12th day of May, 2015 I marled to the Secretary of State of the State of Washington, postage prepaid, a certificate of manual signature in the form attached hereto executed by the following officials: Name Position Jason A. Seth City Clerk, City of Renton, Washington Dated (SIGNATURE) SIGNATURE IDENTIFICATION AND NONLITIGATION CERTIFICATE WE, DENIS W. LAW AND JASON A. SETH, the duly chosen, qualified and acting Mayor and City Clerk, respectively, of the City of Renton, Washington (the "City"), DO HEREBY certify that the following-described Limited Tax General Obligation Refunding Bonds, Series 2015A (the "2015A Bonds") and Limited Tax General Obligation Refunding Bonds, Series 2015B (Taxable) (the "2015B Bonds" and, together with the 2015A Bonds, the "Bonds") of the City bear our true and correct facsimile signatures. The 2015A Bonds are in the total principal amount of $8,825,000, are dated the date of their delivery, are designated "City of Renton, Washington, Limited Tax General Obligation Refunding Bonds, Series 2015A," are in the denomination of $5,000 each or integral multiples thereof, are fully registered, are numbered, bear interest at the rates per annum set forth in the following schedule, payable on December 1, 2015, and semiannually thereafter on the first days of each succeeding June and December, and mature on December 1 in the years and amounts as follows: Maturity Years Principal Interest (December 1)Amounts Rates 2020 $275,000 4.00% 2021 935,000 4.00 2022 975,000 4.00 2023 1,005,000 4.00 2024 1,045,000 4.00 2025 1,090,000 3.50 2026 1,125,000 3.50 2027 1,170,000 3.50 2028 1,205,000 3.00 The 2015B Bonds are in the total principal amount of $3,695,000, are dated the date of their delivery, are designated "City of Renton, Washington, Limited Tax General Obligation Refunding Bonds, Series 2015B (Taxable)," are in the denomination of $5,000 each or integral multiples thereof, are fully registered, are numbered, bear interest at the rates per annum set forth in the following schedule, payable on December 1, 2015, and semiannually thereafter on the first days of each succeeding June and December, and mature on December 1 in the years and amounts as follows: Maturity Years Principal Interest (December 1)Amounts Rates 2015 $330,000 0.50% 2016 100,000 0.85 2017 865,000 1.13 2018 875,000 1.50 2019 890,000 1.81 Maturity Years Principal Interest (December 1)Amounts Rates 2020 635,000 2.07 WE FURTHER CERTIFY that there is no controversy or litigation pending, or to the best of our knowledge threatened, affecting the issuance and delivery of the Bonds, the levy and collection of taxes to pay the principal thereof and interest thereon, the validity of the Bonds, the corporate existence or boundaries of the City, or the title of the present officers of the City to their respective offices, and that no authority or proceedings for the issuance of the Bonds has or have been repealed, revoked or rescinded. Dated as of this 13th day of May, 2015. Title Mayor City Clerk -2- STATE OF WASHINGTON ) ) SS. COUNTY OF KING ) I certify that I know or have satisfactory evidence that DENIS W. LAW is the person who appeared before me, and said person acknowledged that said person signed this instrument, on oath stated that said person was authorized to execute the instrument and acknowledged it as the Mayor of the City of Renton, Washington, to be the free and voluntary act of such party for the uses and purposes mentioned in the instrument. Dated: ~.6~-~ ~.__, 2015. Public ~t~^ ^ Print Name | ~’1~ ~1 My commission exl~res (Use this space for notarial stamp/seal) STATE OF WASHINGTON ) ) SS. COUNTY OF KING ) I certify that I know or have satisfactory evidence that JASON A. SETH is the person who appeared before me, and said person acknowledged that said person signed this instrument, on oath stated that said person was authorized to execute the instrument and acknowledged it as the City Clerk of the City of Renton, Washington, to be the free and voluntary act of such party for the uses and purposes mentioned in the instrument. Dated: ~/~~ .~_, 2015. Not~’ P~iyntc oNmamm~s s i o ~’eVlx ~prr ~i~ (Use this space for notarial stamp/seal) CERTIFICATE REQUIRED BY SECTIONS 7(e)(2) and (7) OF THE PURCHASE CONTRACT I, Iwen Wang, Finance and Information Services Administrator of the City of Renton, Washington (the "City"), in connection with the issuance by the City of its $8,825,000 Limited Tax General Obligation Refunding Bonds, Series 2015A (the "2015A Bonds") and its $3,695,000 Limited Tax General Obligation Refunding Bonds, Series 2015B (Taxable) (the "2015B Bonds" and, together with the 2015A Bonds, the "Bonds"), hereby certify as follows: I am the duly chosen, qualified and acting officer of the City for the office shown below my signature; as such, I am familiar with the facts herein certified and I am duly authorized to execute and deliver this certificate on behalf of the City. Other than as set forth in the Official Statement relating to the Bonds (the "Official Statement"), no action, suit, proceeding, inquiry or investigation at law or in equity, before or by any court, government agency, public board or body is pending or, to my best knowledge after due investigation, threatened: (i)In any way questioning the corporate existence of the City or titles of the officers of the City to their respective offices; (ii)In any way contesting, affecting or seeking to prohibit, restrain or enjoin the issuance or delivery of any of the Bonds, or the collection of taxes pledged or to be pledged to pay the principal of and interest on the Bonds, or the pledge of such taxes, or the application of the proceeds of sale of the Bonds; (iii)in any way contesting or affecting the validity of the Bonds, the Bond Ordinance, or the Bond Purchase Contract between the City and Piper Jaffray & Co. dated April 16, 2015 (the "Purchase Contract"), or the tax-exempt status of interest on the 2015A Bonds or contesting the powers of the City or any authority for the issuance of the Bonds, or the passage of the Bond Ordinance, or the execution and delivery by the City of this Purchase Contract; (iv)That may result in any material adverse change relating to the business, operations or financial condition of the City or its ability to pay debt service on the Bonds; or (v)Contesting the completeness or accuracy of the Preliminary Official Statement or the Official Statement, or asserting that the Preliminary Official Statement or the Official Statement contained any untrue statement of a material fact or omitted to state a material fact necessary in order to make the statements made therein, in the light of the circumstances under which they were made, not misleading, and to the best of my knowledge, there is no basis for any such action, suit, proceeding, inquiry or investigation; The representations and warranties of the City contained in the Purchase Contract were and are true and correct in all material respects, and the City has complied with all agreements and covenants and satisfied all conditions contemplated by the Purchase Contract and the Bond Ordinance on its part to be performed or satisfied at or prior to the date hereof; o Insofar as the City and its affairs, including its financial affairs, are concerned, the Preliminary Official Statement and the Official Statement did not as of their respective dates and do not as of the date hereof contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements made therein, in the light of the circumstances under which they were made, not misleading (except no representation is hereby made with respect to the information regarding The Depository Trust Company or its book-entry system or under the heading "LEGAL AND UNDERWRITING--Underwriting"); and o Insofar as the descriptions, statements and data, including financial data, of or pertaining to other bodies and their activities contained in the Preliminary Official Statement and the Official Statement are concerned, such descriptions, statements and data have been obtained from sources the City believes to be reliable, and the City has no reason to believe that they contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in the light of the circumstances under which they were made, not misleading. Capitalized terms used but not defined herein have the meanings set forth in the Purchase Contract. Dated: May 13, 2015. CITY OF RENTON, WASHINGTON Finance and Information Serv~ces Administrator -2- Blanket Issuer Letter of Representations ITo oe Corr~etec oy Issuer] City o~" l~en1~on, ~T~h~nqt:on &3 W~ter Serect; 50th Floor New York, .N’Y 100~I.0099 ,. ~ letter sets t’orth o~ understanding wir.b respect to aJJ issues (t~e "~ti=’) r.~t Is,met r~qu~s’t ~ made eligible for depodt.by The Delx~imry Trus~ Company (’DTC’). FEDERAL TAX CERTIFICATE I, the undersigned officer of the City of Renton, Washington (the "City"), make this certification for the benefit of all persons interested in the exclusion from gross income for federal income tax purposes of the interest to be paid on the City’s Limited Tax General Obligation Refunding Bonds, Series 2015A (the "Bonds"), which are being issued in the aggregate principal amount of $8,825,000 and delivered simultaneously with the delivery of this certificate. On the date hereof, the City is also issuing its Limited Tax General Obligation Refunding Bonds, Series 2015B (Taxable) (the "Taxable Bonds"). I do hereby certify as follows in good faith on the date of issue of the Bonds: 1. Responsible Officer. I am the duly chosen, qualified and acting officer of the City for the office shown below my signature; as such, I am familiar with the facts herein certified and I am duly authorized to execute and deliver this certificate on behalf of the City. I am the officer of the City charged, along with other officers of the City, with responsibility for issuing the Bonds. 2. Code and Regulations. The Bonds are subject to the provisions of sections 141, 148, 149 and 150 of the Internal Revenue Code of 1986, as amended (the "Code"), and the Treasury Regulations (the "Regulations") promulgated under sections 141, 148, 149 and 150 of the Code. These provisions of the Code and Regulations impose restrictions on the use of bond- financed facilities and on the investment of bond proceeds. This certificate is being executed and delivered pursuant to sections 1.141-1 through 1.141-15, 1.148-0 through 1.148-11, 1.149(b)-1, 1.149(d)-1, 1.149(g)-1, 1.150-1 and 1.150-2 of the Regulations. 3. Definitions. The capitalized terms used in this certificate (unless otherwise defined) that are defined in Ordinance No. 5754, adopted on April 13, 2015, authorizing the issuance of the Bonds (the "Bond Ordinance"), shall for all purposes hereof have the meanings therein specified. All terms defined in the Code or Regulations shall for all purposes of this certificate have the same meanings as given to those terms in the Code and Regulations unless the context clearly requires otherwise. 4. Reasonable Expectations. The facts and estimates that are set forth in this certificate are accurate. The expectations that are set forth in this certificate are reasonable in light of such facts and estimates. There are no other facts or estimates that would materially change such expectations. In connection with this certificate, the undersigned has to the extent necessary reviewed the certifications set forth herein with other representatives of the City as to such accuracy and reasonableness. The undersigned has also relied, to the extent appropriate, on representations set forth in the certificate of Piper Jaffray & Co. (the "Underwriter"), attached as Exhibit A to this certificate; the report of Grant Thornton LLP, certified public accountants, dated May 13, 2015 (the "Report"), attached as Exhibit B; and the bidding agent certificate and related attachments (the "Bidding Agent Certificate") of Causey, Demgen & Moore P.C. (the "Bidding Agent") attached as Exhibit C. The undersigned is aware of no fact, estimate or circumstance that would create any doubt regarding the accuracy or reasonableness of all or any portion of such documents. 5. Description of Governmental Purpose. The City is issuing the Bonds pursuant to the Bond Ordinance and will use proceeds of the Bonds (i)to advance refund and defease a portion of the City’s outstanding Limited Tax General Obligation Bonds, Series 2006 (the "Prior Bonds") that would otherwise mature on December 1, 2017, December 1, 2019, December 1, 2020 through 2024, inclusive, and on December 1, 2028 (the "Refunded Bonds"); and (ii) to pay the costs of issuance of the Bonds. The primary purpose of each transaction undertaken in connection with the issuance of the Bonds is a bona fide governmental purpose. The financing schedules and the Report, attached hereto as Exhibit B, detail all relevant aspects of the application of the proceeds of the Bonds and the City’s program to refund the Refunded Bonds. The Refunded Bonds are being redeemed and defeased to achieve a present- value saving in the debt service payable by the City. December 1, 2016 is the date on which the Refunded Bonds will be called for redemption in advance of their scheduled maturities and retired with the proceeds of the Bonds. 6. The Refunded Bonds. The Prior Bonds were issued by the City to finance a portion of the costs of constructing transportation, street, and utility infrastructure and improvements as part of the South Lake Washington infrastructure project and the SW 27th Street extension project. No portion of the purchase price of the Refunded Bonds represents a loan made from the proceeds of another tax-exempt obligation. All of the original and investment proceeds allocable to the Refunded Bonds have been expended. No portion of the proceeds of the Refunded Bonds was used to pay the principal of, or interest on, any other issue of governmental obligations. 7.Amount and Expenditure of Sale Proceeds of the Bonds. (a) Amount of Sale Proceeds. The sale proceeds from the issuance of the Bonds will be $9,996,804.30. Such amount represents the stated redemption price at maturity of the Bonds of $8,825,000.00, plus original issue premium of $1,171,804.30. No portion of the purchase price of any of the Bonds is provided by the issuance of any other issue of obligations. (b) Expenditure of Sale Proceeds. The sale proceeds of the Bonds and other available funds will be expended as follows: (i) The amount of $50,920.25 will be allocated on the date of issuance of the Bonds to the Underwriter’s discount or compensation. (ii) The amount of $29,375.55 will be disbursed to pay other costs of issuance of the Bonds. (iii) Sale proceeds of the Bonds in the amount of $9,916,039.07, along with proceeds of the Taxable Bonds equal to $3,657,301.54, will be deposited in an escrow fund (the "Escrow Fund") established pursuant to the Escrow Agreement. From the amount deposited, $9,915,377.32 of the proceeds of the Bonds and $3,657,128.54 of the proceeds of the Taxable Bonds will be used to purchase certain Open Market United States Treasury Securities (the "Open Market Escrow Securities"). The remaining $661.75 of the proceeds of the Bonds will be held uninvested as cash, along with $173.00 -2- of the proceeds of the Taxable Bonds. The interest on and maturing principal of the Open Market Escrow Securities, together with the initial cash deposit, will be sufficient to pay the interest on the Refunded Bonds to December 1, 2016, and to redeem them on that date, which is their first call date. (iv) The amount of $469.43 representing additional proceeds will be deposited in the Bond Fund and used to pay debt service on the Bonds. 8.Pre-issuance Accrued Interest. The Bonds are dated as of the initial date of delivery to the Underwriter, and the City will receive no pre-issuance accrued interest on the Bonds. 9. Investment Proceeds. The best estimate of the City is that investment proceeds resulting from the investment of any proceeds of the Bonds will be expended for one of the purposes described in Section 7(b) or for the payment of debt service on the Bonds. 10. Transferred Proceeds. There are no transferred proceeds with respect to the Bonds because all of the proceeds of the Refunded Bonds have been or will be expended on or prior to the date on which proceeds of the Bonds are disbursed to pay principal of the Refunded Bonds. 11. No Replacement Proceeds. There are no amounts that have a sufficiently direct nexus to the Bonds or to the governmental purposes of the Bonds, including the expected use of amounts to pay debt service on the Refunded Bonds to conclude those amounts that would have been used for such purpose if the proceeds of the Bonds were not used or to be used for such purpose. Specifically, (a)No Sinking Funds. Other than to the extent described herein, there is no debt service fund, redemption fund, reserve fund, replacement fund, or similar fund reasonably expected to be used directly or indirectly to pay principal or interest on the Bonds. (b)No Pledged Funds. Other than amounts described herein, there is no amount that is directly or indirectly, other than solely by reason of the mere availability or preliminary earmarking, pledged to pay principal or interest on the Bonds, or to a guarantor of part or all of the Bonds, so as to provide reasonable assurance that such amount will be available to pay principal or interest on the Bonds if the City encounters financial difficulty. For purposes of this certification, an amount is treated as so pledged if it is held under an agreement to maintain the amount at a particular level for the direct or indirect benefit of the holders or the guarantor of the Bonds. (c)No Other Replacement Proceeds. There are no other replacement proceeds allocable to the Bonds because the City reasonably expects that the term of the Bonds will not be longer than is reasonably necessary for the governmental purposes of the Bonds. Furthermore, if the term of the Bonds is longer than is reasonably necessary for the governmental purposes of the Bonds, the City does not reasonably expect to have available amounts during the portion of such period that is longer than is reasonably necessary. The City reasonably expects that the Bonds would be issued to achieve a debt service savings independent of any arbitrage benefit, as evidenced by the expectation that the Bonds would have been issued if the interest on -3- the Bonds were included in gross income (assuming that the hypothetical taxable interest rate would be the same as the actual tax-exempt interest rate). 12. No Excess Gross Proceeds. Except for any eamings on the portion of the amount described in paragraph 7(b)(ii) that is allocable to the Bonds, all gross proceeds of the Bonds, and investment earnings on such amounts and on sale proceeds of the Bonds and the uninvested cash described in paragraph 7(b)(iii), are allocable to: (a) the payment of principal, interest and any call premium on the Refunded Bonds as described in paragraph 7(b)(iii) above; (b) the payment of costs of issuance of the Bonds as described in paragraphs 7(b)(i) and 7(b)(ii) above; (c) the payment of administrative costs allocable to repaying the Refunded Bonds and carrying and repaying the Bonds or investments of Bond proceeds; Investment eamings on (i) the amounts described in paragraph 7(b)(ii), (ii) the initial cash deposit described in paragraph 7(b)(iii) and (iii) surplus amounts in the Escrow Fund are expected to be de minimis. Accordingly, the sum of the amounts earned from such investments is not expected to exceed one percent of the original proceeds of the Bonds. 13. Yield on the Bonds. For the purposes of this certificate, the yield on the Bonds is the discount rate that, when used in computing the present value as of the issue date of the Bonds, of all unconditionally payable payments of principal, interest and fees for qualified guarantees on the Bonds, produces an amount equal to the present value, using the same discount rate, of the aggregate issue price of the Bonds as of the issue date. For purposes of determining the yield on the Bonds, the issue price of the Bonds is the sum of the issue prices for each group of substantially identical Bonds, plus pre-issuance accrued interest. For each group of substantially identical Bonds, the issue price is the first price at which a substantial amount (i.e., 10 percent) is sold to the public (excluding bond houses, brokers, or similar persons or organizations acting in the capacity of underwriters and wholesalers). Based upon the representations of the Underwriter set forth in Exhibit A hereto, the issue price is $9,996,804.30. No Underwriter’s discount, issuance costs, or costs of carrying or repaying the Bonds is deducted from the issue price for purposes of computing the yield on the Bonds. The yield has been computed by treating the portion of the Bonds that are subject to optional redemption and are issued at an issue price that exceeds the stated redemption price at maturity by more than one-fourth of one percent multiplied by the product of the stated redemption price at maturity and the number of complete years to the first optional redemption date for the Bonds as redeemed at their stated redemption price on the optional redemption date that would produce the lowest yield on the Bonds. Based on the representations of the Underwriter, set forth in Exhibit A, the yield on the Bonds, as calculated in the manner set forth above, is 2.018864 percent. -4- 14.Temporary Periods and Yield Restriction. (a) Advance Refunding of the Refunded Bonds. The Refunded Bonds will be advance refunded using Bond proceeds. Pursuant to section 1.148-9(g) of the Regulations, the City hereby elects to waive the 30-day temporary period available under section 1.148-9(d)(2)(i) of the Regulations for proceeds of the Bonds used to advance refund the Refunded Bonds and to invest such proceeds at a yield not in excess of the yield on Bonds beginning on the date of issue. The yield on the Open Market Escrow Securities purchased with sale proceeds of the Bonds has been calculated by the Underwriter to be 0.409583%, which is less than the yield on the Bonds. (b) Costs of Issuance and Additional Proceeds. The amounts described in paragraphs 7(b)(i), 7(b)(ii) and 7(b)(iv) will be disbursed within 13 months of the date hereof for costs of issuing the Bonds; therefore, such amount will be invested for an allowable temporary period. To the extent any portion of the amount described in paragraphs 7(b)(i), 7(b)(ii) and 7(b)(iv) is not expended within 13 months, the City will take steps to restrict the investment of such amounts to a yield which is not materially higher than the yield on the Bonds. 15. Bond Fund. Pursuant to the Bond Ordinance, the City has established a debt service fund designated the "City of Renton Limited Tax General Obligation Bond Debt Service Fund, 2015" (i.e., the Bond Fund) and the proceeds from all taxes levied, assessed and collected for and on account of the Bonds are to be deposited in such Fund. The City expects that taxes levied, assessed and collected for and on account of the Bonds will be sufficient each year to pay such debt service. All amounts deposited in the Bond Fund will be depleted at least once each bond year, except for a reasonable carryover amount not in excess of the greater of the eamings on such portion of the Bond Fund for the immediately preceding bond year or one-twelfth of the principal and interest payments on the Bonds for the immediately preceding bond year. Therefore, all amounts therein may be invested at an unrestricted yield. Any amounts held in the Bond Fund for longer than 13 months will be invested in obligations the yield on which is not in excess of the yield on the Bonds. 16. Minor Portion. All gross proceeds (including any replacement proceeds) will be invested in accordance with paragraphs 14 and 15 above. To the extent such amounts remain on hand following the periods set forth in paragraphs 14 and 15 above or exceed the limits set forth in paragraph 15 above, the City will invest such amounts at a restricted yield as set forth in such paragraphs; provided, however, that a portion of such amounts, not to exceed in the aggregate the lesser of $100,000 or five percent of the sale proceeds of the Bonds, may be invested at a yield which is higher than the yield on the Bonds. 17. Fair Market Value of Open Market Escrow Securities. The Open Market Escrow Securities will be treated as having been acquired at fair market value on their purchase date because: (a) As set forth in the Bidding Agent Certificate, the Bidding Agent made a bona fide solicitation for the purchase of the Open Market Escrow Securities on behalf of the City that satisfied all of the following requirements: -5- (i) to potential providers. The bid specifications were in writing and were timely forwarded (ii) The bid specifications included all material terms of the bid, i.e. all terms that might directly or indirectly affect the yield or the cost of the Open Market Escrow Securities. (iii) The bid specifications included a statement notifying potential providers that submission of a bid is a representation that (A) the potential provider did not consult with any other potential provider about its bid, (B) the bid was determined without regard to any other formal or informal agreement that the potential provider has with the City, the Bidding Agent or any other person (whether or not in connection with the bond issue), and (C) the bid was not submitted solely as a courtesy to the City, the Bidding Agent or any other person for purposes of satisfying the requirements described in paragraphs 17(a)(vii) and 17(a)(viii) below. (iv) The terms of the bid specifications were commercially reasonable, i.e., there was a legitimate business purpose for all terms other than increasing the purchase price or reducing the yield of the Open Market Escrow Securities. (v) All potential providers had an equal opportunity to bid and no potential provider was given the opportunity to review other bids (i.e., a last look) before providing a bid. (vi) At least three providers that have an established industry reputation as a competitive provider of the type of investments being purchased were solicited for bids. (vii) The City received at least three bids from providers that did not have a material financial interest in the Bonds, based upon the representation of those providers made as a part of the bids and acknowledging that (A) a lead underwriter in a negotiated underwriting transaction is deemed to have a material financial interest in an issue, (B) any entity acting as a financial advisor with respect to the purchase of an investment at the time bid specifications are forwarded to potential providers has a material financial interest in an issue, and (C) a person that is a related party to another person that has a material financial interest in an issue is also deemed to have a material financial interest in the issue. (viii) At least one of the three bids described in paragraph 17(a)(vii) was from a provider described in paragraph 17(a)(vi). (ix) The Bidding Agent did not bid to provide the investment. (b)The winning bid satisfied the following requirements: (i) The winning bid was the lowest cost bona fide bid (including any broker’s fees) for the portfolio of Open Market Escrow Securities. -6- (ii) The provider of the Open Market Escrow Securities has certified the administrative costs that it paid (or expects to pay, if any) to third parties in connection with supplying the Open Market Escrow Securities. (c) The City will retain the following records until three years after the last outstanding Bond is redeemed: (i) The purchase agreement or confirmations for the Open Market Escrow Securities, attached to the Bidding Agent Certificate. (ii) The receipt or other record of the amount actually paid by the City for the investments, including a record of any administrative costs paid by the City, and the certification described in paragraph 17(a)(vii) of this section, attached to the Bidding Agent Certificate. (iii) For each bid that is submitted, the name of the person and entity submitting the bid, the time and date of the bid, and the bid results which is attached to the Bidding Agent Certificate. Certificme. (iv) The bid solicitation form, attached to the Bidding Agent (v)The cost of the most efficient portfolio of State and Local Government Series Securities, determined at the time that the bids were required to be submitted pursuant to the terms of the bid specifications, which is attached to the Bidding Agent Certificate. 18. Issue. Other than the Taxable Bonds, there are no other obligations which (a) have been or will be sold within 15 days of the Bonds, (b) are sold pursuant to the same plan of financing with the Bonds, and (c) will be paid out of substantially the same source of funds as the Bonds. 19. Compliance with Rebate Requirements. The City hereby covenants that it will take all necessary steps to comply with the requirement that rebatable arbitrage earnings on the investment of the gross proceeds of the Bonds, within the meaning of section 148(0 of the Code be rebated to the federal government. Specifically, the City will (a) maintain records regarding the investment of the gross proceeds of the Bonds as may be required to calculate such rebatable arbitrage earnings separately from records of amounts on deposit in the funds and accounts of the City which are allocable to other bond issues of the City or moneys which do not represent gross proceeds of any bonds of the City, (b) calculate at such intervals as may be required by applicable Regulations, the amount of rebatable arbitrage earnings, if any, earned from the investment of the gross proceeds of the Bonds and (c) pay, not less often than every fifth anniversary date of the delivery of the Bonds and within 60 days following the final maturity of the Bonds, or on such other dates required or permitted by applicable Regulationsl all amounts required to be rebated to the federal government. Further, the City will not indirectly pay any amount otherwise payable to the federal government pursuant to the foregoing requirements to any person other than the federal government by entering into any investment arrangement with -7- respect to the gross proceeds of the Bonds that might result in a reduction in the amount required to be paid to the federal government because such arrangement results in a smaller profit or a larger loss than would have resulted if the arrangement had been at arm’s-length and had the yield on the issue not been relevant to either party. The City hereby covenants to pay any rebate due on the Refunded Bonds within 60 days after the date the Refunded Bonds are retired. 20.Not an Abusive Transaction. (a)General. No action taken in connection with the issuance of the Bonds is or will have the effect of (a) enabling the City to exploit, other than during an allowable temporary period, the difference between tax-exempt and taxable interest rates to obtain a material financial advantage (including as a result of an investment of any portion of the gross proceeds of the Bonds over any period of time, notwithstanding that, in the aggregate, the gross proceeds of the Bonds are not invested in higher yielding investments over the term of the Bonds), or (b) overburdening the tax-exempt bond market by issuing more bonds, issuing bonds earlier, or allowing bonds to remain outstanding longer than is otherwise reasonably necessary to accomplish the governmental purposes of the Bonds, based on all the facts and circumstances. Specifically, (i) the primary purpose of each transaction undertaken in connection with the issuance of the Bonds is a bona fide governmental purpose; (ii) each action taken in connection with the issuance of the Bonds would reasonably be taken to accomplish the governmental purposes of the Bonds if the interest on the Bonds were not excludable from gross income for federal income tax purposes (assuming the hypothetical taxable interest rate would be the same as the actual tax-exempt interest rate on the Bonds); (iii) the proceeds of the Bonds will not exceed by more than a minor portion the amount necessary to accomplish the governmental purposes of the Bonds and will in fact not be substantially in excess of the amount of proceeds allocated to expenditures for the governmental purposes of the Bonds. (b)No Sinking Fund. No portion of the Bonds has a term that has been lengthened primarily for the purpose of creating a sinking fund or similar fund with respect to the Bonds and thereby eliminating significant amounts of negative arbitrage in the Escrow Fund. (c)No Noncallable Bonds. The Refunded Bonds do not include any noncallable Refunded Bonds that have been refunded in order to invest proceeds in the Escrow Fund allocable to the noncallable Refunded Bonds at a yield that is higher than the yield on the Bonds and thereby eliminate significant amounts of negative arbitrage in the applicable Escrow Fund. (d)No Window Refunding. No portion of the Bonds has been structured with maturity dates the primary purpose of which is to make available released revenues that will enable the City to avoid transferred proceeds or to make available revenues that may be invested to be ultimately used to pay debt service on another issue of obligations. (e)No Sale of Conduit Loan. No portion of the gross proceeds of the Refunded Bonds or the Bonds has been or will be used to acquire, finance, or refinance any conduit loan to any party. -8- 21. No Arbitrage. On the basis of the foregoing facts, estimates and circumstances, it is expected that the gross proceeds of the Bonds will not be used in a manner that would cause any of the Bonds to be an "arbitrage bond" within the meaning of section 148 of the Code and the Regulations. To the best of the knowledge and belief of the undersigned, there are no other facts, estimates or circumstances that would materially change such expectations. 22.No Private Use, Payments or Loan Financing. (a)General. The City reasonably expects, as of the date hereof, that no action or event during the entire stated term of the Bonds will cause the private business use test, the private security or payment test, or the private loan financing test to be met by the any of the separate issues. Specifically, (i) Not more than 10 percent of the proceeds of the Bonds will be used and not more than 10 percent of the proceeds of the Prior Bonds has been used in a trade or business of a nongovernmental person during the combined measurement period that began on the first day of the measurement period for each refunded bond issue and ends on the last day of the measurement period for each refunding bond issue. For purposes of determining use, the City will apply rules set forth in applicable Regulations and Revenue Procedures promulgated by the Internal Revenue Service, including, among others, the following rules: (A) any activity carried on by a person other than a natural person or a state or local governmental unit will be treated as a trade or business of a nongovernmental person; (B) the use of all or any portion of the projects financed or refinanced by the Refunded Bonds and refinanced by Bonds (the "Projects") is treated as the direct use of proceeds; (C) a nongovernmental person will be treated as a private business user of proceeds of the Bonds or the Refunded Bonds as a result of ownership, actual or beneficial use of the proceeds pursuant to a lease, or a management or incentive payment contract, or certain other arrangements such as a take-or-pay or other output- type contract; and (D) a nongovernmental person will be treated as a private business user of proceeds of the Bonds or the Refunded Bonds if the person has special legal entitlements to use directly or indirectly the Projects. (ii) The City has not taken and will not take any deliberate action that would cause or permit the use of the Projects to change such that more than 10 percent of the proceeds of the Bonds will be deemed to be used in the trade or business of a nongovernmental person for so long as any of the Bonds remains outstanding (or until an opinion of nationally recognized bond counsel is received to the effect that such change in use will not adversely affect the excludability from gross income for federal income tax purposes of interest payable on the Bonds). For this purpose any action within the control of the City is treated as a deliberate action. A deliberate action occurs on the date the City enters into a binding contract with a nongovernmental person for use of the Project that is not subject to any material contingencies. (iii) Not more than 10 percent of the payment of the debt service on the Bonds will be directly or indirectly derived from payments (whether or not to the City or any related party) in respect of property, or borrowed money, used or to be used for a private business use. Furthermore, no portion of the payment of the debt service on the Bonds will be directly or indirectly secured by any interest in property used or to be used for a private business use or payments in respect of property used or to be used for a private business use. -9- (iv) No portion of the proceeds of the Bonds will be directly or indirectly used to make or finance a loan to any person. (b)Dispositions of Personal Property in the Ordinary Course. The City does not reasonably expect that it will sell or otherwise dispose of personal property components of the Projects other than in the ordinary course of an established governmental program that satisfies the following requirements: (i) The weighted average maturity of the portion of the Bonds refinancing personal property is not greater than 120 percent of the reasonably expected actual use of such personal property for governmental purposes; (ii) The reasonably expected fair market value of such personal property on the date of disposition will be not greater than 25 percent of its cost; (iii) Such personal property will no longer be suitable for its governmental purposes on the date of disposition; and (iv) The City is required to deposit amounts received from such disposition in a commingled fund with substantial tax or other governmental revenues and the City reasonably expects to spend such amounts on governmental programs within six months from the date of commingling. Furthermore, the City will not sell or otherwise dispose of all or any portion of the Projects in circumstances in which the foregoing requirements are not satisfied unless it has received an opinion of nationally recognized bond counsel to the effect that such disposition will not adversely affect the treatment of interest on the Bonds as excludable from gross income for federal income tax purposes. (c)Other Agreements. The City will not enter into any agreement with any nongovernmental person regarding the use of all or any portion of the Projects during the stated term of the Bonds unless such agreement will not adversely affect the treatment of interest on the Bonds as excludable from gross income for federal income tax purposes. 23. Weighted Average Maturity. The weighted average maturity of the Bonds and of the Refunded Bonds set forth on Exhibit A attached to this certificate is the sum of the products of the issue price of each group of identical bonds of the respective issues and the number of years to maturity (determined separately for each group of identical bonds of the respective issues and taking into account mandatory redemptions), divided by the aggregate sale proceeds of the respective issues. 24. Federal Guarantee Prohibition. The Bonds are not "federally guaranteed" and the City will not cause or allow the Bonds to become "federally guaranteed". Unless otherwise excepted under section 149(b) of the Code, the Bonds will be considered federally guaranteed if: (a) The payment of principal or interest with respect to the Bonds is guaranteed (in whole or in part) by the United States (or any agency or instrumentality thereof); -10- (b)five percent or more of the proceeds of the Bonds are to be: (i) used in making loans the payment of principal or interest with respect to which are to be guaranteed (in whole or in part) by the United States (or any agency or instrumentality thereof), or accounts; or (ii)invested (directly or indirectly) in federally insured deposits or (c) The payment of principal or interest on the Bonds is otherwise indirectly guaranteed (in whole or in part) by the United States (or an agency or instrumentality thereof). The Bonds shall not be treated as federally guaranteed by reason of (i) any guarantee by the Federal Housing Administration, the Department of Veterans Affairs, the Federal National Mortgage Association, the Federal Home Loan Mortgage Corporation, or the Government National Mortgage Association, (ii) any guarantee of student loans and any guarantee by the Student Loan Marketing Association to finance student loans, (iii) any guarantee by the Bonneville Power Authority pursuant to the Northwest Power Act as in effect on July 18, 1984, or (iv) any guarantee by a Federal home loan bank described in Code section 149(b)(3)(E) that is made in connection with the original issuance of bonds during the period beginning on July 8, 2008 and ending on December 3 l, 2010 (or a renewal or extension of a guarantee so made). The federal guarantee prohibition shall not apply to (i) proceeds of the issue invested for an initial temporary period until such proceeds are needed for the purpose for which such issue was issued, (ii) investments of a bona fide debt service fund, (iii) investments of a reasonably required reserve fund, (iv) investments in bonds issued by the United States Treasury, or (v) other investments permitted under Regulations. 27. Bonds are not Hedge Bonds. Not more than 50 percent of the proceeds of the Prior Bonds was invested in nonpurpose investments (as defined in section 148(f)(6)(A) of the Code) having a substantially guaranteed yield for four years or more within the meaning of section 149(g)(3)(A)(ii) of the Code, and the City reasonably expected at the time the Prior Bonds were issued that at least 85 percent of the spendable proceeds of such issue would be used to carry out the governmental purposes of such issue within the three-year period beginning on the applicable date of issue of the Prior Bonds. CITY OF RENTON, WASHINGTON By: Name: Iw Title: Finance and Informatiog~$ervices Administrator Date: May 13, 2015 -ll- EXHIBIT A CERTIFICATE OF UNDERWRITER Piper Jaffray & Co. (the "Underwriter") has acted as underwriter in connection with the sale and delivery of the City of Renton, Washington (the "City") Limited Tax General Obligation Refunding Bonds, Series 2015A (the "Bonds"). I, the undersigned, hereby certify as follows on behalf of the Underwriter: 1. I am the duly chosen, qualified and acting officer of the Underwriter for the office shown below my signature; as such, I am familiar with the facts herein certified and I am duly authorized to execute and deliver this certificate on behalf of the Underwriter. I am the officer of the Underwriter charged, along with other officers of the Underwriter, with responsibility for the Bonds. 2. The Underwriter has purchased the Bonds from the City pursuant to a Bond Purchase Contract dated April 16, 2015 (the "Sale Date"), for an aggregate purchase price of $9,945,884.05. (A) Based on our records and other information available to us which we have no reason to believe is not correct, on the date of Sale Date all of the Bonds were the subject of a bona fide initial offering to the public at prices no higher than, or yields no lower than, those shown on the Official Statement relating to the Bonds (the "Official Statement"). (B) The issue prices set forth in the Official Statement were determined on the date the Bonds were purchased by the Underwriter based on the reasonable expectations regarding the initial public offering prices. Based on our records and other information available to us which we have no reason to believe is not correct, on the Sale Date at least 10 percent of each maturity of the Bonds were sold to the public at initial offering prices not greater than the respective prices shown on the inside cover of the Official Statement, except for those Bonds maturing in each of the years 2026, 2027 and 2028 (the "Excepted Maturities"), which were sold to dealers. The Excepted Maturities were offered to the public at their respective prices shown in the Official Statement using the same marketing efforts as used in marketing all other maturities of the Bonds. Despite such efforts and due to prevailing market conditions, we were unable to obtain offers and sales for at least 10% of each of the Excepted Maturities at their respective prices set forth in the Official Statement. (C) On the Sale Date, based upon then prevailing market conditions we had no reason to believe any of the Bonds would be initially sold to the public at prices greater than the prices, or yields less than the yields, shown on the Official Statement. The aggregate of such issue prices of all of the Bonds is $9,996,804.30. The initial public offering prices described above do not exceed the fair market value for the Bonds on the sale date. The term "public," as used herein, does not include bondhouses, brokers, dealers, and similar persons or organizations acting in the capacity of Underwriter or wholesalers. A-1 3. The yield on the Bonds is not less than 2.018864 percent. For purposes of this certificate, the term "yield" means that yield which is computed as described in paragraph 13 of the Federal Tax Certificate. 4. The weighted average maturity of the Bonds is 10.0362 years and the remaining weighted average maturity of the Refunded Bonds is 10.3081. The weighted average maturity of the Bonds was computed as described in paragraph 23 of the Federal Tax Certificate. 5. To the extent that we provided the Issuer and bond counsel with certain computations that show a bond yield, issue price, weighted average maturity and certain other information with respect to the Bonds, these computations are provided for informational purposes and are based on our understanding of directions that we have received from bond counsel regarding interpretation of the applicable law. We express no view regarding the legal sufficiency of any such computations or the correctness of any legal interpretation made by bond counsel. 