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Home My WebLink About01/21/98 AGENDABREMERTON CITY COUNCIL 239 4TH STREET BREMERTON, WA 98337 CITY COUNCIL AGENDA JANUARY 2'!, '1998 CITY COUNCIL STUDY SESSION: 5:00 - 5:30 P.M. A. General Council Business B. 1-Hour Executive Session Immediately Following The The City Council Meeting To Discuss "Contract Negotiations". CALL TO ORDER: 5:30 P.M. A. Pledge Of Allegiance B. Invocation 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 - January 7, 1998 #AB98-005 CLAIMS/CH ECK REGISTERS 5. COUNCIL MEMBER REPORTS 6. MAYOR'S REPORT 7. PUBLIC RECOGNITION - (Comments Limited to 3 Minutes) o NEW BUSINESS A. Reappointment of Carl Buettgenbach To The Housing Authority Board Bid Award Recommendation For Video Production Equipment - Professional Video and Tape Inc. C. Bremerton Housing Authority And Bremerton Police Department Contract ¢1 #AB98-008 ~ (CONTINUED NEXT PAGE) ORDINANCES A. Ordinance (First Reading) Authorizing The issue Of A $1,250,000 Tax Anticipation Note And Accepting The Purchase Offer of Seafirst Bank #AB98-009 47 2. SUBJECT:~ AGENDA BILL BREME~TON CITY COUNCIL MINUTES - JANUARY 7, 1998 FOR AGENDA OF: 1-21-98 ORIGINATING DEPT: City Council ORIGINATOR: David Farr, President DATE SUBMITTED: 1-13-98 2. ~: (comment on back if necessary) ENDORS FJ~NT INFOPd~_ATI ON APPROVED __ __ BI~' COUNCIL P .RESIDER S%~BMI_~T3.~L: ~-- 4. $~Y STATEMENT AND REOU!REMENT FOR COIINC/L AcTION: ~ 8. RECOMMENDATION: 9. RESPONSIBLE OFFICIAL: ENFORC~M2~NT OFFICIAL: .EX,!RATiON DATE: R_wV~EW DATE: PULLED TABLED COUNCIL DIRECTIVE: 10. NOTICE OF ACTION APPROVED .DISAP.~ROVED ..DATE AMENDED _qLEARkNCE COMMENTS :- ,~ - i..'~.'/~_ACT ON NON-PASSAGE: TAPE #1517 UNAPPROVED DRAFT CiTY COUCIL MEETING MINUTES JANUARY 7, 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 January 7, 1998, at 5:30 P.M., with Council President David Fan' presiding. Council members present were Jim Reed, Carlos Montgomery, Carol Arends, Mike Shepherd, Lon Overson, John Law, Cecil McConnell, and Wayne Olsen. Also present were Assistant City Attorney Glenna Malanca and Deputy City Clerk Gil Johnson. The meeting opened with the Pledge of Allegiance led by Council President Farr and invocation given by Reverend Cleveland Williams of Ebenezer A.M.E. Church. ELECTION OF CITY COUNCIL OFFICERS Acting City clerk. Gil Johnson read into the record the procedure to be used by the City Council to elect City Council Officers. President Farr opened nominations for City Council President/Mayor Pro Tem: Mr. Shepherd nominated David Farr. Mr. Olsen nominated Cecil McConnell President Farr closed the nominations. Vote: David Fart- 6 Votes (Montgomery, Arends, Farr, Shepherd, Overson, Reed) Vote: Cecil McConnell - 3 Votes (Law, McConnell, Olsen) David Fan' was elected City Council President/Mayor Pro Tem. President Fart opened nominations for City Council Vice President. Mr. Olsen nominated Carlos Montgomery. Mr. Overson nominated Cecil McConnell; however Mr. McConnell declined the nomination. President Farr closed the nominations. Vote: Carlos Montgomery - 8 Votes (Reed, Montgomery, Arends, Shepherd, Farr, Overson, Law, OIsen) Abstain: McConnell Carlos Montgomery was elected City Council Vice President. CONSENT AGENDA A. Minutes of Meeting - December 23, 1997 #AB98-001 #0289 M/SlClU(McConnelllMontgomery) Motion to approve the Consent Agenda as presented. TAPE #1517 City Council Reg. Mtg. Minutes January 7, 1998 Page 2 of 10 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 #0306 MISIClU(MontgomerylMcConnell) On January 7, 1998, the Council does approve for payment those vouchers included and further described as follows: Regular Payroll for the pedod ending 12-31-1997, in the amount of $894,782.95. COUNCIL MEMBER REPORTS Mr. Law stated after receiving the vast majority of votes in District #3 in the last election, the message he was given was to continue his non-political representation and to communicate with his district. The next District #3 Neighborhood Meeting will be held January 20, 1998, 7:00 P.M., at the Senior Center. The program for that meeting will include an update on a water reservoir within the District, update on the new Manette Bridge project, and discuss current legislation that will come before the City Council. Mr. Overson wished everyone a "Happy New Year" and welcomed the newly seated City Council members. He believes this Council will be action odented giving sedous consideration to all Agenda items. He sees this new year as a turning point for the City and he anticipates a good year. He congratulated Mr. Montgomery on his being elected Council Vice President and his taking on a new leadership role. Mr. Shepherd thanked the dozens of people who attended the Swearing In Ceremony showing their support of the newly elected and re-elected City Council members and the Mayor for the coming year. District #5 will hold a Neighborhood Meeting on January 22, 1998, 6:30 P.M., at the Memorial Lutheran Church. The program for that meeting will include Mayor Lynn Horton, who will talk about the development of Sinclair Landing Project and her vision of the future for Bremerton, and Jim Spencer, Parks and Recreation Direction, who will speak on Evergreen Park, Haddon Park and Kiwanis Park. Mrs. Arends thanked the residents and drivers traveling through District #7 for their patience with the detour resulting from the CSO construction project. Mr. Mont(~omerv announced on January 22, 1998, 7:00 P.M., he and Kitsap County Commissioner Charlotte Gaddo will host a Town Meeting regarding the isolation of Kitsap County by the State with proposed bridge tolls, ferry fare increases, etc. The intent of this meeting is to get input from the public on transportation issues. Lastly, he announced the next three weekends Kitsap Transit will run five buses between the Ferry Terminal and the Missouri Gate. TAPE #1517 City Council Reg. Mtg. Minutes January 7, 1998 Page 3 of 10 Mr. Reed thanked the City Council for their gracious words to the new Council members and the citizens of District 9 for putting their trust in him to represent their views accurately. He is looking forward to several exciting forward moving years for the City of Bremerton. Speaking to the business community, the City's doors are open and our hand is stretched out ready and willing to look at any and all new proposals that they may be interested in bringing into the Bremerton community. He believes the new Council members and existing Council members share the same views. .Mr. Fan' thanked the Council for extending to him the honor of serving as Council President and he will try to live up to their expectations. He extended a "welcome and congratulations" to the new and returning members of the Council. He is also hopeful that 1998 will be a turning point year for the City. He acknowledged some special people in the audience his daughter Kandace Klemetsrud and grandson Paul, who are visiting from North Dakota and his future wife Anna Laurie. MAYOR'S REPORT Mayor Lynn Horton congratulated Council President Farr and Council Vice President Montgomery and extended a "welcome" to the new City Council members. Mayor Horton announced the City prevailed in three Court cases: (1) West Park Retraining Order issue that was established to keep people out of that area who are known for their criminal activity and records. (2) Abatement Order of the site formally known as Natasha's on Arsenal Way, which will allow the site to be cleaned up. (3) Abatement Order at 1510 Snyder where the Police Department carried out a drug bust. She thanked City staff in the Legal Department, Police Department, and Department of Community Development for their efforts toward resolution of these problem areas. Mayor Horton read the following Proclamation: (1) January 19, 1998, MARTIN LUTHER KING JR. DAY, which was accepted by Reverend Cleveland Williams of the Ebenezer A.M.E. Church. Reverend Williams extended an open invitation to the public to attend the celebration titled "Lift Every Voice And Sing" on January 19, 10:30 P.M., at the Kitsap Pavilion. Mayor Horton reminded residents and those traveling through District #7 that over the next three weekends the Navy will hold Open House aboard the USS Missouri, which could create considerable traffic congestion. TAPE #1517 City Council Reg. Mtg. Minutes January 7, 1998 Page 4 of 10 Police Chief Paul Du Fresne introduced Henry Mincey, who has been selected as the City's Interim Assistant Police Chief, and highlighted Mr. Mincey's professional background in law enforcement and the Safe Street Program. Bremerton Municipal Court Judge James Docter administered the OATH of Office to Mr. Mincey. Henry Mincey thanked Mayor Horton and Police Chief Du Fresne for having confidence in him to perform the duties they have identified for the Interim Assistant Police Chief for the City of Bremerton. He thanked the very fine officers in the Bremerton Police Department and he particularly appreciated the positive comments he has received from them. He thanked the City Council, as a whole, for their support and confidence in him over the past four years. Bremerton is truly at a crossroads and some may believe the trend is going backwards, but he sees that trend moving forward. He feels more comfortable now than he did a few weeks ago based on the enthusiasm shown by the City Council members. He acknowledged the public's support of his efforts over the past four yours. President Farr extended congratulations to Mr. Mincey. President Farr made the following announcements: (1) City Council held a Study Session immediately prior to the Council meeting, which included some instructions for the new City Council members. (2) The City Council will hold an Executive Session immediately following the Council meeting to discuss "litigation" and "contract negotiations". (3) The City Council will hold a Study Session to discuss Public Works and Utilities issues on January 12, 1998, 5:30 - 6:30 P.M., in the Council Conference room. (4) The City Council will hold a Study Session on January 14, 1998, 5:05 -5:25 P.M., in the Council Conference Room. The topic of discussion will be "Update on design changes to Transit facility and process from this point forward". PUBLIC RECOGNITION Reverend Cleveland Williams, Ebenezer A.M. E Church, announced the 4th Annual Dr. Martin Luther King Jr. Celebration Program will be held on January 19, 1998, 10:30 AM - 1:00 P.M., at the Kitsap Pavilion. The young peoples' essays will be on display around the perimeter of the pavilion from 10:30 - 11:00 AM. The program for this event will include a 100-member community choir. Choir rehearsals will be held on January 9 and 16, 7:30 P.M., at the Ebenezer A.M.E. Church. Reverend Cleveland Williams, Ebenezer A.M.E. Church, thanked all of the members of the Bremerton community who helped provide a Christmas Dinner for those in need. He was pleased to report that 118 meals were served on Christmas Day from 12:00 noon until 4:00 P.M., at the Sheridan Park and TAPE #1517 City Council Reg. Mtg. Minutes January 7, 1998 Page 5 of 10 Recreation Center. In addition, there were 48 volunteers, which included personnel from the USS Carl Vinson that assisted with this event. Bob Sauter, President Kitsap County Veterans Coalition, asked when he could expect to see the print of the USS Missouri, which he provided to the City, hung in City Hall. He pointed out the City was in receipt of the print 7-8 weeks ago. On another manner, due to some ethical influence on the part of the veterans, their Coalition was able to gain access [o '1,000 ficke[s for the Open House on the USS Missouri, which were distributed equitably among the students of all the schools in Bremerton, Kitsap County, North Mason High, Sandhill Elementary and Belfair Elementary. He has received many comments from various military dignitaries that they will visit the Missoud even though they do not have tickets for the tour. Jack Lefcoski, Bremerton resident, expressed his concern that a free event, i.e. Open House aboard the Missouri, would require a ticket to gain entry. He announced a study will be conducted on Kitsap Lake, Kitsap