HomeMy WebLinkAbout01/13/99 AGENDABREMERTON CITY COUNCIL
239 4TH STREET
BREMERTON, WA 98337
CITY COUNCIL AGENDA
JANUARY 13, 1999
1. CITY COUNCIL STUDY SESSION: 5:00 - 5:30 P.M.
A. General Council Business
2. CALL TO ORDER: 5:30 P.M.
A. Pledge of Allegiance
B. Invocation
3. CONSENT AGENDA
Items listed below have been distributed to Council members in advance for study
and will be enacted by one motion. If separate discussion is desired on an item, it
may be removed from the Consent Agenda and placed on the Regular Agenda at
the request of a Council member.
A. Minutes of Meeting - December 23, 1998 #AB99-005
4. CLAIMS/CHECK REGISTERS
5. COUNCIL MEMBER REPORTS
6. MAYOR'S REPORT
7. PUBLIC RECOGNITION -- (Comments Limited to 3 Minutes)
8. NEW BUSINESS
A. Professional Services Agreement for Grants Writer #AB99-006 ~r
B. Addendum to Contract 3601 with Kitsap Community #AB99-007 I~
Resources
(CONTINUED ON BACK)
9. ORDINANCES
A. Ordinance (First Reading) Authorizing the Issue of a #AB99-008
$1,250,000 Tax Anticipation Note and Accepting the
Purchase Offer of Seafirst Bank
10. RESOLUTIONS
A. Resolution No. 2687, Approving Change of Control #AB99-009 ¢~(¢
of TCI Franchise to AT&T
B. Resolution No. 2688, In Support of the Proposition #AB99-010 ct
Providing for Jail Expansion
AGENDA BILL
BREMERTON CITY COUNCIL
1. SUBJECT: FOR AGENDA OF: JANUARY 13. 1999
M~NUTES OF MEETING -- DECEMBER 23, 1998 ORIGINATING DEPT: C~IY COUNC~L
ORIGINATOR: MIKE SHEPHERD, PRESIDENT
DATE SUBMITTED: JANUARY 6, 1999
2. CLEARANCES: (comment on back 3. EXHIBITS:
if necessary)
ENDORSEMENT INFORMATION APPROVED BY COUNCIL PRESIDENT ~OP~zS3j~MIT~A~:
4. SUMMARY STATEMENT AND REOUIREMENT FOR COUNCIL ACTION:
8. RECOMMENDATION:
9. RESPONSIBLE OFFICIAL:
ENFORCEMENT OFFICIAL:
EXPIRATION DATE:
REVIEW DATE:
10. NOTICE OF ACTIQN
PULLED TABLED APPROVED DISAPPROVED AMENDED
COUNCIL DIRECTIVE: DATE:
~. AGENDA BILL NO: ~q _005
TAPE #1589 - UI~'APPROVED DRAFT
CITY COUNCIL MEETING MINUTES
DECEMBER 23, 1998
The regular meeting of the City Council of the City of Bremerton was called to order in
the City Council Chambers, 239 4th Street, Bremerton, Washington, Wednesday,
December 23, 1998, at 5:30 P.M., with Council President David Farr presiding. Council
members present were Jim Reed, Carol Arends, Mike Shepherd, Lon Overson, John
Law, Cecil McConnell, and Wayne Olsen. Council member Carlos Montgomery was
absent. Also present were City Attorney Glenna Malanca and Deputy Clerk Gil
Johnson.
The meeting opened with the Pledge of Allegiance led by Council President Farr, and
invocation given by Pastor Paul Meeker of Our Savior's Lutheran Church.
President Fart made the following announcements:
(1) City Council held a Study Session prior to the Council meeting to discuss general
Council business followed by an Executive Session to discuss "Litigation".
(2) Immediately following the City Council meeting, the City Council will hold an
additional Executive Session to discuss "Litigation".
CONSENT AGENDA
None
CLAIMS/CHECK REGISTERS
Vouchers audited and certified by the auditing officer as required by RCW 42.24.080,
and those expense reimbursement claims certified as required by RCW 42.24.090,'
have been recorded on a listing that had been made available to the Council.
#0020 M/S/C/U (Arends/Olsen) On December 23,1998, the Council does approve for
payment those vouchers included and further described as follows: 226516 through
226666 in the amount of $249,467.19; and Regular Payroll in the amount of
$776,900.65 for the period ending December 15, 1998.
COUNCIL MEMBER REPORTS
Mrs. Arends wished everyone a Merry Christmas and Happy New Year, and hopes
everyone is enjoying the Christmas decorations displayed in the 7th District.
Mr. Shepherd shared that downtown Bremerton has many interesting shops available
for last minute shoppers. He announced the next District 5 neighborhood meeting will
be on January 21, 1999, at 6:30 P.M., at the Memorial Lutheran Church located at 10th
& Veneta. Guest Speaker for the program will be Bremerton Municipal Court Judge
James Docter who will discuss the probation and home detention programs. He asked
the public to consider the New Year's Eve event sponsored by the Bremerton Fire
Department. Last of all, he urged everyone to drive carefully!
TAPES #1589 -
City Council Reg. Mtg. Minutes
December 23, 1998
Page 2 of 5
Mr. Overson wished everyone a happy holiday season and hoped that everyone enjoys
the snow. He also expressed his support for shopping downtown.
Mr. Law encouraged shopping in the Manette area, and wished everyone a Merry
Christmas, as well as Happy Holidays! He congratulated new County officials upon
being recently sworn in to office.
Mr. McConnell, Mr. Olsen, and President Fart wished everyone Happy Holidays and
urged safe driving.
MAYOR'S REPORT
Mayor Horton addressed the Y2K issue, and assured the public that the City is doing
everything possible to achieve compliance. In addition, Bill Eley, Information Services
Manager, has addressed the Council on this issue. She discussed a "Y2K Consortium"
that meets regularly, and posts meeting minutes on the Internet at web site
http://www.olympic.ctc.edu. In addition, all City departments are compiling inventory
listings of all electronic devices with computer chips. She urged the public to be
prepared as they would for any other emergency, but warned against stock-piling such
items as gasoline. Most of all, she advised not to panic. Anyone with questions on the
Y2K issue may call her office at 478-5266.
PUBLIC RECOGNITION
Rev. Cleveland Williams, Ebenezer A.M.E. Church, shared the efforts made by his
church to help those in need, including a free Christmas dinner to be held on Christmas
day, at the Sheridan Park Recreation Center. He was happy to announce that at least
56 people have volunteered to assist with the program.
John Becket had concerns about the bulb-outs recently installed on Burwell Street, and
the liability issue to the City, especially during fog or snowstorm situations.
Gordy Byrd wished everyone a Merry Christmas.
Paul Drnjevic requested that the wording on the fluoride ballot be changed. He feels it
can be interpreted that the water is currently being fluoridated. Ms. Malanca, City
Attorney, stated that discussion of ballot issues is not allowed during Public
Recognition, and advised him that there is a process set out in the RCW to contest
ballot titles.
9A - APPOINTMENT OF GARY R. SMITH TO THE CABLE COMMUNICATION
ADVISORY COMMITTEE, #AB98-287
There is a vacancy on the Cable Communications Advisory Committee. It is
recommended Gary R. Smith be appointed to fill the vacancy.
TAPES #1589 - -
City Council Reg. Mtg. Minutes
December 23, 1998
Page 3 of 5
Mayor Horton provided information about video productions Mr. Smith has been
involved in at Bremerton High School where he currently teaches. She believes he will
bring a level of professionalism to the committee.
Public comment - none.
Mr. O/sen stepped out of the meeting at 6:00 P.M.
#0890 M/S/C/U (Law/Arends) Motion to confirm the appointment of Gary R. Smith to the
Cable Communications Advisory Committee.
Mr. Olsen stepped back in to the meeting at 6:05 P.M. He asked the Mayor if she could
bring the Committee appointees to any future Council meetings so that Council can
meet them. Mayor Horton stated that could be done.
9B - SR 304 TRANSPORTATION IMPROVEMENT PROJECT BID AWARD
BtJlLDING MOVING OR DEMOLITION NO. 1. #AB98-288
Bids were opened for the Transportation Improvement Project, Building Moving or
Demolition No. 1 contract on December 7, 1998. This contract provides for the moving
or demolition of all structures occupying 5 separate parcels of public right of way located
within the "Gateway Phase" of the SR 304 Project. Six bids for this project were
received. Orca Properties was the lowest responsive bidder with a bid of $25,437.01.
The Engineer's estimate for this project was $59,283.12. Orca Properties has indicated
that they intend to move the houses from all the parcels to locations outside the City.
The action before the City Council is approval of a contract with Orca Properties for the
SR 304 Transportation Project, Building Moving or Demolition No.1.
Gene Sampley Public Works Director, stated this was an effort to provide an alternative
to straight demolition in the SR304 project corridor. A "call for bids" was issued to see if
there was any interest. A total of 6 bids were received. It is being recommended that
this contract be awarded to Orca Properties, the lowest bidder.
Mr. Byrd wanted to know if this process could assist him in his efforts to provide shelter
for the homeless. Mr. Becker asked for clarification on whether the City was paying to
have the houses moved, or was the contractor paying the City for the houses. In
addition, he felt that the houses should be kept in the City so as not to reduce the City's
tax base. He felt the houses should have been put out to bid separately. Mr. Sampley
responded that the project was a collective effort, with an advertisement placed for the 5
homes as a group. He explained that the City does not become involved in individual
projects. He further stated that anyone with a contractor's license could have submitted
a bid to either move or demolish them.
Mr. McConnell stated that "time was of the essence" for this project. Mr. Olsen
elaborated further, stating that it was too late, because bids were already opened. He
TAPES #1589 -
City Council Reg. Mtg. Minutes
December 23, 1998
Page 4 of 5
stated that it would not be fair to the contractors and could also open the City to
lawsuits. He suggested that in the future, maybe one house at a time could be let out
for bids.
Mr, Law suggested that Mr. Becker contact the Council office, and be put in touch with
the Project Manager for this project to have any further questions answered.
Mr. Shepherd pointed out that there are project deadlines to consider. He pointed out
that other houses have been demolished in this area, where problems with lead paint
and asbestos were discovered. These types of problems create additional difficulties
for the individual without the expertise to deal with them.
#1650 M/S/C/U (Arends/McConnell) Motion to approve award of bid of $25,437.01 with
Orca Properties for the SR 304 Transportation Improvement Project, Building Moving or
Demolition No.1, and authorize the Mayor to execute award of bid.
10A - RESOLUTION NO. 2685. REAUTHORIZING AN INTERFUND LOAN FROM
THE WATER FUND TO THE WASTEWATER FUND; AND RELATED BUDGET
ADJUSTMENT NO. 98-43. #AB98-289
The proposed resolution will provide needed working capital in the Wastewater Fund to
carry on the operations and capital projects of the utility until such time as pending legal
matters and real estate sales can be brought to conclusion. Without this loan the fund
will frequently operate in a deficit position.
Gene Sampley, Public Works Director, stated there were two significant issues with this
item. First, the duration for the existing loan was only authorized through December 31,
1998, so it needs to be extended. Second, the current litigation affecting the sale of
property in the Oyster Bay area affects the cash position of the City, so authorization
needs to be increased so that the total loan amount would not exceed $5.5 million
payable on or before December 31, 2000.
Mr. Becker recommended that a loan be taken out for a longer period of time, and
asked why this loan is only for one year. Additionally, he offered suggestions on various
ways to save this money for the taxpayers. Mr. Sampley clarified that this was a
request for a two-year authorization, and that the cash flow projections for the Water
Fund would not allow for an extended loan period. He explained the loan is needed for
Capital projects. It is not a 0% interest loan, but rather interest is being charged at the
current market rate.
#1850 M/S/C/U (Arends/McConnell) Motion to approve Resolution No. 2685,
authorizing an interfund loan from the Water Fund to the Wastewater Fund.
#1857 M/S/C/U (Arends/McConnell) Motion to approve Budget Adjustment Request No.
98-43.
TAPES #1589
City Council Reg. Mtg. Minutes
December 23, 1998
Page 5 of 5
With no further business, meeting adjourned at 6:30 P.M.
Paula Johnston, Deputy City Clerk
DAVID FARR, Council President
City of Bremerton
P J/DF/Is
cc: Normal Distribution
File Vault
~GEND~ BILL
BREMERTON CITY COUNCIL
1. SUBJECT: Professional Services FOR AGENDA OF: January ~, 1998
Agreement - Grants Writer ORIGINATING DEPT: Admin. Service~_
ORIGINATOR: K, McCluskey ~-~
DATE SUBMITTED: December 21, 1998
2. ~: (comment on back 3. EXHIBITS:
if necessary)
ENDORSE~ENT_~_.~ INFORI~TION__ ~PPROVED BY COU~CIB PRESIDENT~OR~SHB~T~L:
4. S~Y STATEMENT AND REOUIREMENT FOR COUNCIL ACTION:
This is the city's second year contracting with Mr. Young for grants
writing services. Attached are reports for ~hc 9ericd 1/1/98 tc Q/SOl'DO
reflecting grant applications and status reports. /~
8. RECOM~ENDATION:
Motion to a~rove Professional Services contract with Jeffry Young for
grants writing services.
9. RESPONSIBLE OFFICIAL: Admin. SvC. Dir.
ENFORCEMENT OFFICIAL:"
EXPIRATION DATE: 12/31/99
REVIEW DATE: 10_/99
10. NOTICE OF ACTION
PULLED TABLED APPROVED DISAPPROVED __~END~__
COUNCIL DIRECTIVE: DATE:
2. CLEARANCE COMMENTS (cont.):
4. SUMMARY STATEMENT (cont.):
5. IMPACT ON NON-PASSAGE:
6. IMPACT ON STAFFING, BUDGETS, FACILITIES, EQUIPMENT OR OTHER RESOURCES
Funded in 1999-2000 budget.
7. RESEARCH SOURCES:
PROFESSIONAL SERVICES AGREEMENT
Grants Writer
THIS AGREEMENT is between the City ofBremerton, a municipal corporation,
(hereinafter referred to as "City") and Jeffry J. Young, (hereinafter referred to as "Grants
Writer").
WITNE S SETH:
1. SCOPE: Grants Writer, by this Agreement, agrees to seek and write grants for the
City. The Grants Writer will maintain an office for performance of this Agreement at the address
listed under 7(d) and supply equipment as needed, for completion ~of assigned projects.
Appropriate office space and equipment will also be provided at City facilities. City shall provide
access to project applicable City plans and data, prior grant data, grant forms, grant manuals and
funding publications.
2. TERM: Contract shall commence on January 1, 1999, and will terminate on
December 31, 1999.
3. COMPENSATION: City shall pay Grants Writer compensation as follows:
The City and Grants Writer agree that compensation for services rendered under this
Agreement shall be in the amount of One Thousand Two Hundred Eighty-one and 26/100 Dollars
($1,281.26) per month, in two payments of Six Hundred Forty and 63/100 Dollars ($640.63) each
on the regular claims payment dates closest to mid-month and month end.
Should a substantial increase in grant writing occur related to the Sinclair Landing project or a
similar large project, the parties shall negotiate in good faith an additional fee for those services.
Grants Writer shall submit a quarterly report describing the services rendered with a
breakdown for work completed by grant and by department, as authorized under this Agreement.
In addition to Grants Writer's fee, the City shall pay reasonable expenses for mileage,
incidental costs, subscriptions, computer access, and parking with prior approval of the
Administrative Services Director.
4. RELATIONSHIP OF PARTIES: The parties understand and agree that Grants
Writer is an individual skilled in matters pertaining to the writing of grants and will perform
independent functions and responsibilities in the area of its particular field of expertise. Grants
Writer shall act as an independent contractor and not as an employee of the City. As such Grants
Writer has no authority to bind the City nor control employees of the City, contractors, or other
Professional Services Agreement - 1
Grants Writer
entities. Within the performance of these duties, Grants Writer shall work under the direction of
the Administrative Services Director.
5. LICENSE AND TAXES: Grants Writer shall possess a current Bremerton Business
License and any regulatory license required to fulfill Grants Writer's obligations under this
Agreement. B & O taxes shall be paid when due and Grants Writer, by this Agreement, assigns
any payments due under this Agreement to the City Clerk for payment of such taxes which have
been declared delinquent.
6. HOLD ItARMLESS: Grants Writer agrees to defend, indemnify and save harmless
the City, its appointed and elected officers and employees, from and against any and all liability,
loss, costs, damage and expense, including costs and attorney fees in defense thereof because of
actions, claims or lawsuits for damages resulting from personal or bodily injury, including death at
any time resulting therefrom, sustained or alleged to have been sustaine~t by any person or persons
and on account of damage to property, arising or alleged to have arisen directly or indirectly out
of or in consequence of or the performance of this Agreement, whether such injuries to persons or
damage to property is due to the negligence of Grants Writer, his subcontractors or agents. This
provision shall be inapplicable to the extent the City is judicially found solely negligent for such
damage or injury.
7. GENERAL CONDITIONS:
a. Reports and Information - Grants Writer, at such times and in such forms as the City may
require, shall furnish the City such reasonable periodic reports and documents as it may request
pertaining to the work or services undertaken pursuant to this Agreement, the costs and
obligations incurred or to be incurred in connection therewith, and any other matters covered by
this Agreement. Grants Writer will maintain accounting records in accordance with generally
accepted accounting principals and practices to substantiate all invoiced amounts.
b. Entire Agreement - This Agreement constitutes the entire agreement between the parties
and both parties acknowledge that there are no other agreements, written or oral, that have not
been fully set forth in the text of this Agreement.
c. Amendments - The parties hereby further agree that this Agreement cannot be amended or
modified without the written concurrence of both parties.
d. Notices - Any notices required to be given by the City to Grants Writer or by Grants
Writer to the City shall be in writing and delivered to the parties at the following addresses:
Administrative Services Director Jeffry J. Young
23 9 Fourth Street 711 Hewitt Avenue, Apt. A
Bremerton, WA 98337 Bremerton, WA 98337
Professional Services Agreement - 2
Grants Writer
e. Waiver - Failure to insist upon strict compliance with any terms, covenants or conditions
of this Agreement shall not be deemed a waiver of such, nor shall any waiver or relinquishment of
such right or power at any time be taken to be a waiver of any other breach.
f. Compliance with State, Local and Federal Laws - Grants Writer agrees to comply with all
applicable local, state and federal laws in performance of all services under this Agreement.
g. Applicable Law; Venue - This Agreement shall be construed and interpreted in accordance
with the laws of the State of Washington and, in the event of dispute, the venue of any action
brought hereunder shall be in Kitsap County Superior Court.
h. Attorney Fees - The substantially prevailing party in any litigation arising hereunder shall
be entitled to its reasonable attorney's fees and court costs, including appeals, if any.
8. NONDISCRIMINATION: Grants Writer shall not discriminate in employment or
services to the public on the basis of race, color, national origin, sex, religion, age, marital status
or disability, except employment actions based on a bona fide occupational qualification.
9. TERMINATION: This Agreement may be terminated by either party for
convenience upon thirty (30) days' written notice or a shorter mutually agreed upon period
dependant on project status, number of active grant applications, and ability or timeliness of
transitioning to City staff or new contractor. Payments to be pro-rated for any portion of a month
worked.
IN WITNESS WHEREOF the parties hereto have executed this Agreement the date and year
indicated.
Date: /Z/:Z//~( By:JE ~~ f J~~
CITY OF BREMERTON
Date: By:
LYNN HORTON, Mayor
DEPARTMENTAL APPROVAL: APPROVED AS TO FORM:
KATHI,EEN L. McCLUSKEY, Director ~q~E~N-,t~ MAL,~x~CA, Cit~ Attorney
Administrative Services
Professional Services Agreement - 3
Grants Writer
JEFFRY J. YOUNG
11520 Sunrise Drive
Bainbridge Island WA 98110
8 April 1998
Ms. Katldeen McCluskey
CiLY of Bremerton
239 Fourth Street
Bremerton WA 98337
Subject: Quarterly Proposals Report
Dear Ms. McCluskey:
Four proposals were developed and submitted during the first three months of 1998. All of them were prepared for the
Public Works Department.
1) Public Education of Combined Sewer Overflow Impact and Prevention
Submitted to: WA Ecology Department. Water Quality Action Team Public Involvement & Education Fund
Amount: $40,000
Stares: Submitted January 15, 1998; rejected & recommended for resubmission to a different
fund; resubmission pending
Hours: 52 Proportion: 20%
2) SR304 Transportation Improvement Project
Submitted to: WA Transportation Improvement Board; Central Puget Sound Public Transit Account
Amount: $2,000,000
Status: Submitted January.' 29, 1998; still under red-Jew
Hours: 71 Proportion: 28%
3) Residential Dox~xtspout Storm Dram Diversion
Submitted to: Washington Department of Ecology; FY1999 Centennial Clean Water Fund
Amount: $226,900
Status: Submitted February. 27, 1998; still under review
Hours: 47 Proportion: 18%
4) West Hills Commercial District Storm Dram and Water System Construction
Submitted to: U.S. Department of Commerce, Economic Development Agent', Public Works - Title 1
Amount: $1,000,000
Status: Submitted ~March 26, 1998; still under review
Hours: 86 Proportion: 34%
Total Hours: 256
Jeffry J. Young
Grants and Contracts Specialist
JEFFRY J. YOUNG
11620 Sunrise Drive
Bai nbriclge Island WA ~110
9 July 1998
Ms. Kathleen McCluskey
Ci,ty of Bremerton
239 Fourth Street
Bremerton WA 98337
Subject: Quarterly Proposals Report
Dear Ms. McCluskey:
Eight proposals were developed and five submitted during the second quarter of 1998. They were prepared for the Public
Works Department, Police Department, Admiral Theater, Naval Museum/West Sound Arts Council, and Fire Department.