6. I have worked closely with representatives of the City in structuring the financial terms of the Bonds. To the best of my knowledge, which was acquired in the course of structuring the Bonds on behalf of the City, (i) the Bonds were not structured to take advantage of the difference between tax exempt and taxable rates except as identified in the Federal Tax Certificate with respect to permissible investments subject to arbitrage rebate, and (ii) the Bonds were not issued earlier, in a greater amount, with reserves or sinking funds larger, or with a maturity longer than was reasonably necessary to finance the project refinanced by the Bonds. The Underwriter hereby authorizes the City to rely on the statements made herein in connection with making the representations set forth in the Federal Tax Certificate to which this certificate is attached and in its efforts to comply with the conditions imposed by the Code on the exclusion of interest on the Bonds from the gross income of their owners; provided, however, that nothing herein represents our interpretation of any laws, and in particular, regulations under section 148 of the Internal Revenue Code. The Underwriter hereby authorizes Pacifica Law Group LLP to rely on this certificate for purposes of its opinion regarding the treatment of interest on the Bonds as excludable from gross income for federal income tax purposes. Capitalized terms used herein and not otherwise defined have the meaning ascribed to such terms in the Federal Tax Certificate to which this certificate is attached. PIPER JAFFRAY & CO. Name: Lindsay Sovde --) Title: Managing Director Date: May 13, 2015 A-2 EXHIBIT B VERIFICATION REPORT AND FINANCING SCHEDULES B-1 Cash Flow and Yield Verification Report City of Renton, Washington May 13, 2015 Contents Letter Exhibit A Exhibit B Exhibit B-1 Exhibit B-2 Exhibit C Exhibit C-1 Exhibit C-2 Exhibit D Exhibit D-1 Exhibit D-2 Appendix I Schedule of Sources and Uses of Funds Tax-Exempt Escrow Account Cash Flow Cash Receipts From and Yield on the Open-Market Securities in the Tax-Exempt Escrow Account Debt Service Payments on the Refunded Bonds Allocated to the Tax-Exempt Escrow Account Taxable Escrow Account Cash Flow Cash Receipts From and Purchase Price of the Open-Market Securities in the Taxable Escrow Account Debt Service Payments on the Refunded Bonds Allocated to the Taxable Escrow Account Debt S~rvice Payments and Yield on the 2015A Bonds Original Issue Premium on the 2015A Bonds Debt Service Payments on the 2015B Bonds Applicable schedules provided by Piper Jaffray & Co. GrantThornton Report of Independent Certified Public: A¢ounl:nnts On Applying Agreed-Upon Procedures City of Renton 1055 South Grady Way Renton, Washington Grant Thornton LLP 200 S 6th Street, Suite 1400 Minneapolis, MN 55402-1434 T 612.332.0001 F 612.332.8361 GrantThornton.com linkd.in/GrantThorntonUS twitter.com/GrantThorntonU S Padfica Law Group LLP 1191 Second Avenue, Suite 2100 Seattle, Washington U.S. Bank National Associadon 1420 Fifth Avenue, Seventh Floor Seattle, Washington Piper Jaffray & Co. 1420 Fifth Avenue, Suite 4300 Seattle, Washington City of Renton, Washington $8,825,000 Limited Tax General Obligation Refunding Bonds, Series 2015A $3,695,000 Limited Tax General Obligation Refunding Bonds, Series 2015B (Taxable) Dated May 13, 2015 We have peffomaed the procedures described in this report, which were agreed to by the City of Renton, Washington (the "City") and Piper Jaffray & Co, (the "Underwater"), to verify the mathematical accuracy of certain computations contained in the schedules attached in Appendix I provided by the Underwriter. The Underwriter is responsible for these schedules. These procedures were performed soldy toassist you in the issuance of the above-captioned bond issues (the "2015A Bonds" and the "2015B Bonds", collectively referred to as the "Bonds") for the purpose of refunding a portion of the City’s outstanding Limited Tax General Obligation Bonds, 2006 (the "Refunded Bonds") as summarized on the next page. This agreed-upon procedures engagement was conducted in accordance with attestation standards established by the American Institute of Certified Public Accountants. The sufficiency of these procedures is soldy the responsibility of the addressees of this report who are the specified parties. Consequently, we make no representation regarding the sufficiency of the procedures described in this report either for the purpose for which this report has been requested or for any other purpose. Grant Thornton LiP Page 2 Principal Principal Maturities Redemption Redemption ~I~sue Issued Dated Refunded,Refunded Date Pric,e Tax-Exempt Escrow Account: 12-1-21 to 12-1-24 and 2006 $17,980,000 August 1, 2006 $9,055,000 12-1-28 12-1-16 Taxable Escrow Account: 12,1-17, 12-1-19 2006 $17,980,000 August l, 2006 $3,345,000 and !2-1-20 100% 12-1-16 100% VERIFICATION OF ESCROW ACCOUNTS CASH FLOW SUFFICIENCY The Underwriter provided us with schedules (AppenclLx 1) summarizing future escrow accounts cash receipts and disbursements. These schedules indicate that there will be suffident cash available (i) in the Tax-Exempt Escrow Account to pay the principal and interest on the Refunded Bonds allocated to the Tax-Exempt Escrow Account assmrfing the Refunded Bonds allocated to the Tax-Exempt Escrow Account will be redeemed on December 1, 2016 at 100 percent of par plus accrued interest, and (ii) in the Taxable Escrow Account to pay the principal and interest on the Refunded Bonds allocated to the Taxable Escrow Account assuming the Refunded Bonds allocated to the Taxable Escrow Account will be redeemed on December 1, 2016 at 100 percent of par plus accrued interest. The attached Exhibit A (Schedule of Sources and Uses of Funds) was compiled based upon information provided by the Underwriter. As part of our engagement to recalculate the schedules attached as Appendix I we prepared schedules attached hereto as Exhibits B through B-2 and C through C-2 independently calculating future escrow accounts cash recdpts and disbursements and compared the information used in our calculations to the information listed below contained in applicable pages of the following documents: Trade conftrmafions provided by the Underwriter used to acquire certain United States Treasury Bills (the "T-Bills") and Notes (the "T-Notes") (collectively referred to as the "Open-Market Securities") insofar as the Open-Market Securities are described" as to the principal amounts, interest rates, purchase prices and maturity dates; and Official Statement and Ordinance for the Refunded Bonds provided by the Underwriter insofar as the Refunded Bonds are described as to the maturity and interest payment dates, principal amounts, interest rates and optional redemption date and price. Our procedures, as summarized in Exhibits B through B-2 and C through C-2, prove the mathematical accuracy of the schedules provided by the Underwriter summarizing future escrow accounts cash receipts and disbursements. The schedules provided by the Underwriter and those prepared by us reflect that (i) the anticipated receipts from the Open-Market Securities in the Tax-Exempt Escrow Account, together with an inidal cash deposit of $661.75 to be deposited into the Tax-Exempt Escrow Account on May 13, 2015, will be sufficient to pay, when due, the principal and interest related to the Refunded Bonds allocated to the Tax- Exempt Escrow Account assuming the Refunded Bonds allocated to the Tax-Exempt Escrow Account will be redeemed on December 1, 2016 at 100 percent of par plus accrued interest, and (J.i) the anticipated receipts from the Open-Market Securities in the Taxable Escrow Page 3 Account, together with an initial cash deposit of $173.00 to be deposited into the Taxable Escrow Account on May 13, 2015, will be sufficient to pay, when due, the principal and interest related to the Refunded Bonds allocated to the Taxable Escrow Account assuming the Refunded Bonds allocated to the Taxable Escrow Account will be redeemed on December 1, 2016 at 100 percent of par plus accrued interest. VERIFICATION OF YIELDS The Underwriter provided us with schedules (Appendix I) which indicate that the yield on the cash receipts from the Open-Market Securities in the Tax-Exempt Escrow Account is less than the yield on the 2015A Bonds. These schedules were prepared based on the assumed settlement date of May 13, 2015 using a 360-day year with interest compounded semi-annually. The term "yield", as used herein, means that yield which, when used in computing the present value of all payments of principal and interest to be paid or received on an obligation produces an amount equal to, in the case of the cash receipts from the Open-Market Securities in the Tax-Exempt Escrow Account, the purchase price, and in the case of the 2015A Bonds, the issue price. In addition, we found that the schedules provided by the Underwriter, which assume the redemption of the December !, 2025 through December 1, 2028 maturities of the 2015A Bonds identified on Exhibits D and D-1 at par on June 1, 2025 plus accrued interest, correcdy treat those 2015A Bonds as yield-to-call 2015A Bonds as retired on the respective date that for each 2015A Bond produces the lowest yield for the issue that includ& the 2015A Bonds. Those 2015A Bonds identified as yield-to-call 2015A Bonds on the attached Exhibits D and D-1 are those 2015A Bonds that are subject to optional redemption and that are issued at an issue price that exceeds the stated redemption price at maturity of such 2015A Bonds by more than one-fourth of one percent multiplied by the product of the stated redemption price at maturity of such 2015A Bonds and the number of complete years to the first optional redemption date for the 2015A Bonds. We found that there are no other yield-to-call 2015A Bonds other than those identified on the attached Exhibits D and D-1. As part of our engagement to recalculate the schedules attached as Appendix I we prepared schedules attached hereto as Exhibits B-1 and D independendy calculating the yields on (i) the cash receipts from the Open-Market Securities in the Tax-Exempt Escrow Account calculated on Exhibit B-l, and (ii) the 2015A Bonds using the Official Statement provided by the Underwriter insofar as the 2015A Bonds are described as to the maturity and interest payment dates, dated date, principal amounts, interest rates, optional redemption date and price, and, issue price to the public. The results of our calculations, based on the aforementioned assumptions, are summarized below: Yield Ex~bit ¯Yield on the cash receipts from the Open-Market Securities in the Tax-Exempt Escrow Account 0.409583%B-1 ¯Yield on the 2015A Bonds 2.018864% D Our procedures, as summarized in Exhibits B-1 and D, prove the mathematical accuracy of the schedules provided by the Underwriter summarizing the yields. The schedules provided by the Underwriter and those prepared by us reflect that the yield on the cash receipts from the Open- Market Securities in the Tax-Exempt Escrow Account is less than the yield on the 2015A Bonds. Page 4 In addition, we have prepared schedules not attached hereto, which indicate that the yield on the cash receipts from the Open-Market Securities in the Tax-Exempt Escrow Account, assuming reinvestment of the cash balances in the Tax-Exempt Escrow Account at an interest rate of 20%, is less than the yield on the 2015A Bonds. We were not engaged to, and did not, conduct an examination or a review in accordance with attestation standards established by the American Institute of Certified Public Accountants, the objective of which would be the expression of an examination opinion or limited assurance on the items referred to above. Accordingly we do not express such an opinion or limited assurance. Had we performed additional procedures, other matters might have come to our attention that would have been reported to you. This report is intended solely for the information and use of those to whom this letter is addressed and is not intended to be and should not be used by anyone other than these specified parties. Minneapolis, Minnesota May 13, 2015 Exhibit A City of Renton, Washington SCHEDULE OF SOURCES AND USES OF FUNDS May 13, 2015 SOURCES: Principal amount of the Bonds Original issue premium 2015A Bonds $8,825,000.00 1,171,804.30 $9,996,804.30 2015B Bonds $3,695,000.00 $3,695,000.00 ¯Tot~ $12,520,000.00 1,171,804.30 $13,691,804.30 USES: Purchase price of the Open-Market Securities Beginning cash deposit to escrow account Costs of issuance Underwriter’s discount Contingency $9,915,377.32 661.75 29,375.55 50,920.25 469.43 $3,657,128.54 173.00 12,299.45 21,763.55 3,635.46 $13,572,505.86 834.75 41,675.00 72,683.80 4,104.89 $9,996,804.30 $3,695,000.00 $13,691,804.30 Exhibit B City of Renton, Washington TAX-EXEMPT ESCROW ACCOUNT CASH FLOW Dates Cash deposit on May 13, 2015 05-28-15 05-31-15 06-01-15 11-30-15 12-01-15 05-31-16 06-01-16 11-30-16 12-01-16 Cash receipts from Open-Market Securities in the Tax-Exempt Escrow Account (Exhibit B-l) $205,000.00 25,205.00 230,205.00 229,948.75 9,285,155.00 $9,975,513.75 Debt service payments on Refunded Bonds allocated to the Tax-Exempt Escrow Account (Exhibit B-2) $230,293.75 230,293.75 230,293.75 9,285,293.75 $9,976,175.00 Cash balance $661.75 205,661.75 230,866.75 573.00 230,778.00 484.25 230,433.00 139.25 9,285,294.25 0.50 City of Renton, Washington CASH RECEIPTS FROM AND YIELD ON THE OPEN-MARKET SECURITIES IN THE TAX-EXEMPT ESCROW ACCOUNT Exhibit B-1 Receipt date 05-28-15 11-30-15 05-31-16 11-30-16 Cash receipts from Open-Market Present value on Securities in May 13, 2015 Interest the Tax-Exempt using a yield of Principal rate Interest Escrow Account 0.409583% $205,000 0.000%$205,000.00 $204,965.05 205,000 0.250%$25,205.00 230,205.00 229,690.14 205,000 1.750%24,948.75 229,948.75 228,962.96 9,262,000 0.500%23,155.00 9,285,155.00 9,226,559.33 $9,877,000 $98,513.75 $9,975,513.75 $9,915,377.32 The sum of the present values of the cash receipts from the Open-Market Securities in the Tax-Exempt Escrow Account on May 13, 2015, using a yield of 0.409583%, is equal to the purchase price of the Open-Market Securities in the Tax-Exempt Escrow Account as shown below: Maturity Prmdpal Interest Accrued Purchase T]~e date amount rate Price Cost interest price T-Bills 05-28-15 $205,000 0.000%100.009130%$205,018.71 $205,018.71 T-Notes 11-30-15 205,000 0.250%100.074890%205,153.52 $230.91 205,384.43 T-Notes 05-31-16 205,000 1.750%101.515220%208,106.20 1,616.35 209,722.55 T-Notes 11-30-16 9,262,000 " 0.500%100.133737%9,274,386.68 20,864.95 9,295,251.63 $9,877,000 $9,892,665.11 $22,712.21 $9,915,377.32 Exhibit B-2 City of Renton, Washington DEBT SERVICE PAYMENTS ON THE REFUNDED BONDS ALLOCATED TO THE TAX-EXEMPT ESCROW ACCOUNT Date 06-01-15 12-01-15 06-01-16 12-01-16 Principal $9,055,000 (1) $9,055,000 Interest rate Interest $230,293.75 230,293.75 230,293.75 230,293.75 $921,175.00 Debt service payments $230,293.75 230,293.75 230,293.75 9,285,293.75 $9,976,175.00 (1)Actual maturity dates, principal amounts and interest rates are as follows: Maturity Principal Interest date amount rate 12-01-21 $945,000 5.000% 12-01-22 1 000,000 5.250% 12-01-23 1.040,000 5.250% 12-01-24 1.095,000 5.250% 12-01-28 4,975,000 5.000% $9,055,000 City of Renton, Washington T~LE ESCROW ACCOUNT CASH FLOW .Exhibit C Dates Cash deposit on May 13, 2015 05-28-15 05-31-15 06-01-15 11-30-15 12-01-15 05-31-16 06-01-16 11-30-16 12-01-16 Cash receipts from Open-Market Securities in the Taxable Escrow Account (Exhibit C-1) $75,000.00 $9,290.00 83,290.00 83,197.50 3,428,550.00 $3,679,327.50 Debt service payments on Refunded Bonds allocated to the Taxable Escrow Account (Exhibit C-2) $83,625.00 83,625.00 83,625.00 3,428,625.00 $3,679,500.00 Cash balance $173.00 75,173.00 84,463.00 838.00 84,128.00 503.00 83,700.50 75.50 3,428,625.50 0.50 Exhibit C-1 City of Renton, Washington CASH RECEIPTS FROM AND PURCHASE PRICE OF THE OPEN-MARKET SECURITIES IN THE TAXABLE ESCROW ACCOUN’[ Receipt Interest date Principal rate Interest 05-28-15 $75,000 0.000% 05-31-15 $9,290.00 11-30-15 74,000 0.250%9,290.00 05-31-16 74,000 1.750%9,197.50 11-30-16 3,420,000 0.500%8,550.00 $3,643,000 $36,327.50 Cash receipts from Open-Market Securities in the Taxable Escrow Account $75,000.00 9,290.00 83,290.00 83,197.50 3,428,550.00 $3,679,327.50 Purchase price of the Open-Market Securities in the Taxable Escrow Account: Maturity Principal Interest .~l~e date amount rate Price T-Bills 05-28-15 $75,000 0.000%100.009130% T-Notes 11-30-15 74,000 0.250%100.074890% T-Notes 05-31-16 74,000 1.750%101.515220% T-Notes 11-30-16 3,420,000 0.500%100.133737% $3,643,000 Cost $75,006.85 74,055.42 75,121.26 3,424,573.80 $3,648,757.33 Accrued interest $83.35 583.46 7,704.40 $8,371.21 Purchase price $75,006.85 74,138.77 75,704.72 3,432,278.20 $3,657,128.54 City of Renton, Washington DEBT SERVICE PAYMENTS ON THE REFUNDED BONDS ALLOCATED TO THE TAXABLE ESCROW ACCOUNT Exhibit C-2 Date 06-01-15 12-01-15 06-01-16 12-01-16 Interest Principal rate $3,345,000 (1) $3,345,000 Interest $83,625.00 83,625.00 83,625.00 83,625.00 $334,500.00 Debt service payments $83,625.00 83,625.00 83,625.00 3,428,625.00 $3,679,500.00 (1) Actual maturity dates, principal amounts and interest rate areas follows: Maturity Principal Interest date amount rate 12-01-17 $775,000 5.000% 12-01-19 1,670,000 5.000% 12-01-20 900,000 5.000% $3,345,000 Exhibit D City of Renton, Washington DEBT SERVICE PAYMENTS AND YIELD ON THE 2015A BONDS $8,825,000 issue dated May 13, 2015 (1) Interest Total debt Adjusted Date Principal rate Interest service debt service 12-01-15 $178,213.75 $178,213.75 $178~213.75 06-01 - 16 162,012.50 162,012.50 162,012.50 12-01-16 162,012.50 162,012.50 162,012.50 06-01-17 162,012.50 162,012.50 162,012.50 12-01 - 17 162,012.50 162,012.50 162,012.50 06-01 - 18 162,012.50 162,012.50 162,012.50 12-01-18 162,012.50 162,012.50 162,012.50 06-01-19 162,012.50 162,012.50 162,012.50 12-01-19 162,012.50 162,012.50 162,012.50 06-01-20 162,012.50 162,012.50 162,012.50 12-01-20 $275,000 4.000%162,012.50 437,012.50 437,012.50 06-01-21 156,512.50 156,512.50 156,512.50 12-01-21 935,000 4.000%156,512.50 1,091,512.50 1,091,512.50 06-01-22 137,812.50 137,812.50 137,812.50 12-01-22 975,000 4.000%137,812.50 1,112,812.50 1,112,812.50 06-01-23 118,312.50 118,312.50 118,312.50 12-01-23 1,005,000 4.000%118,312.50 1,123,312.50 1,123,312.50 06-01-24 98,212.50 98,212.50 98,212.50 12-01-24 1,045,000 4.000%98,212.50 1,143,212.50 1,143,212.50 06-01-25 77,312.50 77,312.50 4,667,312.50 12-01-25 1,090,000 3.500%77,312.50 1,167,312.50 06-01-26 58,237.50 58,237.50 12-01-26 1,125,000 3.500°/o 58,237.50 1,183,237.50 06-01-27 38,550.00 38,550.00 12-01-27 1,170,000 3.500%38,550.00 1,208,550.00 06-01-28 18,075.00 18,075.00 12-01-28 1,205,000 3.000%18,075.00 1,223,075.00 $8,825,000 $3,204,388.75 $12,029,388.75 $11,722,351.25 Present value on May 13, 2015 using a yield of 2.018864% $176,255.67 158,631.15 157,045.88 155,476.45 ¯153,922.70 152,384.49 150,861.64 149,354.01 147,861.45 146,383.81 390,909.70 138,602.06 956,946.02 119,614.93 956,217.88 100,647.63 946,044.57 81,887.17 943,656.88 3,814,100.21 $9,996,804.30 $8,825,000.00 1,171,804.30 $9,996,804.30 The present value of the future payments is equal to: Principal amount of the Bonds Original issue premium The sum of the present values of the adjusted debt service payments of the 2015A Bonds on May 13, 2015, using a yield of 2.018864%, is equal to the issue price of the 2015A Bonds. (1)Assumes that the December 1, 2025 through December 1, 2028 maturities are called on June 1, 2025 at 100 percent of par plus accrued interest. City of Renton, Washington ORIGINAL ISSUE PREMIUM ON THE 2015A BONDS Exhibit D- 1 Initial public Maturity Interest offering date Prindpal rate Yidd price 12-01-20 $275,000 4.000%1.430%113.664% 12-01-21 935,000 4.000%1.620%114.733% 12-01-22 975,000 4.000%1.720%116.077% 12-01-23 1,005,000 4.000%1.860%116.843% 12-01-24 1,045,000 4.000%1.950%117.783% 12-01-25 1,090,000 3.500%2.080%112.817% (1) (2) 12-01-26 1,125,000 3.500%2.100%112.624% (1) (2) 12-01-27 1,170,000 3.500%2.180%111.854% (1) (2) 12~01-28 1,205,000 3.000%2.400%105.328%(1)(2) $8,825,0OO Original issue premium $37,576.00 137,753.55 156,750.75 169,272.15 185,832.35 139,705.30 142,020.00 138,691.80 64,202.40 $1,171,804.30 (1) Maturities were priced to call on June 1, 2025 at 100 percent of par. (2)Represents the yidd-to-call 2015A Bonds included for purposes of computing yidd on the 2015A Bonds. Exhibit D-2 City of Renton, Washington DEBT SERVICE PAYMENTS ON THE 2015B BONDS $3,695,000 issue dated May 13, 2015 Interest Total debt Date Principal rate Interest service 12-01-15 $330,000 0.500%$30,059.15 $360,059.15 06-01-16 26,501.50 26,501.50 12-01-16 100,000 0.850%26,501.50 126,501.50 06-01-17 26,076.50 26,076.50 12-01-17 865,000 1.130%26,076.50 891,076.50 06-01-18 21,189.25 21,189.25 12-01-18 875,000 1.500%21,189.25 896,189.25 06-01-19 14,626.75 14,626.75 12-01 - 19 890,000 1.810%14,626.75 904,626.75 06-01-20 6,572.25 6,572.25 12-01-20 635,000 2.070%6,572.25 641,572.25 $3,695,000 $219,991.65 $3,914,991.65 APPENDIX I Applicable schedules provided by Piper Jaffray & Co. SOURCES AND USES OF FUNDS City of Renton Limited Tax General Obligation Refunding Bonds, 2015A (BQ) & 2015B (Taxable) (Ref 06) FINAL NUMBERS Dated Date 05/13/2015 Delivery Date 05/13/2015 Limited Tax Limited Tax General General Obligation Obligation Refunding Refunding Bonds, 2015A Bonds, 2015B Sources:(BQ)(Taxable)Total Bond Proceeds: Par Amount 8,825,000.00 3,695,000.00 12,520,000.00 Premium 1,171,804.30 1,171,804.30 9,996,804.30 3,695,000.00 13,691,804.30 Uses: Refunding Escrow Deposits: Cash Deposit Open Market Purchases Delivery Date Expenses: Cost of Issuance Underwfiter’s Discount Other Uses of Funds: Additional Proceeds Limited Tax Limited Tax General General Obligation Obligation Refunding Refunding Bonds, 2015A Bonds, 2015B (BQ)(Taxable)Total 661.75 173.00 834.75 9~915,377.32 3~657,128.54 13~572,505.86 9,916,039.07 3,657,301.54 13,573,340.61 29,375.55 12,299.45 41,675.00 50,920.25 21,763.55 72~683.80 80,295.80 34,063.00 114,358.80 469.43 3,635.46 4,104.89 9,996,804.30 3,695,000.00 13,691,804.30 Apr 16, 2015 11:48 am Prepared by Piper Jaffray & Co.(k:\analysis\dbc\city\RENTON:R06LTGO) Page 8 Date 05/13/2015 05/28/2015 05/31/2015 06/01/2015 11/30/2015 12/01/2015 05/31/2016 06/01/2016 11/30/2016 12/01/2016 ESCROW SUFFICIENCY City of Renton Limited Tax General Obligation Refunding Bonds, 2015A (BQ) & 2015B (Taxable) (Ref 06) FINAL NUMBERS Escrow Net Escrow Excess Excess Requirement Receipts Receipts Balance 834.75 834.75 834.75 280,000.00 280,000.00 280,834.75 34,495.00 34,495.00 315,329.75 313,918.75 -313,918.75 1,411.00 313,495.00 313,495.00 314,906.00 313,918.75 -313,918.75 987.25 313,146.25 313,146.25 314,133.50 313,918.75 -313,918.75 214.75 12, 713,705.00 12, 713,705.00 12, 713,919.75 12,713,918.75 -12,713,918.75 1.00 13,655,675.00 13,655,676.00 1.00 Apr 16, 2015 11:48 am Prepared by Piper Jaffray & Co.(k:\analysis\dbc\eity\RENTON:R06LTGO) Page 28 Type of Maturity Security Date TBill 05/28/2015 TNote 11/30/2015 TNote 05/31/2016 TNote 11/30/2016 ESCROW COST City of Renton Limited Tax General Obligation Refunding Bonds, 2015A (BQ) FINAL NUMBERS Par Accrued Total Amount Rate Yield Price Cost Interest Cost 205,000 - -0.220269%100.0091280 205,018.71 205,018.71 205,000 0.250%0.113613%100.0748900 205,153.52 230.91 205,384.43 205,000 1.750%0.302734%101.5152200 208,106.20 1,616.35 209,722.55 9,262,000 0.500%0.413307%100.1337366 9,274,386.68 20,864.95 9,295,251.63 9,877,000 9,892,665.11 22,712.21 9,915,377.32 Purchase Cost of Cash Total Date Securities Deposit Escrow Cost Yield 05/13/2015 9,915,377.32 661.75 9,916,039.07 0.409583% 9,915,377.32 661.75 9,916,039.07 Apr 16, 2015 11:48 am Prepared by Piper Jaffray & Co.(k:\analysis\dbc\city\RENTON:R06LTGO) Page 24 ESCROW REQUIREMENTS City of Renton Limited Tax General Obligation Refunding Bonds, 2015A (BQ) FINAL NUMBERS Period Principal Ending Interest Redeemed Total 06/01/2015 230,293.75 230,293.75 12/01/2015 230,293.75 -230,293.75 06/01/2016 230,293.75 -230,293.75 12/01/2016 230,293.75 9,055,000.00 9,285,293.75 921,175.00 9,055,000.00 9,976,175o00 Apt 16, 2015 11:48 am Prepared by Piper Jaffray & Co.(k:\analysis\dbc\city\RENTON:R06LTGO) Page 32 SUMMARY OF BONDS REFUNDED City of Renton Limited Tax G~neral Obligation Refunding Bonds, 2015A (BQ) FINAL NUMBERS Bond Maturity Interest " Par Call Date Rate Amount Date LTGO Bonds, 2006, 06LTGO: SERIAL 12/01/2021 12/01/2022 12/01/2023 12/01/2024 2028TERM 12/01/2025 12/01/2026 12/01/2027 12/01/2028 5.000%945,000.00 12/01/2016 5.250%1,000,000.00 12/01/2016 5.250%1,040,000.00 12/01/2016 5.250%1,095,000.00 12/01/2016 5.000%1,155,000.00 12/01/2016 5.000%1,210,000.00 12/01/2016 5.000%1,275,000.00 12/01/2016 5.000%1,335,000.00 12/01/2016 9,055,000.00 Call Price 100.000 100.000 100.000 100.000 100.000 100.000 100.000 100.000 Apr 16, 2015 11:48 am Prepared by Piper Jaffray & Co.(k:\analysis\dbc\city\RENTON:R06LTGO) Page 35 Type of Security TBill TNote TNote TNote Mamfity D~ 05/28/2015 11/30/2015 05/31/2016 11/30/2016 ESCROW COST City of Renton Limited Tax General Obligation Refunding Bonds, 2015B (Taxable) FINAL NUMBERS Par Accrued Total Amount Rate Yield Price Cost Interest Cost 75,000 --0.220317%100.0091300 75,006.85 -75,006.85 74,000 0.250%0.113613%100.0748900 74,055.42 83.35 74,138.77 74,000 1.750%0.302734%101.5152200 75,121.26 583.46 75,704.72 3,420,000 0.500%0.413307%100.1337367 3,424,573.80 7,704.40 3,432,278.20 3,643,000 3,648,757.33 8,371.21 3,657,128.54 Purchase Costof Cash Total Dme Securities Deposit Escrow Cost Yield 05/13/2015 3,657,128.54 173.00 3,657,301.54 0.409673% 3,657,128.54 173.00 3,657,301.54 Apr 16, 2015 11:48 am Prepared by Piper Jaffray & Co.(k:\analysis\dbc\city\RENTON:R06LTGO) Page 25 ESCROW REQUIREMENTS City of Renton Limited Tax General Obligation Refunding Bonds, 2015B (Taxable) FINAL NUMBERS Period Principal Ending Interest Redeemed Total 06/01/2015 83,625.00 83,625.00 12/01/2015 83,625.00 83,625.00 06/01/2016 83,625.00 83,625.00 12/01/2016 83,625.00 3,345,000.00 3,428,625.00 334,500.00 3,345,000.00 3,679,500.00 Apr 16, 2015 11:48 am Prepared by Piper Jaffray & Co.(k:\analysis\dbc\citykRENTON:R06LTGO) Page 33 SUMMARY OF BONDS REFUNDED City of Renton Limited Tax General Obligation Refunding Bonds, 2015B (Taxable) FINAL NUMBERS Bond Maturity Interest Par Call Date Rate Amount Date Call Price LTGO Bonds, 2006, 06LTGO: SERIAL 12/01/2017 5.000% ¯775,000.00 12/01/2016 100.000 2019TERM 12/01/2018 5.000%815,000.00 12/01/2016 100.000 12/01/2019 5.000%.855,000.00 12/01/2016 100.000 SERIAL 12/01/2020 5.000%900,000.00 12/01/2016 100.000 3,345,000.00 Apr 16, 2015 11:48 am Prepared by Piper Jaffray & Co.(k:\analysis\dbc\cityhRENTON:R06LTGO) Page 36 Period Ending 12/01/2015 06/01/2016 12/01/2016 06/0112017 12/01/2017 06/01/2018 12/01/2018 06/01/2019 12/01/2019 06/01/2020 12/01/2020 06/01/2021 12/01/2021 06/01/2022 12/01/2022 06/01/2023 12/01/2023 06/0112024 12/01/2024 06/01/2025 12/01/2025 06/01/2026 12/01/2026 06/01/2027 12/01/2027 06/01/2028 12/01/2028 BOND DEBT SERVICI~ City of Renton Limited Tax General Obligation Refunding Bonds, 2015A (BQ) FINAL NUMBERS Annual Principal Coupon Interest Debt Service Debt Service 178,213.75 178,213.75 178,213.75 162,012.50 162,012.50 162,012.50 162,012.50 324,025.00 162,012.50 162,012.50 162,012.50 162,012.50 324,025.00 -162,012.50 162,012.50 -162,012.50 162,012.50 324,025.00 .162,012.50 162,012.50 .162,012.50 162,012.50 324,025.00 162,012.50 162,012.50 275,000 4.000%162,012.50 437,012.50 599,025.00 156,512.50 156,512.50 935,000 4.000%156,512.50 1,091,512.50 1,248,025.00 137,812.50 137,812.50 975,000 4.000%137,812.50 1,112,812.50 1,250,625.00 118,312.50 118,312.50 1,005,000 4.000%118,312.50 1,123,312.50 1,241,625.00 98,212.50 98,212.50 1,045,000 4.000%98,212.50 1,143,212.50 1,241,425.00 77,312.50 77,312.50 1,090,000 3.500%77,312.50 1,167,312.50 1,244,625.00 58,237.50 58,237.50 1,125,000 3.500%58,237.50 1,183,237.50 1,241,475.00 38,550.00 38,550.00 1,170,000 3.500%38,550.00 1,208,550.00 1,247,100.00 18,075.00 18,075.00 - 1,205,000 3.000%18,075.00 1,223,075.00 1,241,150.00 8,825,000 3,204,388.75 12,029,388.75 12,029,388.75 Apr 16, 2015 11:48 am Prepared by Piper Jaffray & Co.(k:\analysis\dbe\eity\RENTON:R06LTGO) Page 13 Bond Component Serial Bonds (BQ): Da~ BOND PRICING City of Renton Limited Tax General Obligation Refunding Bonds, 2015A (BQ) FINAL NUIVIBERS Yield to Call Call Premimn Amount Rate Yield Price Maturity Date Price (-Discount) 12/01/2020 275,000 4,000%1,430%113.664 37,576.0012/01/2021 935,000 4,000%1.620°,4 114.733 137,753.5512/01/2022 975,000 4.000%1.720%116.077 156,750.75 12/01/2023 1,005,000 4,000%1.860%I16.843 169,272.15 12/01/2024 1,045,000 4.000%1.950%I17.783 185,832.35 12/01/2025 1,090,000 3.500%2,080%112.817 C 2.137%06/0112025 I00.000 139,705.30 12101/2026 1,125,000 3.500%2.100%112.624 C 2,252%06101/2025 lO0.O00 ~ 142,020.00 12/01/2027 1,170,000 3.500%2.180%111.854 C 2.400%06101/2025 100.000 138,691.80 12/01/2028 1,205,000 3.000%2.400%105.328 C 2.533%06/01/2025 100.000 64,202.40 8,825,000 1,171,804.30 Dated Date 05/13,2015 Delivery Date 05/13/2015 First Coupon 12/01/2015 Par Amotmt 8,825,000.00 Premium t, 171,804.30 Production 9,996,804.30 Underwriter’s Discount -50,920.25 Purchase Price 9,945,884,05 Accrued Interest Net Proceeds 9,945,884.05 113,278236% -0.577000% 112,701236% Apr 16, 2015 11:48 am Prepared by Piper Jaffray & Co.(k:\analysis\dbc\city\RENTON:R06LTGO) Page 10 PROOF OF ARBITRAGE YIELD City of Renton Limited Tax General Obligation Refunding Bonds, 2015A (BQ) & 2015B (Taxable) (Ref 06) FINAL NUMBERS Date Debt Service Total 12/01/2015 178,213.75 178,213.75 06/01/2016 162,012.50 162,012.50 12/01/2016 162,012.50 162,012.50 06/01/2017 162,012.50 162,012.50 12/01/2017 162,012.50 162,012.50 06/01/2018 162,012.50 162,012.50 12/01/2018 162,012.50 162,012.50 06/01/2019 162,012.50 162,012.50 12/01/2019 162,012.50 162,012.50 06/01/2020 162,012.50 162,012.50 12/01/2020 437,012.50 437,012.50 06/01/2021 156,512.50 156,512.50 12/01/2021 1,091,512.50 1,091,512.50 06/01/2022 137,812.50 137,812.50 12/01/2022 1,112,812.50 1,112,812.50 06/01/2023 118,312.50 118,312.50 12/01/2023 1,123,312.50 1,123,312.50 06/01/2024 98,212.50 98,212.50 12/01/2024 1,143,212.50 1,143,212.50 06/01/2025 4,667,312.50 4,667,312.50 Present Value to 05/13/2015 2.0188641968% 176,255.67 158 631.15 157 045.88 155 476.45 153 922.70 152 384.49 150 861.64 149 354.01 147 861.45 146 383.81 390 909.70 138 602.06 956 946.02 119 514.93 956,217.88 100,647.63 946,044.57 81,887.17 943,656.89 3,814,100.21 i 1,722,351.25 11,722,351.25 9,996,804.30 Proceeds Summary Delivery date Par Value Premium (Discount) Target for yield calculation 05/13~015 8,825,000.00 1,171,804.30 9,996,804.30 Apr 16, 2015 11:48 am Prepared by Piper Jaffray & Co.(k:\analy sis\dbc\city\RENTON:R06LTGO) Page 18 PROOF OF ARBITRAGE YIELD City of Renton Limited Tax General Obligation Refunding Bonds, 2015A (BQ) & 2015B (Taxable) (Ref 06) FINAL NUMBERS Assumed Call/Computation Dates for Premium Bonds Bond Component SERIALBQ SERIALBQ SERIALBQ SERIALBQ Present Value Maturity Call Call to 05/13/2015 Date Rate Yield Date Price @ 2.0188641968% 12/01/2025 3.500%2.080%06/01/2025 100.000 6,469.82 12/01/2026 3.500%2.100%06/01/2025 100.000 8,848.82 12/01/2027 3.500%2.180%06/01/2025 100.000 18,211.77 12/01/2028 3.000%2.400%06/01/2025 100.000 42,840.82 Rejected Call/Computation Dates for Premium Bonds Bond Maturity Component Date Rate SERIALBQ 12/01/2025 3.500% SERIALBQ 12/01/2026 3.500% SERIALBQ 12/01/2027 3.500% SERIALBQ 12/01/2028 3.000% Present Value Call Call to 05/13/2015 Yield Date Price @ 2.0188641968% Increase to NPV 2.080%-13,000.45 6,530.63 2.100%28,868.39 20,019.57 2.180%52,567.88 34,356.11 2.400%-75,330.79 32,489.97 Apr 16, 2015 11:48 am Prepared by Piper Jaffray & Co.(k:\analysis\dbc\city\RENTON:R06LTGO) Page 19 BOND DEBT SERVICE City of Renton Limited Tax General Obligation Refunding Bonds, 2015B (Taxable) FINAL NUMBERS Period Annual Ending Principal Coupon Interest Debt Service Debt Service 12/01/2015 330,000 0.500%30,059.15 360,059.15 360,059.15 06/01/2016 26,501.50 26,501.50 12/01/2016 100,000 0.850%26,501.50 126,501.50 153,003.00 06/01/2017 26,076.50 26,076.50 12/01/2017 865,000 1.130%26,076.50 891,076.50 917,153.00 06/01/2018 21,189.25 21,189.25 12/01/2018 875,000 1.500%21,189.25 896,189.25 917,378.50 06/01/2019 14,626.75 14,626.75 12/01/2019 890,000 1.810%14,626.75 904,626.75 919,253.50 06/01/2020 6,572.25 6,572.25 12/01/2020 635,000 2.070%6,572.25 641,572.25 648,144.50 3,695,000 219,991.65 3,914,991.65 3,914,991.65 Apr 16, 2015 11:48 am Prepared by Piper Jaffray & Co.(k:\analysis\dbc\cityLRENTON:R06LTGO) Page 14 BOND PRICING City of Renton Limited Tax General Obligation Refunding Bonds, 2015B (Taxable) FINAL NUMBERS Bond Component Maturity Date Amount Rate Yield Serial Bonds (Taxable): 12/01/2015 330,000 0.500%0.500% 12/01/2016 100,000 0.850%0.850% 12/01/2017 865,000 1.130%1.130% 12/01/2018 875,000 1.500%1.500% 12/01/2019 890,000 1.810%1.810% 12101/2020 635,000 2.070%2.070% 3,695,000 Price 100.000 100.000 100.000 100.000 100.000 100.000 Dated Date Delivery Date First Coupon ParAmo~t OfiginallssueDiscount Production Underwriter~s Discount Purchase Price Accrued Interest Net Proceeds 05/13/2015 05/13/2015 12/01/2015 3,695,000.00 3,695,000.00 -21,763.55 3,673,236.45 3,673,236.45 100.000000% -0.589000% 99.411000% Apr 16, 2015 11:48 am Prepared by Piper Jaffray & Co.(k:\analysis\dbc\city\RENTON:R06LTGO) Page 11 Since 1895. Member SIPC and NYSE. Piper laffray ~. Co. City of Renton Final Bond Pricing Numbers $8,825,000 Limited Tax General Obligation Refunding Bonds, Series 2o15A $3,695,ooo Limited Tax General Obligation Refunding Bonds, Series 2o15B (Taxable) PiperJaffray S EATTLE~N O RTI~tWt~T DIViSiON TABLE OF CONTENTS City of Renton Limited Tax General Obligation Refunding Bonds, 2015A (BQ) & 2015B (Taxable) (Ref 06 FINAL NUMBERS Report Page Summary of Financing Results ...........................1 Summary of Refunding Results ...........................2 Savings ....................................5 Sources and Uses of Funds ............................8 Bond Pricing ..................................9 Bond Debt Service ................................12 Bond Summary Statistics .............................15 Proof of Arbitrage Yield .............................18 Form 8038 Statistics ...............................20 Escrow Descriptions ...............................22 Escrow Cost ..................................23 Escrow Cash Flow ................................26 Proof of Composite Escrow Yield ..........................27 Escrow Sufficiency ...............................28 Escrow Statistics ................................29 Prior Bond Debt Service .............................30 Escrow Requirements ..............................31 Summary of Bonds Refunded ...........................34 Unrefunded Bond Debt Service ...........................37 Cost of Issuance .................................38 Apt 16, 2015 11:48 am Prepared by Piper Jaffray & Co.(k:\analysis\dbc\city\RENTON:R06LTGO) SUMMARY OF FINANCING RESULTS City of Renton Limited Tax General Obligation Refunding Bonds, 2015A (BQ) & 2015B (Taxable) (Ref 06) FINAL NUMBERS Bond Escrow Negative Net Series Bond Par Yield Contingency Yield Arbitrage Savings Limited Tax General Obligation Refunding Bonds, 20 8,825,000.00 2.019%469.43 0.410%231,517.81 1,723,201.33 Limited Tax General Obligation Refunding Bonds, 20 3,695,000.00 1.660%3,635.46 0.410%164,669.00 12,520,000.00 4,104.89 231,517.81 1,887,870.33 Aggregate: Arbitrage Yield 2.018864% Escrow Yield 0.409583% Apr 16, 2015 11:48 am Prepared by Piper Jaffray & Co.(k:\analysis\dbc\city\RENTON:R06LTGO) Page 1 SUMMARY OF REFUNDING RESULTS City of Renton Limited Tax General Obligation Refunding Bonds, 2015A (BQ) & 2015B (Taxable) (Ref 06) FINAL NUMBERS Dated Date 05/13/2015 Delivery Date 05/13/2015 Arbitrage yield 2.018864% Escrow yield 0.409583% Value of Negative Arbitrage 298,157.57 Bond Par Amount 12,520,000.00 True Interest Cost 2.141766% Net Interest Cost 2.272737% All-In TIC 2.184533% Average Coupon 3.347031% Average Life 8.172 Par amount of refunded bonds Average coupon of refunded bonds Average life of refunded bonds PV of prior debt to 05/13/2015 @ 2.018864% Net PV Savings Percentage savings of refunded bonds Percentage savings of refunding bonds 12,400,000.00 5.062793% 8.637 15,623,608.09 1,887,870.33 15.224761% 15.078837% Apr 16, 2015 11:48 am Prepared by Piper Jaffray & Co.(k:\analysis\dbc\city\RENTON:R06LTGO) Page 2 SUMMARY OF REFUNDING RESULTS City of Renton Limited Tax General Obligation Refunding Bonds, 2015A (BQ) F1NAL NUMBERS Dated Date Delivery Date Arbitrage yield Escrow yield Value of Negative Arbitrage Bond Par Amount True Interest Cost Net Interest Cost All-In TIC Average Coupon Average Life Par amount of refunded bonds Average coupon of refunded bonds Average life of refunded bonds PV of prior debt to 05/13/2015 @ 2.018864% Net PV Savings Percentage savings of refunded bonds Percentage savings of refunding bonds 05/13/2015 05/13/2015 2.018864% 0.409583% 231,517.81 8,825,000.00 2.187631% 2.338684% 2.222348% 3.596850% 10.095 9,055,000.00 5.072046% 10.308 11,812,932.47 1,723,201.33 19.030385% 19.526361% Apr 16, 2015 11:48 am Prepared by Piper Jaffray & Co.(k:\analysis\dbc\city\RENTON:R06LTGO) Page 3 SUMMARY OF REFUNDING RESULTS City of Renton Limited Tax General Obligation Refunding Bonds, 2015B (Taxable) FINAL NUMBERS Dated Date 05/13/2015 Delivery Date 05/13/2015 Arbitrage yield 1.660278% Escrow yield 0.409673% Value of Negative Arbitrage 66,639.76 Bond Par Amount 3,695,000.00 True Interest Cost 1.831603% Net Interest Cost 1.828397% All-In TIC 1.929021% Average Coupon 1.663799% Average Life 3.578 Par amount of refunded bonds Average coupon of refunded bonds Average life of refunded bonds PV of prior debt to 05/13/2015 @ 2.018864% Net PV Savings Percentage savings of refunded bonds Percentage savings of refunding bonds 3,345,000.00 5.000000% 4.112 3,810,675.62 164,669.00 4.922840% 4.456536% Apr 16, 2015 11:48 am Prepared by Piper Jaffray & Co.(k:\analysis\dbc\city\RENTON:R06LTGO) Page 4 Date SAVINGS City of Renton Limited Tax General Obligation Refunding Bonds, 2015A (BQ) & 2015B (Taxable) (Ref 06) FINAL NUMBERS Present Value Prior Refunding Annual to 05/13/2015 Debt Service Debt Service Savings Savings @ 2.0188642% 06/01/2015 313,918.75 313,918.75 313,603.62 12/01/2015 313,918.75 538,272.90 -224,354.15 89,564.60 -221,889.11 06/01/2016 313,918.75 188,514.00 125,404.75 122,787.44 12/01/2016 313,918.75 288,514.00 25,404.75 150,809.50 24,625.95 06/01/2017 313,918.75 188,089.00 125,829.75 120,753.42 12/01/2017 1,088,918.75 1,053,089.00 35,829.75 161,659.50 34,040.66 06/01/2018 294,543.75 183,201.75 111,342.00 104,725.21 12/01/2018 1,109,543.75 1,058,201.75 51,342.00 162,684.00 47,808.28 06/01/2019 274,168.75 176,639.25 97,529.50 89,909.25 12/01/2019 1,129,168.75 1,066,639.25 62,529.50 160,059.00 57,067.84 06/01/2020 252,793.75 168,584.75 84,209.00 76,085.70 12/01/2020 1,152,793.75 1,078,584.75 74,209.00 158,418.00 66,380.29 06/01/2021 230,293.75 156,512.50 73,781.25 65,338.12 12/01/2021 1,175,293.75 1,091,512.50 83,781.25 157,562.50 73,452.33 06/01/2022 206,668.75 137,812.50 68,856.25 59,764.07 12/01/2022 1,206,668.75 1,112,812.50 93,856.25 162,712.50 80,648.83 06/01/2023 180,418.75 118,312.50 62,106.25 52,833.36 12/01/2023 1,220,418.75 1,123,312.50 97,106.25 159,212.50 81,782.09 06/01/2024 153,118.75 98,212.50 54,906.25 45,779.48 12/01/2024 1,248,118.75 1,143,212.50 104,906.25 159,812.50 86,594.14 06/01/2025 124,375.00 77,312.50 47,062.50 -38,459.20 12/01/2025 1,279,375.00 1,167,312.50 112,062.50 159,125.00 90,661.65 06/01/2026 95,500.00 58,237.50 37,262.50 29,845.12 12/01/2026 1,305,500.00 1,183,237.50 122,262.50 159,525.00 96,946.63 06/01/2027 65,250.00 38,550.00 26,700.00 20,959.88 12/01/2027 1,340,250.00 1,208,550.00 131,700.00 158,400.00 102,353.18 06/01/2028 33,375.00 18,075.00 15,300.00 11,771.86 12/01/2028 1,368,375.00 1,223,075.00 145,300.00 160,600.00 110,676.99 18,104,525.00 15,944,380.40 2,160,144.60 2,160,144.60 1,883,765.45 Savings Summary PV of savings from cash flow Plus: Refunding funds on hand 1,883,765.45 4,104.89 Net PV Savings 1,887,870.34 Apr 16, 2015 11:48 am Prepared by Piper Jaffray & Co.(k:\analysis\dbc\city\RENTON:R06LTGO) Page 5 Date 06/01/2015 12/01/2015 06/01/2016 12/01/2016 06/01/2017 12/01/2017 06/01/2018 12/01/2018 06/01/2019 12/01/2019 06/01/2020 12/01/2020 06/01/2021 12/01/2021 06/01/2022 12/01/2022 06/01/2023 12/01/2023 06/01/2024 12/01/2024 06/01/2025 12/01/2025 06/01/2026 12/01/2026 06/01/2027 12/01/2027 06/01/2028 12/01/2028 SAVINGS City of Renton Limited Tax General Obligation Refunding Bonds, 2015A (BQ) FINAL NUMBERS Present Value Prior Refunding Annual to 05/13/2015 Debt Service Debt Service Savings Savings @ 2.0188642% 230,293.75 230,293.75 230,293.75 230 293.75 230 293.75 230 293.75 230 293.75 230 293.75 230 293.75 230 293.75 230 293.75 230 293.75 230 293.75 1,175,293.75 206,668.75 1,206,668.75 180,418.75 1,220,418.75 153,118.75 1,248,118.75 124,375.00 1,279,375.00 95,500.00 1,305,500.00 65,250.00 1,340,250.00 33,375.00 1,368,375.00 230,293.75 230,062.57 178,213.75 52,080.00 282,373.75 51,507.78 162,012.50 68,281.25 66,856.16 162,012.50 68,281.25 136,562.50 66,188.03 162,012.50 68,281.25 65,526.59 162,012.50 68,281.25 136,562.50 64,871.75 162,012.50 68,281.25 64,223.46 162,012.50 68,281.25 136,56Z50 63,581.65 162,012.50 68,281.25 62,946.25 162,012.50 68,281.25 136,562.50 62,317.20 162,012.50 68,281.25 61,694.43 437,012.50 -206,718.75 -138,437.50 -184,910.88 156,512.50 73,781.25 65,338.12 1,091,512.50 83,781.25 157,562.50 73,452.33 137,812.50 68,856.25 59,764.07 1,112,812.50 93,856.25 162,712.50 80,648.83 118,312.50 62,106.25 52,833.36 1,123,312.50 97,106.25 159,212.50 81,782.09 98,212.50 54,906.25 45,779.48 1,143,212.50 104,906.25 159,812.50 86,594.14 77,312.50 47,062.50 38,459.20 1,167,312.50 112,062.50 159,125.00 90,661.65 58,237.50 37,262.50 29,845.12 1,183,237.50 122,262.50 159,525.00 96,946.63 38,550.00 26,700.00 20,959.88 1,208,550.00 131,700.00 158,400.00 102,353.18 18,075.00 15,300.00 11,771.86 1,223,075.00 145,300.00 160,600.00 110,676.99 13,996,525.00 12,029,388.75 1,967,136.25 1,967,136.25 1,722,731.90 Savings Summary PV of savings from cash flow Plus: Refunding funds on hand 1,722,731.90 469.43 Net PV Savings 1,723,201.33 Apr 16, 2015 11:48 am Prepared by Piper Jaffray & Co.(k:\analysis\dbc\city\RENTON:R06LTGO) Page 6 Date SAV1NGS City of Renton Limited Tax General Obligation Refunding Bonds, 2015B (Taxable) FINAL NUMBERS Present Value Prior Refunding Annual to 05/13/2015 Debt Service Debt Service Savings Savings @ 2.0188642% 06/01/2015 83,625.00 83,625.00 83,541.05 12/01/2015 83,625.00 360,059.15 -276,434.15 -192,809.15 -273,396.89 06/01/2016 83,625.00 26,501.50 57,123.50 55,931.28 12/01/2016 83,625.00 126,501.50 -42,876.50 14,247.00 -41,562.09 06/01/2017 83,625.00 26,076.50 57,548.50 55,226.83 12/01/2017 858,625.00 891,076.50 -32,451.50 25,097.00 -30,831.09 06/01/2018 64,250.00 21,189.25 43,060.75 40,501.75 12/01/2018 879,250.00 896,189.25 -16,939.25 26,121.50 -15,773.37 06/01/2019 43,875.00 14,626.75 29,248.25 26,963.00 12/01/2019 898,875.00 904,626.75 -5,751.75 23,496.50 -5,249.36 06/01/2020 22,500.00 6,572.25 15,927.75 14,391.26 12/01/2020 922,500.00 641,572.25 280,927.75 296,855.50 251,291.17 4,108,000.00 3,914,991.65 193,008.35 193,008.35 161,033.54 Savings Summar~ PV of savings from cash flow Plus: Refunding funds on hand 161,033.54 3,635.46 Net PV Savings 164,669.00 Apr 16, 2015 11:48 am Prepared by Piper Jaffray & Co.(k:\analysis\dbc\city\RENTON:R06LTGO) Page 7 SOURCES AND USES OF FUNDS City of Renton Limited Tax General Obligation Refunding Bonds, 2015A (BQ) & 2015B (Taxable) (Ref 06) FINAL NUMBERS Dated Date 05/13/2015 Delivery Date 05/13/2015 Limited Tax Limited Tax General General Obligation Obligation Refunding Refunding Bonds, 2015A Bonds, 2015B Sources:(BQ)(Taxable)Total Bond Proceeds: Par Amount 8,825,000.00 3,695,000.00 12,520,000.00 Premium 1,171,804.30 -1,171,804.30 9,996,804.30 3,695,000.00 13,691,804.30 Limited Tax Limited Tax General General Obligation Obligation Refunding Refunding Bonds, 2015A Bonds, 2015B Uses:(BQ)(Taxable)Total Refunding Escrow Deposits: Cash Deposit Open Market Purchases Delivery Date Expenses: Cost of Issuance Underwriter’s Discount Other Uses of Funds: Additional Proceeds 661.75 173.00 834.75 9,915,377.32 3,657,128.54 13,572,505.86 9,916,039.07 3,657,301.54 13,573,340.61 29,375.55 12,299.45 41,675.00 50,920.25 21,763.55 72,683.80 80,295.80 34,063.00 114,358.80 469.43 3,635.46 4,104.89 9,996,804.30 3,695,000.00 13,691,804.30 Apr 16, 2015 11:48 am Prepared by Piper Jaffray & Co.(k:\analysis\dbc\city\RENTON:R06LTGO) Page 8 Bond Component Serial Bonds (BQ): Serial Bonds (Taxable): BOND PRICING City of Renton Limited Tax General Obligation Refunding Bonds, 2015A (BQ) & 2015B (Taxable) (Ref 06) FINAL NUMBERS Maturity Yield to Call Call Date Amount Rate Yield Price Maturity Date Price 12/01/2020 275,000 4.000%1.430%113.664 12/01/2021 935,000 4.000%1.620%114.733 12/01/2022 975,000 4.000%1.720%116.077 12/01/2023 1,005,000 4.000%1.860%116.843 12/01/2024 1,045,000 4.000%1.950%117.783 12/01/2025 1,090,000 3.500%2.080%112.817 12/01/2026 1,125,000 3.500%2.100%112.624 12/01/2027 1,170,000 3.500%2.180%111.854 12/01/2028 1,205,000 3.000%2.400%105.328 8,825,000 c c c c 2.137%06/01/2025 100.000 2.252%06/01/2025 100.000 2.400%06/01/2025 100.000 2.533%06/01/2025 100.000 12/01/2015 330,000 0.500%0.500%100.000 12/01/2016 100,000 0~850%0.850%100.000 12/01/2017 865,000 1.130%1.130%100.000 12/01/2018 875,000 1.500%1.500%100.000 12/01/2019 890,000 1.810%1.810%100.000 12/01/2020 635,000 2.070%2.070%100.000 3,695,000 Premium (-Discount) 37,576.00 137,753.55 156,750.75 169,272.15 185,832.35 139,705.30 142,020.00 138,691.80 64,202.40 1,171,804.30 12,520,000 1,171,804.30 Dated Date 05/13/2015 Delivery Date 05/13/2015 First Coupon 12/01/2015 109.359459% -0.580542% 108.778918% Par Amount 12,520,000.00 Premium 1,171,804.30 Production 13,691,804.30 Underwriter’s Discount -72,683.80 Purchase Price 13,619,120.50 Accrued Interest Net Proceeds 13,619,120.50 Apr 16, 2015 11:48 am Prepared by Piper Jaffray & Co.(k:\analysis\dbc\city\RENTON:R06LTGO) Page 9 Bond Component Serial Bonds (BQ): Maturity Date BOND PRICING City of Renton Limited Tax General Obligation Refunding Bonds, 2015A (BQ) F1NAL NUMBERS Yield to Call Call Premium Amount Rate Yield Price Maturity Date Price (-Discount) 12/01/2020 12/01/2021 12/01/2022 12/01/2023 12/01/2024 12/01/2025 12/01/2026 12/01/2027 12/01/2028 275,000 4.000%1.430%113.664 37,576.00 935,000 4.000%1.620%114.733 137,753.55 975,000 4.000%1.720%116.077 156,750.75 1,005,000 4.000%1.860%116.843 169,272.15 1,045,000 4.000%1.950%117.783 185,832.35 1,090,000 3.500%2.080%112.817 C 2.137%06/01/2025 100.000 139,705.30 1,125,000 3.500%2.100%112.624 C 2.252%06/01/2025 100.000 142,020.00 1,170,000 3.500%2.180%111.854 C 2.400%Q6/01/2025 100.000 138,691.80 1,205,000 3.000%2.400%105.328 C 2.533%06/01/2025 100.000 64,202.40 8,825,000 1,171,804.30 Dated Date 05/13/2015 Deliveu¢ Date 05/13/2015 First Coupon 12/01/2015 Par Amount 8,825,000.00 Premium 1,171,804.30 Production 9,996,804.30 Underwriter’s Discount -50,920.25 Purchase Price 9,945,884.05 Accrued Interest Net Proceeds 9,945,884.05 113.278236% -0.577000% 112.701236% Apr 16, 2015 11:48 am Prepared by Piper Jaffray & Co.(k:\analysis\dbc\city\RENTON:R06LTGO) Page 10 BOND PRICING City of Renton Limited Tax General Obligation Refunding Bonds, 2015B (Taxable) F1NAL NUMBERS Bond Component Maturity Date Amount Rate Yield Serial Bonds (Taxable): 12/01/2015 330,000 0.500%0.500% 12/01/2016 100,000 0.850%0.850% 12/01/2017 865,000 1.130%1.130% 12/01/2018 875,000 1.500%1.500% 12/01/2019 890,000 1.810%1.810% 12/01/2020 635,000 2.070%2.070% 3,695,000 Price 100.000 100.000 100.000 100.000 100.000 100.000 Dated Date Delivery Date First Coupon Par Amount Original Issue Discount Production Underwriter’s Discount Purchase Price Accrued Interest Net Proceeds 05/13/2015 05/13/2015 12/01/2015 3,695,000.00 3,695,000.00 -21,763.55 3,673,236.45 3,673,236.45 100.000000% °0.589000% 99.411000% Apr 16, 2015 11:48 am Prepared by Piper Jaffray & Co.(k:\analysis\dbc\city\RENTON:R06LTGO) Page 11 BOND DEBT SERVICE City of Renton Limited Tax General Obligation Refunding Bonds, 2015A (BQ) & 2015B (Taxable) (Ref 06) FINAL NUMBERS Period Ending Annual Principal Coupon Interest Debt Service Debt Service 12/01/2015 330,000 0.500% 06/01/2016 12/01/2016 100,000 0.850% 06/01/2017 - 12/01/2017 865,000 1.130% 06/01/2018 - 12/01/2018 875,000 1.500% 06/01/2019 - 12/01/2019 890,000 1.810% 06/01/2020 12/01/2020 910,000 ** % 06/01/2021 12/01/2021 935,000 4:000% 06/01/2022 12/01/2022 975,000 4.000% 06/01/2023 12/01/2023 1,005,000 4.000% 06/01/2024 12/01/2024 1,045,000 4.000% 06/01/2025 12/01/2025 1,090,000 3.500% 06/01/2026 12/01/2026 1,125,000 3.500% 06/01/2027 12/01/2027 1,170,000 3.500% 06/01/2028 12/01/2028 1,205,000 3.000% 208 272.90 188 514.00 188 514.00 188 089.00 188 089.00 183 201.75 183 201.75 176 639.25 176 639.25 168 584.75 168,584.75 156,512.50 156,512.50 137,812.50 137,812.50 118,312.50 118,312.50 98,212.50 98,212.50 77,312.50 77,312.50 58,237.50 58,237.50 38,550.00 38,550.00 18,075.00 18,075.00 538,272.90 538,272.90 188,514.00 - 288,514.00 477,028.00 188,089.00 - 1,053,089.00 1,241,178.00 183,201.75 1,058,201.75 1,241,403.50 176,639.25 1,066,639.25 1,243,278.50 168,584.75 1,078,584.75 1,247,169.50 156,512.50 1,091,512.50 1,248,025.00 137,812.50 1,112,812.50 1,250,625.00 118,312.50 1,123,312.50 1,241,625.00 98,212.50 1,143,212.50 1,241,425.00 77,312.50 1,167,312.50 1,244,625.00 58,237.50 1,183,237.50 1,241,475.00 38,550.00 1,208,550.00 1,247,100.00 18,075.00 1,223,075.00 1,241,150.00 t2,520,000 3,424,380.40 15,944,380.40 15,944,380.40 Apt 16, 2015 11:48 am Prepared by Piper Jaffray & Co.(k:\analysis\dbc\city\RENTON:R06LTGO) Page 12 Period Ending 12/01/2015 06/01/2016 12/01/2016 06/01/2017 12/01/2017 06/01/2018 12/01/2018 06/01/2019 12/01/2019 06/01/2020 12/01/2020 06/01/2021 12/01/2021 06/01/2022 12/01/2022 06/01/2023 12/01/2023 06/01/2024 12/01/2024 06/01/2025 12/01/2025 06/01/2026 12/01/2026 06/01/2027 12/01/2027 06/01/2028 12/01/2028 BOND DEBT SERVICE City of Renton Limited Tax General Obligation Refunding Bonds, 2015A (BQ) FINAL NUMBERS Annual Principal Coupon Interest Debt Service Debt Service 178,213.75 178,213.75 178,213.75 162,012.50 162,012.50 -162,012.50 162,012.50 324,025.00 -162,012.50 162,012.50 -162,012.50 162,012.50 324,025.00 -162,012.50 162,012.50 -162,012.50 162,012.50 324,025.00 162,012.50 162,012.50 162,012.50 162,012.50 324,025.00 162,012.50 162,012.50 - 162,012.50 437,012.50 599,025.00 156,512.50 156,512.50 - 156,512.50 1,091,512.50 1,248,025.00 137,812.50 137,812.50 - 137,812.50 1,112,812.50 1,250,625.00 118,312.50 118,312.50 - 118,312.50 1,123,312.50 1,241,625.00 98,212.50 98,212.50 98,212.50 1,143,212.50 1,241,425.00 77,312.50 77,312.50 77,312.50 1,167,312.50 1,244,625.00 58,237.50 58,237.50 58,237.50 1,183,237.50 1,241,475.00 38,550.00 38,550.00 38,550.00 1,208,550.00 1,247,100.00 18,075.00 18,075.00 18,075.00 1,223,075.00 1,241,150.00 12,029,388.75 275,000 4.000% 935,000 4.000% 975,000 4.000% 1,005,000 4.000% 1,045,000 4.000% 1,090,000 3.500% 1,125,000 3.500% 1,170,000 3.500% 1,205,000 3.000% 8,825,000 3,204,388.75 12,029,388.75 Apr 16, 2015 11:48 am Prepared by Piper Jaffray & Co.(k:\analysis\dbc\city\RENTON:R06LTGO) Page 13 BOND DEBT SERVICE City of Renton Limited Tax General Obligation Refunding Bonds, 2015B (Taxable) FINAL NUMBERS Period Annual Ending Principal Coupon Interest Debt Service Debt Service 12/01/2015 330,000 0.500%30,059.15 360,059.15 360,059.15 06/01/2016 26,501.50 26,501.50 12/01/2016 100,000 0.850%26,501.50 126,501.50 153,003.00 06/01/2017 26,076.50 26,076.50 12/01/2017 865,000 1.130%26,076.50 891,076.50 917,153.00 06/01/2018 21,189.25 21,189.25 12/01/2018 875,000 1.500%21,189.25 896,189.25 917,378.50 06/01/2019 14,626.75 14,626.75 12/01/2019 890,000 1.810%14,626.75 904,626.75 919,253.50 06/01/2020 6,572.25 6,572.25 12/01/2020 635,000 2.070%6,572.25 641,572.25 648,144.50 3,695,000 219,991.65 3,914,991.65 3,914,991.65 Apr 16, 2015 11:48 am Prepared by Piper Jaffray & Co.(k:\analysis\dbc\city\RENTON:R06LTGO) Page 14 BOND SUMMARY STATISTICS City of Renton Limited Tax General Obligation Refunding Bonds, 2015A (BQ) & 2015B (Taxable) (Ref 06) FINAL NUMBERS Dated Date 05/13/2015 Delivery Date 05/13/2015 Last Maturity 12/01/2028 Arbitrage Yield 2.018864% True Interest Cost (TIC)2.141766% Net Interest Cost (NIC)2.272737% All-In TIC 2.184533% Average Coupon 3.347031% Average Life (years)8.172 Duration of Issue (years)7.247 Par Amount Bond Proceeds Total Interest Net Interest Total Debt Service Maximum Annual Debt Service Average Annual Debt Service 12,520,000.00 13,691,804.30 3,424,380.40 2,325,259.90 15,944,380.40 1,250,625.00 1,176,707.04 Underwriter’s Fees (per $1000) Average Takedown Other Fee 5.805415 Total Underwriter’s Discount 5.805415 Bid Price 108.778918 Par Average Average Bond Component Value Price Coupon Life Serial Bonds (Taxable)3,695,000.00 100.000 1.664%3.578 Serial Bonds (BQ)8,825,000.00 113.278 3.597%10.095 12,520,000.00 8.172 All-ln Arbitrage TIC TIC Yield Par Value 12,520,000.00 12,520,000.00 8,825,000.00 + Accrued Interest + Premium (Discount)1,171,804.30 1,171,804.30 1,171,804.30 - Underwriter’s Discount -72,683.80 -72,683.80 - Cost of Issuance Expense -41,675.00 - Other Amounts - Target Value 13,619,120.50 13,577,445.50 9,996,804.30 Target Date 05/13/2015 05/13/2015 05/13/2015 Yield 2.141766%2.184533%2.018864% Apt 16, 2015 11:48 am Prepared by Piper Jaffray & Co.(k:\analysis\dbc\city\RENTON:R06LTGO) Page 15 BOND SUMMARY STATISTICS City of Renton Limited Tax General Obligation Refunding Bonds, 2015A (BQ) FINAL NUMBERS Dated Date 05/13/2015 Delivery Date 05/13/2015 Last Maturity 12/01/2028 Arbitrage Yield 2.018864% True Interest Cost (TIC)2.187631% Net Interest Cost (NIC)2.338684% All-In TIC 2.222348% Average Coupon 3.596850% Average Life (years)10.095 Duration of Issue (years)8.616 Par Amount Bond Proceeds Total Interest Net Interest Total Debt Service Maximum Annual Debt Service Average Annual Debt Service 8,825,000.00 9,996,804.30 3,204,388.75 2,083,504.70 12,029,388.75 1,250,625.00 887,777.77 Underwriter’s Fees (per $1000) Average Takedown Other Fee 5.770000 Total Underwriter’s Discount 5.770000 Bid Price 112.701236 Par Average Average Bond Component Value Price Coupon Life Serial Bonds (BQ)8,825,000.00 113.278 3.597%10.095 8,825,000.00 10.095 All-In Arbitrage TIC TIC Yield Par Value 8,825,000.00 8,825,000.00 8,825,000.00 + Accrued Interest + Premium (Discount)1,171,804.30 1,171,804.30 1,171,804.30 - Underwriter’s Discount -50,920.25 -50,920.25 - Cost of Issuance Expense -29,375.55 - Other Amounts Target Value 9,945,884.05 9,916,508.50 9,996,804.30 Target Date 05/13/2015 05/13/2015 05/13/2015 Yield 2.187631%2.222348%2.018864% Apr 16, 2015 11:48 am Prepared by Piper Jaffray & Co.(k:\analysis\dbc\city\RENTON:R06LTGO) Page 16 BOND SUMMARY STATISTICS City of Renton Limited Tax General Obligation Refunding Bonds, 2015B (Taxable) FINAL NUMBERS Dated Date 05/13/2015 Delivery Date 05/13/2015 Last Maturity 12/01/2020 Arbitrage Yield 1.660278% True Interest Cost (TIC)1.831603% Net Interest Cost (NIC)1.828397% All-In TIC 1.929021% Average Coupon 1.663799% Average Life (years)3.578 Duration of Issue (years)3.476 Par Amount 3,695,000.00 Bond Proceeds 3,695,000.00 Total Interest 219,991.65 Net Interest 241,755.20 Total Debt Service 3,914,991.65 Maximum Annual Debt Service 919,253.50 Average Annual Debi Service 705,403.90 Underwriter’s Fees (per $1000) Average Takedown Other Fee 5.890000 Total Underwriter’s Discount 5.890000 Bid Price 99.411000 Par Average Bond Component Value Price Coupon Serial Bonds (Taxable)3,695,000.00 100.000 1.664% 3,695,000.00 Average Li~ 3.578 3.578 Par Value + Accrued Interest + Premium (Discount) - Underwriter’s Discount - Cost of Issuance Expense - Other Amounts Target Value Target Date Yield TIC 3,695,000.00 All-In TIC 3,695,000.00 -21,763.55 -21,763.55 -12,299.45 Arbitrage Yield 3,695,000.00 3,673,236.45 3,660,937.00 3,695,000.00 05/13/2015 05/13/2015 05/13/2015 1.831603%1.929021%1.660278% Apr 16, 2015 11:48 am Prepared by Piper Jaffray & Co.(k:\analysis\dbc\city\RENTON:R06LTGO) Page 17 PROOF OF ARBITRAGE YIELD City of Renton Limited Tax General Obligation Refunding Bonds, 2015A (BQ) & 2015B (Taxable) (Ref 06) FINAL NUMBERS Date Debt Service Present Value to 05/13/2015 Total @ 2.0188641968% 12/01/2015 06/01/2016 12/01/2016 06/01/2017 12/01/2017 06/01/2018 12/01/2018 06/01/2019 12/01/2019 06/01/2020 12/01/2020 06/01/2021 12/01/2021 06/01/2022 12/01/2022 06/01/2023 12/01/2023 06/01/2024 12/01/2024 06/01/2025 178,213.75 162,012.50 162 012.50 162 012.50 162 012.50 162 012.50 162 012.50 162 012.50 162 012.50 162 012.50 437 012.50 156 512.50 1,091,512.50 137,812.50 1,112,812.50 118,312.50 1,123,312.50 98,212.50 1,143,212.50 4,667,312.50 178,213.75 162,012.50 162,012.50 162,012.50 162,012.50 162,012.50 162,012.50 162,012.50 162,012.50 162,012.50 437,012.50 156,512.50 1,091,512.50 137,812.50 1,112,812.50 118,312.50 1,123,312.50 98,212.50 1,143,212.50 4,667,312.50 176,255.67 158,631.15 157,045.88 155,476.45 153,922.70 152 384.49 150 861.64 149 354.01 147 861.45 146 383.81 390 909.70 138 602.06 956 946.02 119,614.93 956,217.88 100,647.63 946,044.57 81,887.17 943,656.89 3,814,100.21 11,722,351.25 11,722,351.25 9,996,804.30 Proceeds Summary Delivery date Par Value Premium (Discount) Target for yield calculation 05/13/2015 8,825,000.00 1,171,804.30 9,996,804.30 Apr 16, 2015 11:48 am Prepared by Piper Jaffray & Co.(k:\analysis\dbc\city\RENTON:R06LTGO) Page 18 PROOF OF ARBITRAGE YIELD City of Renton Limited Tax General Obligation Refunding Bonds, 2015A (BQ) & 2015B (Taxable) (Ref 06) FINAL NUMBERS Assumed Call/Computation Dates for Premium Bonds Present Value Bond Maturity Call Call to 0511312015 Component Date Rate Yield Date Price @ 2.0188641968% SERIALBQ 12/01/2025 3.500%2.080%06/01/2025 100.000 6,469.82 SERIALBQ 12/01/2026 3.500%2.100%06/01/2025 100.000 8,848.82 SERIALBQ 12/01/2027 3.500%2.180%06/01/2025 100.000 18,211.77 SERIALBQ 12/01/2028 3.000%2.400%06/01/2025 100.000 42,840.82 Rejected Call/Computation Dates for Premium Bonds Present Value Bond Maturity Call Call to 05/13/2015 Component Date Rate Yield Date Price @ 2.0188641968% SERIALBQ 12/01/2025 3.500%2.080%13,000.45 SERIALBQ 12101/2026 3.500%2.100%28,868.39 SERIALBQ 12/01/2027 3.500%2.180%-52,567.88 SERIALBQ 12/01/2028 3.000%2.400%-75,330.79 Increase to NPV 6,530.63 20,019.57 34,356.11 32,489.97 Apr 16, 2015 11:48 am Prepared by Piper Jaffray & Co.