Creek, Wildcat Creek, and Wildcat Lake, with the idea of learning how many and what kinds of fish come up and down the creeks into the lakes. This year Coho Salmon came into the lake, this raised the interest of the Suquamish Tribe to possibly making Kitsap Lake a Coho rearing lake. Since Kitsap Lake is a City owned/controlled recreational lake that is totally inhabited, he questioned if it was a good idea to make the lake into a salmon rearing pond. He noted 30-40,000 legal trout are planted each year in Kitsap Lake and there is possibly a population of 200-1,000 bass in the lake as well, which he believes would have an adverse affect on Coho Salmon eggs and young salmon, if planted in the lake. The Study also calls for the Department of Fish and Wildlife to reduce their legal plant from 35,000 down to 20,000. He doubted the fishing sportsman would want to see that happen. Another question raised was will the eggs successfully hatch in calm running waters; however, some people believe the they won't hatch in freshwater. He emphasized if that is true, then why go through the exercise. Mr. Reed asked Mr. Lefcoski if there was an option other than using Kitsap Lake as a rearing pen for Coho Salmon? Mr. Lefcoski stated there are four different options. Mr. Overson requested this discussion continue after the Council meeting based on the fact that Mr. Lefcoski had already exceeded the 3-minute time limit. Gordy. Byrd congratulated the newly elected Council members. He also wanted to know how someone within the community could tour the Missouri without a ticket. He noted Councilman Law is highly thought of in the community. Lastly, he wanted to assure the public that he is still working on his dream to build a shelter for the homeless. -7 TAPE #1517 City Council Reg. Mtg. Minutes January 7, 1998 Page 6 of 10 Susan Brow.n, Bremerton resident, summarized the history of her activity, for the benefit of the new Council members, on the formal complaint she filed with the City council that involved two City Council members. She went on to explain she had not lobbied any of the new Council members up to this point; however half of the Council members have contacted her either personally or by telephone and told her they support changes in the Code of Ethics. Therefore, she asked what is the next step to be taken. President Fan' stated Council has already spent a great deal of time on this issue. He recalled that not too long ago the City Charter was revised and did address ethic issues, but did not recall getting any input on that issue during the revision process. It is not outside the realm of possibility that Council can look at the Ethics regulations, but at this time he would not promise Mrs. Brown that it is a highest priodty item for the Council. He believes Council has been responsible in providing her the items she requested. Council can offer the suggestion that a response will be provided, but it may not be the response that she particularly desired. Mrs. Brown asked what response did she get? President Fan' stated he would not get into a debate, he was explaining Council will consider her suggestions addressing the "Ethics" section. However, Mrs. Brown failed to mention that her husband was defeated for an elected office by President Farr's friend. Mrs. Brown stated that was irrelevant to this discussion. She asked if President Fart was using his position, as Council President, to say that no we are not going to follow this. President Fan' stated no, Mrs. Brown misunderstood what he said. Paul Drnievic, Citizens For Safe Water, stated on December 17, 1997, he presented the City council with a letter requesting several items. As of January 6, 1998, he had not received a response so he called the Council Office. Due to Council's staff being out of the office, he did not receive a call back until January 7, at which time he was informed he would need to fill out a Public Disclosure Request form to receive the items he requested. He felt that 3-weeks was not an appropriate length of time to receive a response to his request. He views the actions displayed toward him, Jack Lefcoski and Susan Brown were not indications of a truly open City Council. He would like to see more City Council meetings and business conducted at the Wednesday evening meetings in front of the public. He and others feel that too much business is conducted in Study Sessions or Executive Sessions where the public does not have the right to ask questions or give input. Mr. McOonnell emphasized the fact that Study Sessions are used as informal discussions on issues, which are then brought before Council for formal action in a public meeting where public input is taken. He also reminded Mr. Drnjevic that Study Sessions are open to the public..Mr. Dmjevic stated people do have the impression that most everything is decided before it ever comes on the Council floor. Mr. McConnell stated he had that same impression prior to his being seated on the Council and thanked Mr. Drnjevic for his concern. TAPE #1517 City Council Reg. Mtg. Minutes January 7, 1998 Page 7 of 10 Mr. Mont.qome~ stated in order to have more time for the public to discuss issues during Council meetings, he recommended that the time for "Public Recognition" be moved to the end of the Council meeting thereby taking care of City business first. President Farr stated that will be an issue that will be discussed in an open Study Session. 8A - LEACHATE TREATMENT AGREEMENT WITH OLYMPIC VIEW SANITARY LANDFILL~ #AB98-002 The Olympic View Sanitary Landfill (OVSL) has a need for a reliable disposal facility for secondary treatment and disposal of pretreated leachate generated at its landfill in Bremerton. As a result, OVSL would like to enter into a formal agreement with the City of Bremerton for the processing of its leachate at the City" wastewater Treatment Plant (WWTP). The WVVTP has the treatment capacity. Should the City agree with the proposed agreement, OVSL will pay $0.01 per gallon of pretreated leachate delivered to the plant. Gene SamDle¥, Director of Public Works and utilities, stated on an emergency basis OVSL has hauled leachate to the WVVPT and the City is knowledgeable how the plant reacts to this type of influent. Because of the size of the City's plant, there is no significant potential for a problem. OVSL operates on a Waste Discharge Permit issued by the Department of Ecology so all assurances are there that the City will have appropriate testing and that the material delivered to the WWTP will not adversely affect that process. Public comment - none. Mr. McConnell referenced Section 6.2 of the agreement and questioned if he understood correctly that the control of how much leachate is delivered is with the OVSL driver. Mr. Sampley stated OVSL is required by their permit to keep a log and would deliver the leachate to a point within the City that is outside the treatment plant for dilution. If the truck would have to be brought into the WWTP facility it would create some problems. There is a certain amount of trust; however the log that is kept is an official log, and he believes that is adequate. Mr. McConnell questioned the actual cost to the City to provide this service? Mr. Sampley stated it would cost a fraction of the $.01 per gallon the City will receive from OVSL. Mr. McConnell questioned if accepting the leachate will have any affect on the Puget Sound Alliance? Mr. Sampley stated no. Mr. Montgomery described a situation that he observed in 1997 whereby the OVSL leachate ponds were nearly overflowing and would have gone into the Union River. At that time, the City's Wastewater Department Manager, and staff gathered tanks from around the State and Canada to collect the leachate and shipped it to the Vvw'rP; thereby preventing any seepage into the Union River. OVSL had a contract with the Port Orchard Sewage District, however, they were TAPE #1517 City Council Reg. Mtg. Minutes January 7, 1998 Page 8 of 10 not able to handle the load. When this incident took place, the City WWTP did not experience any overflows. He views this agreement as a "good deal" for Bremerton. Mr. Reed asked who measures what is delivered, i.e. the log of the driver or VWVTP? Mr. Sampley explained OVSL keeps the official log and each tanker is assumed to be full. Mr. Reed questioned for clarification that this action would not impact the City's ability to have additional sewer hookups? . Mr. Sampley stated no, it is virtually immeasurable when looking at the size of the WWTP and the amount OVSL will deliver. Mr. Shepherd stated this is an excellent opportunity to generate revenue for the Wastewater Utility and encouraged Mr. Sampley to look for other such options or organizations that need WWTP services for leachate. President Farr stated he assumed the $50,000 listed, as an estimate of revenues to be generated would be put back into the Wastewater Fund, and therefore is of benefit to the ratepayers. Mr. Sampley stated president Fart was correct. Mr. Mont,qomery stated it was his understanding that the WWTP has operated at as high as 40 million gallons in emergencies without any adverse affect. Mr. Sampley stated the WWTP has an official hydraulic capacity of 29.5 million gallons, a short-term ability to accommodate much greater flow, and it has exceeded 40 million gallons without any adverse affect. #2370 MISIC/U(MontgomerylShepherd) Motion to approve Leachate Treatment Agreement and authorize the Mayor to enter into the Agreement and sign the same subject to City Administrative Policies and Procedures. 9A - ORDINANCE #4620 (SECOND READING) VACATING UNOPENED STREETS IN PLAT OF PORT ORCHARD AND PLAT OF CHARLESTON BY OPERATION OF LAW~ #ABg. 7-279 John Beach, Porter Street resident, stated he views this proposal as a good way to get rid of unusable City property so that it can get cleaned up and used. He questioned the length of time before this action becomes final? In his circumstance, an alley is being vacated that contains a mess that was created by his neighbor. He questioned who is responsible for cleaning up the area? He also wanted to know what recourse did he need to take to get the other property owner to clean up the area that they have used as a dumping ground, as shown in the pictures he passed to the City Council? Glenna Malanca, Acting City Attorney, explained the first choice is to have the responsible party clean up the site, which would be the City's enforcement officer's first attempt. She anticipates the effective date of this action will be within 3-4 weeks. Mr.. TAPE #1517 City Council Reg. Mtg. Minutes January 7, 1998 Page 9 of 10 S.ampley stressed the importance of working together with the City Attorney's Office; however, technically this vacation occurred many years ago. This is a process by which the City officially disclaims ownership. In regard to cleaning of the property, the City has always attached the responsibility to the responsible party. Admiral Ross, Cottman Street resident, questioned where could he obtain formation on the procedures to be used to have an unopened street vacated under operation of law?. Ms. Malanca stated she would mail that information to Mr. Ross. #2913 MISIClU(ArendslMontgomery) Motion to pass Ordinance #4620, on second reading, vacating portions of Porter Street, Hartford Avenue, Farragut Street and alleys within Blocks 3, 5, 6, 8, 9. 10, 12, 13, 14 and 15, all within the Plat of Port Orchard. 