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HomeMy WebLinkAboutORD 4661 YQ ! r Amends: ORD 3184, 4201, 4372, 4390 4483 CITY OF RENTON, WASHINGTON ORDINANCE NO. 4661 AN ORDINANCE of the City of Renton, Washington, relating to contracting indebtedness; providing for the issuance of Limited Tax General Obligation Refunding Bonds, 1997A, of the City to obtain the funds required to refund all of the City's outstanding Limited Tax General Obligation Bonds, 1978, Limited Tax General Obligation Bonds, 1989, Limited Tax General Obligation Bonds, 1992, and Limited Tax General Obligation Bonds, 1993C, and a portion of the City's outstanding Limited Tax General Obligation Bonds, 1994, and to pay the administrative costs of the refunding and the costs of issuance and sale of the bonds; fixing the date, form, maturities, accreted value at maturity, interest rates, terms and covenants of the bonds; establishing a bond redemption fund; providing for and authorizing the purchase of certain obligations out of the proceeds of the sale of the bonds authorized herein and for the use and application of the money derived from those investments; authorizing the execution of an agreement with First Trust National Association of Seattle, Washington, as refunding trustee; providing for the call, payment and redemption of the outstanding bonds to be refunded; providing for bond insurance; and approving the sale and providing for the delivery of the bonds to Piper Jaffray Inc. of Seattle, Washington. WHEREAS, pursuant to Ordinance No. 3184, the City of Renton, Washington (the "City") , heretofore issued its $900,000 par value Limited Tax General Obligation Bonds, 1978 (the "1978 Bonds") , for the purpose of providing part of the funds with which to pay the cost of land acquisition as necessary, and construction and/or acquisition of a senior citizens center and appurtenances, and by that ordinance reserved the right to redeem the 1978 Bonds prior to their maturity on February 1, 1988, or any semiannual interest payment date thereafter, at a price of par plus accrued interest to the date fixed for redemption; and 282778.03 ORDINANCE N0. 4661 WHEREAS, there are presently outstanding $75,000 par value of 1978 Bonds maturing on February 1, 1998, and bear interest at the rate of 5.50$; and � WHEREA3, pursuant to Ordinance No. 4201, the City heretofore issued its $1,600, 000 par value Limited Tax General Obligation I Bonds, 1989 (the "1989 Bonds") , for the purpose of providing funds with which to pay the cost of replacing equipment, making capital improvements, including remodeling and upgrading facilities of the police department and e�ansion and remodeling of other municipal office space, replacing certain fire equipment, and conducting various park, street/traffic and public works projects, .and by that ordinance reserved the right to redeem the 1989 Bonds prior to their maturity on February 1, 1996, or any semiannual interest payment date thereafter, at a price of par plus accrued interest to the date fixed for redemption; and WHEREAS, there are presently outstanding $785,000 par value of 1989 Bonds maturing on February 1 of each of the years 1998 through 2002, inclusive, and bearing various interest rates from 6.80$ to 7.00�; and WHEREAS, pursuant to Ordinance No. 4372, the City heretofore issued its $1,365,000 par value Limited Tax General Obligation Bonds, 1992 (the "1992 Bonds") , for general City purposes to provide funds with which to pay a part of the cost of acquiring computers and updated computer systems, remodeling existing ' municipal space, including renovating the City Hall, acquiring a life support vehicle, aerial ladders, various municipal vehicles 2azns.a� -�- ORDINANCE NO. 4661 and equipment, acquiring wetland and open space properties and carrying out other general municipal purposes, which 1992 Bonds were issued without the right or option of the City to redeem those bonds prior to their maturity; and � i WHEREAS, there are presently outstanding $900,000 par value of 1992 Bonds maturing on December 1 of each of the years 1997 through 2002, inclusive, and bearing various interest rates from 4.10$ to 5.00�; and WHEREAS, pursuant to Ordinance No. 4390, the City heretofore issued its $350,000 par value Limited Tax General Obligation Bonds, 1993C (the "1993C Bonds") , for general City purposes to provide funds with which to pay the cost of acquiring yard waste carts for Solid Waste Utility residential customers, which 1993C Bonds were issued without the right or option of the City to redeem those bonds prior to their maturity; and WHEREAS, there are presently outstanding $165,000 par value of 1993C Bonds maturing on December 1 of each of the years 1997 through 1999, inclusive, and bearing various interest rates from 4.55& to 4.95�; and WHEREAS, pursuant to Ordinance No. 4483, the City heretofore issued its $980, 000 par value Limited Tax General Obligation Bonds, 1994 (the '�1994 Bonds") , for general City purposes to provide funds with which to reimburse the City for capital assets acquired by the Equipment Rental Fund during 1994 and to fund equipment acquisitions in 1995, which 1994 Bonds were issued without the 2szns.o3 -3- ORDINANCE NO. 4661 right or option of the City to redeem those bonds prior to their maturity; and WHEREAS, there are presently outstanding $670,000 par value of 1994 Bonds maturing on December 1 of each of the years 1997 through 2002, inclusive, and bearing various interest rates from 5.30� to 6. 10� (the "Refunded 1994 Bonds") ; and WHEREAS, after due consideration, it appears to the City Council that the 1978 Bonds, the 1989 Bonds, the 1992 Bonds, the 1993C Bonds and the Refunded 1994 Bonds (collectively, the "Refunded Bonds") may be advance refunded by the issuance and sale of the limited tax general obligation refunding bonds authorized herein (the "Bonds") so that a savings will be effected by the difference between the present value of principal and interest cost over the life of the Bonds and the present value of principal and interest cost over the life of the Refunded Bonds but for such refunding and to restructure a portion of the City's outstanding limited tax general obligation debt thereby allowing more cost effective structuring of additional debt, which refunding will be effected by: (a) The issuance of the Bonds and the payment of the costs of the -issuance of the Bonds and the costs of the refunding; (b) The call, payment and redemption on August 1, 1997, of all of the 1978 Bonds at a price of par plus accrued