1) West Hills Commercial District Storm Drain and Water System Construction
Submitted to: U.S. Department of Commerce, Economic Development Agency, Public Works - Title 1
Amount: $1,000,000
Status: Submitted March 26, 1998; still under review
Hours: 4 (follow-up submitted in May) Proportion:
2) COPS FAST
Submitted to: U.S. Department of Justice, Office of Commumty Policing Services
Amount: $15,000
Status: Submitted April 30, 1998; still under review
Hours: 20 Proportion:
3) Admiral Theater Fall Season Programming
Submitted to: The Boeing Company
,~nount: $75,000
Status: Submitted May 22, 1998; still under review
Hours: 16 Proportion: 7°'0
4) Naval Museum/~,Vest Sound .M-ts Council Relocation
Submitted to: Capital Projects Fund for Washington's Hehtage
Amount: $365,500
Status: Submitted June 4, 1998; still under review
Hours: 46 Proportion:
~ COPS MORE
Submitted to: U.S. Department of Justice, Office of Commumty Policing Services
Amount: $570,598
Status: Submitted June 12, 1998; still under review
Hours: 72 Proportion: 31
13
6) COPS School-Based Partnerships
Submitted to: U.S. Department of 3'ustice, Office of Community Policing Services
Amount: $119.425
Status: Submitted June 15, 1998; still under review
Hours: 61 Proportion: 26%
7) Local Law Enforcement Block Grant
Submitted to: U.S. Department of Justice, Bureau of Justice ,assistance
Amount: $54,633
Status: To be submitted July 10, 1998; for review
Hours: 8 Proportion: 3°"0
8) Fire Safety Enhancement Program
Submitted to: Bremerton Community Development Block Grant HOME Program
Amount: To be determined
Status: To be submitted August 18, 1998; for review
Hours: 8 Proportion: 3%
Total Hours: 235
In addition, updated status reports on earlier applications follow:
1) Public Education of Combined Sewer Overflow Impact and Prevention
Submitted to: WA Ecology Department, Water Quality Action Team Public Involvement & Education Fund
Amount: $40,000
Status: Submitted January 15, 1998; rejected & recommended for resubmission to a different
fund; resubmission pending
2) SR304 Transportation Improvement Project
Submitted to: WA Transportation Improvement Board; Central Puget Sound Public Transit Account
Amount: $2,000,000
Status: Submitted January 29, 1998; approved for fundin~ State budget cut, dropped below new cut-off
3) Residential Downspout Storm Drain Diversion
Submitted to: Washington Department of Ecology; FY1999 Centennial Clean Water Fund
Amount: $226,900
Status: Submitted February 27, 1998; not funded
Very truly yours,
Jeffry J. Young
Grants and Contracts Specialist
JE[FFRY J, YOUNG
7'1 lA I-lewitt Avenue
Bremera3n WA ~
15 October 1998
Ms. Kathleen McCluskey
City of Bremerton
239 Fourth Street
Bremerton WA 98337
Subject: Quarterly Proposals Report
Dear Ms. McCluskey:
Three proposals were developed and two submitted during the third quarter of 100R_ They were prepared for the Police
Department, Admiral Theater/Parks Department, and Fire Department.
1) Local Law Enforcement Block Grant
Submitted to: U.S. Department of Justice, Bureau of Justice Assistance
Amount: $54,633
Status: Submitted July 10, 1998; still under review
Hours: 14 Proportion: 23%
2) Fire Safety, Enhancement Program
Submitted to: Bremerton Community Development Block Grant HO~ Program
Amount: $25,000
Status: Not submitted (funds would not be used for city obligations)
Hours: 12 Proportion: 27%
3} Admiral Theater Fall Season Programming
Submitted to: The National Endowment for the ,~-r.s
Amount: $150,000
Status: Submitted September 12, 1998; still under review, site visit pending
Hours: 26 Proportion: 50%
Total Hours: 52
In addition, updated status reports on earlier applications follow:
1) West Hills Commercial District Storm Drain and Water System Construction
Submitted to: U.S. Department of Commerce, Economic Development Agency, Public Works - Title l
Amount: $1,000,000
Status: Awarded $1,000,000
2) COPS FAST
Submitted to: U.S. Department of Justice, Office of Commumty Policing Services
Amount: 515,000
Status: Not funded
3) Admiral Theater Fall Season Programming
Submitted to: The Boeing Company
Amount: $75,000
Status: Awarded $15,000
4) Naval Museum/West Sound Arts Council Relocation
Submitted to: Capital Projects Fund for Washington's Heritage
Amount: $365,500
Status: Not funded
~) COPS MORE
Submitted to: U.S. Department of Justice, Office of Community Policing Services
Amount: $570,598
Status: Not funded
6) COPS School-Based Partnerships
Submitted to: U.S. Department of Justice, Office of Community Policing Services
Amount: $119,425
Status: Not funded
Very truly yours,
Jeffry J. Young
Grants and Contracts Specialist
GRANT SPECIALIST'S REPORT, 1998
Eighteen proposals were developed during 1998. They were prepared with the Public Works
Department, Police Department, Kitsap Transit, Admiral Theater/Parks Department, Naval MuseumANest
Sound Arts Council, and Fire Department.
FUNDED
1) West Hills Commercial District Storm Drain and Water System Construction
Submitted to: US Department of Commeme, Economic Development Agency, Public Works - Title 1
Amount: $1,000,000
Status: Awarded $1,000,000
2) Local Law Enl'orcement Blocl( Grant
Submitted to: U.S. Department of Justice, Bureau of Justice Assistance
Amount: $54,633
Status: Awarded $54,633
3) Admiral Theater Fall Season Programming
Submitted to: The Boeing Company
Amount: $75,000
Status: Awarded $15,000
ALMOST FUNDED
4) SR304 Transportation Improvement Project
Submitted to: WA Transportation Improvement Board; Central Puget Sound Public Transit Account
Amount: $2,000,000
Status: Submitted January, 1998; approved for funding, State budget cut, dropped below cut-off
PENDING
5) Admiral Theater Fall Season Programming
Submitted to: The National Endowment for the Arts
Amount: $150,000
Status: Submitted September 12, 1998; site visit held in October, under review until February
6) Bremerton Transportation Center and Sinclair Landing Concourse
Submitted to: Federal Highway Administration
Amount: $1,500,000
Status: Submitted October 16, 1998; still under review
7) Werner Road/West Hills Corridor Detention Pond
Submitted to: Washington Transportation Improvement Board, Transportation Enhancement Program
Amount: $330,300
Status: Submitted December 31, 1998; still under review
8) Radar Speed Trailer
Submitted to: Washington Transportation Improvement Board, Transportation Enhancement Program
Amount: $15,570
Status: Submitted December 31,1998; still under review
Page 1/2
9) Auto Center Way Improvements from 6~h Avenue to the SB SR30nramp
Submitted to: Washington Transportation Improvement Board, Urban Arterial Trust Account
Amount: $450,000
Status: To be submitted January 15, 1999
10) SR304 Transportation Improvement Project
Submitted to: WA Transportation Improvement Board; Central Puget Sound Public Transit Account
Amount: $2,000,000
Status: To be submitted January 15, 1999
11 ) SR304 Transportation Improvement Project
Submitted to: WA Transportation Improvement Board; Statewide Competitive Program
Amount: $2,000,000
Status: To be submitted January 15, 1999
NOT FUNDED
12) COPS FAST
Submitted to: U.S. Department of Justice, Office of Community Policing Services
Amount: $15,000
Status: Not funded
13) Naval MuseumNVest Sound Arts Council Relocation
Submitted to: Capital Projects Fund for Washington's Heritage
Amount: $365,500
Status: Not funded
14) COPS MORE
Submitted to: U.S. Department of Justice, Office of Community Policing Services
Amount: $570,598
Status: Not funded
15) COPS School-Based Partnerships
Submitted to: U.S. Department of Justice, Office of Community Policing Services
Amount: $119,425
Status: Not funded
16) Public Education of Combined Sewer Overflow Impact and Prevention
Submitted to: WA Ecology Department, Water Quality Action Team PIE Fund
Amount: $40,000
Status: Not funded
17) Residential Downspout Storm Drain Diversion
Submitted to: Washington Department of Ecology; FY1999 Centennial Clean Water Fund
Amount: $226,900
Status: Not funded
18) Fire Safety Enhancement Program
Submitted to: Bremerton Community Development Block Grant HOME Program
Amount: $25,000
Status: Not submitted (funds would not be used for city obligations)
Page 2/2
AGENDA BILL
BREMERTON CITY COUNCIL
t. SUBJECT: FOR AGENDA OF: 1/13/99
Contract 3601 Addendum: ORIGINATING DEPT: Adm. Svcs
Kitsap Community Resources ORIGINATOR: Penny Hill
DATE SUBMITTED:
2. CLEARANCES: (comment on back 3. EXHIBITS:
if necessary)
Administrative Services ~! . Addendum
City Attorney ~~~Contract
Council Fiscal & Budge~-~~munity Service Summary
Council Operations a ~~J Reports
ENDORSEME~I_= INFORMATION APPROVED BY COUNCIL PRESIDE NT.F a3U AL:
MAY OR ~ / ~ m_ COUNCIL PRESIDENT
4. SUMMARY STATEMENT AND REQUIREMENT FOR COUNCIL ACTION:
In 1995, the City entered into a contract with Kitsap Community
Resources (KCR) wherein KCR agreed to manage the City of Bremerton Community
Service Work Program. The program provides that defendants convicted in
Bremerton Municipal Court are directed to the Community Service work program
to perform a specific number of hours of labor for the City in lieu of jail
or fines.
This addendum renews the Agreement with KCR for an additional 1 year term.
8. RECOMMENDATION: That City Council approve the contract addendum wi~h
Kitsap Community Resources.
9. RESPONSIBLE OFFICIAL: Admin. Services
ENFORCEMENT OFFICIAL: Admin Services
EXPIRATION DATE: 12/31/99
REVIEW DATE: 11/01/99
10. NOTICE OF ACTION
PULLED TABLED APPROVED DISAPPROVED
COUNCIL DIRECTIVE: DATE:
2. CLEARANCE COMMENTS (cont.) :
4. SUMMARY STATEMENT (cont.) :
5. IMPACT ON NON-PASSAGE:
Loss of Community Service Worker program
6. IMPACT ON STAFFING, BUDGETS, FACILITIES, EQUIPMENT OR OTHER RESOURCES
Budgeted
7. RESEARCH SOURCES:
ADDENDUM TO CONTRACT
3601
WHEREAS, the CITY OF BREMERTON, a municipal corporation (herinafter referred to as
"City"), and KITSAP COMMUNITY RESOURCES, a duly organized corporation, (hereinafter referred
to as "KCR") hereto entered into a Contract, dated January 1, 1995 as amended January 1,1998, and,
WHEREAS, the parties desire to extend the Contract for an additional one (1) year term,
NOW, THEREFORE, in consideration for the mutual covenants set forth below, the parties
agree as follows:
I
Section 2. Term shall be amended to read as follows:
Contract shall commence on January 1, 1999 and will terminate December 31, 1999.
II
Section 3. Compensation shall be amended to read as follows:
City shall pay KCR the sum of Fourteen Thousand Dollars ($14,000), in equal monthly
installments of One Thousand, One Hundred Sixty-six Dollars and Sixty-six cents ($1,166.66), for the
services provided hereunder.
III
The City of Bremerton and Kitsap Community Resources agree that all provisions of the original
Agreement which are not in conflict with this Addendum or the January 1, 1998 Addendum to the
Contract, shall remain in full force and effect.
CITY OF BREMERTON KITSAP COMMUNITY RESOURCES
DATE: DATE:
BY: BY:
LYNN S. HORTON, Mayor Executive Director
BY:
APPROVED AS TO FORM: Board President
City Attorney
RECEIVED FOR FILING:
KATHLEEN L. McCLUSKEY, CITY CLERK
PROFESSIONAL SERVICES AGREEMENT
Bremerton Community Service Program
THIS AGREEMENT is between the City of Bremerton, a municipal
corporation (hereinafter referred to as "city") and Kitsap
Community Action Program/PACK, (hereinafter referred to as
"KCAP/PACK").
W I T N E S S E T H:
1. SCOPE: KCAP/PACK agrees to manage the City of Bremerton
Community Service Work Program. Defendants convicted in Bremerton
Municipal Court are directed to the Community Service Work Program
to provide a specified number of hours of labor for the City in
lieu of jail or fines.
The Bremerton Municipal Court will provide KCAP/PACK with a
form for each individual, which form shall include the defendant's
name, start date and number of community service hours to be
performed by the defendant. KCAP/PACK will supervise the
defendants in the performance of community service work and provide
a report to the court indicating whether a defendant has fulfilled
his or her community service obligation.
A monthly summary report indicating the number of individuals
referred to KCAP/PACK, total hours of service performed, and number
of "no shows" will be provided to the Bremerton Municipal Court on
a monthly basis.
2. TERM: Contract shall commence on January 1 1995 and will
terminate December 31, 1995. '
3. COMPENSATION: City shall pay KCAP/PACK the sum of F~ve
Thousand Five Hundred Dollars ($5,500.00), in equal monthly
installments, for the services provided hereunder.
In addition to KCAP/PACK's fee, the City will provide, at no
cost to KCAP/PACK, office space in Suite 208 (656 square feet) of
the Fourth Street Building, together with utilities. No janitorial
services will be provided.
4. RELATIONSHIP OF PARTIES: The parties understand and agree
that KCAP/PACK is an organization skiilled in matters pertaining to
community service programs and will perform independent functions
and responsibilities in the area of its particular field of
expertise. KCAP/PACK and its personnel shall act as independent
contractors and not employees of the City. As such they have no
authority to bind the City nor control employees of the City,
contractors, or other entities. Within the performance of these
duties, KCAP/PACK shall work under the direction of the
PROFESSIONAL SERVICES AGREEMENT --1--
KCAPPACK.PSA - Disk 11 - 12/9/94
Administrative Service Director.
5. INDUSTRIAL INSURANCE: KCAP/PACK agrees to provide for
State industrial insurance coverage for its personnel as required
by State law.
6. LICENSE AND TAXES: KCAP/PACK shall possess a current
Bremerton Business License and any regulatory license required to
fulfill its obligations under this Agreement. B & O taxes shall be
paid when due and KCAP/PACK, by this Agreement, assigns any
payments due under this Agreement to the City Clerk for payment of
such taxes which have been declared delinquent.
7. INSURANCE AND HOLD HARMLESS: Prior to and during the
performance of the work covered by this Agreement, KCAP/PACK shall
provide the Risk Manager for the city of Bremerton with evidence
that it has obtained and malntains in full force and effect during
the term of this Agreement a policy of professional liability
insurance, providing coverage of at least $1,000,000.00 against
professional liability or errors and omissions in connection with
the work to be performed by KCAP/PACK under this Agreement. Risk
Manager shall be provided thirty (30) days' written notice of any
cancellation of said professional liability insurance.
KCAP/PACK agrees to defend, indemnify and save harmless the
city, its appointed and elected officers and employees, from and
against any and all liability, loss, costs, damage and expense,
including costs and attorney fees in defense thereof because of
actions, claims or lawsuits for damages resulting from personal or
bodily injury, including death at any time resulting therefrom,
sustained or alleged to have been sustained by any person or
persons and on account of damage to property, arising or alleged to
have arisen directly or indirectly out of or in consequence of or
the performance of this Agreement, whether such injuries to persons
or damage to property is due to the negligence of KCAP/PACK, its
subcontractors, agents, successors or assigns. This provision
shall be inapplicable to the extent the City is judicially found
solely negligent for such damage or injury.
8. GENERAL CONDITIONS:
a. Reports and Information - KCAP/PACK, at such times and in
such forms as the City may require, shall furnish the City such
reasonable periodic reports and documents as it may request
pertaining to the work or services undertaken pursuant to this
Agreement, the costs and obligations incurred or to be incurred in
connection therewith, and any other matters covered by this
Agreement. KCAP/PACK will maintain accounting records in
accordance with generally accepted accounting principles and
practices to substantiate all invoiced amounts.
PROFESSIONAL SERVICES AGREEMENT -2-
KCAPPACK.PSA - Disk 1~ - 12/9/94
b. Entire Agreement - This Agreement constitutes the entire
agreement between the parties and both parties acknowledge that
there are no other agreements, written or oral, that have not been
fully set forth in the text of this Agreement.
c. Amendments - The parties hereby further agree that this
Agreement cannot be amended or modified without the written
concurrence of both parties.
d. Notices - Any notices required to be given by the City to
KCAP/PACK or by KCAP/PACK to the city shall be in writing and
delivered to the parties at the following addresses:
City Clerk Diana Theroux
239 Fourth St. Kitsap Community Action Program/PACK
Bremerton, WA. 98337 245 Fourth Street Building
~Bremerton, WA. 98337
e. Waiver - Failure to insist upon strict compliance with any
terms, covenants or conditions of this Agreement shall not be
deemed a waiver of such, nor shall any waiver or relinquishment ~of
such right or power at any time be taken to be a waiver of any
other breach.
f. Compliance with State, Local and Federal Laws -
KCAP/PACK agrees to comply with all applicable local, state and
federal laws in performance of all services under this Agreement.
g. Applicable Law; Venue - This Agreement shall be construed
and interpreted in accordance with the laws of the State of
Washington and, in the event of dispute, the venue of any action
brought hereunder shall be in Kitsap County Superior Court.
h. Attorney Fees - The substantially prevailing party in any
litigation arising hereunder shall be entitled to its reasonable
attorney's fees and court costs, including appeals, if any.
9. NONDISCRIMINATION: KCAP/PACK shall not discriminate in
employment or services to the public on the basis of race, color,
national origin, sex, religion, age, marital status or disability,
except employment actions based on a bona fide occupational
qualification.
10. TERMINATION: This Agreement may be terminated by either
party for convenience upon thirty (30) days' written notice to the
other party, or for cause if either party fails substantially to
perform through no fault of the other and does not commence
correction within five (5) days of written notice and diligently
completes the correction thereafter. Upon such termination, City
will be entitled to reports showing the status of all matters upon
which KCAP/PACK is advising the City as of the effective date of
PROFESSIONAL SERVICES AGREEMENT -3-
K~APPACK.PSA - D~sk ~1 - 12/9/9/,
termination.
IN WITNESS WHEREOF the parties hereto have executed this
Agreement the date and year indicated.
KITSAP COMMUNITY ACTION PROGRAM/PACK
LARRY EYE , Director
CITY OF BREMERTON
TON, Mayor
DE~TMENTAL APPROVAL:
~THLEEN McCLUSKEY, Administrative Services Director
I~ R."~EVERS, city Attorney
PROFESSIONAL SERVICES AGREEMENT -4-
KCAPPACK.PSA - Disk 11 - 12/9/94
ADDENDUM TO CONTRACT
3601
WHEREAS, the CITY OF BREMERTON, a municipal corporation (hereinafter
referred to as "City"), and KITSAP COMMUNITY ACTION PROGRAM, a duly organized
corporation, (hereinafter referred to as "KCAP") hereto entered into a Contract, dated
January 1, 1995, as amended January 1997, and,
WHEREAS, the parties desire to extend the Contract for an additional one (1) year
term,
NOW, THEREFORE, in consideration for the mutual covenants set forth below, the
parties agree as follow:
That the name of Kitsap Community Action Program has been changed and shall be
hereafter known as KITSAP COMMUNITY RESOURCES and hereinafter referred to as
"KCR".
II.
The term of the Agreement executed by the parties hereto on January 1, 1995 shall
be extended from January 1, 1998 through December 31, 1998.
III,
That City shall pay KCR Twelve Thousand and no/100 dollars ($12,000.00) for
services. Payment shall be made in twelve equal monthly installments of One Thousand
and no/100 dollars ($1,000.00), beginning in January 1998.
In addition, the City will pay to KCR the sum of One Thousand Dollars ($1,000.00)
for the purchase of auto liability insurance required in Section IV of this Agreement.
IV.
That Insurance and Hold Harmless requirements are amended to include: KCR shall
provide the Risk Manager of the City with evidence that it has obtained and maintains in
full force and effect during the term of this Agreement a policy of automotive liability
coverage in the amount of $1,000,000.00, naming the City of Bremerton an additional
insured. Further that KCR agrees to defend, indemnify and save harmless the City, its
appointed and elected officers and employees, from and against any and all liability, loss,
costs, damage and expense, including claims or lawsuits for damages resulting from errors
or omissions, or personal, bodily injury, including death at any time resulting therefrom,
sustained or alleged to have been sustained by any person or persons and on account of
damage to property, arising or alleged to have arisen directly or indirectly out of or in
consequence of or the performance of this Agreement, whether such injuries to persons
or damage to property is due to the negligence of KCR, its subcontractors, agents,
employees, volunteers, successors or assigns. This provision shall be inapplicable to the
extent the City is judicially found solely negligent for such damage or injury.