9B - ORDINANCE #4621 (SECOND READING) VACATING D, E1 FI G, AND H STREETS WEST OF SR 3; AND BAYVIEW BETVVEEN C AND E STREETSI #AB97-280 Public comment - none. #2986 MlSlC(MontgomerylMcConnell) Motion to pass Ordinance #4621, on second reading, vacating those portions of D, E, F, G and H Streets west of SR3 and east of Oyster Bay Avenue, and Bayview Avenue between C and E Street. Vote on Motion: Motion carried. In Favor: Montgomery, Arends, Reed, Farr, Overson, Law, McConnell, Olsen Abstain: Shepherd President Farr thanked the TV camera crew for their services: Bob Neal, Doug Engebretson, Kelly Kehoe, David Chivis, Shannon Watson and Tim Schnitzer. With no further business meeting adjourned at 7:00 P.M. GIL JOHNSON, Deputy City Clerk TAPE #1517 City Council Reg. Mtg. Minutes January 7, 1998 Page 10 of 10 DAVID FARR, City Council President City of Bremerton P J/DF/me Cc: Normal Distribution FileNault AGENDA BILL BREMERTON CITY COUNCIL 1. SUBJECT: Reappointment to the Housing Authority Board FOR AGENDA OF: ORIGINATING DEPT: ORIGINATOR: DATE SUBMITTED: Executive Mayor Horton January 15, 1998 2. ~: (comment on back if necessary) 3. ~: Application for Appointment APPROVED BY COUNCIL PRF~IDENT F/.O~_SUBMITTAL: co czL PRESZDENT / 4. SUMMARy STATEMENT AND REOUIREMENT FOR COUNCIL ACTION: Carl Buettgenbach's term on the Housing Authority Board has expired. It is recommended he be reappointed to another term. 8. RECOMMENDATION: Motion to confirm the reappointment of Carl Buettgenbach to the Housing Authority Board. 9. RESPONSIBLE OFFICIAL: ENFORCEMENT OFFICIAL: EXPIRATION DATE: REVIEW DATE: PULLED TABLED COUNCIL DIRECTIVE: 10. NOTICE OF ACTION APPROVED DISAPPROVED AMENDED AGENDA BILL NO: 2. CLEARANCE COMMENTS: N/A 5. IMPACT ON NON-PASSAGE: Less than full membership on the Board.' 6. IMPACT ON STAFFING, BUDGETS, FACILITIES. EOUIPMENT OR OTHER RESOURCES: N/A 7. RESEARCH SOURCES: N/A LYNN S. HORTON, Mayor 239 4th Street · Bremerton, WA 98337 o (360) 478-5266 · FAX {3(>0) 478-5883 January 8, 1998 MEMO TO: City Council Members FROM: Mayor Horton ~,~ SUBJECT: Reappointment to the Housing Authority Board The term of Carl Buettgenbach on the Housing Authority Board has expired. I am recommending he be reappointed to another term. Attached is his application for reappointment. Please contact me if you have any questions or concerns regarding this reappointment. I plan to place this item on the City Council agenda of January 21, 1998 for a vote of confirmation. LH:ev · Celebrating 50 Years of Freedom · CITY OF BREIVIERTON APPLICATION FOR CITY BOARDS/COMMISSIONS/COMMITTEE NOTE: As an applicant for a City Board, Commission or Committee, your name, address, and telephone number will be available to the press and public. You will be contacted before any action is taken on your appointment. (Please type or print clearly) NAME: Carl ~ BUettgenbach HOME ADDRESS: 931 Ash Place :B~'emer ton, WA 98310-4252 OCCUPATION: Retired Sheet Ncgtal Worker DATE: 6, Ja~ua_~-y, 1998 PHONE: 360-377-4~17 NoAo (H) (W) EDUCATION: Kigh School Grad. Served four yeast Apprentice.~hip Sheet Metal Wkr$, PROFESSIONAL/COMMUNITY ACTIVITIES: Sex-ced on Bremerton Housing Authority 1~ yrs. Served on Chuck-waKen Senior Nutrition program .Present Chairman B~eme~ton School Dist. Vocational advisary program. Over ten yrs. LOCAL REFERENCES (name & phone number): Merrill Walaee II 36G-275-5700 John Mitchell ATT. 560-479-3000 Robert Kennedy 360-692-4405 Arthur N Morken 360-377-2591 I AM INTERESTED IN SERVING ON (please check one or Disability Action Committee Civil Service Commission(18 yrs. & older) Urban Forest Committee Cable Communications Advisory Committee Community Development Block Grant Advisory Committee Youth Council Safe Streets' Steering Committee Citizen's Commission on Council Salaries more): Planning Commissi,,on (18 yrs. & older) Parks & Recreation Commission Ethics Commission Parking Advisory Board Solid Waste IVlanagement Bremerton Housing Authority Board of Appeals, Housing/Building Codes Mayor's Select Committee on Law Enforcement Is this an application for reappointment? Yes If yes; how many years have you served on this commission/committee? 15 PLEASE RETURN TO: Mayor's Office 239 4th Street Bremerton, WA 98337 Signature Applications be reviewed periodically to determine continued availability. information may be put on back. Additional pertinent CO~~ Vice Chairman ~ulie Evslt ~c.~ Novcmber l7, 1997 Thc Honorable Lynn Horton Mayor, City of Brcmeaon 239 Fourth Street Brcmcrton, WA 98337 Board of Cc~m0~c~m Reappohm~nt Requ~ for Cad F. B~ Dear Mayor H°rton: (3~0) 7~-SSZ~ Please be advised that Commissionex Carl F. Buettgeabach's term of office is due to ¢xpix¢ November 30, 1997. Mr. Bucttgenbach has been a great asset and very dedicated to the Housing Authority' mission. At the xecomm~dafio~ ofthe four oth~ C~ixm~ic~s, and also with the coz~ren~ of Mr. Buett~enbach, we would like to request that he be nmppoint~ for a further five year term e~cfive December 1, 1997. We are looking forward to hearing from you in this matter. Sincerely, ' Executive Director 110 Russell Road · P.O. Box 4460 · Bremerton, WA 98312 · TDD-'Phon¢: (360) 479-3694 · Fax: (360) 377-5355 Equal Housing Opportunity Barrier Free CITY OF BREMERTON CF. RTIFICATE OF APPOINTMENT OF COMMISSIONER OF THE HOUSING AUTHORITY OF THE CITY OF BREMERTON THIS IS TO CI~TIFY THAT CARL F. BUETTGENBACH is hereby appointed to the office of Commissioner of the Housing Authority of the City of Bremerton, under the provisions of the Housing Authorities Law of the State of Washington, for the term of Five (b') years, beginning December 1, 1997, and ending November 30, 2002. Mayor, City of Bremerton STATE OF WASHINGTON) S.S. C1TY OF B~TON CARL F. BUETTGENBACH, be'rog first duly sworn, on oath, disposes and says: That he is the person appointed to the office of Commissioner of the Housing Authority of the City of Bremerton on the. .. day of , 1997; that he will support the Constitution and Laws of the United States and the Constitution and Laws of the State of Washington, and that he will fai~ demean himself in said office. Notary Public in ~d for th~ State orW CEKTIFICATE OF APPOINTMENT November 21, 1997 rilE Honorable Lynn S. Horton Mayor, City of Bremerton 239 Fourth Street Breanerton, WA 98337 Dear Mayor Horton: As we previously discussed, Commissioner Carl BuettsenbaCh's appointment expires this montl~ term of Mr. Buettgenbach is truly one of our Board's top performers. Hot only has he unselfishly provided trade advise and recommendations on union matters, he was also elected by the National Association of Housing and Redevelopment 0ffi~ (NAHR0) in Washington, D.C. to represent housing in the Northwest on various local and national working committees and offices. Carl has always, and continues to, share these experiences he has acquired with this agency. Again, Carl is a very active commissioner and I would like to strongly support his appointment. I ask your support on tNs matter, and as always, will accept muy decision you make. Very respectfulIy, Chairman of the Board AM/cg enclosure 110 Russell Road · P.O. Box 4460 · Bremerton, WA 98312 · TDD-Phone: (360) 479-3694 · Fax: (360) 377-5355 Equal HousJng Opponunity ~ I (~ Barrier Free ~-~ · GRADUATED FROM BREMERTON HIGH SCHOOL IN 1949 · SEKVRD 4 YEAR APPRENTICE~ TO BECOME A SttEET METAL WORKEK WO~ FOKLENT'S INC., 24 YEARS AS A JOUR1N-E~ AND I.RAD MECHANIC · SEKVI=.I) HIS UNION AS BUSINESS REPRESENTATIVE FOK THRI:.R AND ONE- · RETIBRD IN Ai:~RIL 1994 · AP?OINTED TO TI-IE BOARD OF COMMISSIO~ OF THE HOUSING AU'I~O~ OF THE CITY OF BREMERTON BY MAYOR GENE NELSON IN 1982 · RE-A~POINTED '170 THE BOARD OF COMMISSIONERS BY MAYOR GENE LOBE IN 1987 AND MAYOR MENTOR IN 1992. SERVED A TOTAL OF 15 YEARS · SERVED AS CI-IAIi~iAN OF THE BOARD OF COMMISSIONERS OF THE HOUSING AUTHORITY OF THE CITY OF BREMRKTON FOUR, TIMES · SEKVED ON COMMISSIO~ COMMITTEE FOP. FOUK YEARS AT THE NATIONAL AND PACIFIC NORTHWEST LEVEL, AND FOUR YEARS AT THE CHAPTEK LEVEL · MEMBEK OF THE BREMEKTON HI-KS CLUB FOK 18 YEARS · MEMBER. OF THE BP, E~KTON ~F KITSAP LIONS CLUB FOR 27 YEAI~ · HAS SEKVED ON THE VOCATIONAL ADVISOKY BOARD FOK THE BREMEKTON SCHOOL DISTRICT SINCE 1983 · SEKVED ON PRESTIGIOUS AWARDS COMMITrEE NATIONAL ASSOCIATION OF HOUSING AND REDEVELOPMENT OFFICIALS FOK THREE YEARS. SERVED AS CHAmMAN IN 1997 BREMERTON CITY COUNCIL AGENDA BILL 1. SUBJECT: Bid Award Recommendation Video Production Equipment ORIGINATING DEPARTMENT~m. Srvc. FOR AGENDA OF: t I ;;L[ ~ cf ~ ~ ORIGINATOR: Gil ~lohnSon~.~ DATE SUBMITTED: 2. CLEARANCES: (comment on back if 3. EXHIBITS: necessary) Administrative Services-~/~ _(9.~.~.,-~. , Tabulation City Attorney City Treasurer ~_ _ Council Fiscal & Budget~~~ Council Operations ~ _~~ ENDORSEMENT IVIAYO R~'~-- INFORMATION APPROVED BY COUNCIL PRESIDENT FOR SUBMITTAL: 4. SUMMARY STATEMENT AND REQUIREMENT FOR COUNCIL ACTION: Requests for bids were prepared, advertised, distributed and received in accordance with accepted Call for Bid procedures for Video Production Equipment. The equipment will be used to upgrade City Council video production capability. Much of the current equipment was "used" when acquired by the City when Council meetings began telecasting and ~s obsolete. Some of the equipment used is no longer in production and can no longer be repaired. Two bids were received. The Iow bid for the equipment and installation was submitted by Professional Video and Tape, Inc., in the amount of $55,864.38 including tax and installation. 8. RECOMMENDATION: That City Council accept the bid for video production equipment and installation from Professional Video and Tape, Inc., as to specifications and Iow bid received in the amount of $55,864.38. 9. RESPONSIBLE OFFICIAL: G. Johnson ENFORCEMENT OFFICIAL: G. Johnson EXPIRATION DATE: 12_/31/98 REVIEW DATE: 03/30/98 10. NOTICE OF ACTION PULLED ,,, T~LED COUNCIL DIRECTIVE: APPROVED DISAPPROVED DATE: 11. AGI AMENDED '-oo7 2. CLEARANCE COMMENTS: 5. IMPACT OF NON-PASSAGE: City will continue to telecast Council meetings with existing equipment. 6. IMPACT ON STAFFING, BUDGETS, FACILITIES, EQUIPMENT OR OTHER RESOURCES: Prepayment by TCI of $0.21 for access included in monthly customer bills. 7. RES.EARCH SOURCES: BID TITLE: DATE OPENED: CITY OF BREMERTON BID TABULATION VIDEO PRODUCTION EQUIPMENT 12/15197 TIME OPENED: 2:00 P.M. OPENED BY GIL JOHNSON WITNESS: Bob Neal ProLine Yes $60,084.00 g~eneck mic.'s $4,059.47 $64,143.47 Professional V'~leo & Tape Yes $53,496.90 42 ea. is' $55,864.38 gooseneck mic.'s. $2,367.48 Totals shown include SaLes Tax SUMMARY ! TOTAL BID COMMENTS LOW BIDDER Professional Video $55,864.30 SECO.D SOW B~D~E. $64,143.47 ProLine THIRD LOW BIDDER AGENDA BII,L BREMERTON CITY COUNCIL SUBJECT: BHA and BPD Contract FOR AGENDA OF:Tues, January 13,1998 ORIGINATING DEPT: Police ORIGINATOR: Asst_ Chief ri. Mincey DATE SUBMITTED: January 5, 1998 CLEARANCES: ( Comment on back if necessa~') Assist. Chie~ Mincey a-'"" City Attornk~)/fl,.,c--''~ 3.EXHIBITS:Copy of Contract for "Supplemental Law Enforcement Services" for 1998. ENDORSEMENT')~ INFOR31ATION____ APPROVED BY COUNCIL PRESIDENT FOR SUBMITTAL: MAYORC--~-- ~fl' 'f'~ COUNCIL PRESIDE .... 4. SUMMARY STATEMENT AND REQUIREMENT FOR COUNCIL ACTION: Authorization for the acceptance and implementation of the contract agreement by the city police department as delineated in the contract. 8. RECOMMENDATION: Approval for mayoral authorization for contract agreement 9. RESPONSIBLE OFFICIAL: Police C_hiefPaul L. Du.Fresne ENFORCEMENT OFFICIAL: Asst.. Police Chief Henry R. Mincey EXPIRATION DATE: December 31,1998 REVIEW DATE: Janua~ 1, 1998 10. NOTICE OF ACTtON PULLED TABLED, APPROVED DISAPPROVED AMENDED COUNCIL DIRECTIVE: 11. AGENDA BILL NO: 2. CLEARANCE COMMENTS (cont3: SUMMARY STATEMENT (cont.): Scope. Police officer funded by and assigned to the Housing Authority of the city of Bremerton are responsible for the delivery of supplemental police services to the residents of the West Park Development. Specifically, officers are expected to work as community officers, including and responsibilities described in attachment A and B. IMPACT ON NON-PASSAGE: Loss of the benefits listed below. IMPACT ON STAFFING, BUDGETS, FACILITIES, EQUIPMENT OR OTHER RESOURCES 1. One police officer position personnel cost including salary and benefits. 2. Cost for maintenance of one police vehicle provided. 