interest; (c) The call, payment and redemption on August 1, 1997, of all of the 1989 Bonds at a price of par plus accrued interest; zszns.o� -4- ORDINANCE NO. 4661 (d) The payment of the principal of and interest on the 1992 Bonds when due up to and including December 1, 2002, . the final maturity date of the 1992 Bonds; (e) The payment of the principal of and interest on the 1993C Bonds when due up to and including December 1, 1999, the final maturity date of the 1993C Bonds; (f) The payment of the principal of and interest on the Refunded 1994 Bonds when due up to and including December 1, 2002, the final maturity date of the Refunded 1994 Bonds; and WHEREAS, to effect that refunding in the manner that will be most advantageous to the City it is found necessary and advisable that certain Acquired Obligations (hereinafter defined) bearing interest and maturing at such time or times as necessary to accomplish the refunding as aforesaid be purchased out of the proceeds of the Bonds; and WHEREAS, the MBIA Insurance Corporation of Armonk, New York ("Bond Insurer") , has made a commitment to issue an insurance policy (the "Municipal Bond Insurance Policy") insuring the payment when due of the principal of and interest on the Bonds as provided therein, and the City Council of the City deems that the purchase of the Municipal Bond Insurance Policy is in the best interest of the City; and WHEREAS, Piper Jaffray Inc. of Seattle, Washington, has offered to purchase the Bonds under the terms and conditions hereinafter set forth in the form of a purchase contract; NOW, I� THEREFORE, 2szns.a� -5- ORDINANCE NO. 4661 THE CITY COUNCIL OF THE CITY OF RENTON, WASHINGTON, DO ORDAIN as follows: SECTION I. Debt Capacitv. The assessed valuation of the taxable property within the City as ascertained by the last preceding assessment for City purposes for the calendar year 1997 is $3,625, 601,764. The City has outstanding general indebtedness evidenced by limited tax general obligation bonds and conditional sales contracts in the principal amount of $6,770, 360.49 incurred within the limit of up to 1-1/2� of the' value of the taxable . property within the City permitted for general municipal purposes without a vote of the qualified voters therein, unlimited tax general obligation bonds in the principal amount of $4,595,000 incurred within the limit of up to 2-1/2� of the value of the taxable property within the City for capital purposes only and unlimited tax general obligation bonds in the principal amount of $2,940,000 incurred within the additional limit of up to 2-1/2� of the value of the taxable property. within the City for parks and open space purposes issued pursuant to a vote of the qualified voters of the City. The amount of indebtedness for which bonds are authorized herein to be issued is $4,085,000 (calculated based on accreted value at maturity) and the City will issue simultaneously with the bonds authorized herein additional limited tax general obligation bonds in the amount of $16,490,000 (calculated based on principal amount or accreted value at maturity, as applicable) . SECTION II. Authorization of Bonds. The City shall borrow money on the credit of the City and issue negotiable limited tax zszns.a+ -6- ORDINANCE NO. 4661 general obligation refunding bonds evidencing that indebtedness in the amount of $4,085,000 for general City purposes to provide part of the money required to: (A) Call, pay and redeem on August 1, 1997, all of the 1978 Bonds at a price of par plus accrued interest; (B) Call, pay and redeem on August 1, 1997, all of the 1989 Bonds at a price of par plus accrued interest; (C) Pay the principal of and interest on the 1992 Bonds when due up to and including December 1, 2002, the final maturity date of the 1992 Bonds; . (D) Pay the principal of and interest on the 1993C Bonds when due up to and including December 1, 1999, the final maturity date of the 1993C Bonds; (E) Pay the principal of and interest on the Refunded , 1994 Bonds when due up to and including December 1, 2002, the final maturity date of the Refunded 1994 Bonds; ' (the Refunding Plan") , and pay the administrative costs of the refunding and the costs of issuance and sale of the Bonds. The general indebtedness to be incurred shall be within the limit of up to 1-1/2� of the value of the taxable Pro�er_�ty within the City permitted for general municipal purposes without a vote of the gualified voters therein. SECTION III. Description of Bonds. The bonds shall be called Limited Tax General Obligation Refunding Bonds, 1997A, of the City (the "Bonds") ; shall be in the original purchase price per $5,000 accreted maturity amount as set forth below; shall be dated the date of delivery; shall be in the denomination of $5, 000 accreted maturity amount or any integral multiple thereof within a single maturity; shall be numbered separately in the manner and with any additional designation as the Bond Registrar (collectively, the aszns.os -7- ORDINANCE NO. 4661 fiscal agencies of the State of Washington) deems necessary for purposes of identification; shall bear interest to be compounded semiannually on each June 1 and December 1, commencing December 1, 1997, to the maturity of the Bonds and accrued for payment at �I maturity; and� shall mature and be due and payable as to both principal and interest on Dece7nber 1 in the years and in the amounts as follows: Purchase Price per $5,000 Aggregate Accreted Maturitv Accreted Maturity Amount Maturity Amount 2003 $3,554.70 $1,195,000 2004 3,350.30 940,000 2005 3, 164.75 1,225, 000 2006 2,958.85 725,000 The accreted value of the Capital Appreciation Bonds of each maturity are set forth in Exhibit A. The accreted values on dates between those shown in Exhibit A shall be computed by straight line interpolation. SECTION IV. Reqistration and Transfer of Bonds. The Bonds � shall be issued only in registered form as to both principal and interest and shall be recorded on books or records maintained by the Bond Registrar (the "Bond Register") . . The Bond Register shall contain the name and mailing address of the owner of each Bond and the principal amount and number of each of the Bonds held by each owner. Bonds surrendered to the Bond Registrar may be exchanged for Bonds in any authorized denomination of an equal aggregate principal amount or accreted value and of the same interest rate and maturity. Bonds may be transferred only if endorsed in the zszns.o� -8- ORDINANCE NO. 4661 manner provided thereon and surrendered to the Bond Registrar. Any