V.
That the scope of work shall be amended to include weed abatement services
coordinated through the Department of Community Development..
VI.
The CITY OF BREMERTON and the KITSAP COMMUNITY RESOURCES, agree to all
provisions of the original Agreement which are not in conflict with this Addendum to
Contract shall remain in full force and effect.
ClTY OFBREMERTON KITSAP COMMUNITY RESOURCES
LYNN S. HORTON, Mayor EXECUTIVE DIRECTOR
KATHLEEN L. McCLUSKEY, City Cl~rk
To: Penny Hill
From: David C. Boynton
Date: 09-30-98
Subject: City ofBremerton CSW Budget proposal for 1999.
After another successful year of operation we are submitting the following
contract proposal for the Bremerton Municipal Court Community Service Worker
Program. Each year we have made improvements in the program with help from the
city's department heads and staff.
In 1999 we are requesting funding of $14,000. The following is a breakdown of
proposed funding:
Cash match for AmeriCorps members $ 5,000.00
Tools and Equipment $ 3,600.00
Office supplies (computer, printer, copying paper, etc)
$ 1,500.00
Supervisor salary $ 1,200.00
Administration (Insurance for two vehicles) $ 2,700.00
Total $14,000.00
Please let myself or Russ Donahue know if there is any other documents that will
be needed for the up coming 1999 budget hearings.
B REMERTON MUN I C I PAL COURT
AME ICORPS /C.S.W. PROGRAM
COMMUNITY SERVICE SUMMARY REPORT - MONTHLY
REPORT PERIOD: 12/01/98 to 12/31/98
TOTAL FOR TOTAL TO
PERIOD DATE
1.
TOTAL NIIMBER OF PEOPLE REFERRED - CITY: 54 564
TOTAL NIIMBER OF PEOPLE REPORTING - OTHER: 0 5
2.
TOTAL NUMBER OF PERSONS FAILING TO REPORT: 33
TOTAL NUMBER OF PERSONS COMPLETING - CITY: 13 198
TOTAL NUMBER OF PERSONS CO.MPLETING -OTHER: ~~_3 5
3. TOTAL NUMBER OF MANHOURS COMPLETED AS FOLLOWS:
COURT COSTS/FINES/FEES - MANHOURS 352.5 4758
(ASSIGNED AT $5.15/HR) -COSTS $ 1815,40 $ 24554,45
JAIL TIME -MANHOURS 316,5 3583,5
(8 HRS. SERVICE= 1 DAY)
(JAIL TIME AT $55/DAY) -COST $ 2172.5 $ 24632.75
TOTAL FOR THE PERIOD -MANHOURS 669 8351
-COSTS $ 3987.90 $ 49187.90
PREPARED BY: Derek Salstrom DATE:01/04/98
distribution:
Dr. Nancy Hinkley
Dave Boynton
KCR Information Srvcs
CSW records
1998 KCR EXECUTIVE INFORMATION REPORT
Program- > Community Service Workers
Contract Year: January to December
Reporting Month: December
Grant/Contract Component Goal Month Year
to Date to Date
1) Number of Workers referred to this Program - all 400 ~-..5._4 564
2) Workers completing their Program - city 350 13 198
Workers completing - from other courts 0 5
3) Workers failing to comply. - city 50 33
4) Number of Hours Assigned by Court - jail ! 1206
- tines 1139.5
- Total 2345.5
5) Number of Hours of Service - all 8000 669 8351.5
I
6) Number of Hours of Service in Streets - city 6000 338 5707
Hours in Streets - other courts 0 149
7) Number of Hours in Service in Other - city 2000 331 2585.5
Component number one is reported as the number of NEW Workers enrolled in the program for the reporting
month.
All Components are reported as monthly numbers or number of workers/hours processed for this month only.
Community Service Worker Team Stat Sheet
1998/99
Grant Component
Number of Hours Removing Graffiti
Number of Pieces of Graffiti
removed
Number of Hours Cleanin§ &
Maintaining Streets **
Number of Hours Moving Office
Furniture for City
Number of Hours picking up
trash/litter other than along streets
Special Events hours
Number of working days in the
month
Number of City CSW (people)
Total number of hours
!The Formula Not In Table
Community Service Worker Program Stat Sheet
1998/99
** Hours where Street Cleaning Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sept Total
and Maintenance wasdone 98 98 98 99 99 99 99 99 99 99 99 99
ST-6 - 6th street 8 0 4 12
ST-11 - 11 th Street 4 4 0 8
STAL- Alleys 0 8 0 8
STWH- Wheaton Way 24 0 0 24
STWA-Warren Ave 0 4 8 12
STCB- Street Cleaning Central 8 20 96 124
Business District
STKT- Kitsap Way 24 16 8 48
STLW - Lower Wheaton Way 0 4 0
STW- Street Cleaning West Side 46 44 56 146
STE- Street Cleaning East Side 0 16 8 ~1~ c~
STC- Street Cleaning Central 0 0_ 0 0 _
Total Hours 114 116 180
AGENDA BILL
BREMERTON CITY COUNCIL
January 13, 1999
1. SUBJECT: ORDINANCE NO. FOR AGENDA OF: January .20, 1999
ORIGINATING DEPT: Tre~~,'
AUTHORIZING THE ISSUE OF A $1,250,000 TAX ORIGINATOR: Ri~l:~ _Hann~.~_~
ANTICIPATION NOTE AND ACCEPTING THE DATE SUBMITTED: ~ ~
PURCHASE OFFER OF SEAFIRST BANK
2. CLEARANCES: Comment of back if necessary) 3. EXHIBITS:
Dir. Admin. Services%'~~ Proposed Ordinance
-' " 17 /,. .2
Fiscal and Budget eom .~.~~ ~/~.-~~~h Flow Projection
Note Purchase Offer (at Council meeting)
ENDORSEMENTS /)( INFORMATION APPROVED BY COUNCIL PRESIDENT FOR gUBMITTAL:
4. SUMMARY STATEMENT AND REQUIREMENT FOR COUNCIL ACTION:
As indicated in the attached documents, the City's General Fund will operate in a deficit cash position through most
of the year without some form of cash flow financing. Analysis indicates that issuance of a Tax Anticipation Note, or
TAN is the most economical way of financing this cash flow need.
8. RECOMMENDATION:
Motion to approve on first reading the Ordinance authorizing the issue of a Tax Anticipation Note and accepting the
purchase offer of Seafirst Bank.
Motion to pass on second reading Ordinance No. authorizing the issue of a Tax Anticipation Note and
accepting the purchase offer of Seafirst Bank.
9. RESPONSIBLE OFFICIAL: Treasurer
ENFORCEMENT OFFICIAL: Mayor
EXPIRATION DATE: January 31, 2000
REVIEW DATE: N/A
'10. NOTICE OF ACTION
PULLED TABLED APPROVED DISAPPROVED
COUNCIL DIRECTIVE:
2. CLEARANCE COMMENTS:
5. IMPACT ON I~ION-PASSAGE:
The City's General Fund will operate for most of the year with a negative cash balance which is contrary to statute.
6. IMPACT ON STAFFING, BUDGETS, FACILITIES, EQUIPMENT OR OTHER RESOURCES:
Included in the 1999 - 2000 Budget.
7. RESEARCH SOURCES:
Cash flow projections. Bond counsel. Negotiations with underwriting bank.
CITY OF BREMERTON
1999 CASH FLOW PROJECTION
Thousands
2000
1500
1000
50O
-500
-1000
-1500
DEC JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC
I~PROJECTION I i
1ST DRAFT 12/21/98
For Discussion Purposes Only
CITY OF BREMERTON, WASHINGTON
ORDINANCE NO.
AN ORDINANCE of the City of Bremerton Washington relating
to the incurrence of indebtedness; providing for the sale and
issuance of $1,250,000 principal amount tax anticipation notes,
1999, to pay City expenses pending for the receipt of general City
taxes; providing for the date, denominations, form, terms,
registration privileges, maturity, interest rates and covenants of the
notes; establishing a debt service fund for the notes; and providing
for the sale and delivery of such notes to NationsBanc
Montgomery Securities LLC
WHEREAS, the City Council of the City of Bremerton (the "City") finds that the
periodic collections of sales, excise and general ad valorem taxes and other revenue in
1999 will not be sufficient to meet necessary City expenses as they are incurred in 1999,
and
WHEREAS, the City Council of the City deems it to be in the best interest of the
City that the City borrow money and issue and sell a short-term obligation in the form of
tax anticipation notes pursuant to chapter 39.50 RCW for the purpose of financing such
expenses pending receipt of taxes and other revenue collected by the City; and
WHEREAS, the incurrence of such indebtedness by the City will not cause the
total indebtedness of the City to be incurred without the assent of the voters of the City to
exceed the limitations set forth in Chapter 39.36 RCW; and
WHEREAS, NationsBanc Montgomery Securities LLC (the "Purchaser") has
offered, by way of the Purchase Agreement (the "Purchase Agreement"), to purchase
such limited tax anticipation notes upon the terms and conditions hereinafter set forth;
NOW, THEREFORE,
THE CITY OF BREMERTON DOES ORDAIN AS FOLLOWS:
1ST DRAFT 12/21/98
For Discussion Purposes Only
Section 1. Finding, Purpose and Description of Notes. The City authorizes the
sale and issuance of its "Tax Anticipation Notes, 1999" (the "Notes") for the purpose of
financing City expenses pending receipt of taxes and other revenue collected by the City
and to pay certain "incidental costs and costs related to the sale and issuance" (as defined
in RCW 39.46.070) of the Notes.
The Notes shall be in the aggregate principal amount of $1,250,000; shall be
dated February 1, 1999; shall mature on January 31, 2000; shall bear interest (computed
on the basis of a 360-day year of twelve 30-day months) from their date at the rate of
% per annum, payable at maturity. The Notes shall be issued in fully registered
form as to both principal and interest; shall be in the denomination of $50,000 each or
any integral multiple thereof; shall be numbered separately in such manner and with any
additional designation as the fiscal agencies of the State of Washington in Seattle,
Washington, and New York, New York (collectively, the "Registrar"), deem necessary
for purposes of identification.
If any Note is not paid upon proper presentment at its maturity date, the City shall
have the obligation to pay interest at the same rate from and after such maturity date until
such Note, both principal and interest, is paid in full.
The Notes shall be negotiable instruments to the extent provided by
RCW 62A. 8-102 and RCW 62A. 8-105.
On the date of issue of the Notes, all Notes maturing in the same maturity year shall
be issued in the form of a single certificate, which certificate shall be registered in the
name of The Depository Trust Company or any successor thereto engaged to operate a
book-entry system for recording the beneficial ownership of the Notes, as Custodian (the
2
1ST DRAFT 12/21/98
For Discussion Purposes Only
"Custodian"), or its nominee, and delivered to the Custodian. The Custodian shall hold
each such Note certificate in fully immobilized form for the benefit of the beneficial
owners of the Notes (the "Beneficial Owners") pursuant to the Blanket Issuer Letter of
Representations, dated November 19, 1997, between the City and the Custodian (the
"Letter of Representations"), until the earliest to occur of either (1) the date of maturity of
the Notes evidenced by such certificate, at which time the Custodian shall surrender such
certificate to the Registrar for payment of the principal of and interest on such Notes
coming due on such date, and the cancellation thereof; (2) the fifth business day
following the date of receipt by the Registrar of the City's request to terminate the book°
entry system of registering the beneficial ownership of the Notes (the "Book-Entry
Termination Date"); or (3) the date the City determines to utilize a new Custodian for the
Notes, at which time the old Custodian shall (provided the City is not then in default of
any payment then due on the outstanding Notes) surrender the immobilized certificates to
the Registrar for transfer to the new Custodian and cancellation as herein provided.
For so long as any outstanding Notes are registered in the name of the Custodian or
its nominee and held by the Custodian in fully immobilized form as described in this
Section 1, the rights of the Beneficial Owners shall be evidenced solely by an electronic
and/or manual entry made from time to time on the records established and maintained by
the Custodian in accordance with the Letter of Representations, and no certificates
evidencing such Notes shall be issued and registered in the name of any Beneficial
Owner or such Beneficial Owner's nominee.
The City may terminate the "book-entry" system of registering ownership of the
Notes at any time (provided the City is not then in default of any payment then due on the
3
1ST DRAFT 12/21/98
For Discussion Purposes Only
outstanding Notes) by delivering to the Registrar: (a) a written request that it issue and
deliver Note certificates to each Beneficial Owner or such Beneficial Owner's nominee
on the Book-Entry Termination Date; (b) a list identifying the Beneficial Owners as to
both name and address; and (c) a supply of Note certificates, if necessary for such
purpose. Upon surrender to the Registrar of the immobilized certificates evidencing all
of the then outstanding Notes, the Registrar shall issue and deliver new certificates to
each Beneficial Owner or such BenefiCial Owner's duly appointed agent, naming such
Beneficial Owner or such Beneficial Owner's nominee as the Owner thereof. Such
certificates may be in any integral multiple of $50,000. Following such issuance, the
Owners of such Notes may transfer and exchange such Notes in accordance with
Section 9 hereof.
Neither the City nor the Registrar shall have at any time any responsibility or
liability to any Beneficial Owner of any Notes or to any other person for any error,
omission, action or failure to act on the part of the Custodian with respect to payment,
when due, to the Beneficial Owner of the principal and interest on the Notes, proper
recording of beneficial ownership of Notes, proper transfers of such beneficial
ownership, or any notices to Beneficial Owners or any other matter pertaining to the
Notes.
Section 2. Place, Manner and Medium of Payment. Both the principal of and
interest on the Notes shall be payable in lawful money of the United States of America.
Prior to the Book-Entry Termination Date, the principal and interest on the Notes shall be
paid by the Registrar to the Custodian as the Owner (hereinafter defined) thereof, for the
benefit of the Beneficial Owners thereof, in accordance with the Letter of
4
1ST DRAFT 12/21/98
For Discussion Purposes Only
Representations. From and after the Book-Entry Termination Date, principal of and
interest on the Notes shall be paid to the persons who are named as the registered owners
of the Notes (the "Owners") on the registration books for the Notes (the "Note Register")
maintained by the Registrar only upon presentation and surrender of such Owners' Notes
upon maturity, at the principal corporate trust office of either Registrar, at the option of
the Owners.
Section 3. No Redemption; Open Market Purchase. The Notes shall not be
subject to redemption prior to maturity.
The City reserves the right to purchase any or all of the Notes on the open market
at any time and at any price. All Notes purchased by the City shall be surrendered to the
Registrar for cancellation.
Section 4. Debt Limit Not Exceeded. The City finds and covenants that the
Notes are issued within all constitutional and statutory debt limitations presently
applicable to the City.
Section 5. Pledge of Full Faith, Credit and Resources. The Notes are limited tax
general obligations of the City. The City hereby irrevocably covenants to include in its
budgets and to make annual levies of taxes upon all property within the City subject to
taxation without a vote in amounts which, together with any other money legally
available therefor, shall be sufficient to pay the principal and interest on the Notes as the
same shall become due. The City hereby irrevocably pledges its full faith, credit and
resources to the annual levy and collection of such taxes and for the prompt payment of
such principal and interest. All of such taxes shall be paid into the Note Fund hereinafter
created.
1ST DRAFT 12/21/98
For Discussion Purposes Only
The City hereby irrevocably covenants that the annual tax provided for herein to
be levied for the payment of the principal of and interest on the Notes shall be within and
as a part of the tax levy permitted the City without a vote of the people and that a
sufficient portion of each such annual tax levy to be made so long as the Notes are
outstanding, together with any other money legally available therefor, shall be and is
hereby set aside, pledged and appropriated for the payment of the principal of and interest
on the Notes as the same shall become due.
Section 6. Form of Notes. The Notes shall be typewritten, printed or
lithographed on good bond paper in a form consistent with this ordinance and
Washington law.
Section 7. Execution of Notes. The Notes shall be signed on behalf of the City
with the facsimile or manual signatures of the Mayor and the City Clerk, and shall have
the seal of the city impressed or a facsimile thereof imprinted thereon.
In case either or both of the officers who shall have executed any Note shall cease
to be such officer or officers of the City before the Note so signed shall have been
authenticated or delivered by the Registrar or issued by the City, such Note nevertheless
may 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 Note also may be signed and attested on
behalf of the City by such persons as at the actual date of execution of such Note shall be
the proper officers of the City although at the original date of such Note such persons
were not such officers of the City.
1ST DRAFT 12/21/98
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Section 8. Authentication and Delivery of Notes by Registrar. The Registrar are
authorized and directed, on behalf of the City, to authenticate and deliver Notes initially
issued or transferred or exchanged in accordance with the provisions of such Notes and
this ordinance.
Only such Notes as shall bear thereon a "Certificate of Authentication" manually
executed by an authorized signatory of the Registrar shall be valid or obligatory for any
purpose or entitled to the benefits of this ordinance. Such Certificate of Authentication
shall be conclusive evidence that the Notes so authenticated have been duly executed,
authenticated and delivered hereunder and are entitled to the benefits of this ordinance.
The Registrar shall be responsible for their representations contained in the
Certificate of Authentication on the Notes.
Section 9. Registration; Transfer and Exchange. The Registrar shall keep, or
cause to be kept, the Note Register at principal corporate trust office of either or both of
them.
The City and each Registrar, in its discretion, may deem and treat the Owner of
each Note as the absolute owner thereof for all purposes, and neither the City nor the
Registrar shall be affected by any notice to the contrary. Payment of any such Note shall
be made only as described in Section 2 hereof, but such registration may be transferred as
herein provided. All such payments made as provided in Section 2 hereof shall be valid
and shall satisfy and discharge the liability of the City upon such Note to the extent of the
amount or amounts so paid.
The registered ownership of any Note may be transferred. Prior to the Book-
Entry Termination Date, the beneficial ownership of the Notes may only be transferred
7
1ST DRAFT 12/21/98
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on the records established and maintained by the Custodian. On and after the Book-Entry
Termination Date, no transfer of any Note shall be valid unless it is surrendered at any
principal corporate trust office of either Registrar, with the assignment form appearing on
such Note duly executed by the Owner or such Owner's duly authorized agent, in a
manner satisfactory to the Registrar. Upon such surrender, the Registrar shall cancel the
surrendered Note and shall authenticate and deliver, without charge to the Owner or
transferee therefor (other than any governmental fees or taxes pa}/able on account of such
transfer), a new Note or Notes (at the option of the new Owner), of the same maturity and
interest rate and for the same aggregate principal amount, in any authorized
denomination, naming as Owner the person or persons listed as the assignee on the
assignment form appearing on the surrendered Note, in exchange for such surrendered
and cancelled Note.
On and after the Book-Entry Termination Date, any Note may be surrendered at
the principal corporate trust office of either Registrar and exchanged, without charge, for
an equal aggregate principal amount of Notes, in any authorized denomination. The
Registrar shall not be obligated to transfer or exchange any Note during the 15 days
preceding the maturity date.
Either Registrar may become the Owner of any Note with the same rights it would
have if it were not a 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 rights of the Owners of the
Notes.
1ST DRAFT 12/21/98
For Discussion Purposes Only
The City covenants that, until all Notes shall have been surrendered and
cancelled, it will maintain a system of recording the ownership of each Note that
complies with the provisions of the Internal Revenue Code of 1986, as amended (the
"Code").
Section 10. Mutilated, Lost, Stolen or Destroyed Notes. If any Note becomes
mutilated, lost, stolen or destroyed, the Registrar may authenticate and deliver a new
Note of the same maturity and interest rate and of like tenor and effec~ in substitution
therefor, all in accordance with law. If such mutilated, lost, stolen or destroyed Note has
matured, the City at its option, may pay the same without the surrender thereof.
However, no such substitution or payment shall be made unless and until the applicant
shall furnish (a) evidence satisfactory to the Registrar of the destruction or loss of the
original Note and of the ownership thereof, and (b) such additional security, indemnity or
evidence as may be required by or on behalf of the City. No substitute Note shall be
furnished unless the applicant shall reimburse the City and the Registrar for their
respective expenses in the furnishing thereof. Any such substitute Note so furnished shall
be equally and proportionately entitled to the security of this ordinance with all other
Notes issued hereunder.
Section 11. Defeasance. If money and/or "Government Obligations" (as such
obligations are defined in Chapter 39.53 RCW, as now in existence or hereafter
amended) maturing at such times(s) and bearing such interest to be earned thereon
(without any reinvestment thereof) as will provide a series of payments which shall be
sufficient, together with any money initially deposited, to provide for the payment of the
principal of and interest on all or a portion of the Notes, when due in accordance with
1ST DRAFT 12/21/98
For Discussion Purposes Only
their terms in accordance with a refunding plan adopted by the City, are set aside in a
special fund (hereinafter called the "trust account") to effect such payment and are
pledged irrevocably for the purpose of effecting such payment, then no further payments
need be made into the Note Fund for the payment of the principal of and the interest on
such Notes, the Owners thereof shall cease to be entitled to any lien, benefit or security of
this ordinance except for the right to receive the money and the principal and interest
proceeds on the obligations set aside in the trust account, and such Notes shall no longer
be deemed to be outstanding hereunder.