3. Enhanced police services and less drain on fiscal and human resources of the police department as this would be a permanent assigned beat with all cost for its coverage paid for by the contracting agency BHA. 7. RESEARCH SOURCES: De~mber 17, 1997 Paul L. Du Fresne, Chief of Police Bremerton Police Department 239 4th Street Bremerton, WA 98312 Dear ChicfDu Frcnsc: Enclosed is the "Contract for Supplemental La~ Enforcement Services" for 1998. Please note that all changes are bolded. You will notice that an additiOnal item has been added to the contract specifically requesting that your department provide BHA with a Quarterly Crime Statistics Report The report is critical to our continued funding from IaSJD. Enclosed you will find a draf~ copy of the form mentioned above. Please review and contact me regarding any comments or questions you may have. Sincerely, HOUSING AUTHORITY OF THE CITY OF BREMERTON Executive Director lVlW/cg Michelle Beardsley Clarence Nelson 110 Russell Road · P.O. Box 4460 · Bremerton, WA 98312 · TDD-Phone: (360) 479-3694 · Fax: (360) 377-5355 Equal Housing Opportunity {~ Barrier Free ~-~ CONTRACT FOR SUPPLEMENTAL LAW ENFORCEMENT SERVICES THIS AGREEMENT is between the CITY OF BREMERTON, by and through the BREMERTON POLICE DEPARTMENT ("Contractor"), a law enforcement agency of the State of Washington with jurisdiction over the relevant geographical area, and THE HOUSING AUTHORITY OF THE CITY OF BREMERTON ("BHA"), a municipal corporation organized under RCW 35.82, et seq. I. RECITALS WHEREAS, A. BHA operates a Iow-income housing area, commonly referred to as Westpark; and Bo Westpark contains 582 Iow-income households and comprises a geographic area of approximately 74 acres; and Co The incidence of criminal activity within Westpark substantially exceeds the level of activity in surrounding locales and requires supplemental law enforcement services; and Contractor is willing to provide supplemental law enforcement services on a contractual basis but within the scope of its general law enforcement responsibilities as a police authority. NOW, THEREFORE, for and in consideration of the mutual benefit to be derived herefrom, the adequacy of which is acknowledged by each party's authorized agent affixing his or her signature hereto, the parties now make and enter into the following: CONTRACT FOR SUPPLEMENTAL LAW ENFORCEMENT SERVICES -- PAGE I 01/98 suplawen II. AGREEMENTS SCOPE. Police officers funded by and assigned to the Housing Authority of the City of Bremerton are responsible for the delivery of supplemental police services to the residents of the Westpark Development. Specifically, officers are expected to work as community police officers, including the duties and responsibilities described in Attachment A and B. One (1) community Police Officer assigned to Westpark forty (40) hours per week. BHA to specify the hours. Part time service with police car exclusively at Westpark for sixteen (16) hours, Fridays and Saturdays, 5:00 p.m. to 1:00 a.m. Baseline Services, regular services afforded to all other residents of the City of Bremerton to include investigative services. Bo TERM. Services shall commence January 1, '1998, and shall terminate on December 31, '1998, unless extended by agreement of the parties. C. COMPENSATION. Cost of one new hire to replace assigned officer @ $49,'197.00 includes wages and benefits with vacations and holidays for 2,096 hours of work per year, plus 832 hours of overtime coverage @ $36.00 per hour maximum, or $30,894.00, for a total of $80,091.00 per year. Baseline service is at no additional cost during the term of this agreement. No additional compensation above the hourly patrol rate will be paid for court appearances, coordinating conferences or other time demands arising from patrol services. CONTRACT FOR SUPPLEMENTAL LAW ENFORCEMENT SERVICES -- PAGE 2 01198 suplawen Cars and Equipment. The charges set out in paragraph 1. preceding include all compensation for cars, gasoline, repair and equipment provided by Contractor. Contractor will provide BHA with an itemized billing for services within ten (10) days following the end of each calendar month during which services are provided. BHA shall pay for such services within twenty (20) days of receiving the bill. REPORTS AND INFORMATION ACCESS. Contractor agrees that BHA will have unrestricted access to all public information which in any way deals with criminal activity in Westpark and which is disclosable pursuant to RCW 10.97, 42.17 and any other laws pertaining to the disclosure of public records. This information will be provided at no cost by Contractor upon BHA's request and will be in addition to daily activity reports. In addition contractor shall provide BHA with the following reports: Monthly Summary Report of Criminal Activity Semi-Annual Progress Report Eo REASSIGNMENT. BHA shall have the right to reasonably request Contractor to replace any assigned personnel for the following reasons: 2. 3. 4. Neglect or non-performance of duties; Disorderly conduct, use of abusive or offensive language, or fighting; Criminal activity; Selling, consuming, possessing or being under the influence of intoxicants, including alcohol or illegal substances, while on assignment at Westpark; Inadequate punctuality or attendance; or Substantiated complaints from public housing residents or management. BHA shall provide written enumeration of the reasons for the request for replacement of the assigned personnel, including documentation and witnesses to the alleged behaviors. CONTRACT FOR SUPPLEMENTAL LAW ENFORCEMENT SERVICES m PAGE 3 01/98 suplawen ADMINISTRATION. Paul L. Du Fresne, Chief, is designated as Contractor's representative and Merrill Wallace II, the Executive Director of the Housing Authority of the City of Bremerton, is designated as BHA's representative for administration of this contract. Go NOTICES. All notices to be given by either of the parties hereto to the other party 3hall be in writing and may either be delivered personally or may be deposited in the United States Mail, postage prepaid, as either certified or regular mail, addressed to: Merrill Wallace II Housing Authority of the City of Bremerton P.O. Box 4460 Bremerton, WA 98312 Paul L. Du Fresne, Chief Bremerton Police Department 239 Fourth Street Bremerton, WA 98337 or to such other respective addresses as either party may from time to time designate in writing. Notices sent by mail shall be deemed to have been given when properly mailed; the postmark affixed by the United States Post Office shall be conclusive evidence of the date of mailing. HOLD HARMLESS. Contractor agrees to defend, indemnify, and hold harmless the BHA, its Commissioners, officers, employees, and agents from and against any and all liability, loss, cost, 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 the negligent performance of this Agreement, whether such injuries to persons or damage to property is due to the negligence of the Contractor, or its agents. If, however, the negligence of both BHA and Contractor is judicially found to be the cause of such damage or injury, the loss, cost, or expense will be shared in proportion to the relative degree of negligence of each. CONTRACT FOR SUPPLEMENTAL LAW ENFORCEMENT SERVICES -- PAGE 4 01/98 suplawen NONDESCRIMINATION. Contractor hereby certifies that it is an equal opportunity employer and has developed and implemented an Affirmative Action Program in accordance with the guidelines contained in Revised Order 4 of the United States Department of Labor. Both parties agree that they will not discriminate in any manner against any employee or applicant for employment because of race, color, religion, sex, national origin, age, marital status and disability, except for employment actions based on a bonafide occupational qualification. Such action includes, but is not limited to, employment, upgrading, layoff or termination, rates of pay or other forms of compensation, or selection for training. TERMINATION. This Agreement terminates automatically on December 31, 1998; however, if either party fails to substantially perform through no fault of the other and does not commence correction within five (5) days after written notice of the default and moves to diligently complete the correction thereafter, this Agreement is terminated upon a further ten (10) days' written notice. K. EXAMINATION AND RETENTION OF CONTRACTOR'S RECORDS. BHA, HUD, or Comptroller General of the United States or any of their duly authorized representatives shall, until three (3) years after final payment under this contract, have access to and the right to examine any of the Contractor's directly pertinent books, documents, papers, or other records involving transactions related to this contract which are otherwise disclosable pursuant to public disclosure laws, including RCW 42.17 and RCW 10.97 for the purpose of making audits, examinations, excerpts and transcriptions. The periods of access and examination in paragraph 1. above are for records relating to: a) litigation for settlement of claims arising from the performance of this contract; or b) costs and expenses of this contract to which BHA, HUD or Comptroller General or any of their duly authorized representatives has taken CONTRACT FOR SUPPLEMENTAL LAW ENFORCEMENT SERVICES t PAGE 5 01/98 .3( suplawen exception shall continue until disposition of such appeals, litigation, claims, or exceptions. Lo LIMITATIONS ON PAYMENTS MADE TO INFLUENCE CERTAIN FEDERAL FINANCIAL TRANSACTIONS. The Contractor agrees to comply with Section 1352 of Title 31, United States Code ("the Act") which prohibits the use of Federal appropriated funds to pay any person for influencing or attempting to influence an officer or employee of any agency, a Member of Congress, an officer or employee of Congress, or an employee of a Member of Congress in connection with any of the following covered Federal actions: The awarding of any federal contract; the making of any Federal grant; the making of any Federal loan; the entering into of any cooperative agreement; or the modification of any Federal contract, grant, loan or cooperative agreement. The Contractor further agrees to comply with the requirement of the Act to furnish a disclosure of any funds other than Federal appropriated funds (including profit or fee received under a covered Federal transaction) that have been paid or will be paid to any person for influencing or attempting to influence an officer or employee of any agency, a Member of Congress, an officer or employee of Congress, or an employee of a Member of Congress in connection with a Federal contract, grant, loan or cooperative agreement. APPLICABLE LAW; VENUE. This Agreement shall be construed and interpreted in accordance with the laws of the State of Washington. In the event of a dispute, such dispute shall be litigated in the Superior Court of the State CONTRACT FOR SUPPLEMENTAL LAW ENFORCEMENT SERVICES -- PAGE 6 01/98 suplawen of Washington for Kitsap County. ENTIRE AGREEMENT. This contract constitutes the entire Agreement between the parties. Any modifications or amendments shall be in writing and shall be signed by each party. HOUSING AUTHORITY OF THE CITY OF BREMERTON DATED: BY: MERRILL WALLACE II Executive Director CITY OF BREMERTON DATED: BY: LYNN S. HORTON Mayor DEPARTMENTAL APPROVAL: PAUL L. DuFRESNE, Chief of Police APPROVED AS TO FORM: lAN R. SIEVERS, City Attorney RECEIVED FOR FILING: KATHLEEN L. McCLUSKEY, City Clerk CONTRACT FOR SUPPLEMENTAL LAW ENFORCEMENT SERVICES -- PAGE 7 01/98 suplawen.doc HOUSING AUTHORITY OF THE CITY OF BREMERTON SUPPLEMENTAL POLICE SERVICES (ATTACHMENT A) POSITION DESCRIPTION Police officers funded by and assigned to the Housing Authority of the City of Bremerton are responsible for the delivery of supplemental police services to the residents of Westpark Development. Specifically, officers are expected to work as community policing officers, including performing the following duties and responsibilities: 1. Respond to all calls, both emergency and non-emergency in nature, involving the Westpark Development and residents, and follow guidelines as stated in Attachment B. 2. Engage in proactive policing strategies; develop and maintain rapport with Westpark residents, thus fostering an atmosphere of cooperation, compassion, coordination, peace and order within the Westpark Development. 3. Encourage residents to report any and all suspicious or criminal activities as well as suspected/observed abuse or neglect of people, animals or property. 4. Assist victims and homeless people, referring them to other agencies, when appropriate, for further assistance. 