exchange or transfer shall be without cost to the owner or transferee. The Bond Registrar shall not be obligated to exchange or transfer any Bond during the 15 days preceding any principal payment date. The Bonds initially shall be registered in the name of CEDE & CO. , as the nominee of The Depository Trust Company, New York, New York ("DTC") . The Bonds so registered shall be held in fully immobilized form by DTC as depository in accordance with the provisions of a Blanket Issuer Letter of Representations dated April 15, 1997, between the City and DTC (the "Letter of Representations") . Neither the City nor the Bond Registrar shall have any responsibility or obligation to DTC participants or the persons for whom they act as nominees with respect to the Bonds regarding accuracy of any records maintained by DTC or DTC participants of any amount in respect of principal of or interest on the Bonds, or any notice which is permitted or required to be given to registered owners hereunder (except such notice as is required to be given by the Bond Registrar to DTC) . I� For so long as any Bonds are held in fully immobilized form, DTC or its successor depository shall be deemed to be the registered owner for all purposes hereunder and all references to registered owners, bondowners, bondholders or the like shall mean DTC or its nominees and shall not mean the owners of any beneficial interests in the Bonds. Registered ownership of such Bonds, or any portions thereof, may not thereafter be transferred except: (i) to zszna.a� -9- ORDINANCE NO. 4661 any successor of DTC or its nominee, if that successor shall be qualified under any applicable laws to provide the services proposed to be provided by it; (ii) to any substitute depository appointed by the City or such substitute depository's successor; or (iii) to any person if the Bonds are no longer held in immobilized form. 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 City that it no longer wishes to continue the system of book entry transfers through DTC or its successor (or any substitute depository or its successor) , the City may 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. If (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 City determines that the Bonds are to be in certificated form, the ownership of Bonds may be transferred to any person as provided herein and the Bonds no longer shall be held in fully immobilized form. SECTION V. Payment of Bonds. Both principal of and interest on the Bonds shall be payable in lawful money of the United States of America. Principal of and interest on the Bonds shall be payable upon presentation and surrender of the Bonds by the registered owners at either of the principal offices of the Bond Registrar at the option of the owners. Notwithstanding the zsrr�s.o� -10- ORDINANCE N0. 4661 foregoing, as long as the Bonds are registered in the name of DTC or its nominee, payment of principal of and interest on the Bonds shall be made in the manner set forth in the Letter of Representations (as it may be amended by the Rules of DTC) . SECTION VI. Optional Redemption and Open Market Purchase of Bonds. The Bonds shall be issued without the right or option of the City to redeem the Bonds prior to their stated maturity dates. The City reserves the right and option to purchase any or all of the Bonds in the open market at any time at any price acceptable to the City plus accrued interest, if any, to the date of purchase. All Bonds purchased under this section shall be canceled. SECTION VII. Failure to Redeem Bonds, If any Bond is not redeemed when properly presented at its maturity date, the City shall be obligated to pay interest on that Bond at the same rate provided in the Bond from and after its maturity date until that Bond, both principal and interest, is paid in �full or until sufficient money for its payment in full is on deposit in the bond redemption fund hereinafter created and the Bond has been called for payment by giving notice of that call to the registered owner of each of those unpaid Bonds. SECTION VIII. Pledge of Taxes. For as long as any of the . Bonds are outstanding, the City irrevocably pledges to include in its budget and levy taxes annually within the constitutional and statutory tax limitations provided by law without a vote of the electors of the City on all of the taxable property within the City in an amount sufficient, together with other money legally zszns.os -11- ORDINANCE NO. 4661 available and to be used therefor, to pay when due the principal of and interest on the Bonds, and the full faith, credit and resources of the City are pledged irrevocably for the annual levy and collection of those taxes and the prompt payment of that principal and interest. SECTION IX. Form and Execution of Bonds. The Bonds shall be printed or lithographed on good bond paper in a form consistent with the provisions of this ordinance and state law and shall be signed by the Mayor and City Clerk, either or both of whose signatures may be manual or in facsimile, and the seal of the City or a facsimile reproduction thereof shall be impressed or printed thereon. Only Bonds bearing a Certificate of Authentication in the following form, manually signed by the Bond Registrar, shall be valid or obligatory for any purpose or entitled to the benefits of this ordinance: CERTIFICATE OF AUTHENTICATION This Bond is one of the fully registered City of Renton, Washington, Limited Tax General Obligation ', Refunding Bonds, 1997A, described in the Bond Ordinance. I WASHINGTON STATE FISCAL AGENCY I Bond Registrar By � Authorized Signer The authorized signing of a Certificate of Authentication shall be conclusive evidence that the Bonds so authenticated have been duly executed, authenticated and delivered and are entitled to the benefits of this ordinance. 