Section 12. Sale of the Notes. The Purchaser has presented the Purchase
Agreement to the City pursuant to which the Purchaser has offered to purchase the Notes,
under the terms and conditions provided in the Purchase Agreement, which written
Purchase Agreement is on file with the City Clerk and is incorporated herein by this
reference. The City Council finds that entering into the Purchase Agreement is in the
City's best interest and therefore accepts the offer contained in the Purchase Agreement
and authorizes the execution of the Purchase Agreement by City officials.
The Notes will be printed at City expense and will be delivered to the Purchaser
in accordance with the terms of the Purchase Agreement with the approving legal opinion
of the City's bond counsel relative to the issuance of the Notes printed on each Note or
attached thereto. Bond counsel has not been engaged to participate in the preparation or
review of, or express any opinion concerning the completeness or accuracy of the official
statement or other disclosure documentation used in connection with the offer or sale of
the Notes by any person, and bond counsel's opinion shall so state. Bond counsel has not
been retained to monitor, and shall not be responsible for monitoring, the City's
10
1ST DRAFT 12/21/98
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compliance with any federal law or regulations to maintain the tax-exempt status of the
interest on the Notes.
Section 13. Delivery_ of Notes; Temporary_ Notes. The proper City officials are
authorized and directed to execute and/or approve, as appropriate, all documents,
including but not limited to, the final Official Statement pertaining to the Notes, and to do
everything necessary for the preparation and delivery of a transcript of proceedings
pertaining to the Notes, and the printing, execution and prompt delivery of the Notes to
the Purchaser and for the proper application and use of the proceeds of the sale thereof.
If definitive Notes are not ready for delivery by the date established for closing
(the "Closing"), the City Treasurer, upon the approval of the Purchaser, may cause to be
issued and delivered to the Purchaser one or more temporary Notes with appropriate
omissions, changes and additions. Any temporary Note or Notes shall be entitled and
subject to the same benefits and provisions of this ordinance with respect to the payment,
security and obligation thereof as definitive Notes authorized hereby. Such temporary
Note or Notes shall be exchangeable without cost to the Owners thereof for definitive
Notes when the latter are ready for delivery.
Section 14. Establishment of Note Fund; Application of Note Proceeds There is
hereby created and established in the office of the City Treasurer a special fund to be
designated as the "Tax Anticipation Note Fund, 1999" (the "Note Fund"). Any proceeds
resulting from authorized temporary investments of money on deposit in the Note Fund
or such investment proceeds of any taxes hereafter levied for payment of the Notes and
placed in the Note Fund shall be used for the sole purpose of retiring the Notes or paying
the interest thereon.
1ST DRAFT 12/21/98
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The accrued interest on the Notes received by the City upon the sale of the Notes,
if any, shall be deposited into the Note Fund and shall be applied to the payment of
interest coming due on the Notes. The principal proceeds of the Notes shall be deposited
in the General Fund of the City and used solely for the purpose of paying the cash flow
deficits in the City's General Fund resulting from budgeted expenditures, and any interest
received from the deposit or investment of such proceeds shall be applied and used solely
for such purposes or for deposit into the Note Fund.
Section 15. Permitted Financing of Cumulative Cash Flow Deficit. Based upon
the reasonably expected amounts of sales, excise and general ad valorem property taxes
and other revenue to be collected in 1999 (including investment proceeds of the Notes)
and that are expected to be available to make General Fund expenditures in 1999
(computed by treating a reasonably working capital reserve in an amount not exceeding
5% of the total General Fund expenditures in the prior fiscal year as not being available
to make those expenditures), the City Council finds that the principal amount of the
Notes does not exceed the maximum anticipated "cumulative cash flow deficit" (as
defined by Section 148 of the Internal Revenue Code of 1986, as amended (the "Code"),
and applicable Treasury Regulations thereunder) expected to occur in the City's General
Fund during 1999 and that is to be financed with the proceeds of the Notes.
Section 16. Tax-Exemption Covenants. The City covenants that it will not take
or permit to be taken on its behalf any action that would adversely affect the exclusion of
the interest on the Notes from gross income for purposes of federal income taxation, and
will take or require to be taken such acts as may be permitted by Washington law and as
may from time to time be required under applicable law to continue the exclusion of the
1ST DRAFT 12/21/98
For Discussion Purposes Only
interest on the Notes from gross income for purposes of federal income taxation.
Without limiting the generality of the foregoing, the City will not invest or make or
permit any use of the proceeds of the Notes or of its other money at any time during the
term of the Notes which would cause the Notes to be "arbitrage bonds" within the
meaning of Section 148 of the Code.
The City further covenants that, if the City issues more than $5 million in tax-
exempt bonds in the calendar year 1999 and all the proceeds of the Notes have not been
spent within six months from the date of issuance of the Notes, it further covenants that
it will calculate or cause to be calculated, and shall rebate to the United States, all
earnings from the investment of Note proceeds that are in excess of the amount that
would have been earned had the yield on such investments been equal to the yield on the
Notes, plus income derived from such excess earnings, to the extent and in the manner
required by Section 148 of the Code.
The City has not been notified of any listing or proposed listing by the Internal
Revenue Service to the effect that the City is a bond issuer the arbitrage certifications of
which may not be relied upon.
The City will take no actions and will make no use of the proceeds of the Notes or
any other funds held under this ordinance which would cause any Note to be treated as a
"private activity bond" (as defined in Section 141(b) of the Code) subject to treatment
under said Section 141(b) as an obligation not described in Section 103(a) of the Code,
unless the tax exemption thereof is not affected.
The City hereby designates the Notes as "qualified tax-exempt obligations" for
purposes of Section 265 of the Code (relating to the deduction by financial institutions of
13
1ST DRAFT 12/21/98
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the interest incurred to carry tax-exempt debt), and authorizes and directs the proper City
officials to execute and deliver all documents necessary to evidence such designation to
any and all interested parties. The City further covenants not to issue more than
$10,000,000 of such "qualified tax-exempt obligations" during 1999.
Section 17. Preliminary_ Official Statement Declaration. The City has been
provided with copies of a preliminary official statement dated (the
"Preliminary Official Statement"), prepared in connection with the sale of the Notes. For
the sole purpose of the Purchaser's compliance with Securities and Exchange
Commission Rule 15c2-12(b)(1), the City "deems final" the Preliminary Official
Statement, as of its date, except for the omission of information on offering prices,
interest rates, selling compensation, delivery dates, ratings, other terms of the Notes
dependent on such matters.
Section 18. Undertaking to Provide Continuing Disclosure. This section
constitutes the City's written undertaking for the benefit of the Owners and the Beneficial
Owners of the Notes required by subsection (d)(2)(ii) of Rule 15c2-12 (the "Rule") of the
United States Securities and Exchange Commission (the "SEC").
The City hereby agrees to provide or cause to be provided upon request to any
person or at least annually to the State Information Depository ("SID"), if one is created:
(a) financial statements prepared in accordance with the generally accepted accounting
principles applicable to governmental units, as such principles may be changed from time
to time and as permitted by State law; which statements will not be audited, except that if
and when audited financial statements are otherwise prepared and available to the City,
1ST DRAFT 12/21/98
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they will be provided; and (b) other operating data that may be prepared by the City (the
"Financial Information").
In its provision of such Financial Information, the City may cross-reference to any
"final official statement" (as defined in the Rule) available from the Municipal Securities
Rulemaking Board (the "MSRB") or any other documents theretofore provided to each
then existing nationally recognized municipal securities information repository
designated by the SEC ("NRMSIR") or the SID, if one is created.
The City further agrees to provide or cause to be provided, in a timely manner, to
the Si2), if one is created, and to either the MSRB or each then existing NKMSIR, notice
of any of the following events with respect to the Notes, 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
Notes;
7. Modifications to rights of the Owners of the Notes;
8. Optional redemptions of the Notes;
9. Defeasances of the Notes;
1ST DRAFT 12/21/98
For Discussion Purposes Only
10. Release, substitution or sale of property securing repayment of the
Notes; and
11. Rating changes.
After the issuance of the Notes, so long as the interests of the Owners or Beneficial
Owners of the Notes will not be materially impaired thereby, as determined by a party
unaffiliated with the City (including, without limitation, a trustee for the Owners,
nationally recognized bond counsel or other counsel familiar with the federal securities
law), or pursuant to a favorable "no-action letter" issued by the SEC, this Section 18 may
only be amended in connection with any change in legal requirements, change in law, or
change in the identity, nature or status of the obligated person, or type of business
conducted, and only in such a manner that the undertaking of the City, as so amended,
would have complied with the requirements of the Rule at the time of the primary
offering, after taking into account any amendments or interpretations of the Rule, as well
as any change in circumstances.
The City's obligations to provide Financial Information and notices of certain
events shall terminate without amendment upon the defeasance, prior redemption or
payment in full of all of the then outstanding Notes. This Section 18 or any provision
hereof, shall be null and void if the City (i) obtains an opinion of nationally recognized
bond counsel or other counsel familiar with the federal securities laws to the effect that
those portions of the Rule which require this Section 18 or any such provision are invalid,
have been repealed retroactively or otherwise do not apply to the City; and (ii) notifies
and provides the SID, if any, and either the MSRB or each then existing NRMSIR with
copies of such opinion.
16
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The right of each Owner and Beneficial Owner of Notes to enforce the provisions
of this Section 18 shall be limited to the right to obtain specific enforcement of the City's
obligations under this Section 18, and any failure by the City to comply with the
provisions of this undertaking shall not be a default with respect to the Notes under this
ordinance.
The City Treasurer is authorized and directed to take such further action on behalf
of the City as may be necessary, appropriate or convenient to carry out the requirements
of this Section 18.
Section 19. Contract; Severability. The covenants contained in this ordinance
shall constitute a contract between the City and the Owners of each and every Note. The
City unconditionally covenants that it will keep and perform all of the covenants of the
Notes and this ordinance. If any one or more of the provisions of this ordinance shall be
declared unconstitutional or invalid for any reason, such decision shall not affect the
validity of the remaining provisions of this ordinance or the Notes, and this ordinance and
the Notes shall be construed and enforced as if such unconstitutional or invalid provision
had not been contained herein.
Section 20. Effective Date. This ordinance shall take effect and be in full force
five days after passage and publication of an approved summary, consisting of the title.
APPROVED by the City Council of the City of Bremerton, Washington, this __
day of January, 1999.
PASSED by the City Council of the City of Bremerton, Washington, this __. day
of January, 1999.
1ST DRAFT 12/21/98
For Discussion Purposes Only
, Council President
APPROVED this __ day of January, 1999.
LYNN HORTON, Mayor
ATTEST:
· City Clerk
APPROVED AS TO FORM:
By
Judith Andrews, Bond Counse-J
PUBLI SHED:
EFFECTIVE DATE:
ORDINANCE NO.
PRELMINAR Y OFFICIAL STATEMENT DATED JANUARY '12, 'I999
BOOK-ENTRY ONLY
NEW ISSUE
NEGOTIATED RATING: Not Applied For
in the opinion of Bond Counsel, as of the Date of Issue, and assuming the City fulfills its covenant to comply with certain requirements of the Internal
Revenue Code of 1986, as amended (the "Code") that must be met subsequent to the issuance of the Notes: interest on the Notes is excluded from gro~s
income for federal income tax purposes, and is not an item of tax preference for purposes of cletetTnining the alternative minimum tax on individuals and
corporab'ons; and the Notes are "qualified tax-exempt obligations' for purposes of the parifal interest expense deduction available under Section 265 of the
Code. However, interest on the Notes is included in the computation of other taxes, including without limitation the alternative minimum tax on
corporations, and may be subject to other collateral tax consequences. See 'TAX EXEMPTION" and 'OTHER TAX CONSEQUENCES" hereto.
CITY OF BREMERTON, WASHINGTON
$1,250,000
TAX ANTICIPATION NOTES, 1999
DATED: February. `1; '1999 DUE: January. 31, 2000
The City's Tax Anticipation Notes, 1999 (the 'Notes"), are issued in fully registered form, and will be fully registered in
the name of Cede & Co., as Note owner and nominee for The Depository Trust Company ("DTC"), New York, New York.
DTC will act as securities depository for the Notes. The Notes will be initially issued in book-entry form only in the value
of $50,000 or any integral multiple thereof within a single maturity. Purchasers will not receive certificates representing
their interest in the Notes purchased. The Notes bear interest payable at maturity. The principal of and interest on the
Notes are payable by either fiscal agency of the State of Washington, currently The Bank of New York, New York, New
York and Wells Fargo Bank, National Association, Seattle, Washington (the "Fiscal Agent' or 'Registrar"). For so long
as the Notes remain in a "book-entry only' transfer system, the Fiscal Agent will make such payments only to DTC,
which will in turn remit such principal and interest to the DTC participants for subsequent disbursement to Beneficial
Owners of the Notes as described herein under the caption 'Book-Entry Only System."
MATURITY
Due Amount Rate Yield or Price
January 31, 2000 $1,250,000 %
The Notes will not be subject to redemption prior to their stated maturity.
The Notes are limited tax general obligations of the City. The City irrevocably covenants that, unless the principal of
and interest on the Notes are paid from other sources, so long as the Notes are outstanding, the City shall make annual
levies of taxes upon all property within the City subject to taxation without a vote in amounts sufficient, together with any
other money legally available therefor, to pay such principal and interest as the same shall become due. The City has
irrevocably pledged its full faith, credit and resources to the annual levy and collection of such taxes and for the prompt
payment of such principal and interest. See 'SECURITY" herein.
The City has designated the Notes as "qualified tax-exempt obligations" under the Internal Revenue Code of 1996, as
amended, for banks, thrift institutions and other financial institutions. See "CERTAIN OTHER FEDERAL TAX
CONSEQUENCES" herein.
The Notes are offered by the Underwriter when, as, and if issued, subject to the approving legal opinion of Gottlieb,
Fisher & Andrews, PLLC, Bond Counsel, Seattle, Washington, a copy of which opinion will be delivered with the Notes.
The Notes in definitive book-entry form will be ready for delivery through the facilities of DTC in New York, New York, on
or around February ,1999.
This cover page contains certain information for quick reference only. It is not a summary of this issue. Investors must
read the entire Official Statement to obtain information essential to making an informed investment decision.
Representations
Neither the City nor the Underwriter has authorized any dealer, broker, salesperson or other
persons to give any information or make any representations other than those made in this
Preliminary Official Statement, and, if given or made, such other information or representations
must not be relied upon as having been authorized by the City or the Underwriter. This
Preliminary Official Statement does not constitute an offer to sell, nor shall there be any sale of
the Notes by any person in any jurisdiction in which it is unlawful for such person to make such a
sale.
The information contained in this Preliminary Official Statement has been obtained from City
Officials and other sources believed to be reliable. Neither a representation, warranty nor
guarantee is made by the Underwriter as to the accuracy or completeness of any information in
this Preliminary Official Statement and nothing contained in this Preliminary Official Statement is
or shall be relied upon as a promise or representation by the Underwriter. The delivery of this
Preliminary Official Statement does not imply that the information contained herein is correct as
of any time subsequent to the date of the Preliminary Official Statement as shown on the cover
page.
Disclosure Statement
The City will deliver to the Underwriter at the time of delivery of the Notes a signed statement
substantially to the effect that this Preliminary Official Statement, as of its date and as of the date
of the Notes, neither contains any untrue statement of a material fact nor omits to state any
material fact necessary to make the statements therein, in light of the circumstances under which
they were made, not misleading in any material respect and that there has not been any material
adverse change in the normal operations or financial condition of the City nor, to the best of the
City's knowledge, in the general economy of the City since the date of the final Official Statement.
Secondary Market
It has been the practice of the Underwriter to maintain a secondary market in municipal securities
which it sells. The Underwriter intends to engage in secondary market trading of the Notes,
subject to applicable securities laws. The Underwriter, however, is neither obligated to engage in
secondary trading nor to repurchase any of the Notes at the request of the registered owners
thereof and no assurance can be given that a secondary market for the Notes will be available.
In connection with the offering of the Notes, the Underwriter may over-allot or effect
transactions that stabilize or maintain the market price of the Notes at a level above that which
might otherwise prevail in the open market. Such stabilizing, if commenced, may be discontinued
at any time.
This Preliminary Official Statement, as of its date, is in a form that is expected to be "deemed
final" by the City for purposes of SEC Rule 15c2-12(b)(I_), but is subject to revision, amendment
and completion in a final Official Statement that will be available within seven (7) days of the
sale date of the Bonds.
CITY OF BREMERTON
KITSAP COUNTY, WASHINGTON
239 Fourth Street
Bremerton, Washington 98337
(360) 478-5290
MAYOR Term Expires
December 31
Lynn Horton 2001
CITY COUNCIL
David Farr Chairperson 1999
Wayne Olsen Member 2001
John Law Member 2001
Carol Arends Member 2001
Cecil McConnell Member 1999
Carlos Montgomery Member 1999
Mike Shepherd Member 2001
Lon Overson Member 1999
Jim Reed Member 2001
APPOINTED CITY
OFFICIALS
Richard Hanna Treasurer
Kathleen McCluskey Administrative Services
Director/City Clerk
Glenna Malanca Attorney
BOND COUNSEL
Gottlieb, Fisher & Andrews, PLLC
Seattle, Washington
UNDERWRITER
NationsBanc Montgomery Securities LLC
Seattle, Washington
TABLE OF CONTENTS
Page
Introduction .................................................................................................................................. 1
Description of the Notes ................................................................................................................ 1
Authorization ................................................................................................................................ 4
Security ........................................................................................................................................ 4
Purpose ......................................................................................................................................... 4
Note Fund ..................................................................................................................................... 4
Failure to Redeem the Notes .......................................................................................................... 4
Debt Payment Record .................................................................................................................... 5
Future Financing ........................................................................................................................... 5
Assessed Valuation Determination ................................................................................................. 5
Tax Collection Procedure .............................................................................................................. 5
Authorization of Debt .................................................................................................................... 6
General Obligation Indebtedness .................................................................................................... 6
Limits on Amount of General Obligation Indebtedness ................................................................... 6
Authorization of Short-Term Debt ................................................................................................. 7
Taxing Powers and Limitations ..................................................................................................... 7
Auditing of City Finances .............................................................................................................. 8
Authorized Investments ................................................................................................................. 8
Net Direct Debt and Estimated Net Overlapping General Obligation Debt ...................................... 10
Bonded Debt Ratios of the City ..................................................................................................... 10
Statutory Debt Limit Calculation ................................................................................................... 11
Ad Valorem Tax Record of the City. ............................................................................................. 12
Ad Valorem Property Tax Rates in the City ................................................................................... 12
Comparative Statement of General Fund Revenues and Expenditures ............................................. 13
Contingency Reserve Fund Year-End Balances .............................................................................. 13
General Fund Budget .................................................................................................................... 14
Schedule of General Obligation Bond Debt Service for the City ..................................................... 15
City. Profile ................................................................................................................................... 15
General and Economic Information ................................................................................................ 17
Preservation of Tax Exemption ..................................................................................................... 2.3
Conflicts of Interest ....................................................................................................................... 23
Tax Exemption ............................................................................................................................. 23
Other Tax Consequences ............................................................................................................... 24
Absence of Material Litigation ...................................................................................................... 24
Approval of Bond Counsel ............................................................................................................ 25
Continuing Disclosure ................................................................................................................... 25
Underwriting ................................................................................................................................. 26
Concluding Statement ................................................................................................................... 26
Form of Legal Opinion ...................................................................................................... Appendix A
iii
PRELIMINARY OFFICIAL STATEMENT
City OF BREMERTON, WASHINGTON
$1,250,000
TAX ANTICIPATION NOTES, 1999
INTRODUCTION
The City of Bremerton, Washington (the "City"), a municipal corporation duly organized and
existing under and by virtue of the laws of the State of Washington, furnishes this Official
Statement in connection with the offering of $1,250,000 principal amount of Tax Anticipation
Notes, 1999 (the "Notes"). This Official Statement provides information concerning the City and
the Notes.
DESCRIPTION OF THE NOTES
Principal Amount, Date, Interest Rate, and Maturity
The Notes will be issued in the principal amount of $1,250,000 and will be dated and bear interest
from February 1, 1999 until their stated maturity. The Notes will mature on January 31, 2000, and
will bear interest, payable at maturity, at the rate of % per annum. Interest on the Notes
will be computed on the basis of a 360-day year of twelve 3 O-day months.
Optional Redemption
The City has not reserved the right to redeem the Notes prior to maturity.
Paying Agent
Principal of and interest on the Notes will be payable by either State fiscal agency (the "Fiscal
Agent" or "Registrar") in New York, New York, or Seattle, Washington, currently The Bank of
New York and Wells Fargo Bank, National Association (or such other fiscal agency or agencies
as the City Treasurer may from time to time designate). So long as Cede & Co. is the registered
owner of the Notes, principal of and interest on the Notes are payable by wire transfer by the
Registrar to DTC, which, in turn, is obligated to remit such principal and interest to the DTC
Participants for subsequent disbursement to the Beneficial Owners of the Notes, as further
described herein under the caption "Book-Entry Only System."
Form and Denomination
The Notes will be issued in fully registered form as to both principal and interest in the
denomination of $50,000 or any integral multiple thereof. The Notes, when issued, will be
registered in the name of Cede & Co., as registered owner and nominee of The Depository Trust
Company, New York, New York ("DTC").