(k:\analysis\dbc\city\RENTON:R06LTGO) Page 19 FORM 8038 STATISTICS City of Renton Limited Tax General Obligation Refunding Bonds, 2015A (BQ) & 2015B (Taxable) (Ref 06) FINAL NUMBERS Dated Date 05/13/2015 Delivery Date 05/13/2015 Bond Component Serial Bonds (BQ): Redemption Date Principal Coupon Price Issue Price at Maturity 12/01/2020 275,000.00 4.000%113.664 312,576.00 275,000.00 12/01/2021 935,000.00 4.000%114.733 1,072,753.55 935,000.00 12/01/2022 975,000.00 4.000%116.077 1,131,750.75 975,000.00 12/01/2023 1,005,000.00 4.000%116.843 1,174,272.15 1,005,000.00 12/01/2024 1,045,000.00 4.000%117.783 1,230,832.35 1,045,000.00 12/01/2025 1,090,000.00 3.500%112.817 1,229,705.30 1,090,000.00 12/01/2026 1,125,000.00 3.500%112.624 1,267,020.00 1,125,000.00 12/01/2027 1,170,000.00 3.500%111.854 1,308,691.80 1,170,000.00 12/01/2028 1,205,000.00 3.000%105.328 1,269,202.40 1,205,000.00 8,825,000.00 9,996,804.30 8,825,000.00 Stated Weighted Maturity Interest Issue Redemption Average Date Rate Price at Maturity Maturity Yield Final Maturity 12/01/2028 3.000%1,269,202.40 1,205,000.00 Entire Issue 9,996,804.30 8,825,000.00 10.0362 2.0189% Proceeds used for accrued interest Proceeds used for bond issuance costs (including underwriters’ discount) Proceeds used for credit enhancement Proceeds allocated to reasonably required reserve or replacement fund Proceeds used to currently refund prior issues Proceeds used to advance refund prior issues Remaining weighted average maturity of the bonds to be currently refunded Remaining weighted average maturity of the bonds to be advance refunded 0.00 80,295.80 0.00 0.00 0.00 9,916,039.07 0.0000 10.3081 Apr 16, 2015 11:48 am Prepared by Piper Jaffray & Co.(k:\analysis\dbc\city\RENTON:R06LYGO) Page 20 FORM 8038 STATISTICS City of Renton Limited Tax General Obligation Refunding Bonds, 2015A (BQ) & 2015B (Taxable) (Ref 06) FINAL NUMBERS Refunded Bonds Bond Component Date Principal Coupon Price Issue Price LTGO Bonds, 2006: SERIAL 12/01/2021 945,000.00 5.000%100.000 945,000.00 SERIAL 12/01/2022 1,000,000.00 5.250%100.000 t,000,000.00 SERIAL 12/01/2023 1,040,000.00 5.250%100.000 1,040,000.00 SERIAL 12/01/2024 1,095,000.00 5.250%100.000 1,095,000.00 2028TERM 12/01/2025 1,155,000.00 5.000%100.000 1,155,000.00 2028TERM 12/01/2026 1,210,000.00 5.000%100.000 1,210,000.00 2028TERM 12/01/2027 1,275,000.00 5.000%100.000 1,275,000.00 2028TERM 12/01/2028 1,335,000.00 5.000%100.000 1,335,000.00 9,055,000.00 9,055,000.00 Remaining Last Weighted Call Issue Average Date Date Maturity LTGO Bonds, 2006 12/01/2016 08/01/2006 10.3081 All Refunded Issues 12/01/2016 10.3081 Apr 16, 2015 11:48 am Prepared by Piper Jaffray & Co.(k:\analysis\dbc\city\RENYON:R06LTGO) Page 21 Type of Security May 13, 2015: TBill TBill TNote TNote TNote TNote ESCROW DESCRIPTIONS City of Renton Limited Tax General Obligation Refunding Bonds, 2015A (BQ) & 2015B (Taxable) (Ref 06) FINAL NUMBERS CUSIP or ID Maturity Par Interest Interest Interest Date Amount Rate Yield Price Class Frequency Day Basis 912796EC9 912796EC9 912828A26 912828QP8 912828G46 912828G46 05/28/2015 75,000 - -0.220%100.009130 Periodic Semiannual ACT/ACT 05/28/2015 205,000 - -0.220%100.009128 Periodic Semiannual ACT/ACT 11/30/2015 279,000 0.250%0.114%100.074890 Periodic Semiannual ACT/ACT 05/31/2016 279,000 1.750%0.303%101.515220 Periodic Semiannual ACT/ACT 11/30/2016 3,420,000 0.500%0.413%100.133737 Periodic Semiannual ACT/ACT 11/30/2016 9°262°000 0.500%0.413%100.133737 Periodic Semiannual ACT/ACT 13,520,000 Apr 16, 2015 11:48 am Prepared by Piper Jaffray & Co.(k:\analysis\dbc\city\RENTON:R06LTGO) Page 22 Type of Security TBill TBill TNote TNote TNote TNote ESCROW COST City of Renton Limited Tax General Obligation Refunding Bonds, 2015A (BQ) & 2015B (Taxable) (Ref 06) FINAL NUMBERS Maturity Date Par Accrued Total Amount Rate Yield Price Cost Interest Cost 05/28/2015 05/28/2015 11/30/2015 05/31/2016 11/30/2016 11/30/2016 75,000 - -0.220317%100.0091300 75,006.85 75,006.85 205,000 - -0.220269%100.0091280 205,018.71 205,018.71 279,000 0.250% 0.113613%100.0748900 279,208.94 314.26 279,523.20 279,000 1.750% 0.302734%101.5152200 283,227.46 2,199.81 285,427.27 3,420,000 0.500% 0.413307%100.t337367 3,424,573.80 7,704.40 3,432,278.20 9,262,000 0.500% 0.413307%100.1337366 9,274,386.68 20,864.95 9,295,251.63 13,520,000 13,541,422.44 ’31,083.42 13,572,505.86 Purchase Cost of Cash Total Date Securities Deposit Escrow Cost 05/13/2015 13,572,505.86 834.75 13,573,340:61 13,572,505.86 834.75 13,573,340.61 Apr 16, 2015 11:48 am Prepared by Piper Jaft?ay & Co.(k:\analysis\dbc\city\RENTON:R06LTGO) Page 23 ESCROW COST City of Renton Limited Tax General Obligation Refunding Bonds, 2015A (BQ) FINAL NUMBERS Type of Maturity Par Accrued Total Security Date Amount Rate Yield Price Cost Interest Cost TBill 05/28/2015 205,000 -0.220269%100.0091280 205,018.71 205,018.71 TNote 11/30/2015 205,000 0.250%0.113613%100.0748900 205,153.52 230.91 205,384.43 TNote 05/31/2016 205,000 1.750%0.302734%101.5152200 208,106.20 i,616.35 209,722.55 TNote 11/30/2016 9,262,000 0.500%0.413307%100.1337366 9,274,386.68 20,864.95 9,295,251.63 9,877,000 9,892,665.11 22,712.21 9,915,377.32 Purchase Cost of Cash Total Date Securities Deposit Escrow Cost 05/13/2015 9,915,377.32 661.75 9,916,039.07 9,915,377.32 661.75 9,916,039.07 Yield 0.409583% Apr 16, 2015 11:48 am Prepared by Piper Jaffray & Co.(k:\analysis\dbc\city\RENTON:R06LTGO) Page 24 ESCROW COST City of Renton Limited Tax General Obligation Refunding Bonds, 2015B (Taxable) FINAL NUMBERS Type of Maturity Par Accrued Total Security Date Amount Rate Yield Price Cost Interest Cost TBill 05/28/2015 75,000 -0.220317%100.0091300 75,006.85 75,006.85 TNote 11/30/2015 74,000 0.250% 0.113613%100.0748900 74,055.42 83.35 74,138.77 TNote 05/31/2016 74,000 1.750% 0.302734%101.5152200 75,121.26 583.46 75,704.72 TNote 11/30/2016 3,420,000 0.500% 0.413307%100.1337367 3,424,573.80 7,704.40 3,432,278.20 3,643,000 3,648,757.33 8,371.21 3,657,128.54 Purchase Cost of Cash Total Date Securities Deposit Escrow Cost 05/13/2015 3,657,128.54 173.00 3,657,301.54 3,657,128.54 173.00 3,657,301.54 Yield 0.409673% Apt 16, 2015 11:48 am Prepared by Piper Jaffray & Co.(k:\analysis\dbc\city\RENTON:R06LTGO) Page 25 ESCROW CASH FLOW City of Renton Limited Tax General Obligation Refunding Bonds, 2015A (BQ) & 20t5B (Taxable) (Ref 06) FINAL NUMBERS Net Escrow Date Principal Interest Receipts 05/28/2015 280,000.00 280,000.00 05/31/2015 34,495.00 34,495.00 11/30/2015 279,000.00 34,495.00 313,495.00 05/31/2016 279,000.00 34,146.25 313,146.25 11/30/2016 12,682,000.00 31,705.00 12,713,705.00 13,520,000.00 134, 841.25 13,654,841.25 Escrow Cost Summary Purchase date Purchase cost of securities 05/13/2015 13,572,505.86 Apr 16, 2015 11:48 am Prepared by Piper Jaffray & Co.(k:\analysis\dbc\city\RENTON:R06LTGO) Page 26 PROOF OF COMPOSITE ESCROW YIELD City of Renton Limited Tax General Obligation Refunding Bonds, 2015A (BQ) & 2015B (Taxable) (Ref 06) FINAL NUMBERS All restricted escrows funded by bond proceeds Date Present Value Security to 05/13/2015 Receipts @ 0.4095830613% 05/28/2015 205,000.00 204,965.05 05/31/2015 25,205.00 25,199.84 11/30/2015 230,205.00 229,690.14 05/31/2016 229,948.75 228,962.96 11/30/2016 9,285,155.00 9,226,559.33 9,975,513.75 9,915,377.32 Escrow Cost Summary Purchase date Purchase cost of securities Target for yield calculation 05/t3/2015 9,915,377.32 9,915,377.32 Apr 16, 2015 11:48 am Prepared by Piper Jaffray & Co.(k:\analysis\dbc\city\RENTON:R06LTGO) Page 27 Date 05/13/2015 05/28/2015 05/31/2015 06/01/2015 11/30/2015 12/01/2015 05/31/2016 06/01/2016 11/30/2016 12/01/2016 ESCROW SUFFICIENCY City of Renton Limited Tax General Obligation Refunding Bonds, 2015A (BQ) & 2015B (Taxable) (Ref 06) FINAL NUMBERS Escrow Net Escrow Excess Excess Requirement Receipts Receipts Balance 834.75 834.75 834.75 280,000.00 280,000.00 280,834.75 34,495.00 34,495.00 315,329.75 313,918.75 -313,918.75 1,411.00 313,495.00 313,495.00 314,906.00 313,918.75 -313,918.75 987.25 313,146.25 313,146.25 314,133.50 313,918.75 -313,918.75 214.75 12,713,705.00 12,713,705.00 12,713,919.75 12,713,918.75 --12,713,918.75 1.00 13,655,675.00 13,655,676.00 1.00 Apr 16, 2015 11:48 am Prepared by Piper Jaffray & Co.(k:\analysis\dbc\city\RENTON:R06LTGO) Page 28 ESCROW STATISTICS City of Renton Limited Tax General Obligation Refunding Bonds, 2015A (BQ) & 2015B (Taxable) (Ref 06) FINAL NUMBERS Escrow Modified Yield to Yield to Perfect Value of Total Duration Receipt Disbursement Escrow Negative Escrow Cost (years)Date Date Cost Arbitrage Limited Tax General Obligation Refunding Bonds, 2015A (BQ), Global Proceeds Escrow: 9,916,039.07 1.475 0.409583% 0.408785%9,683,959.51 231,517.81 Limited Tax General Obligation Refunding Bonds, 2015B (Tax, Global Proceeds Escrow: 3,657,301.54 1.476 0.409673% 0.408838%3,590,482.42 66,639.76 13,573,340.61 13,274,441.93 298,157.57 Cost of Dead Time 561.75 179.36 741.11 Delivery date 05/13/2015 Arbitrage yield 2.018864% Note: Value of Negative Arbitrage for issues excluded from the arbitrage yield is based on the yield of the related issue. Apr 16, 2015 11:48 am Prepared by Piper Jaffray & Co.(k:\analysis\dbc\city\RENTON:R06LTGO Page 29 PRIOR BOND DEBT SERVICE City of Renton Limited Tax General Obligation Refunding Bonds, 2015A (BQ) & 2015B (Taxable) (Ref 06) FINAL NUMBERS Period Ending 06/01/2015 12/01/2015 06/01/2016 12/01/2016 06/01/2017 12/01/2017 06/01/2018 12/01/2018 06/01/2019 12/01/2019 06/01/2020 12/01/2020 06/01/2021 12/01/2021 06/01/2022 12/01/2022 06/01/2023 12/01/2023 06/01/2024 12/01/2024 06/01/2025 12/01/2025 06/01/2026 12/01/2026 06/01/2027 12/01/2027 06/01/2028 12/01/2028 Annual Principal Coupon ’ Interest Debt Service Debt Service 313,918.75 313,918.75 313,918.75 313,918.75 627,837.50 313,918.75 313,918.75 313,918.75 313,918.75 627,837.50 313,918.75 313,918.75 775,000 5.000%313,918.75 1,088,918.75 1,402,837.50 294,543.75 294,543.75 815,000 5.000%294,543.75 1,109,543.75 1,404,087.50 274,168.75 274,168.75 855,000 5.000%274,168.75 1,129,168.75 1,403,337.50 252,793.75 252,793.75 900,000 5.000%252,793.75 1,152,793.75 1,405,587.50 230,293.75 230,293.75 945,000 5.000%230,293.75 1,175,293.75 1,405,587.50 206,668.75 206,668.75 1,000,000 5.250%206,668.75 1,206,668.75 1,413,337.50 180,418.75 180,418.75 1,040,000 5.250%180,418.75 1,220,418.75 1,400,837.50 153,118.75 153,118.75 1,095,000 5.250%153,118.75 1,248,118.75 1,401,237.50 124,375.00 124,375.00 1,155,000 5.000%124,375.00 1,279,375.00 1,403,750.00 95,500.00 95,500.00 1,210,000 5.000%95,500.00 1,305,500.00 1,401,000.00 65,250.00 65,250.00 1,275,000 5.000%65,250.00 1,340,250.00 1,405,500.00 33,375.00 33,375.00 1,335,000 5.000%33,375.00 1,368,375.00 1,401,750.00 12,400,000 5,704,525.00 18,104,525.00 18,104,525.00 Apr 16, 2015 11:48 am Prepared by Piper Jaffray & Co.(k:\analysis\dbc\city\RENTON:R06LTGO) Page 30 ESCROW REQUIREMENTS City of Renton Limited Tax General Obligation Refunding Bonds, 2015A (BQ) & 2015B (Taxable) (Ref 06) F1NAL NUMBERS Period Principal Ending Interest Redeemed Total 06/01/2015 313,918.75 313,918.75 12/01/2015 313,918.75 313,918.75 06/01/2016 313,918.75 313,918.75 12/01/2016 313,918.75 12,400,000.00 12,713,918.75 1,255,675.00 12,400,000.00 13,655,675.00 Apr 16, 2015 11:48 am Prepared by Piper Jaffray & Co.(k:\analysis\dbc\city\RENTON:R06LTGO) Page 31 ESCROW REQUIREMENTS City of Renton Limited Tax General Obligation Refunding Bonds, 2015A (BQ) FINAL NUMBERS Period Principal Ending Interest Redeemed Total 06/01/2015 230,293.75 230,293.75 12/01/2015 230,293.75 230,293.75 06/01/2016 230,293.75 230,293.75 12/01/2016 230,293.75 9,055,000.00 9,285,293.75 921,175.00 9,055,000.00 9,976,175.00 Apr 16, 2015 l 1:48 am Prepared by Piper Jaffray & Co.(k:\analysis\dbc\city\RENTON:R06LTGO) Page 32 ESCROW REQUIREMENTS City of Renton Limited Tax General Obligation Refunding Bonds, 2015B (Taxable) FINAL NUMBERS Period Principal Ending Interest Redeemed Total 06/01/2015 83,625.00 83,625.00 12/01/2015 83,625.00 83,625.00 06/01/2016 83,625.00 83,625.00 12/01/2016 83,625.00 3,345,000.00 3,428,625.00 334,500.00 3,345,000.00 3,679,500:00 Apr 16, 2015 11:48 am Prepared by Piper Jaffray & Co.(k:\analysis\dbc\city\RENTON:R06LTGO) Page 33 SUMMARY OF BONDS REFUNDED City of Renton Limited Tax General Obligation Refunding Bonds, 2015A (BQ) & 2015B (Taxable) (Ref 06) FINAL NUMBERS Bond Maturity Interest Par Call Call Date Rate Amount Date Price LTGO Bonds, 2006, 06LTGO: SERIAL t 2/01/2017 2019TERM 12/01/2018 12/01/2019 SERIAL 12/0112020 12/01/2021 12/01/2022 12/01/2023 12/01/2024 2028TERM 12/01/2025 12/01/2026 12/01/2027 12/01/2028 5.000%775,000.00 12/01/2016 100.000 5.000%815,000.00 12/01/2016 100.000 5.000%855,000.00 12/01/2016 100.000 5.000%900,000.00 12/01/2016 100.000 5.000%945,000.00 12/01/2016 100.000 5.250%1,000,000.00 12/01/2016 100.000 5.250%1,040,000.00 12/01/2016 100.000 5.250%1,095,000.00 12/01/2016 100.000 5.000%1,155,000.00 12/01/2016 100.000 5.000%1,210,000.00 12/01/2016 100.000 5.000%1,275,000.00 12/01/2016 100.000 5.000%1,335,000.00 12/01/2016 100.000 12,400,000.00 Apr 16, 2015 11:48 am Prepared by Piper Jaffray & Co.(k:\analysis\dbc\city\RENTON:R06LTGO) Page 34 SUMMARY OF BONDS REFUNDED City of Renton Limited Tax General Obligation Refunding Bonds, 2015A (BQ) FINAL NUMBERS Bond Maturity Interest Par Call Date Rate Amount Date LTGOBonds, 2006, 06LTGO: SERIAL 12/01/2021 12/01/2022 12/01/2023 12/01/2024 2028TERM 12/01/2025 12/01/2026 12/01/2027 12/01/2028 5.000%945,000.00 12/01/2016 5.250%1,000,000.00 12/01/2016 5.250%1,040,000.00 12/01/2016 5.250%1,095,000.00 12/01/2016 5.000%1,155,000.00 12/01/2016 5.000%1,210,000.00 12/01/2016 5.000%1,275,000.00 12/01/2016 5.000%1,335,000.00 12/01/2016 9,055,000.00 Call Price 100.000 100.000 100.000 100.000 100.000 100.000 100.000 100.000 Apr 16, 2015 11:48 am Prepared by Piper Jaffray & Co.(k:\analysis\dbc\city\RENTON:R06LTGO) Page 35 SUMMARY OF BONDS REFUNDED City of Renton Limited Tax General Obligation Refunding Bonds, 2015B (Taxable) FINAL NUMBERS Bond Maturity Interest Par Call Date Rate Amount Date LTGO Bonds, 2006, 06LTGO: SERIAL 12/01/2017 2019TERM 12/01/2018 12/01/2019 SERIAL 12/01/2020 5.000%775,000.00 12/01/2016 5.000%815,000.00 12/01/2016 5.000%855,000.00 12/01/2016 5.000%900,000.00 12/01/2016 3,345,000.00 Call Price 100.000 100.000 100.000 100.000 Apr 16, 2015 11:48 am Prepared by Piper Jaffray & Co.(k:\analysis\dbc\city\RENTON:R06LTGO) Page 36 UNREFUNDED BOND DEBT SERVICE City of Renton Limited Tax General Obligation Refunding Bonds, 2015A (BQ) & 2015B (Taxable) (Ref 06) FINAL NUMBERS Annual Period Debt Debt Ending Principal Coupon Interest Service Service 06/01/2015 -34,500 34,500 12/01/2015 700,000 5.250%34,500 734,500 769,000 06/01/2016 -16,125 16,125 12/01/2016 750,000 4.300%16,125 766,125 782,250 1,450,000 101,250 1,551,250 1,551,250 Apr 16, 2015 11:48 am Prepared by Piper Jaffray & Co.(k:\analysis\dbc\city\RENTON:R06LTGO) Page 37 COST OF ISSUANCE City of Renton Limited Tax General Obligation Refunding Bonds, 2015A (BQ) & 2015B (Taxable) (Ref 06) FINAL NUMBERS Cost of Issuance $/1000 Amount Bond Counsel 2.02077 25,300.00 S&P rating fee 0.98842 12,375.00 Verification Agent 0.23962 3,000.00 Escrow Agent 0.07987 1,000.00 3.32867 41,675.00 Apr 16, 2015 11:48 am Prepared by Piper Jaffray & Co.(k:\analysis\dbc\city\RENTON:R06LTGO) Page 38 EXHIBIT C BIDDING AGENT CERTIFICATE C-1 BIDD1NG AGENT CERTIFICATE CERTIFICATE OF BIDDING AGENT This Certificate is being furnished by Causey, Demgen & Moore P.C. (the "Bidding Agent") with respect to the bidding for the purchase of certain securities (the "Escrow Securities") in connection with the issuance by the City of Renton, Washington (the "Issuer") of the Issuer’s Limited Tax General Obligation Refunding Bonds, 2015A (the "2015A Bonds") and Limited Tax General Obligation Refunding Bonds, Series 2015B (Taxable) (the "2015B Bonds" and collectively with the 2015A Bonds as the "Bonds"). Proceeds of the Bonds will be used to defease the Issuer’s Limited Tax General Obligation Bonds, 2006 (the "Prior Bonds"). This Certificate is intended to be used by Pacifica Law Group LLP, as Bond Counsel with respect to the Bonds, in connection with their opinion regarding the exclusion from gross income for federal income tax purposes of interest payable on the Bonds. The undersigned HEREBY CERTIFIES as follows: o ° o On April 16, 2015, the Bidding Agent participated in the solicitation of bids for the purchase of the Escrow Securities, to be held in or credited to the escrow account. In this connection, the Bidding Agent timely forwarded to potential bidders a bona fide solicitation for the sale or purchase, as applicable, of the Escrow Securities that specified, in writing, all material terms of such sale or purchase. The terms of the bid specifications were commercially reasonable. Each term was included for a legitimate business reason, other than to increase the purchase price or decrease the yield for the Escrow Securities. The bid specifications contained a notice to potential bidders that submission of a bid is a representation that the potential bidder did not consult with any other potential bidder about its bid, that the bid was determined without regard to any formal or informal agreement that the potential bidder has with the Issuer, the Bidding Agent, or any other person (whether or not in connection with the Bonds or the Prior Bonds), and that the bid is not being submitted solely as a courtesy to the Issuer, the Bidding Agent, or any other person for purposes of satisfying the federal income tax regulations relating to the yield and valuation of investments in connection with tax- exempt bonds. At least three reasonably competitive bidders were solicited for bids of the Escrow Securities. A reasonably competitive bidder is one that has an established industry reputation as a competitive seller of the type of securities being purchased. All potential bidders had an equal opportunity to bid, and no potential bidder was given the opportunity to review other bids before providing a bid. Of the bidders solicited by the Bidding Agent, the Bidding Agent received four bids for the Escrow Securities from bidders meeting the qualifications of the specifications and have no material financial interest (as provided herein) in the Bonds. Each of the bids was from a reasonably competitive provider, and no bid was from the Bidding Agent. As used herein, a bidder with a material financial interest is one who (i) served as a lead underwriter in connection with the Bonds, or (ii) served as a financial advisor in connection with the transaction described herein, or (iii) is a related party to either (i) or (ii) in this sentence. o The sale price submitted by Wells Fargo Securities (the "Provider") was the lowest price submitted (net of any broker’s fees) for which qualifying bids with respect to the purchase of the Escrow Securities were made. The Provider is a reasonably competitive provider of securities such as the Escrow Securities and has no material financial interest in the Bonds, as defined in Section 5 above. United States Treasury Securities, State and Local Government Series ("SLGs") were not available on the day bids were submitted. The Bidding Agent was paid a total fee of $4,000 (the "Fee") in connection with the purchase of the Escrow Securities and other escrowed securities. Except for such payment, no amount has been or will be paid to the Bidding Agent by any person in connection with the sale or purchase of the Escrow Securities. The Fee is a reasonable fee for the Bidding Agent’s services in connection with soliciting bids for the purchase of the Escrow Securities, and such amount does not exceed the lesser of i) $39,000 or ii) 0.2% of the amount reasonably expected, as of the date of purchase of the Escrow Securities, to be invested under the contract over its term, or $4,000 (if 0.2% of such amount reasonably expected to be invested under the contract over its term is less than $4,000). The total fees received by the Bidding Agent with respect to the investment of any proceeds of the Bonds at any time does not exceed $110,000. Attached hereto is documentation that the Bidding Agent provided to the Issuer, which sets forth (i) for each bid that was submitted, the name of the person and entity submitting the bid, the time and date of the bid, and the bid results; and (ii) the bid solicitation form and, if the terms of the bids deviated from the bid solicitation form or a submitted bid was modified, a brief statement explaining the deviation and stating the purpose for the deviation. The undersigned is authorized to execute this certificate on behalf of the Bidding Agent, which is based on one or more of (i) personal knowledge, (ii) inquiry deemed adequate by the undersigned, and (iii) institutional knowledge regarding the matters set forth herein. Dated: May 13, 2015 CAUSEY DEMGEN & MOORE P.C. By: Title: REQUEST FOR BIDS FORM City of Renton, Washington -REQUEST FOR BIDS- CITY OF RENTON, WASHINGTON Security Portfolio Causey Demgen & Moore P.C., on behalf of the City of Renton, Washington (the "Issuer"), is soliciting bids to provide Eligible Securities (defined below) to fund the escrow requirements set forth in Exhibit A hereto (the "Defeasance Escrow"). The Defeasance Escrow will be established by the Issuer in connection with the issuance of its Limited Tax General Obligation Refunding Bonds, 2015A and Limited Tax General Obligation Refunding Bonds, Series 2015B (Taxable) (collectively, the "Bonds"). Bid Date:April 16~ 2015 Bid Time:12:40 p.m. Eastern Time Bid Award:12:50 p.m. Eastern Time Settlement Date:May 13~ 2015 ,(on the Settlement ,Da,te~ the Winning Bidder (as, defined herein) shall be required to guarantee delivery of the Eligible Securities (as defined herein) by 11:00 a.m. Eastern Time) Bid Submittal:Bids are to be emailed to Causey Demgen & Moore P.C., Bidding Agent, at investmentbids(~_~causeyc~.com by 12:40 p.m. EDT on April 16, 2015 and followed up by a fax of the bid form provided as Exhibit B attached hereto, to (303) 468-8233. A fax copy of the bid form must be received promptly following the email bid by the bidder. Bids will be considered firm for 10 minutes after the Bid Time. Conditional bids will not be accepted. Eligible Securities:Eligible Securities shall consist of non-callable United States Treasury securities. Substitution of Eligible Securities Prior to Settlement: Structure: If the Winning Bidder (defined below) cannot deliver the Eligible Securities on the Settlement Date as outlined in its proffered portfolios, the Winning Bidder will have the right to deliver other Eligible Securities for the Defeasance Escrow. Any such substitution must be determined and the details of which must be provided to the Bidding Agent at least 5 business days prior to the Settlement Date. The cost of the new portfolio must not exceed the cost of the original portfolio and the other Eligible Securities shall provide sufficient cash-flow to meet the cash-flow requirements set forth in Exhibit A herein. Additional professional fees incurred by the Issuer due to any such substitution will be at the expense of the Winning Bidder. The Issuer is seeking to purchase Eligible Securities for the Defeasance Escrow to provide sufficient cash-flow to defease certain debt service of the Issuer’s Limited Tax General Obligation Bonds, 2006. The Defeasance Escrow must be funded with Eligible Securities, plus an initial cash deposit, if any, made by the Issuer. The Issuer’s required initial cash deposit, if any, and the bidding agent fee mus_._...~t be included in each bidder’s Cost of CAUSEY DEMGEN & MOORE P.C.PAGE 1 City of Renton, Washington Basis of Award: Ties: Identifying Escrow: Escrow Agent: Bidding Agent: Verification Agent: Underwriter: Bond Counsel: Confirm Information Funding (as defined herein) in order to allow direct comparisons between bids. Each bidder will specify a dollar amount required for the Defeasance Escrow, which will be produced by adding the following: (1) the one-time sale by such bidder to the Issuer of Eligible Securities, (2) any initial cash deposit made by the Issuer and (3) the bidding agent fee (herein collectively referred to as the "Cost of Funding"). The Escrow Agent will deliver cash, equal to the purchase price of the Eligible Securities, to the Winning Bidder upon receipt of the Eligible Securities (on a delivery versus payment basis), that together with any initial cash deposit made by the Issuer, will be sufficient to fund the Defeasance Escrow. The final maturity of the Eligible Securities must occur on or before the final payment date of the cash flow requirements set forth in Exhibit A. The award shall be made to the bidder who provides the lowest overall Cost of Funding for funding the Defeasance Escrow (the "Winning Bidder"). Each bidder’s Cost of Funding must include the cost of the Eligible Securities, the bidding agent fee and the Issuer’s initial cash deposit, if any, required to fund the Defeasance Escrow. The Issuer reserves the right to reject any and all bids in its sole discretion if it determines it is in its best interest to do so. In the event of a tie in bids, the Winning. Bidder will be determined by the time the bids were submitted, with award being made to the bidder who submitted its bid first. Within one hour of award, the Winning Bidder must detail the specific Eligible Securities to be delivered to the Escrow Agent on the Settlement Date. Portfolio details must be provided to Causey Demgen & Moore, P.C. Failure to provide portfolio details within the allotted time period may result in the rescission of the Bid Award to the non-complying bidder. U.S. Bank National Association Causey Demgen & Moore P.C. Grant Thornton LLP Piper Jaffray & Co. Pacifica Law Group LLP Tax ID#: Issuer Legal Name: Issuer Contact: Issuer Address: Escrow Contact 9!-6001271 City of Renton, Washington Iwen Wang, Finance and Information Services Administrator 1055 South Grady Way, Renton, Washington 98058 Carolyn Morrison (206) 344-4678 CAUSEY DEMGEN & MOORE P.C.PAGE 2 City of Renton, Washington DVP Instructions:To be provided Enclosures:Exhibit A -.Cashflow Requirement Exhibit B - Bid Form Exhibit C - Certificate of the Winning Bidder Comments:If for any reason issuance of the Bonds is not completed or the purchase of the Eligible Securities does not take place or is delayed, the Winning Bidder will have no recourse against the Issuer, Underwriter, Bidding Agent, Escrow Agent, Verification Agent or Bond Counsel for any expenses incurred or damages sustained. Award will be subject to escrow verification. Any questions regarding this bid may be directed to Bill Glasso at (303) 672-9886. Other Requirements and Provisions: o The Winning Bidder must sign and deliver the certification regarding administrative costs, yield and other matters, so as to satisfy the "safe harbor" regulations promulgated by the Treasury Department in Treas. Reg. § 1.148-5(d)(6)(iii). This certificate is set forth as Exhibit C hereto and must be delivered on or prior to the Settlement Date and dated the Settlement Date. All bidders are hereby notified that submission of a bid is a representation that (A) the potential bidder did not consult with any other potential bidder about its bid, (B) the bid was determined without regard to any other formal or informal agreement that the potential bidder has with the Issuer or any other person (whether or not in connection with the bond issue), and (C) the bid is not being submitted solely as a courtesy to the Issuer or any other person for the purpose of satisfying the requirement that (a) at least three bids be obtained from disinterested bidders solicited under a bona fide solicitation, and (b) at least~ one of the three bids is fi’om a reasonably competitive bidder. All payments are to be made in same day funds and will be conducted on a delivery versus payment basis. No fees will be paid and no expenses reimbursed by the Issuer. No exceptions to the terms herein will be permitted. As Bidding Agent in this transaction, Causey Demgen & Moore P.C. will receive a fee payable . by the Winning Bidder in the amount of $4d)00.00.~ All potential bidders will have an equal opportunity to bid. No potential bidder will have the opportunity to review other bids ("last-look") before submitting a bid. The Winning Bidder will guarantee delivery of Eligible Securities and in the event of a failure to deliver the Eligible Securities, shall be required to deliver, at the option of the Issuer, (at a cost not to exceed the original portfolio) cash and/or other Eligible Securities necessary to provide sufficient cash-flow to meet the cash-flow requirements as set forth in Exhibit A herein and shall pay any and all additional professional fees and other costs incurred by the Issuer or the Borrower due to any such substitution. In the event that the Winning Bidder is required to deliver cash, the Winning Bidder will retain the right, for a period of thirty (30) calendar days beginning on the Settlement Date, to deliver the failed securities on a daily basis (business days only) in full or in part to the Escrow Agent at the original applicable price offered using the original settlement date and will be credited back in whole or on a pro-rated basis, as applicable, the cash deposit for any or all portions of the failed securities. In the event that the Winning Bidder delivers the failed securities in part, such delivery must occur on the last business day during the thirty (30) day period in which the Winning Bidder retains the right to deliver the failed securities. CAUSEY DEMGEN & MOORE P.C.PAGE 3 City of Renton, Washington EXHIBIT A CITY OF RENTON, WASHINGTON CASHFLOW REQUIREMENTS Payment Date Total 01-Jun-15 $ 313,918.75 01-Dec- 15 313,918.75 01-Jun-16 313,918.75 01 -Dec- 16 12,713,918.75 $13,655,675.00 Key Dates: 1. April 16,2015 2. May 13, 2015 3. December 1, 2016 Bid Date Closing/Settlement Date Cashflow Requirement Maturity CAUSEY DEMGEN & MOORE P.C.PAGE 4 City of Renton, Washington EXHIBIT B CITY OF RENTON, WASHINGTON Security Portfolio BID FORM April 16, 2015 Fax: (303) 468-8233 For the Defeasance Escrow evidenced as Exhibit A in the Request for Bids, which is hereby made a part of this bid, we hereby offer to provide Eligible Securities sufficient to fund the Defeasance Escrow, meeting the requirements on the respective dates as reflected in Exhibit A. The bidder acknowledges that if it is the Winning Bidder it must sign and deliver the certificate in the form attached to the Request for Bids as Exhibit C on or prior to the Settlement Date and dated the Settlement Date. The bidder hereby represents that it did not consult with any other potential bidder about its bid, that the bid was determined without regard to any other formal or informal agreement that the potential bidder has with the Issuer or any other person and that the bid is not being submitted solely as a com~esy to the Issuer or any other person for purposes of satisfying the requirements that (a) at least three bids be obtained from disinterested bidders solicited under a bona fide solicitation, and (b) at least one of the three bids is from a reasonably competitive bidder. Terms used but not defined herein shall have the meaning provided in the Request for Bid to which this Bid Form is attached as Exhibit B. By submitting this bid, we certify that thee security or securities provided will be Eligible Securities that--subject to verification--will be sufficient in amount to meet the Cash Flow Requirement as indicated in Exhibit A. Name of Bidder: Contact: Phone: Signature: Cost of Funding:* Bids will be accepted by email at investmentbids@eause,ccpas.com by 12:40 p.m. Eastern Time and must be followed promptly by a faxed bid form. Please fax bid responses to Bill Glasso at Causey Demgen & Moore P.C. at (303) 468-8233. *Cost of Funding must include the cost of the Eligible Securities as well as any initial cash deposit to be made by the Issuer and the bidding agent fee. CAUSEY DEMGEN & MOORE P.C.PAGE 5 City of Renton, Washington EXHIBIT C CITY OF RENTON, WASHINGTON CERTIFICATE OF THE WINNING BIDDER The undersigned hereby states and certifies to the City of Renton, Washington (the "Issuer") as follows: o o The undersigned is a of (the "Winning Bidder"), and is authorized to execute and deliver this certificate on behalf of the Winning Bidder and is kiaowledgeable with respect to the matters set forth herein. Reference is made to the Solicitation (defined in Section 4 below) for definitions of capitalized terms used and not otherwise defined herein. The Winning Bidder is a reasonably competitive bidder of securities of the type comprising the Eligible Securities, and the Winning Bidder has no material financial interest (within the meaning of Treasury Regulations Section 1.148-5(d)(6)(iii)(B)(1)) in the Limited Tax General Obligation Refunding Bonds, 2015A and Limited Tax General Obligation Refunding Bonds, 2015B (Taxable) (collectively, the "Bonds") other than as a bidder to provide Eligible Securities to satisfy the cash flow requirements set forth as Exhibit A to the Solicitation. The Winning Bidder is, on the date hereof, delivering securities to U.S. Bank National Association (the "Escrow Agent") as escrow agent to the Issuer against payment for such securities. The Winning Bidder received a request for bids (the "Solicitation") with respect to the cash flow requirements and submitted its bid to provide Eligible Securities for the cash flow requirements in compliance with the terms of such solicitation. The Winning Bidder represents that the bid was: (1) determined without consultation with any other bidder, (2) determined without regard to any other formal or informal agreement with the Issuer or any other person (whether or not in connection with the issuance of the Bonds described herein), and (3) not submitted solely as a courtesy to the Issuer or any other person for purposes of satisfying the requirement that (a) at least three bids be obtained from disinterested bidders solicited under a bona fide solicitation and (b) at least one of the three bids is from a reasonably competitive bidder. The Winning Bidder had no opportunity to review other bids submitted by other potential bidders before providing its bid. The Solicitation included all material terms of the bid, and the terms of the Solicitation are commercially reasonable. Other than a bidding agent fee of $4~000.00 paid to Causey Demgen & Moore P.C., the Winning Bidder is not paying, and does not expect to pay, any administrative costs to third parties, including any brokerage or selling commissions, legal and accounting fees, investment advisory fees, recordkeeping, safekeeping, custody and similar costs or expenses, in connection with supplying the Eligible Securities. Dated: May 13, 2015 By: Name: Title: CAUSEY DEMGEN & MOORE P.C.PAGE 6 BIDS RECEIVED AND RESULTS TO: FROM: SUBJECT: DATE: CC: MEMORANDUM IWEN WANG, CITY OF RENTON, WASHINGTON BILL GLASSO, CAUSEY DEMGEN & MOORE P.C. SUMMARY OF OFFERS FOR THE PURCHASE OF SECURITIES - DEFEASANCE ESCROW APRIL 16, 2015 LINDSAY SOVDE, PIPER JAFFRAY & CO. JUSTIN MONWAI, PIPER JAFFRAY & CO. STACEY LEWIS, PACIFICA LAW GROUP LLP DEANNA GREGORY, PACIFICA LAW GROUP LLP KRISTIN PATTERSON, PACIFICA LAW GROUP LLP The table below contains the complete list of firms who were solicited to provide securities and the offers they submitted on April 16, 2015 for the sale of securities. [PROVIDER NAME BID AMOUNT TIME RECEIVEDI Cantor Fitzgerald Credit-Suisse BOK Financial PNC Capital Markets Commerzbank BB&T Debt Capital Markets Wells Fargo Securities Chris Cercy Chris Patronis Jason Glidden Robert DiPasquale Brian Nevel Will Fen’ell (1) Doug Safford $13,579,663.91 $13,575,049.57 $13,575,392.45 $13,573,339.61 12:39 p.m. EDT 12:38 p.m. EDT 12:35 p.m. EDT 12:39 p.m. EDT Lowest Bid $13,573,339.61 SLG Cost $13,585,983.00 Open Market Savings $12,643.39 (1) Winning Bidder William D Glasso From: Sent: To: Cc: Subject: safford @wellsfargo.com Thursday, April 16, 2015 10:39 AM Investrnentbids Joseph.P.Celentano@we!lsfargo.com; Brian.Warden@wellsfargo.com Request for Bids - City of Renton - THURS, APR 16 @ 12:40 EDT 13,573,339.61 Portfblio Cost (including cash and $4,000 bidders fee): Settlement Date: 5/13/15 Total Draws: 13,655,675.oo Firm Time: lo Minutes RFP/RFQ Required Disclosure Statement This proposal is submitted in response to your Request for [Proposals/Qualifications/Bids] dated 4/16/15. The contents of this proposal and any subsequent discussions between us, including any and all information, recommendations, opinions, indicative pricing, quotations and analysis with respect to any municipal financial product or issuance of municipal securities, are provided to you in reliance upon the exemption provided tbr responses to requests for propesals or qualifications under the municipal advisor rules (the "Muni Advisor Rules") of the Securities and Exchange Commission (the "SEC")(the "Municipal Advisor Rule").t,,, 24o C~R ~ Saa ~- 1 et seq.?l The Staff of the SEC’s Office of Municipal Securities has issued guidance which provides that, in order for a request for proposals to be consistent with this exemption, it must (a) identify a particular objective, (b) be open for not more than a reasonable period of time (up to six months being generally considered as reasonable), and (c) involve a competitive process by (such as by being provided to at least three reasonably competitive service providers or by being publicly posted to your official website). In submitting this proposal, we have relied upon your compliance with this guidance. In submitting this proposal (a) Wells Fargo Securities is not acting as your Municipal Advisor, providing you with municipal advisory services and does not owe a fiduciary duty to you pursuant to Section 15B of the Securities Exchange Act of 1934 to you with respect to the information and material contained in this proposal in the event you are a municipal entity; (b) Wells Fargo Securities is acting for its own interests; and (c) you should discuss any information and material contained in this proposal with any and all internal or external advisors and experts that you deem appropriate before acting on this information or material. Doug Safford, CFA Director Fixed Income Sales and Trading Wells Fargo Securities, LLC !00 West Washington, MAC $4101-17L Phoenix, AZ 85003 602-3 78-4002-Phone 800-218-3125 602-3 78-4001 -Fax We cannot accept trades submitted by e-mail or fax. Investments: NOT FDIC insured I May lose value ] No bank guarantee this emad is subject [o a d sdmmer: please c!ick o~ the foliowin~,~ }ink or o{~{ at~d paste fl~e link Jr~,lo the address ba[ of your browser b~D~;//’ww~,~f~[gg:6omfcom/disc!a!m~dfled 5 City of Renton, Washington EXHIBIT B CITY OF RENTON, WASHINGTON Security Portfolio BID FO~ April 16, 2015 Fa~X; (303) 46~-8Z33 For the Defeasance Escrow evidenced as Exhibit A in the Request for Bids, which is hereby made a part of this bid, we hereby offer to provide Eligible Securities sufficient to fund the Defeasance Escrow, meeth~g the requh’ements on the respective dates as reflected in Exhibit A. The bidder acknowledges tha~ if it is the Winning Bidder it must sign mad deliver the certificate in the form attached to the Request for Bids as Exhibit C on or prior to the Settlement Date and dated the Settlement Date. The bidder hereby represenls that it did not consult with any other potential bidder about its bid, that the bid svas detetanined without regm’d to any other formal or informal agreement that the potential bidder has with the Issuer or any other person and that the bid is not being submitted solely as d courtesy to the Issuer or any other person for purposes of satisfying the requirements that (a) at least three bids be obtained fi’om disinterested bidders solicited under a bona fide solicitation, and (b) at least one of the three bids is from a reasonably competitive bidder. Terms used but not defined herein shall have the meaning provided in the Request for Bid to which this Bid Form Is attached as Exhibit B. By submitting this bid, we cedlfy that the security or securities plx~vided will be Eligible Securities that--subject to verification--will be sufficient in amount to meet the Cash Flow Reqt,irement as indicated in Exhibit A. L, Lc Name of Bidder: Contact: Phone: Signature: Bids will be accepted by email at investmentbids@causevcoas,eom by 12:40 p.m. Eastern Time and must be followed promptly by a faxed bid form. Please fax bid responses to Bill Glasso at Cansey Demgen & Moore P.C. at (303) 468,8233. *Cost of Fnnding must include the eost of the Eligible Securities as well as any initial cash deposit to be made by the Issuer and the bidding agent fee. CAUSEY DEMGEN & MOORE P.C, PAGE 6 William D Glasso From: Sent: To: C: Subject: Fabrizio, Stephen < SFabrizio@cantor.com Thursday, April 16, 2015 10:39 AM Investmentbids Fabrizio, Stephen; Ciresi, Gregory Renton v9. :~3,579,663.9:~ CONFIDENTIAL: This e-mail, includin~ its contents and attachments, if any, are confidential. If you are not the named recipient please notify the sender and immediately delete it. You may not disseminate, distribute, or forward this e-mail messaBe or disclose its contents to anybody else. Copyril~ht and any other intellectual property rights in its contents are the sole property of Cantor Fitzgerald and its affiliates. E-mail transmission cannot be guaranteed to be secure or error-free. The sender therefore does not accept liability for any errors or omissions in the contents of this message, which arise as a result of e-mail transmission. If verification is required please request a hard-copy version. Although we routinely screen for viruses, addressees should check this e-mail and any attachments for viruses. We make no representation or warranty as to the absence of viruses in this e-mail or any attachments. Please note that to ensure regulatory compliance and for the protection of our customers and business, we may monitor and read e-mails sent to and from our server(s). Any prices or data contained herein are indicative and subject to chanl~e without notice; its accuracy is not guaranteed and should not be relied on. Reliance may not be placed on trade confirmations issued other than by the Operations Department. This e-mail was issued by Cantor Fitzgerald. Cantor Fitzgerald Europe ("CFE") is reBulated by the Financial Conduct Authority ("FCA"). CFE is an unlimited liability company incorporated under the laws of England (company number 2505767) and VAT registration (number 577 406809). CFE’s registered office is at One Churchill Place, London El4 5RB. For any issues arisinB from this email please reply to the sender. CFE appears on the FCA register under no 149380. The FCA reBister appears at http:/,/www.fca.or~.uk/rel~ister!. The FCA is a financial services industry reBulator in the United KinBdom and is located at 25 The North Colonnade, Canary Wharf, London, E14 5HSo Gity of Renton, Washington EXIiIBIT B CITY OF’ RENTON, WASHINGTON Security Portfolio Exh~lt C on or prior m the Se~mem ~ ~O dram ~0 $~lomem D~, ~e M~er h~by ~men~ t~ it did n= co~ ~ ~y o~ ~ton~ bldd~ ~o~ t~ bid~ ~ ~e b~ ~ de~ln~ ~o~ ~ to ~y o~ f~ ~ inf~ ~ment ~ ~ po~,~ bidd~ ~ wi~ the I~ or ~ o~ ~ ~d ~ the Md ~ ~t ~ subm~ ~lely ~ a ~u~y ~ ~e ~ssuor ~ ~ ~I~ per,~ f~ ~o~ of ~s~g ~ r~u~ t~ (~) st I~ ~ b~ ~ ~in~ ~om d~st~We~d bidde~ sollc~ und~a ~ solic~ion, ~ (b) ~ l~ o~ o~ ~e ~ bids i~ ~ a r~m~ly ~,tttive biddy. T~s ~ bm not d,~d bemln s~l have ~o m~g p~vid~ M the R~q~ for Bid ~ which ~ia B~d F~ i, ~ ~ Exhibit B. By submitting this bid, we c=~ that tM security or s~urtdes prostl~d that-.-subjtmt to vertfl~tiorv-wtlJ be sufl~cimat in amount to Exhibit A, Name of .Bidder: Phone: Sig.ature; Bids wig be accepted by ema|| it i.m~t~e .m~idst~.~coms~_ ~..oom by ] 2:40 p.m. ~ Time ~d m~t ~ ~oliowcd ~mptly by a ~ bid fo~, Ple~ f~ bid ~ to Bill Oi~so & M~re P.C. at (303) the btddlngagent ~e, CAuSer D=Mt~EN & MOORE P.G,PAtm 8 William D Glasso From: Sent: To: Subject: Attachments: Patronis, Chris <chris.patronis@credit-suisse.com> Thursd~ay, April 16, 2015 10:38 AM William D Glasso Investmentbids 12:40: Request for Bids - City of Renton - THURS, APR 16 @ 12:40 EDT Scan 001.pdf Here it is Bill-thank you Chris Patronis CREDIT SUISSE CREDIT SUISSE I PB USA ISG New York, SAEV 2 Eleven Madison Avenue I 10010-3629 New York I United States Phone +1 2~.2 538 6264 I Fax +1 212 322 1145 chris.patronis@credit-suisse.com I www.credit-suisse.com From: William D Glasso [mailto:Wglasso@causeycpas.com] Sent: Wednesday, April 15, 2015 6:47 PM To: stacey.lewis@pacificalawl~roup.com; "(deanna.l~regory@pacificalawl~roup.com); ’Kristin.Patterson@pacificalawl~roup.com’; lindsay.a.sovde@pjc.com; justin.w.monwai@pjc.com; ’caroiyn.morrison@usbank.com’; ’grel~.skutnik@usbank.com’; ’ryan.brennan@usbank.com’ Cc: Hisam K Derani; Teow Lim Goh; Justin M Greaser Subject: Request for Bids - City of Renton - THURS, APR 16 @ 12:40 EDT Attached, please find a Request for Bids form for the City of Rentono The City will be acceptinl~ bids until 12:40 p.m. EDT, Thursday, April 16th. Eligible securities will consist of Treasury securities only as more fully described in the attached bid form. Thank you and we look forward to receivinl~ your bid. Bill Bill Glasso Causey Demgen & Moore P.C. 1~.25 Seventeenth Street, Suite 1450 / Denver, CO 80202 Phone (303) 672-9886 / Fax (303) 468-8233 www.causeycpas.com This electronic transmission contains information from Causey Demgen & Moore P.C. which is intended for the use of the individual to whom it is addressed, and which mav contain information that is confidential. If the reader of this message is not the intended recipient any disclosure, dissemination, distribution, copying or other use of this communication or its substance is prohibited. If you have received this communication in error, please notify us and destrov the original transmission. Thank you. City of Renton, Washington EXHIBIT B CITY OF RENTON, WASHINGTON Security Portfolio BID FORM April 16, 2015 Fax: (303) 468-8233 For the Defeasance Escrow evidenced as Exhibit A in the Request for Bids, which is hereby raade a part of this bid, we hereby offer to provide Eligible Securities sufficient to fund the Defeasance Escrow, meeting the requirements on the respective dates as reflected in Exhibit .4,. The bidder acknowledges that if it is the Wimaing Bidder it must sign and deliver the certificate in the form attached to the Request for Bids as Exhibit C on or prior to the Settlement Date and dated the Settlement Date. The bidder hereby represents that it did not consult with any other potential bidder about its bid, that the bid was determined without regard to any other formal or informal agreement that the potential bidder has with the Issuer or any other person and that the bid is not being submitted solely as a courtesy to the Issuer or any other person for purposes of satisfying the requirements that (a) at least three bids be obtained from disinterested bidders solicited under a bona fide solicitation, and (b) at least one of the three bids is from a reasonably competitive bidder. Terms used but not defined herein shall have the meaning provided in the Request for Bid to which this Bid Form is attached as Exhibit B. By submitting this bid, we certify that the security or securities provided will be Eligible Securities that--subject to verification--will be sufficient in amount to meet the Cash Flow Requirement as indicated in Exhibit A. . ~,. _~_~j~,~.,,j.4~.~/~.~~ Name of Bidder: ~ ~ ~" Contact: Phone: Signature: Cost of Funding:* Bids will be accepted by email at investmentbids@causeyepas.eo~ by 12:40 p.m. Eastern Time and must be followed promptly by a faxed bid form. Please fax bid responses to Bill Glasso at Causey Demgen & Moore P,C. at (303) 468-8233. *Cost of Funding must include the cost of the Eligible Securities as well as any initial cash deposit to be made by the Issuer and the bidding agent fee, CAUSEY DEMGEN & MOORE P.C. PAGE 5 William D Glasso From: Sent: To: Subject: Ferrell, Will <wferre!l@bbandtcm.com> Thursday, April 16, 2015 10:34 AM Investmentbids BB&T CDM RENTON 5/13/15 WITH $4K FEE DRAWS 13,655,675.00 COST $13,575,392.45 Will Ferrell Senior Vice President BB&T Debt Capital Markets 901 East Byrd Street Suite 300 Richmond,Va 23219 Phone - 804-649-3919 Toll Free 800-834-8644 Cell 804-874-6656 Fax- 804-644-7682 E- Mail jwfe.rrell@bbandtcm.com This message is intended only for the addressee. BB&T Capital Markets, a division of BB&T Securities, LLC, member F1NRA/SIPC, is a wholly-owned nonbank subsidiary of BB&T Corporation. The securities sold, offered or recommended are not a deposit, not FDIC insured, not guaranteed by a bank, not guaranteed by any federal government agency and may go down in value. Please be aware that since the confidentiality of Internet email cannot be guaranteed, do not include private or confidential information such as passwords, account numbers, social security numbers, etc., in emails to us. Additionally, instructions having financial consequences such as trade orders, funds transfer, etc., should not be included in your email communications to us as we cannot act on such instructions received by email. For a list of full disclosures relating to the firm and this communication, please click here http:/!bbtscottstringfellow.com/aboutus/disclosures ¯ If you no longer wish to receive commercial messages from our organization through electronic means, please email the following address (donotemailcommerciat@BBandTCM.com) with the word "stop" in the subject line. City of Renton, Washington EXHIBIT B CITY OF RENTON, WASHINGTON Security Portfolio BID FORM April ]6, 2015 Fax: (303) 468-8233 For the Defeasanee Escrow evidenced as Exhibit A in the Request tbr Bids, which is hereby made a part of this bid, we hereby offer 1o provide Eligible Securities sufficient to litnd the Defeasance Escro\v, meeting the requirements on the respective dates as retlected in Exhibit A. The bidder acknowledges that il~ it is the Winning Bidder it must sign and deliver the certificate in the form attached to the Request tbr Bids as Exhibit C on or prior to the Settlement Date and dated the Settlement Date. The bidder hereby represents that it did not consult with any other potential bidder about its bid, that the bid was determined without regard to any other tbrmal or inlbrmal agreement that the potential bidder has with the Issuer or any olher person and lhat the bid is not being submitted solely as a courtesy to the Issuer or any other person [br purposes of satisfying the requirements that (a) at least three bids be obtained from disinterested bidders solicited under a bona fide solicitation, and (b) at least one of the three bids is from a reasonably competitive bidder. Terms used but not defined herein shall have the meaning provided in the Request [br Bid to which this Bid Form is attached as Exhibit B. By submitting this bid, we certil3, that the security or securities provided will be Eligible Securities that--subject to verification~wili be sufficient in amount to meet the Cash Flow Requiren~cnt as indicated in Exhibit A. Name of Bidder:~- ~ Cost of Funding:* Bids will be accepted by email at investm.entbids@~.auseycpas.com by 12:40 p.m. Eastern Time and must be/bllowed promptly by a taxed bid form. Please fax bid responses to Bill Glasso al Causey Demgen & Moore P.C. at (303) 468-8233. C.ost of Funding musl include the cost of Ihe Eligible Securities as well as any initia! cash dcpt~sit to be made by the Issuer and the bidding agcnl fcc, CAUSEY DEMGEN & MOORE P.C.PAGE WINNING BIDDER CERTIFICATE City of Renton, Washington EXHIBIT C OF RENTON, WASHINGTON CERTIFICA~ OF THE ~,~G B~DER The undersigned hereby states and certifies to the City of Renton, Washington (the "Issuer") as follows: "Whmh~g Bidder"), and is authorized to execute and deliver thi~ cel~ificate on behalf of the Winning Bidder and is ka~owledgeable with respect to the matters set forth herein, Reference is made to the Solicitation (defined hi Section 4 below) for definJtinns of capitalized terms used and not otherwise defined herein, 2,The Winning Bidder is a reasonably competitive bidder of securities of the type comprising the Eligible Securities, and the Winning Bidder has no material financial interest (within the meaning of Treasury Regulations Section 1.148.5(d)(6)(iit)(B)(1)) in the Lhnited Tax General Obligation Reflmding Bonds, 2015A and Limited Tax General Obligation Refunding Bonds, 2015B (Taxable) (collectively, the "Bonds") other titan as a bidder to provide Eligible Securitie~ to satisfy the cash flow requirements set forth as Exhibit A to the Solicitation. 3,The Winning Bidder is, on the date hereof, delivering securities to U.S. Batik National. Association (the "Escrow Agent") as escrow agent to the Issuer against payment for sucl~ securities. 