2szna.os -12- ORDINANCE NO. 4661 If any officer whose facsimile signature appears on the Bonds ceases to be an officer of the City authorized to sign bonds before the Bonds bearing his or her facsimile signature are authenticated or delivered by the Bond Registrar or issued by the City, those Bonds nevertheless may be authenticated, delivered and issued and, when authenticated, issued and delivered, shall be as binding on the City as though that person had continued to be an officer of the City authorized to sign bonds. Any Bond also may be signed on behalf of the City by any person who, on the actual date of signing of the Bond, is an officer of the City authorized to sign bonds, although he or she did not hold the required office on the date of issuance of the Bonds. • SECTION X. Bond Registrar. The Bond Registrar shall keep, or cause to be kept, at its principal corporate trust office, sufficient books for the registration and transfer of the Bonds, which shall be open to inspection by the City at all times. The Bond Registrar is authorized, on behalf of the City, to authenticate and deliver Bonds transferred or exchanged in accordance with the provisions of the Bonds and this ordinance, to serve as the City's paying agent for the Bonds and to carry out all of the Bond Registrar's powers and duties under this ordinance and City Ordinance No. 3755 establishing a system of registration for the City's bonds and obligations. The Bond Registrar shall be responsible for its representations contained in the Bond Registrar's Certificate of Authentication on the Bonds. The Bond Registrar may become the aszna.o� -13- ORDINANCE NO. 4661 owner of Bonds with the same rights it would have if it were not the Bond Registrar and, to the extent permitted by law, may act as depository for and permit any of its officers or directors to act as members of, or in any other capacity with respect to, any committee formed to protect the rights of Bond owners. SECTION XI. Preservation of Tax Exemption for Interest on Bonds. The City covenants that it will take all actions necessary to prevent interest on the Bonds from being included in gross income for federal income tax purposes, and it will neither take any action nor make or permit any use of proceeds of the Bonds or d other funds of the City treated as proceeds of the Bonds at any time during the term of the Bonds which will cause interest on the Bonds to be included in gross income for federal income tax purposes. The City also covenants that it will, to the extent the arbitrage rebate requirement of Section 148 of the Internal Revenue Code of 1986, as amended (the "Code") , is applicable to the Bonds, take all actions necessary to comply (or to be treated as having complied) with that requirement in connection with the Bonds, including the calculation and payment of any penalties that the II City has elected to pay as an alternative to calculating rebatable arbitrage, and the payment of any other penalties if required under Section 148 of the Code to prevent interest on the Bonds from being I included in gross income for federal income tax purposes. The City certifies that it has not been notified of any listing or proposed listing by the Internal Revenue Service to the effect that it is a bond issuer whose arbitrage certifications may not be relied upon. 282778.03 -14- ORDINANCE NO. 4661 SECTION XII. Undertaking to Provide Continuing Disclosure. To meet the requirements of United States Securities and Exchange Commission ("SEC") Rule 15c2-12 (b) (5) (the "Rule") , as applicable to a participating underwriter for the Bonds, the City makes the following written undertaking (the "Undertaking") for the benefit of holders of the Bonds: (A) Undertaking to Provide Annual Financial Information and Notice of Material Events. The City � undertakes to provide or cause to be provided, either directly or through a designated agent: (1) To each nationally recognized municipal securities information repository designated by the SEC in accordance with the Rule ("NRMSIR") and to a state information depository, if any, established in the state of Washington (the "SID") annual financial information and operating data of the type included in the final official statement for the Bonds and described in Section XII (B) ("annual financial information") ; (2) To each NRMSIR or the Municipal Securities Rulemaking Board ("MSRB") , and to the SID, timely notice of the occurrence of any of the following events with respect to the Bonds, if material: (1) principal and interest payment delinquencies; (2) non-payment related defaults; (3) unscheduled draws on debt service reserves reflecting financial difficulties; (4) unscheduled draws on credit enhancements reflecting financial difficulties; (5) substitution of credit or liquidity providers, or their failure to perform; (6) adverse tax opinions or events affecting the tax-exempt status of the Bonds; (7) modifications to rights of holders of the Bonds; (8) Bond calls (other than scheduled mandatory redemptions of Term Bonds) ; (9) defeasances; (10) release, substitution, or sale of property securing repayment of the Bonds; and (11) rating changes; and (3) To each NRMSIR or to the MSRB, and to the SID, timely notice of a failure by the City to provide required annual financial information on or before the date specified in Section XII (B) . zszns.o� -15- ORDINANCE NO. 4661 (B) Type of Annual Financial Information Undertaken to be Provided. The annual financial information that the City undertakes to provide in Section XII(A) : (1) Shall consist of the annual financial information and operating data regarding the City of the type included in the Official Statement for the Bonds as follows: (i) annual financial statements of the City; (ii) a statement of � authorized, issued and outstanding general obligation bond debt; (iii) the assessed value of the property within the City subject to ad valorem taxation; and (iv) ad valorem tax levy rates and amounts and percentage of taxes collected. Any and all of this information may be provided in the form of or contained in the City's Comprehensive Annual Financial Report or similar documents; (2) Shall be prepared (except as noted in the financial statements) in accordance with applicable generally accepted accounting principles promulgated by the Government Accounting Standards Board ("GASB") , as such principles may be changed from time to time by GASB or its successor; (3) Shall not be audited, except, however, that if and when audited financial statements are otherwise prepared and available to the City they will be provided; . (4) Shall be provided to each NRMSIR and the SID, not later than the last day of the ninth month after the end of each fiscal year of the City (currently, a fiscal year ending December 31) , as such fiscal year may be changed as required or permitted by State law, commencing with the City's. fiscal year ending December 31, 1996; and (5) May be provided in a single or multiple documents, and may be incorporated by reference to other documents that have been filed with each NRMSIR and the SID, or, if the document incorporated by reference is a "final official statement" with respect to other obligations of the City, that