DTC will act as securities depository for the Notes. Individual purchases may be made in book-
entry form only. Purchasers will not receive certificates representing their interest in the Notes
purchased. So long as Cede & Co. is the registered owner of the Notes, as nominee of DTC,
references herein to the registered owners or Note owners will mean Cede & Co. and will not
mean the "Beneficial Owners" of the Notes. In this Official Statement, the term "Beneficial
Owner" will mean the person for which a DTC participant acquires an interest in the Notes.
I
So long as Cede & Co. is the registered owner of the Notes, principal of and interest on the Notes
are payable by wire transfer by the Registrar to DTC, which, in turn, is obligated to remit such
principal and interest to the DTC participants for subsequent disbursement to Beneficial Owners
of the Notes, as further described under the caption "Book-Entry Only System."
Book-Entry Only System
The following information has been provided by DTC. Beneficial Owners should confirm the
following with DTC or the Participants.
DTC will act as initial securities depository for the Notes. The Notes will be issued as fully
registered Notes, and will be registered in the name of Cede & Co. (DTC's partnership nominee).
One fully-registered Note certificate will be issued for the Notes, in the aggregate principal
amount of the Notes, and will be deposited with DTC.
DTC 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, as amended. DTC holds securities that its participants (the
"Participants") deposit with DTC. DTC also facilitates the settlement among Participants of
securities transactions, such as transfers and pledges, in deposited securities through electronic
computerized book-entry changes in accounts of the Participants, thereby eliminating the need of
physical movement of securities certificates. Direct Participants include securities brokers and
dealers, banks, trust companies, clearing corporations and certain other organizations. DTC is
owned by a number of its Direct Participants and by the New York Stock Exchange, Inc., the
American Stock Exchange, Inc. and the National Association of Securities Dealers, Inc. Access to
the DTC system is also available to others such as banks, brokers, dealers and trust companies
that clear through or maintain a custodial relationship with a Direct Participant, either directly or
indirectly ("Indirect Participants"). The rules applicable to DTC and its Participants are on file
with the Securities and Exchange Commission.
Purchases of the Notes under the DTC system, in denominations of $50,000 or any integral
multiple thereof, must be made by or through Direct Participants, which will receive a credit for
the Notes on DTC's records. The ownership interest of each actual purchaser of each Note
("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, but
Beneficial Owners are expected to receive written confirmations providing details of the
transaction, as well as periodic statements of their holdings, from the Direct or Indirect
Participants through which the Beneficial Owner entered into the transaction. Transfers of
ownership interests in the Notes are to be accomplished by entries made on the books of
Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates
representing their ownership interests in the Notes, except in the event that use of the book-entry
system for the Notes is discontinued.
To facilitate subsequent transfers, all Notes deposited by Participants with DTC are registered in
the name of DTC's partnership nominee, Cede & Co. The deposit of Notes with DTC and their
registration in the name of Cede & Co. effect no change in beneficial ownership. DTC has no
knowledge of the actual Beneficial Owners of the Notes. DTC's records reflect only the identity
of the Direct Participants to whose accounts such Notes are credited, which may or may not be
the Beneficial Owners. The Participants will remain responsible for keeping account of their
holdings on behalf of their customers.
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.
2
Redemption notices will be sent to Cede & Co. If less than all of the Notes are being redeemed,
DTC's practice is to determine by lot the amount of the interest of each Direct Participant in
Notes to be redeemed.
Neither DTC nor Cede & Co. will consent or vote with respect to Notes. Under its usual
procedures, DTC mails an Omnibus Proxy to the City 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 the Notes are credited on the record date (identified in a listing attached to the
Omnibus Proxy).
Principal and interest payments on the Notes will be made to DTC. DTC's practice is to credit
Direct Participants' accounts on payable date in accordance with their respective holdings shown
on DTC's records unless DTC has reason to believe that it will not receive payment on the
payable date. Payments 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, the Registrar, or the City, subject to any statutory or regulatory
requirements as may be in effect from time to time. Payment of principal and interest to DTC is
the responsibility of the City or Registrar. 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.
DTC may discontinue providing its services as securities depository with respect to the Notes at
any time by giving reasonable notice to the City or the Registrar. Under such circumstances and
in the event that a successor securities depository is not obtained, Note certificates are required to
be printed and delivered.
The City may decide to discontinue use of book-entry transfers through DTC (or a successor
securities depository). In that event, Note certificates will be printed and delivered.
The information in this section concerning DTC and DTC's book-entry system has been obtained
from sources the City believes to be reliable, but the City takes no responsibility for the accuracy
thereof.
Procedure in the Event of Revisions of Book-Entry Transfer System
If the City is unable to retain a qualified successor to DTC or the City has determined that it is in
the best interest of the City not to continue the book-entry system of transfer or that interests of
the Beneficial Owners of the Notes might be adversely affected if the book-entry system of
transfer is continued, the City will execute, authenticate and deliver at no cost to the Beneficial
Owners of the Notes or their nominees, Notes in fully registered form, in the denomination of
$50,000 or any integral multiple thereof. Thereafter, the principal of and interest on the Notes
will be payable to the persons who are named as registered owners of the Notes on the
registration books for the Notes upon due presentment and surrender thereof at the principal
corporate trust office of the Registrar, and the Notes will be transferable as provided in the Note
Ordinance.
Year 2000 Issues (The Bank of New York and DTC)
DTC has stated that it is aware of the problems that may be presented for certain computer
systems by the use of date fields and the like on and after January 1, 2000, and that it has
developed and is implementing a program to help assure that its systems, as the same relate to the
timely payment of principal and interest to bondholders, will be unaffected by such problems.
However, DTC's ability to facilitate the timely payment of principal and interest is also dependent
upon the issuer and certain third party vendors which routinely supply DTC with payment
information. DTC has contacted these third party vendors to make them aware of the Year 2000
issues and has requested status update of their Year 2000 readiness. DTC has not indicated that it
has contacted its Participants regarding Year 2000 compliance.
6o
3
The Bank of New York has stated that it is aware of the problems that may be presented for
certain computer systems on and aider January 1, 2000, and has developed a strategic plan to
complete Year 2000 compliance modifications to Bank-owned mission critical systems by the end
of 1998, which should allow for a full year of production use of these systems prior to the Year
2000.
AUTHORIZATION
The Notes are issued in accordance with the provisions of the Constitution and applicable statutes
of the State of Washington, pursuant to Ordinance No. (the "Ordinance") of the City
Council, adopted on , 1999.
SECURITY
The Notes are limited tax general obligations of the City. Unless the principal of and interest on
the Notes are paid from other sources, so long as the Notes are outstanding, the City has
irrevocably covenanted in the Ordinance to include in its budgets and to make annual levies of
taxes upon all property within the City subject to taxation without a vote in amounts which,
together with any other money legally available therefor, shall be sufficient to pay the principal
and interest on the Notes as the same shall become due. The City has irrevocably pledged its full
faith, credit and resources to the annual levy and collection of such taxes and for the prompt
payment of such principal and interest. All of such taxes shall be paid into the Note Fund.
The City has irrevocably covenanted that the annual tax to be levied for the payment of the
principal of and interest on the Notes shall be within and as a part of the tax levy permitted the
City without a vote of the people and that a sufficient portion of each such annual tax levy to be
made so long as the Notes are outstanding, together with any other money legally available
therefor, shall be set aside, pledged and appropriated for the payment of the principal of and
interest on the Notes as the same shall become due.
PURPOSE
The proceeds of the Notes will be used to provide cash flow management of the City's General
Fund revenues and expenditures, in anticipation of the collection of sales, excise and general ad
valorem property taxes and other money due the City's General Fund in 1999, and paying the
costs of issuance and sale of the Notes, all as approved by the City Council.
NOTE FUND
The City has created and established in the office of the City Treasurer a special fund to be known
and designated as the Tax Anticipation Note Fund, 1999 (the "Note Fund") for the sole purpose
of payment of the principal of and interest on the Notes. Accrued interest, if any, received from
the sale of the Notes shall be deposited in the Note Fund.
FAILURE TO REDEEM THE NOTES
If any Note is not paid when properly presented at its maturity, the City is obligated to pay
interest on that Note at the same rate provided in the Note from and after its maturity until that
Note, both principal and interest, is paid in full or until sufficient money for its payment in full is
on deposit in the Note Fund.
4
DEBT PAYMENT RECORD
The City has always promptly met principal and interest payments on outstanding obligations
when due. Additionally, no refunding Bonds have been issued for the purpose of preventing an
impending default.
FUTURE FINANCING
The City is considering the possibility of refinancing approximately $2 to $2.5 million of its
Limited Tax General Obligation Bonds, 1994, issued for development of the Gold Mountain Golf
Course sometime in the first quarter of 1999.
ASSESSED VALUATION DETERMINATION
In the State of Washington, the County Assessor (the "Assessor") determines the value of all real
and p. ersonal property throughout the County (including the City) which is subject to ad valorem
taxation. The Assessor's duties and methods of determining value are prescribed and controlled by
statute and by detailed regulations promulgated by the Department of Revenue of the State of
Washington. For tax purposes the assessed value of property is set at 100% of its actual value.
Property in Kitsap County is revalued annually based on market sales and receives an on-site
appraisal every six years. The property is listed by the Assessor on a tax roll at its current assessed
value and the tax roll is filed in the Assessor's office.
The Assessor's determinations are subject to revision by the County Board of Equalization and,
for certain property, subject to further revision by the State Board of Equalization. After all
administrative procedures are completed, the taxing unit receives the Assessor's final certificate of
assessed value of property within the taxing unit.
TAX COLLECTION PROCEDURE
Property taxes are levied in specific amounts, and the rate for all taxes levied for all taxing cities in
the County (including the City) are determined, calculated and fixed by the Assessor based upon
the assessed valuation of the property within the various taxing cities. The Assessor extends the
taxes to be levied within each taxing City upon a tax roll which contains the total amount of taxes
to be so levied and collected and assigns a tax account number to each tax lot. The tax roll is
delivered to the Kitsap County Treasurer by January 15 of each year, and an abstract of the tax
roll, showing the total amount of taxes collectible in each of the taxing cities for the year, is
delivered to the Board of County Commissioners at the same time. All taxes are due and payable
on the 30th of April of each year, but if the amount due from a taxpayer exceeds thirty dollars
($30.00), one-half may be paid then and the balance no later than October 31 of each year.
The method of giving notice of payment of taxes due, accounting for the money collected, the
division of the taxes among the various taxing cities, giving notice of delinquency, and collection
procedure are all covered by detailed statutes. The lien for ad valorem property taxes which have
been levied prior to the filing of federal tax liens is prior to such federal tax liens.
In other respects, and subject to the possible "Homestead Exemption," the lien for delinquent
property taxes is prior to all other liens or encumbrances of any kind on real or personal property
subject to taxation. By law (Chapter 6.13 RCW) the taxing unit may commence foreclosure of a
tax lien on real property after three (3) years have passed since the first delinquency. Washington
State's courts have not decided whether the Homestead Exemption may give the occupying home
owner a right in the forced sale of the family residence for delinquent general property taxes to
retain the first $30,000 of proceeds of the sale. (See Algona vs. Sharp, 30 Wn. App. 837, 638
5
P.2d 627 (1982), holding the homestead right superior to liens for local improvement district
assessments).
AUTHORIZATION OF DEBT
The power of the City to contract debt of any kind is controlled and limited by state law. All debt
must be set forth in accordance with detailed budget procedures and paid for out of identifiable
receipts and revenues. The budget must be balanced for each fiscal year. It is unlawful for an
officer or employee of the City to incur liabilities in excess of budgetary appropriations.
GENERAL OBLIGATION INDEBTEDNESS
Under the Constitution and statutes of the State, the City may incur two types of general
obligation indebtedness. The two types are primarily differentiated by the limits on the real and
personal property taxes which may be collected for the payment thereof.
Limited tax general obligation indebtedness is payable from taxes upon all the taxable property in
the City which may be imposed by the City within the limitations prescribed by State statute
without a vote of the people (sometimes referred to as "non-voted debt" or "non-voted bonds" or
"councilmanic bonds or notes"). The statutory limits on the levy of such taxes are described in the
section herein entitled "LIMITS ON AMOUNT OF GENERAL OBLIGATION INDEBTEDNESS."
Unlimited tax general obligation indebtedness is payable from taxes without limitation as to rate
or amount, imposed upon all taxable property in the City. Unlimited tax indebtedness may be
incurred only after approval by 60% of the City voters at an election in which the total vote cast
exceeds 40% of the votes cast at the last preceding general election of the City or State. Such
unlimited tax indebtedness is sometimes referred to as "voted debt," "voted bonds" or "unlimited
tax bonds."
Bonds issued to refund outstanding general obligation indebtedness of either type may be issued
without voter approval.
LIMITS ON AMOUNT OF GENERAL OBLIGATION INDEBTEDNESS
State statutes limit the total principal amount of all City general obligation indebtedness incurred
for "general" purposes, both limited tax and unlimited tax, to 2.5% of the actual value of taxable
property within the City. Within this 2.5% limitation, non-voted indebtedness is further limited to
1.5% of the value of such taxable property.
The City is additionally authorized to incur general obligation indebtedness for the following
"special" purposes, with voter approval, in the total principal amount of up to the following
percentages of the actual value of taxable property within the City: water, artificial light and
sewers: 2.5%; open space and park facilities: 2.5%. The combination of unlimited tax and limited
tax general obligation debt for all purposes cannot exceed 7.5% of the City's assessed valuation.
The State statutory limits on City general obligation indebtedness described in this section are
more restrictive than those contained in the State Constitution. Both the Constitutional and
statutory debt limits may be exceeded if necessary to meet obligations made mandatory by State
law or, if necessary, to maintain the corporate existence of the City.
In computing total general obligation indebtedness, the following "assets" may be deducted
.against the principal amount of indebtedness outstanding: (a) money and investments on deposit
in general obligation bond retirement funds: (b) taxes (both current and delinquent) levied for the
6
payment of general obligation indebtedness; and (c) delinquent (but not current) taxes due the
general fund.
In addition to limits on the total principal amount of general obligation indebtedness described in
this section, the Constitution and statutes of the State impose other limitations on the City's levy
of taxes upon real and personal property (see section herein entitled "TAXING POWERS AND
LIMITATIONS".)
AUTHORIZATION OF SHORT-TERM DEBT
As a result of 1982 legislation, any Washington municipal corporation may borrow money and
issue short-term obligations, the proceeds of which may be used for any lawful purpose. Short-
term obligations may be issued in anticipation of the receipt of revenues, taxes, or grants or the
sale of (1) general obligation bonds if the bonds may be issued without the consent of the voters
or if previously ratified by the voters; (2) revenue bonds if the bonds have been authorized by
ordinance or resolution; or (3) local improvement district bonds if the bonds have been authorized
by ordinance or resolution. These short-term obligations shall be repaid out of money derived
from the source or sources in anticipation of which they were issued or from any money legally
available for this purpose.
Additionally, the City may incur short-term indebtedness in the following ways: first, in an
emergency, the Council members may put a plan into effect and authorize indebtedness outside
the current budget. All expenditures for emergency purpose shall be paid by warrants form any
available money in the fund properly chargeable with such expenditures. If there is insufficient
money on hand in the fund, the warrants become registered interest-bearing warrants. In adopting
the budget for any fiscal year, the Council members shall appropriate funds to retire any
outstanding registered warrants issued since the adoption of the last preceding budget. Second,
the City may, without a vote of the electors, purchase property on a conditional sales contract if
the total contract amount, together with the other non-voted general obligation indebtedness of
the City, does not exceed 3/4 of 1% of the value of taxable property in the City; any item so
purchased must be budgeted for payment in accordance with the terms of the contract.
TAXING POWERS AND LIMITATIONS
Pursuant to Chapter 84.52.043 RCW, cities may levy, without a vote of the residents residing
therein, a maximum of $3.375 per thousand for general city purposes (the "regular levy"). Cities
with full-time firemen may levy an additional $.225 per thousand to fund the city's Fireman's
Pension Fund (Chapter 41.16.060 RCW), thus creating a maximum annual levy rate of $3.60 per
thousand. The City is currently levying $3.325 per thousand dollars of taxable assessed valuation
for its regular levy.
According to RCW 27.12.390, any city or town annexed to a rural library district, island library
district, or inter-county rural library district, such as the City, shall be entitled to levy up to $3.60
per thOusand dollars of assessed valuation less any regular levy made by such library district in the
incorporated area, notwithstanding any other provision of law.
A city's regular property taxes are subject to the provisions of a state statute limiting the growth
of annual property taxes (RCW 84.55.010). The limitation, which was amended by the Property
Tax Act (enacted as Senate Bill 5835 by the Washington Legislature in 1997 and adopted and
ratified at the November 1997 general election) provides that the regular property taxes payable in
the following year shall not exceed the amount of the single highest regular levy amount lawfully
levied by the municipal entity in the three immediately preceding calendar years multiplied by a
limit factor, plus an additional amount due to the incremental assessed valuation increase in the
municipal entity caused by new construction and property improvements. The limit factor is
defined in the Property Tax Act as (i) the lesser of 106% or 100% plus inflation, or (ii) any
amount up to 106% if approved by a majority plus one vote of the governing body of the
municipality upon a finding of substantial need. The regular property taxes levied by a city may
be increased above the limit factor upon the affirmative vote of a majority of the voters residing in
the municipal entity at an election held for such purposes (RCW 84.55.050).
AUDITING OF CITY FINANCES
The State Auditor is required to examine the affairs of cities at least once every two years. 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 auditing department of the City.
AUTHORIZED INVESTMENTS
'Chapter 39.59 RCW limits the investment of public funds to the following authorized investments:
bonds of the State and any local government in the State, which bonds are rated at the time of
investment in one of the three highest credit ratings by a nationally recognized rating agency;
.general obligation bonds of other states and subdivisions thereof so long as those bonds are rated
~n one of the three highest categories; registered warrants of a local government within the same
county as the entity making the investment; and any investment authorized by law for the
treasurer of the State or any local government exclusive of certificates of deposit of banks or bank
branches not located in the State. Under chapter 43.84 RCW, the State Treasurer may invest in
non-negotiable certificates of deposit in designated qualified public depositories; in obligations of
the U.S. government, its agencies and wholly owned corporations; in bankers' acceptances; in
commercial paper; in repurchase agreements; in the obligations of the federal home loan bank,
federal national mortgage association and other government corporations subject to statutory
provisions. Utility revenue bonds and warrants of any city and bonds or warrants of a local
~mprovement district are also eligible investments (RCW 35.39.030).
Any municipal corporation, including the City, may authorize the investment of funds not required
for immediate expenditure by the County Treasurer. Such funds of the City, including debt
service funds, may be invested by the County Treasurer. The County Treasurer may, upon the
request of one or more units of local government that invest their money with the County,
combine those monies for the purposes of investment (RCW 36.29.022). The office of the
County Treasurer receives up to five percent of the earnings on such investments, subject to a
maximum of fifty dollars on each transaction, as its investment service fee. The County Treasurer
may reimburse its office for any expenses incurred in the establishment and maintenance of such a
County investment pool (RCW 36.29.024).
Local Government Investment Pool
The State Treasurer's Office administers the Washington State Local Government Investment
Pool (the "LGIP"), a $1.25 billion fund that invests money on behalf of more than 350 cities,
counties and special taxing districts. In its management of LGIP, the State Treasury adheres, at all
times, to the principles appropriate for the prudent investment of public funds. These are, in
priority order, (i) the safety of principal; (ii) the assurance of sufficient liquidity to meet cash flow
demands; and (iii) to attain the highest possible yield within the constraints of the first two goals.
Historically, the LG~ has had sufficient liquidity to meet all cash flow demands.
The LGIP, authorized by chapter 43.250 RCW, is a voluntary pool that 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 a conservatively managed, highly liquid
money market fund. The pool is restricted to investments with maturities of one year or less, and
the average investment life typically is less than 90 days. Permissible investments include U.S.
government and agency securities, bankers' acceptances, high quality commercial paper,
8
repurchase and reverse rep. urchase agreements, and certificates of deposit issued by qualified
Washington State depositories.
Authorized Investments for Bond Proceeds
In addition to the eligible investments discussed above, bond proceeds only may also be invested
in mutual funds with portfolios consisting of U.S. government and guaranteed agency securities
with average maturities of less than four years; municipal securities rated in one of the four
highest categories; and money market funds consisting, of the same, so long as municipal securities
held in the fund(s) are in one of the two highest rating categories. Bond proceeds may also be
invested in shares of money market funds with portfolios of securities otherwise authorized by law
for investment by local governments (RCW 39.59.030).
The City's Investments
The investments of the City, except those of the Community Development Block Grant Fund, are
managed in a pooled format. Interest earnings are distributed monthly to the individual funds
based on their respective balances at the beginning of the month. These pooled investments are
classified on the balance sheet as cash and equivalents. As required by state statue, all
investments and deposits of the City's funds are obligations of the U.S. Government, U.S. agency
issues, deposits with the State Treasurer's Investment Pool, prime bankers' acceptances, deposits
with Washington State banks and savings and loan institutions or repurchase agreements with
authorized securities as collateral.