4,The Winning Bidder received a request for bids (the "Solicitation") with respect to the cash flow requirements and submitted its bid to provide Eligible Securities for the cash flow requirements in compliance with .the terms of such solicitation. 5,Tile Winning Bidder represents that the bid was: (1) determined wifl~out consultation with any other bidder, (2) determined without regard to any other formal or informal agreement with the Issuer or any or!let person (whether or not in connection with the issuance of the Bonds described herein), and (3) not submitted solely as a courtesy to the Issuer or any other person for purposes of satisfying the t~luirement that (a) at least three bids be obtained from disinterested bidders solicited under a bona fide solicitation and (b) at least one of the three bids is fi’om a reasonably competitive bidder. 6.The Winning Bidder had no opportunity to review other bids submitted by other potential bidders before providing its bid. 7.The Solicitation included all material terms of the bid, and the terms of the Solicitation are colmnereially reasonable~ 8.Other than a bidding agent fee of ~4~000.00 paid to Causey Demgen & Moore P.C., the Winning Bidder is not paying, and does not expect to pay, any administrative costs to third parties, including any brokerage or selling commissions, legal and accounting fees, investment advisory fees, recordkeeping, safekeeph~g, custody and similar costs or expenses, in supplying the Eligible Securities, May 13, 2015 :’~)d~[\\Dated’. By:_~.__- °~ ’ , Title: CAUSEY DEMGEN & MOORE P,C. PAGE 6 WINNING PORTFOLIO Delivery iDa~ Issuer maturk’y DATE 0~’01;20! 5 833,75 280,000 O0 279,000 O0 12,r~2,ooo Do Requirements Total Cost 13,655,67S.00 13,572,505.86 833.75 t3,573,339.61 912796EC9 31~,91&75 213 75 31,705 O0 12,~!3,918,75 12,713,91875 T 1 3/4 05/311!6 1 750% 0500% Par Amount P~ce 280,000 279.000 279,000 12,~2,000 TRADE TICKETS Hisam K Derani ,, From: Sent: To: Subject: Brian.Warden@wellsfargo.com Thursday, April 16, 2015 3:04 PM BrianoWarden@wellsfargo.com Trade Confirmation *TRADE TICKET *AS Of: 04/16/15 ISIN: US912828QP82 TICKET NUMBER: 35759365 ENTRY DATE TIME: 04/16/15 10:05 MATURITY DATE : 05/31/16 SALES PERSON: DOUG SAFFORD (DATED: 05/31/11) CUSTOMER ACCOUNT: POQ PENDING WFS Broadridge #: xxxx0014 SELLS: 279 (M) of UST 1.75 5/31/16 CUSIP: 912828QP8 PRICE: 101.51522000, YIELD: .30273420, SPREAD: .0000 SETTLEMENT on 05/13/15 ISSUER~ US TREASUR NOTES: Renton **PRINCIPAL: ** ACCRUED (days): ** ADDITIONAL FEE: ** TOTAL: {912828QP8 Govt DES} $283,227.46 2,199.81 $.oo $285,427.27 FINRA Rule 4515.01 requires that all accepted orders with the intent to allocate complete that allocation by 12 p.m. EST on the next business day following the trading session. In order to comply with this new rule, we ask for your help to provide your allocations to us with enough time to execute before the noon deadline. Wells Fargo Securities is the trade name for the capital markets and investment banking services of Wells Fargo & Company and its subsidiaries, including Wells Fargo Securities, LLC, member FINRA and SIPC. If this communication relates to an offering of US registered securities (i) a registration statement has been filed with the SEC, (ii) before investing you should read the prospectus and other documents the issuer has filed with the SEC, and (iii) you may obtain these documents from your sales representative, by calling 1-800-326-5897 or visiting www.sec.~. If this communication relates to a securities offering exempt from US registration, you should contact your sales representative for the complete disclosure package. In Japan, see: ~:!/www.wellsfar~o.com/com!disclaimer/wfs.~bl. s ,>jet ios ~isc ai; er, Die;~.se c!ck on tile fol ow ng ii~k r~r ~’u~ a~d p~}ste the ink nto the address ba~ ol yo~r h!~ps:/lwww,wellsfargo comtco~disclaimeff~ed5 Hisam K Derani From: Sent: To: Subject: Brian.Warden@wellsfargo.com Thursday, April 16, 2015 3:04 PM Brian.Warden@wellsfargo.com Trade Confirmation *TRADE TICKET *As Of: 04/16/15 ISIN:US912828A263 TICKET NUMBER: 35759364 ENTRY DATE TIME: 04/16/15 10:05 MATURITY DATE : 11/30/15 SALES PERSON: DOUG SAFFORD (DATED: 12/02/13) CUSTOMER ACCOUNT: POQ PENDING WFS Broadridge #: xxxx0014 SELLS: 279 (M) of UST 0.25 11/30/2015 CUSIP: 912828A26 PRICE: 100.07489000, YIELD: .11361320, SPREAD: .0000 SETTLEMENT on 05/13/15 NOTES: Renton **PRINCIPAL: ** ACCRUED (days): ** ADDITIONAL FEE: ** TOTAL: ISSUER: UNITED STA {912828A26 Govt DES} $279,208.94 314.26 $.oo $279,523.20 FINRA Rule 4515.01 requires that all accepted orders with the intent to allocate complete that allocation by 12 p.m. EST on the next business day following the trading session. In order to comply with this new rule, we ask for your help to provide your allocations to us with enough time to execute before the noon deadline. Wells Fargo Securities is the trade name for the capital markets and investment banking services of Wells Fargo & Company and its subsidiaries, including Wells Fargo Securities, LLC, member FINRA and SIPC. If this communication relates to an offering of US registered securities i) a registration statement has been filed with the SEC, ii) before investing you should read the prospectus and other documents the issuer has filed with the SEC, and iii) you may obtain these documents from your sales representative, by calling 1-800-326-5897 or visiting ~.s~. If this communication relates to a securities offering exempt from US registration, you should contact your sales representative for the complete disclosure package. In Japan, see: htt~s://www.wellsfarqo.com/com/disclaimer/wfs~. 7his ems}l is subject ~:o a discla met. please c:4ck on the follow r~g i¢,,k or cu~ and pasie ti~e link into the address }a~ ol yo~r b~owser httpsJtwww, we!lsfar.q~.,comlcomld.is.~ia.!merl~ed5 Hisam K Derani ,,,,,,,, ,,, From; Sent: To: Subject: Brian.Warden@wellsfargo.com Thursday, April 16, 2015 3:04 PM Brian.Warden@weltsfargo.com Trade Confirmation *TRADE TICKET *AS Of: 04/16/15 ISIN: US912828G468 TICKET NUMBER: 35759367 ENTRY DATE TIME: 04/16/15 10:05 MATURITY DATE : 11/30/16 SALES PERSON: DOUG SAFFORD (DATED: 12/01/14) CUSTOMER ACCOUNT: POQ PENDING WFS Broadridge #: xxxx0014 SELLS: 12682 (M) of UST 0.5 11/30/2016 CUSIP: 912828G46 PRICE: 100.13373670, YIELD: .41330690, SPREAD: .0000 SETTLEMENT on 05/13/15 NOTES: Renton **PRINCIPAL: ** ACCRUED (days): ** ADDITIONAL FEE: ** TOTAL: ISSUER: UNITED STA {912828G46 Govt DES} $12,698,960.49 28,569.34 $.oo $12,727,529.83 FINRA Rule 4515.01 requires that all accepted orders with the intent to allocate complete that allocation by 12 p.m. EST on the next business day following the trading session. In order to comply with this new rule, we ask for your help to provide your allocations to us with enough time to execute before the noon deadline. Wells Fargo Securities is the trade name for the capital markets and investment banking services of Wells Fargo & Company and its subsidiaries, including Wells Fargo Securities, LLC, member FINRA and SIPC. If this communication relates to an offering of US registered securities (i) a registration statement has been filed with the SEC, (ii) before investing you should read the prospectus and other documents the issuer has filed with the SEC, and (iii) you may obtain these documents from your sales representative, by calling 1-800-326-5897 or visiting _~www.se~.~gov. If this communication relates to a securities offering exempt from US registration, you should contact your sales representative for the complete disclosure package. In Japan, see: ~://~ww.wellsfarqo~.com/com/disclaimer/wfsjbl. ]h}s emaii is s~bject to ~- discaner. !)ieas:,e ciick on rise foi.o,~.ng ink or cut 8,nd !)sste the Ink into the address bar oi your browser https://www.wellsfa~o.comlconddlsclaimer!~l~d5 Hisam K Derani From: Sent: To: Subject: Brian.Warden@wellsfargo.com Thursday, April 16, 2015 3:04 PM Brian.Warden@wellsfargo.com Trade Confirmation *TRADE TICKET *AS Of: 04/16/15 ISIN:US912796EC97 TICKET NUMBER: 35759362 ENTRY DATE TIME: 04/16/15 10:05 MATURITY DATE : 05/28/15 SALES PERSON: DOUG SAFFORD (DATED: 05/29/14) CUSTOMER ACCOUNT: POQ PENDING WFS Broadridge #: xxxx0014 SELLS: 280 (M) of UST TBILL 05/28/2015 CUSIP: 912796EC9 PRICE: 100.00913000, YIELD: -.22214305, DISCOUNT: -.2191 SETTLEMENT on 05/13/15 NOTES:Renton **PRINCIPAL: **ACCRUED ( days): **ADDITIONAL FEE: **TOTAL: ISSUER: UNITED STA $ $ {912796EC9 Govt DES} 280,025.56 .00 .00 280,025.56 FINRA Rule 4515.01 requires that all accepted orders with the intent to allocate complete that allocation by 12 p.m. EST on the next business day following the trading session. In order to comply with this new rule, we ask for your help to provide your allocations to us with enough time to execute before the noon deadline. Wells Fargo Securities is the trade name for the capital markets and investment banking services of Wells Fargo & Company and its subsidiaries, including Wells Fargo Securities, LLC, member FINRA and SIPC. If this communication relates to an offering of US registered securities (i) a registration statement has been filed with the SEC, (ii) before investing you should read the prospectus and other documents the issuer has filed with the SEC, and (iii) you may obtain these documents from your sales representative, by calling 1-800-326-5897 or visiting If this communication relates to a securities offering exempt from US registration, you should contact your sales representative for the complete disclosure package. In Japan, see: https:!/w~w.wellsfar~.com/com/disclaimer/wfs~%. I his err;~,ii is subject ~o a d sclaimer, please dick on - *~ ; ,~" li~k or :~! 8rid iasl ~ ~e rink }r~lo t~e r:sddress be[ of y.~}u~ b~owse~ https://WWW we Isfar~o,~mlcornldisclaimer~qed5 (Rev. September 2011) Department of the Treesury~ Internal Revenue Service Information Return for Tax-Exempt Governmental Obligations ~ Under Intemal Revenue Code section 149(e)OMB No. 1545-0720 )" See separate instructions. Caution: If the issue pdce is under $100,000, use Form 8038-GC. .:P:l~lm Reporting Authority If Amended Return, check here ¯[] 1 Issuer’s name 2 Issuer’s employer identification number (EIN) City of Renton, Washington 91-6001271 3a Name of person (other than issuer) with whom the IRS may communicate about this return (see instructions)31) Telephone number of other person shown on 3a 4 Number and street (or P.O. box if mail is not delivered to street address)I Room/sulte 5 Report number (For IRS Use Only) 1055 South Grady Way I I 3 ~-~ 6 City, town, or post office, state, and ZIP cede 7 Date of issue Renton, Washington 98055 0511312015 8 Name of issue 9 CUSIP number Limited Tax General Obligation Refunding Bonds, 2015A 760133TJ7 10a Name and title of officer or other employee of the issuer whom the IRS may call for more information (see 10b Telephone number of officer or ether instructions)employee shown on 10a Iwen Wang, Finance and Information Services Administrator 425-430-6868 I:P:l~ill Type of Issue (enter the issue price). See the instructions and attach schedule. 11 Education ............................ 12 Health and hospital .......................... 13 Transportation .......................... 14 Public safety ............................. 15 Environment (including sewage bonds) .................... 16 Housing .............................. 17 Utilities . . . ¯ .........! .................. 18 Other. Describe ¯ 19 If obligations are TANs or RANs, check only box 19a .............¯ [] If obligations are BANs, check only box 19b ................¯ [] 20 If obligations are in the form of a lease or installment sale, check box ........¯ [] 9,996,804 I’.k’1ii111 Description of Obligations. Complete for the entire issue for which this form is being filed. ’price at maturity average maturity 21 12/0112028 $9,996,804 ~;8,825,000 10.0362 years I’.RI"~I Uses of Proceeds of Bond Issue (including underwriters’ discount) 22 Proceeds used for accrued interest ..................... 23 Issue price of entire issue (enter amount from line 21, column (b)) ........... 24 Proceeds used for bond issuance costs (including underwriters’ discount). ~ .80,296 25 Proceeds used for credit enhancement ............25 26 Proceeds allocated to reasonably required reserve or replacement fund 26 27 Proceeds used to currently refund pdor issues .........27 28 Proceeds used to advance refund prior issues .........26 9,916,039 29 Total (add lines 24 through 28) ...................... 30 Nonrefunding proceeds of the issue (subtract line 29 from line 23 and enter amount here) |-.,~T~ir, Description of Refunded Bonds. Complete this part only for refunding bonds. 31 Enter the remaining weighted average maturity of the bonds to be currently refunded ....¯ 32 Enter the remaining weighted average maturity of the bonds to be advance refunded ....¯ 33 Enter the last date on which the refunded bonds will be called (MM/DD/YYYY) ......¯ 34 Enter the datels) the refunded bonds were issued ¯ (MM/DD/YYYY)08/0112006 For Paperwork Reduction Act Notice, see separate instructions,cat. No. 63773S (e) Yield 2.0189 9,996,804 9,996,335 469 N/A years 10.3081 years 12/0112016 Form 8038-G (aev. 9-2011) Form 8038-G (Rev. 9-2011)Page 2 i ",/i’litvi I Miscellaneous 35 Enter the amount of the state volume cap allocated to the issue under section 141(b)(5) .... 36a Enter the amount of gross proceeds invested or to be invested in a guaranteed investment contract (GIC) (see instructions) ......................... b Enter thefinal maturity date of the GIC ¯ c Enter the name of the GIC provider ¯ 37 Pooled financings: Enter the amount of the proceeds of this issue that are to be used to make loans to other governmental units .........................0 38a If this issue is a loan made from the proceeds of another tax-exempt issue, check box ¯[] and enter the following information: b Enter the date of the master pool obligation ¯ c Enter the EIN of the issuer of the master pool obligation ¯ d Enter the name of the issuer of the master pool obligation ¯ 39 If the issuer has designated the issue under section 265(b)(3)(B)(i)(lll) (small issuer exception), check box ....¯[] 40 If the issuer has elected to pay a penalty in lieu of arbitrage rebate, check box .............¯[] 41a If the issuer has identified a hedge, check here ¯[] and enter the following information: b Name of hedge provider I~ c Type of hedge ¯ d Term of hedge ¯ 42 If the issuer has superintegrated the hedge, check box .....................¯[] 43 If the issuer has established written procedures to ensure that all nonqualified bonds of tills ~ssue are remediated according to the requirements under the Code and Regulations (see instructions), check box ........), [] 44 If the issuer has established written procedures to monitor the requirements of section 148, check box .....¯[] 45a If some portion of the proceeds was used to reimburse expenditures, check here ¯ [] and enter the amount of reimbursement ......... ¯ b Enter the date the official intent was adopted ¯ Signature and Consent Paid Preparer Use Only Under penalties of perjury, I declare that I have examined this return and accompanying schedules and statements, and to the best of my knowledge and belief, they are true, correct, and complete. I further declare that I consent to the IRS’s disclosure of the issuer’s return information, as necessary to process this return, to the person that I have Print/Type preparer’s name Edward A. McCullough Firm’s name ¯Pacifica Law Group Firm’s address ¯1191 Second Ave, Suite 2100, Seattle, WA 98101 ~lwen Wang, Finance & Info, Services Admin. Type or print name and title Date I Check [] if PTIN self-emp oyed P01066582 Firm’s EIN ~45-1446871 Phone no.(206) 245-1700 Form 80~-(~ (Rev. 9-2011) AFFIDAVIT OF MAILING STATE OF WASHINGTON ) ) SSo COUNTY OF KING ) Kristin Patterson, being duly sworn, deposes and says that she is a citizen of the United States and over the age of eighteen years; that she is a resident of Snohomish County, Washington. That on August 13, 2015, at 3" |C) p.m., she caused a Form 8038-G, completed by the City of Renton, Washington, regarding its Limited Tax General Obligation Refunding Bonds, 2015A, to be mailed by depositing the same in the United in a sealed envelope, certified delivery, first class, postage prepaid, properly to the Department of the Treasury, Internal Revenue Service Center, Ogden, UT I certify that I know or have satisfactory evidence that Kristin Patterson is the person who appeared before me, and said person acknowledged that she signed this instrument, and acknowledged it to be her free and voluntary act for the uses and purposes mentioned in the instrument. Dated: Print Name My commission expires zt- 11-18 rn m Postage Oertffied Fee Return Receipt Fee (Endomement Required) (Endorsement Required) i_ ¯ Complete items 1, 2, and3. I ¯ Print your name and address on the reverse I so that we can return the card to you. : ¯ AttaCh this card to the back of the mailplece, l or oq the front if space permits. t 1. Article Addressed to: DEPT. OF THE TREASURY IRS C~rr~ OGDEN, UTAH 84201 X [] Agent [] Addressee Date of Delivery IIIIlllillllllllllllllllilllll]illlllllllllll~9590.9401 0049 5168 4545 26 2. Arttcl~ Number ~Transfer from serv/ce~ 7013 1710 001~0 0233 PS Form 381 !, April 2015 PSN 7530-02-000-9053 ~ USPS.com®- USPS Tracking®Page 1 of 2 English Customer Service USPS Mobile Register/Sign In USPS.COM USPS Tracking®Have questions? We’re here to help. Get Easy Tracking Updates Sign up for My USPS. Tracking Number: 70131710000002332109 Updated Delivery Day: Monday, August 17, 2015 Product & Tracking information Postal Product:Features: Certified Mail~ DATE & TIME STATUS OF ITEM August 17, 2015,10:59 am Delivered Your iterrl was delivered at 10:59 am on/kugusl 17, 2015 in LOCATION OGDEN. UT 84201 Available Actions Text Updates Ema|l Updates August 17, 2015,7:31 am August 17, 2015,7:21 am August 17, 2015,2:24 am August 15, 2015,11:05 pm August 15, 2015,11:55 am August 14, 2015,7:44 am August 13, 2015,11:19 pm Out for Delivery Sorting Complete Departed USPS Facility Arrived at Unit Arrived at USPS Facility Departed USPS Facility Arrived at USPS Facility SALT LAKE CITY. UT 84199 SALT LAKE CITY UT 84199 SALT LAKE CITY. UT 84199 SALT LAKE CITY UT 84199 SALT LAKE CITY. UT 84199 SEATTLE. WA 98168 SEATTLE WA 98168 Track Another Package Tracking (or receipt) number Manage incoming Packages Track all your packages from a dashboard, No tracking numbers necessary. Sign up for My USPS > https://tools.usps.corn/go/TrackConfirmAction?tLabels=70131710000002332109 8/31/2015 USPS.com® - USPS Tracking®Page 2 of 2 HELPFUL LINKS ON ABOUT.USPSCOM OTHER USPS SITES LEGAL INFORMATION Contact Us About USPS Home Business Customer Gateway Privacy Policy Site Index Newsroom Postal Inspectors Terms of Use FAQs USPS Service Updates Inspector General FOIA Forms & Publicetions Postal Explorer No FEAR Act EEO Data Government Services National Postal Museum Car~ers Resources for Developers Copyright © 2015 USPS. All Rights Reserved. Search or Enter a Tracking Number https://tools.usps.com/go/TrackConfirmAction?tLabels=70131710000002332109 8/31/2015 CERTIFICATE OF AUTHORIZATION OF AUTHORIZED SIGNER ON BEHALF OF THE FISCAL AGENT FOR THE STATE OF WASHINGTON I, Ryan P. Brennan, certify that I am a Trust Officer of U.S. Bank National Association (the "Bank"), fiscal agent for the State of Washington and Registrar for the City of Renton, Washington, Limited Tax General Obligation Refunding Bonds, Series 2015A, in the aggregate principal amount of $8,825,000 and the City of Renton, Washington, Limited Tax General Obligation Refunding Bonds, Series 2015B (Taxable), in the aggregate principal amount of $3,695,000; and I further certify that Carolyn Morrison is authorized by the Bank to sign the above bonds as an Authorized Signer for the Bank; and I further certify that the signature set forth below is the true and correct signature of that Authorized Signer. DATED as of this 13th day of May, 2015. U.S. BANK NATIONAL ASSOCIATION, fiscal agent for the State of Washington CITY OF RENTON, WASHINGTON LIMITED GENERAL OBLIGATION REFUNDING BONDS, SERIES 2015A $8,825,000 and CITY OF RENTON, WASHINGTON LIMITED GENERAL OBLIGATION REFUNDING BONDS, SERIES 2015B (TAXABLE) $3,695,000 CERTIFICATE OF AUTHENTICATION, REGISTRATION AND DELIVERY OF BONDS U.S. Bank National Association, fiscal agent for the State of Washington (the "Registrar"), hereby certifies as follows: (1) The Registrar hereby acknowledges receipt in Seattle, Washington, of the following numbers of unauthenticated bonds of the following issue: Bond Issue City of Renton, Washington, Limited Tax General Obligation Refunding Bonds, Series 2015A - $8,825,000 Number of Unauthenticated Bonds Received 9 City of Renton, Washington, Limited Tax General Obligation Refunding Bonds, Series 2015B (Taxable) - $3,695,000 6 (2) On the date hereof the Registrar authenticated and registered the City of Renton, Washington, Limited Tax General Obligation Refunding Bonds, Series 2015A, in the aggregate principal amount of $8,825,000 and the City of Renton, Washington, Limited Tax General Obligation Refunding Bonds, Series 2015B (Taxable), in the aggregate principal amount of $3,695,000 (together, the "Bonds") by manually executing the Certificates of Authentication and by entering the names and addresses of the Bond owners or their nominees in records maintained for such purpose and shall hold the Bonds on behalf of The Depository Trust Company. (3) All unauthenticated bonds delivered to the Registrar shall be held by it and shall subject to the terms of the Agreement for Fiscal Agency Services dated as of February 1, 2015, between the Washington State Finance Committee, as agent of the state of Washington, and U.S. Bank National Association (the "Fiscal Agency Contract"), and the duties and obligations created therein. The Registrar shall be liable for the safekeeping thereof and for the performance of its duties and obligations as specifically set forth therein and for the actions and omissions of its agent(s). The Registrar shall act in good faith, and no implied duties or obligations shall be incurred by the Registrar other than those specifically in the Fiscal Agency Contract. (4) CUSIP numbers have been assigned to the Bonds as follows: CITY OF RENTON, WASHINGTON LIMITED GENERAL OBLIGATION REFUNDING BONDS, SERIES 2015A Maturity Year CUSIP No. (December 1)Principal Amount Interest Rate (760133) 2020 $ 275,000 4.00%TA6 2021 935,000 4.00 TB4 2022 975,000 4.00 TC2 2023 1,005,000 4.00 TD0 2024 1,045,000 4.00 TE8 2025 1,090,000 3.50 TF5 2026 1,125,000 3.50 TG3 2027 1,170,000 3.50 TH1 2028 1,205,000 3.00 T J7 CITY OF RENTON, WASHINGTON LIMITED GENERAL OBLIGATION REFUNDING BONDS, SERIES 2015B (TAXABLE) Maturity Year CUSIP No. (December 1)Principal Amount Interest Rate (760133) 2015 $ 330,000 0.50%TM0 2016 100,000 0.85 TN8 2017 865,000 1.13 TP3 2018 875,000 1.50 TQ1 2019 890,000 1.81 TR9 2020 635,000 2.07 TS7 DATED as of this 13th day of May, 2015. U.S. BANK NATIONAL ASSOCIATION, fiscal agent for the State of Washington, as Registrar -2- CERTIFICATE OF DELIVERY I, IWEN WANG, Finance and Information Services Administrator of the City of Renton, Washington (the "City"), do hereby certify that on this date the City delivered to Piper Jaffray & Co., Seattle, Washington (the "Underwriter"), or its duly appointed agent, the City’s Limited Tax General Obligation Refunding Bonds, Series 2015A, in the aggregate principal amount of $8,825,000 (the "2015A Bonds"), and the City’s Limited Tax General Obligation Refunding Bonds, Series 2015B (Taxable) in the aggregate principal amounts of $3,695,000 (the "2015B Bonds" and, together with the 2015A Bonds, the "Bonds"), in the form provided by No. 5754 passed on April 13, 2015. I further certify that at the time of such delivery, the City received payment for the Bonds, from the Underwriter, as follows: Source of Funds Principal Amount of 2015ABonds Plus: Original Issue Premium on 2015A Bonds Principal Amount of 2015B Bonds Less: Underwriter’s Discount Total Sources of Funds Distribution of Funds $8,825,000.00 1,171,804.30 3,695,000.00 (72,683.80) $ 13,619.120.50 To: U.S. Bank National Association, as escrow agent Refunding Fund Costs of Issuance To: City of Renton Bond Fund (additional proceeds) Total Funds Disbursed $ 13,573,340.61 41,675.00 $13,615,015.61 $4,104.89 $4,104.89 $ 13,619.120.50 Dated this 13th day of May, 2015. CITY OF RENTON, WASHINGTON By Iweh Wang,2d~’~ncefl~’~nformation Services Adffffnistrator RECEIPT FOR BONDS Receipt of the City of Renton, Washington, Limited Tax General Obligation Refunding Bonds, Series 2015A, in the aggregate principal amount of $8,825,000, and the City of Renton, Washington, Limited Tax General Obligation Refunding Bonds, Series 2015B (Taxable), in the aggregate principal amount of $3,695,000, this 13th day of May, 2015, is hereby acknowledged on behalf of Piper Jaffray & Co., the Underwriter. PIPER JAFFRAY & CO. By Lindsa¥ Sovde Its Managing Director -1- PiperJaffray. S EATTLE-NO RTH~IIfEST DIVISION 1420 Fifth Avenue, Suite 4300, Seattle, Washington 98101 Tel: 206-628-2882 I Te1:866-382-6637 I Fax: 206-343-2103 Piper Jaffray & Co. Since 1895. Member SIPC and NYSE. Closing Memorandum Re:City of Renton, Washington $8,825,000 Limited Tax General Obligation Refunding Bonds, Series 2015A $3,695,000 Limited Tax General Obligation Refunding Bonds, Series 2015B Dated: May 13, 2015 From:Justin Monwai, Assistant Vice President Piper Jaffray & Co. Date:May 6, 2015 Closing Closing will occur at 9 a.m. on Wednesday, May 13, 2015 via conference call initiated by Pacifica Law Group LLP. Please use the following dial-in number: Dial-in: 1-888-909-7654 Participant Pass Code: 7466612 Funds Wire #1: Piper Jo~ray & Co. will wire funds to U.S. Bank National Association, as Escrow Agent (the "Escrow Agent"), in the amount shown below. The closing contact for Piper Jaffray & Co. is Sarah Miles, (612) 303-7005, and the contact for the Escrow Agent is Greg Skutnik, (206) 344-4607: Transfer Amount: BBK: BNF: OBI: Reference: $13,615,015.61 (Federal Funds) U.S. Bank ABA #091000022 U.S. Bank National Association/AC #180121167365 Corporate Trust City of Renton, LTGO Refunding Bonds, 2015A & 2015B Wire #2: Piper Jas~ray & Co. will wire funds to the City of Renton (the "City") in the amount shown below. The closing contact for the City is Iwen Wang, (425) 430-6858: Amount: To: ABA Number: Account Name: Account Number: Reference: $4,104.89 (Federal Funds) U.S. Bank, N.A. 125000105 City of Renton Treasurer’s Account 153500698326 City of Renton, LTGO Refunding Bonds, 2015A & 2015B Page 2 The following is a summary of the sources of funds for the Bonds and how the City and Escrow Agent will apply those funds: Sources of Funds 2015A Bonds 2015B Bonds Total Bond Proceeds Principal Amount $8,825,000.00 $3,695,000.00 S 12,520,000.00 Plus: Premium 1,171,804.30 0.00 1,171,804.30 Less: Underwriter’s Discount (50,920.25)(21,763.55)(72,683.80) Total Sources of Funds:S 9.945;884.05 S 3.673.236.45 S 13.619.120.50 Distribution of Funds U.S. Bank National Association, Escrow Agent Deposit to Escrow Account Costs of Issuance (1) Total to the Escrow Agent 9,916,039.07 ~; 3,657,301.54 ~ 13,573,340.61 29,375.55 12,299.45 41,675.00 9,945,414.62 3,669,600.99 13,615,015.61 City of Renton Additional Proceeds (Deposit to Bond Fund) Total Funds Disbursed: 469.43 3,635.46 4,104.89 9.945.884.05 S 3;673.236.45 $ 13,619,120.50 (1)See Exhibit A for a list of the costs of issuance to be paid at closing by the Escrow Agent. The final debt service schedule and pricing report for the Bonds are attached as Exhibits B and C. Debt service payments for the unrefunded bonds are shown as Exhibit D. If you have any questions, please contact Lindsay Sovde at (206) 628-2875 or Justin Monwai at (206) 628-2899. Attachments cc:Iwen Wang, City of Renton Jamie Thomas, City of Renton Deanna Gregory, Pacifica Law Group LLP Stacey Lewis, Pacifica Law Group LLP Kristin Patterson, Pacifica Law Group LLP Carolyn Morrison, U.S. Bank National Association Greg Skutnik, U.S. Bank National Association Ryan Brennan, U.S. Bank National Association David Thompson, K&L Gates LLP Kerry Salas, K&L Gates LLP Lindsay Sovde, Piper Jaffray & Co. Jason Miller, Piper Jaffray & Co. FICM Accounting, Piper Jaffray & Co. Tim Dittrich, Piper Jaffray & Co. Sarah Miles, Piper Jaffray & Co. EXHIBIT A City of Renton, Washington Limited Tax General Obligation Refunding Bonds, Series 2015A Limited Tax General Obligation Refunding Bonds, Series 2015B Dated: May 13, 2015 Costs of issuance to be paid by the Escrow Agent upon receipt of invoice: Description Firm Total Bond Counsel Fee Pacifica Law Group LLP $25,300.00 Rating Fee Standard & Poor’s 12,375.00" Verification Agent Grant Thornton LLP 3,000.00 Escrow Agent U.S. Bank National Association 1,000.00 Total $ 41.675.00 *The City paid the Standard & Poor’s rating fee directly. The Escrow Agent will wire the funds allocated to the rating fee to the City as reimbursement. EXHIBIT B BOND DEBT SERVICE City of Remon Lflnited Tax Goneral Obligation Refunding Bonds, 2015A (BQ) & 2015B (Taxable) (Ref 06) FINAL NUMBERS Period Ending Annual Principal Coupon Interest Debt Service Debt Service 12/01/2015 06/01/2016 12/01/2016 06/01/2017 12/01/2017 06/01/2018 12/01/2018 06/01/2019 12/01/2019 06/01/2020 12/01/2020 06/01/2021 12/01/2021 06/01/2022 12/01/2022 06/01/2023 12/01/2023 06/01/2024 12/01/2024 06/01/2025 12/01/2025 06/01/2026 12/01/2026 06/01/2027 12/01/2027 06/01/2028 12/01/2028 330,000 100,000 865,000 875,000 890,000 910,000 935,000 975,000 1,005,000 1,045,000 1,090,000 1,125,000 1,170,000 1,205,000 0.500% 0.850% 1.130% 1.500% 1810% ~,* % 4.000% 4,000% 4.000% 4.000% 3.500% 3.500% 3.500% 3.000% 208,272.90 538,272.90 538,272.90 188,514.00 188,514.00 188,514.00 288,514.00 477,028.00 188,089.00 188,089.00 188,089.00 1,053,089.00 1,241,178.00 183,201.75 183,201.75 183,20!.75 1,058,201.75 1,241,403.50 176,639.25 176,639.25 176,639.25 1,066,639.25 1,243,278.50 168,584.75 168,584.75 168,584.75 1,078,584.75 1,247,169.50 156,512.50 156,512.50 156,512.50 1,091,512.50 1,248,025.00 137,812.50 137,812.50 137,812.50 1,112,812.50 1,250,625.00 118,312.50 118,312.50 118,312.50 1,123,312.50 1,241,625.00 98,2 ! 2.50 98,212.50 98,212.50 1,143,212.50 1,241,425.00 77,312.50 77,312.50 77,312.50 1,167,312.50 1,244,625:00 58,237.50 58,237.50 58,237.50 10183,237.50 1,241,475.00 38,550.00 38,550.00 38,550.00 1,208,550.00 1,247,100.00 18,075.00 18,075.00 18,075.00 1,223,075.00 1,241,150.00 12,520,000 3,424,380.40 15,944,380.40 15,944,380.40 Apt 16, 2015 l 1:~8 am Prel~red by Piper Jaffray & Co.(k:hatmlysis\dbe\eity\RENTON: R06LTGO) P~ge 12 EXHIBIT C Sedal Brads (Tm~able): BOND PRICING City of Limited Tax General Obligation Refunding Bonds, 2015A (BQ) & 2015B (Taxable) (Ref06) FINAL NUMBERS Maturity Yield to Call Call Date Al~0tlat l~te Yield Plice Maturity Date Price 12/01/2020 275,000 4.000%1.430e,~113.664 12/01/2021 935,000 4.000%1.620%114.733 12/01/2022 975,000 4.000%1.720%116.077 12J01/202;~1,005,000 4.000%1.860%116,843 12/01/2024 1,O45,000 4.000%1.950%117.783 - 12/01/2025 1,0~0,000 3.500%2.080%112.817 C 2.137%06/01/2025 12/01~2026 1,125,000 3.500%2.100"/0 112.624 C 2.252%06/01/2025 12/01/2027 1,170,000 3.500%2.180%111.854 C 2.400%06t01/2025 12./01/2028 1~?.05 000 3.000%2.400%105.328 C 2..~33%05/01/2025 100.000 100.000 100.000 100.000 12/01/2015 330,000 0,500%0,500% 100,000 12/01/2016 100,000 0.850%0.856%100.000 12/01/2017 865,000 1.130~A~L130% 12/01/2018 875,000 1.500%1.500%10~.O00 12t01/2019 890,000 1.810%1.810%100.000 t 2/01/2020 635 000 2.070~0 2.070%100.000 3,695,O00 Premium (-Dis~o~nt) 37,576.00 137.753.55 156,730.75 169,272,15 185,832.35 139,705.30 14Z,020,00 138,691.80 64~202.40 1,171,804.30 12~520,01~)1,171,804.30 DatedDate 05/13/2015 Ddivery Date 05/13/2015 First CoupOll 12~ 1/2015 par Amount 12,520.000.00 Premium 1,171,804.30 13,691.804.30 109.359459% -72,683.80 -0.580542e,~ 13,619,120.50 108.778918% Prodactiot~ Unde~wrltet’~ Discount Purchtse Price Accnled Jnt we~’t Set Proc~ds 13,619,120.50 Ap[ 16, 2015 ] 1:48 am Prepared by Piper Jaffray & Co.(k:kanalysis\ctbe\¢itykR.ENTON:R06bTGO) Page 9 EXHIBIT D UNREFUNDED BOND DEBT SERVICE City of P..enton Limited Tax General Obligation l~funding Bonds, 2015A (BQ) & 2015B (Taxable) (Rcf06) FINAL NUMBERS Annual Period Debt Debt Ending Principal Coupon Interest Service Setarice 06/01/2015 34,500 34,500 12/01/2015 700,000 5.250%34,500 734,500 769,000 06/01/2016 16,125 16,125 12/01/2016 750,000 4.300%16,125 766,125 782,250 !,450,000 101,250 1,551,250 1,551,250 Apt 16, 2015 11:48 am Prepared by Piper Jafffay & Co.(k:~analysisklbe\eity\RENTON:R06LTGO) Page 37 PiperJaffray SEATTLE-NORTHWEST DIVISION 1420 Fifth Avenue, Suite 4300, Seattle, Washington 98101 Tel: 206-628-2882 Tel: 866-382-6637 I Fax:206-343-21O3 Piper Jafl’ray & Co. Since 1895. Member $1PC and NYSE. City of Renton, Washington Limited Tax General Obligation Refunding Bonds, 2015 Distribution List CITY City of Renton 1055 S. Grady Way Renton, WA 98058 Iwen Wang, Finance and Information Services Administrator Jamie Thomas, Fiscal Services Director Phone: (425) 430-6858 Fax: (425) 430-6855 e-mail: iwang@rentonwa.gov Phone: (425) 430-6929 Fax: (425) 430-6957 e-mail: jdthomas@rentonwa.gov BOND COUNSEL Pacifica Law Group LLP 1191 Second Avenue, Suite 2100 Seattle, Washington 98101 Stacey Lewis, Attorney-at-law Deanna Gregory, Attorney-at-law Kristin Patterson, Paralegal Fax: (206) 623-7022 Phone: (206) 245-1714 e-mail: stacey.lewis@pacificalawgroup.com Phone: (206) 245-1716 e-mail: deanna.gregory@pacificalawgroup.com Phone: (206) 245-1704 e-mail: kristin.patterson@pacificalawgroup.com UNDERWRITER Piper Jaffray & Co. 1420 Fifth Avenue, Suite 4300 Seattle, WA 98101 Lindsay A. Sovde, Managing Director Justin Monwai, Assistant Vice President Fax: (206) 343-2103 Phone: (206) 628-2875 e-mail: lindsay.a.sovde@pjc.com Phone: (206) 628-2899 e-mail: justin.w.monwai@pjc.com UNDERWRITER’S COUNSEL K&L Gates LLP 925 Fourth Avenue, Suite 2900 Seattle, Washington 98104 David Thompson, Attorney-at-law Kerry Salas, Paralegal Fax: (206) 623-7022 Phone: (206) 370-8395 e-mail: david.thompson@klgates.com Phone: (206) 370-5766 e-mail: kerry.salas@klgates.com PiperJaffray SEATTLE-NORTHWEST DIVISION REFUNDING TRUSTEE/BOND REGISTRAR U.S. Bank National Association 1420 Fifth Avenue, 7th Floor Seattle, WA 98101 Carolyn Morrison, Vice President Greg Skutnik, Assistant Vice President Ryan Brennan, Trust Officer 1420 Fif~ Avenue, Suite 4300, Seat~, Washington 98101 206-628-2882 I Tel: 866-382-6637 Fax: 206-343-2103Tel: Piper Jalfray & Co. Since 1895. Member SIPC and NYSE. Fax: (206) 344-4630 Phone: (206) 344-4678 e-mail: carolyn.morrison@usbank.com Phone: (206) 344-4607 e-mail: greg.skutnik@usbank.com Phone: (206) 344-4648 e-mail: ryan.brennan@usbank.com STATE OF WASHINGTON DEPARTMENT OF COMMERCE 906 Columbia Street SW P.O. Box 42525 Olympia, WA 98504-2525 Phone: 360/725-5021 Fax: 360/586-4162 BOND 101 REPORT FORM Issue ID: 1505-011 Date Submitted: 08/31/2015 Name of Issuer:City of Renton Address of Issuer:1055 South Grady Way Renton, WA 98055 City/TownIssue Type: Principle User, if different than issuer: Counties in which the entity using the bond proceeds is located: King [] Various Counties - More than four [] Statewide Was this bond voter approved?[] Yes ¯No Exact title of issue:Limited Tax General Obligation Refunding Bonds, Series 2015A; Limited Tax General Obligation Refunding Bonds, Series 2015B (Taxable) Issue Sale Method:Negotiated Sale If Competitive Bid, number of bids: Debt Type:GO Bond Debt Category:Bond Series:2015A; 2015B New/Refund/Combo:Refund Dated Date of Issue: 05/13/2015 Issue Closing Date: 05/13/2015 Date of Issue Sale: 04/17/2015 Purpose of Proceeds: Purpose Type: Is this a Bond Cap issuance? Issue Maturity Date: 12/01/2028 to advance refund and defease a potion of the City’s outstanding limited tax general obligation bonds and to pay costs of issuance for the Bonds. Other [] Yes ¯No If yes: Bond Cap Use Category: Project Title: Bond Cap Amount: Tax-Exempt Par Value: $8,825,000.00 Taxable par Value: $3,695,000.00 Total Par Value: $12,520,000.00 Discount: $0.00 Net Tax-Exempt Interest Rate: 2.338684% Net Taxable Interest Rate: 1.828397% Premium: $1,171,804.30 Variable Variable Printed on 8/31/2015 11:38:18 AM Page 1 of 3 STATE OF WASHINGTON DEPARTMENT OF COMMERCE 906 Columbia Street SW P.O. Box 42525 Olympia, WA 98504-2525 Phone: 360/725-5021 Fax: 360/586-4162 Underlying security that supports the debt (e.g. taxes or other revenue streams Gross Underwriting Spread: Underwriting Spread per $1,000: Bond Counsel Fee: Legal/Underwriter’s Counsel Fee: Adminsitrative/Commission Fee: taxes $72,683.80 []Estimate $5.81 $25,300.00 []Estimate $0.00 []Estimate $0.00 []Estimate Feasiblity Study Cost:$0.00 []Estimate Rating Agency Fee:$12,375.00 []Estimate Trustee Fee:$0.00 []Estimate Credit Enhancement:$0.00 []Estimate Escrow Costs:$4,000.00 []Estimate Financial Advisor Fee:$0.00 []Estimate Bond Insurance:$0.00 []Estimate Printing, inc. Office Statement:$0.00 []Estimate Out-of-State Travel:$0.00 []Estimate Miscellaneous:$0.00 []Estimate Name of Financial Advisor: Name of Bond Counsel: Name Of Lead Underwiter(s): Name Of Company Insuring Bond: Name of Bond Registrar: Name of Trustee: N/A Pacifica Law Group LLP Piper Jaffray & Co. N/A U.S. Bank National Assocation N/A Standard & Poor’s:AAIAA+ FMoody’s: Fitch: !N/A Are bond covenants available?Yes [] No Is an Official Statement available?¯Yes [] No Reporter Name:Kristin Patterson Title:Paralegal Affiliation:Pacifica Law Group LLP Printed on 8/31/2015 11:38:18 AM Page 2 of 3 STATE OF WASHINGTON DEPARTMENT OF COMMERCE 906 Columbia Street SW P.O. Box 42525 Olympia, WA 98504-2525 Phone: 360/725-5021 Fax: 360/586-4162 Address: Email: Phone: 1191 2nd Ave, Suite 2000 Seattle, WA 98101-1758 kristin.patterson@pacificalawgroup.com (206) 245-1704 Printed on 8/31/2015 11:38:18 AM Page 3 of 3 UNITED STATES OF AMERICA UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED P,~PRESENTATIVE OF THE DEPOSFYORY TRUST COMPANY. A NEW YORK CORPORATION (°’DTC), TO THE ISSUER OR ITS AGENT FOR P~EGISTRATION OR TRANSFEI~ EXCHANGE, OR PAYMENT, AND ANY CERT~:ICATE ISSUED IS REGISTERED IN THE NAIv~ OF CEDE ~ CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHOR.IZED REPRESENTATIV~ OF DTC (AND ANY PAYMENT IS MADE TO ~EDE ~ CO. OR TO SUCH OTHER ENTITY AS IS R-1 $275,000 STATE OF WASHINGTON CITY OF RENTON LIMITED TAX GENERAL OBLIGATION REFUNDING BOND, 2015A INTEREST RATE MATURITY DATE CUSIP NO. 4.00%DECEMBER 1, 2020 760133TA6 REGISTERED OWNER: CEDE & CO. PRINCIPAL AMOUNT: TWO HUNDRED SEVENTY-FIVE THOUSAND AND NO 100/DOLLARS The City of Renton, Washington (the "City"), hereby acknowledges itself to owe and for value received promises to pay to the Registered Owner identified above, or registered assigns, on the Maturity Date identified above, the Principal Amount indicated above and to pay interest thereon from May 13, 2015, or the most recent date to which interest has been paid or duly provided for until payment of this bond at the Interest Rate set forth above, payable on December 1, 2015, and semiannually thereafter on the first days of each succeeding June and December. Both principal of and interest on this bond are payable in lawful money of the United States of America. The fiscal agent of the State of Washington has been appointed by the City as the authenticating agent, paying agent and registrar for the bonds of this issue (the "Bond Registrar"). For so long as the bonds of this issue are held in fully immobilized form, payments of principal and interest thereon shall be made as provided in accordance with the operational arrangements of The Depository Trust Company ("DTC") referred to in the Blanket Issuer Letter of Representations (the "Letter of Representations") from the City to DTC. The bonds of this issue are issued under and in accordance with the provisions of the Constitution and applicable statutes of the State of Washington and Ordinance No. 5754 duly passed by the City Council on April 13, 2015 (the "Bond Ordinance"). Capitalized terms used in this bond have the meanings given such terms in the Bond Ordinance. This bond shall not be valid or become obligatory for any purpose or be entitled to any security or benefit under the Bond Ordinance until the Certificate of Authentication hereon shall have been manually signed by or on behalf of the Bond Registrar or its duly designated agent. This bond is one of an authorized issue of bonds of like series, date, tenor, rate of interest and date of maturity, except as to number and amount in the aggregate principal amount of $8,825,000 and is issued pursuant to the Bond Ordinance to provide a portion of the funds necessary (a) to refund and defease certain limited tax general obligation bonds of the City, and (b) to pay costs of issuance. Pursuant to the Bond Ordinance, the City has also authorized the issuance of its Limited Tax General Obligation Refunding Bonds, Series 2015B (Taxable) in the aggregate principal amount of $3,695,000 for these purposes. The bonds of this issue are subject to redemption as provided in the Bond Ordinance and the Bond Purchase Contract. The City hereby irrevocably covenants and agrees with the owner of this bond that it will include in its annual budget and levy taxes armually, within and as a part of the tax levy permitted to the City without a vote of the Page 1 of 2 electorate, upon all the property subject to taxation in amounts sufficient, together with other money legally available therefor, to pay the principal of and interest on this bond as the same shall become due. The full faith, credit and resources of the City are hereby irrevocably pledged for the annual levy and collection of such taxes and the prompt payment of such principal and interest. The bonds of this issue have been designated by the City as "qualified tax-exempt obligations" for investment by financial institutions under Section 265(b) of the Code. The pledge of tax levies for payment of principal of and interest on the bonds may be discharged prior to maturity of the bonds by making provision for the payment thereof on the terms and conditions set forth in the Bond Ordinance. It is hereby certified that all acts, conditions and things required by the Constitution and statutes of the State of Washington to exist and to have happened, been done and performed precedent to and in the issuance of this bond exist and have happened, ’been done and performed and that the issuance of this bond and the bonds of this issue does not violate any constitutional, statutory or other limitation upon the amount of bonded indebtedness that the City may incur. IN WITNESS WHEREOF, the City of Renton, Washington, has caused this bond to be executed by the manual or facsimile signatures of the Mayor and the City Clerk and the seal of the City imprinted, impressed or otherwise reproduced hereon as of this 13th day of May, 2015. ATTEST: CITY OF RENTON, WASHINGTON By ,fl~A~/, ~~t~ Mayor City Clerk Date of Authentication: CERTIFICATE OF AUTHENTICATION This bond is one of the bonds described in the within-mentioned Bond Ordinance and is one of the Limited Tax General Obligation Refunding Bonds, Series 2015A, of the City of Renton, Washington, dated May 13, 2015. WASHINGTON STATE FISCAL AGENT, as Bond Registrar By Page 2 of 2 UNITED STATES OF AMERICA UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COlv~ANY, A NEW YORK CORPORATION ("DTC)o TO TH~ ISSUER OR ITS AGENT FOR REOISTRATION OR TRANSFER~ EXCHANGE, OR PAYMENT~ AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CF~E ~ CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE ~ CO. OR TO SUCH UTHER ENTITY AS IS R-1 $330,000 STATE OF WASHINGTON CITY OF RENTON LIMITED TAX GENERAL OBLIGATION REFUNDING BOND, 2015B (TAXABLE) INTEREST RATE MATURITY DATE CUSIP NO. 0.50%DECEMBER 1, 2015 760133TM0 REGISTERED OWNER: CEDE & CO. PRINCIPAL AMOUNT: THREE HUNDRED THIRTY THOUSAND AND NO 100/DOLLARS The City of Renton, Washington (the "City"), hereby acknowledges itself to owe and for value received promises to pay to the Registered Owner identified above, or registered assigns, on the Maturity Date identified above, the Principal Amount indicated above and to pay interest thereon from May 13, 2015, or the most recent date to which interest has been paid or duly provided for until payment of this bond at the Interest Rate set forth above, payable on December 1, 2015, and semiannually thereafter on the first days of each succeeding June and December. Both principal of and interest on this bond are payable in lawful money of the United States of America. The fiscal agent of the State of Washington has been appointed by the City as the authenticating agent, paying agent and registrar for the bonds of this issue (the "Bond Registrar"). For so long as the bonds of this issue are held in fully immobilized form, payments of principal and interest thereon shall be made as provided in accordance with the operational arrangements of The Depository Trust Company ("DTC") referred to in the Blanket Issuer Letter of Representations (the "Letter of Represe.ntations") from the City to DTC. The bonds of this issue are issued under and in accordance with the provisions of the Constitution and applicable statutes of the State of Washington and Ordinance No. 5754 duly passed by the City Council on April 13, 2015 (the "Bond Ordinance"). Capitalized terms used in this bond have the meanings given such terms in the Bond Ordinance. This bond shall not be valid or become obligatory for any purpose or be entitled to any security or benefit under the Bond Ordinance until the Certificate of Authentication hereon shall have been manually signed by or on behalf of the Bond Registrar or its duly designated agent. This bond is one of an authorized issue of bonds of like series, date, tenor, rate of interest and date of maturity, except as to number and amount in the aggregate principal amount of $3,695,000 and is issued pursuant to the Bond Ordinance to provide a portion of the funds necessary (a) to refund and defease certain limited tax general obligation bonds of the City, and (b) to pay costs of issuance. Pursuant to the Bond Ordinance, the City has also authorized the issuance of its Limited Tax General Obligation Refunding Bonds, Series 2015A in the aggregate principal amount of $8,825,000 for these purposes. The bonds of this issue are no~t subject to optional redemption. The City hereby irrevocably covenants and agrees with the owner of this bond that it will include in its annual budget and levy taxes annually, within and as a part of the tax levy permitted to the City without a vote of the electorate, upon all the property subject to taxation in amounts sufficient, together with other money legally Page 1 of 2 available therefor, to pay the principal of and interest on this bond as the same shall become due. The full faith, credit and resources of the City are hereby irrevocably pledged for the annual levy and collection of such taxes and the prompt payment of such principal and interest. The pledge of tax levies for payment of principal of and interest on the bonds may be discharged prior to maturity of the bonds by making provision for the payment thereof on the terms and conditions set forth in the Bond Ordinance. It is hereby certified that all acts, conditions and things required by the Constitution and statutes of the State of Washington to exist and to have happened, been done and performed precedent to and in the issuance of this bond exist and have happened, been done and performed and that the issuance of this bond and the bonds of this issue does not violate any constitutional, statutory or other limitation upon the amount of bonded indebtedness that the City may incur. IN WITNESS WHEREOF, the City of Renton, Washington, has caused this bond to be executed by the manual or facsimile signatures of the Mayor and the City Clerk and the seal of the City imprinted, impressed or otherwise reproduced hereon as of this 13th day of May, 2015. CITY OF RENTON, WASHINGTON ATTEST: By Mayor City Clerk CERTIFICATE OF AUTHENTICATION Date of Authentication: ~’/]"~ ]/S This bond is one of the bonds described in the within-mentioned Bond Ordinance and is one of the Limited Tax General Obligation Refunding Bonds, Series 2015B (Taxable), of the City of Renton, Washington, dated May 13, 2015. WASHINGTON STATE FISCAL AGENT, as Bond Registrar By Page 2 of 2 K&L GATES LLP 925 FOURTH AVENUE SUITE 2900, SEATTLE, WA 98104-1158 T +1 206 623 7580 F +1 206 623 7022 klgates.com May 13, 2015 Piper Jaffray & Co. Seattle, Washington Re:City of Renton, Washington, Limited Tax General Obligation Refunding Bonds, Series 2015A ($8,825,000), and Limited Tax General Obligation Refunding Bonds, Series 2015B (Taxable) ($3,695,000) (together, the "Bonds") Ladies and Gentlemen: We have acted as your counsel in connection with your purchase of the Bonds under a Bond Purchase Contract between you and the City of Renton, Washington (the "City"), dated April 16, 2015 (the "’Purchase Contract"). The Bonds are issued pursuant to Ordinance No. 5754 of the City, passed by the City Council on April 13, 2015 (the "Bond Ordinance"). Capitalized terms not otherwise defined in this letter have the meanings given them in the Purchase Contract or, if not defined in the Purchase Contract, in the Bond Ordinance. In our capacity as your counsel, we have examined originals, or copies certified or otherwise identified to our satisfaction as being true copies of originals, of those documents, records and other instruments that we have deemed necessary or appropriate for purposes of this opinion including, without limitation: (a) the Purchase Contract, (b) the Bond Ordinance, (c) the opinions referred to in Section 7(e)(4) and (5) of the Purchase Contract, and (d) the Official Statement of the City dated April 16, 2015, relating to the Bonds (the "Official Statement"). In arriving at the conclusions below, we are not expressing any opinion or view on, and with your permission we are assuming and relying on, the validity, accuracy and sufficiency of the records, documents, certificates and opinions referred to above (including the accuracy of all factual matters represented and legal conclusions contained therein, including without limitation, representations and legal conclusions regarding the due authorization, issuance, delivery, validity and enforceability of the Bonds). Based on the foregoing and in reliance thereon, we are of the opinion that: 1. The Bonds are not subject to the registration requirements of the Securities Act of 1933, as amended, and the Bond Ordinance is exempt from qualification under the Trust Indenture Act of 1939, as amended. 2. The Undertaking, together with Section 5(q) of the Purchase Contract, satisfies the requirements contained in paragraph (b)(5) of Rule 15c2-12 for an undertaking klgates.com Piper Jaffray & Co. May 13, 2015 Page 2 for the benefit of the owners and beneficial owners of the Bonds to provide the information at the times and in the manner required by paragraph (b)(5) of Rule 15c2-12. 