5. Periodically engage in walking or bicycle patrols throughout the shift in all public areas of the Westpark Development to deter disorder or crime. 6. Work with youth in the Westpark Development to help them understand and comply with laws and regulations. 7. Work with the Bremerton Housing Authority and residents to help clean up the Westpark Development, including removal of graffiti, trash and debris. 8. Work with Bremerton Housing Authority managers and resident councils to develop crime prevention programs, resident patrols and youth-oriented programs. 9. Make presentations and speeches to resident organizations and groups, as assigned. 10. Remain alert to the emergency needs of residents and visitors and take the appropriate action to protect life and property. 11. Development and maintain a working knowledge of judicial and criminal law in the areas of: self-incrimination; right to counsel; arrest; search and seizure; interrogation and confession; and the collection and preservation of evidence. CONTRACT FOR SUPPLEMENTAL LAW ENFORCEMENT SERVICES -- PAGE 8 01/98 suplawen 12. 13. 14. 15. 16. 17. 18. 19. 20. 21. 22. 23. 24. 25. Investigate the activities of suspicious persons as encountered or upon resident complaint using standard police techniques and in conformance with legal requirements to determine the identity, activity and reason for the presence of the suspicious person or persons. Deliver citations for violations of Bremerton Housing Authority regulations as well as vehicle and local ordinances in conformance with legal requirements and police department policies and procedures. Direct vehicle traffic as required to ensure the safe, orderly flow of traffic. Serve warrants or summonses in conformance with legal requirements and police department policies and procedures in order to comply with court orders. Interrogate suspects in accordance with legal requirements and police department policies and procedures using standard interrogation techniques and strategies. Search individuals and their personal property prior to taking them into custody in compliance with legal requirements and police department policies and procedures using standard police search techniques to ensure the safety of the officer, other police department personnel, arrested persons, and the residents. Incarcerate arrested persons as required in accordance with legal requirements and police department policies and procedures using standard police techniques in order to detain arrested persons pending further investigation and/or processing through the criminal justice system. Assist in the securing of crime scenes and in the gathering and processing of evidence. Promptly and properly prepare and submit the required daily reports to the Housing Authority of the City of Bremerton and the police department on each shift. Enforce towing of abandoned or stolen vehicles. Counsel juvenile and adult residents, referring them to the appropriate persons or agencies for further assistance. Assist other police officers, as appropriate; accept and adhere to lawful direction and orders issued by a superior officer. Assist prosecuting attorney(s) and the Bremerton Housing Authority attorney(s) in the preparation of court cases and, as required, testify at judicial trials and hearings. Maintain a professional decorum and attitude in all dealings with residents, visitors, superiors and other department personnel; conduct personal life in a manner that sets a positive example for residents, especially youths. CONTRACT FOR SUPPLEMENTAL LAW ENFORCEMENT SERVICES -- PAGE 9 01/g8 35- suplawen 26. 27. 28. 29. 30. 31. Operate a vehicle (to be supplied by the police department) within assigned geographic area at the direction of a supervisor or at own discretion according to standard police techniques and strategies in order to deter and detect criminal activity. Operate closed circuit television (CCTV) cameras and monitors in the Westpark Housing Development, as required, for the purpose of deterring criminal activity and arresting violators. Attend training courses, as assigned, to increase and enhance professional knowledge, skills and ability. Maintain liaison with all law enforcement officers, Bremerton Housing Authority officials and related agencies' personnel to exchange information and facilitate cooperative efforts. Work in an overtime status as required by the Bremerton Housing Authority Executive Director. Provide any service necessary to further the Bremerton Housing Authority's mission and objectives that is not restricted by legal or police department policy. 32, Perform other law enforcement duties as assigned. CONTRACT FOR SUPPLEMENTAL LAW ENFORCEMENT SERVICES- PAGE 10 01/¢JB suplawen HOUSING AUTHORITY OF THE CITY OF BREMERTON SUPPLEMENTAL POLICE SERVICES (ATTACHMENT B) RCW 59.18.075 Seizure of Illegal Drugs -- Notification of Landlord Any law enforcement agency which seizes a legend drug pursuant to a violation of chapter 69.41 RCW, a controlled substance pursuant to a violation of chapter 69.50 RCW, or an imitation controlled substance pursuant to a violation of chapter 69.52 RCW, shall make a reasonable attempt to discover the identity of the landlord and shall notify the landlord in writing at the last address listed on the property tax records and at any other address known to the law enforcement agency of the seizure and the location of the seizure of the illegal drugs or substances. Any law enforcement agency which arrests a tenant for threatening another tenant with a firearm or other deadly weapon, or for some other unlawful use of a firearm or other deadly weapon on the rental premises, or for physically assaulting another person on the rental premises shall make a reasonable attempt to discover the identity of the landlord and notify the landlord about the arrest in writing at the last address listed in the property tax records and at any other address known to the law enforcement agency. (1991 c 38 &4; 1988 c 150 & 11.) CONTRACT FOR SUPPLEMENTAL LAW ENFORCEMENT SERVICES -- PAGE 11 01./98 suplawen HOUSING AUTHORITY OF THE CITY OF BREMERTON SUPPLEMENTAL POLICE SERVICES (ATTACHMENT C) AGREEMENT OF COOPERATION BETWEEN The HOUSING AUTHORITY OF THE CITY OF BREMERTON and The BREMERTON POLICE DEPARTMENT A. AGREED UPON CONCERN: 1. Need for continued communication and cooperation between Bremerton Police Department and the Housing Authority of the City of Bremerton. 2. Need for comprehensive and enhanced screening of Low Rent Public Housing applicants. B. MAJOR GOALS: 1. Reduce the number of problematic residents by utilizing an enhanced applicant screening process in the Low Rent Public Housing Program; 2. Create a safer environment which will be attractive to law abiding, productive residents who will contribute and enhance the quality and livability of a neighborhood; 3. Continue the communication and cooperation link between the Bremerton Police Department and the Housing Authority of the City of Bremerton; 4. Improve the identification of applicants through more thorough review of forms of identification. Co as necessary, AGREED UPON ACTIONS BY PARTICIPANTS: 1. BHA Board of Commissioners - a. Adopt a non-financial Agreement of cooperation to continue, and amend the enhanced screening process; CONTRACT FOR SUPPLEMENTAL LAW ENFORCEMENT SERVICES -- PAGE 12 01/98 supiawen b. Approve the addition of Bremerton Police Department record information to the current screening process; c. Utilization of Guidelines for Evaluating Criminal Histories of Applicants to LRPH for use as a reference in evaluation the seriousness of individual records; and d. Endorse public education and awareness of this enhanced screening process through media and community forums. 2. BHA LRPH Program Staff- a. Participate and cooperate with The Bremerton Police Department staff in the administration of this enhanced screening process. 3. Bremerton Police Department- a. Provide personnel during BHA screening sessions to assist in the identification of applicants, to answer applicant questions, and to provide other mutually agreed upon services; b. Provide Bremerton Police Data Service (BPDS) printouts without charge to the Housing Authority while this Agreement is in effect; c. Provide support from the Planning and Support Division's Statistical Analysis unit for evaluation of the enhanced screening process; and d. Endorse public education and awareness of this enhances screening process through media and community forums. D. EFFECTIVE DATES OF AGREEMENT: The Bremerton Police Department and the Housing Authority of the City of Bremerton concur with the terms of this Agreement. This Agreement shall remain in effect until either party notifies the other through 30 day written notice of the need to revise or cancel the Agreement. mo PROGRAM EVALUATION: The Bremerton Police Department and the Housing Authority of the City of Bremerton semi-annually, or as may be necessary, to review any areas of concern. agree to meet CONTRACT FOR SUPPLEMENTAL LAW ENFORCEMENT SERVICES -- PAGE 13 01/98 suplawen This Agreement is signed and executed on behalf of the Housing Authority of the City of Bremerton and the Bremerton Police Department by the following parties: Merrill Wallace II, Executive Director Housing Authority of the City of Bremerton Date Chief Paul Dufresne Bremerton Police Department Date CONTRACT FOR SUPPLEMENTAL LAW ENFORCEMENT SERVICES -- PAGE 14 01/98 suplawen HOUSING AUTHORITY OF THE CITY OF BREMERTON SUPPLEMENTAL POLICE SERVICES (ATTACHMENT D) HOUSING AUTHORITY OF THE CITY OF BREMERTON SCREEN CRITERIA FOR LOW RENT PUBLIC HOUSING APPLICANTS 1. Resident completes and submits application and reference forms. (Reference forms include Landlord and/or professional references). 2. Detailed questionnaires are mailed to landlord and/or professional references, along with a signed release from the applicant. 3. Criminal history checks are made through the Bremerton Police Department for all family members age 15 and older. 4. A review of HAP's Do Not Rehouse files is made to determine if the applicant family was a prior resident who should not be rehoused due to any or all of the following reasons: Eviction; skip from unit without notice; history of damage to the unit; excessive move-out charges, etc. 5. A review is made of the list of prior residents of other housing authorities (who are members of the Association of Washington Housing Authorities), who left owing money or moved in violation of the lease. 6. If the applicant's criminal or eviction record or landlord reference information is such that they are likely not to pay rent in a timely manner, not to take reasonable good care of the premises, or to interfere with the rights of other residents, the application is denied. A letter explaining the reason(s) for denial is sent to the applicant and gives the applicant the right to request an informal heating. 