NET DIRECT DEBT AND ESTIMATED NET
OVERLAPPING GENERAL OBLIGATION DEBT]
(As of November 30, 1998)
Direct Debt:
Voted General Obligation Bonds Outstanding ...................... $ 1,395,000
Non-Voted Bonds Outstanding ............................................ 8,458,150
Non-Voted General Obligation Tax Anticipation Notes ......... 1,250,000
Bank Line of Credit Outstanding .......................................... 8,210
Lease-Purchase Contract Outstanding ................................... 10,128
Less: Debt Service Fund Balance .......................................... (346,374)
Net Direct Debt ...................................................................... $ 10,775,114
Estimated' Net Overlapping Debt:
Net G,O, Debt Percent of Amount of
Outstanding Overlap Overlap
Kitsap County $ 46,077,179 11.05% $ 5,089,710
Port of Bremerton 1,564,788 25.95 406,056
Bremerton Sch. Dist. No. 100-C 27,625,000 73.98 20,435,879
Central Kitsap Sch. Dist. No. 401 87,175,000 1.09 948,188
South Kitsap Sch. Dist. No. 402 9,780,000 0.13 13,163
Estimated Net Overlapping Debt: ........................................... $ 26,892,996
Net Direct Plus Estimated Net Overlapping Debt: ....................................... $ 37,668,110
BONDED DEBT RATIOS OF THE CITY
Preliminary Assessed Valuation for Collection Year 19992 ......................... $1,343,271,067
Estimated City Population (1998)3 ............................................................ 37,260
Assessed Valuation Per Capita .................................................................. $ 36,051
Net Direct Debt to Assessed Valuation ........................................................ 0.80%
Net Direct and Estimated Overlapping Debt to Assessed Valuation ........... 2.80%
Net Direct Debt Per Capita ........................................................................ $ 289
Net Direct and Estimated Overlapping Debt Per Capita ............................. $ 1,011
1 Adjusted to reflect the issuance of the Notes.
2 Preliminary assessed valuation for tax collection year 1999 is stated as the full assessed value of all taxable real and
personal property in the City.
3 Source: Washington State Office of Financial Manag,em_,ent (August 1998).
STATUTORY DEBT LIMIT CALCULATION[
(As of November 30, 1998)
Total Preliminary 1998 Assessed Valuation for Collection Year 1999 ................ $ 1,343,271,067
I. General Purposes
a. Non-Voted Indebtedness Limit (1.5% of Assessed Valuation) .............. $ 20,149,066
Less: Non-Voted Bonds Outstanding .............................................. (8,458,150)
Less: Non-Voted Notes Outstanding .............................................. (1,250,000)
Less: Bank Line of Credit Outstanding ............................................ (8,210)
Less: Lease-Purchase Contract Outstanding .................................... (10,128)
Plu~: Cash and Investments in Debt Service Funds .......................... 302,927
Remaining Capacity for General Purposes (Non-voted) ............. $ 10,725,505
b. Voted Indebtedness Limit (2.5% of Assessed Valuation) ...................... $ 33,581,777
Less: Voted Bonds Outstanding ...................................................... (1,395,000)
Less: Non-Voted Bonds Outstanding .............................................. (8,458,100)
Less: Non-Voted Notes Outstanding (the Notes) ............................ (1,250,000)
Less: Bank Line of Credit Outstanding ............................................ (8,210)
Less: Lease-Purchase Contract Outstanding .................................... ( 10,128)
Plus: Cash and Investments in Debt Service Funds .......................... 346,374
Remaining Capacity for General Purposes (Voted) .................... $ 22,806,713
II. Utility Purposes (2.5% of Assessed Valuation)
Limit .................................................................................................. $ 33,581,777
Less: Bonds Outstanding ...................................................................
Remaining Capacity for Utility Purposes .................................... $ 33,581,777
Ill. Parks and Open Space Purposes (2.5% of Assessed Valuation)
Limit .................................................................................................. $ 33,581,777
Less: Bonds Outstanding ................................................................... 0
Remaining Capacity for Parks and Open Space Purposes ........... $ 33,581,777
1 Adjusted to reflect the issuance of the Notes. (_ ~
I1
AD VALOREM TAX RECORD OF THE CITY 1
Collected as of
Collection Taxable Assessed Tax Collected Year of Levy November 30, 1998
2 3
Year Valuation Levy Amount Percent Amount Percent
1999 $1,343,271,067 NA5 NA5 NA5 NA5 NA5
4
1998 1,345,904,065 $ 5,450,559 $ 3,779,316 69.34% $ 3,801,020 69.74%
1997 1,299,548,001 4,953,030 4,702,202 94.94 4,858,989 98.10
1996 1,223,940,521 4,669,894 4,467,109 95.66 4,622,692 98.99
1995 1,203,299,197 4,464,606 4,236,391 94.89 4,455,531 99.80
1994 1,169,824,600 4,128,583 3,957,637 95.86 4,122,384 99.85
1993 1,072,545,656 4,278,723 4,110,011 95.74 4,273,065 99.87
NOTE: Taxes are due and payable on April 30, of each year. At least one half of the tax amount due must be
paid on or before April 30, or else the total amount becomes delinquent on May 1. The second half of
the tax due is payable on or before October 31, becoming delinquent November 1.
AD VALOREM PROPERTY TAX RATES IN THE CITY]
(Rates In Dollars per $1,000 of Assessed Valuation)
City School Emerg.
Collection General City State Kitsap PoN of Dist. No. Medical Regional
Year Fund Bonds School County Breme~o 100C PUD Service Library Total
n $
1998 $ $ $ $ $ $ $ $ $ $
3.3250 0.2218 3.5911 1.3908 0.4624 5.0292 0.1017 0.5000 0.5000 15.1220
1997 3.3469 0.2153 3.6467 1.6641 0.4338 5.1331 0.0998 0.2500 0.9781 15.7678
1996 3.3573 0.2255 3.4848 1.6347 0.4287 5.1551 0.0939 0.2500 0.4677 15.0977
1995 3.2470 0.2308 3.5508 1.2249 0.4079 2.1387 0.0940 0.2500 0.4595 11.6036
1994 3.0635 0.2393 3.4297 1.1731 0.3897 5.0440 0.0865 0.2490 0.4447 14.1210
1 Source: Kitsap County Treasurer
2 Assessed valuation is stated as the assessed valuation of all taxable real and personal property in the City.
3 Includes all City levies.
4 Preliminary, subject to change.
5 Not available. ~, ?
12
COMPARATIVE STATEMENT OF GENERAL FUND
REVENUES AND EXPENDITURES 1
(FISCAL YEAR ENDING DECEMBER 31)
1997 1996 1995 1994 1993
Reven u es:
Taxes $ 15,678,923 $ 15,498,917 $ 14,501,567 $ 14,137,828 $ 13,340,322
Licenses & Permits 348,796 312,203 298,989 390,454 362,968
Intergovernmental 812,436 742,432 847,272 728,407 778,927
Charges for Services 1,762,945 1,864,848 1,783,646 1,394,815 1,502,067
Fines & Forfeits 512,828 433,775 483,964 593,093 556,447
Miscellaneous 290,343 342,700 248,743 240,672 261,198
Total Revenues $ 19,406,271 $ 19,194,875 $ 18,164,181 $ 17,485,269 $ 16,801,929
Expenditures:
General Government $ 4,199,525 $ 5,313,516 $ 5,009,311 $ 4,843,656 $ 5,039,485
Security of Persons & Prop. 10,893,020 9,313,570 8,614,262 8,219,945 7,850,957
Physical Environment 613,338 942,764 848,346 587,931 698,08i0
Transportation 923,064 959,327 850,639 840,530 879,838
Economic Environment 507,996 276,689 454,250 514,320 448,824
Mental & Physical Health 24,632 30,818 264,239 250,493 249,239
Culture & Recreation 1,768,867 1,867,204 1,566,669 1,426,763 1,323,285
Redemption of Gen. L.T. Debt 2,688 0 0 24,672 30,735
Debt Service 74,055 85,540 59,860 44,593 18,414
Capital Outlay 298 438 404 888 486,005 385,414 277,113
Total Expenditures $ 19,305,623 $ 19,194,316 $ 18,153,581 $ 17,138,317 $ 16,815,970
Other Financing Sources
(Uses)
Operating Transfers In $ I 13,144 $ 196,725 $ 6,000 $ 6,000 $ 6,000
Operating Transfers Out (406,836) (357,180) (307,836) (398,376) (236,725)
General Fixed Assets Disp. 15,568 36,671 2,886 59,640 0
Proceeds of Gen. L.T. Debt 16.629 237,700 0 0 0
Total Other Financing
Sources {Uses) $ (261,495) $ 113,916 $ (298,950) $ (323,736) $ (230,725)
Fund Balance, Janua~ 1 $ 861,135 $ 709,671 $ 1,064,368 $ (44,548) $ 206,399
Prior Year' s Corrections 0 0 0 0 0
Residual Equity Transfers 0 6,435 (65,128) 9,717 (6,108)
Other Equity Changes 1.438 30,554 ( 1.219) 1,084,983 (73)
TOTAL ENDING FUND $ 701:726 $ 861:135 $ 709:671 $ 1.064.3 $ _(44.548.______)
BALANCE
CONTINGENCY RESERVE FUND
YEAR-END BALANCES~,2
1997 1996 1995 1994 1993
Ending Fund Balance $ 706,947 $ 673,110 $ 709,040 $ 704,922 $ 387,205
1 Source: City of Bremerton Annual Financial Reports. All years have been audited by the Washington State Auditor's Office.
2 Money in this fund in excess of $650,000 is transferred to t~eral Fund to finance capital purchases.
GENERAL FUND BUDGET
FOP, 1998 AND 1999z
(Fiscal Year Ending December 31)
19982 1999
REVENUES
Beginning Fund Balance ..................................................... $ 550,667 $ 535,000
Taxes .................................................................................. 16,353,700 16,569,500
Licenses and Permits .......................................................... 343,605 343,480
Intergovernmental Revenue ................................................ 787,043 1,057,811
Charges for Services ........................................................... 1,641,065 1,739,205
Fines and Forfeitures .......................................................... 515,500 536,600
Miscellaneous and Other .....................................................3,085,828 3.057,345
Total Revenue .................................................................... $ 23,277,408 $ ~838,941
EXPENDITURES
General Government
City Council ....................................................................... $ 163,326 $ 166,397
Executive ............................................................................ 213,189 160,297
Administrative Services3 ..................................................... 2,070,164 2,088,385
Police & Fire Pension ................................................... 1,432,188 1,513,337
Intergovernmental Service ...........................................119,956 134,447
Misc. Non-Departmental ............................................. 1,002,163 1,347,387
Legal Department ............................................................... 586,119 501,756
Human Resources ............................................................... 236,272 205,352
Community Development ................................................... 714,729 709,457
City Auditor ........................................................................ 89,621 85,426
Public Safety
Police Department .............................................................. 6,090,021 6,269,049
Fire Department .................................................................. 4,151,654 4,218,965
Public Works
General Facilities ................................................................ 419,776 418,171
Engineering ........................................................................ 355,601 351,178
Transportation .................................................................... 1,106,342 1,165,008
Leisure Services
General Parks ..................................................................... 1,022,620 1,054,511
Recreation ........................................................................... 227,362 221,692
Senior Center ...................................................................... 166,794 171,668
Pool .................................................................................... 281,535 293,328
Cemetery Services ............................................................... 71,415 72,025
Athletics ............................................................................. 256,561 191,105
Tax Anticipation Note Debt Service .................................. 2,500,000 2,500,000
Total Current Expenditures ............................................. $ 2_3,277,408 $ 23~838.94~1
1 Source: City of Bremerton.
2 Amended Budget.
3 City Clerk, Treasurer, Information Services, Municipal Court and Risk Management are combined under Administrative
Services. ~]- ~
14
SCHEDULE OF GENERAL OBLIGATION BOND DEBT SERVICE FOR THE CITY]
(As of December 31, 1998)
Outstanding Non-Voted
Voted General Obli,qation Bonds General Obli.qation Bonds
Total
Year Principal Interest Principal Interest All Bonds
1999 $ 205,000 $ 56,994 $ 452,391 $ 496,105 $ 1,210,490
2000 140,000 47,723 480,758 471,815 1,140,296
2001 185,000 40,805 680,000 445,850 1,351,655
2002 190,000 32,648 720,000 406,057 1,348,705
2003 205,000 23,906 760,000 363,213 1,352,119
2004 135,000 1.6,308 810,000 317,252 1,278,560
2005 140,000 10,085 855,000 267,563 1,272,648
2006 150,000 3,450 910,000 213,872 1,277,322
2007 0 0 965,000 155,663 1,120,663
2008 0 0 275,000 92,475 367,475
2009 0 0 290,000 75,370 365,370
2010 0 0 315,000 57,195 372,195
2011 0 0 335,000 37,017 372,017
2012 0 0 275,000 15,537 290,537
Total $ 1,350,000 $ 231,919 $ 8,123,149 $ 3,414,984 $ 13,120,052
CITY PROFILE
The City was incorporated in 1901 and operates as Home Rule Charter City with a Mayor
Council form of government. The Council is comprised of nine members, elected by district by the
citizens of the City, each serving a four-year term. The Council Members are part-time elected
officials who exercise the legislative powers of the City and determine matters of policy. The
Mayor, a full-time elected official, is the chief executive officer of the City. The Officers and
department directors are appointed by the mayor with Council approval.
The City provides a full range of municipal services including fire and police protection, parks and
recreation facilities/activities, streets, planning, zoning and general administrative services. The
City operates water, sewer and stormwater utility systems. Currently, there are 322 full-time
employees of the City.
Key Personnel
Lynn Horton, Mayor: Ms. Horton began her Second term as Mayor of the City in 1998. Before
her election as mayor, she served for six years on the Bremerton City Council. She is the past
Chair and current Board Member of the Kitsap Regional Planning Council, and a board member
of Kitsap Transit, Kitsap County Cen-Com and the Bremerton-Kitsap County Health Department.
Ms. Horton is a graduate of the University of Washington and has been a resident of the City
since 1974.
Does not include the Notes. -~,Q~
15
Richard Hanna, City Treasurer: Mr. Hanna has been the Treasurer of the City of Bremerton
since 1986. Before joining the City, he was Treasurer of the City of Centralia, Washington. Mr.
Hanna received his Bachelor's Degree in Accounting from Western Washington University in
1974 and a Masters of Business Administration Degree in Finance from University of Puget
Sound in 1983. Mr. Hanna is a member of the Washington Finance Officers Association,
Washington Municipal Treasurers Association and Puget Sound Finance Officers Association.
Labor Relations
The City has entered into written agreements with each of the bargaining groups set forth below.
These agreements contain provisions on such matters as vacations, sick leave, medical and dental
insurance, salaries, working conditions and grievance procedures.
Employees of the City represented by bargaining units are as follows:
Union Membership Contract Period Expiration Date
Teamsters Local 589 130 3 yr. 12/31/00
Patrolman's Association 53 3 yr. 12/31/99
Police Management Association 5 3 yr. 12/31/99
International Association of 44 3 yr. 12/31/981
Fire Fighters Local 437
In accordance with State requirements, the City conducts full negotiations with all bargaining
units. The City's management considers its relations with employees to be satisfactory.
The City - Year 2000 Information
The City has evaluated its computer applications and equipment using date logic regarding the
potential problems related to date-sensitive functions beginning in the year 2000. The City is
continuing to address these issues. The City does not believe that there will be any material
adverse impact on the City or its operation. However, it is not possible to forecast or anticipate
all potential problems at this time that could arise from internal systems or interfaces with other
service providers. It is not possible to quantify potential losses due to disruption of service nor
the amount of any potential recovery or liability by the City.
Kitsap County - Year 2000 Information
Two years ago Kitsap County began identifying and correcting technology programs and
replacing systems which were not Year 2000 compliant. The County has classified these
applications into three major categories: its own business computing applications, its interface
with external agencies and its non-business computing environment. Each area includes identified
critical and non-critical factors, as well as target dates for completion of each task. Factors
identified as "critical" by the County are targeted for completion (reaching compliance) by mid-
1999.
1 Under negotiation. ~1~
GENERAL AND ECONOMIC INFORMATION
The City of Bremerton, is located on Puget Sound, approximately 15 miles west of Seattle and 35
miles north of Tacoma. The largest city in Kitsap County (the "County"), Bremerton was
incorporated in 1901 and has an estimated 1998 population of 37,260 Kitsap County, covering
393 square miles of land, also includes the following other incorporated areas: Bainbridge Island
(1998 population 19,080), Port Orchard (1998 population 6,945) and Poulsbo (1998 population
6,590).
Military Presence
The economy of the City is closely tied to the United States Navy. The Puget Sound Naval
Shipyard in Bremerton ("PSNS") is the largest Naval shipyard on the Pacific Coast and is the
,only West Coast shipyard capable of working on nuclear ships. With 8,494 civilian employees,
8,955 military personnel, and approximately 12,000 military family members, the shipyard is also
the only facility capable of decommissioning and.recycling nuclear submarines which are being
disassembled in accordance with Strategic Arms Limitations Treaties. PSNS is the largest naval
employer in the State. The shipyard itself encompasses 344 acres of hard land, 382 buildings and
nine permanent piers totaling 12,310 feet of deep water space. The economic impact of PSNS
locally is $700 million per year. The Fleet Industrial Supply Center is another local military
facility in the City, with about 200 employees.
Located a few miles north of the City of Bremerton is the Naval Submarine Base at Bangor.
Bangor serves as a home base for Trident Missile submarines, the USS Parche fast attack
submarine and various support commands. The base provides employment to 5,000 civilians, and
5,300' military personnel. Another 10,000 military family members are connected to the base.
Bangor is the only base of its kind on the Pacific Coast. Annual local economic impact of Bangor
is $230 million are local residents.
Another military installation located near the City is the Naval Undersea Warfare Engineering
Station at Keyport. The station tests and maintains torpedoes, provides maintenance support for
fire control equipment and mines, and provides other engineering-related services for undersea
warfare. The Undersea Warfare Station employs approximately 1,450 civilian and 30 military
personnel.
U.S. Navy Projects in Kitsap County
Recent historical and projected spending for Navy construction and related facilities support work
in Kitsap County provided by the U.S. Navy Engineering Field Activity Northwest office as
follows:
Kitsap County
Fiscal Year Amount (millions)
1995 $ 200.7
1996 192.3
1997 142.3
1998 127.8
1999 115.8
2000 109.3
:?4
The $250.5 billion defense spending bill approved by Congress in September of 1998, includes the
following projects for Kitsap County military facilities:
Project Location Amount
(millions)
Innovative wastewater treatment research program PSNS $ 7.0
Development of an environmentally safe and inexpensive
way to eradicate asbestos PSNS 4.0
Additional ship repair and maintenance projects* PSNS and
others 30.0
Strengthening of apprenticeship program PSNS 3.5
Impact aid to education provided to Washington State (to
offset loss of local tax base because of military installations)Kitsap Co. 1.9
Expansion of Naval Hospital Bremerton Bremerton 28.0
Security Force Building at Strategic Weapons Facility
Pacific Bangor 2.8
Facility for housing the Navy' s Disease Vector, Ecology
and Control Center Bangor 5.7
Community Support Facility at Jackson Park Naval
Housing Bangor 4.3
* A supplemental. Defense Bill, expected to be passed later in the 1998-99 fiscal year,
will include another $60 million for naval ship repair.
Other Major Employers
The Port of Bremerton (the "Port") operates the Bremerton National Airport and the 560-acre
Olympic View Industrial Park, both located approximately 10 miles southwest of the City. The
park includes 34 firms which employ a total of approximately 350 people. The Port's facilities are
designated as a foreign trade zone which offers duty savings to its tenants. Harbor Air recently
began providing commuter flights from the Bremerton Airport, and a boat manufacturer recently
began business at the industrial park.
Bremerton National Airport is the largest airport in fhe County, with a 6,200-foot runway and full
instrumentation and lighting systems. The airport can handle all general aviation aircrat5 and most
transport and military planes. Charter passenger and air freight services are available to SeaTac
Airport, the major international airport in the Puget Sound area. The Bremerton Airport is
currently undergoing improvements.
Health care needs are met by several facilities in the Bremerton area including the Naval Hospital
- Bremerton with 347 civilian, 719 military and approximately 2,500 military family members.
The Naval Hospital is undergoing a major renovation and expansion project. Harrison Memorial
Hospital in Bremerton has 1,330 employees. In late 1993, Harrison Memorial completed a $20.5
million expansion project which doubled the number of operating rooms; expanded the laboratory
and administration areas; and provided additional space for patient education and an outpatient
mental health clinic. Harrison is building a new facility in the Silverdale area of the County. A
number of nursing homes and retirement complexes are also located in Bremerton.
Olympic College is a two-year public community college located in Bremerton, with an
enrollment of approximately 4,310 (full-time equivalents) and 600 employees, including part-time
workers. The college offers associate of arts degrees in four fields, as well as adult education and
non-credit courses, and began a four-year degree program (called "2-Plus-2") in 1994. The 2-
Plus-2 degree program is associated with the University of Washington, Tacoma branch. A new
18
library is being constructed at the college. The Olympic College campus will be expanding in the
years ahead due to a private donation of 20 acres of land for that purpose near Poulsbo.
]lousing
Kitsap County home sales in the first six months of 1998 indicated a stronger housing market than
the first six months of 1997. Home listings averaged a listing time before sale of 98 days, versus
150 in the year prior. There were 1,439 single-family homes sold in the first six months of 1998,
compared with 1,257 homes sold in the same period in 1997. Condominium sales were also up,
with 69 sold in the first two quarters of 1998, compared with 50 sold in that period the year
before.