3. We are not passing upon and do not assume any responsibility for the accuracy, completeness or fairness of any of the statements contained in the Preliminary Official Statement or the Official Statement and make no representation that we have independently verified the accuracy, completeness or fairness of any such statements. In our capacity as your counsel, to assist you as part of your responsibilities with respect to the Preliminary Official Statement and the Official Statement, we participated in conferences with your representatives and representatives of the City, the City’s bond counsel, and others, during which the contents of the Preliminary Official Statement and Official Statement and related matters were discussed. Based on our participation in those conferences and in reliance thereon and on the records, documents, certificates, opinions and matters set forth in our opinion, and as a matter of fact and not opinion, during the course of our representation of you on this matter, no facts came to the attention of the attorneys in our firm rendering legal services to you in connection with the Preliminary Official Statement or Official Statement that caused us to believe that the Preliminary Official Statement or Official Statement as of their dates (except for any CUSIP numbers, financial, economic, engineering or demographic data or forecasts, numbers, charts, tables, graphs, estimates, projections, assumptions or expressions of opinion contained therein, information regarding environmental matters, litigation, tax exemption, DTC and its book-entry only system, and for the appendices thereto, as to all of which we express no opinion or view), contained any untrue statement of a material fact or omitted to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. This opinion is given as of the date hereof, and we assume no obligation to update, revise or supplement this opinion to reflect any facts or circumstances that may hereafter come to our attention or any changes in law that may hereafter occur. This opinion is addressed solely to you and may not be used, circulated, quoted or otherwise referred to or relied upon by owners of the Bonds or by any other party to whom it is not specifically addressed. Very truly yours, K&L GATES LLP K:~2022537\OOO39Q0391 _D0"~20391 L24QZ PACIFICA LAW GROUP T 206.245.1700 1191 2nd Avenue, Suite 2000 Seattle, WA 98101-3404 pacificalawgroup.com May 13, 2015 City of Renton Renton, Washington Piper Jaffray & Co. Seattle, Washington U.S. Bank National Association Seattle, Washington Re:City of Renton, Washington Limited Tax General Obligation Refunding Bonds, Series 2015A -- $8,825,000 Limited Tax General Obligation Refunding Bonds, Series 201B (Taxable) -- $3,695,000 Ladies and Gentlemen: We are bond counsel to the City of Renton, Washington (the "City"), and have acted as such in connection with the issuance and sale by the City of its Limited Tax General Obligation Refunding Bonds, 2015A, in the aggregate principal amount of $8,825,000,000 (the "2015A Bonds"), and Limited Tax General Obligation Refunding Bonds, 2015B (Taxable), in the aggregate principal amount of $3,695,000 (the "2015B Bonds" and together with the 2015A Bonds, the "Bonds") issued pursuant to Ordinance No. 5754 (the "Bond Ordinance") of the City, for the purpose of providing funds to refund the City’s outstanding Limited Tax General Obligation Bonds, 2006, that would otherwise mature on December 1 in the years 2017, 2019, 2020 through 2024 and 2028 (the "Refunded Bonds") and paying costs of issuing the Bonds. Capitalized terms used in this opinion which are not otherwise defined shall have the meanings given to such terms in the Bond Ordinance. A portion of the proceeds of the Bonds, including additional amounts from the City, will be deposited with U.S. Bank National Association, having an office in Seattle, Washington, as the Escrow Agent, pursuant to the Escrow Deposit Agreement, dated as May 13, 2015 (the "Escrow Agreement"), between the City and the Escrow Agent, in amounts sufficient to pay to the date of maturity or earlier call date thereof all remaining outstanding principal and interest on the Refunded Bonds. The sufficiency of such escrow maintained pursuant to the Escrow Agreement has been verified by Grant Thornton LLP. For purposes of the opinions rendered herein, we have relied, without independent investigation, on the verification set forth therein and on the performance under the terms of the Escrow Agreement by the Escrow Agent, respectively. City of Renton Piper Jaffray & Co. U.S. Bank National Association May 13, 2015 Page 2 Based upon the foregoing, we are of the opinion that the Refunded Bonds have been legally defeased and discharged in accordance with the ordinance authorizing their issuance, are deemed paid and no longer outstanding and have no further claim to be paid from any funds of the City and such defeasance shall not affect the exclusion of interest on the Refunded Bonds from gross income for the purpose of federal income taxes. Very truly yours, PACIFICA LAW GROUP LLP PACIFICA LAW GROUP T 206.245.1700 1191 2nd Avenue, Suite 2000 Seattle, WA 98101-3404 pacificalawgroup.com May13,2015 City of Renton Renton, Washington Piper Jaffray & Co. Seattle, Washington Re:City of Renton, Washington Limited Tax General Obligation Refunding Bonds, Series 2015A- $8,825,000 Ladies and Gentlemen: We have acted as bond counsel to the City of Renton, Washington (the "City"), and have examined a certified transcript of all of the proceedings taken in the matter of the issuance by the City of its Limited Tax General Obligation Refunding Bonds, Series 2015A, in the aggregate principal amount of $8,825,000 (the "Bonds"). The Bonds are issued pursuant to Ordinance No. 5754 of the City Council, passed April 13, 2015 (the "Bond Ordinance"), to provide a portion of the funds necessary to advance refund and defease prior to maturity certain outstanding limited tax general obligation bonds of the City and to pay costs of issuance for the Bonds. Simultaneously with the issuance of the Bonds, the City is issuing its Limited Tax General Obligation Refunding Bonds, Series 2015B (Taxable). Capitalized terms not otherwise defined herein shall have the meanings given such terms in the Bond Ordinance. The Bonds are subject to redemption prior to their scheduled maturities as provided in the Bond Ordinance and in the Bond Purchase Contract. Regarding questions of fact material to our opinion, we have relied on representations of the City in the Bond Ordinance and in the certified proceedings and on other certifications of public officials and others furnished to us without undertaking to verify the same by independent investigation. Based on the foregoing, we are of the opinion that, under existing law: 1. The Bonds have been legally issued and constitute valid and binding general obligations of the City, except to the extent that the enforcement of the rights and remedies of the holders and owners of the Bonds may be limited by laws relating to bankruptcy, insolvency, moratorium, reorganization or other similar laws of general application affecting the rights of creditors, by the application of equitable principles and the exercise of judicial discretion. City of Renton, Washington Piper Jaffray & Co. May 13, 2015 Page 2 2. The Bond Ordinance is a legal, valid and binding obligation of the City, has been duly authorized, executed and delivered and is enforceable in accordance with its terms, except to the extent that enforcement may be limited by laws relating to bankruptcy, insolvency, moratorium, reorganization or other similar laws of general application affecting the rights of creditors, by the application of equitable principles and the exercise of judicial discretion. 3. Both principal of and interest on the Bonds are payable out of annual levies of ad valorem taxes to be made upon all of the taxable property within the City permitted to be levied without a vote of the electorate in the amounts which, together with other available funds, will be sufficient to pay such principal and interest as the same shall become due. 4. Interest on the Bonds is excludable from gross income for federal income tax purposes and is not an item of tax preference for purposes of the federal altemative minimum tax imposed on individuals and corporations; however, interest on the Bonds is taken into account in determining adjusted current earnings for the purpose of computing the altemative minimum tax imposed on certain corporations. The opinion set forth in the preceding sentence is subject to the condition that the City must comply with all requirements of the Internal Revenue Code of 1986, as amended (the "Code"), that must be satisfied subsequent to the issuance of the Bonds in order that the interest thereon be, and continue to be, excludable from gross income for federal income tax purposes. The City has covenanted to comply with all applicable requirements. Failure to comply with certain of such covenants may cause interest on the Bonds to be included in gross income for federal income tax purposes retroactively to the date of issuance of the Bonds. The Bonds have been designated as "qualified tax-exempt obligations" within the meaning of Section 265(b)(3) of the Code. Except as expressly stated above, we express no opinion regarding any other federal or state income tax consequences of acquiring, carrying, owning or disposing of the Bonds. Owners of the Bonds should consult their tax advisors regarding the applicability of any collateral tax consequences of owning the Bonds, which may include original issue discount, original issue premium, purchase at a market discount or at a premium, taxation upon sale, redemption or other disposition, and various withholding requirements. We have not been engaged nor have we undertaken to review the accuracy, completeness or sufficiency of the official statement or other offering material related to the Bonds (except to the extent, if any, stated in the official statement), and we express no opinion relating thereto, or relating to the undertaking by the City to provide ongoing disclosure pursuant to Securities and Exchange Commission Rule 15c2-12. City of Renton, Washington Piper Jaffray & Co. May 13, 2015 Page 3 This opinion is given as of the date hereof, and we assume no obligation to update, revise or supplement this opinion to reflect any facts or circumstances that may hereafter come to our attention or any changes in law that may hereafter occur. Very truly yours, PACIFICA LAW GROUP LLP PACIFICA LAW GROUP T 206.245.1700 1191 2nd Avenue, Suite 2000 Seattle, WA 98101-3404 pacificalawgroup.¢om May 13, 2015 City of Renton Renton, Washington Piper Jaffray & Co. Seattle, Washington Re:City of Renton, Washington Limited Tax General Obligation Refunding Bonds, Series 201B (Taxable) -- $3,695,000 Ladies and Gentlemen: We have acted as bond counsel to the City of Renton, Washington (the "City"), and have examined a certified transcript of all of the proceedings taken in the matter of the issuance by the City of its Limited Tax General Obligation Refunding Bonds, Series 2015B (Taxable), in the aggregate principal amount of $3,695,000 (the "Bonds"). The Bonds are issued pursuant to Ordinance No. 5754 of the City Council, passed April 13, 2015 (the "Bond Ordinance"), to provide a portion of the funds necessary to advance refund and defease prior to maturity certain outstanding limited tax general obligation bonds of the City and to pay costs of issuance for the Bonds. Simultaneously with the issuance of the Bonds, the City is issuing its Limited Tax General Obligation Refunding Bonds, Series 2015A. Capitalized terms not otherwise defined herein shall have the meanings given such terms in the Bond Ordinance. The Bonds are not subject to redemption prior to their scheduled maturities. Regarding questions of fact material to our opinion, we have relied on representations of the City in the Bond Ordinance and in the certified proceedings and on other certifications of public officials and others furnished to us without undertaking to verify the same by independent investigation. Based on the foregoing, we are of the opinion that, under existing law: 1. The Bonds have been legally issued and constitute valid and binding general obligations of the City, except to the extent that the enforcement of the rights and remedies of the holders and owners of the Bonds may be limited by laws relating to bankruptcy, insolvency, moratorium, reorganization or other similar laws of general application affecting the rights of creditors, by the application of equitable principles and the exercise of judicial discretion. City of Renton, Washington Piper Jaffray & Co. May 13, 2015 Page 2 2. The Bond Ordinance is a legal, valid and binding obligation of the City, has been duly authorized, executed and delivered and is enforceable in accordance with its terms, except to the extent that enforcement may be limited by laws relating to bankruptcy, insolvency, moratorium, reorganization or other similar laws of general application affecting the rights of creditors, by the application of equitable principles and the exercise of judicial discretion. 3. Both principal of and interest on the Bonds are payable out of annual levies of ad valorem taxes to be made upon all of the taxable property within the City permitted to be levied without a vote of the electorate in the amounts which, together with other available funds, will be sufficient to pay such principal and interest as the same shall become due. o purposes. Interest on the Bonds is not excludable from gross income for federal income tax Except as expressly stated above, we express no opinion regarding any other federal or state income tax consequences of acquiring, carrying, owning or disposing of the Bonds. Owners of the Bonds should consult their tax advisors regarding the applicability of any collateral tax consequences of owning the Bonds, which may include original issue discount, original issue premium, purchase at a market discount or at a premium, taxation upon sale, redemption or other disposition, and various withholding requirements. We have not been engaged nor have we undertaken to review the accuracy, completeness or sufficiency of the official statement or other offering material related to the Bonds (except to the extent, if any, stated in the official statement), and we express no opinion relating thereto, or relating to the undertaking by the City to provide ongoing disclosure pursuant to Securities and Exchange Commission Rule 15c2-12. This opinion is given as of the date hereof, and we assume no obligation to update, revise or supplement this opinion to reflect any facts or circumstances that may hereafter come to our attention or any changes in law that may hereafter occur. Very truly yours, PACIFICA LAW GRouP LLP Denis Law � Clty Of S,�Y � Mayor � u '� � � � ` � ��, p'� N'r City Clerk -Jason A.Seth,CMC May 8, 2015 Kristin Patterson Pacifica Law Group 1191 Second Avenue, Suite 2000 Seattle, WA 98101-3404 Subject: Documents for Signature—City of Renton—LTGO Refunding Bonds, 2015A and 20156 Dear Ms. Patterson: Enclosed, you will find three original fully executed, signed and notarized, closing related documents for the City of Renton's Bond issue. Thank you so much for the clear and detailed instructions on signing,they were extremely helpful and allowed our office to produce the documents for you in a timely manner. If you have any problems or questions, please don't hesitate to contact me at (425) 430- 6504 or mgregor@rentonwa.gov. Thank you. Sincere y, � Megan Gregor Deputy City Clerk 1055 South Grady Way•Renton,Washington 98057• (425)430-6510/Fax(425)430-6516•rentonwa.gov � � CERTIFICATE FOR TRANSCRIPT I, JASON A. SETH, the duly qualified City Clerk of the City of Renton, Washington (the "City"), DO HEREBY CERTIFY that the within and attached documents are in each case true and correct copies of the originals of such documents and that none of the resolutions, ordinances, proceedings, statements or certificates contained herein have been repealed, rescinded or canceled and all of the officers last certified as holding City offices have continued to hold their respective offices from such date to and including the date of this certificate. Dated this 13th day of May, 2015. � J n A. Seth, C, City Clerk ity of Renton, Washington '•r�' �rr� CERTIFICATE I, DENIS W. LAW, Mayor of the City of Renton, Washington, do hereby certify that Iwen Wang is the duly appointed Finance and Information Services Administrator and Jason A. Seth is the duly appointed City Clerk of the City of Renton. Dated this 13th day of May, 2015. + �J� Denis W. Law, Mayor City of Renton, Washington � � CERTIFICATE I, JASON A. SETH, the duly qualified City Clerk of the City of Renton, Washington, do hereby certify that the attached is a true and correct copy of the proceedings of the City Council establishing the date,time and place for regular meetings of the City Council. Dated this 13th day of May, 2015. � Jas A. eth, C, City Clerk ity of Renton, Washington � � .. �% �- � POLICY & PROCEDURE _ Subject: Index: LEGISLATIVE MEETINGS OF THE CITY COUNCIL Number: 500-02 Effective Date Supersedes Page Staff Contact Approved Ry 8/13/2007 1/27/1992 1 of 3 Ja Covin ton �j-ru 1.0 PURPOSE: To establish the time and location of the various City Council meetings. 2.0 ORGANIZATIONS AFFECTED: City Council 3.0 REFERENCES: RCW 42.30(Open Public Meetings act); RCW 35A.12.100; RCW 35A.12.110 4.0 POLICY: 4.1 Regular business meetings of the City Council shall be held the first four Mondays of each month commencing at 7:00 pm in the Council Chambers of City Hall, or at another location determined by the City Council. The City Council will not meet when a regular meeting falls on a holiday acknowledged as such by official Council action; all pending business and agenda items will be carried forward to the next regularly scheduled meeting. 4.2 There shall be regular Council meetings held the first four Mondays of each month except where a City holiday falls on a Monday. Committee of the Whole meetings (Council work sessions) may be held prior to weekly Council meetings. No final disposition shall be taken at any Council work session; rather, recommendations shall be offered for final action at a succeeding regular business meeting of the Council. 4.3 At all meetings of the City Council, a majority of the Councilmembers shall constitute a quorum for the transaction of business, but a less number may adjourn from time to time and may compel the attendance of absent members as prescribed by ordinance. 4.4 Except as provided for in law, all regular and special meetings of the City Council shall be open to the public as set forth in RCW 42.30.OI0. 4.5 The Mayor shall be the presiding officer at all meetings of the City Council except Council work sessions. The Council President shall preside in the mayor's absence and shall be notified when the mayor leaves the state. In the absence of both the Mayor and the Council President, the Council President Pro Tem shall preside. , ' 800-Q2 � rw+i Page 2 4.5.1 The Mayor shall have a vote only in the case of a tie in the votes of the councilmembers with respect to matters other than the passage of any ordinance, grant, revocation of a franchise or license, or any resolution for the payment of any money. 4.5.2 The Mayor ar other presiding officer may require any person addressing the City Council to be sworn as a witness and to testify under oath; the presiding officer shall so require, if directed to do so by a majority vote of the City CounciL 4.6 The Council President shall preside at all Council work sessions of the City Council. The President Pro Tem of the Council shall preside in the absence of the Council President. 5.0 DEFINITIONS: N/A 6.0 PROCEDURES: 6.1 Special meetings may be called by the Mayor or any four members of the City Council to discuss issues or business items provided that written notice is delivered to each member of the Council at least 24 hours before the time specified for the proposed meeting. 6.1.1 The notice shall specify the time and place of the special meeting and the business to be transacted. 6.1.2 In addition, the city clerk shall give notice of such special meeting as further provided for in RCW 42.30.080. 6.1.3 No final disposition shall be taken on any other matter at such special meeting by the governing body. 6.1.3.1 Written notice may be dispensed with for any Councilmember who, at or prior to the time the meeting convenes, files a written waiver of such notice with the city clerk. 6.1.3.2 Written notice may also be dispensed with for any member who is actually present at the meeting at the time it convenes. 6.1.3.3 IV'otice may be dispensed with in the event that a special meeting is called to deal with an emergency involving injury or damage to persons or property or the likelihood of such injury or damage when time requirements would make notice impractical and increase the tikelihood of such injury or damage. 6.2 The President or majority of the members of the City Council may hold executive sessions during a regular or special meeting to consider: a. matters affecting national security; b. the selection af a site or the acquisition of real estate by lease or purchase when public knowledge regarding such consideration could cause a likelihood of an increased price to the city; 840-02 +�,r �,�r+' Page 3 c. the appointment, employment or dismissal of a public officer or employee; d. coznplaints or charges brought against a public officer or employee by another public officer, employee or member of the public; e. any proceeding concerned with the formal issuance of an order granting, suspending, revoking or denying a license, permit or certificate to engage in any business, occupation or profession, or to any disciplinary proceedings involving a member of such business, occupation or profession; f. that portion of a meeting when the Council sits as a quasi judicial body which relates to a quasi judicial matter between named parties as distinguished from a matter having a general effect on the public or on a class or group; g. planning or adopting the strategy or position to be taken during the course of any collective bargaining, professional negotiations, grievance or mediation proceedings, or the review of proposals made in such negotiations or proceedings; h. input from the city attorney concerning settlements, avoidance or contemplated ]itigation, settlement offers and like matters which are subject to the statutory attorney-client privilege. 6.2.1 No official action shall be taken at any executive session; however, nothing shall prevent the Council, when permitted by law, from taking an informal vote on any matter under discussion. 6.2.2 No member of the City Council, employee of the city or any person present during an executive session shall disclose to any other person the content or substance of discussion or action which took place during the session,unless a majority of the Council authorizes such disclosure. 6.2.3 Executive sessions, to the extent permitted by law, shall be limited to the Mayor and the members of the City Council unless the presence of non- members is requested by a majority of the City Councilmembers. � � CERTIFICATE I, Jason A. Seth, City Clerk of the City of Renton, Washington (the "City"), do hereby certify that the Renton Reporter is the official newspaper of the City. Dated this 13th day of May, 2015. J son A. Set , CMC, City Clerk City of Renton, Washington STATE OF WASHINGTON, COUNTY OF KING } AFFIDAVIT OF PUBLICATION PUBLIC NOTICE Linda M Mills, being first duly sworn on oath that she is the Legal Advertising Representative of the rrrt'OF RENTON Renton Re orter NOTICE OF ORDINANCFti P ADOPTED BY Tf1F. RRN'fON CI'1'Y COl1NClL Following is a summary of the Ordinances adopted by the Ren- � a weekly newspaper, which newspaper is a legal newspaper of �� c;cy coU�o�i on Apnl i3. general circulation and is now and has been for more than six months aois: prior to the date of publication hereinafter referred to, published in ORDINANCF,NO.s�sa An Ordinnnce of the City of the English language continuously as a weekly newspaper in King Rentan, Washington, providing County, Washington. The Renton Reporter has been approved as . r°``�'e "'°�„�°f°�°` '"°re series of Limited Tax Gcncral a Legal Newsgaper by order of the Superior Court of the State of Obligation Refunding E3onds oe Washington for King County. cn�c�cy in the aggregate princi- pal amount of not ro excccd The notice in the exact form annexed was published in regular issues � aia.000,000 co refund certain of the Renton Reporter (and not in supplement form) which was outstanding Limited Tas General re ularl distributed to its subscribers durin the below stated eCiod. Ub�igation Bonds �,a co p8y g Y g P costs of issuing the bonds; anJ The annexed notice, a: dcle�ating the authoriry to ap- . prove the finel terms of the Public Notice ��5. r:tr�oc��e: May�3,zo�s ORDiNANCE NO..57,55 An Ordinance of the City of was published on April 17, 2015. Renton, Washington, amending the Ciry of Renton fiscal years 2015l2016 Biennial Budget as adopted by Ordinance N�.5737, � The full amaunt of the fee charged for said foregoing publication is in the amount of 566,944.s2�. Effectivc: April 22,2015 the sum f$98.00. - S Complete text of these ordinano- � a es is avuilable at Renton City j'�f�J�,' ��+�, liall, 1055 South Grady Way; and posted et the King County I.inda Mills t;bT��es in Rentan, 64 RAinier Legal Advertising Representative, Renton Reporter ��i�� Ave s, sc� A (temporAry loce- Subscribed and sworn to me this 17th da of A ril, 2015. ��`� R A q �i, tion) and 2902 NE 12th 5trcet. y � � � N� /� Upon request m the City Clerk's � �� \� �SgiONF�;.,'�.9�i� office, (425) 430-651Q copies :w=?�°�� Ai9�"�,�0� ,viJaeon ASeth,C ry Clerl: '• � • NOTARY 'Z� Published in the Renton Reporter J erA.An rson,Not Public for the State af Washington, _ : p�g�� onApri 1 1 7,2 01�.1 t 1 2 9 961 1. Residing in Buckley,Washington �"'��•, ,�'p�� .,�;�,•..02,�:..s�,•�� `�� '-.., .`•41rASN�� ,:��►�� `' i� CERTIFICATE REGARDING OUTSTANDING NON-VOTED DEBT I, IWEN WANG, Finance and Information Services Administrator of the City of Renton, Washington (the "City"), do hereby certify that the following are all of the City's currently outstanding general obligation bonds and long-term leases and financing contracts as of May 13, 2015 (excluding the City's Limited Tax General Obligation Refunding Bonds, Series 2015A, and Limited Tax General Obligation Refunding Bonds, Series 2015B (Taxable)) issued on the date hereo�: Voted General Obligation Bonds: Designation Outstanding Balance $ 0 Nonvoted General Obligation Bonds and Obligations: Designation Outstanding Balance Fire Protection District No. 40 Promissory Note $5,3 I 3,953 2006 LTGO 1,450,000 2009 SCORE Bonds<<� 28,936,800 2010 Valley Com. Bonds �� 220,000 LTGO & Refunding, 2010 6,010,000 LTGO Bonds, 2011 A 12,460,000 � LTGO Refunding, 2011 4,825,000 LTGO Bond, 2013 2,990,000 TOTAL $ 62,205,753 �� The South Correctional Entity Facility Public Development Authority issued bonds on November 4, 2009 (the "SCORE Bonds"). The par amount of the SCORE Bonds was $86,235,000 and pursuant to an interlocal agreement, the City is obligated to pay 36 percent of the debt service on the SCORE Bonds. �'� The Valley Communications Center Development Authority issued special obligation refunding bonds on April 5, 2010 in the total aggregate principal amount of$5,325,000 (the "Valley Com. Bonds"). Pursuant to an interlocal agreement,the City is obligated to pay 20 percent of the debt service on the Valley Com. Bonds. �r++` �r.r` Long-term leases and conditional sale contracts (including COPs) and other debt: Designation Outstanding Balance $ 0 Dated as of this 13th day of May, 2015. , �---,;;.,r wen Wang, Finance and Informati Services Administrator City of Renton, Washington -2- `�r+` �.✓` CEI�TIFICATE I, Jason A. Seth, City Clerk of the City of Renton, Washington (the "City"), do hereby certify that the attached is a true and correct copy of the minutes of the April 6, 2015 regular meeting of the City Council which reflects the first reading of Ordinance No. 5754. Dated as of this 13th day of May, 2015. � ason A. S t , CMC, City Clerk : City of Renton, Washington '�' "�r.rr� RENTON CITY COUNCIL Regular Meeting April 6,2015 Council Chambers Monday,7:00 p.m. M I N U T E S Renton City Hall CALL TO ORDER Mayor Law called the meeting of the Renton City Council to order and led the Pledge of Allegiance to the flag. ROLL CALL OF ED PRINCE,Council President;DON PERSSON;MARCIE PALMER;RANDY COUNCILMEMBERS CORMAN;GREG TAYLOR;ARMONDO PAVONE;RUTH PEREZ. CITY STAFF IN ATTENDANCE DENIS LAW,Mayor;JAY COVINGTON,Chief Administrative Officer;ZANETTA FONTES,Senior Assistant City Attorney;JASON SETH,City Clerk;MEGAN GREGOR, Deputy City Clerk;GREGG ZIMMERMAN, Public Works Administrator; PREETI SHRIDHAR,Deputy Public Affairs Administrator;JENNIFER HENNING, Planning Director;CHIEF KEVIN MILOSEVICH,DEPUTY CHIEF ED VANVALEY, COMMANDER KATIE MCCLINCY,COMMANDER TRACY WILKINSON,and COMMANDER CLARK WILCOX,Police Department. SPECIAL PRESENTATION Police Chief Kevin Milosevich recognized the following individuals,chosen by Police:Employee Recognition their peers,for outstanding performances in 2014,and recapped each person's achievements: • Specialist Rosa Brito-Employee of the 1st Quarter • Evidence Technician Chad Jay-Employee of the 2nd Quarter;Employee of the Year • Officer Kevin Lane-Employee of the 2nd Quarter • Officer Marty Leverton-Employee of the 3rd Quarter ADMINISTRATIVE REPORT Chief Administrative Officer 1ay Covington reviewed a written administrative report summarizing the City's recent progress towards goals and work programs adopted as part of its business plan for 2015 and beyond. Item noted was: � The two tennis courts at Gene Coulon Memorial Beach Park will be closed April 9,2015 through early June for renovation. Nearby tennis courts at Liberty Park and Highlands Park are availabie for use during the renovation. AUDIENCE COMMENT Howard McOmber(Renton)expressed appreciation to the City for its support of Citizen Comment:McOmber— the current volunteer programs.He also remarked that the volunteers made Volunteer City positive contributions throughout the community. CONSENT AGENDA Items listed on the consent ogenda ore adopted by one motion which follows the listing. Council:Meeting Minutes of Approval of Council meeting minutes of 3/23/2015. Council concur. 3/23/2015 Appointment:Library Advisory Mayor Law appointed Kimberly Unti to the Library Advisory Board for a term Board expiring 9/1/2017. Refer to Communitv Services Committee. Appointment:Municipal Arts Mayor Law appointed the following individuals to the Municipal Arts Commission Commission:Mary Clymer,for a term expiring on 12/31/2015; Kimberly Eshelman,Adrienne LaFaye,and Neil Sheesley for terms expiring on 12/31/2017.Refer to Communitv Services Committee. CERTIFlCATE 1,the undersigned City Clerk of the City of Renton, Washington, certify th is is a tru and correct copy of � � �� LS. Subscribed an sca this d of�,20�5— , v Ctl}�C April 6, 2015 �✓ Renton Citv Council Minutes � Pa�e 63 CAG: 15-025, Riverview Park City Clerk reported a bid opening on 3/23/2015 for CAG-15-025, Riverview Park Bridge Replacement, Rodarte Bridge Replacement; six bids; engineer's estimate$800,000;and submitted Construction, Inc. staff recommendation to award the contract to the low bidder, Rodarte Construction, Inc., in the amount of$759,628.88. Refer to Finance Committee for discussion of funding. CAG: 15-032, Sunset Terrace City Clerk reported a bid opening on 3/24/2015 for CAG-15-032, Sunset Terrace Regional Stormwater Facility, Regional Stormwater Facility Project;ten bids; engineer's estimate Olson Bros Excavating, Inc. $738,160.09;and submitted staff recommendation to award the contract to the low bidder,Olson Bros Excavating, Inc., in the amount of$649,550. Council concur. Appeal:Tiffany Park City Clerk Reported appeal of the Hearing Examiner's final decision upon Preliminary Plat, LUA-13- reconsideration regarding the Reserve at Tiffany Park Preliminary Plat(LUA-13- 001572 001572) by Renate Beedon,Tiffany Park Woods Advocacy Group, accompanied by required fee. Refer to Plannin�and Development Committee. Community Services: 2015 Community Services Department reported receipt of five 2015 Neighborhood Neighborhood Grant Grant Program applications and recommended funding all five projects totaling Applications $45,252. Refer to Communitv Services Committee. Community Services: Purchase Community Services Department recommended approval of an amendment to &Sale Agreement the Purchase and Sale agreement for the Fawcett property, along May Creek, Amendment, Fawcett property with an agreed upon price of$785,000. Refer to Finance Committee. Public Works: Interlocal Public Works Department recommended approval of an Interlocal Cooperative Cooperative Purchasing Purchasing Agreement with Kitsap County to expedite the purchase of capital Agreement, Kitsap County Items.Council concur. (See page 65 forreso/ution.J Transportation: Increase in Transportation Systems Division requested authorization to increase a Public Staffing Works Department Transportation Systems Division Operations Section Civil Engineer II Position from 0.50 Full Time Equivalent(FTE)to 1.0 FTE. Refer to Finance Committee. Transportation:Airport Transportation Systems Division recommended approval of a resolution Sustainability Management adopting the Renton Municipal Airport Sustainability Management Plan. Refer Plan to Transportation (Aviation) Committee. Lease:Amendment 015-15, Transportation Systems Division recommended approval of Amendment 015-15 Aerodyne, LLC, LAG-84-006 to LAG-84-006,Aerodyne, LLC, for a land rental rate adjustment from$0.75 to $0.7252 in accordance with a January 2015 lease arbitration decision. Council concur. Lease:Amendment 2-15, Transportation Systems Division recommended approval of Amendment 02-15 Renton Gateway Center, LAG- to LAG-09-006, Renton Gateway Center,for a land rental rate adjustment from 09-006 $0.57 to$0.7252 in accordance with a January 2015 lease arbitration decision. Council concur. Lease:Amendment 015-15, Transportation Systems Division recommended approval of Amendment 015-15 Kaynan, Inc., LAG-84-003 to LAG-84-003, Kaynan, Inc.,for a land rental rate adjustment from$0.75 to $0.7252 in accordance with a lanuary 2015 lease arbitration decision. Council concur. Lease: Amendment 09-15, Transportation Systems Division recommended approval of Amendment 09-15 Kaynan, Inc., LAG-85-011 to LAG-85-011, Kaynan, Inc.,for a land rental rate adjustment from$0.75 to $0.7252 in accordance with a January 2015 lease arbitration decision. Council concur. April 6, 2015 `� Renton Citv Council Minutes `"� Pa�e 64 CAG: 14-018, Monterey Utility Systems Division submitted CAG-14-018, Montery Terrace Water Main Terrace Water Main Replacement Project;and requested approval of the project, authorization for Replacement, Buno final pay estimate in the amount of$13,485.11,commencement of a 60-day Construction, LLC. lien period,and release the retainage to Buno Construction, LLC.,contractor, if all required releases are obtained.Council concur. Utility: 2015-2016 KC Solid Utility Systems Division recommended approval to accept$231,876 for the Waste Reduction & Recycling, 2015-2016 King County Solid Waste Division Waste Reduction and Recycling KC Grant Grant. Council concur. (See page 66forresolution.J MOVED BY PRINCE,SECONDED BY CORMAN, COUNCIL CONCUR TO APPROVE THE CONSENT AGENDA AS PRESENTED. CARRIED. UNFINISHED BUSINESS Finance Committee Chair Persson presented a report recommending approval Finance Committee of Claim Vouchers 336582 -337288, seven wire transfers and two payroll runs Finance: Vouchers with benefit withholding payments totaling$13,771,079.78 and payroll vouchers including 1,449 direct deposits and 130 payroll checks totaling $3,129,654.28. MOVED BY PERSSON,SECONDED BY PAVONE, COUNCIL CONCUR IN THE COMMITTEE RECOMMENDATION. CARRIED. Finance: Bond Refunding, 2006 Finance Committee Chair Persson presented a report recommending LTGO Bonds concurrence in the staff recommendation to approve the proposed refinancing plan and adoption of the ordinance authorizing the issuance of up to$14 million in new bonds,for a true interest cost of approximately 2.59% including underwriter's discount and issue cost(or 234%without), which will replace approximately$12.4 million of existing 2006 LTGO bonds, maturing between 2017 through 2028 carrying an average interest rate of 5.06%,with a net present value (NPV)saving of$1.46 million or 11.8%of the refunded debt. MOVED BY PERSSON,SECONDED BY PAVONE,COUNCIL CONCUR IN THE COMMITTEE RECOMMENDATION.CARRIED. (See paqe 66 for ordinance.J Lease:Amendment#3, 200 Finance Committee Chair Persson presented a report recommending Mill Building, King County concurrence in the staff recommendation to approve the five-year Lease Sexual Assault Resource Amendment with KCSARC for continued tenancy of 7,421 sq.ft. of the ground Center(KCSARC) floor of the 200 Mill Building in Renton, WA,98057.The Committee further recommended that the Mayor and City Clerk be authorized to sign the Lease Amendment. MOVED BY PERSSON, SECONDED BY PAVONE, COUNCIL CONCUR IN THE COMMITTEE RECOMMENDATION.CARRIED. Lease:Amendment#5,4th Finance Committee Chair Persson presented a report recommending Floor City Hall, Iron Mountain concurrence in the staff recommendation to approve the three-year Lease Information Management, Amendment with Iron Mountain Information Management, Inc.,for continued LAG-00-003 tenancy of 14,208 sq.ft.of the fourth floor of Renton City Hall, 1055 S.Grady Way, Renton, WA, 98057.The Committee further recommended that the Mayor and City Clerk be authorized to sign the Lease Amendment. MOVED BY PERSSON,SECONDED BY PAVONE,COUNCIL CONCUR IN THE COMMITTEE RECOMMENDATION. CARRIED. Finance:Amended 2015-2016 Finance Committee Chair Persson presented a report recommending Fee Schedule concurrence in the staff recommendation to amend the 2015-16 Fee Schedule to incorporate the 2015 school impact fees and to correct the omitted changes in development services fees. MOVED BY PERSSON, SECONDED BY PAVONE, COtJNCII CONCUR IN THE COMMIITEE RECOMMENDATION. CARRIED. (See page 66 for resolution.) Apri)6, 2015 ``"�'" Renton Citv Council Minutes � Pa�e 65 Finance: Utility Billing Finance Committee Chair Persson presented a report recommending granting Adjustment Request, 215 5. the waiver requested for sewer and King County Metro related charges from a 4th PI. water leak at the service address of 215 S 4th PI. (Account#04752-000),as presented for the total amount of$9,116.68.The adjustment includes City Sewer($3,290.86) and King County Metro($5,825.82)charges above their normal usage. MOVED BY PERSSON, SECONDED BY PAVONE, COUNCIL CONCUR IN THE COMMITTEE RECOMMENDATION.CARRIED. Finance: 2015 Carry Forward Finance Committee Chair Persson presented a report recommending Amendment concurrence in the staff recommendation to approve an amendment in the 2015/2016 Budget appropriations in the amount of$66,949,826 with the total amended budget to be$552,837,193 for the biennium.The Committee further recommended that the ordinance regarding this matter be presented for first reading. MOVED BY PERSSON,SECONDED BY PAVONE,COUNCIL CONCUR IN THE COMMITTEE RECOMMENDATION.CARRIED.(See page 66forordinance.J Transqortation (Aviation) Transportation (Aviation)Committee Chair Palmer presented a report Committee authorizing the Mayor and City Clerk to execute the consultant agreement with Transportation: NE Sunset Perteet, Inc. in the amount of$578,048 to proceed with the preliminary design Blvd. Roadway Improvements; phase of the NE Sunset Blvd. (N Park Dr.to Monroe Ave. NE) Roadway Perteet, Inc. Improvements Project. MOVED BY PALMER,SECONDED BY PEREZ, COUNCIL CONCUR IN THE COMMITTEE RECOMMENDATION. CARRIED. Lease:Amendment 03-15, 800 Transportation (Aviation) Committee Chair Palmer presented a report Building, Rainier Flight Service recommending concurrence in the staff recommendation to approve Amendment 03-15 to Rainier Flight Service's lease agreement(LAG 14-005)for a land rental rate adjustment from $0.75 to$0.7252 in accordance with a lanuary 2015 lease arbitration decision, and authorize the Mayor and City Clerk to sign the lease amendment. MOVED BY PALMER, SECONDED BY PEREZ, COUNCII CONCUR IN THE COMMITTEE RECOMMENDATION. CARRIED. CAG: 13-149,800 W Perimeter Transportation (Aviation) Committee Chair Palmer presented a report Rd., Forma Construction recommending concurrence in the staff recommendation to approve the Job Company Order Contract proposal for final improvements to the building at 800 W. Perimeter Rd. and authorize the Mayor and City Clerk to sign the proposal. MOVED BY PALMER,SECONDED BY PEREZ,COUNCIL CONCUR IN THE COMMITTEE RECOMMENDATION.CARRIED. Plannin�&Development Planning& Development Committee Chair Corman presented a report Committee recommending that the Critical Areas regulations be amended to ensure the CED: 2015 Major regulations meet Best Available Science in compliance with the State required Comprehensive Plan Work 2015 Comprehensive Plan Update and to improve functionality and usability. Program &Public Participation MOVED BY CORMAN,SECONDED BY PAVONE, COUNCIL CONCUR IN THE Plan COMMITTEE RECOMMENDATION. CARRIED. RESOLUTIONS AND The following reso/utions were presented for reading and adoption: ORDINANCES RESOLUTION#4247 A resolution was read authorizing the Mayor and City Clerk to enter into and Public Works: Interlocal interlocal cooperative purchasing agreement with Kitsap County. MOVED BY Cooperative Purchasing PERSSON,SECONDED BY PALMER, COUNCIL ADOPT THE RESOLUTION AS Agreement, Kitsap County PRESENTED. CARRIED. April 6, 2015 '�"' Renton Citv Council Minutes � Pa�e 66 RESOLUTION#4248 A resolution was read authorizing the Mayor and City Clerk to enter into an Utility:2015-2016 KC Solid interlocal cooperative agreement with King County entitled "Interagency Waste Reduction &Recycling Agreement for 2015 and 2016 Between King County and the City of Renton." Grant MOVED BY PERSSON,SECONDED BY PRINCE,COUNCIL ADOPT THE RESOLUTION AS PRESENTED.CARRIED. RESOLUTION#4249 A resolution was read amending the 2015-16 City of Renton fee schedule. Finance: Amended 2015-2016 MOVED BY PERSSON, SECONDED BY PAVONE, COUNCIL ADOPT THE Fee Schedule RESOLUTION AS PRESENTED. CARRIED. The following ordinances were presented for first reading and referred to the 4/13/2015 Council meeting for second and final reading: ORDINANCE An ordinance was read providing for the issuance of one or more series of Finance: Bond Refunding, 2006 limited tax general obligation refunding bonds of the City in the aggregate LTGO Bonds principal amount of not to exceed$14,000,000 to refund certain outstanding limited tax general obligation bonds and to pay costs of issuing the bonds;and delegating the authority to approve the final terms of the bonds. MOVED BY PERSSON,SECONDED BY CORMAN, COUNCIL REFER THE ORDINANCE FOR SECOND AND FINAL READING ON 4/13/2015. ORDINANCE An ordinance was read amending the city of Renton fiscal years 2015/2016 Finance: 2015 Carry Forward Biennial Budget as adopted by Ordinance No.5737, in the amount of Amendment $66,949,826,for an amended total of$552,837,193 over the biennium. MOVED BY PERSSON,SECONDED BY PAVONE, COUNCIL REFER THE ORDINANCE FOR SECOND AND FINAL READING ON 4/13/2015. The following ordinance was presented for fina/reading and adoption: ORDINANCE#5753 An ordinance was read establishing an assessment district for sanitary sewer Utility: Final Sewer Extension, service for properties adjacent to 5132nd St.; and establishing the amount of Special Assessment District the charge upon connection to the facilities. MOVED BY CORMAN,SECONDED No. 0047 BY PALMER, COUNCIL ADOPT THE ORDINANCE AS READ. ROLL CALL:ALL AYES. CARRIED. NEW BUSINE55 Please see attached Council Committee Meeting Ca/endar for updates from Councilmembers on upcoming Counci/Committee meetings. ADIOURNMENT MOVED BY PERSSON, SECONDED BY PRINCE,COUNCIL ADJOURN. CARRIED. TIME: 7:29 p.m. Jason A. Seth,CMC,City Clerk Megan Gregor, Recorder April 6,2015 � � CERTIFICATE I, Jason A. Seth, City Clerk of the City of Renton, Washington (the "City"), do hereby certify that the attached is a true and correct copy of the minutes of the April 13, 2015 regular meeting of the City Council which reflects the second reading and passage of Ordinance No. 5754. Dated as of this 13th day of May, 2015. � son . Seth, CMC, City Clerk City of Renton, Washington � � RENTON CITY COUNCIL Regular Meeting Apri113,2015 Council Chambers Monday,7:00 p.m. M I N U T E S Renton City Hall CALL TO ORDER Mayor Law called the meeting of the Renton City Council to order and led the Pledge of Allegiance to the flag. ROLL CALL OF ED PRINCE,Council President;DON PERSSON;MARCIE PALMER; RANDY COUNCILMEMBERS CORMAN;GREG TAYLOR;ARMONDO PAVONE; RUTH PERE2. CITY STAFF IN AITENDANCE DENIS LAW, Mayor;JAY COVINGTON,Chief Administrative Officer;LAWRENCE J. WARREN,City Attorney;lASON SETH,City Clerk;MEGAN GREGOR, Deputy City Clerk;GREGG ZIMMERMAN, Public Works Administrator;PETER RENNER, Facilities Director;JENNIFER HENNING, Planning Director;COMMANDER CHARLES KARLEWICZ,Police Department. SPEtiAI PRESENTATIONS Sue Paro,Executive Director of Communities in Schoois of Renton(CISR), Communities In Schools of presented updates and changes that have happened in her organization over Renton(CISRj the past year.She highlighted data supporting the effectiveness of the ' Communities in Schools(CIS)program,and the benefits of supporting their efforts.5he introduced the CIS Model of Integrated Student 5upports and explained what CIS does in Renton,who they serve,how they are able to operate,and what partnerships they have within the community.She also shared the 2013-2014 goals and outcomes and expressed their need for valunteers to sign up as mentors to help reduce/eliminate the effects of trauma,disparity,and poverty on learning among the youth of Renton. Puget Sound Emergency Radio Marlin Blizinsky, PSERN Governmental Relations Officer,provided a Network(PSERN)—Briefing presentation on the replacement project for the existing public safety radio system.Through his presentation,he explained what today's public safety radio system does,why there is a need for a new system,and how PSERN would improve upon the current system. He also fiighlighted which cities own/operate the system,the project scope,and the funding sources for the project. Responding to council inquiries,Mr.Blizinsky stated that,if implemented,the new system would provide better coverage,both inside and outside of buildings. ADMINISTRATIVE REPORT Chief Administrative Officer 1ay Covington reviewed a written administrative report summarizing the City's recent progress towards goals and work programs adopted as part of its business plan for 2015 and beyond. ltems noted were: � The trestle bridge next to Maplewood Roadside Park at the Cedar River Trai)will be receiving minor repairs from April 13 through May 22.The contractor will be setting up their work area on the outside of the trestle bridge,so there will be equipment on the trail at times. Please use caution traversing the trail during this time. � Due to the 2015 Seahawks 12K Run at The Landing on Sunday,Apri� 19th,there will be road closures along the southeast shore of Lake Washington that morning. The streets involved are Lake Washington Blvd N, Park Ave.N, N.8th St.,and Logan Ave.N. Most streets will c(ose at 8:30 a.m.and reopen at varying times. CERTIF7CAT� 1, the undersigned City Cierk of the City of Renton, Washington, certify that t is is a true and c nect copy of �s �f Sub c ibed an seai his d f—�� 20(� Cit� �-�r Apri)13,2015 �,.,...� Renton Citv Council Minutes �r►° Pa�e 68 CONSENT AGENDA ltems listed on the conseni agenda ore adopted by one motion which follows Lhe listing. Council: Meeting Minutes of Approval of Council meeting minutes of 4/6/2015. Council concur. 4/6/2015 CED:Approval of Quitclaim Community and Economic Development Department recommended Deed and Temporary authorizing a quitclaim deed and a temporary easement, in favor of the Easement Washington State Department ofTransportation,to further regional highway improvements within the City. Council concur. Transportation:Staffing Transportation Systems Division requested authorization of an increase to Increase staffing by adding a 1.0 FTE(Full-time Equivalent) Civil Engineer III and a 1.0 FTE Administrative Secretary, and adjust the budget as necessary. Refer to Finance Committee. CAG: 14-078,Sewer Radio Utility Systems Division submitted CAG 14-078,Sewer Radio Panel Relocation Panel Relocation and Lift and Lift Station Improvements; and requested approval of the project, Station Improvements, Equity authorization for final pay estimate in the amount of$6,022.50, Builders, LLC commencement of a 60 day lien period, and release the retainage in the amount of$6,708.57 to Equity Builders, LLC, contractor, subject to the receipt of all required authorizations. Council concur. Utility: Establish SE 165 St. Utility Systems Division requested authorization to establish the SE 165th St. Sewer Extension SAD 5ewer Extension Special Assessment District(SAD), in the estimated amount of $143,000,to ensure that project costs are equitably distributed to those who benefit,and direct staff to proceed with the estabfishment of the final SAD upon completion of the construction of the SE 165th St.Sewer Extension Project. Refer to Utilities Committee. MOVED BY PRINCE,SECONDED BY CORMAN, COUNCIL CONCUR TO APPROVE THE CONSENT AGENDA AS PRESENTED. CARRIED. UNFINISHED BUSINE55 Counci)President Prince presented a Committee of the Whole report Committee of the Whole concurring with the Administration's intent to pursue a competitive process to Utility: 2016 Solid Waste procure the 2016 solid waste col(ection contract. MOVED BY PRINCE, Collection Contract SECONDED BY CORMAN,COUNCIL CONCUR IN THE COMMITTEE RECOMMENDATION. CARRIED. Communitv Services Community Services Committee Chair Perez presented a report recommending Committee concurrence in the staff recommendation to confirm Mayor Law's appointment Appointment: Library Advisory of Kim Unti to the Library Advisory Board for a term expiring September 1, Board 2017. MOVED BY PEREZ,SECONDED BY PALMER, COUNCIL CONCUR IN THE COMMITTEE RECOMMENDATION. CARRIED. Appointments: Municipal Arts Community Services Committee Chair Perez presented a report recommending Commission concurrence in the staff recommendation to confirm Mayor Law's appointments to the Renton Municipal Arts Commission: Ms. Mary Clymer for a term expiring December 31,2015, Ms. Kimberly Eshelman for a term expiring December 31, 2017, Ms.Adrienne LaFaye for a term expiring December 31, 2017,and Mr. Neil Sheesley for term expiring on December 31, 2017. MOVED BY PEREZ,SECONDED BY PALMER, COUNCIL CONCUR IN THE COMMITTEE RECOMMENDATION. CARRIED. Aaril 13,2015 �r.,►Renton Citv Council Minutes '"�"'" Pa�e 69 Community Services: 2015 Community Services Committee Chair Perez presented a report recommending Neighborhood Grant concurrence in the staff recommendation to approve and authorize the Applications following 2015 Neighborhood Project Grant awards: 1) South Renton Neighborhood Association—Planting trees within the neighborhood and celebrate Arbor Day. $3,369 2) Starwood Homeowner's Association—Install a playground in the neighborhood common area. $19,888 3) Sorrento Homeowner's Association—Install identifying signage at entrance into the neighborhood. $4,111 4) Victoria Park Homeowner's Association-Install a playground in the neighborhood children's park. $13,560 5) LaCrosse Homeowners Association—Install irrigation into the neighborhood communitygarden and add a blueberry patch and grape arbor. $4,326. MOVED BY PEREZ,SECONDED BY PALMER,COUNCIL CONCUR IN THE COMMITTEE RECOMMENDATION. CARRIED. RESOLUTIONS AND The fallowing ordinances were presented for final reading and adoption: ORDINANCES ORDINANCE#5754 An ordinance was read providing for the issuance of one or more series of Finance: Bond Refunding, 2006 limited tax general obligation refunding bonds of the City in the aggregate LGTO Bonds principa)amount not to exceed$14,000,000 to refund certain outstanding limited tax general obligation bonds and to pay costs of issuing the bonds; and delegating the authority to approve the final terms of the bonds. MQVED BY PER5SON,SECONDED BY CORMAN,COUNCIL ADOPTTHE ORDINANCE AS READ. ROLL CALL:ALL AYES.CARRIED. ORDINANCE#5755 An�rdinance was read amending the city of Renton fiscal years 2015/2016 Finance:2015 Carry Forward Biennial Budget as adopted by Ordinance No.5737, in the amount of Amendment $66,949,826,for an amended total of$552,837,193 over the biennium. MOVED BY PERSSON,SECONDED 8Y CORMAN, COUNCIL ADOPT THE ORDlNANCE AS READ. ROLL CALL:ALL AYES.CARRIED. NEW BUSINESS See attached Council Committee Meeting Colendar. AUDIENCE COMMENT Dave Della, Public Sector Manager with Waste Management,thanked Council Citizen Comment:Della,Waste for the opportunity to forge a partnership with the City for the past 26 years. Management He stated that Waste Management serves Renton with pride by ensuring customers'waste collection service needs are satisfied. He listed accomplishments reached during Waste Management's tenure with the City, and informed Council that the organization is ready to move forward through the next steps of the procurement process. ADJOURNMENT MOVED BY PERSSON, SECONDED BY PRINCE, COUNCIL ADJOURN. CARRIED. TIME: 7:52 p.m. � �- f�~,� / ' � � , � j�/� 1( � J , �� ' � �� Jasor}-� .Seth,C , ity Clerk Megan Gregor, Recorder April 13, 2015 ,� �incil Committee Meeting Calend� April 13, 2015 April 14, 2015 Tuesday 10:00 AM Transportation Committee, Chair Palmer Council Conference Room 1. Sustainability Plan Resolution 2. Kennydale Transportation Concerns 3. Emerging Issues in Transportation Apri) 20, 2015 Monday CANCELED Public Safety Committee, Chair Pavone Council Conference Room 4:30 PM Finance Committee, Chair Persson Council Conference Room 1 . Riverview Park Bridge Replacement Bid Award 2. May Creek Property Acquisition 3. Transportation Division Staffing Increase (Civil Engineer& Adm. Sec.) 4. Vouchers 5:30 PM Committee of the Whole, Chair Prince Council Chambers 1. Eastside Rail Corridor Master Plan Update 2. Regionallssues �rrr � CERTIFICATE REGARDING ORDiNANCE I, Jason A. Seth, City Clerk of the City of Renton, Washington (the "City"), do hereby certify: 1. That the attached Ordinance No. 5754 (the "Ordinance") is a true and correct copy of an ordinance of the City Council, as finally adopted at a regular meeting of the City Council held on April 13, 2015, and duly recorded in my office, and that such Ordinance has not been amended or superseded. 