has been filed with the MSRB. (C) Amendment of Undertakina. The Undertaking is subject to amendment after the primary offering of the Bonds without the consent of any holder of any Bond, or of any broker, dealer, municipal securities dealer, participating underwriter, rating agency, NRMSIR, the SID Zszns.a� -16- ORDINANCE NO. 4661 or the MSRB, under the circumstances and in the manner permitt+ed by the Rule. The City will give notice to each NRMSIR or the MSRB, and the SID, of the substance (or provide a copy) of any amendment to the Undertaking and a brief statement of the reasons for the amendment. If .the amendment changes the type of annual financial information to be provided, the notice also will include a narrative explanation of the effect of that change on the type of information to be provided. (D) Beneficiaries. The Undertaking evidenced by this Section XII shall inure to the benefit of the City and any holder of Bonds, and shall not inure to the benefit of or create any rights in any other person. (E) Termination of Undertakina. The City's obligations under this Undertaking shall terminate upon the legal defeasance of all of the Bonds. In addition, the City's obligations under this Undertaking shall terminate if those provisions of the Rule which require the City to comply with this Undertaking become legally inapplicable in respect of the Bonds for any reason, as confirmed by an opinion of nationally recognized bond counsel or other counsel familiar with federal securities laws delivered to the City, and the City provides timely notice of such termination to each NRMSIR or the MSRB and the SID. (F) Remedy for Failure to Comply with Undertakinq. As soon as practicable after the City learns of any failure to comply with the Undertaking, the City will proceed with due diligence to cause such noncompliance to be corrected. No failure by the City or other obligated person to comply with the Undertaking shall constitute a default in respect of the Bonds. The sole remedy of any holder of a Bond shall be to take such actions as that holder deems necessary, including seeking an order of specific performance from an appropriate court, to compel the City or other obligated person to comply with the Undertaking. (G) Desiqnation of Official Responsible to Administer Undertakinct. The Finance and Information Services Administrator of the City (or such other officer of the City who may in the future perform the duties of the Finance and Information Services Administrator) or his or her designee is authorized and directed in his or her discretion to take such further actions as may be necessary, appropriate or convenient to carry out the Undertaking of the City in respect of the Bonds set forth 2azns.o� -17- ORDINANCE NO. 4661 in this Section XII and in accordance with the Rule, including, without limitation, the following actions: (1) Preparing and filing the annual financial information undertaken to be provided; (2) Determining whether any event specified I in Section XII(A) has occurred, assessing its materiality with respect to the Bonds, and, if material, preparing and disseminating notice of its occurrence; (3) Determining whether any person other than the City is an "obligated person" within the meaning of the Rule with respect to the Bonds, and obtaining from such person an undertaking to provide any annual financial information and notice of material events for that person in accordance with the Rule; (4) Selecting, engaging and compensating designated agents and consultants, including but not limited to financial advisors and legal counsel, to assist and advise the City in carrying out the Undertaking; and (5) Effecting any necessary amendment of the Undertaking. SECTION XIII. Bonds Negotiable. The Bonds shall be negotiable instruments to the extent provided by RCW 62A.8-102 and 62A.8-105. SECTION XIV. Refunding or Defeasance of the Bonds. The City may issue refunding bonds pursuant to the laws of the State of Washington or use money available from any other lawful source to pay when due the principal of and interest on the Bonds, or any portion thereof included in a refunding or defeasance plan, and to redeem and retire, refund or defease all such then-outstanding Bonds (hereinafter collectively called the "defeased Bonds") and to pay the costs of the refunding or defeasance. If money and/or direct obligations of the United States of America maturing at a zszns.os -18- ORDINANCE NO. 4661 time or times and bearing interest in amounts (together with money, if necessary) sufficient to redeem and retire, refund or defease the defeased Bonds in accordance with their terms are set aside in a special trust fund or escrow account irrevocably pledged to that redemption, retirement or defeasance of defeased Bonds (hereinafter called the "trust account") , then all right and interest of the owners of the defeased Bonds in the covenants of this ordinance and in the funds and accounts obligated to the payment of the defeased Bonds shall cease and become void. The owners of defeased Bonds shall have the right to receive payment of the principal of and , interest on the defeased Bonds from the trust account. The City shall include in the refunding or defeasance plan such provisions as the City deems necessary for the random selection of any defeased Bonds that constitute less than all of a particular maturity of the Bonds, for notice of the defeasance to be given to the owners of the defeased Bonds and to such other persons as the City shall determine, and for any required replacement of Bond certificates for defeased Bonds. The defeased Bonds shall be deemed no longer outstanding, and the City may apply any money in any other fund or account established for the payment or redemption of the defeased Bonds to any lawful purposes as it shall determine. Notwithstanding anything in this section to the contrary, if the principal of and/or interest due on the Bonds is paid by the Bond Insurer pursuant to the Municipal Bond Insurance Policy, the Bonds shall be treated as remaining outstanding for all purposes and shall not be considered paid the City, and the covenants, Zs2ris.os -19- ORDINANCE NO. 4661 agreements and other obligations of the City to the registered owners of the Bonds shall continue to exist, and the Bond Insurer shall be subrogated to the rights of the registered owners. SECTION XV. Bond Fund and Deposit of Bond Proceeds. There has been created and established in the office of the Finance and Information Services Administrator a special