New Developments
A proposed Growth Management Plan for Kitsap County will be heard by the Washington State
Growth Management Hearing Board in the first quarter of 1999. Upon approval of the plan it is
expected that development of several projects in the City and the County which are dependent
upon zoning changes, will proceed.
Among the projects recently completed or proposed for development in Bremerton are the
following:
· The first phase of a Planned Unit Development, Sinclair Landing, is now under construction
on the City's downtown waterfront. A combination of public and private uses make up this
38-acre project, including: a transit center, new ferry terminal, expansion of the waterfront
park, expansion of the marina, a new terminal for passenger-only ferry service, parking, retail
use, restaurants, offices, an inn, a multiplex cinema and multi-family housing, all connected
with pedestrian corridors. A letter of commitment has been signed by the developer of the
privately funded portion of the project, and anchor tenants are expected to be secured by the
end of the first quarter of 1999.
The portion of the project that will be publicly funded includes two fast foot ferries that will
serve Bremerton (one is already in service), the Bremerton Transportation Center, highway
improvements to Bremerton and an expanded overwater park and a parking garage. The cost
of the publicly funded projects is estimated at $21 million. The privately funded projects,
which include an outlet shopping complex, restaurants, history-theme entertainment, night
clubs, a multi-screen move complex, a hotel and condominiums, are estimated to cost $265
million.
Transportation linkage is the key public investment in Sinclair Landing. The new Bremerton
Transportation Center, scheduled to open in 1999, will serve ferry, bus, bicycle and pedestrian
commuters and travelers on their way to Seattle and Port Orchard. Expanded ferry service is
also on the way: high-speed 30-minute passenger ferries between Bremerton and Seattle begin
service in 1998 and a 30% increase in car capacity is anticipated by 2000. New parking
garages will accommodate foot ferry passengers and visitors coming to enjoy and do business
at Sinclair Landing.
· Pope Resources, a timber and land management company based in Poulsbo, and its subsidiary,
Olympic Resource Management, have recently obtained land within the City that is planned
for development as a 61-acre business park and 209 acres for 450 new homes. Known as
West Hills, the project will be submitted to the City for review upon receiving approval of the
Growth Management Plan.
· The Kitsap County Economic Development Council (EDC) has recently reorganized, reducing
the size of its board, appointing four new directors and is refocusing its priorities on business
(a) recruitment, (b) retention and expansion, (c) startup and education, (d) information
services, and (e) community development for economic expansion.
· The Oyster Bay Plaza retail complex in the City has recently undergone expansion and
renovation. QFC purchased the former 6,000 square-foot Thriftway and invested $3 million
to upgrade the facility to a 26,000 square-foot supermarket. A remodeled Rite Aid
Drugstore, new video stores, a renovated auto supply store and other improvements are now
part of the this complex.
· Twenty-First Century Research, a chemical research company, will be relocating from its
current building near Poulsbo to a new, 20,000 square-foot demonstration plant on 18.8 acres
at the Olympic View Industrial Park (partially within the City.) The company is expected to
expand from its 15 employees to approximately 50, upon completion of its two new buildings
during the first quarter of 2000.
· A 34-unit congregate care facility is currently under construction in the City.
· The City is conducting a site plan review of the proposed Auto Center Industrial Park. The
project includes clearing and grading of roadways and building pads for development of a 16.4
acre industrial park.
· Another new addition to the Olympic View Industrial Park is Custom Camera Design, a
recycler of disposable cameras. The company expects to complete construction of two 8,500
square-foot buildings by August 1999. Initially, the company Expects to exploy about 150
people
· In the summer of 1998, ETF Electroplating located at the Olympic View Industrial Park. The
company produces chrome parts for vehicles and has six employees.
· Romark, Inc., a manufacturer of custom closets, also located at the Olympic View Industrial
Park in late summer of 1998 in a 6,000 square-foot facility with 12 employees. The company
is already expanding by another 3,000 square-feet and will add several new employees as well.
· The Port is currently in the design stage of a light industrial area known as the West Puget
Tech Park, which will be developed at the Olympic View Industrial Park. Site work is
expected to begin in spring of 1999 for a 24,000 square-foot business development center.
The remainder of this project will be developed on a demand basis.
· As of November 30, 1998, 536 building permits had been issued in the City for a total value of
$18.6 million. This compares with annual totals of 508 permits in 1997 valued at $19.4
million and 511 permits in 1996 valued at $15.8 million. There were 26 single-family homes
permitted in 1998 as of November 30 and one four-plex. The eight new commercial
properties to receive permits during that time were valued at $3.8 million.
Following are economic indicators of the City and the County.
KITSAP COUNTY POPULATION1
Kitsap
City of Other KitsapCounty County
Year Bremerton Incorporated Unincorporated Total
1998 37,260 32,615 159,125 229,000
1997 38,600 32,060 158,740 229,400
1996 38,496 31,210 155,120 224,700
1995 39,610 29,915 151,075 220,600
1994 35,920 28,625 148,655 213,200
1993 36,380 28,160 145,460 210,000
1992 38,990 27,405 139,205 205,600
1991 37,040 26,6392 132,821 196,500
1990 38,142 12,913 138,676 189,731
1 Source: Washington State Office of Financial Management and U.S. Census.
2 The large increase is due to the annexation of the unincorporated areas of Bainbridge Island to the new City of Bainbridge
Island. ,.~ ~
20
CITY OF BREMERTON MAJOR TAXPAYERS!
Assessed Valuation for
Taxpayer Business 1998 Collection Year
Puget Sound Energy Electric Utility $ 21,832,996
US West Inc. Telecommunications 18,316,212
HMI, Inc. Developer 11,039,360
Michael Connolley Olympic College Business Svcs. 8,036,000
Viewcrest Villages Limited Partnership Apartments 7,828,000
Merit Company Retail 6,729,000
FirLane Terrace Convention Center Convention Center 6,504,000
East Towne Center Community Center 6,231,000
Cascade Natural Gas Gas Utility 5,918,012
Brernerton Cascade Associates Apartments 5,775,000
TAXABLE RETAIL SALES2
Year Kitsap County City of Bremerton
1997 $ 1,958,346,681 $ 498,779,418
1996 1,836,198,934 477,467,218
1995 1,768,304,057 451,277,414
1994 1,774,185,000 461,026,409
1993 1,658,975,823 422,329,475
SEATTLE-BREMERTON FERRY TRAFFIC STATISTICS3
Year Number of Vehicles Number of Passengers
1997 756,796 2,047,014
1996 731,926 1,863,596
1995 751,266 1,820,433
1994 719,125 1,719,414
1993 676,031 1,694,234
KITSAP COUNTY AND WASHINGTON STATE
LABOR FORCE AND AVERAGE ANNUAL UNEMPLOYMENT4
Resident Civilian Average Annual Total
Year Labor Force Unemployment Employment Kitsap County (%) Washington (%)
1997 92,900 5,100 87,800 5.5 4.8
1996 93,500 6,300 87,200 6.7 6.5
1995 89,600 6,000 83,600 6.7 6.4
1994 88,600 5,300 83,300 6.0 6.4
1993 89,600 6,100 83,500 6.8 7.6
1 Source: Kitsap County Assessor's Office.
2 Source: Washington State Department of Revenue.
3 Source: Washington State Department of Transportation, Marine Division. Passengers total includes the passenger-only
ferries and vehicle ferries.
4 Includes nonagricultural wage and salary, self-employed, unpaid family workers, domestics, agricultural workers, labor
disputants. ~.~
21
KITSAP COUNTY AND WASHINGTON STATE
INCOME ESTIMATES!
Kitsap County Per Capita Income
Year Personal Income ($000) Kitsap County Washington
1996 $ 4,811,513 $ 20,815 $ 25,277
1995 4,560,454 20,193 23,974
1994 4,330,443 20,024 22, 806
1993 4,126,471 19,426 22,168
1992 3,937,392 18,714 21,515
KITSAP COUNTY
MAJOR PRIVATE SECTOR EMPLOYERS2
Employer No. of Employees
Harrison Memorial Hospital 1,330
Johnson Controls World Services4 825
Safeway 644
Wal-Mart (as of Dec-97) 549
Lauder Enterprises (McDonald's) 450
Tracor3 401
Town & Country Markets 400
Fred Meyer 331
Martha & Mary Nursing/Child Care 331
Group Health Cooperative 325
The Doctors Clinic 320
Belmont Terrace & Ridgemont Terrace 307
JC Penney Company 245
Costco Wholesale 230
The SUN Newspaper 221
Kitsap Physicians Service 208
KITSAP COUNTY
MAJOR PUBLIC AGENCY EMPLOYERS4
Employer No. of Employees
State agencies (Dept. of Revenue,
Employment Security, Social & Health
Services, Transportation, State Patrol) 1,891
Central Kitsap School District 1,595
South Kitsap School District 1,295
North Kitsap School District 1,100
Kitsap County 1,053
Bremerton School District 950
Bainbridge Island School District 415
Olympic College 277
1 Source: u.s. Bureau of Economic Analysis; presented in 1996 dollars.
2 Source: Kitsap County Economic Development Council as of August 1998.
3 Private companies handling major contracts with the D.O.D.
4 Source: Kitsap County Economic Development Council as of August 1998.
PRESERVATION OF TAX EXEMPTION
The City has covenanted, in the Ordinance, to take all actions necessary to prevent interest on the
Notes from being included in gross income for federal income tax purpose, and it will neither take
any action nor make or permit any use of proceeds of the Notes or other funds of the City at any
time during the term of the Notes which will cause interest on the Notes to be 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.
CONFLICTS OF INTEREST
Some or all of the fees of the Underwriter and Bond Counsel are contingent upon the issuance
and sale of the Notes. Furthermore, Bond Counsel from time to time serves as counsel to the
Underwriter with respect to issuers other than the City and transactions other than the issuance of
the Notes. None of the council members or other officers of the City has interests in the issuance
of the Notes that are prohibited by applicable law.
TAX EXEMPTION
In the opinion of Gottlieb, Fisher & Andrews, PLLC, Bond Counsel, as of the date of issue of the
Notes (the "Date of Issue"), and subject to certain assumptions described in the next paragraph:
the Notes are not "private activity bonds," as defined by the Code; the Notes have been
designated by the City as "qualified tax-exempt obligations" for purposes of the partial
interest expense deduction for purposes of Section 265 of the Code; interest on the Notes is
excluded from gross income for federal income tax purposes under existing federal law; and such
interest is not an item of tax preference for purposes of determining the alternative minimum tax
on individuals and corporations under existing federal law. However, under existing federal law
interest on the Notes received by certain corporations is to be taken into account in the
computation of adjusted current earnings for purposes of calculating the alternative minimum tax
applicable to such corporations; such interest received by certain S corporations may be subject to
tax; and such interest received by foreign corporations with United States branches may be
subject to a foreign branch profits tax. Bond Counsel expresses no opinion regarding any other
federal tax consequences of receipt of interest on the Notes. Potential purchasers of the Notes
should consult with their tax advisors as to all possible tax consequences of ownership of the
Notes. See also, "OTHER TAX CONSEQUENCES," herein,
The Code contains certain requirements which must be satisfied subsequent to the issuance of the
Notes in order to maintain the tax treatment described above, including requirements relating to
the application of the proceeds of the Notes, use of facilities which are financed with such
proceeds, limitations on income derived from the investment of gross proceeds of the Notes, and
rebate to the United States Treasury of certain of such investment income on such gross proceeds.
The City has covenanted to comply with these requirements; and the opinion of Bond Counsel
described in the preceding paragraph assumes such compliance. However, Bond Counsel has not
undertaken and shall not undertake to monitor compliance by the City with such requirements and
failure of the City to comply with such requirements could cause the interest on the Notes to be
included in gross income for federal income tax purposes, and could be treated as an item of tax
preference for purposes of the alternative minimum tax on individuals and corporations, and could
result in a loss of the partial interest expense deduction available for qualified tax-exempt
obligations, in each case, retroactive to the Date of Issue.
OTHER TAX CONSEQUENCES
Under current federal law:
1. Corporate Alternative Minimum Tax. The interest on tax-exempt obligations received
by a corporation is taken into account in the computation of the alternative minimum tax
applicable to corporations (as defined for federal income tax purposes). Under current
federal law, the alternative minimum taxable income of such a corporation (other than an
S corporation, a regulated investment company, a real estate investment trust or a
REMIC) is increased by 75% of the amount by which the "adjusted current earnings" of
the corporation exceeds the corporation's alternative minimum taxable income determined
without regard to such increase and any alternative tax net operating loss deduction.
Interest on tax-exempt obligations, whenever issued or acquired, including interest on the
Notes, is included in the computation of"adjusted current earnings."
2. Tax on Excess Passive Investment Income of S Corporations. Certain excess net
passive investment income, including interest on the Notes, received by an S corporation
(a corporation treated as a partnership for most federal tax purposes) that has "subchapter
C earnings and profits" at the close of its taxable year may be subject to federal income tax
at the highest rate applicable to corporations if more than 25% of the gross receipts of
such S corporation for such taxable year is passive investment income.
3. Foreign Corporation Branch Profits Tax. Interest on the Notes received by certain
foreign corporations doing business in the United States may be subject to a branch profits
tax applicable to such corporations that is based on their Untied States source earnings
and profits, including tax-exempt interest on obligations such as the Notes.
4. Reduction of Loss Deduction for Property and Casualty Insurance Companies.
Interest on tax-exempt obligations, including the Notes, received by property and casualty
insurance companies, will reduce tax deductions for loss reserves otherwise available to
such companies by an amount equal to 15 percent of such tax-exempt interest received
during the taxable year.
5. Social Security and Tier 1 Railroad Retirement Benefits Subject to Tax. Interest
received or accrued during the year from tax-exempt obligations, such as the Notes, is
included in the calculation of "modified adjusted gross income" of recipients of the social
security or tier 1 railroad retirement benefits. If the sum of the "modified adjusted gross
income" for the taxable year plus one-half of the social security or tier 1 railroad
retirement benefits received during the taxable year exceeds a base amount provided by
the Code (the "excess amount"), then the lesser of (i) one-half of the social security or tier
1 railroad retirement benefits received during the taxable year or (ii) one-half of the
"excess amount", is included in the gross income of the social security or tier 1 railroad
retirement benefit recipient.
ABSENCE OF MATERIAL LITIGATION
There is no litigation of any kind now pending or, to the knowledge of the City, threatened to
restrain or enjoin the issuance or delivery of the Notes or in any manner questioning the
proceedings and authority under which the Notes are issued or affecting the ability of the City to
pay the principal of or the interest on the Notes.
APPROVAL OF BOND COUNSEL
Legal matters incident to the authorization, issuance and sale of Notes by the City are subject to
the approving legal opinion of Gottlieb, Fisher & Andrews, PLLC, Bond Counsel. A copy of the
opinion of Bond Counsel will be delivered with the Notes.
CONTINUING DISCLOSURE
The City has undertaken, for the benefit of the Owners and Beneficial Owners of the Notes
required by subsection (b)(5)(i) of the Rule 15c2-12 (the "Rule") of the United States Securities
and Exchange Commission (the "SEC"), to provide or cause to be provided upon request to any
person or at least annually to the State Information Depository ("SID"), if one is created, financial
statements prepared in accordance with the generally accepted accounting principles applicable to
governmental units, as such principles may be changed from time to time and as permitted by
State law; which statements will not be audited, except that if and when audited financial
statements are otherwise prepared and available to the City, they will be provided; and other
operating data that may be prepared by the City (collectively, the "Financial Information").
In its provision of such financial information and operating data, the City may cross-reference to
any "final official statement" (as defined in the Rule) available from the Municipal Securities
Rulemaking Board (the "MSRB") or any other documents theretofore provided to each then
existing Nationally Recognized Municipal Securities Information Repository designated by the
SEC ("NRMSIR") or the SID, if one is created.
The City further agrees to provide or cause to be provided, in a timely manner, to the SI'D, if one
is created, and to either the MSRB or each then existing NRMSIR, notice of any of the following
events with respect to the Notes, 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 Notes;
7. Modifications to rights of the Owners of the Notes;
8. Optional redemptions of the Notes;
9. Defeasances of the Notes;
10. Release, substitution or sale of property securing repayment of the Notes; and
11. Rating changes.
After the issuance of the Notes, so long as the interests of the Owners or Beneficial Owners of the
Notes will not be materially impaired thereby, as determined by a party unaffiliated with the City
(including, without limitation, a trustee for the Owners, nationally recognized bond counsel or
other counsel familiar with the federal securities law), or pursuant to a favorable "no-action letter"
issued by the SEC, this continuing disclosure undertaking may only be amended in connection
with any change in legal requirements, change in law, or change in the identity, nature or status of
the obligated person, or type of business conducted, and only in such a manner that the continuing
disclosure undertaking of the City, as so amended, would have complied with the requirements of
the Rule at the time of the primary offering, after taking into account any amendments or
interpretations of the Rule, as well as any change in circumstances.
The City's obligations to provide Annual Financial Information and notices of certain events shall
terminate without amendment upon the defeasance, prior redemption or payment in full of all of
the then outstanding Notes. This continuing,disclosure undertaking or any provision hereof, shall
be null and void if the City (i) obtains an opinion of nationally recognized bond counsel or other
counsel familiar with the federal securities laws to the effect that those portions of the Rule which
require this continuing disclosure undertaking or any such provision are invalid, have been
repealed retroactively or otherwise do not apply to the Notes; and (ii) notifies and provides the
SI]3, if any, and either the MSRB or each then existing NRMSIR with copies of such opinion.
The fight of each Owner or Beneficial Owner of Notes to enforce the provisions of this
continuing disclosure undertaking shall be limited to the right to obtain specific enforcement of
the City's obligations in this continuing disclosure undertaking and any failure by the City to
comply with the provisions of this continuing disclosure undertaking shall not be a default with
respect to the Notes under the Ordinance.
UNDERWRITING
The Underwriter has agreed, subject to certain conditions, to purchase all of the Notes, if any are
purchased, at a price of __% of the par value of the Notes, plus accrued interest from the
dated date to the settlement date. The Notes will be reoffered at an average price of % of the
par value of the Notes, resulting in a underwriting spread of $ per $1,000. After the initial
public offering, the public offering prices may be varied from time to time.
CONCLUDING STATEMENT
All estimates, assumptions, statistical information and other statements contained herein, while
taken from sources considered reliable, are not guaranteed by the City or the Underwriter. 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 Notes. Additional information may be obtained directly from the City or the
Underwriter.
The foregoing statements relating to the Ordinance and other documents are in all respects subject
to and qualified in their entirety by provisions of such documents.
This Official Statement, starting with the cover page and all subsequent pages, including the
appendices, comprise the entire Official Statement, which has been approved by the City. The City
has represented to the Underwriter that the portions of this Official Statement directly pertaining
to the City neither contain any misrepresentation of material fact nor omit any material fact
necessary to understand the financial, economic or legal nature of the City or any information
presented herein.
APPENDIX A
FORM OF LEGAL OPINION
AGENDA BILL
BREMERTON CITY COUNCIL
i. SUBJECT: Resolution # ,~2' ~7 FOR AGENDA OF: January 13; i~99
Approve change of control of ORIGINATING DEPT: Admin. Services
TCI franchise to AT&T ORIGINATOR: K. McCluskey
DATE SUBMITTED: Deu~mber 29. 1998
2. ~: (comment on back 3. ~:
~~.eces s~y )/~
- :~ t''y..' >--,, ' {. -------
E DORSEm NT X INFO TIO APPROVED COrmCIL PRESIDENT e TAL:
4. S~Y STATEMENT hlq'D REOUIREMENT FOR COUlq'CIL ACTION:
TCI & AT&T have reqllested approval of their merger. Pursuant to
Sections 2.7 & 2.8 of our franchise a change of control requires council
approval.
AT&T will become the parent company of TCI. TCI will continue to exist
as a corporation and wholly owned subsidiary of AT&T. TCI will continue to
hold the franchise. Local management and employees of TCI will remain in
place.
8. RECOMMENDATION:
Motion to approve Resolution #. "~7 approving change in control of
TCI Cable franchise to AT&T with conditions.
9. RESPONSIBLE OFFICIAL: Admin. Services
ENFORCEMENT OFFICIAL: Admin. Services
EXPIRATION DATE: 2007
REVIEW DATE: 2005
10. NOTICE OF ACTION
PULLED TABLED APPROVED DISAPPROVED tOA
COUNCIL DIRECTIVE: DATE:
11. AGENDA BILL NO: ~? -- ~
2. CLEARANCE COMMENTS (cont.!:
4. SUMMARY STATEMENT (cont.):
5. IMPACT ON NON-PASSAGE:
Possible litigation
Possible loss of cable service
6. IMPACT ON STAFFING, BUDGETS, FACILITIES, EOUIPMENT OR OTHER RESOURCES
None
7. RESEARCH SOURCES:
RESOLUTION NO.
A RESOLUTION approving the change of control of TCI
Cablevision of Washington, Inc., holder of a Cable Franchise
in Bremerton, Washington, to AT&T with conditions.
1. AT&T ("Transferee") has agreed to acquire Tele-Communications, Inc. ("TCI") pursuant
to an Agreement and Plan of Merger, dated June 23, 1998.