7. The Admission Hearing Panel, composed of staff representatives and a Tenant's Commissioner meet to hear the denial cases. If the denial is upheld, or if the applicant fails to request a hearing, the applicant must wait one year to reapply for the Low Rent Public Housing Programs. CONTRACT FOR SUPPLEMENTAL LAW ENFORCEMENT SERVICES -- PAGE 15 01/98 suplawen GUIDELINES FOR EVALUATING CRIMINAL HISTORIES OF APPLICANTS TO L.R.P.H. The decision regarding approval or denial of an application to Low Rent Public Housing (LRPH) will always be left to the sound discretion of the Housing Programs Manager or The Assistant Housing Programs Manager. It is the goal of BHA to only accept applicants who BHA believes will be able to meet the essential requirements of tenancy and who will not adversely affect the health, safety or welfare of other residents. The following guidelines are intended to assist and guide the decision-makers in approving or denying applications so far as criminal activities are concerned. The denial of an application based on criminal activity shall be treated the same as a denial for any other reason, i.e., the applicant is entitled to view before the Housing Programs Manager. Evidence of any member of the applicant household having engaged in the listed criminal activities ~vill be grounds for taking further screening action as described. BHA's approval or denial of an application will be based on the criminal activity engaged in, and is not dependent upon any action or inaction by any law enforcement agency, district attorney, or court. However, evidence of conviction for a crime shall be conclusive proof that a particular criminal activity was engaged in, and no denial decision shall be based solely upon the fact that an arrest was made for any particular crime. An applicant household will be placed in Category 1, 2, 3, or 4 for further screening according to the highest category into which an occurrence of any listed criminal activity falls. Any second and subsequent occurrences in any one category will be placed in the next higher category. Any occurrence more than 10 years old will be placed in the next lower category. FURTHER SCREENING, BY CATEGORY: Category 1 - concerned. No further screening, applicant household admitted so far as criminal history is Category 2 - Applicant(s) will be asked for explanation of criminal activities. Denial of application by Housing Programs Manager/Housing Programs Assistant requires approval of supervisor. Category 3 - Applicant(s) will be asked for explanation and extensive evidence of rehabilitation, including but not limited to recommendations from social workers, parole or probation officers, treatment centers and others. Approval of application by Housing Programs Manager/Housing Programs Assistant requires approval of supervisor. Category 4- Admission denied. CRIMES LISTED BY CATEGORY: Category 1 MISDEMEANOR TRAFFIC OFFENSES Criminal driving while suspended Driving while under the influence of intoxicants CONTRACT FOR SUPPLEMENTAL LAW ENFORCEMENT SERVICES m PAGE 16 01/98 suplawen Failure to perform duties of driver when property damaged or person injured Reckless driving Catefforv 2 OFFENSES AGAINST PERSONS Assault, 4th degree Sexual abuse, 3rd degree OFFENSES AGAINST PROPERTY Criminal mischief, 3rd degree Criminal trespass, 2nd degree Deposit of trash within 100 yards of xvaters or in waters Negotiating a bad check Offensive littering Placing offensive substances in waters, on highways or property Theft, 3rd degree OFFENSES AGAINST PUBLIC ORDER Abuse of venerated objects Disorderly conduct Harassment Telephone harassment OFFENSES AGAINST PUBLIC HEALTH, DECENCY AND ANIMALS Animal abandonment Animal abuse, 1 st and 2nd degree Animal neglect, 1 st and 2nd degree Dog fighting Involvement in animal fighting Participation in dog fighting Cateeorv 3 OFFENSES AGAINST PERSONS Abandonment of a child Assault, 3rd degree Assaulting public safety officer Child neglect, 1st and 2nd degree Coercion Criminal mistreatment, 2nd degree Menacing Public indecency Rape, 2nd and 3rd degree Reckless Endangerment Sodomy, 2nd and 3rd degree Sexual abuse, 2nd degree Unlawful sexual penetration, 2nd degree CONTRACT FOR SUPPLEMENTAL LAW ENFORCEMENT SERVICES -- PAGE 17 01/98 suplawen OFFENSES AGAINST PROPERTY Burglary, 2nd degree Criminal mischief, 2nd degree Criminal trespass Criminal trespass while in possession of firearm Interfering with police animal Possession of burglar's tools Theft, 2nd degree Theft of services Unauthorized use of a vehicle OFFENSES INVOLVING FRAUD OR DECEPTION Criminal possession of a forged instrument, 1 st and 2nd degree Criminal possession of a forgery device Criminal simulation Forgery, 1 st and 2nd degree Fraudulently obtaining a signature Fraudulent use of a credit card OFFENSES AGAINST PUBLIC ORDER Abuse of corpse Interfering with public transportation Intimidation, 2nd degree OFFENSES INVOLVING FIREARMS AND OTHER WEAPONS Negligently wounding another Obliteration or change of identification number on firearm Pointing firearm at another Possession of firearm in public building Unlawful purchase of firearm OFFENSES AGAINST PUBLIC HEALTH, DECENCY AND ANIMALS Displaying obscene materials to minors Disseminating obscene material Exhibiting an obscene performance to a minor Frequenting a place where controlled substances are used Furnishing obscene materials to minors Prostitution Publicly displaying nudity or sex for advertising purposes Sadomasochistic abuse or sexual conduct in live show Sending obscene materials to minors Tampering with drug records CONTROLLED SUBSTANCES Illegally selling drug equipment Possession of controlled substance Unlawful delivery of imitation controlled substance. CONTRACT FOR SUPPLEMENTAL LAW ENFORCEMENT SERVICES -- PAGE 18 01198 suplawen WP stats 1 SUMMARY (Attachment E) BREMERTON POLICE DEPARTMENT QUARTERLY REPORT FOR WESTPARK QUARTER 19 Any change or lack of change in crime statistics: yes no Comments: PATROL RELATED STATISTICS FOR WESTPARK QUARTER 19~ ( 19 TO 19 ) AID CALLS (Includes first aid calls, suicide attempts, heart problems, falls) ASSAULTS DISPUTE, PHYSICAL (non-domestic) DISPUTE, VERBAL (non-domestic) DOMESTIC CALLS Broken down specifically as follows: Child Abuse Child Neglect copre.doc 12/17/97 4_7 WP stats 2 Custody Dispute Runaway Reports Verbal Dispute Physical Dispute FOLLOW-UP INVESTIGATIONS FOUND PROPERTY MALICIOUS MISCHIEF/VANDALISM MISSING PERSONS PROTECTIVE ORDER VIOLATIONS RESIDENT COMPLAINTS (Includes animal problems, noise complaints, harassment, parking problems, unwanted persons, disturbance, etc.) SEX OFFENSES Rape Indecent Exposure Miscellaneous SUBJECT WITH A GUN COMPLAINTS SUSPICIOUS PERSON (Includes prowler and suspicious person calls) LARCENY COMPLAINTS Robbery Burglary Auto Theft Other Thefts copre.doc 12/17/97 ¥¥ AGENDA BILL BREMERTON CITY COUNCIL 1, SUBJECT: ORDINANCE NO. AUTHORIZING THE ISSUE OF A $1,250,000 TAX ANTICIPATION NOTE AND ACCEPTING THE PURCHASE OFFER OF SEAFIRST BANK FOR AGENDA OF: Jan. 21,1998 ORIGINATING DEPT: Treasurer . /~) ORIGINATOR: R. Hat~"~ DATE SUBMITTED: Jan.13, 1998 2. CLEARANCES C~ment of bac, k if necessary) Dir. Admin. Seryices City Attorne~,,//~/~ Council Fiscal & ENDORSEMENTS .~ INFORMATION 3. EXHIBITS: Proposed Ordinance Preliminary Official Statement Cash Flow Projection Note Purchase Offer (at Council meeting) APPROVED BY COUNCIL PRESIDENT FOR SUBMIT 4, SUMMARY STATEMENT AND REQUIREMENT FOR COUNCIL ACTION: As indicated in the exhibits attached, the City's General Fund will run a cash deficit for several months during the year unless some form of cash flow financing is provided. Analysis indicates that a Tax Anticipation Note is the most advantageous method of providing the necessary cash flow financing. RECOMMENDATION: MOTION TO APPROVE ON FIRST READING ORDINANCE NO. MOTION TO PASS ON SECOND READING ORDINANCE NO. 9. RESPONSIBLE OFFICIAL: Treasurer ENFORCEMENT OFFICIAL: Mayor EXPIRATION DATE: Jan. 31, 1999 REVIEW DATE: N/A PULLED COUNCIL DIRECTIVE: TABLED 10. NOTICE OF ACTION APPROVED DISAPPROVED 11. AMENDED CLEARANCE COMMENTS: 5. IMPACT ON NON-PASSAGE: The City's General Fund will operate for much of the year with a negative cash balance which is contrary to state law. 6. IMPACT ON STAFFING. BUDGETS. FACILITIES. EQUIPMENT OR OTHER RESOURCES; Budgeted. RESEARCH SOURCES: Cash Flow Projections. Bond Counsel. Negotiations with underwriting bank. CITY OF BREMERTON, WASHINGTON ORDINANCE NO. AN ORDINANCE of the City of Bremerton, Washington, authorizing the issuance of $1,250,000 principal amount of tax anticipation notes for the purpose of paying City expenses pending the receipt of general City taxes; creating a note redemption fund; providing for the sale of those notes to BancAmerica ROBERTSON STEPHENS of Seattle, Washington. Approved: Passed: January __, 1998 January __, 1998 This document was prepared by: Foster Pepper & Shefelman PLLC 1111 Third Avenue, Suite 3400 Seattle, Washington 98101 (206) 447-4400 -4? CITY OF BREMERTON, WASHINGTON ORDINANCE NO. AN ORDINANCE of the City of Bremerton, Washington, authorizing the issuance of $1,250,000 principal amount of tax anticipation notes for the purpose of paying City expenses pending the receipt of general City taxes; creating a note redemption fund; providing for the sale of those notes to BancAmerica ROBERTSON STEPHENS of Seattle, Washington. WHEREAS, the City Council of the City of Bremerton, Washington (the "City"). f'mds that the periodic collections of sales, excise and general ad valorem taxes and other revenues in 1998 will not be sufficient to meet necessary City expenses as they are incurred in 1998, and that it is in the best interest of the City to contract short-term debt pursuant to chapter 39.50 RCW to pay those expenses pending receipt of taxes and other revenue collected by the City; NOW, THEREFORE, THE CITY OF BREMERTON DOES ORDAIN: Section 1. Debt Capacity_. The preliminary assessed valuation of the taxable property of the City as ascertained by the last preceding assessment for City purposes for the year 1997 for tax collection in the year 1998 is 1--$-} [$1,356,380,817,] and the City as ,,. [December 11, 1997, had {x~ [$9,899,710] of outstanding general indebtedness evidenced by limited tax general obligation bonds and notes {ead3[,1 tax anticipation notes [anti lease/purchase contrac, ts] incurred within the limit of up to 1-1/2% of the value of the taxable property within the City permitted for general municipal purposes without a vote of the qualified voters therein, and unlimited tax general obligation bonds in the principal amount of 1--$-} [$1,545,000] within the limit of up to 2-1/2% of the value of the taxable property within the City for general capital purposes issued pursuant to a vote of the qualified voters of the City, and the amount of indebtedness for which the notes are herein authorized to be issued is $1,250,000. The general indebtedness to be incurred shall be within the limit of up to 1-i/2% of the value of the taxable property within the City permitted for general municipal purposes without a vote of the qualified voters therein. Section 2. Note Fund; Authorization and Description of Notes. There is created in the office of the City Treasurer a special fund called the Tax Anticipation Note Fund, 1998 (the "Note Fund"). Pending the collection of sales, excise and general ad valorem property taxes levied for collection in 1998 and other revenues anticipated to be received in 1998, the City shall issue and sell its tax anticipation notes to be designated Tax Anticipation Notes, 1998 (the "Notes"), in the principal amount of $1,250,000. The Notes shall be dated February 1, 1998; shall mature on January 31, 1999; shall be in the denomination of $50,000 or any integral multiple thereof; shall be numbered separately in the manner and with any additional designation as the Note Registrar (collectively, the fiscal agencies of the State of Washington located in Seattle, Washington, and New York, New York) deems necessary for purposes of identification; and shall bear interest at the rate of % per annum (computed on the basis of a 360-day year of twelve 30-day months), payable at maturity. If any Note is not redeemed when properly presented at its maturity, then interest shall continue to accrue at the same rate from and after maturity until that Note, with interest, is paid in full or until sufficient money for such payment in full is on deposit in the Note Fund and the Note has been called for redemption. The City Council declares and finds that the f~xing of the above interest rate is in the best interests of the City. The Notes shall be general obligations of the City. The Notes shall not be subject to redemption prior to their maturity date. Section 3. Registration and Transfer of Notes. The Notes shall be issued only in registered form as to both principal and interest and shall be recorded on books or records maintained by the Note Registrar (the "Note Register"). The Note Register shall contain the 0318073.02 name and mailing address of the owner of each Note and the principal amount and number of each of the Notes held by each owner. Notes surrendered to the Note Registrar may be exchanged for Notes in any authorized denomination of an equal aggregate principal amount. Notes may be transferred only if endorsed in the manner provided thereon and surrendered to the Note Registrar. Any exchange or transfer shall be without cost to the owner or transferee. The Note Registrar shall not be obligated to exchange or transfer any Note during the 15 days preceding the maturity date. .