2. That the meeting was duly convened and held in all respects in accordance with law, and to the extent required by law, due and proper notice of the meeting was given; that a legal quorum was present throughout the meeting and a legally sufficient number of inembers of the City Council voted in the proper manner for the adoption of the Ordinance; that all other requirements and proceedings incident to the proper adoption of the Ordinance have been duly fulfilled, carried out and otherwise observed; and that I am authorized to execute this certificate. Dated this 13th day of May, 2015. � J on . et , CMC, City Clerk City of Renton, Washington � � CITY OF RENTON, WASHINGTON LIMITED TAX GENERAL OBLIGATION REFUNDING BONDS, SERIES 2015 ORDINANCE NO. 5754 AN ORDINANCE OF THE CITY OF RENTON, WASHINGTON, PROVIDING FOR THE ISSUANCE OF ONE OR MORE SERIES OF LIMITED TAX GENERAL OBLIGATION REFUNDING BONDS Of THE CITY IN THE AGGREGATE PRINCIPAL AMOUNT OF NOT TO EXCEED $14,000,000 TO REFUND CERTAlN OUTSTANDING LIMITED TAX GENERAL OBLIGATION BONDS AND TO PAY COSTS OF ISSUING THE BONDS; AND OELEGATING THE AUTHORITY TO APPROVE THE FINAI TERMS OF THE BONDS. PASSED: April 13, 2015 PREPARED BY: PaaFica Law GRouP LLP Seattle, Washington CERTIFICATE I, the undecsigned City Clerk of the C�ty of Renton, Washington, certify that his is5�S�d correct copy of ��• . Subscribed and sea this d of��, 20� � C ity ,rk � "`�'° ORDiNANCE N0. 5754 � TABLE OF CONTENTS* Paae Section 1. Definitions and Interpretation of Terms.................. ,,,,,,,..,.....,.....,2 ......................... Section 2. Authorization of Bonds and Bond Details.................. ....g ......................................... Section 3. Registratian, Exchange and Payments ................ .._.... g ............................................ Section 4. Redemption Prior to Maturity and Purchase of Bonds............... ....................14 Section 5. Form of Bonds.......................................... ......18 ........................................................ Section 6. Execution of Bonds........................................... ,.,..,,,Zp ............................................. Section 7. Refunding Plan;Application of Bond Proceeds................ .....................................21 Section 8. Tax Covenants.................... ....................................................................................23 . Section 9. Bond Fund and Provision for Tax Levy Payments................... ..,..,,..,2C .................... Section 10. Defeasance .................................................... ...........27 ............................................. Section 11. Sale of Bonds .................... .....................................................................................28 Section 12. Undertaking to Provide Ongoing Disclosure.................... ......30 ............................... Settion 13. Lost, Stolen or Destroyed Bonds...................................................... ........35 Section 14. Severability; Ratification........................ .....35 ........................................................... Section 15. Effective Date of Ordinance ....................... ...........................................................36 * This Table of Contents is provided for convenience only and is not a part of this ordinance. -i- oa�a,s � �rr� CITY OF RENTON, WASHINGTON �RDINANCE NO. 5754 AN ORDINANCE OF THE CITY OF RENTON, WASHINGTON, PROVIDING FOR THE ISSUANCE OF ONE OR MORE SERIES OF IIMiTED TAX GENERAL OBLIGATION REFUNDING BONDS OF THE CITY IN THE AGGREGATE PRINCIPAL AMOUNT OF NOT TO EXCEED $14,000,000 TO REFUND CERTAIN OUTSTANDING LIMITED TAX GENERAL OBLIGATION BONDS AND TO PAY COSTS OF ISSUING THE BONDS; AND DELEGATING THE AUTHORITY TO APPROVE THE FINAL TERMS OF THE BONDS. WHEREAS, the City of Renton, Washington (the "City"), has outstanding its Limited Tax General Obligation Bonds, 2006, issued on August 8, 2006, pursuant to Ordinance No. 5215 adopted by the City Council (the "Council") of the City on July 17, 2006 (the "2006 Bond Ordinance"), which remain outstanding as follows: Maturity Dates (December 1) Principal Amounts Interest Rates 2015 $ 700,000 5.25°� 2016 750,000 4.30 2017 775,000 5.00 2019* 1,670,000 S.OQ 2a2� 900,000 5.00 2021 945,000 5.00 2022 1,000,000 5.25 2023 1,040,000 5.25 2024 1,095,d00 5.25 2028* 4,975,000 5.00 * Term Bonds. (the "2006 Bonds"); and WHEREAS, the 2006 Bond Ordinance provides that the City may call the 20Q6 Bonds maturing on or after pecember 1, 2017 (the "Refunding Candidates"), for redemption on or � � CITY OF RENTON, WASHINGTON LIMITED 7AX GENERAL OBLIGATION REFUNDtNG BONDS, SERIES 2015 ORDINANCE NO. 5754 AN ORDINANCE OF THE CITY OF RENTON, WASHINGTON, PROVIDING FOR THE ISSUANCE OF ONE OR MORE SERIES OF LIMITED TAX GENERAL OBLIGATION REFUNDtNG BONDS OF THE CITY IN THE AGGREGATE PRINCIPAL AMOUNT �F NOT TO EXCEED $14,000,000 TO REFUND CERTAIN OUTSTANDING IiMITED TAX GENERAI OBLIGATION BONDS AND TO PAY COSTS OF ISSUING THE BONDS; AND DElEGATING THE AUTHORITY TO APPROVE THE FINAL TERMS OF THE BONDS. PASSED: April 13, 2015 PREPARED BY: PAC�F�ca l.Aw GRouP LLP Seattle, Washington `''�'"` ORDINANCE N0. 5754 �` TABLE OF CONTENTS* PaQe Section 1. Definitions and Interpretation ofTerms.................................................................2 Section 2. Authorization of Bonds and Bond Oetails...............................................................8 Section 3. Registration, Exchange and Payments....................................................................8 Section 4. Redemption Prior to Maturity and Purchase of Bonds.........................................14 Section5. Form of Bonds........................................................................................................I8 Section 6. Execution of Bonds................................................................................................20 Section 7. Refunding Plan;Application of Bond Proceeds.....................................................21 Section8. Tax Covenants........................................................................................................23 Section 9. Bond Fund and Provision for Tax Levy Payments .................................................26 Section10. Defeasance ............................................................................................................27 Section11. Sale of Bonds .........................................................................................................28 Section 12. Undertaking to Provide Ongoing Disclosure.........................................................30 Section 13. Lost, Stolen or Destroyed Bonds...........................................................................35 Section 14. Severability; Ratification........................................................................................35 Section 15. Effective Date of Ordinance ..................................................................................36 * This Table af Contents is provided for convenience only and is not a part of this ordinance. -1- O4/14115 � � CITY OF RENTON, WASHINGTON ORDINANCE NO. 5754 AN ORDINANCE OF THE CITY OF RENTON, WASHINGTON, PROVIDING FOR THE ISSUANCE OF ONE OR MORE SERIES OF LIMITED TAX GENERAL OBLIGATiON REFUNDING BONDS OF THE CITY IN THE QGGREGATE PRINCIPAL AMOUNT OF NOT TO EXCEED $14,000,000 TO REFUND CERTAIN OUTSTANDING LIMITED TAX GENERAL OBLIGATI�N BONDS AND TO PAY COSTS OF ISSUING THE BONDS; AND DELEGATING THE AUTHORITY TO APPROVE THE FINAL TERMS OF THE BONDS. WHEREAS, the City of Renton, Washington (the "City"), has outstanding its Limited Tax General Obligation Bonds, 2006, issued on August 8, 2006, pursuant to Ordinance No. 5215 adopted by the City Council (the "Council") of the City on July 17, 2006 (the "2006 Bond Ordinance"), which remain outstanding as follows: Maturity Dates (December 1) Principal Amounts Interest Rates 2015 $ 700,000 5.25 % 2016 750,000 4.30 2017 775,000 5.00 2019* 1,670,000 5.00 2020 900,000 5.00 2021 945,000 5.00 Z�22 1,000,000 5.25 2Q23 1,04Q,000 5.25 2024 1,095,000 5.25 2028* 4,975,000 5.00 * Term Bonds. (the "2006 Bonds"j; and WHEREAS, the 2006 Bond Ordinance provides that the City may call the 2006 Bonds maturing on or after December 1, 2017 (the "Refunding Candidates"), for redemption on or ""'�+'" ORDINANCE N0. 5754 ``""'g after December 1; 2016, in whole or in part on any date, at the price of par plus accrued interest, if any,to the date of redemption; and WHEREAS, after due consideration it appears that all or a portion of the Refunding Candidates (the "Refunded Bonds") may be defeased and refunded by the proceeds of limited tax general obligation bonds at a savings to the City and its taxpayers; and WHEREAS, the Council deems it in the best interest of the City to issue one or more series of limited tax general obligation refunding bonds in the aggregate principal amount of not to exceed $14,000,400 (the "Bonds") to redeem and defease the Refunded Bonds and to pay costs of issuing the Bonds; and WHEREAS, the Council wishes to delegate authority to the Mayor, Chief Administrative Officer and Finance Director (each, a "Designated Representative"), for a limited time, to approve the interest rates, maturity dates, redemption terms and principal maturities for the Bonds within the parameters set by this ordinance, in order to effect such a refinancing; and WHEREAS, the City expects to receive a proposal from Piper laffray & Co. (the "Underwriter") to underwrite the Bonds, and now desires to issue and sell the Bonds to the Underwriter as set forth herein; NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF RENTON, WASHINGTON, DOES ORDAIN AS FOLLOWS: Section 1. Definitions and Interpretatian of Terms. (a) Definitions. As used in this ordinance, the following words shall have the following meanings: Acquired Obligations means the Government Obligations acquired by the City under -�- oan a�,a ``�` ORDINANCE NO. 5754 ""� the terms of this ordinance and the Escrow Agreement to effect the defeasanee and refunding of the Refunded Bonds. Beneficial Owner means any person that has or shares the power, directly or indirectly to make investment decisions concerning ownership of any Bonds (including persons holding Bonds through nominees, depositories or other intermediaries). Bond Fund means the "City of Renton Limited Tax General Obligation Bond Debt Service Fund, 2015" authorized to be created pursuant to Section 9. Bond Purchase Contract means the contract for the purchase of the Bonds between the Underwriter and City, executed pursuant to Section 11. Bond Register means the registration books showing the name, address and tax identification number of each Registered Owner of the Bonds, maintained for the Bonds in the manner required pursuant to Section 149(a) of the Code. eond Registrar means, initially, the fiscal agent of the State of Washington, for the purposes of registering and authenticating the Bonds, maintaining the Bond Register, effecting transfer of ownership of the Bonds and paying interest on and principal of the Bonds. Bond Vear means each one-year period that ends on the date selected by the City. The first and last Bond Years may be short periods. If no day is selected by the City before the earlier of the final maturity date of the Bonds or the date that is five years after the date of issuance of the Bonds, Bond Years end on each anniversary of the date of issue and on the final maturity date of the Bonds. Bonds mean the not to exceed $14,OOO,Q00 aggregate principal amount of City of Renton, Washington, Limited Tax General Obligation Refunding Bonds, Series 2015(_], or -3- oana,a `"'�+'` ORDINANCE N0. 5754 `� other series designation as approved by a Designated Representative, issued pursuant to this ordinance. Call Date means December 1, 2016. City means the City of Renton, Washington, a municipal corporation duly organized and existing by virtue of the laws of the State of Washington. Code means the Internal Revenue Code of 1986, as amended, and shall include all applicable regulations and rulings relating thereto. Commission means the Securities and Exchange Commission. Councit means the City Council as the general legislative authority of the City, as duly and regularly constituted from time to time. Designated Representative means the Mayor, the Chief Administrative Officer and the Finance Director of the City, and any successor to the functions of such offices. The signature of one Designated Representative shall be sufficient to bind the City. DTC means The Depository Trust Company, New York, New York, a (imited purpose trust company organized under the laws of the State of New York, as depository for the Bonds pursuant to Section 3. Escrow Agent means U.S. Bank National Association, Seattle, Washington. Escrow Agreement means the Escrow Deposit Agreement between the City and the Escrow Agent, executed pursuant to Section 7. Federal Tax Certificate means the certificate executed by a Designated Representative setting forth the requirements of the Code for maintaining the tax exemption of interest on any series of Tax-Exempt Bonds, and attachments thereto. -4- oa�ar,s � ORDINANCE N0. 5754 � Finance Director shal) mean the City's Finance and Information Services Administrator or the successor to suth officer. Government Obligations mean those obligations now or hereafter defined as such in chapter 39.53 RCW. Letier of Representations means the blanket issuer letter of �epresentations from the City to DTC. MSRB means the Municipal Securities Rulemaking Board or any successors to its functions. Net Proceeds, when used with reference to any series of Tax-Exempt Bonds, mean the principal amount of such Tax-Exempt Bonds, plus accrued interest and original issue premium, if any, and less original issue discount, if any. Private Person means any natural person engaged in a trade or business or any trust, estate, partnership, association, company or corporation. Private Person Use means the use of property in a trade or business by a Private Person if such use is other than as a member of the general public. Private Person Use includes ownership of the property by the Private Person as well as other arrangements that transfer to the Private Person the actual or beneficial use of the property (such as a lease, management or incentive payment contract or other special arrangement) in such a manner as to set the Private Person apart from the general public. Use of property as a member of the general public includes attendance by the Private Pe�san at municipal meetings or business rental of property to the Private Person an a day-to-day basis if the rental paid by such Private Person is the same as the rental paid by any Private Person wha desires to rent the property. Use of -5- oai,an s `�° ORDINANCE N0. 5754 `"� property by nonprofit community groups or community recreationai �roups is not treated as Private Person Use if such use is incidental to the governmentai uses of property, the property is made available for such use by all such community groups on an equal basis and such community groups a�e charged oniy a de minimis fee to cover custodial expenses. Refunded Bonds mean those Refunding Candidates designated by a Designated Representative for refunding pursuant to Section 7 and Section 11. Refunding Account means the account by that name established pursuant to Section 7. Refunding Candidates mean the 2006 Bonds maturing on or after December 1, 2017, as shown in the recitals to this ordinance. Registered Owner means the person named as the registered owner of a Bond in the Bond Register. For so lang as the Bonds are held in book-entry only form, DTC shat! be deemed to be the sole Registered Owner. Rule means the Commission's Rule 15c2-12 under the Securities Exchange Act of 1934, as the same may be amended from time to time. Taxable Bonds means any Bonds determined to be issued on a taxable basis pursuant to Section 11. Fax-Exempt Bonds means any Bonds determined to be issued on a tax-exempt basis under the Code pursuant to Section 11. 2006 Bond Ordinance means �rdinance No. 5215 adopted by the Council on Jufy 17, 2006, authorizing the issuance af the 2006 Bonds. -6- oana�,s `"'�'' ORDINANCE NO. 5754 "'� 2006 Bonds mean the Limited Tax General Obligation Bonds, 2Q06 of the City, issued on August 8, 2006, pursuant to the 2006 Bond (?rdinance as described in the recitals of this ordinance. Underwriter means Piper laffray& Co. (bj Interpretation. In this ordinance, unless the context otherwise requires: (1) The terms "hereby," "hereof," "hereto," "herein," "hereunder" and any similar terms, as used in this ordinance, refer to this ordinance as a whofe and not to any particular article, section, subdivision or clause hereof, and the term "hereafter" shall mean after, and the term "heretofore" shall mean before,the date of this ordinance; (2) Words of the masculine gender shall mean and include correlat+ve words of the feminine and neutral genders and words importing the singular number shall mean and include the plural number and vice versa; (3) Words importing persons shall include firms, associations, partnerships (including limited partnershipsj, trusts, c�rporations and other tegal entities, including public bodies, as well as natural persons; (4) Any headings preceding the text of the several articles and sections of this ordinance, and any table of contents or marginal notes appended to copies hereof, shall be solely for convenience of reference and shall not constitute a part of this ordinance, nor shall they affect its meaning, construction or effect; and (5) All references herein to "articles," "sections" and other subdivisions or clauses are to the corresponding articles, sections, subdivisions or clauses hereof. ~�— oanai,s �'` ORDINANCE N0. 5754 � Section 2. Authorization of Bonds and Bond Details. For the purpose of refunding the Refunded Bonds and paying costs of issuance of the Bonds, the City is hereby authorized to issue a�d sell one or more series of limited tax general obligation refunding bonds in the aggregate principal amount of not to exceed $14,000,000(the "Bonds"). The Bonds shall be general obfigations of the City, shall be designated "City of Renton, Washington, Limited Tax General Obligation Refunding Bonds, Series 2015[_)" or other such designation as set farth in the Bond Purchase Contract and approved by a Designated Representative. The Bonds of a series shall be dated as of their date of initial delivery; shall be fully registered as to both principal and interest; shall be in the denomination of$5,000 each, or any integral multiple thereof, within a maturity; shall be numbered separately in such manner and with any additional designation as the Bond Registrar deems necessary for purposes of identification; and shall bear interest payable on the dates set forth in the Bond Purchase Contract; and shall mature on the dates and in the pri�cipal amounts set forth in the Bond Purchase Contract and as approved by a Designated Representative pursuant to Section 11. The Bonds of any of the maturities may be combined and issued as term bonds, subject to mandatory redemption as provided in the Bond Purchase Contract. Section 3. Re�istration, Exchan�e and Pavme�ts. (a) Bond Registrar/Bond Register. The City hereby specifies and adopts the system of registration approved by the Washington State Finance Committee from time to time through the appointment of a state fiscal agent. The City shalt cause a bond register to be maintained by the Bond Registrar. So long as any Bonds remain outstanding, the Bond -$- oa,a,s �"`' ORDINANCE N0. 5754 � Registrar shall make all necessary provisions to permit the exchange or registration or transfer of Bonds at its designated corporate trust office. The Bond Registrar may be removed at any time at the option of the Finance Director upon prior notice to the Bond Registrar and a successor Bond Registrar appointed by the Finance Director. No resignation or removal of the Bond Registrar shall be effective until a successor shall have been appointed and until the successor Bond Registrar shall have accepted the duties of the Bond Registrar hereunder. 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 and to carry out all of the Bond Registrar's powers and duties under this ord'+nance. The Bond Registrar shall be responsible for its representations contained in the Certificate of Authentication of the Bonds. (b) Registered Ownership. The City and the Bond Registrar, each in its discretion, may deem and treat the Registered Owner of each Band as the absolute owner thereof for all purposes (except as provided in Section 12), and neither the City nor the Bond Registrar sha{I be affected by any notice to the contrary. Payment of any such Bond shall be made only as described in Section 3(h), but such Bond may be transferred as herein provided. All such payments made as described in Section 3(h} shall be valid and shall satisfy and discharge the liability of the City upon such Bond to the extent of the amount or amounts so paid. (c) DTC Acceptance/Letters of Represenrations. The Bonds initially shall be held in fully immobilized form by DTC acting as depository. To induce DTC to accept the Bonds as eligible for deposit at DTC, the City has executed and delivered to DTC a Blanket Issuer Letter of Representations. Neither the City nor the Bond Registrar will have any responsibility or -9- OM14/15 �" ORDINANCE NO. 5754 `'�"`' obligation to DTC participants or the persons for whom they act as nominees (or any successor depository) with respect to the Bonds in respect of the accuracy of any records maintained by DTC (or any successor depository) or any DTC participant, the payment by DTC (or any successor depository) or any DTC participant of any amount in respect of the principa) of or interest on Bonds, any notice which is permitted or required to be given to Registered Owners under this ordinance (except such notices as shall be required to be given by the City to the Bond Registrar or to DTC (or any successor depository)j, or any consent given or other action taken by DTC (or any successor depository) as the Registered Owner. For so long as any Bonds are held in fully-immobilized form hereunder, DTC or its successor depository shall be deemed to be the Registered Owner for alf purposes hereunder, and all references herein to the Registered Owners shall mean DTC (or any successor depository) or its nominee and shall not mean the owners of any beneficiaf interest in such Bonds. If any Bond shall be duly presented for payment and funds have not been duly provided by the City on such applicabfe date, then interest shall continue to accrue thereafter on the unpaid principal thereof at the rate stated on such Bond until it is paid. (d) Use of Depository. (1) The Bonds shall be registered initially in the name of "Cede & Co.", as nominee of DTC, with one Bond maturin�on each of the maturity dates for the Bonds within a series in a denomination corresponding to the total principa! therein designated to mature on such date. Registered ownership of such immobilized Bonds, or any portions thereaf, may not thereafter be transferred except (A) to any successor of DTC or its nominee, provided that any such successor shall be qualified under any applicable laws to provide the service proposed to -10- oanans '`""�'' ORDINANCE N0. 5754 �"`' be provided by it; (B)to any substitute depository appointed by the Finance Director pursuant to subsection (2) betow or such substitute depository's successor; or (C)to any person as pravided in subsection (4) below. (2) Upon the resignation of DTC or its successor (or any substitute depasitory or its successor) from its functions as depository or a determination by the Finance Director to discontinue the system of book entry transfers through DTC or its successor(or any substitute depository or its successor), the Finance Director may hereaRer appoint a substitute depository. Any such substitute depository shafl be qualified under any applicable laws to provide the services proposed to be provided by it. (3) In the case of any transfer pursuant to clause (Aj or (B) of subsection (1) above, the Bond Registrar shall, upon receipt of atl outstanding Bonds of a series, together with a written request on behalf of the Finance Director, issue a single new Bond for each maturity of that series then outstanding, registered in the name of such successor or such substitute depository, or their nominees, as the case may be, all as specified in such written request of the Finance Director. (4) In the event that (A) DTC or its successor (or substitute depository or its successor) resigns from its functions as depository, and no substitute depository can be obtained, or (B)the Finance Directar determines that it is in the best interest of the beneficial owners of the Bonds that such owners be able to obtain such Bonds in the form of eond certificates, the ownership of such Bonds may then be transferred to any person or entity as herein provided, and shall no longer be held by a depository. The Finance Director shall deliver a written request to the Bond Registrar, together with a supply of physical Bonds, to issue -11- oa,a,s �"'' ORDINANCE N0. 5754 � Bonds as herein provided in any authorized denomination. Upon receipt by the Bond Registrar of all then outstanding Bonds together with a written request on behalf of the Finance Director to the Bond Registrar, new Bonds of such 5eries shall be issued in the appropriate denominations and registered in the names of such persons as are requested in such written request. (e) Registration of Transfer of Ownership or Exchange; Change in Denominations. The transfer of any Bond may be registe�ed and Bonds may be exchanged, but no transfer of any such Bond shall be valid unless it is surrendered to the Bond Registrar with the assignment form appearing on such Bond duly executed by the Registered Owner or such Registered Owner's duly authorized agent in a manner satisfactory to the Bond Registrar. Upon such surrender, the Bond Registrar shall cancel the surrendered Bond and shall authenticate and deliver, without charge to the Registered Owner or transferee therefor, a new Bond (or Bonds at the option of the new Registered Owner) of the same date, series, maturity and interest rate and for the same aggregate principal amount in any authorized denomination, naming as Registered Owner the person or persons listed as the assignee on the assignment form appearing on the surrendered Bond, in exchange for such surrendered and cancelled Bond. Any Bond may be surrendered to the Bond Registrar and exchanged, without charge, for an equal aggregate principal amount of Bonds of the same date, series, maturity and interest rate, in any authorized denomination. The Bond Registrar shall not be obligated to register the transfer or to exchange any 6ond during the 15 days preceding any interest payment or principal payment date any such Bond is to be redeemed. -12- oan an s � ORDINANCE NO. 5754 �`""'' (f) Bond Registrar's Ownership of Bonds. The Bond Registrar may become the Registered Owner of any Bond 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 a member of, or in any other capacity with respect to, any committee formed to protect the right of the Registered Owners of Bonds. (g) Registration Covenant. The City covenants that, until all Bonds have been surrendered and canceled, it will maintain a system for recording the awnership of each Bond that complies with the provisions of Section 149 of the Code. (h) P/ace and Medium of Payment. 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 calculated on the basis of a year of 360 days and twelve 30-day months. For so long as all Bonds are held by a depository, payments of principal and interest thereon shall be made as provided in accordance with the operational arrangements of DTC referred to in the Letter of Representations. In the event that the Bonds are no longer held by a depository, interest on the Bonds shall be paid by check or draft mailed to the Registered Owners at the addresses for such Registered Owners appearing on the Bond Register on the fifteenth day of the month preceding the interest payment date, or upon the written request of a Registered Owner of more than $1,0OO,OQO of Bonds (received by the Bond Registrar at least 15 days prior to the applicable payment date), such payment shall be made by the Bond Registrar by wire transfer to the account within the United States designated by the Registered Owner. Principal of the Bonds shall be payable upon presentation and surrender of such Bonds by the Registered Owners at the designated office of the Bond Registrar. -13- oa+a�s �`�"''` ORDINANCE N0. 5754 � If any Bond shall be duly presented for payment and funds have not been duly provided by the City on such applicable date, then interest shall continue to accrue thereafter on the unpaid principal thereof at the rate stated on such Bonds until it is paid. Section 4. Redemation Prior to Maturitv and Purchase of Bonds. {aj Mandatory Redemption of Term Bonds and Optiona/ Redemption, if any. The Bonds of a series sha{I be subject to optional redemption on the dates, at the prices and under the terms set forth in the Bond Purchase Contract approved by a Designated Representative pursuant to Section 11. The Bonds of a series shall be subject to mandatory redemption to the extent, if any, set forth in the Bond Purchase Contract and as approved by a Designated Representative pursuant to Section 11. (b) Purchase of Bonds. The City reserves the right to purchase any of the Bonds offered to it at any time at a price deemed reasonable by a Designated Representative. (c) Se/ection of 8onds for Redemption. For as long as the Bonds are held in book-entry only form, the selection of particular Bands within a series and a maturity to be redeemed shall be made in accordance with the operational arrangements then in effect at DTC. If the Bonds are no longer he�d in uncertificated form, the selection of such Bonds to be redeemed and the surrender and reissuance thereof, as applicable, shall be made as provided in the following provisions of this subsection (c). If the City redeems at any one time fewer than all of the Bonds having the 5ame maturity date within a series, the particular Bonds or portions of Bonds of such series and maturity to be redeemed shafl be selected by lot (or in such manner determined by the Bond Registrar) in increments of$5,000. In the case of a Bond of a denomination greater than $5,000, the City and the Bond Registrar shall treat each Band -14- aanane � ORDINANCE N0. 5754 � of such series as representing such number of separate Bonds each of the denomination of $5,000 as is obtained by dividing the actual principal amount of such Bond by $5,000. in the event that only a portion of the principai sum of a Bond is redeemed, upon surrender of such Bond at the designated office of the Bond Registrar there shall be issued to the Registered Owner, without charge therefor, for the then unredeemed balance of the principal sum thereof, at the option of the Registered Owner, a Bond or Bonds of like series, maturity and interest rate in any of the denominations herein authorized. (d) No[ice of Redemption. (1) t3fficial Notice. Far so long as the Bonds are held in uncertificated form, notice of redemption (which notice may be conditional) shall be given in accordance with the operational arrangements of DTC as then in effect, and neither the City nor the Bond Registrar will provide any notice of redemption to any Beneficial Owners. Thereafter (if the Bonds are no longer held in uncertificated form), notice of redemption shall be given in the manner hereinafter provided. Unless waived by any owner of Bonds to be redeemed, official notice of any such redemption (which redemption may be conditioned by the Bond Registrar on the receipt of sufficient funds for redemption or otherwise) shall be given by the Bond Registrar on behalf of the City by mailing a copy of an official redemption natice by first class mail at least 20 days and not more than 60 days priar to the date fixed for redemption to the Registered Owner of the Bond or Bonds to be redeemed at the address shown on the Register or at such other address as is furnished in writing by such Registered Owner to the Bond Registrar. All official notices of redemption shall be dated and shall state: (A) the redemption date, -15- oana��s �' ORDINANCE N0. 5754 � (B) the redemption price, (Cj if fewer than all outstanding Bonds a�e to be redeemed, the identification by series and maturity (and, in the case of partial redemption, the respective principal amounts) of the Bonds to be redeemed, (D) any conditions to redemption; (E) that (unless such notice is conditional) on the redemption date the redemption price will become due and payable upon each such Bond or portion thereof called for redemption, and that interest thereon shall cease to accrue from and after said date, and (F) the place where such Bonds are to be surrendered for payment of the redemption price, which place of payment shall be the designated office of the Bond Registrar. On or prior to any redemption date, unless any condition to such redemption has not been satisfied or waived or notice of such redemption has been rescinded, the City shall deposit with the Bond Registrar an amount of money sufficient to pay the redemption price of all the Bonds or portions of Bonds which are to be redeemed on that date. The City retains the right to rescind any redemption notice and the related optional redemption of Bonds by giving notice of rescission to the affected registered owners at any time on or prior to the scheduled redemption date. Any notice of optional redemption that is so rescinded shall be of no effect, and the Bonds for which the notice of optional redemption has been rescinded shall remain outstanding. -16- oa�,ans � ORDINANCE N0. 5754 � (2) Effect_of Notice; Bonds Due. if an unconditional notice of redemption has been given and not rescinded, or if the conditions set forth in a conditional notice of redemption have been satisfied or waived, the Bonds or portions of Bonds to be redeemed shall, on the redemption date, become due and payable at the redemption price therein specified, and, if the Bond Registrar then holds sufficient funds to pay such Bonds at the redemptian price, then from and after such date such Bands or portions of Bonds shall cease to bear interest. Upon surrender of such Bonds for redemption in accordance with said notice, such Bonds shall be paid by the 8ond Registrar at the redemption price. Installments of interest due on or prior to the redemption date shall be payabfe as herein provided for payment of interest. All Bonds which have been redeemed shall be canceled by the Bond Registrar and shall not be reissued. (3j Additional Notice. In addition to the foregoing notice, further notice shall be given by the City as set out below, but no defect in said further notice nor any failure to give all or any portion of such further notice shall in any manner defeat the effectiveness of a call for redemption if notice thereof is given as above prescribed. Each further notice of redemption given hereunder shall contain the information required above for an official notice of redemption plus (A) the CUSIP numbers of all Bonds being redeemed; (B}the date of issue of the Bonds as originally issued; (C)the rate of interest borne by each Bond being redeemed; (D) the series and maturity date of each Bond being redeemed; and (E) any other descriptive information needed to identify accurately the Bonds being redeemed. Each further notice of redemption may be sent at least 20 days before the redemption date to each party entitled to receive notice pursuant to Section 12 and with such additional information as the City shall -17- oa,ai�s ``""'' ORDINANCE NO. 5754 `� deem appropriate, but such mailings shall not be a condition precedent to the redemption of such Bonds. (4) Amendment of Notice Provisions. The foregoing notice provisions of this Section 4, including but not limited to the information to be included in redemption notices and the persons designated to receive notices, may be amended by additions, deletions and changes in order to maintain compliance with duly promulgated regulations and recommendations regarding notices of redemption of municipal securities. Section 5. Form of Bonds. The Bonds shall be in substantially the following form: UNITEO STATES OF AMERICA N0. $ STATE OF WASHINGTON CITY OF RENTON LIMfTED TAX GENERAL OBLIGATION REFUNDING BOND, SERIES 2015[ ] INTEREST RATE: % MATURITY DATE: CUSIP NO.: REGISTERED OWNER: CEDE & CO. PRINCIPAL AMOUNT: The City of Renton, Washington (the "City"), hereby acknowledges itself to owe and for value received promises to pay to the Registered Owner identified above, or registered assigns, on the Maturity Date identified above, the Principal Amount indicated above and to pay interest thereon from . 2015, or the most recent date to which interest has been paid or duly provided for until payment of this bond at the Interest Rate set forth above, payable on 1, 2015, and semiannualfy thereafter on the first days of each succeeding and . Both principal of and interest on this bond are payable in lawful money of the United States of America. The fiscal agent of the State of Washington has been appointed by the City as the authenticating agent, paying agent and registrar for the bonds of this issue (the "Bond Registrar"). For so long as the bonds of this issue are held in fully immobilized form, payments of principal and interest thereon shall be made as provided in accordance with the operational arrangements of The Depository Trust Company ("�TC") referred to in the Blanket Issuer Letter of Representations (the "Letter of Representations") from the City to DTC. -18- oan an e `""'�� ORDINANCE N0. 5754 � The bonds of this issue are issued under and in accordance with the provisions of the Constitution and applicable statutes of the State of Washington and Ordinance No. duly passed by the City Council on April 13, 2a15 (the "Bond Ordinance"). Capitalized terms used in this bond have the meanings given such terms in the Bond Ordinance. This bond shall not be valid or become obligatory for any purpose or be entitled to any security or benefit under the Bond Ordinance until the Certificate of Authentication hereon shall have been manually signed by or on behalf of the Bond Registrar or its duly designated agent. This bond is one of an authorized issue of bonds of like series, date, tenar, rate of interest and date of maturity, except as to number and amount in the aggregate principal amount of$ and is issued pursuant to the Bond Ordinance to provide a portion of the funds necessary (a)to refund and defease certain limited tax general obligation bonds of the City, and (b) to pay costs of issuance. [Pursuant to the Bond Ordinance, the City has also authorized the issuance of its Limited Tax General Obligation Refunding Bands, Series 2015[ ] in the aggregate principa) amount of$ for these purposes.] [The bonds of this issue are not subject to optional redemption.j[The bonds of this issue are subject to redemption as provided in the Bond Ordinance and the Bond Purchase Contract.] The City hereby irrevocably covenants and agrees with the owner of this bond that it will include in its annual budget and levy taxes annually, within and as a part of the tax levy permitted to the City without a vote of the electorate, upon all the property subject to taxation in amounts sufficient,together with other money legally available therefor,to pay the principal af and interest on this bond as the same shalf become due. The full faith, credit and resources of the City are hereby irrevocably pfedged for the annual Ievy and collection of such taxes and the prompt payment of such principal and interest. [The bonds of this issue have [not] been designated by the City as "qualified tax-exempt obligations"for investment by financial institutions under Section 265(b)of the Code.J The pledge of tax levies for payment of principal of and interest on the bonds may be discharged prior to maturity of the bonds by making provision for the payment thereof on the terms and conditions set forth in the Bond Ordinance. It is hereby certified that all acts, conditions and things required by the Constitution and statutes of the State of Washington to exist and to have happened, been done and performed precedent to and in the issuance of this bond exist and have happened, been done and performed and that the issuance of this bond and the bonds of this issue does not violate any constitutional, statutory or other limitation upon the amount of bonded indebtedness that the City may incur. -19- oa�,ar,s � ORDINANCE N0. 5754 �`� IN WITNESS WHEREOF, the City of Renton, Washington, has caused this bond to be executed by the manual or facsimile signatures of the Mayor and the City Cierk and the seal of the City imprinted, impressed or otherwise reproduced hereon as of this day of , 2015. [SEAL] CITY OF RENTON,WASHINGTON By /s/manual or facsimife Mayor ATTEST: /s/manual or facsimile City Clerk The Bond Registrar's Certificate of Authentication on the Bonds shall be in substantially the following form: CERTiFICATE OF AUTHENTICATION This bond is one of the bonds described in the within-mentioned Bond Ordinance and is one of the Limited Tax General Obligation Refunding Bonds, Series 2015[ ], of the City of Renton, Washington, dated , 2015. WASHINGTON STATE FISCAL AGENT, as Bond Registrar gy Section 6. Execution of Bonds. The Bonds shall be executed on behalf of the City with the manual or facsimile signatures of the Mayor and City Clerk of the City and the seal of the City shall be impressed, imprinted or otherwise reproduced thereon. Only such Bonds as shall bear thereon a Certificate of Authentication in the form hereinbefore recited, manually executed by the Bond Registrar, shall be valid or obligatory far any purpose or entitled to the benefits of this ordinance. Such Certificate of Authentication -za- a�,,,,,5 � ORDINANCE N0. 5754 � shall be conciusive 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 of the officers who shall have executed the Bonds shali cease to be an officer or officers of the City before the Bonds so signed shall have been authenticated or delivered by the Bond Registrar, or issued by the City, such Bonds may nevertheless be authenticated, delivered and issued and upon such authentication, delivery and issuance, shall be as binding upon the City as though those who signed the same had continued to be such officers of the City. Any Bond may be signed and attested on behalf of the City by such persons who at the date of the actual execution of such Bond, are the proper officers of the City, although at the original date of such Bond any 5uch person shall not have been such officer of the City. Section 7. Refundin�Plan;Application of Bond Proceeds. (a) Refunding Plan. For the purpose of realizing a debt service savings and benefiting the taxpayers of the City, the Council proposes to refund and defease the Refunded Bonds as set forth herein. The Refunded Bonds shall incfude all or a portion of the Refunding Candidates as designated by a Designated Representative and set forth in the Bond Purchase Contract. Proceeds of the Bonds and other available funds of the City shall be deposited with the Escrow Agent pursuant to the Escrow Agreement to be used immediately upon receipt thereof to defease the Refunded Bonds as authorized by the 2006 Bond Ordinance and to pay costs of issuance of the Bonds. The net proceeds deposited with the Escrow Agent shall be used to defease the Refunded Bonds and discharge the obligations thereon by the purchase of certain Government -21- 04/t 41?5 �° ORDINANCE N0. 5754 � Obligations (which obligations so purchased, are herein called "Acquired Obligations"), bearing such interest and maturing as to principal and interest in such amounts and at such times which, together with any necessary beginning cash balance, will provide for the payment of: (1) interest on the Refunded Bonds due and payable on and prior to the Call Date; and (2) tF�e redemption prices of the Refunded Bonds on the Call Date. Such Acquired Obligations shall be purchased at a yield not greater than the yield permitted by the Code and regulations relating to acquired obligations in connection with refunding bond issues. (b) Escrow Agent/Escrow Agreement. The City hereby appoints U.S. Bank National Association, Seattle, Washington, as the Escrow Agent for the Refunded 8onds (the "Escrow Agent"). A cash balance, if any, and the Acquired Obligations shall be deposited irrevocably with the Escrow Agent in an amount sufficient to defease the Refunded Bonds. The proceeds of the Bonds remaining after acquisition of the Acquired Obligations and provision for the necessary cash balance shall be utilized to pay expenses of the acquisition and safekeeping of the Acquired Obligations and expenses of the issuance of the Bonds. In order to carry out the purposes of this Section 7, each Designated Representative is authorized and directed to execute and deliver to the Escrow Agent the Escrow Agreement. (c} Cal! for Redemption of Refunded eonds. The City hereby catls the Refunded Bonds for redemption on their Call Date in accordance with the provisions of the 2006 Bond Ordinance authorizing the redemption and retirement of the 2006 Bonds prior to their fixed maturities. Said defeasance and call for redemption of the Refunded Bonds shall be -22- oai�ai,s ```� ORDINANCE N0. 5754 � irrevocable after the issuance of the Bonds and delivery of the Acquired Obiigations to the Escrow Agent. The Escrow Agent is hereby authorized and directed to provide for the giving of notices of the redemption of the Refunded Bonds in accordance with the applicable provisions of the 2006 Bond Ordinance. The costs of publication of such notices shall be an expense of the City. The Escrow Agent is hereby autharized and directed to pay to the Finance Director, or, at the direction of the Finance Director, to the paying agent for the Refunded Bonds, sums sufficient to pay, when due, the payments specified in this Section 7. All such sums shatl be paid from the money and Acquired Obiigations deposited with the Escrow Agent, and the income therefrom and proceeds thereof. All such sums so paid to said Finance Director shall be credited to the Refunding Account. A!I moneys and Acquired Obligations depasited with the Escrow Agent and any income therefrom shall be held, invested (but only at the direction of the Finance Director) and applied in accordance with the provisions of this ardinance and with the laws of the State of Washington for the benefit of the City and owners of the Refunded Bonds. The City will take such actions as are found necessary to see that all necessary and proper fees, compensation and expenses of the Escrow Agent for the Refunded Bonds shall be paid when due. Section 8. Tax Covenants. The City covenants that it will not take or permit to be taken on its behalf any action that would adversely affect the exemption from federal income taxation of the interest on the Tax-Exempt Bonds and will take or require to be taken such acts as may reasanably be within its ability and as may from time to time be required under -23- oa,a,s �""° ORDINANCE N0. 5754 � applicable faw to continue the exemption from federal income taxation of the interest on the Tax-Exempt Bonds. (a� Arbitrage Covenant. Without limiting the generality of the foregoing, the City covenants that it will not take any action or fail to take any action with respect to the proceeds of the sale of the Tax-Exempt Bonds or any other funds of the City which may be deemed to be proceeds of the Tax-Exempt Bonds pursuant to Section 148 of the Code and the regulations promulgated thereunder which, if such use had been reasonably expected on the dates of delivery of the Tax-Exempt Bo�ds to the initial purchase�s thereof, would have caused the Tax- Exempt Bonds to be treated as "arbitrage bonds" within the meaning of such term as used in Section 148 of the Code. The City will comply with the requirements of Section 148 of the Code and the applicable regulations thereunder throughout the term of the Tax-Exempt Bonds. (bj Private Person Use Limitation for Bonds. The City covenants that for as long as the Tax-Exempt Bonds are outstanding, it will not permit: (1) More than 10% of the Net Proceeds of the Tax-Exempt Bonds to be allocated to any Private Person Use; and (2) More than 10% of the principal or interest payments on the Tax-Exempt Bonds in a Bond Year to be directly or indirectly: (Aj secured by any interest in property used or to be used for any Private Person Use or secured by payments in respect of property used or to be used for any Private Person Use, or (B) derived from payments (whether or not made to the City} in respect of property, or borrowed money, used or to be used for any P�ivate Person Use. -24- oanai,s � ORDINANCE N0. 5754 � The City further covenants that, if: (3) More than five percent of the Net Proceeds of the Tax-Exempt Bonds are allocable to any Private Person Use; and (4) More than five percent of the pri�cipaf or interest payments on the Tax- Exempt Bonds in a Bond Year are (under the terms of this ordinance or any underlying arrangement) directly or indirectly: (A) secured by any interest in praperty used or to be used for any Private Person Use or secured by payments in respect of property used or to be used for any Private Person Use, or (B) derived from payments (whether or not made to the City) in respect of property, or borrowed money, used or to be used for any Private Person Use, then, (i) any Private Person Use of projects described in subsection (3j hereof or Private Person Use payments described in subsection (4) hereof that is in excess of the five percent limitations described in such subsections (3) or (4) will be for a Private Person Use that is related to the state or tocal governmental use of the projects refunded by the proceeds af the Tax-Exempt Bonds, and (ii)any Private Person Use will not exceed the amount of Net Proceeds of the Tax- Exempt Bonds allocable to the state or Iocal governmental use portion of the projects to which the Private Person Use of such portion of projects refunded by the proceeds of the Tax-Exempt Bonds relate. The City further covenants that it will comply with any limitations on the use of the projects refunded by the proceeds of the Tax-Exempt Bonds by other than state and local governmental users that are necessary, in the opinion of its bond counsel, to preserve the tax exemption of the interest on the Tax-Exempt Bonds. -25- aa�,ans � ORDINANCE N0. 5754 � (c) Modification of Tax Covenanrs. The covenants of this section are specified solely to assure the continued exemption from regular income taxation of the interest on the Tax- Exempt Bonds. To that end, the provisions of this section may be modified or eliminated without any requirement for formal amendment thereof upon receipt of an opinion of the City's bond counsel that such modification or elimination will not adversely affect the tax exemption of interest on any Tax-Exempt Bonds. (d) Designation under Section 265(b). In the Federal Tax Certificate the City may designate any Tax-Exempt Bonds as "qualified tax-exempt obligations" under Section 265(b)(3) of the Code for investment by financial institutions if the City does not expect to issue more than $10,000,000 in qualifying tax-exempt obligations in calendar year 2015. Section 9. 