2. TCI is the parent corporation ofTCI Cablevision of Washington, Inc. ("Franchisee")
which presently owns and controls a cable franchise originally issued by the City of Bremerton
("City") by Ordinance No. 4598 passed by the City Council on July 12, 1997 ("TCIfBremerton
franchise").
3. Section 2.7 and 2.8 of the TCIfBremerton franchise prohibit a franchise transfer or change
in control without the prior written consent of the City of Bremerton. Section 2.7 of the franchise
provide that the City of Bremerton may condition a transfer upon such terms and conditions
related to the technical, legal, and financial qualifications of the prospective transferee to perform
according to the terms of the Franchise as the City deems appropriate, including those conditions
deemed necessary by the City to ensure the strict performance of the requirements of the
franchise.
4. The proposed change in control of TCI is subject to the requirements of the Cable
Communications Policy Act of 1992 ("1992 Cable Act"), and applicable implementing regulations
of the Federal Communications Commission ("FCC"). TCI and Transferee filed FCC Form 394
pursuant to the 1992 Cable Act and FCC regulations, which was received by the City of
Bremerton on September 4, 1998. In conjunction with such filing, TCI and AT&T have stated
that the filing involves only a change in control at the parent level of TCI, that the Franchisee will
continue to hold the TCUBremerton franchise, that local management and employees of TCI will
remain in place after the change in control, and that ail commitments, obligations, and liabilities
will remain in place, whether or not such commitments, obligations, or liabilities pre-dated the
consummation of the proposed change in control.
5. It is recommended that the City approve the change of control subject to certain
conditions, including: (a) assurances regarding Transferee's obligation to cause Franchisee to
comply with all existing TCUBremerton franchise requirements; (b) documentation of Transferee
and TCI corporate organization and proxy statements issued in connection with the merger; (c)
assurances regarding completion of current TCI/Bremerton upgrade; (d) assurances regarding
construction and completion of Bremerton institutional network commitments; (e) commitments
to comply with all applicable laws regarding nondiscriminatory access to Franchisee's proposed
internet cable modem platform and services; (f) commitments to comply with all applicable laws
regarding commercial leased access; (g) reimbursement of all direct, out-of-pocket costs of the
City incurred in analyzing and acting upon change of control request; and (h) compliance with all
other applicable legal requirements, including carriage of broadcast digital and high definition
television signals, and interconnection of cable system with potential competitors for purposes of
sharing cable PEG channels, to the extent required by the TCI/Bremerton franchise agreement.
6. The City should approve the change in control of the TCI/Bremerton franchise to
Transferee subject to the formal acceptance by Transferee of the conditions set forth in this
Resolution.
BE IT RESOLVED by the City Council of the City of Bremerton that:
a. The City of Bremerton hereby approves the change of control of the cable franchise of TCI
Cablevision of Washington, Inc., Ordinance No. 4598 passed by the Council July 23, 1997 to
Transferee subject to the following conditions:
(1) Compliance with franchise. Transferee shall cause Franchisee to comply, with the lawful
requirements of the TCI/Bremerton franchise, including all applicable ordinances, orders,
contracts, agreements, commitments, side letters, and regulatory actions taken pursuant thereto,
including but not limited to system upgrade commitments, support for Public, Educational, and
Governmental (PEG) cable access; and institutional network construction requirements in all
respects and without exception.
(2) Organization and proxy statements. Within thirty (30) days of the earlier of closure of the
merger transaction or public release of the requested information, Transferee shall submit (a)
updated Transferee and TCI corporate organization charts identifying the roles, specifically, of
AT&T Consumer Services and AT&T Business or Network Services; and (b) all publicly
available proxy statements issued in connection with the merger.
(3) Non-discriminatory access to cable modem platform. Transferee shall comply, and cause
Franchisee to comply with all federal, state and local legal requirements with respect to
nondiscriminatory access, to the Franchisee's cable modem platform for providers of Internet and
on-line services, whether or not such providers are affiliated with Transferee or the Franchisee.
So long as cable modem services are deemed to be "cable services", as provided under Title VI of
the Communications Act of 1934, as amended, Transferee and the Franchisee shall comply with
all lawful requirements regarding such services, including but not limited to, the inclusion of
revenues from cable modem services and access within the gross revenues of the Franchisee's
cable franchise.
(4) Commercial Leased Access. Transferee shall comply and cause Franchisee to comply with
all lawful federal, state and local requirements with respect to commercial leased access.
(5) Reimbursement of costs. Upon invoice by the City, the Franchisee shall within thirty (30)
days of the invoice reimburse all direct, out-of-pocket costs of the City incurred in analyzing and
acting upon Transferee's change of control request. Payment of such reimbursement shall
accompany the form of written acceptance, as provided in subsection c., below.
(6) Compliance with all other applicable legal requirements. Transferee shall cause the
Franchisee to comply, with all other applicable legal requirements that are now or may hereafter
apply to the Franchisee's cable operations, including, but not limited to, carriage of broadcast
digital and high definition television signals, interconnection of cable system with potential
franchised cable competitors for purposes of sharing cable PEG channels, and adherence to
applicable federal and state emergency notification provisions to the extent required by the
TCI/Bremerton Franchise agreement.
(7) Responsibility for any non-compliance by franchisee. Transferee acknowledges that the
legislative history of the 1992 Cable Act contemplates that the City should address any
deficiencies in service, including non-compliance, at the time of transfer. Transferee agrees that
the Franchisee remains responsible for any and all non-compliance under the TCI/Bremerton
franchise that may now exist or may later be discovered to have existed during the term of the
franchise, even if prior to the closing of this transaction.
b. Written acceptance.
(1) This resolution shall not be effective until accepted in writing by Transferee. The
acceptance, which shall be contingent upon final closing of the transaction shall be substantially
similar in form to that attached hereto as Exhibit I.
(2) Within thirty (30) days after passage of this resolution by the Council, Transferee shall file
in the Office of the Administrative Services Director such written acceptance of this resolution
meeting the approval of the City Attorney.
(3) A failure on the part of Transferee to file such written acceptance within such time shall be
deemed an abandonment and rejection of the rights and privileges conferred hereby and this
resolution shall thereupon be null and void. Such acceptance shall be unqualified and shall be
construed to be an acceptance of all the terms, conditions and restrictions contained in this
resolution.
c. Automatic nullification in event of failure to close or closure on materially different terms. In
the event the transaction which is the subject of this resolution is not consummated or does not
reach final closure for any reason, or in the event such closure is reached on terms substantially
and materially different to the terms described in the FCC Form 394 and subsequent information
provided by the Transferee and relied upon by the City, then this resolution, together with the
written acceptance provided hereunder, shall be null and void.
PASSED by the City Council of the City of Bremerton this 13th day of January, 1999.
Council President
EXHIBIT I
ACCEPTANCE
Director of Administrative Services
City of Bremerton
239 Fourth Street
Bremerton, Washington 98337
This is to advise the City of Bremerton, Washington that AT&T hereby accepts the terms and
provisions of Resolution No. , passed by the City Council on January 13, 1999,
consenting to a change of control of Tele-Communications, Inc. to AT&T, with conditions.
AT&T agrees to abide by, and to cause TCI and its subsidiaries and affiliates to abide by, each
and every provision of the franchise agreements, including all applicable ordinances, orders,
contracts, agreements, side letters, commitments, and regulatory actions taken pursuant hereto, as
applicable, and without exception.
AT&T
By:
Title:
Date:
State of )
) SS.
County of )
This Acceptance was acknowledged before me on the day of .,
1999, by as , a
duly authorized officer of AT&T.
Notary Public for
September 1, 1998
City of Bremerton
239 Fourth Street
Bremerton, WA 98337
Attn: City Clerk
Re: TC I Merger with AT&T
Request for Consent to Change of Control
As I informed you in previous correspondence, Tele-Communications, Inc. (TCI),
the ultimate parent corporation of your cable franchise, has announced its intention to
merge with AT&T. We are writing to provide you with additional information regarding
this matter, and to formally request any consent that may be required by the franchise or
applicable law.
Both TCI and AT&T are excited about the merger, which we believe will have
significant benefits to our customers, With the combined expertise and initiative of TCI
and AT&T, we hope to offer an expanded choice of products and services to our
customers.
Under the terms of the merger a~eement, AT&T will become the parent company
of TCI. TCI will continue to exist as a corporation and a wholly owned subsidiary of
AT&T. All of the cable television franchises held by TCI entities will continue to be held
by those entities. Our records indicate that our franchise with you may require that we
obtain your consent to this change of control. The merger will not involve a transfer of
the franchise. The current cable franchisee will continue to hold the franchise, and local
management and employees of TCI will remain in place. The merger will, however,
result in a new parent company for TCI and indirectly, for your cable franchise.
To provide you with all information necessary, to grant the consent we seek, we
are including three copies of the Federal Communications Commission's (FCC's) Form
394. According to the FCC, the Form 394 is designed to provide a franchise authority
with the information necessary to assess the financial, legal and technical qualifications
of the proposed new controlling entity. As part of that Form, you are receiving a copy of
the merger agreement, AT&T's Annual Report for 1997, and any specific additional
information required by the franchise in connection with a change of control of TCI.
Under the FCC's rules, you have 120 days from the date you receive this information to
review it and to act upon our request for consent to the merger. Should you choose not to
take any action within this 120 days, under federal law your consent will be deemed
granted.
For you convenience and consideration, we have also enclosed a draft resolution
which addresses your consent to merger. We respectfully request that this resolution be
placed on the agenda for your next meeting. I am available to discuss any questions you
have about this resolution or any of the other enclosed documents at your convenience.
As always, if at any time you have any questions or concerns about the merger,
please feel free to call me at (360) 377-8528 or Janet Turpen, Regional Director of
Franchising at (425) 462-2799. Thank you for your assistance in this matter.
Sincerely,
TCI Cablevision of Washington, Inc.
By:. ~
Patrick McDonald
General Manager
Enclosure
cc: Division Franchising Department
Receipt on this day of September, 1998,of this letter and the FCC Form 394,
including attachments, is hereby acknowledged.
BY:
NAME:
TITLE:
TCI CASL~ FR~c~s£ .... --
C. TCI agrees that its sole remedy under this provision, other than testimony before the
City Council, is to seek injunctive relief to prevent the issuance of a franchise which
would violate the first paragraph.
D. No provisions of this section shall be enforceable unless all are enforceable.
2.4 NEw FRANCHISE
The City may establish appropriate requirements for new franchises or franchise renewals
so long as they are in accordance with federal, state and local law.
2.5 FRANCHISE RENEWAL
The City and TCI agree that any proceedings undertaken by the City that relate to the
renewal of TCI's Franchise shall be governed by and comply with the provisions of
Section 626 of the Cable Act, as amended, unless the procedures and substantive
protections set forth therein shall be deemed to be preempted and superseded by the
provisions of any subsequent provision of federal or state law.
In addition to the procedures set forth in said Section 626(a), the City agrees to notify TCI
of all of its assessments regarding the identity of future cable-related community needs and
interests, as well as the qualifications and past performance of TCI under the then current
Franchise term. The City further agrees that such a preliminary assessment shall be
provided to TCI promptly so that TCI has adequate time to submit a proposal under
Section 626(5) of the Cable Act and complete renewal of the Franchise prior to expiration
of its term. TCI and the City consider the terms set forth in this Section to be consistent
with the express provisions of Section 626 of the Cable Act and the Bremerton City
Charter.
2.6 PERIODIC PUBLIC REVIEW OF FILa~CHISE
At such times as it deems appropriate, but no more often than annually, with no
expectations regarding extension of franchise, the City may conduct a public review of the
Franchise. The purpose of any such review shall be to ensure, with the benefit of full
opportunity for public comment, that the Franchise cominues to effectively serve the
public in the light of new developments in cable law and regulation, cable technology,
cable company performance, local regulatory environment, community needs and interests,
and other such factors. Both the City and TCI agree to make a full and good faith effort
to participate in the review.
2.7 TRANS~ OF OWNERSt-n-P
This Franchise shall not be sold, leased, mortgaged, assigned or otherwise transferred, nor
shall any of the rights or privileges herein granted or authorized be leased, assigned,
mortgaged, sold or transferred, either in whole or in part, nor shall title hereto, either legal
or equitable, or any right, interest or property herein, pass to or vest in any person, except
TCI or any entity controlling, controlled by, or under common control with TCI, either by
act of TCI or by operation of law, without the prior consem of the City, expressed in
writing. The granting of such prior consent in one instance shall not render unnecessary
any subsequent prior consent in another instance. Any transfer of ownership shall make
~4~os ~ ~ Page7
TCI CABLE FRANCHISE
the Franchise subject to revocation unless and until the City shall have given written prior
consent thereto.
If TCI wishes to transfer this franchise, TCI and City shall proceed pursuant to Section
617 of the Cable Act and related role makings of the FCC. TCI shall give City written
notice of the proposed transfer, and shall request consent of the transfer by the City. For
the purposes of determining whether it will consent to such transfer, City may inquire into
the qualifications of the prospective transferee to perform the obligations of TCI under
this Franchise agreement. TCI shall assist City in any such inquiry, and shall provide all
information requested in writing by the City that is reasonably necessary to determine the
legal, financial and technical qualifications of the proposed transferee in order to determine
whether it will consent to the proposed transfer. All costs associated with the City's
review process, including but not limited to legal and consulting costs, shall be reimbursed
to the City by TCI.
In cases where the City finds it inappropriate to give unconditional consem to the
proposed transfer, the City may offer its consent upon such terms and conditions as it
deems appropriate, related to the qnalificafions of the prospective transferee to perform
the obligations of TCI under this franchise. Consent to the transfer shall not be
unreasonably withheld. Any transfer of ownership effected without the written consent of
the City shall render this franchise subject to revocation. The City shall have 120 days to
act upon any request for approval of a transfer that contains or is accompanied by such
information as is required in accordance with FCC regulations and by the City. If the City
fails to render a final decision on the request within said 120 days, the request shall be
deemed granted unless TCI and the City agree to an extension of time.
TCI, upon any transfer as heretofore described, shall within sixty (60) days thereafter file
with the City a copy of the deed, agreement, mortgage, lease, or other written instrument
evidencing such sale, lease, mortgage, assignment or transfer, certified and sworn to as
correct by TCI. Every such transfer as heretofore described, whether voluntary or
involuntary, shall be deemed void and of no effect unless TCI shall within sixty (60) days
after the same shall have been made, file such certified copy as is required.
The requirements of this Section shall not be deemed to prohibit the use of TCI's property
as collateral for security in financing the construction or acquisition of all or pan of the
Cable System franchised hereunder. However, such financing shall be subject to the
provisions of this Franchise.
CHANGE IN CONTROL
TCI shall promptly notify the City through the City Council of any proposed change in,
transfer of, or acquisition by any other party of control of TCI. If ownership of thirty
(30) percent or more of the voting stock of TCI, or of any parent company of TCI
directly or indirectly controlling or managing TCI, or of any entity now owning or later
acquiring such a beneficial interest is acquired by a single entity or by several entities
under common control, and if such entity or agent of common control is other than an
organi:,ation a) whose primary business is cable system operation, and b) is more than 50
TCI CA~LE F~cms£
percent owned by TCI or a parent of TCI, then a change in control will be deemed to have
taken place unless the City, upon request of TCI, finds otherwise. Such change in control
shall make this Franchise subject to revocation unless and until the City shall have given
written consent thereto. For the purpose of determining whether it will consent to such
change, transfer, or acquisition of control, the City may inquire into the qualifications of
the prospective controlling party to perform the obligations of TCI under this Franchise.
TCI shall assist the City in any such inquiry. The City may condition its consent upon
such terms and conditions as it deems appropriate. Consent to the transfer shall not be
unreasonably withheld.
2.9 REVOCATION
In addition to any fights set out elsewhere in this document, the City reserves the right,
without prejudice to the requirements of Section 2.14, to declare a forfeiture or otherwise
revoke the Franchise, and all fights and privileges pertaining thereto, in the event that:
A. TCI is in substantial non-compliance with any material provision of the Franchise and
fails to correct the violation after written notice &the violation and proposed
forfeiture and a reasonable opportunity thereafter to correct the violation as noted in
- Section 7.6, Procedure for Remedying Franchise Violations; or
B. TCI's completion of the channel capacity upgrade as required by Section 4.3 is delayed
for more than 12 months from the completion date identified in the construction
schedule approved by the City; or
C. TCI or any parent company becomes insolvent, unable or unwilling to pay its debts as
they become due, or is adjudged a bankrupt; or
D. TCI fails to obtain and maintain any permit required by any federal or state regulatory
body, relating to the construction, maintenance and operation of the system; or
E. At any time during the term of the Franchise, as it may be extended from time to time
pursuant to this Ordinance, TCI fails to provide and ma/ntain a Construction Bond and
Performance Bond as required under Sections 11.3 and 11.4 and of this Ordinance; or
F. TCI practices or attempts to practice any fraud or deceit upon cable subscribers or
upon the City, whether during the term of the Franchise or in any proposal,
application, or negotiations relating to the Franchise; or
G. TCI fails to restore service after ten (10) comtive days of interrupted service,
except when approval of such interruption is obtained from the City; or
H. TCI engages in a continuous and willful pattern of grossly inadequate service and fails
to respond to legitimate subscriber complaints.
Upon the occurrence of one of the events set out above, following thirty (30) days written
notice to TCI of the occurrence and the proposed forfeiture and the completion of the
t~'~ ~ ~ Page9
AGENDA BILL
BREMERTON CITY COUNCIL
1. SUBJECT: Resolution No. ~~ FOR AGENDA OF: January 13; 1999
In support of the proposition ORIGINATING DEPT: city Council
providing for jail expansion ORIGINATOR:
DATE SUBMITTED: January 8, 1999
2./~Zh~ ~ - *'/~--~e~essa~') /~ ~ EXHIBITS: ~: (,~omment on4back 3.
Attorney i~/'~ ~/~,~/~W-J~/~---6~-' Resolution
4. SUMMARY STATEMENT AND REOUIREMENT FOR COUNCIL A~TION:
The attached resolution supports the proposition providing for the
expansion of the Kitsap County Correctional Facility and operation and
maintenance of the Adult Correctional Facility and the Juvenile Justice
Facility.
8. RECOMMENDATION:
Motion to approve Resolution No. ~
9. RESPONSIBLE OFFICIAL:
ENFORCEMENT OFFICIAL:
EXPIRATION DATE:
REVIEW DATE:
10. NOTICE OF ACTION
PULLED TABLED APPROVED
COUNCIL DIRECTIVE: DATE:
2. CLEARANCE COMMENTS (cont,):
4. SUMMARY STATEMENT (cont.):
5. IMPACT ON NON-PASSAgE:
6. IMPACT ON STAFFING~ BUDGETS~ FACILITIES~ EOUIPMENT OR OTHER RESOURCES
7. RESEARCH SOURCES:
RESOLUTION NO. ¢~ (.,, 8~
RESOLUTION IN SUPPORT OF THE PROPOSITION PROVIDING FOR THE
EXPANSION OF THE KITSAP COUNTY CORRECTIONAL FACII,ITY AND
OPERATION AND MAINTENANCE OF THE ADULT CORRECTIONAL
FACILITY AND THE JUVENILE JUSTICE FACILITY
WHEREAS, the Kitsap County Law and Justice Advisory Council has reviewed the
existing conditions at the Kitsap County adult correctional facility; and
WHEREAS, the existing adult correctional facility has the capacity of 200 beds, but the
average daily population for 1998 is 256 inmates; and
WHEREAS, it is estimated that more than 400 jail beds will be required per day by the
year 2010 to house the individuals incarcerated or waiting to be incarcerated in the criminal
justice system in Kitsap County; and
WHEREAS, a study commissioned by the Sheriff s Office has been conducted reviewing
options that the County may consider in order to handle the future increase in inmate population
for the Kitsap County Correctional Facility; and
WHEREAS, an additional $858,564 in personnel cost would be required to operate an
off-campus facility as compared with an on-site location to provide the existing level of service.
Over a thirty year period, by expanding the existing correctional facility rather than utilizing an
off-campus location, the County will realize an estimated savings of $25,759,620 in personnel
related costs; and
WHEREAS, after reviewing the construction costs, the operation and maintenance costs,
and the pros and cons of the different options, the study recommends that a new facility be
constructed on the Court House Campus as an expansion of the existing correctional facility; and
WHEREAS, proceeds generated by the sales and use tax will also be used to ensure that
the juvenile detention facility is opened and operated at full capacity; and
WHEREAS, it is projected that a one-tenth of one percent sales and use tax in Kitsap
County will generate $2,000,000 a year;
WHEREAS, a sales and use tax lessens the burden on property owners in the County by
transferring the costs associated with the measure to the County population as a whole, as well as
to the transient population purchasing goods within the County; and
WHEREAS, it is essential to the public welfare and safety of the residents of the County
to have correctional facilities that can accomodate the increasing needs of the law and justice
community;
NOW THEREFORE, be it resolved by the Bremerton City Council as follows:
Section 1. The Bremerton City Council recognizes the need for an expansion of the
Kitsap County Correctional Facility; and
Section 2. The Bremerton City Council supports the proposition calling for a sales and
use tax to provide for the expansion of the Kitsap County jail and operation of the juvenile
detention facility; and
Section 3. The Bremerton City Council urges the citizens of Kitsap County to support
this necessary improvement in our community by voting for the proposition.
DATED this 13th day of January, 1999.
Council President