fund designated as the General Governmental Miscellaneous Debt Fund (the "Bond Fund") . Within the Bond Fund an account to be known as the "1997A Refunding Bonds" account will be created and established. All taxes collected for and allocated to the payment of the principal of and interest on the Bonds shall be deposited in that account in the Bond Fund. The proceeds of the Bonds shall be deposited in accordance with the provisions of Section XVI herein. Section XVI. Refunding of the Refunded Bonds. (A) Appointment of Refunding Trustee. First Trust National Association of Seattle, Washington, is appointed Refunding Trustee. (B) Use of Bond Proceeds: Acquisition of Acquired Obligations. Al1 of the proceeds of the sale of the Bonds shall be deposited inimediately upon the receipt thereof, together with other money of the City legally available therefor, if necessary, with the Refunding Trustee and used to discharge the obligations of the City relating to the Refunded Bonds under Ordinances Nos. 3184, 4201, 4372, 4390 and 4483 (the "Refunded Bond Ordinances") by providing for the payment of the amounts required to be paid by the Refunding Plan. To the extent practicable, such obligations shall be discharged fully by the Refunding Trustee's simultaneous zszns.o� -20- ORDINANCE NO. 4661 purchase of United States Treasury Certificates of Indebtedness and/or Notes--State and Local Government Series or other direct, noncallable obligations of the United States of America (the "Acquired Obligations"j , bearing such interest and maturing as to principal and interest in such amounts and at such times so as to provide, together with a beginning cash balance, if necessary, for the payment of the amount required to be paid by the Refunding Plan. The Acquired Obligations are listed and more particularly described in Schedule A attached to the Refunding Trust Agreement between the City and the Refunding Trustee, but are subject to substitution as set forth below. Any Bond proceeds or other money deposited with the Refunding Trustee not needed to purchase the Acquired Obligations and provide a beginning cash balance, if any, and pay the costs of issuance of the Bonds shall be returned to the . City at the time of delivery of the Bonds to the initial purchaser thereof and deposited in the Bond Fund to pay interest on the Bonds on the first interest payment date. (C) Substitution of Acauired Obligations. Prior to the purchase of any Acquired Obligations, the City reserves the right to substitute other Government Obligations for any of the Acquired Obligations and to use any savings created thereby for any lawful City purpose if, (a) in the opinion of Foster Pepper & Shefelman, the City's bond counsel, the interest on the Bonds and the Refunded Bonds will remain excluded from gross income for federal income tax purposes under Sections 103, 148 and 149 (d) of the Code, and (b) such substitution shall not impair the timely payment of tl�e aszns.o� -21- ORDINANCE NO. 4661 amounts required to be paid by the Refunding Plan, as verified by a nationally recognized independent certified public accounting f irm. After the purchase of the Acquired Obligations by the Refunding Trustee, the City reserves the right to substitute therefor cash or Government Obligations subject to the conditions that such money or securities held by the Refunding Trustee shall i be sufficient to carry out the Refunding Plan, that such substitution will not cause the Bonds and the Refunded Bonds to be arbitrage bonds within the meaning of Section 148 of the Code and regulations thereunder in effect on the date of such substitution and applicable to obligations issued on the issue date of the Bonds, and that the City obtain, at its expense: (i) a verification by a nationally recognized independent certified public accounting firm acceptable to the Refunding Trustee confirming that the payments of principal of and interest on the substitute securities, if paid when due, and any other money held by the Refunding Trustee will be sufficient to carry out the Refunding Plan; and (2) an opinion from Foster Pepper & Shefelman, bond counsel to the City, its successor, or other nationally recognized bond counsel to the City, to the effect that the disposition and substitution or purchase of such securities, under the statutes, rules and regulations then in force and applicable to the Bonds, will not cause the interest on the Bonds or the Refunded Bonds to be included in gross income for federal income tax purposes and that such disposition and substitution or purchase is zszna.o� -22- ORDINANCE NO. 4661 in compliance with the statutes and regulations applicable to the Bonds. Any surplus money resulting from the sale, transfer, other disposition or redemption of the Acquired Obligations and the substitutions therefor shall be released from the trust estate and transferred to the City to be used for any lawful City purpose. (D) Administration of Refunding Plan. The Refunding Trustee is authorized and directed to purchase the Acquired Obligations (or substitute obligations) and to make the payments required to be made by the Refunding Plan from the Acquired Obligations (or substitute obligations) and money deposited with the Refunding Trustee pursuant to this ordinance. All Acquired Obligations (or substitute obligations) and the money deposited with the Refunding Trustee and any income therefrom shall be held irrevocably, invested and applied in accordance with the provisions of the Refunded Bond Ordinances, this ordinance, chapter 39.53 RCW and other applicable statutes of the State of Washington and the Refunding Trust Agreement. All necessary and proper fees, compensation and expenses of the Refunding Trustee for the Bonds and all other costs incidental to the setting up of the escrow to accomplish the refunding of the Refunded Bonds and costs related to the issuance and delivery of the Bonds, including bond printing, rating service fees, verification fees, bond counsel's fees and other related expenses, shall be paid out of the proceeds of the II Bonds. (E) Authorization for Refunding Trust Agreement. To carry out the Refunding Plan provided for by this ordinance, the Mayor or 2szns.os -23- ORDINANCE NO. 4661 Finance and Information Services Administrator of the City is authorized and directed to execute and deliver to the Refunding Trustee a Refunding Trust Agreement substantially in the form on file with the Finance and Information Services Administrator and by this reference made a part hereof setting