8ond Fund and Provision for Tax Lew Pavments. The City hereby authorizes the creation of a fund to be used for the payment of debt service on the Bonds, designated as the "City of Renton Limited Tax General Obligation Bond Debt Service Fund, 2015" (the "Bond Fund"). No later than the date each payment of principal of or interest on the Bonds becomes due, the City s#�all transmit sufficient funds, from the Bond Fund or from other legal(y available sources, to the Bond Registrar for the payment of such principal or interest. Money in the Bond Fund may be invested in legal investments for City funds. The City hereby irrevocably covenants and agrees for as long as any of the Bonds are outstanding and unpaid that each year it will include in its budget and levy an ad valorem tax upon all the property within the City subject to taxation in an amount that will be sufficient, together with all other revenues and money of the City legally available for such purposes, to pay the principal of and interest on the Bonds when due. -26- oa�,<ns � ORDINANCE N0. 5754 � The City hereby irrevocabiy pledges that the annual tax provided for herein to be levied for the payment af such principal and interest shall be within and as a part of the tax levy permitted to cities without a vote af the people, and that a sufficient portion of each annual levy to be levied and collected by the City prior to the full payment of the principal af and interest on the Bonds will be and is hereby irrevocably set aside, pledged and appropriated for the payment of the principal of and interest on the Bonds. The full faith, credit and resources of the City are hereby irrevocably pledged for the annual levy and collection of said taxes and for the prompt payment of the principal of and interest on the Bonds when due. Section 10. Defeasance. In the event that the City, to effect the payment, retirement or redemption of any Bond, sets aside in the Bond Fund or in another special account, cash or noncallable Government Obligations, or any combination of cash and/or noncallable Government Obligations, in amounts and maturities which, together with the known earned income therefrom, are sufficient to redeem or pay and retire such Bond in accordance with its terms and to pay when due the interest and redemption premium, if any, thereon, and such cash and/or noncallable Government Obligations a�e irrevocably set aside and pledged for such purpose, then no further payments need be made into the Bond Fund for the payment of the principal of and interest on such Bond. The owner of a Bond so provided for shall cease to be entitled to any lien, benefit or security of this ordinance except the right to receive payment of principal, premium, if any, and interest from the Bond Fund or such special account, and such Bond shall be deemed to be not outstanding under this ordinance. -27- oanans � ORDINANCE NO. 5754 � The City shail give written notice of defeasance to the owners of a!I Bonds so provided for within 30 days of the defeasance and to each party entitled to receive notice in accordance with Section 12. Section 11. Sale of Bonds. (aj eond Sa1e. The Bonds shall be sold at negotiated sale to the tJnderwriter pursuant to the terms of the Bond Purchase Contract. Market conditions are fluctuating and, as a result, the most favorable market conditions may occur on a day other than a regular meeting date of the Council. The Council has determined that it would be in the best interest of the City to delegate to the Designated Representatives for a (imited time the authority to approve the final interest rates, aggregate principal amount, principal amounts of each maturity of the Bonds, whether to issue the Bonds in one or more series, whether to designate the Bonds (or the Bonds of a series) as Tax-Exempt or Taxable Bonds, whether to designate the Bonds of a series as "qualified tax-exempt obligations" under Section 265(b)(3) of the Code, selection of the Refunded Bonds, and redemption rights. Each Designated Representative is hereby authorized to determine whether to issue the Bonds in one or more series, whether to designate the Bonds (or the Bonds of a series) as Tax-Exempt or Taxable Bonds, whether to designate the Bonds of a series as "qualified tax- exempt obligations" under Section 265(b)(3) of the Code, and to approve the final interest rates, aggregate principal amount, principal amounts of each maturity of the Bonds, selection of the Refunded Bonds, and redemption rights for the Bonds in the manner provided hereafter so long as: -28- oan an e "�'` ORDINANCE N0. 5754 `""'� (1} the aggregate principal amount of the Bonds does not exceed $14,000,000, (2) the final maturity date for the Bonds is no later than December 1, 2028, (3) the Bonds are sold (in the aggregatej at a price not less than 98%and not greater than 120%, (4) the Bonds are sold for a price that results in a minimum net present value debt service savings over the Refunded Bonds of 8.00%, (5) the true interest cost for the Bonds (in the aggregate) does not exceed 4.00%, and (6) the Bonds conform to all other terms of this ordinance. Subject to the terms and conditions set forth in this Section 11, the Designated Representatives are hereby authorized to execute the Bond Purchase Contract. The signature of one Designated Representative shall be sufficient to bind the City. Foliowing the execution of the Bond Purchase Contract, a Designated Representative or the Finance Director shali provide a report to the Council describing the final terms of the Bonds approved pursuant to the authority delegated in this section. The authority granted to the Designated Representatives by this Section 11 shall expire 120 days after the effective date of this ordinance. If a Bond Purchase Contract for the Bonds has not been executed within 120 days after the effective date of this ordinance, the authorization for the issuance of the Bonds shall be rescinded, and the Bonds shall not be issued nor their sale approved unless such Bands shall have been re-authorized by ordinance of the Council. The ordinance re-authorizing the issuance and sale of such Bonds may be in the form of a new ordinance repealing this -29- oa,a�,s � ORDINANCE N0. 5754 `"""'� ordinance in whole or in part or may be in the form of an amendatory ordinance approving a bond purchase contract or establishing terms and conditions for the authority detegated under this Section 11. (b) Delivery of Bonds; Documentation. Upon the passage and approval of this ordinance, the proper officials of the City, including the Designated Representatives, are authorized and directed to undertake all action necessary fo� the prompt execution and delivery of the Bonds to the Underwriter and further to execute all clasing certificates and documents required to effect the closing and delivery of the Bonds in accordance with the terms of the Bond Purchase Contract. (c) Preliminary and Final Official Statements. The Finance Director is hereby authorized to ratify and to deem final the preliminary Official Statement relating to the Bonds for the purposes of the Rule. The Finance Director is further authorized to ratify and to approve for purposes of the Rule, on behalf of the City, the final Official Statement relating to the issuance and sale of the Bonds and the distribution of the final Official Statement pursuant thereto with such changes, if any, as may be deemed by her to be appropriate. Section 12. Undertakin�to Provide On�oin� Disclosure. (a) Contract/Undertaking. This section constitutes the City's written undertaking for the benefit of the owners, including Beneficial Owners, of the Bonds as required by Section (b)(5)of the Rule. (b) Financial Statements/Operating Data. The City agrees to provide or cause to be provided to the Municipal Securities Rulemaking Board ("MSRB"�, the following annual -3Q- oanans '�"°' ORDINANCE N0. 5754 `"'�'�` financial information and operating data for the prior fiscal year (commencing in 2015 for the fiscal year ended December 31, 2014): (1) Annual financial statements, which statements may or may not be audited, showing ending fund balances for the City's general fund prepared in accordance with the Budgeting Accounting and Reporting System prescribed by the Washington State Auditor pursuant to RCW 43.09.200 (or any successor statute) and generally of the type included in the official statement for the Bonds under the heading "Comparative Statement of Revenues, Expenditures and Changes in Fund Balances"; (2) The assessed valuation of taxable property in the City; (3) Ad valorem taxes due and percentage of taxes collected; (4) Property tax levy rate per$1,000 of assessed valuation; and (5) Outstanding general obligation debt of the City. Items (2)-(5) shall be required only to the extent that such information is not included in the annual financial statements. The information and data described above shall be provided on or before the end of nine months after the end of the City's fiscai year. The City's current fiscal year ends December 31. The City may adjust such fiscal year by providing written notice of the change of fiscal year to the MSRB. In lieu of providing such annual financial information and operating data, the City may cross-reference to other documents available to the public on the MSRB's internet website or filed with the Commission. If not provided as part of the annual financial information discussed above, the City shall provide the City's audited annual financial statement prepared in accordance with the -31- a4n 4�,s "'� ORDfNANCE NO. 5754 � 6udgeting Accounting and Reporting System prescribed by the Washington State Auditor pursuant to RCW 43.09.200 (or any successor statute) when and if available to the MSRB. (c) Listed Events. The City agrees to provide or cause to be provided to the MSRB, in a timely manner not in excess of ten business days after the occurrence of the event, natice of the occurrence of any of the following events with respect to the Bonds: • Principai and interest payment delinquencies; • Non-payment related defaults, if material; • Unscheduled draws on debt service reserves reflecting financial difficulties; • Unscheduled draws on credit enhancements reflecting financial difficulties; � Substitution of credit or liquidity providers, or their failure to perform; � Adverse tax opinions, the issuance by the Internal Revenue Service of proposed or final determinations of taxability, Notices of Proposed Issue (IRS Form 5701- TEB) or other material notices or determinations with respect to the tax status of the Bonds, or other material events affecting the tax status of the Bonds; � Modifications to the rights of Bondholders, if material; • Optional, contingent or unscheduled Bond calls other than scheduled sinking fund redemptions for which notice is given pursuant to Exchange Act Release 34-23856, if material, and tender offers; • Defeasances; • Release, substitution, or sale of property securing repayment of the Bonds, if material; • Rating changes; -32- oana,s �''' ORDINANCE NO. 5754 `"� • Bankruptcy, insolvency, receivership or similar event of the City; • The consummation of a merger, consolidation, or acquisition invalving the City or the sale of all or substantially all of the assets of the City, other than in the ordinary course of business, the entry into a definitive agreement to undertake such an action or the termination of a definitive agreement relating to any such actions, other than pursuant to its terms, if material; and • Appointment of a successor or additional trustee or the change of name of a trustee, if material. (d) Format for Filings with the MSRB. All notices, financial information and operating data required by this undertaking to be provided to the MSRB must be in an electronic format as prescribed by the MSRB. All documents provided to the MSRB pursuant to this undertaking must be accompanied by identifying information as prescribed by the MSRB. (e) Notification Upon Failure to Provide Financial Data. The City agrees to provide or cause to be provided, in a timely manner, to the MSRB notice of its failure to provide the annual financial information described in Subsection (b) above on or prior to the date set forth in Subsection (b) above. (f� Termination/Modificotion. The City's obligations to provide annual financial information and notices of certain listed events shall terminate upon the legal defeasance, prior redemption or payment in full of all of the Bonds. Any provision of this section shall be null and void if the City (1) obtains an opinion of nationally recognized bond counsel to the effect that the portion of the Rule that requires that provision is invalid, has been repeafed -33- oa,ans `�'` ORDINANCE N0. 5754 � retroactively or otherwise does not apply ta the Bonds and (2) notifies the MSRB of such opinion and the cancellation of this section. The City may amend this section with an opinion of nationally recognized bond counsel in accordance with the Rule. In the event of any amendment of this section, the City shall describe such amendment in the next annual report, and shall include a narrative explanation of the reason for the amendment and its impact on the type (or in the case of a change of accounting principles, on the presentation) of financial information or operating data being presented by the City. In addition, if the amendment relates to the accounting principles to be followed in preparing financial statements, (A) notice of such change shall be given in the same manner as for a listed event under Subsection (c), and (B)the annual report for the year in which the change is made shall present a comparison (in narrative form and also, if feasible, in quantitative form) between the financial statements as prepared on the basis of the new accounting principles and those prepared on the basis of the former accounting principles. (g) Bond Owner's Remedres Under This Section. The right of any bondowner ar Beneficial Owner of Bonds to enforce the provisions of this section shall be limited to a right to obtain specific enforcement of the City's obligations under this section, and any failure by the City to comply with the provisions of this undertaking shall not be an event of default with respect to the Bonds. (h) No Default. Except as otherwise disclosed in the City's official statement relating to the Bonds, the City is not and has not been in default in the performance of its obligations of any prior undertaking for ongoing disclosure with respect to its obligations. -34- oa,ans ``�"' ORDINANCE N0. 5754 � Section 13. Lost, Stolen or Destroved Bonds. In case any Bond or Bonds shall be lost, stolen or destroyed, the Bond Registrar may execute and deliver a new Bond or Bonds of like series, date, number and tenor to the Registered Owner thereof upon the Registered Owner's paying the expenses and charges of the City and the Bond Registrar in connection therewith and upon his/her filing with the City evidence satisfactory to the City that such Bond was actually lost, stolen or destroyed and of his/her ownership thereof, and upon furnishing the City and/or the Bond Registrar with indemnity satisfactory to the City and the Bond Registrar. Section 14. Severabilitv; Ratification. If any one or more of the covenants or agreements provided in this ordinance to be performed on the part of the City shall be declared by any court of competent jurisdiction to be contrary to law, then such covenant or covenants, agreement ar agreements, shall be null and void and shall be deemed separable from the remaining covenants and agreements of this ordinance and shall in no way affect the validity of the other provisions of this ordinance or of the Bonds. All acts taken pursuant to the authority granted in this ordinance but prior to its effective date are hereby ratified and confirmed. -35- oanat,e ``�"'' ORDINANCE NO. 5754 `"� Section 15. Effective Date of Ordinance. This ordinance shall go into effect thirty (30) days from the time of final passage as provided by law. PASSED BY THE CITY COUNCIL this 13th day of April, 2015. if� i / : y �..-- �� j'J� �� Jason A. th, CMC; i y Clerk APPROVED BY THE MAYOR this 13th day of April, 2 5. �, � � �� ,�� v . Denis Law, Mayor ,....��it,�t,��,. Appraved as to form: _��Y ��yr0,,,,y;. � r �--Tt.�� " . � � : ;,� _ ,�� : Deanna Gregory �,� � - �� Pacifica Law Group LLP � .� � _ Bond Counsel � � �';-.;"�Rat�v`'��.,��' ,� l ` . 4/17/2 015 (S umma r �,"„�,,�,��.nt��,+��:�,��, Date of Publication: y) -36- oan an s � � SIGNATURE IDENTIFICATION AND NONLITIGATION CERTIFICATE WE, DENIS W. LAW AND JASON A. SETH, the duly chosen, qualified and acting Mayor and City Clerk, respectively, of the City of Renton, Washington (the "City"), DO HEREBY certify that the following-described Limited Tax General Ob(igation Refunding Bonds, Series 2015A (the "2015A Bonds") and Limited Tax General Obligation Refunding Bonds, Series 2015B (Taxable) (the "2015B Bonds" and, together with the 2015A Bonds, the `Bonds") of the City bear our true and correct facsimile signatures. The 2015A Bonds are in the total principal amount of$8,825,000, are dated the date of their delivery, are designated "City of Renton, Washington, Limited Tax General Obligation Refunding Bonds, Series 2015A," are in the denomination of$5,000 each or integral multiples thereof, are fully registered, are numbered, bear interest at the rates per annum set forth in the following schedule, payable on December 1, 2015, and semiannually thereafter on the first days of each succeeding June and December, and mature on December 1 in the years and amounts as follows: Maturity Years Principal Interest (December 1) Amounts Rates 2020 $ 275,000 4.00% 2021 935,000 4.00 2022 975,000 4.00 2023 1,005,000 4.00 2024 1,045,000 4.00 2025 1,090,000 3.50 2026 1,125,000 3.50 2027 1,170,000 3.50 2028 I,205,000 3.00 The 2015B Bonds are in the total principal amount of$3,695,000, are dated the date of their delivery, are designated "City of Renton, Washington, Limited Tax General Obligation Refunding Bonds, Series 2015B (Taxable)," are in the denomination of$5,000 each or integral multiples thereof, are fully registered, are numbered, bear interest at the rates per annum set forth in the following schedule, payable on December l, 2015, and semiannually thereafter on the first days of each succeeding June and December, and mature on December 1 in the years and amounts as follows: Maturity Years Principal Interest (December 1) Amounts Rates 2015 $ 330,000 0.50% 2016 100,000 0.85 2017 865,000 1.I 3 2018 875,000 1.50 2019 890,000 1.81 �r+` �`` Maturity Years Principal Interest (December 1) Amounts Rates 2020 635,000 2.07 WE FURTHER CERTIFY that there is no controversy or litigation pending, or to the best of our knowledge threatened, affecting the issuance and delivery of the Bonds, the levy and collection of taxes to pay the principal thereof and interest thereon, the validity of the Bonds, the corporate existence or boundaries of the City, or the title of the present officers of the City to their respective offices, and that no authority or proceedings for the issuance of the Bonds has or have been repealed, revoked or rescinded. Dated as of this 13th day of May, 2015. Si nature Title Mayor ` City Clerk * * * * � * - 2 - �.r� �rr� STATE OF WASHINGTON ) ) ss. COUNTY OF KING ) I certify that I know or have satisfactory evidence that DENIS W. LAW is the person who appeared before me, and said person acknowledged that said person signed this instrument, on oath stated that said person was authorized to execute the instrument and acknowledged it as the Mayor of the City of Renton, Washington, to be the free and voluntary act of such party for the uses and purposes mentioned in the instrument. Dated: �'�.� �, 2015. : C7 � Q� ��'� Notar Public ---�— � y !- �,�� Print Name �c4 h �• Ut V �/ �,��.�5 �Z My commission e ires �- 15 � WA� (Use this space for notarial stamp/seal) * * * * * * STATE OF WASHINGTON ) ) ss. COUNTY OF KING ) I certify that I know or have satisfactory evidence that JASON A. SETH is the person who appeared before me, and said person acknowledged that said person signed this instrument, on oath stated that said person was authorized to execute the instrument and acknowledged it as the City Clerk of the City of Renton, Washington, to be the free and voluntary act of such party for the uses and purposes mentioned in the instrument. Dated: �, 2015. ��, ��F� ��Qo`� Notar Public --��— �` y +�,� ��"� �� Print Name Yy t- � u✓ `�q� �,,�7 1 Q '"�-: My commission ex ' es �w`�r�,` �:;;�,�'� f� � ,_ (Dse this space for notaria stamp/seal) - 3 - �w►" � CERTIFICATE OF DELIVERY I, IWEN WANG, Finance and Information Services Administrator of the City of Renton, Washington (the "City"), do hereby certify that on this date the City delivered to Piper Jaffray & Co., Seattle, Washington (the "Underwriter"), or its duly appointed agent, the City's Limited Tax General Obiigation Refunding Bonds, Series 2015A, in the aggregate principal amount of $8,825,000 (the "2015A Bonds"), and the City's Limited Tax General Obligation Refunding � Bonds, Series 2015B (Taxable) in the aggregate principal amounts of $3,695,000 (the "2015B Bonds" and, together with the 2015A Bonds, the `Bonds"), in the form provided by No. 5754 passed on April 13, 2015. I further certify that at the time of such delivery, the City received payment for the Bonds, from the Underwriter, as fo(lows: Source of Funds Principal Amount of 201 SABonds $ 8,825,000.00 Plus: Original Issue Premium on 2015A Bonds 1,171,804.30 Principal Amount of 2015B Bonds 3,695,000.00 Less: Underwriter's Discount (72,683.80) Total Sources of Funds $_ 13,619.120.50 Distribution of Funds To: U.S. Bank National Association, as escrow agent Refunding Fund $ 13,573,340.61 Costs of Issuance 41,675.00 $ 13,615,015.61 To: City of Renton Bond Fund (additional proceeds) $ 4.104.89 $ 4,104.89 Total Funds Disbursed $ 13 619.120.50 Dated this 13th day of May, 2015. CITY OF RENTON, WASHINGTON .� ,_--- BY Iwen Wang, Finance and ormation Services Adminis ator "'�+' �rr� CERTIFICATE OF MANUAL SIGNATURE � Srgnature STATE OF WASHINGTON ) ) ss: COUNTY OF KING ) I, the undersigned affiant, being first du(y sworn, on oath depose and say: My name is Jason A. Seth (print or type) I have been duly chosen and am qualified and acting as Citv Clerk (title or positionJ for Citv of Renton Washington (name of municipaliryJ The signature appearing above is my true manual signature. This affidavit is made to comply with 39.62.020 Revised Code of Washington (Ch. 86, Wash. Sess. Laws of 1969). � Signature � SUBSCRIBED AND SWORN TO before me this � day of (� , 2015. �." �/I�O `�--� ARY PUBLIC in and for the State of X,�„► Washington, residing at �� , (,��J- p�,� Printed Name: t H �✓ ' - -1� My Commission Ex ires: � ) , � `ry'-! �t � aF w°�.� �.r � CERTIFICATE REQUIRED BY SECTIONS 7(e)(2) and (7) OF THE PURCHASE CONTRACT I, Iwen Wang, Finance and Information Services Administrator of the City of Renton, Washington (the "City"), in connection with the issuance by the City of its $8,825,000 Limited Tax General Obligation Refunding Bonds, Series 2015A (the "2015A Bonds") and its $3,695,000 Limited Tax General Obligation Refunding Bonds, Series 2015B (Taxable) (the "2015B Bonds" and, together with the 2015A Bonds, the `Bonds"), hereby certify as follows: l. I am the duly chosen, qualified and acting officer of the City for the office shown below my signature; as such, I am familiar with the facts herein certified and I am duly authorized to execute and deliver this certificate on behalf of the City. 2. Other than as set forth in the Official Statement relating to the Bonds (the "Official Statement"), no action, suit, proceeding, inquiry or investigation at law or in equity, before or by any court, government agency, public board or body is pending or, to my best knowledge after due investigation, threatened: (i) In any way questioning the corporate existence of the City or titles of the officers of the City to their respective offices; (ii) In any way contesting, affecting or seeking to prohibit, restrain or enjoin the issuance or delivery of any of the Bonds, or the collection of taxes pledged or to be pledged to pay the principal of and interest on the Bonds, or the pledge of such taxes, or the application of the proceeds of sale of the Bonds; (iii)in any way contesting or affecting the validity of the Bonds, the Bond Ordinance, or the Bond Purchase Contract between the City and Piper Jaffray & Co. dated April 16, 2015 (the "Purchase Contract"), or the tax-exempt status of interest on the 2015A Bonds or contesting the powers of the City or any authority for the issuance of the Bonds, or the passage of the Bond Ordinance, or the execution and delivery by the City of this Purchase Contract; (iv)That may result in any material adverse change relating to the business, operations or financiai condition of the City or its ability to pay debt service on the Bonds; or (v) Contesting the completeness or accuracy of the Preliminary Official Statement or the Official Statement, or asserting that the Preliminary Official Statement or the Official Statement contained any untrue statement of a material fact or omitted to state a material fact necessary in order to make the statements made therein, in the light of the circumstances under which they were made, not misleading, and to the best of my knowledge, there is no basis for any such action, suit, proceeding, inquiry or investigation; � � 3. The representations and warranties of the City contained in the Purchase Contract were and are true and correct in all material respects, and the City has complied with all agreements and covenants and satisfied all conditions contemplated by the Purchase Contract and the Bond Ordinance on its part to be performed or satisfied at or prior to the date hereof; 4. Insofar as the City and its affairs, including its financial affairs, are concerned, the Preliminary Official Statement and the Official Statement did not as of their respective dates and do not as of the date hereof contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements made therein, in the light of the circumstances under which they were made, not misleading (except no representation is hereby made with respect to the information regarding The Depository Trust Company or its book-entry system or under the heading"LEGAL AND LTNDERWRITING—Underwriting"); and 5. Insofar as the descriptions, statements and data, including financial data, of or pertaining to other bodies and their activities contained in the Preliminary Official Statement and the Official Statement are concerned, such descriptions, statements and data have been obtained from sources the City believes to be reliable, and the City has no reason to believe that they contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in the light of the circumstances under which they were made, not misleading. Capitalized terms used but not defined herein have the meanings set forth in the Purchase Contract. Dated: May 13, 2015. CITY OF RENTON, WASHINGTON �' r� By: � Iwen ng, Finance and Information Services Administrator -2- � � FEDERAL TAX CERTIFICATE I, the undersigned officer of the City of Renton, Washington (the "City"), make this certification for the benefit of a(( persons interested in the exclusion from gross income for federal income tax purposes of the interest to be paid on the City's Limited Tax General Obligation Refunding Bonds, Series 2015A (the `Bonds"), which are being issued in the aggregate principal amount of$8,825,000 and delivered simultaneous(y with the delivery of this certificate. On the date hereof, the City is also issuing its Limited Tax General Obligation Refunding Bonds, Series 2015B (Taxable) (the "Taxable Bonds"). I do hereby certify as follows in good faith on the date of issue of the Bonds: 1. Responsible Officer. I am the duly chosen, qualified and acting officer of the City for the office shown below my signature; as such, I am familiar with the facts herein certified and I am duly authorized to execute and deliver this certificate on behalf of the City. I am the officer of the City charged, along with other officers of the City, with responsibility for issuing the Bonds. 2. Code and Regulations. The Bonds are subject to the provisions of sections 141, 148, 149 and 150 of the Internal Revenue Code of 1986, as amended (the "Code"), and the Treasury Regulations (the "Regulations") promulgated under sections 141, 148, 149 and 150 of the Code. These provisions of the Code and Regulations impose restrictions on the use of bond- financed facilities and on the investment of bond proceeds. This certificate is being executed and delivered pursuant to sections 1.141-1 through 1.141-15, 1.148-0 through 1.148-I1, 1.149(b)-1, 1.149(d)-1, 1.149(g)-1, 1.150-1 and 1.150-2 ofthe Regulations. 3. Definitions. The capitalized terms used in this certificate (unless otherwise defined) that are defined in Ordinance No. 5754, adopted on April 13, 2015, authorizing the issuance of the Bonds (the "Bond Ordinance"), shall for all purposes hereof have the meanings therein specified. Al( terms defined in the Code or Regulations shal( for all purposes of this certificate have the same meanings as given to those terms in the Code and Regulations unless the context clearly requires otherwise. 4. Reasonable Expectations. The facts and estimates that are set forth in this certificate are accurate. The expectations that are set forth in this certificate are reasonable in light of such facts and estimates. There are no other facts or estimates that wou(d materially change such expectations. In connection with this certificate, the undersigned has to the extent necessary reviewed the certifications set forth herein with other representatives of the City as to such accuracy and reasonableness. The undersigned has also relied, to the extent appropriate, on representations set forth in the certificate of Piper Jaffray & Co. (the "Underwriter"), attached as Exhibit A to this certificate; the report of Grant Thornton LLP, certified public accountants, dated May 13, 2015 (the "Report"), attached as Exhibit B; and the bidding agent certificate and related attachments (the `Bidding Agent Certificate") of Causey, Demgen & Moore P.C. (the "Bidding Agent") attached as Exhibit C. The undersigned is aware of no fact, estimate or circumstance that would create any doubt regarding the accuracy or reasonableness of all or any portion of such documents. � � 5. Description of Governmental Purpose. The City is issuing the Bonds pursuant to the Bond Ordinance and will use proceeds of the Bonds (i)to advance refund and defease a portion of the City's outstanding Limited Tax Genera( Obligation Bonds, Series 2006 (the "Prior Bonds") that would otherwise mature on December l, 2017, December l, 2019, December l, 2020 through 2024, inclusive, and on December 1, 2028 (the "Refunded Bonds"); and (ii)to pay the costs of issuance of the Bonds. The primary purpose of each transaction undertaken in connection with the issuance of the Bonds is a bona fide governmental purpose. The financing schedules and the Report, attached hereto as Exhibit B, detail al( relevant aspects of the application of the proceeds of the Bonds and the City's program to refund the Refunded Bonds. The Refunded Bonds are being redeemed and defeased to achieve a present- value saving in the debt service payable by the City. December 1, 2016 is the date on which the Refunded Bonds will be called for redemption in advance of their scheduled maturities and retired with the proceeds of the Bonds. 6. The Refunded Bonds. The Prior Bonds were issued by the City to finance a portion of the costs of constructing transportation, street, and utility infrastructure and improvements as part of the South Lake Washington infrastructure project and the SW 27th Street extension project. No portion of the purchase price of the Refunded Bonds represents a loan made from the proceeds of another tax-exempt obligation. All of the original and investment proceeds al(ocable to the Refunded Bonds have been expended. No portion of the proceeds of the Refunded Bonds was used to pay the principal of, or interest on, any other issue of governmenta( obligations. 7. Amount and Exnenditure of Sale Proceeds of the Bonds. (a) Amount of Sale Proceeds. The sale proceeds from the issuance of the Bonds will be $9,996,804.30. Such amount represents the stated redemption price at maturity of the Bonds of$8,825,000.00, plus original issue premium of$1,171,804.30. No portion of the purchase price of any of the Bonds is provided by the issuance of any other issue of obligations. (b) Expenditure of Sale Proceeds. The sale proceeds of the Bonds and other available funds will be expended as follows: (i) The amount of$50,920.25 will be allocated on the date of issuance of the Bonds to the Underwriter's discount or compensation. (ii) The amount of$29,375.55 will be disbursed to pay other costs of issuance of the Bonds. (iii) Sale proceeds of the Bonds in the amount of$9,916,039.07, along with proceeds of the Taxable Bonds equal to $3,657,301.54, will be deposited in an escrow fund (the "Escrow Fund") established pursuant to the Escrow Agreement. From the amount deposited, $9,915,377.32 of the proceeds of the Bonds and $3,657,128.54 of the proceeds of the Taxable Bonds will be used to purchase certain Open Market United States Treasury Securities (the "Open Market Escrow Securities"). The remaining $661.75 of the proceeds of the Bonds will be held uninvested as cash, along with $173.00 -2- � � of the proceeds of the Taxable Bonds. The interest on and maturing principal of the Open Market Escrow Securities, together with the initial cash deposit, will be sufficient to pay the interest on the Refunded Bonds to December 1, 2016, and to redeem them on that date, which is their first call date. (iv) The amount of $469.43 representing additional proceeds will be deposited in the Bond Fund and used to pay debt service on the Bonds. 8. Pre-issuance Accrued Interest. The Bonds are dated as of the initial date of delivery to the Underwriter, and the City will receive no pre-issuance accrued interest on the Bonds. 9. Investment Proceeds. The best estimate of the City is that investment proceeds resulting from the investment of any proceeds of the Bonds will be expended for one of the purposes described in Section 7(b) or for the payment of debt service on the Bonds. 10. Transferred Proceeds. There are no transferred proceeds with respect to the Bonds because all of the proceeds of the Refunded Bonds have been or will be expended on or prior to the date on which proceeds of the Bonds are disbursed to pay principal of the Refunded Bonds. 1 l. No Replacement Proceeds. There are no amounts that have a sufficient(y direct nexus to the Bonds or to the governmental purposes of the Bonds, including the expected use of amounts to pay debt service on the Refunded Bonds to conclude those amounts that would have been used for such purpose if the proceeds of the Bonds were not used or to be used for such purpose. Specifically, (a) No Sinkin� Funds. Other than to the extent described herein, there is no debt service fund, redemption fund, reserve fund, replacement fund, or similar fund reasonably expected to be used directly or indirectly to pay principal or interest on the Bonds. (b) No Pled�ed Funds. Other than amounts described herein, there is no amount that is directly or indirectly, other than solely by reason of the mere availabi(ity or preliminary earmarking, pledged to pay principal or interest on the Bonds, or to a guarantor of part or all of the Bonds, so as to provide reasonable assurance that such amount will be availab(e to pay principal or interest on the Bonds if the City encounters financial difficulty. For purposes of this certification, an amount is treated as so pledged if it is held under an agreement to maintain the amount at a particular level for the direct or indirect benefit of the holders or the guarantor of the Bonds. (c) No Other Replacement Proceeds. There are no other replacement proceeds allocable to the Bonds because the City reasonably expects that the term of the Bonds will not be longer than is reasonably necessary for the governmental purposes of the Bonds. Furthermore, if the term of the Bonds is longer than is reasonably necessary for the governmental purposes of the Bonds, the City does not reasonably expect to have available amounts during the portion of such period that is longer than is reasonably necessary. The City reasonably expects that the Bonds would be issued to achieve a debt service savings independent of any arbitrage benefit, as evidenced by the expectation that the Bonds would have been issued if the interest on -3- �i � the Bonds were included in gross income (assuming that the hypothetical taxable interest rate would be the same as the actual tax-exempt interest rate). 12. No Excess Gross Proceeds. Except for any earnings on the portion of the amount described in paragraph 7(b)(ii) that is allocable to the Bonds, all gross proceeds of the Bonds, and investment earnings on such amounts and on sale proceeds of the Bonds and the uninvested cash described in paragraph 7(b)(iii), are al(ocable to: (a) the payment of principal, interest and any call premium on the Refunded Bonds as described in paragraph 7(b)(iii) above; (b) the payment of costs of issuance of the Bonds as described in paragraphs 7(b)(i) and 7(b)(ii) above; (c) the payment of administrative costs allocable to repaying the Refunded Bonds and carrying and repaying the Bonds or investments of Bond proceeds; Investment earnings on (i) the amounts described in paragraph 7(b)(ii), (ii) the initial cash deposit described in paragraph 7(b)(iii) and (iii) surplus amounts in the Escrow Fund are expected to be de minimis. Accordingly, the sum of the amounts earned from such investments is not expected to exceed one percent of the original proceeds of the Bonds. 13. Yield on the Bonds. For the purposes of this certificate, the yie(d on the Bonds is the discount rate that, when used in computing the present value as of the issue date of the Bonds, of all unconditionaily payable payments of principal, interest and fees for qualified guarantees on the Bonds, produces an amount equal to the present value, using the same discount rate, of the aggregate issue price of the Bonds as of the issue date. For purposes of determining the yield on the Bonds, the issue price of the Bonds is the sum of the issue prices for each group of substantially identical Bonds, plus pre-issuance accrued interest. For each group of substantially identical Bonds, the issue price is the first price at which a substantial amount (i.e., 10 percent) is sold to the public (excluding bond houses, brokers, or similar persons or organizations acting in the capacity of underwriters and wholesalers). Based upon the representations of the Underwriter set forth in Exhibit A hereto, the issue price is $9,996,804.30. No Underwriter's discount, issuance costs, or costs of carrying or repaying the Bonds is deducted from the issue price for purposes of computing the yield on the Bonds. The yield has been computed by treating the portion of the Bonds that are subject to optional redemption and are issued at an issue price that exceeds the stated redemption price at maturity by more than one-fourth of one percent mu(tiplied by the product of the stated redemption price at maturity and the number of complete years to the first optional redemption date for the Bonds as redeemed at their stated redemption price on the optional redemption date that would produce the lowest yield on the Bonds. Based on the representations of the Underwriter, set forth in Exhibit A, the yield on the Bonds, as calculated in the manner set forth above, is 2.018864 percent. -4- � � 14. Temporarv Periods and Yield Restriction. (a) Advance Refunding of the Refunded Bonds. TheRefunded Bonds will be advance refunded using Bond proceeds. Pursuant to section 1.148-9(g) of the Regulations, the City hereby elects to waive the 30-day temporary period available under section 1.148-9(d)(2)(i) of the Regulations for proceeds of the Bonds used to advance refund the Refunded Bonds and to invest such proceeds at a yield not in excess of the yield on Bonds beginning on the date of issue. The yield on the Open Market Escrow Securities purchased with sale proceeds of the Bonds has been calculated by the Underwriter to be 0.409583%, which is less than the yield on the Bonds. (b) Costs of Issuance and Additional Proceeds. The amounts described in paragraphs 7(b)(i), 7(b)(ii) and 7(b)(iv) will be disbursed within 13 months of the date hereof for costs of issuing the Bonds; therefore, such amount will be invested for an allowable temporary period. To the extent any portion of the amount described in paragraphs 7(b)(i), 7(b)(ii) and 7(b)(iv) is not expended within 13 months, the City will take steps to restrict the investment of such amounts to a yield which is not materially higher than the yield on the Bonds. 15. Bond Fund. Pursuant to the Bond Ordinance, the City has established a debt service fund designated the "City of Renton Limited Tax General Obligation Bond Debt Service Fund, 2015" (i.e., the Bond Fund) and the proceeds from all taxes levied, assessed and collected for and on account of the Bonds are to be deposited in such Fund. The City expects that taxes levied, assessed and collected for and on account of the Bonds will be sufficient each year to pay such debt service. All amounts deposited in the Bond Fund will be depleted at least once each bond year, except for a reasonab(e carryover amount not in excess of the greater of the earnings on such portion of the Bond Fund for the immediately preceding bond year or one-twelfth of the principal and interest payrnents on the Bonds for the immediately preceding bond year. Therefore, all amounts therein may be invested at an unrestricted yield. Any amounts held in the Bond Fund for longer than 13 months will be invested in obligations the yield on which is not in excess of the yie(d on the Bonds. 16. Minor Portion. All gross proceeds (including any replacement proceeds) will be invested in accordance with paragraphs 14 and 15 above. To the extent such amounts remain on hand following the periods set forth in paragraphs 14 and I S above or exceed the limits set forth in paragraph 15 above, the City will invest such amounts at a restricted yield as set forth in such paragraphs; provided, however, that a portion of such amounts, not to exceed in the aggregate the (esser of$]00,000 or five percent of the sale proceeds of the Bonds, may be invested at a yield which is higher than the yield on the Bonds. 17. Fair Market Value of Open Market Escrow Securities. The Open Market Escrow Securities will be treated as having been acquired at fair market value on their purchase date because: (a) As set forth in the Bidding Agent Certificate, the Bidding Agent made a bona fide solicitation for the purchase of the Open Market Escrow Securities on behalf of the City that satisfied all of the following requirements: -5- �.�r „�r=' (i) The bid specifications were in writing and were timely forwarded to potential providers. (ii) The bid specifications included all material terms of the bid, i.e. all terms that might directly or indirect(y affect the yield or the cost of the Open Market Escrow Securities. (iii) The bid specifications included a statement notifying potential providers that submission of a bid is a representation that (A) the potential provider did not consult with any other potential provider about its bid, (B)the bid was determined without regard to any other formal or informal agreement that the potential provider has with the City, the Bidding Agent or any other person (whether or not in connection with the bond issue), and (C) the bid was not submitted sole(y as a courtesy to the City, the Bidding Agent or any other person for purposes of satisfying the requirements described in paragraphs 17(a)(vii) and 17(a)(viii) below. (iv) The terms of the bid specifications were commercially reasonab(e, i.e., there was a legitimate business purpose for all terms other than increasing the purchase price or reducing the yield of the Open Market Escrow Securities. (v) All potential providers had an equal opportunity to bid and no potential provider was given the opportunity to review other bids (i.e., a last look) before providing a bid. (vi) At least three providers that have an established industry reputation as a competitive provider of the type of investments being purchased were solicited for bids. (vii) The City received at least three bids from providers that did not have a materia! financial interest in the Bonds, based upon the representation of those providers made as a part of the bids and acknowledging that (A) a lead underwriter in a negotiated underwriting transaction is deemed to have a material financial interest in an issue, (B) any entity acting as a financial advisor with respect to the purchase of an investment at the time bid specifications are forwarded to potential providers has a material financial interest in an issue, and (C) a person that is a related party to another person that has a material financial interest in an issue is also deemed to have a material financial interest in the issue. (viii) At least one of the three bids described in paragraph 17(a)(vii) was from a provider described in paragraph 17(a)(vi). (ix) The Bidding Agent did not bid to provide the investment. (b) The winning bid satisfied the following requirements: (i) The winning bid was the lowest cost bona fide bid (including any broker's fees) for the portfolio of Open Market Escrow Securities. -6- � � (ii) The provider of the Open Market Escrow Securities has certified the administrative costs that it paid (or expects to pay, if any) to third parties in connection with supplying the Open Market Escrow Securities. (c) The City will retain the fo(lowing records until three years after the last outstanding Bond is redeemed: (i) The purchase agreement or confirmations for the Open Market Escrow Securities, attached to the Bidding Agent Certificate. (ii) The receipt or other record of the amount actually paid by the City for the investments, including a record of any administrative costs paid by the City, and the certification described in paragraph 17(a)(vii) of this section, attached to the Bidding Agent Certificate. (iii) For each bid that is submitted, the name of the person and entity submitting the bid, the time and date of the bid, and the bid results which is attached to the Bidding Agent Certificate. (iv) The bid solicitation form, attached to the Bidding Agent Certificate. (v) The cost of the most efficient portfolio of State and Local Government Series Securities, determined at the time that the bids were required to be submitted pursuant to the terms of the bid specifications, which is attached to the Bidding Agent Certificate. 18. Issue. Other than the Taxable Bonds, there are no other obligations which (a) have been or will be sold within 15 days of the Bonds, (b) are sold pursuant to the same plan of financing with the Bonds, and (c) will be paid out of substantially the same source of funds as the Bonds. 19. Compliance with Rebate Requirements. The City hereby covenants that it will take all necessary steps to comply with the requirement that rebatab(e arbitrage earnings on the investment of the gross proceeds of the Bonds, within the meaning of section 148(fl of the Code be rebated to the federal government. Specifically, the City wiil (a) maintain records regarding the investment of the gross proceeds of the Bonds as may be required to calculate such rebatable arbitrage earnings separately from records of amounts on deposit in the funds and accounts of the City which are allocable to other bond issues of the City or moneys which do not represent gross proceeds of any bonds of the City, (b) calculate at such intervals as may be required by applicable Regu(ations, the amount of rebatable arbitrage earnings, if any, earned from the investment of the gross proceeds of the Bonds and (c) pay, not less often than every fifth anniversary date of the delivery of the Bonds and within 60 days following the final maturity of the Bonds, or on such other dates required or permitted by applicable Regulations, all amounts required to be rebated to the federal government. Further, the City will not indirectly pay any amount otherwise payable to the federal government pursuant to the foregoing requirements to any person other than the federa( government by entering into any investment arrangement with -7- �' � respect to the gross proceeds of the Bonds that might result in a reduction in the amount required to be paid to the federal government because such arrangement results in a smaller profit or a larger loss than would hav� resulted if the arrangement had been at arm's-length and had the yield on the issue not been relevant to either party. The City hereby covenants to pay any rebate due on the Refunded Bonds within 60 days after the date the Refunded Bonds are retired. 20. Not an Abusive Transaction. (a) General. No action taken in connection with the issuance of the Bonds is or will have the effect of (a) enabling the City to exploit, other than during an allowable temporary period, the difference between tax-exempt and taxable interest rates to obtain a material financial advantage (including as a result of an investment of any portion of the gross proceeds of the Bonds over any period of time, notwithstanding that, in the aggregate, the gross proceeds of the Bonds are not invested in higher yielding investments over the term of the Bonds), or (b) overburdening the tax-exempt bond market by issuing more bonds, issuing bonds earlier, or allowing bonds to remain outstanding longer than is otherwise reasonably necessary to accomplish the governmental purposes of the Bonds, based on all the facts and circumstances. Specifically, (i) the primary purpose of each transaction undertaken in connection with the issuance of the Bonds is a bona fide governmental purpose; (ii) each action taken in connection with the issuance of the Bonds would reasonably be taken to accomplish the governmental purposes of the Bonds if the interest on the Bonds were not excludable from gross income for federal income tax purposes (assuming the hypothetical taxable interest rate wou(d be the same as the actual tax-exempt interest rate on the Bonds); (iii) the proceeds of the Bonds will not exceed by more than a minor portion the amount necessary to accomplish the governmental purposes of the Bonds and will in fact not be substantially in excess of the amount of proceeds allocated to expenditures for the governmental purposes of the Bonds. (b) No Sinkin Fund. No portion of the Bonds has a term that has been lengthened primarily for the purpose of creating a sinking fund or similar fund with respect to the Bonds and thereby e(iminating significant amounts of negative arbitrage in the Escrow Fund. (c) No Noncallable Bonds. The Refunded Bonds do not include any noncallable Refunded Bonds that have been refunded in order to invest proceeds in the Escrow Fund allocable to the noncallable Refunded Bonds at a yield that is higher than the yield on the Bonds and thereby eliminate significant amounts of negative arbitrage in the applicable Escrow Fund. (d) No Window Refundin . No portion of the Bonds has been structured with maturity dates the primary purpose of which is to make available released revenues that will enable the City to avoid transferred proceeds or to make available revenues that may be invested to be ultimately used to pay debt service on another issue of obligations. (e) No Sale of Conduit Loan. No portion of the gross proceeds of the Refunded Bonds or the Bonds has been or will be used to acquire, finance, or refinance any conduit loan to any party. -8- �wr � 21. No Arbitra�e. On the basis of the foregoing facts, estimates and circumstances, it is expected that the gross proceeds of the Bonds will not be used in a manner that would cause any of the Bonds to be an "arbitrage bond" within the meaning of section 148 of the Code and the Regulations. To the best of the knowledge and belief of the undersigned, there are no other facts, estimates or circumstances that would materially change such expectations. 