[The Notes initially shall be registered in the name..of CEDE & CO., as .the,. nominee of~..The Depository, Trust Company, New York, New, York ("DTC"). The, No.t. es so registered shall be held in fully immobilizpd..form by DTC ~ depository, in accordance with the provisions of a Blanket Issuer Letter of Representations.. dated November 19, 1997, between the City and DTC (the "Letter of Repres,ent, ations"). Neither the, City nor the Note Registrar.shall have any responsibility or obligation to..DTC participants or the pers0n, s fqr whom they act as nominees with resgect to the Notes regarding accuracy of any records maintained by.. DTC or DTC participants, of any amount in respect of principal of or interest on the Notes, or any notice which is. permitted, or.required to be given to registered owners hereunder (except such notice as. is re, quired to be given by the Note Registrar. to m-c). For SO l. ong as any Notes are .held in fully immobilized fo. rm, DTC or its successor depository shal. 1 be deemed to. be the regiaered owner f. gr..all purposes hereunder and all references to registered owners, noteowners, noteh,01ders, or the like shall mean DTC or its nominees and shall not mean the owners,.of any heReficial interests in the Notes. Registered ownership of such Note.sT or any portions thereof, may not thereafter be ~ransferred except: (i) to any successor of DTC or its nominee, i..f that suc.cessor shall be qualifie.d unde.r any 0318073.02 -3- 5D applicable laws to provide the services proposed to be provided by itl (ii) to any substitute depository appointed by the City or such substitute depository's successor; or (iii) to any person if the Notes are no longer held in immobilized form. Upon the resignation of DTC or its successor (or any substitute depository or its successor) from its functions as depository, or a determination by the City, that it no longer wishes to continue the system of book entry transfers through DTC or its successor (or any substitute depository or its successor), the City may appoint a substitute depository. Any such substitute depository shall be qualified under any applicable laws to provide the services proposed to be provided bv it. If (i) DTC or its successor (or substitute depository or its successor) resigns from its functions as depository, and no substitute depository can be obtained, or (ii) the City determines that the Notes are to be in certificated form, the ownership of Notes may be tran.~ferred to any person as provided herein and the Notes no longer shall be held in fully immobilized form.J Section 4. Payment of Notes. Both principal of and interest on the rn~,.,4o~t,,,~..,.oj [Notes] shall be payable in lawful money of the United States of America upon presentation and surrender of the Notes by the registered owners at either of the principal offices of the -{q3on~ [Notel Registrar at the option of the owners. [Notwithstanding the fore~oin~, as lon~ as the Notes are registered in the name of DTC or its nominee, payment of principal of and shall be made in the manner set forth in the Letter of interest on the Notes Representations.J Section 5. Pledge of Taxes. The Notes shall be paid solely from the Note Fund. The City irrevocably pledges to budget and levy taxes within the constitutional and statutory tax limitations provided by law without a vote of the electors of the City on all of the taxable 0318073.02 -4- property in the City in an amount sufficient, together with other money legally available and to be used therefor, to pay the principal of and interest on the Notes at maturity. The City further irrevocably pledges to set aside and deposit into the Note Fund from such taxes and other money on or before the maturity date of the Notes an amount sufficient to pay, both principal and interest, and redeem the Notes on their maturity date. The full faith, credit and resources of the City are pledged irrevocably for the payment of the principal of and interest on the Notes. Section 6. Form and Execution of Notes. The Notes shall be printed, typed or multicopied on good bond paper in a form consistent with the provisions of this ordinance and state law, shall be signed by the manual or facsimile signature of the City Treasurer, and shall have the seal of the City or a facsimile reproduction thereof impressed or printed thereon. Only Notes bearing a Certificate of Authentication in the following form, manually signed by the Note Registrar, shall be valid or obligatory for any purpose or entitled to the benefits of this ordinance: CERTIFICATE OF AUTHENTICATION This Note is one of the fully registered City of Bremerton, Washington, Tax Anticipation Notes, 1998, described in the Note Ordinance. WASHINGTON STATE FISCAL AGENCY {-Bend-} [Note] Registrar By Authorized Signer The authorized signing of a Certificate of Authentication shall be conclusive evidence that the Notes so authenticated have been duly executed, authenticated and delivered and are entitled to the benefits of this ordinance. 0318073.02 If any officer whose facsimile signature appears on the Notes ceases to be an officer of the City authorized to sign notes before the Notes bearing his or her facsimile signature are delivered or issued by the City, those Notes nevertheless may be issued and delivered and, when issued and delivered, shall be as binding on the City as though that person had continued to be an officer of the City authorized to sign notes. Any Note also may be signed on behalf of the City by any person who, on the actual date of signing of the Note, is an officer of the City authorized to sign bonds, although he or she did not hold the required office on the date of issuance of the Notes. Section 7. Note Registrar. The Note Registrar shall keep, or cause to be kept, at its principal corporate trust office, sufficient books for the registration and transfer of the Notes, which shall be open to inspection by the City at all times. The Note Registrar is authorized, on behalf of the City, to authenticate and deliver Notes transferred or exchanged in accordance with the provisions of the Notes and this ordinance, to serve as the City's paying agent for the Notes and to carry out all of the Note Registrar's powers and duties under this ordinance and City Ordinance No. 3862 establishing a system of registration for the City's bonds and obligations. The Note Registrar shall be responsible for its representations contained in the Note Registrar's Certificate of Authentication on the N°tes. The Note Registrar may become the owner of Notes with the same rights it would have if it were not the Note Registrar and, to the extent permitted by law, may act as depository for and permit any of its officers or directors to act as members of, or in any other capacity with respect to, any committee formed to protect the rights of Note owners. Section 8. Notes Negotiable. The Notes shall be negotiable instruments to the extent provided by RCW 62A. 8-102 and 62A.8-105. 0318073.02 -6- -5'5 Section 9. Use of Proceeds. The principal proceeds received from the sale 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 in the Note Fund. Any proceeds resulting from authorized temporary investments of money on deposit in the Note Fund or such investment proceeds of any of the 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. Accrued interest on the Notes received from the sale and delivery of the Notes shall be paid into the Note Fund. .Section 10. Permitted Financine of Cumulative Cash Flow Deficit. Based upon the reasonably expected amounts of sales, excise and general ad valorem property taxes and other revenues to be collected in 1998 (including investment proceeds of the Notes) and that are expected to be available to make General Fund expenditures in 1998 (computed by treating a reasonable 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 1998 and that is to be financed with proceeds of the Notes. Section 11. Preservation of Tax Exemption of Interest on Notes. The City covenants that it will take all actions necessary to prevent interest on the Notes from being included in gross income for federal income tax purposes, and it will neither take any action nor make or permit any use of proceeds of the Notes or other funds of the City treated as proceeds of the 0318073.02 -7- E~ Notes 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. {-~Section 12. Small Governmental Issuer Arbitrage Rebate Exception and Designation of Notes as "Qualified Tax-Exempt Oblitations." The City f'mds and declares that (a) it is a duly organized and existing governmental unit of the State of Washington and has general taxing power; (10) no Note which is part of this issue of Notes is a "private activity bond" within the meaning of Section 141 of the Code; (c) at least 95% of the net proceeds of the Notes will be used for local governmental activities of the City (or of a governmental unit the jurisdiction of which is entirely within the jurisdiction of the City); (d) the aggregate face amount of all tax-exempt obligations (other than private activity bonds and other obligations not required to be included in such calculation) issued by the City and all entities subordinate to the City (including any entity which the City controls, which derives its authority to issue tax-exempt obligations from the City or which issues tax-exempt obligations on behalf of the City) during the calendar year in which the Notes are issued is not reasonably expected to exceed $5,000,000; and (e) the amount of tax-exempt obligations, including the Notes, designated by the City as "qualified tax-exempt obligations" for the purposes of Section 265(10)(3) of the Code during the calendar year in which the Notes are issued does not exceed $10,000,000. The City therefore certifies that the Notes are eligible for the arbitrage rebate exemption under Section 148(f)(4)(D) of the Code and designates the Notes as "qualified tax-exempt obligations" for the purposes of Section 265(lo)(3) of the Code.{-] 0318073.02 Section 13. Undertaking to Provide Continuing Disclosure. To meet the requirements of paragraph (b)(5) of United States Securities and Exchange Commission ("SEC") Rule 15c2-12 (the "Rule"), to the extent applicable to an issue of municipal securities with a stated maturity of 18 months or less under paragraph (d)(3) of the Rule, as applicable to a participating underwriter for the Notes, the City makes the following written undertaking (the "Undertaking") for the benefit of holders of the Notes: (a) Undertaking to Provide Notice of Material Events. The City undertakes to provide or cause to be provided, either directly or through a designated agent, to each nationally recognized municipal securities information repository designated by the SEC in accordance with the Rule ("NRMSIR") or the Municipal Securities Rulemaking Board ("MSRB"), and to a state information depository, if any, established in the state of Washington (the "SID"), timely notice of the occurrence of any of the following events with respect to the Notes, if material: (i) principal and interest payment delinquencies; (ii) non-payment related defaults; (iii) unscheduled draws on debt service reserves reflecting financial difficulties; (iv) unscheduled draws on credit enhancements reflecting financial difficulties; (v) substitution of credit or liquidity providers, or their failure to perform; (vi) adverse tax opinions or events affecting the tax-exempt status of the Notes; (vii) modifications to rights of holders of the Notes; (viii) Note calls; (ix) defeasances; (x) release, substitution, or sale of property securing repayment of the Notes; and (xi) rating changes. (b) Amendment of Undertaking. The Undertaking is subject to amendment after the primary offering of the Notes without the consent of any holder of any Note, or of any broker, dealer, municipal securities dealer, participating underwriter, rating agency, NRMSIR, the SID or the MSRB, under the circumstances