forth the duties, obligations and responsibilities of the Refunding Trustee in connection with the payment, redemption and retirement of the Refunded Bonds as provided herein and stating that the provisions for payment of the fees, compensation and expenses of such Refunding Trustee set forth therein are satisfactory to it. Prior to executing the Refunding Trust Agreement, the Mayor or Finance and Information Services Administrator of the City is authorized to make such changes therein which do not change the substance and purpose thereof or which assure that the escrow provided therein and the Bonds are in compliance with the requirements of federal law governing the exclusion of interest on the Bonds from gross income for federal income tax purposes. Section XVII. Call for Redemption of the 1978 and 1989 Bonds. • The City calls for redemption on August 1, 1997, all of the 1978 Bonds and 1989 Bonds at a price of par. Such calls for redemption shall be irrevocable after the delivery of the Bonds to the initial purchaser thereof. The dates on which the 1978 and 1989 Bonds are herein called for redemption are the first dates respectively on which those bonds may be called. The proper City officials are authorized and directed to give or cause to be given such notices as required, at the times and in Zazns.o� -24- ORDINANCE NO. 4661 , the manner required pursuant to Ordinances Nos. 3184 and 4201 in order to effect the redemption prior to their maturity of the 1978 Bonds and the 1989 Bonds, respectively. Section XVIII. City Findings with Respect to Refundinq. The City Council finds and determines that the issuance and sale of the Bonds at this time will effect a savings to the City and is in the best interest of the City and its taxpayers and in the public interest. In making such finding and determination, the City Council has given consideration to the fixed maturities of the Bonds and the Refunded Bonds, the costs of issuance of the Bonds and the known earned income from the investment of the proceeds of the issuance and sale of the Bonds and other money of the City used in the Refunding Plan pending payment and redemption of the Refunded Bonds. The City Council further finds and determines that the money to be deposited with the Refunding Trustee for the Refunded Bonds in accordance with Section XVI of this ordinance will discharge and satisfy the obligations of the City under the Refunded Bond Ordinances with respect to the Refunded Bonds, and the pledges, I charges, trusts, covenants and agreements of the City therein made or provided for as to the Refunded Bonds, and that the Refunded Bonds shall no longer be deemed to be outstanding under the respective Refunded Bond Ordinance immediately upon the deposit of such money with the Refunding Trustee. SECTION XIX. Approval of Bond Purchase Contract. Piper Jaffray Inc. of Seattle, Washington, has presented a purchase zszna.os -25- ORDINANCE NO. 4661 contract (the "Bond Purchase Contract") to the City offering to purchase the Bonds under the terms and conditions provided in the Bond Purchase Contract, which written Bond Purchase Contract is on file with the City Clerk and is incorporated herein by this reference. The City Council finds that entering into the Bond Purchase Contract is in the City's best interest and therefore accepts the offer contained therein and authorizes its execution by City officials. The Bonds will be printed at City expense and will be delivered . to the purchaser in accordance with the Bond Purchase Contract, with the approving legal opinion of Foster Pepper & Shefelman, municipal bond counsel of Seattle, Washington, regarding the Bonds. Bond counsel shall not be required to review and shall express no opinion concerning the completeness or accuracy of any off•icial statement, offering circular or other sales or disclosure material issued or used in connection with the Bonds, and bond counsel's opinion shall so state. ' The proper City officials are authorized and directed to do everything necessary for the prompt delivery of the Bonds to the purchaser and for the proper application and use of the proceeds of the sale thereof. SECTION XX. Preliminary Official Statement Deemed Final. The City Council has been provided with copies of a preliminary official statement dated April 8, 1997 (the "Preliminary Official Statement") , prepared in connection with the sale of the Bonds. For the sole purpose of the Bond purchaser's compliance with SEC Zarr�s.as -26- ORDINANCE NO. 4661 Rule 15c2-12 (b) (1) , the City "deems final" that Preliminary Official Statement as of its date, except for the omission of information as to offering prices, interest rates, selling compensation, aggregate principal amount, principal amount per maturity, maturity dates, options of redemption, delivery dates, ratings and other terms of the Bonds dependent on such matters. ' SECTION XXI. Bond Insurance. The City Council finds that it is in the City's best interest to purchase, and that a savings will result from purchasing, the Municipal Bond Insurance Policy for the Bonds. The City shall purchase from the Bond Insurer the Municipal Bond Insurance Policy insuring the prompt payment of the principal of and interest on the Bonds and agrees to the conditions for obtaining that policy, including the payment of the premium therefor and the following provisions entitled "Payments under the Policy" required by the Bond Insurer to be included in this resolution: "A. In the event that, on the second Business Day, and again on the Business Day, prior to the payment date on the Obligations, the Paying Agent [the Bond Registrar] has not received sufficient moneys to pay all principal of and interest on the Obligations due on the second following or following, as the case may be, Business Day, the Paying Agent shall immediately notify the Insurer or its designee on the same Business Day by telephone or telegraph, confirmed in writing by registered or certified mail, of the amount of the def iciency. � "B. If the deficiency is made up in whole or in part prior to or on the payment date, the Paying Agent shall so notify the Insurer or its designee. "C. In addition, if the Paying Agent has notice that any Bondholder has been required to disgorge payments of principal or interest on the Obligation to a trustee in Bankruptcy or creditors or others pursuant to a final judgment by a court of competent jurisdiction that such payment constitutes a zazns.o� -27- ORDINANCE NO. 4661 voidable preference to such Bondholder