22. No Private Use Pavments or Loan Financine. (a) General. The City reasonably expects, as of the date hereof, that no action or event during the entire stated term of the Bonds will cause the private business use test, the private security or payment test, or the private loan financing test to be met by the any of the separate issues. Specifically, (i) Not more than 10 percent of the proceeds of the Bonds will be used and not more than 10 percent of the proceeds of the Prior Bonds has been used in a trade or business of a nongovernmental person during the combined measurement period that began on the first day of the measurement period for each refunded bond issue and ends on the last day of the measurement period for each refunding bond issue. For purposes of determining use, the City will apply ru(es set forth in applicable Regulations and Revenue Procedures promulgated by the Internal Revenue Service, inc(uding, among others, the following rules: (A) any activity carried on by a person other than a natural person or a state or local governmental unit will be treated as a trade or business of a nongovernmental person; (B) the use of all or any portion of the projects financed or refinanced by the Refunded Bonds and refinanced by Bonds (the "Projects") is treated as the direct use of proceeds; (C) a nongovernmental person will be treated as a private business user of proceeds of the Bonds or the Refunded Bonds as a result of ownership, actual or beneficial use of the proceeds pursuant to a lease, or a management or incentive payment contract, or certain other arrangements such as a take-or-pay or other output- type contract; and (D) a nongovernmental person will be treated as a private business user of proceeds of the Bonds or the Refunded Bonds if the person has special legal entitlements to use directly or indirectly the Projects. (ii) The City has not taken and will not take any deliberate action that would cause or permit the use of the Projects to change such that more than 10 percent of the proceeds of the Bonds will be deemed to be used in the trade or business of a nongovernmental person for so long as any of the Bonds remains outstanding (or until an opinion of nationally recognized bond counsel is received to the effect that such change in use will not adverse(y affect the excludability from gross income for federal income tax purposes of interest payable on the Bonds). For this purpose any action within the control of the City is treated as a deliberate action. A deliberate action occurs on the date the City enters into a binding contract with a nongovernmental person for use of the Project that is not subject to any material contingencies. (iii) Not more than 10 percent of the payment of the debt service on the Bonds will be directly or indirectly derived from payments (whether or not to the City or any re(ated party) in respect of property, or borrowed money, used or to be used for a private business use. Furthermore, no portion of the payment of the debt service on the Bonds will be directly or indirectly secured by any interest in property used or to be used for a private business use or payments in respect of property used or to be used for a private business use. -9- �✓ �.r� (iv) No portion of the proceeds of the Bonds will be directly or indirectly used to make or finance a loan to any person. (b) Disoositions of Personal Property in the Ordinarv Course. The City does not reasonably expect that rt w�ll sel( or otherwise dispose of personal property components of the Projects other than in the ordinary course of an established governmental program that satisfies the following requirements: (i) The weighted average maturity of the portion of the Bonds refinancing personal property is not greater than 120 percent of the reasonably expected actual use of such personal property for governmental purposes; (ii) The reasonably expected fair market value of such personal property on the date of disposition will be not greater than 25 percent of its cost; (iii) Such persona( property will no longer be suitable for its governmental purposes on the date of disposition; and (iv) The City is required to deposit amounts received from such disposition in a commingled fund with substantial tax or other governmental revenues and the City reasonably expects to spend such amounts on governmental programs within six months from the date of commingling. Furthermore, the City will not seil or otherwise dispose of all or any portion of the Projects in circumstances in which the foregoing requirements are not satisfied unless it has received an opinion of nationally recognized bond counsel to the effect that such disposition will not adversely affect the treatment of interest on the Bonds as exc(udable from gross income for federal income tax purposes. (c) Other A�reements. The City wi(I not enter into any agreement with any nongovernmental person regarding the use of all or any portion of the Projects during the stated term of the Bonds unless such agreement will not adversely affect the treatment of interest on the Bonds as excludable from gross income for federal income tax purposes. 23. Wei�hted Average Maturity. The weighted average maturity of the Bonds and of the Refunded Bonds set forth on Exhibit A attached to this certificate is the sum of the products of the issue price of each group of identical bonds of the respective issues and the number of years to maturity (determined separately for each group of identical bonds of the respective issues and taking into account mandatory redemptions), divided by the aggregate sale proceeds of the respective issues. 24. Federal Guarantee Prohibition. The Bonds are not "federally guaranteed" and the City will not cause or allow the Bonds to become "federally guaranteed". Unless otherwise excepted under section 149(b) of the Code, the Bonds will be considered federally guaranteed if: (a) The payment of principal or interest with respect to the Bonds is guaranteed (in whole or in part) by the United States (or any agency or instrumentality thereo�; -10- � �.r+: (b) five percent or more of the proceeds of the Bonds are to be: (i) used in making loans the payment of principal or interest with respect to which are to be guaranteed (in whole or in part) by the United States (or any agency or instrumentality thereo�, or (ii) invested (directly or indirectly) in federally insured deposits or accounts; or (c) The payment of principal or interest on the Bonds is otherwise indirectly guaranteed (in whole or in part) by the United States (or an agency or instrumentality thereo�. The Bonds shal( not be treated as federal(y guaranteed by reason of(i) any guarantee by the Federal Housing Administration, the Department of Veterans Affairs, the Federal National Mortgage Association, the Federal Home Loan Mortgage Corporation, or the Government National Mortgage Association, (ii) any guarantee of student loans and any guarantee by the Student Loan Marketing Association to finance student loans, (iii) any guarantee by the Bonneville Power Authority pursuant to the Northwest Power Act as in effect on July 18, 1984, or (iv) any guarantee by a Federal home loan bank described in Code section 149(b)(3)(E)that is made in connection with the original issuance of bonds during the period beginning on July 8, 2008 and ending on December 31, 2010 (or a renewal or extension of a guarantee so made). � The federal guarantee prohibition shall not app(y to (i) proceeds of the issue invested for an initial temporary period until such proceeds are needed for the purpose for which such issue was issued, (ii) investments of a bona fide debt service fund, (iii) investments of a reasonably required reserve fund, (iv) investments in bonds issued by the United States Treasury, or (v) other investments permitted under Regulations. 27. Bonds are not Hedge Bonds. Not more than 50 percent of the proceeds of the Prior Bonds was invested in nonpurpose investments (as defined in section 148(�(6)(A) of the Code) having a substantially guaranteed yield for four years or more within the meaning of section l49(g)(3)(A)(ii) of the Code, and the City reasonably expected at the time the Prior Bonds were issued that at least 85 percent of the spendable proceeds of such issue would be used to carry out the governmental purposes of such issue within the three-year period beginning on the applicable date of issue of the Prior Bonds. CITY OF RENTON, WASHINGTON .; By: Name: Iwen Wang �� Title: Finance and Information ervices Administrator Date: May 13, 2015 � -11- � �: EXHIBIT A CERTIFICATE OF UNDERWRITER Piper Jaffray & Co. (the "Underwriter") has acted as underwriter in connection with the sale and delivery of the City of Renton, Washington (the "City") Limited Tax General Obligation Refunding Bonds, Series 2015A (the "Bonds"). I, the undersigned, hereby certify as follows on behalf of the Underwriter: 1. I am the duly chosen, qualified and acting officer of the Underwriter for the office shown below my signature; as such, I am familiar with the facts herein certified and I am duly authorized to execute and deliver this certificate on behalf of the Underwriter. I am the officer of the Underwriter charged, along with other officers of the Underwriter, with responsibility for the Bonds. 2. The Underwriter has purchased the Bonds from the City pursuant to a Bond Purchase Contract dated April 16, 2015 (the "Sale Date"), for an aggregate purchase price of $9,945,884.05. (A) Based on our records and other information available to us which we have no reason to believe is not correct, on the date of Sale Date all of the Bonds were the subject of a bona fide initial offering to the public at prices no higher than, or yie(ds no lower than, those shown on the Official Statement relating to the Bonds (the "Official Statement"). (B) The issue prices set forth in the Official Statement were determined on the date the Bonds were purchased by the Underwriter based on the reasonable expectations regarding the initial public offering prices. Based on our records and other information available to us which we have no reason to believe is not correct, on the Sale Date at least 10 percent of each maturity of the Bonds were sold to the public at initial offering prices not greater than the respective prices shown on the inside cover of the Official Statement[, except for those Bonds maturing in each of the year[s] (the "Excepted Maturities"), which were �]. The Excepted Maturities were offered to the public at their respective prices shown in the Official Statement using the same marketing efforts as used in marketing all other maturities of the Bonds. Despite such efforts and due to prevailing market conditions, we were unable to obtain offers and sales for at least 10% of each of the Excepted Maturities at their respective prices set forth in the Official Statement.] (C) On the Sale Date, based upon then prevailing market conditions we had no reason to believe any of the Bonds wouid be initially sold to the public at prices greater than the prices, or yields less than the yields, shown on the Official Statement. The aggregate of such issue prices of all of the Bonds is $9,996,80430. The initial public offering prices described above do not exceed the fair market value for the Bonds on the sale date. The term "public," as used herein, does not include bondhouses, brokers, dealers, and similar persons or organizations acting in the capacity of Underwriter or wholesalers. A-1 �wiw v..r�'' 3. The yield on the Bonds is not less than 2.018864 percent. For purposes of this certificate, the term "yield" means that yield which is computed as described in paragraph 13 of the Federal Tax Certificate. 4. The weighted average maturity of the Bonds is 10.0362 years and the remaining weighted average maturity of the Refunded Bonds is 10.3081. The weighted average maturity of the Bonds was computed as described in paragraph 23 of the Federa( Tax Certificate. 5. The yield on the Open Market Escrow Securities purchased with sale proceeds of the Bonds has been calculated by the Underwriter to be 0.409583%. 6. To the extent that we provided the Issuer and bond counsel with certain computations that show a bond yield, issue price, weighted average maturity and certain other information with respect to the Bonds, these computations are provided for informational purposes and are based on our understanding of directions that we have received from bond counsel regarding interpretation of the applicable law. We express no view regarding the legal sufficiency of any such computations or the correcmess of any legal interpretation made by bond counseL 7. I have worked closely with representatives of the City in structuring the financial terms of the Bonds. To the best of my knowledge, which was acquired in the course of structuring the Bonds on behalf of the City, (i) the Bonds were not structured to take advantage of the difference between tax exempt and taxable rates except as identified in the Federal Tax Certificate with respect to permissible investments subject to arbitrage rebate, and (ii) the Bonds were not issued earlier, in a greater amount, with reserves or sinking funds larger, or with a maturity longer than was reasonably necessary to finance the project refinanced by the Bonds. The Underwriter hereby authorizes the City to rely on the statements made herein in connection with making the representations set forth in the Federa( Tax Certificate to which this certificate is attached and in its efforts to comply with the conditions imposed by the Code on the exclusion of interest on the Bonds from the gross income of their owners; provided, however, that nothing herein represents our interpretation of any laws, and in particular, regu(ations under section 148 of the Internal Revenue Code. The Underwriter hereby authorizes Pacifica Law Group LLP to rely on this certificate for purposes of its opinion regarding the treatment of interest on the Bonds as excludable from gross income for federal income tax purposes. Capitalized terms used herein and not otherwise defined have the meaning ascribed to such terms in the Federal Tax Certificate to which this certificate is attached. PIPER JAFFRAY & CO. By: Name: Lindsay Sovde Title: Managing Director Date: May 13, 2015 A-2 '�w+° `..r+� EXffiBIT B VERIFICATION REPORT AND FINANCING SCHEDULES B-1 � � EXHIBIT C BIDDING AGENT CERTIFICATE GI Form$�3$-G Information'!�`turn for Tax-Exempt Governmenta�iligations (Rev.September 2oi�) ►Under Internal Revenue Code section 149(e) Department of the Treasury ►See separate instructions. OMB No.15a5-o720 Internal Revenue Service Caution:lf the issue price is under$100,000,use Form 8038-GC. Reporting Authority If Amended Return,check here ► ❑ 1 Issuer's name 2 Issuer's employer identification number(EIN) City of Renton,Washington 91-6001271 3a Name of person(other than issuer)with whom the IRS may communicate about this return(see instructions) 3b Telephone number of other person shown on 3a 4 Number and street(or P.O.box if mail is not delivered to street address) Room/suite 5 Report number(For IRS Use Only) 1055 South Grady Way 3 6 City,town,or post office,state,and ZIP code 7 Date of issue Renton,Washington 98055 05i13f2015 8 Name of issue 9 CUSIP number Limited Tax General Obligation Refunding Bonds,2015A 760133TJ7 10a Name and title of officer or other employee of the issuer whom the IRS may catl for more information(see 10b Telephone number of officer or other instructions) employee shown on 10a Iwen Wang,Finance and Information Services Administrator 425-430-685$ '• Type of Issue(enter the issue price).See the instructions and attach schedule. 11 Education . . . . . . . . . . . . . . . . 1 y 12 Health and hospital . , . , . . . . , , . . ' 12 13 Transportation . . . . . . . . . . . . . . . . . . . . . . . 13 14 Public safety . . . . . . . . . . . . . . . . . . . . . . 14 15 Environment(including sewage bonds) . . . . . . . . . . . . . . . . 15 16 Housing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 17 Utilities . . . . . . . . . . . . . . . . . . . . . . . . . . 17 18 Other. Describe ► � � � ' 18 9,996,804 19 If obligations are TANs or RANs;check only box 19a . . . . . . . . . . . . . ► ❑ If obligations are BANs,check only box 19b . . . . . . . . . . . . . . . . ► ❑ 20 If obligations are in the form of a lease or installment sale,check box . . . . . . . , ► � Description of Obligations.Complete for the entire issue for which this form is being filed. (a)Final maturity date (b)Issue price (c)Stated redemption (d)Weighted price at maturity average maturity (e)Yield 21 12101/2028 9,996,804 8,825,000 10.0362 ears 2.0189 % • Uses of Proceeds of Bond Issue(including underwriters' discount) 22 Proceeds used for accrued interest . . . . . . . . . . . . . . . . . 22 23 Issue price of entire issue(enter amount from line 21, column (b)) . . . . . . . . 23 s,99s,soa 24 Proceeds used for bond issuance costs(including underwriters'discount). . 24 8o,2s6 25 Proceeds used for credit enhancement . . . . . . . . . . . . 25 26 Proceeds allocated to reasonably required reserve or replacement fund . 26 27 Proceeds used to currently refund prior issues . . . . . . . . . 27 28 Proceeds used to advance refund prior issues . . . . . . . . . 28 9,916,039 29 Total(add lines 24 through 28) . . . . . 29 9,996,335 30 Nonrefunding proceeds of the issue(subtract line 29 from line 23 and enter amount here) . . 30 as9 '• Description of Refunded Bonds.Complete this part only for refunding bonds. 31 Enter the remaining weighted average maturity of the bonds to be currently refunded . . . . ► N/a 32 Enter the remaining weighted average maturity of the bonds to be advance refunded . ► �0.308� Years 33 Enter the last date on which the refunded bonds will be called MM/DD/YY vears ( � . . . . . . ► izio�i2ois 34 Enter the date(s)the refunded bonds were issued�(MM/DD/YYYY) o8/oi/2o06 For Paperwork Reduction Act Notice,see separate instructions. cac.No.ss��3s Form 8038-G(Rev.9-2011) Form 8038-G(Rev.9-2011) � v�+ Page 2 Misceflaneous 35 Enter the amount of the state volume cap allocated to the issue under section 141(b)(5) . . . . 35 0 36a Enter the amount of gross proceeds invested or to be invested in a guaranteed investment contract (GIC)(see instructions) . . . . . . . . . . . . . . . . . . . . . . . . . 36a o b Enter the final maturity date of the GIC► a Enter the name of the GIC provider► 37 Pooled financings: Enter the amount of the proceeds of this issue that are to be used to make loans to other governmental units . . . . . . . . . . . . . . . . . . . . . . . . 37 0 38a If this issue is a loan made from the proceeds of another tax-exempt issue,check box► ❑and enter the foliowing information: b Enter the date of the master pool obligation► � Enter the EIN of the issuer of the master pool obligation► d Enter the name of the issuer of the master pool obligation► 39 If the issuer has designated the issue under section 265(b)(3)(B)(i)(III)(small issuer exception), check box . . . . ► �✓ 40 If the issuer has elected to pay a penalty in lieu of arbitrage rebate, check box . . . . . . . , , . . . ► ❑ 41a If the issuer has identified a hedge, check here► ❑ and enter the following information: b Name of hedge provider► a Type of hedge► d Term of hedge► 42 If the issuer has superintegrated the hedge,check box . . . . . . . . . . . . . . . . . . . ► ❑ 43 If the issuer has established written procedures to ensure that all nonqualified bonds of this issue are remediated according to the requirements under the Code and Regulations(see instructions),check box . . . . . . . . ► � 44 If the issuer has established written procedures to monitor the requirements of section 148,check box . . . . . ► �❑ 45a If some portion of the proceeds was used to reimburse expenditures,check here► ❑ and enter the amount of reimbursement . . . . . . . . . ► b Enter the date the official intent was adopted► Under penalties of perjury,I declare that I have examined this return and accompanying schedules and statements,and to the best of my knowledge Signature and belief,they are true,correct,and complete.I further declare that I consent to the IRS's disclosure of the issuer's return information,as necessary to and process this return,to the person that I have autho ized above. Consent �' ~ Iwen Wang, Finance& �nfo.Services Admin. 'Signature of is§ ut ized resentative Date 'Type or print name and title Paid Print/Type preparer's name Prepare signature Date PTIN Check � if Preparer Edward A.McCullough self-employed P01066582 Use Only Firm's name ► PaCifiCa Law Group LLP Firm's EIN ► 45-1446871 Firm's address ► 1191 Second Ave,Sui[e 2100,Seattle,WA 98101 Phone no. (206)245-1700 Form 8��-ra(Rev.9-2011) � � ESCROW DEPOSIT AGREEMENT CITY OF RENTON, WASHINGTON LIMITED TAX GENERAL OBLIGATION REFUNDING BONDS, SERIES 2015A and LIMITED TAX GENERAL OBLIGATION REFUNDING BONDS, SERIES 2015B (TAXABLE) THIS ESCROW AGREEMENT, dated as of May 13, 2015 (herein, together with any amendments or supplements hereto, called the "Agreement") is entered into by and between the City of Renton, Washington (the "City") and U.S. Bank National Association, Seattle, Washington, as escrow agent (herein, together with any successor in such capacity, called the "Escrow Agent"). The notice addresses of the City and the Escrow Agent are shown on Exhibit A attached hereto and made a part hereof. WITNESSETH : WHEREAS, the City heretofore has issued and there presently remain outstanding the obligations described in Exhibit B attached hereto (the "Refunded Bonds"); and WHEREAS, pursuant to Ordinance No. 5754 passed on April 16, 2015 (the `Bond Ordinance"), the City has determined to issue its Limited Tax General Obligation Refunding Bonds, Series 2015A and its Limited Tax General Obligation Refunding Bonds, Series 2015B (Taxable) (together, the`Bonds"); and WHEREAS, a portion of the proceeds of the Bonds will be used for the purpose of providing funds to pay the costs of refunding the Refunded Bonds; and WHEREAS, Grant Thornton LLP has prepared a report dated May 13, 2015 (the "Verification Report") relating to the source and use of funds available to accomplish the refunding of the Refunded Bonds, the investment of such funds in Government Obligations (as defined herein) and the adequacy of such funds and investments to provide for the payment of the debt service due on the Refunded Bonds; and WHEREAS, pursuant to the Bond Ordinance, the Refunded Bonds have been designated for redemption prior to their scheduled maturity dates and, after provision is made for such redemption, the Refunded Bonds will come due in such years, bear interest at such rates, and be payable at such times and in such amounts as are set forth in Exhibit C attached hereto and made a part hereof; and WHEREAS, when Escrowed Securities have been deposited with the Escrow Agent for the payment of all principal and interest of the Refunded Bonds when due, then the Refunded Bonds shall be legally defeased; and 1 05/06/15 � � WHEREAS, the issuance, sale, and delivery of the Bonds have been duly authorized to be issued, sold, and delivered for the purpose of obtaining the funds required to provide for the payment of the principal of, interest on and redemption premium (if any) on the Refunded Bonds when due as shown on Exhibit C attached hereto; NOW, THEREFORE, in consideration of the mutual undertakings, promises and agreements herein contained; the sufficiency of which hereby are acknowledged, and to secure the full and timely payment of principal of and the interest on the Refunded Bonds, the City and the Escrow Agent mutua(ly undertake, promise and agree for themselves and their respective representatives and successors, as follows: Article 1. Definitions Section 1.1. Definitions. Unless the context clearly indicates otherwise, the following terms shall have the meanings assigned to them below when they are used in this Agreement: Escrow Fund means the fund created by this Agreement to be established, held and administered by the Escrow Agent pursuant to the provisions of this Agreement. Escrowed Securities means the noncallable Government Ob(igations described in Exhibit D attached to this Agreement, or cash or other nonca(lable obligations substituted therefor pursuant to Section 4.2 of this Agreement. Covern�nent Obligations means direct, noncallable (a) United States Treasury Obligations, (b) United States Treasury Obligations - State and Local Government Series, (c) non-prepayable obligations which are unconditionally guaranteed as to full and timely payment of principal and interest by the United States of America or (d) REFCORP debt ob(igations unconditionally guaranteed by the United States. Paying Agent means U.S. Bank National Association, as the fiscal agency of the State of Washington, and as the paying agent for the Refunded Bonds. Section 1.2. Other Definitions. The terms "Agreement," "City," "Escrow Agent," `Bond Ordinance," "Verification Report," "Refunded Bonds," and `Bonds" when they are used in this Agreement, shall have the meanings assigned to them in the preamble to this Agreement. Section 1.3. Interpretations. The titles and headings of the articles and sections of this Agreement have been inserted for convenience and reference only and are not to be considered a part hereof and shal( not in any way modify or restrict the terms hereof. This Agreement and all of the terms and provisions 2 osiasn s � � hereof shall be (iberally construed to effectuate the purposes set forth herein and to achieve the intended purpose of providing for the refunding of the Refunded Bonds in accordance with applicable law. Article 2. Deposit of Funds and Escrowed Securities Section 2.1. Deposits in the Escrow Fund. Concurrently with the sale and delivery of the Bonds, the City shall deposit, or cause to be deposited, with the Escrow Agent, for deposit in the Escrow Fund (as defined below), the funds (from the proceeds of the Bonds and a cash contribution by the City, if necessary) sufficient to purchase the Escrowed Securities and pay costs of issuance described in Exhibit D, and the Escrow Agent shall, upon the receipt thereof, acknowledge such receipt to the City in writing. Article 3. Creation and Operation of Escrow Fund Section 3.1. Escrow Fund. The Escrow Agent has created on its books a special trust fund and irrevocable escrow account to be known as the Refunding Account (the "Escrow Fund"). The Escrow Agent hereby agrees that upon receipt thereof it will deposit to the credit of the Escrow Fund the funds and the Escrowed Securities described in Exhibit D attached hereto. Such deposit, all proceeds therefrom, and all cash balances from time to time on deposit therein (a) shall be the property of the Escrow Fund, (b) shall be applied only in strict conformity with the terms and conditions of this Agreement, and (c) are hereby irrevocably pledged to the payment of the principal of and interest on the Refunded Bonds as set forth in Ordinance No. 5215 adopted by the City Council of the City on July 17, 2006 (the "2006 Bond Ordinance"), which payment shall be made by timely transfers of such amounts at such times as are provided for in Section 3.2 hereof. When the fina) transfers have been made for the payment of such principal of and interest on the Refunded Bonds, any balance then remaining in the Escrow Fund shall be transferred to the City, and the Escrow Agent shall thereupon be discharged from any further duties hereunder. Section 3.2. Payment of Principal and Interest. The Escrow Agent is hereby irrevocably instructed to transfer to the Paying Agent from the cash balances from time to time on deposit in the Escrow Fund, the amounts required to pay the principal of the Refunded Bonds at their respective redemption dates and interest thereon to such redemption dates in the amounts and at the times shown in Exhibit C attached hereto. Section 3.3. Sufficiency of Escrow Fund. The City represents that, based upon the information provided in the Verification Report, the successive receipts of the principal of and interest on the Escrowed Securities will assure that the cash balance on deposit from time to time in the Escrow Fund will be at all times sufficient to provide moneys for transfer to the Paying Agent at the times and in the amounts required to pay • � 05/O6/15 � � the interest on the Refunded Bonds as such interest comes due and the principal of the Refunded Bonds as the Refunded Bonds are paid on an optional redemption date prior to maturity, all as more fully set forth in Exhibit E attached hereto and as required for the legal defeasance of the Refunded Bonds under the terms of the 2006 Bond Ordinance. If, for any reason, at any time, the cash balances on deposit or scheduled to be on deposit in the Escrow Fund shall be insufficient to transfer the amounts required by the Paying Agent to make the payments set forth in Section 3.2. hereof, the City shall timely deposit in the Escrow Fund, from any funds that are lawfully available therefor, additional funds in the amounts required to make such payments. Notice of any such insufficiency shall be given promptly as hereinafter provided, but the Escrow Agent shall not in any manner be responsible for any insufficiency of funds in the Escrow Fund or the City's failure to make additional deposits thereto. Section 3.4. Trust Fund. The Escrow Agent or its affiliate, shall hold at all times the Escrow Fund, the Escrowed Securities and all other assets of the Escrow Fund, wholly segregated from all other funds and securities on deposit with the Escrow Agent; it sha(I never allow the Escrowed Securities or any other assets of the Escrow Fund to be commingled with any other funds or securities of the Escrow Agent; and it shall hold and dispose of the assets of the Escrow Fund only as set forth herein. The Escrowed Securities and other assets of the Escrow Fund shall always be maintained by the Escrow Agent as trust funds for the benefit of the owners of the Refunded Bonds; and a special account thereof shall at all times be maintained on the books of the Escrow Agent. The owners of the Refunded Bonds shall be entitled to the same preferred claim and first lien upon the Escrowed Securities, the proceeds thereof, and all other assets of the Escrow Fund to which they are entitled as owners of the Refunded Bonds as set forth in the 2006 Bond Ordinance. The amounts received by the Escrow Agent under this Agreement shall not be considered as a banking deposit by the City, and the Escrow Agent shal( have no right to title with respect thereto except as a trustee and Escrow Agent under the terms of this Agreement. The amounts received by the Escrow Agent under this Agreement shall not be subject to warrants, drafts or checks drawn by the City or, except to the extent expressly herein provided, by the Paying Agent. Article 4. Limitation on Investments Section 4.1. Investments. Except for the initial investment in the Escrowed Securities the Escrow Agent shall not have any power or duty to invest or reinvest any money held hereunder, or to make substitutions of the Escrowed Securities, or to sell, transfer, or otherwise dispose of the Escrowed Securities. Section 4.2. Substitution of Securities. [Reserved] 4 oeiosns `� `�„+' Article 5. Application of Cash Balances Section 5.1. In General. Except as provided in Section 2.1, 3.2 and 4.2 hereof, no withdrawals, transfers or reinvestment shall be made of cash balances in the Escrow Fund. Cash balances shall be held by the Escrow Agent in United States currency as cash balances as shown on the books and records of the Escrow Agent and, except as provided herein, shall not be reinvested by the Escrow Agent; provided, however, a conversion to currency shall not be required (i) for so long as the Escrow Agent's internal rate of return does not exceed 20%, or (ii) if the Escrow Agent's internal rate of return exceeds 20%, the Escrow Agent receives a letter of instructions, accompanied by the opinion of nationally recognized bond counsel, approving the assumed reinvestment of such proceeds at such higher yield. Article 6. Redemption of Refunded Bonds Section 6.1. Call for Redemption. The City hereby irrevocably calls the Refunded Bonds for redemption on their eariiest redemption dates, as shown in the Verification Report and on Appendix A attached hereto. Section 6.2. Notice of Redemption/Notice of Defeasance. The Escrow Agent agrees to give a notice of defeasance and a notice of the redemption of the Refunded Bonds pursuant to the terms of the Refunded Bonds and in substantially the forms attached hereto as Appendices A and B attached hereto and as described on said Appendices A and B to the Paying Agent for distribution as described therein. The notice of defeasance shall be given immediately following the execution of this Agreement, and the notice of redemption shal( be given in accordance with the ordinance authorizing the Refunded Bonds. The Escrow Agent hereby certifies that provision satisfactory and acceptable to the Escrow Agent has been made for the giving of notice of redemption of the Refunded Bonds. Article 7. Records and Reports Section 7.1. Records. The Escrow Agent will keep books of record and account in which complete and accurate entries shall be made of all transactions relating to the receipts, disbursements, allocations and application of the money and Escrowed Securities deposited to the Escrow Fund and all proceeds thereof, and such books shall be availab(e for inspection during business hours and after reasonable notice by the parties hereto and by the owners of the Refunded Bonds. Section 7.2. Reports. While this Agreement remains in effect, the Escrow Agent monthly shall prepare and send to the City a written report summarizing all transactions relating to the Escrow Fund during 5 osiosn s � � the preceding financial month, including, without limitation, credits to the Escrow Fund as a result of interest payments on or maturities of the Escrowed Securities and transfers from the Escrow Fund for payments on the Refunded Bonds or otherwise, together with a detailed statement of all Escrowed Securities and the cash balance on deposit in the Escrow Fund as of the end of such period. Article 8. Concerning the Paying Agents and Escrow Agent Section 8.1. Representations. The Escrow Agent hereby represents that it has all necessary power and authority to enter into this Agreement and undertake the obligations and responsibilities imposed upon it herein, and that it will carry out all of its obligations hereunder. Section 8.2. Limitation on Liability. The liability of the Escrow Agent to transfer funds for the payment of the principal of and interest on the Refunded Bonds shall be limited to the proceeds of the Escrowed Securities and the cash balances from time to time on deposit in the Escrow Fund. Notwithstanding any provision contained herein to the contrary, the Escrow Agent sha(1 have no liability whatsoever for the insufficiency of funds from time to time in the Escrow Fund or any failure of the obligors of the Escrowed Securities to make timely payment thereon, except for the obligation to notify the City promptly of any such occurrence. The recitals herein and in the proceedings authorizing the Bonds shall be taken as the statements of the City and shall not be considered as made by, or imposing any obligation or liability upon, the Escrow Agent. The Escrow Agent is not a party to the proceedings authorizing the Bonds or the Refunded Bonds and is not responsible for nor bound by any of the provisions thereo£ In its capacity as Escrow Agent, it is agreed that the Escrow Agent need look only to the terms and � provisions of this Agreement. The Escrow Agent makes no representations as to the value, conditions or suf�ciency of the Escrow Fund, or any part thereof, or as to the title of the City thereto, or as to the security afforded thereby or hereby, and the Escrow Agent shall not incur any liability or responsibility in respect to any of such matters. It is the intention of the parties hereto that the Escrow Agent shall never be required to use or advance its own funds or otherwise incur personal financial liability in the performance of any of its duties or the exercise of any of its rights and powers hereunder. The Escrow Agent shall not be liable for any action taken or neglected to be taken by it in good faith in any exercise of reasonable care and believed by it to be within the discretion or power conferred upon it by this Agreement, nor shall the Escrow Agent be responsible for the consequences of any error of judgment; and the Escrow Agent shall not be answerable except for 6 05/06/15 � � its own neglect or willful misconduct, nor for any loss unless the same shall have been through its negligence or bad faith. Unless it is specifically otherwise provided herein, the Escrow Agent has no duty to determine or inquire into the happening or occurrence of any event or contingency or the performance or failure of performance of the City with respect to arrangements or contracts with others, with the Escrow Agent's sole duty hereunder being to safeguard the Escrow Fund, to dispose of and deliver the same in accordance with this Agreement. If, however, the Escrow Agent is called upon by the terms of this Agreement to determine the occurrence of any event or contingency, the Escrow Agent sha(1 be obligated, in making such determination, only to exercise reasonable care and diligence, and in event of error in making such determination the Escrow Agent shall be liable only for its own willful misconduct or its negligence. In determining the occurrence of any such event or contingency the Escrow Agent may request from the City or any other person such reasonable additional evidence as the Escrow Agent in its discretion may deem necessary to determine any fact relating to the occurrence of such event or contingency, and in this connection may make inquiries of, and consult with, among others, the City at any time. Section 8.3. Compensation. The City shall pay to the Escrow Agent fees for performing the services hereunder and for the expenses incurred or to be incurred by the Escrow Agent in the administration of this Agreement pursuant to the terms of the Fee Schedule dated May 13, 2015. The Escrow Agent hereby agrees that in no event shall it ever assert any claim or lien against the Escrow Fund for any fees for its services, whether regular or extraordinary, as Escrow Agent, or in any other capacity, or for reimbursement for any of its expenses as Escrow Agent or in any other capacity. Section 8.4. Successor Escrow Agents. Any corporation, association or other entity into which the Escrow Agent may be converted or merged, or with which it may be consolidated, or to which it may sell or otherwise transfer all or substantially all of its corporate trust assets and business or any corporation, association or other entity resulting from any such conversion, sale, merger, consolidation or other transfer to which it is a party, ipso facto, shall be and become successor escrow agent hereunder, vested with all other matters as was its predecessor, without the execution or filing of any instrument or any further act on the part of the parties hereto, notwithstanding anything herein to the contrary. If at any time the Escrow Agent or its legal successor or successors should become unable, through operation or law or otherwise, to act as escrow agent hereunder, or if its property and affairs shall be taken under the control of any state or federal court or administrative body because of insolvency or bankruptcy or for any other reason, a vacancy shall forthwith exist in the office of Escrow Agent hereunder. In such event, the City, by appropriate action, promptly shall appoint an Escrow Agent to fill such vacancy. If no successor Escrow Agent shall have been appointed by the City within 60 days, a successor may be appointed by the owners of a majority in principal amount of the Refunded Bonds then outstanding by an instrument or � osiosri s � � instruments in writing filed with the City, signed by such owners or by their duly authorized attorneys-in-fact. If, in a proper case, no appointment of a successor Escrow Agent shall be made pursuant to the foregoing provisions of this section within three months after a vacancy shall have occurred, the owner of any Refunded Bond may apply to any court of competent jurisdiction to appoint a successor Escrow Agent. Such court may thereupon, after such notice, if any, as it may deem proper, prescribe and appoint a successor Escrow Agent. Any successor Escrow Agent shall be a corporation organized or doing business under the laws of the United States or the State of Washington, authorized under such laws to exercise corporate trust powers, having a combined capital and surplus of at least $100,000,000 and subject to the supervision or examination by federal or state authority. Any successor Escrow Agent shall execute, acknowledge and deliver to the City and the Escrow Agent an instrument accepting such appointment hereunder, and the Escrow Agent shall execute and deliver an instrument transferring to such successor Escrow Agent, subject to the terms of this Agreement, all the rights, powers and trusts of the Escrow Agent hereunder. Upon the request of any such successor Escrow Agent, the City shall execute any and all instruments in writing for more fully and certainly vesting in and confirming to such successor Escrow Agent all such rights, powers and duties. The obligations assumed by the Escrow Agent pursuant to this Agreement may be transferred by the Escrow Agent to a successor Escrow Agent if (a) the requirements of this Section 8.4 and the 2006 Bond Ordinance are satisfied; (b) the successor Escrow Agent has assumed all the obligations of the Escrow Agent under this Agreement; and (c) all of the Escrowed Securities and money held by the Escrow Agent pursuant to this Agreement have been duly transferred to such successor Escrow Agent. Article 9. Costs of Issuance Section 1. Costs of Issuance Fund. The Escrow Agent has created on its books a specia( trust fund and escrow fund to be known as the Costs of Issuance Fund. The Escrow Agent agrees that upon receipt it will deposit to the credit of the Costs of Issuance Fund the amount shown on Exhibit D to pay those costs of issuance set forth in such exhibit. Such deposit, all proceeds therefrom, and all cash balances on deposit therein shall be the property of the Costs of Issuance Fund to pay those costs of issuance set forth on Exhibit D upon receipt of invoices. If any of the deposit allocated for costs of issuance for the Bonds remains unspent 60 days after the date of this Agreement, the Escrow Agent shali transfer such unspent amount to the City. Section 2. Investments. The Escrow Agent shall not have any power or duty to invest or reinvest any money held in the Costs of Issuance Fund. Article 10. Miscellaneous 8 05/06/15 � � Section 101. Notice. Any notice, authorization, request, or demand required or permitted to be given hereunder shall be in writing and shall be deemed to have been duly given when mailed by registered or certified mail, postage prepaid addressed to the City or the Escrow Agent at the address shown on Exhibit A attached hereto. The United States Post Office registered or certified mail receipt showing delivery of the aforesaid shall be conclusive evidence of the date and fact of delivery. Any party hereto may change the address to which notices are to be delivered by giving to the other parties not less than 10 days prior notice thereof. Section 10.2. Termination of Responsibilities. Upon the taking of all the actions as described herein by the Escrow Agent, the Escrow Agent shall have no further obligations or responsibilities hereunder to the City, the owners of the Refunded Bonds or to any other person or persons in connection with this Agreement. Section 10.3. Binding Agreement. This Agreement shall be binding upon the City and the Escrow Agent and their respective successors and legal representatives, and shall inure solely to the benefit of the owners of the Refunded Bonds, the City, the Escrow Agent and their respective successors and legal representatives. Section 10.4. Severability. In case any one or more of the provisions contained in this Agreement shall for any reason be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provisions of this Agreement, but this Agreement shall be construed as if such invalid or illegal or unenforceable provision had never been contained herein. Section 10.5. Washington Law Governs. This Agreement shall be governed exclusively by the provisions hereof and by the applicable laws of the State of Washington. Section 10.6. Time of the Essence. Time shall be of the essence in the performance of obligations from time to time imposed upon the Escrow Agent by this Agreement. Section 10.7. Notice to Standard & Poor's and Fitch. In the event that this Agreement or any provision thereof is severed, amended or revoked, the City shall provide written notice of such severance, amendment or revocation to Standard & 9 osiosi,s � � Poor's at 38th Floor, 55 Water Street, New York, New York, 10041, Attention: Public Finance Surveillance and Fitch Ratings, 33 Whitehall Street, New York, NY 10004, Attention: Public Finance Rating Desk/Refunded Bonds. 5ection 10.8. Amendments. This Agreement shall not be amended except to cure any ambiguity or formal defect or omission in this Agreement. No amendment shall be effective unless the same shall be in writing and signed by the parties thereto. No such amendment shall adversely affect the rights of the holders of the Refunded Bonds. No such amendment shall be made without first receiving written confirmation from the rating agencies (if any) which have rated the Refunded Bonds that such administrative changes will not result in a withdrawal or reduction of its rating then assigned to the Refunded Bonds. If this Agreement is amended, prior written notice and copies of the proposed changes shall be given to the rating agencies which have rated the Refunded Bonds. EXECUTED as of the date first written above. CITY OF RENTON, WASHINGTON �, t� — -- Finance and nformation Ser ices Administrator U.S. BANK NATIONAL ASSOCIATION Authorized Officer Exhibit A — Addresses of the City and the Escrow Agent Exhibit B — Description of the Refunded Bonds Exhibit C — Schedule of Debt Service on Refunded Bonds Exhibit D — Description of Beginning Cash Deposit (if any) and Escrowed Securities Exhibit E — Escrow Fund Cash Flow Appendix A — Notice of Redemption for the 2006 Bonds Appendix B — Notice of Defeasance for the 2006 Bonds 10 osiosn e �nrr° � EXHIBIT A Addresses of the City and Escrow Agent The City: City of Renton, Washington 1055 S. Grady Way Renton, Washington 98057 Attention: Finance and Information Services Administrator Escrow Agent: U.S. Bank National Association Global Corporate Trust Services PD-WA-T7CT 1420 Fifth Avenue, 7th Floor Seattle, WA 98101 Attention: Greg E. Skutnik A-� 05/O6/15 �✓ �.r� EXHIBIT B Description of the Refunded Bonds City of Renton, Washington Limited Tax General Obligation Bonds, 2006 Maturity Dates (December 1) Principal Interest Rates 2017 $ 775,000 5.00% 2019* 1,670,000 5.00 2020 900,000 5.00 2021 945,000 5.00 2�22 1,000,000 5.25 2023 1,040,000 525 2024 1,095,000 5.25 2028* 4,975,000 5.00 * Term Bonds. B-1 05/O6/15 �"` w� EXHIBIT C Schedule of Debt Service on the Refunded Bonds Principal/ Date Interest Redemption Price Total 06/O1/2015 $313,918.75 -- $313,918.75 12/O1/2015 313,918.75 -- 313,918.75 06/Ol/2016 313,918.75 -- 313,918.75 12/01/2016 313,918.75 $12,400,000.00 12,713,918.75 $1,255,675.00 $12,400,000.00 $13,655,675.00 G 1 osiosn s �.rj "�r�" EXHIBIT D Escrow Deposit I. Cash: $834.75 II. Other Obligations: Principal Description Maturity Date Amount Interest Rate Total Cost TBill OS/28/2015 $ 75,000 -- $ 75,006.85 TBill OS/28/2015 205,000 -- 205,018.71 TNote 11/30/2015 279,000 0.25% 279,523.20 TNote OS/31/2016 279,000 1.75 285,427.27 TNote 11/30/2016 3,420,000 0.50 3,432,278.20 TNote 11/30/2016 9,262,000 0.50 9,295,251.63 $ 13,520,000 $ 13,572,505.86 IIL Costs of Issuance (1): Escrow Agent Fee (U.S. Bank) $ 1,000.00 Bond Counsel Fee (Pacifica Law Group LLP) 25,300.00 Rating Agency (Standard & Poor's) 12,375.00 Verification Agent Fee (Grant Thornton LLP) 3,000.00 TOTAL: $ 41,675.00 (1) Net of Purchaser's fee of$72,683.80. D-1 05/06/15 '`�++ w.r" EXHIBIT E Escrow Fund Cash Flow Escrow Net Escrow Excess Cash Date Requirement Receipts Receipts Balance OS/13/2015 $ 834.75 $ 834.75 $ 834.75 OS/28/2015 280,000.00 280,000.00 280,834.75 OS/31/2015 34,495.00 34,495.00 315,329.75 06/O1/2015 $ 313,918.75 -- (313,918.75) 1,411.00 11/30/2015 -- 313,495.00 313,495.00 314,906.00 12/O1/2015 313,918.'75 -- (313,918.75) 987.25 OS/31/2016 -- 313,146.25 313,146.25 314,133.50 06/Ol/2016 313,918.75 -- (313,918.75) 214.75 11/30/2016 -- 12,713,705.00 12,713,705.00 12,713,919.75 12/O1/2016 12,713,918.75 -- (12,713,918.75) 1.00 $ ]3,655,675.00 $ 13,655,676.00 $ 1.00 E-1 osiosi,s � � APPENDIX A-1 NOTICE OF REDEMPTION* City of Renton, Washington Limited Tax General Obligation Bonds,2006 NOTICE IS HEREBY GIVEN that the City of Renton, Washington (the "City") has called for redemption on December 1, 2016, a portion of its outstanding Limited Tax General Obligation Bonds, 2006 (the "Bonds"). The Bonds to be refunded will be redeemed at a price of one hundred percent (100%) of their principal amount, plus interest accrued to December 1, 2016. The redemption price of the Bonds is payable on presentation and surrender of the Bonds at the office of: U.S. Bank National Association Global Corporate Trust Services 111 Fillmore Ave E St. Paul, MN 55107 Interest on the Bonds to be refunded or portions thereof which are redeemed shall cease to accrue on December l, 2016. The following Bonds are being redeemed: Maturity Dates Principal Interest CUSIP (December 1) Amounts Rates Numbers 2017 $ 775,000 5.00% 760133QV3 2019* 1,670,000* 5.00 760133QX9 2020 900,000 5.00 760133QY7 2021 945,000 5.00 760133QZ4 2022 1,000,000 5.25 760133RA8 2023 1,040,000 525 760133RB6 2024 1,095,000 5.25 760133RC4 2028* 4,975,000* 5.00 760133RGS * Term Bonds. * This notice shall be given not more than 60 nor less than 30 days prior to December l, 2016 by first c(ass mail to each registered owner of the Refunded Bonds. In addition notice shall be mailed to The Depository Trust Company of New York, New York; MBIA Insurance Corporation (or its successor in interest); Standard&Poor's,Fitch Ratings;and to the Municipal Securities Rulemaking Board. A-i o5iosn s � � By Order of the City of Renton, Washington U.S. Bank National Association, as Paying Agent Dated: Withholding of 28% of gross redemption proceeds of any payment made within the United States may be required by the Jobs and Growth Tax Relief Reconciliation Act of 2003 (the "Act") unless the Paying Agent has the correct taxpayer identification number (social security or employer identification number) or exemption certificate of the payee. Please furnish a properly completed Form W-9 or exemption certificate or equivalent when presenting your Bonds. f�1-II 05/06/15 � � APPENDIX B Notice of Defeasance* City of Renton, Washington Limited Tax General Obligation Bonds, 2006 NOTICE IS HEREBY GIVEN to the owners of that portion of the above-captioned bonds with respect to which, pursuant to an Escrow Deposit Agreement dated May 13, 2015, by and between the City of Renton, Washington (the "City") and U.S. Bank National Association, Seattle, Washington (the "Escrow Agent"), the City has deposited into an escrow account, held by the Escrow Agent, cash and non-callable direct obligations of the United States of America, the principal of and interest on which, when due, will provide money sufficient to pay each year, to and including the respective maturity or redemption dates of such bonds so provided for, the principal thereof and interest thereon (the "Defeased Bonds"). The Defeased Bonds will be called on December 1, 2016, at a price of 100°/o plus accrued interest. Such Defeased Bonds are therefore deemed to be no longer outstanding pursuant to the provisions of Ordinance No. 5215 of the City, authorizing the issuance of the Defeased Bonds, but will be paid by application of the assets of such escrow account. The Defeased Bonds are described as follows: Limited Tax General Obligation Bonds, 2006 (Dated August l, 2006) Maturity Dates CUSIP (December 1) Principal Interest Rates Numbers 2017 $ 775,000 5.00 760133QV3 2019* 1,670,000 5.00 760133QX9 2020 900,000 5.00 760133QY7 202 I 945,000 5.00 760133QZ4 2022 1,000,000 5.25 760133RA8 2023 1,040,000 5.25 760133RB6 2024 1,095,000 5.25 760133RC4 2028* 4,975,000 5.00 760133RG5 * Term Bonds. ` This notice shall be given immediately by first class mail to each registered owner of the Defeased Bonds. In addition notice shall be mai(ed to The Depository Trust Company of New York, New York; MBIA Insurance Corporation (or its successor in interest); Standard & Poor's, Fitch Ratings; and to the Municipal Securities Rulemaking Board. � � Information for Individual Registered Owner The addressee of this notice is the registered owner of Bond Certificate No. of the Defeased Bonds described above, which certificate is in the principal amount of $ All of which has been defeased as described above. B-1 l 05/O6/15