within the meaning of any applicable bankruptcy laws, then the Paying Agent shall notify the Insurer or its designee of such fact by telephone or telegraphic notice, confirmed in writing by registered or certified mail. "D. The Paying Agent is hereby irrevocably designated, appointed, directed and authorized to act as attorney-in-fact for Holders of the Obligations as follows: "1. If and to the extent there is a deficiency in amounts required to pay interest on the Obligations, the Paying Agent shall (a) execute and deliver to State Street Bank and Trust Company, N.A. , or its successors under the Policy (the "Insurance Paying Agent") , in form satisfactory to the Insurance Paying Agent, an ' instrument appointing the Insurer as agent for such Holders in any legal proceeding related to the payment of such interest and an assignment to the Insurer of the , claims for interest to which such deficiency relates and which are paid by the Insurer, (b) receive as designee of the respective Holders (and not as Paying Agent) in accordance with the tenor of the Policy payment from the Insurance Paying Agent with respect to the claims for interest so assigned, and (c) disburse the same to such respective Holders; and "2. If and to the extent of a deficiency in amounts required to pay principal of the Obligations, the Paying Agent shall (a) execute and deliver to the Insurance Paying Agent in form satisfactory to the Insurance Paying Agent an instrument appointing the Insurer as agent for such Holder in any legal proceeding relating to the payment of such principal and an assignment to the Insurer of any of the Obligation surrendered to the Insurance Paying agent of so much of the principa,l amount thereof as has not previously been paid or � for which moneys are not held by the Paying Agent and available for such payment (but such assignment shall be delivered only if payment from the Insurance Paying Agent is received) , (b) receive as designee of the respective Holders (and not as Paying Agent) in accordance with the tenor of the Policy payment therefor from the Insurance Paying Agent, and (c) disburse the same to such Holders. , "E. Payments with respect to claims for interest on and principal of Obligations disbursed by the Paying Agent from proceeds of the Policy shall not be considered to discharge zszns.a� -28- ORDINANCE NO. 4661 the obligation of the Issuer with respect to such Obligations, ' and the Insurer shall become the owner of such unpaid Obligations and claims for the interest in accordance with the tenor of the assignment made to it under the provisions of this subsection or otherwise. . "F. Irrespective of whether any such assignment is executed and delivered, the Issuer and the Paying Agent hereby , agree for the benefit of the Insurer that: "1. They recognize that to the extent the Insurer makes payments, directly or indirectly (as by paying through the Paying Agent) , on account of principal of or interest on the Obligations, the Insurer will be subrogated to the rights of such Holders to receive the amount of such principal and interest from the Issuer, with interest thereon as provided and solely from the sources stated in this Indenture and the Obligations; and "2. They will accordingly pay to the Insurer the amount of such principal and interest (including principal and interest recovered under subparagraph (ii) of the first paragraph of the Policy, which principal and interest shall be deemed past due and not to have been paid) , with interest thereon as provided in this Indenture and the Obligations, but only from the sources and in the manner provided herein for the payment of principal of and interest on the Obligations to Holders, and will otherwise treat the Insurer as the owner of such rights to the amount of such principal and interest. "G. In connection with the issuance of additional Obligations, the Issuer shall deliver to the Insurer a copy of ' the disclosure document, if any, circulated with respect to such additional Obligations. "H. Copies of any amendments made to the documents executed in connection with the issuance of the Obligations which are consented to by the Insurer shall be sent to Standard & Poor's Corporation. "I. The Insurer shall receive notice of the resignation ' or removal of the Paying Agent and the appointment of a successor thereto. "J. The Insurer shall receive copies of all notices required to be delivered to Bondholders and, on an annual basis, copies of the Issuer's audited financial statements and �I Annual Budget. � 2szns.o3 � -29- I ORDINANCE NO. 4661 "Notices: Any notice that is required to be given to a holder of the Obligation or to the Paying Agent pursuant to the Indenture shall also be provided to the Insurer. All notices required to be given to the Insurer under the Indenture shall be in writing and shall be sent by registered or certified mail addressed to MBIA Insurance Corporation, 113 King Street, Armonk, New York 10504 Attention: Surveillance. " � SECTION XXII. Effective Date of Ordinance. This ordinance shall be effective upon its passage, approval and five days after publication. PASSED by the City Council this 21st day o A il, 1997. arily etersen, City Clerk APPROVED BY THE MAYOR this 21st day of April , 1997. ��� Jess Tanner, Mayor Approved as to Form: � Bond C unsel Date of Publication: April 25, 1997 Zszns.o� -30- APPENDIX A CAPITAL APPRECIATION BOND ACCRETED VALUE SCHEDULE Accreted Value Per $5,000 Maturity Amount Maturity Date (December i) Date of Calculation 2006 2007 2008 2009 May 1, 1997 $3,554.70 $3,350.30 $3,164.75 $2,958.ffi c���� ; June 1, 1997 3,570.08 3,365.07 3,178.83 2,972.38 December 1, 1997 3,663.80 3,455.09 3,264.66 3,054.ffi June 1, 1998 3,759.97 3,547.52 3,352.81 3,139.64 December 1, 1998 3,858.67 3,642.42 3,443.34 3,226.'T6 June 1, 1999 3,959.96 3;739.85 3,536.31 3,316.31 December l, 1999 4,063.91 3,839.90 3,631.80 3,408.34 June l, 2000 4,170.59 3,942.62 3,729.86 3,502.92 December l, 2000 4,280.07 4,048.09 3,830.57 3,600.13 June l, 2001 4,392.42 4,156.38 3,933.99 3,700.Q3 December l, 2001 4,507.72 4,267.56 4,040.21 3,802.71 June l, 2002 4,626.05 4,381.72 4,149.30 3,908.24 December l, 2002 4,747.49 4,498.94 4,261.34 4,016.68 June 1, 2003 4,872.11 4,619.29 4,376.39 4,128.1G December 1, 2003 5,000.00 4,742.86 4,494.56 4,242.72 June 1, 2004 - 4,869.73 4,615.92 4,360.46 December 1, 2004 - 5,000.00 4,740.55 4,481.46 I June 1, 2005 - - 4,868.55 4,605.ffi December 1, 2005 - - 5,000.00 4,733.63 June l, 2006 - - - 4,864.99 December 1, 2006 - - - 5,000.00 zszns.o