and in the manner permitted by the rule. The City will give notice to each NRMSIR or the MSRB, and the SID, of the substance (or provide a copy) of any amendment to the Undertaking and a brief statement of the reasons for the amendment. (c) Beneficiaries. The Undertaking evidenced by this Section 13 shall inure to the benefit of the City and any holder of Notes, and shall not inure to the benefit of or create any rights in any other person. (d) Termination of Undertaking. The City's obligations under this Undertaking shall terminate upon the legal defeasance of all of the Notes. In addition, the City's obligations under this Undertaking shall terminate if those provisions of the Rule which require the City to comply with this Undertaking become legally inapplicable in respect of the Notes for any reason, as confn'med 0318073.02 -9- by an opinion of nationally recognized bond counsel or other counsel familiar with federal securities laws delivered to the City, and the City provides timely notice of such termination to each NRMSIR or the MSRB and the SID. (e) Remedy for Failure to Comply with Undertaking. As soon as practicable after the City learns of any failure to comply with the Undertaking, the City will proceed with due diligence to cause such noncompliance to be corrected. No failure by the City or other obligated person to comply with the Undertaking shall constitute a default in respect of the Notes. The sole remedy of any holder of a Note shall be to take such actions as that holder deems necessary, including seeking an order of specific performance from an appropriate court, to compel the City or other obligated person to comply with the Undertaking. (f) Designation of Official Responsible to Administer Undertaking. The Treasurer of the City or his or her designee (or such other officer of the City who may in the future perform the duties of the City Treasurer) is authorized and directed in his or her discretion to take such further actions as may be necessary, appropriate or convenient to carry out the Undertaking of the City in respect of the Notes set forth in this Section 13 and in accordance with the Rule, including, without limitation, the following actions: (i) Determining whether any event specified in Section 13(a) has occurred, assessing its materiality with respect to the Notes, and, if material, preparing and disseminating notice of its occurrence; (ii) Determining whether any person other than the City is an "obligated person" within the meaning of the Rule with respect to the Notes, and obtaining from such person an undertaking to provide any notice of material events for that person in accordance with the Rule; (iii) Selecting, engaging and compensating designated agents and consultants, including but not limited to financial advisors and legal counsel, to assist and advise the City in carrying out the Undertaking; and (iv) Effecting any necessary amendment of the Undertaking. Section 14. Approval of Note Purchase Contract. BancAmerica ROBERTSON STEPHENS of Seattle, Washington, has presented a purchase cOntract (the "Note Purchase Contract") to the City offering to purchase the Notes under the terms and conditions provided in the Note Purchase Contract, which written Note Purchase Contract is on file with the City Clerk and is incorporated herein by this reference. The City Council finds that entering into the 0318073.02 Note Purchase Contract is in the City's best interest and therefore accepts the offer contained therein and authorizes its execution by City officials. The Notes will be prepared at City expense and will be delivered to the purchaser in accordance with the Note Purchase Contract, with the approving legal opinion of Foster Pepper & Shefelman, municipal bond counsel of Seattle, Washington. Bond counsel shall not be required to review and shall express no opinion concerning the completeness or accuracy of any official statement, offering circular or other sales or disclosure material issued or used in connection with the Notes, and bond counsel's opinion shall so state. The proper City officials are authorized and directed to do everything necessary for the prompt delivery of the Notes to the purchaser and for the proper application and use of the proceeds of the sale thereof. Section 15. Preliminary Official Statement Deemed Final. The City Council has been provided with copies of a preliminary official statement dated January __, 1998 (the "Preliminary Official Statement"), prepared in connection with the sale of the Notes. For the sole purpose of the purchaser's compliance with SEC Rule 15c2-12(b)(1), the City "deems final" that Preliminary Official Statement as of its date, except for the omission of information as to offering price, interest rate, selling compensation, delivery date and other terms of the Notes dependent on such matters. Section 16. Effective Date. This ordinance shall take effect ten (10) days after its passage and publication. APPROVED by the City Council of the City of Bremerton, Washington, this January, 1998. PASSED by the City Council of the City of Bremerton, Washington, this ~ January, 1998. day of day of 0318073.02 APPROVED this __ day of January, 1998. DAVID FARR, Council President ATTEST: LYNN HORTON, Mayor KATHLEEN McCLUSKEY, City Clerk APPROVED AS TO FORM: George M. Mack, Bond Counsel Publication Date: Ordinance Number: 0318073.02 -12- I, KATHLEEN L. McCLUSKEY, City Clerk of the City of Bremerton, Washington, certify that the attached copy of Ordinance No. ~ is a true and correct copy of the original ordinance passed on the __ Book of the City. DATED this __ day of January, 1998. day of January, 1998, as that ordinance appears on the Minute Kathleen L. McCluskey City Clerk 0318073.02 PRELIMII~ARY OFFICIAL STATEMENT DATED JANUAR~'__, 1998 BOOK-ENTRY ONLY NEW ISSUE RATING: Not Applied For NEGOTIATED In the opinion of Bond Counsel, assuming compliance by the City with applicable requirements of the Internal Revenue Code of I986, as amended, including ad3itrage requirements, interest on the Notes is excluded from gross income of registered owners for federal income tax purposes under existing federal law and is not an item of tax preference for purposes of the alternative minimum tax applicable to individuals. However, while interest on the Notes also is not an item of tax preference for purposes of the alternative minimum tax applicable to corporations, interest on the Notes received by corporations is taken into account in the computation of adjusted current earnings for purposes of the alternative minimum tax applicable to corporations, interest on the Notes received by certain S corporations may be subject to tax and interest on the Notes received by foreign corporations with United States branches may be subject to a foreign branch profits tax. Receipt of interest on the Notes may have other federal tax consequences for certain taxpayers. See the captions "TAX EXEMPTION' and "CERTAIN OTHER FEDERAL TAX CONSEQUENCES' herein. CITY OF BREMERTON, WASHINGTON $1,25O,0OO X ANTICIPATION NOTES, 1998 DATED: February 1, 1998 DUE: January 31,1999 The City's Tax Anticipation Notes, 1998 (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"). 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." Due Amount Rate January 31, 1999 $1,250,000 % Price The Notes will not be subject to redemption prior to their stated maturity. The Notes are direct and general obligations of the City. The City irrevocably pledges to budget and levy taxes within the constitutional and statutory limitations provided by law without a vote of the electors of the City on all of the taxable property in the City in an amount sufficient, together with other money legally available and to be used therefor, to pay the principal of and interest on the Notes at maturity. The City further irrevocably pledges to set aside and deposit in to the Note Fund from such taxes and other money on or before the maturity date of the Notes an amount sufficient to pay, both principal and interest, and redeem the Notes on their maturity date. The full faith, credit and resources of the City are pledged irrevocably for the payment of the principal of and interest on the Notes. See "SECURITY" herein. The City has designated the Notes as "qualified tax-exempt obligations" for banks, thrift institutions and other financial institutions. See "CERTAIN OTHER FEDERAL TAX CONSEQUENCES" herein. The approving legal opinion of Foster Pepper & Shefelman PLLC, Bond Counsel, Seattle, Washington, will be delivered with the Notes. The Notes in definitive book-entry form will be ready for delivery at the facilities of DTC in New York, New York, on or around February __, 1998. 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. BancAmerica ROBERTSON STEPHENS 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 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 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 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 Official Statement and nothing contained in this Official Statement is or shall be relied upon as a promise or representation by the Underwriter. The delivery of this Official Statement does not imply that the information contained herein is correct as of any time subsequent to the date of the 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 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 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 other,vise 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)(1) but is subject to revision, amendment and completion in a final Official Statement that will be available within seven (7) business days of the sale date of the Notes. CITY OF BREMERTON KITSAP COUNTY, WASHINGTON Lynn Horton David Farr John Law ~uff-Menees Cecil McConnell Carlos Montgomery ~hard Neville Lon Overson ........R-ob:e~rt Winters MAYOR CITY COUNCIL Chairperson Member Member Member Member Member Member Member Member Term Expires December 31 1999 ....1-9-97--- .-1-997--' 1999 1999 ....4-997 1999 Richard Hanna Kathleen McCluskey APPOINTED OFFICIALS Treasurer Administrative Services Director/City Clerk Attorney NOTE COUNSEL Foster Pepper & Shefelman PLLC Seattle, Washington UNDERWRITER BancAmerica ROBERTSON STEPHENS Seattle, Washington 111 TABLE OF CONTENTS Page Introduction ........................................................................................................................... 1 Description of thc Notes ....................................................................................................... 1 Authorization ........................................................................................................................ 3 security .................................................................................................................................. 3 Purpose .................................................................................................................................. 4 Note Fund .............................................................................................................................. 4 Failure to Redeem the Notes ................................................................................................. 4 Debt Payment Record ........................................................................................................... 4 Future Financing ................................................................................................................... 4 Assessed Valuation Determination ....................................................................................... 4 Tax Collection Procedure ...................................................................................................... 5 Authorization of Debt ........................................................................................................... 5 General Obligation Indebtedness .......................................................................................... 5 Limits on Amount of General Obligation Indebtedness ....................................................... 6 Authorization of Short-Term Debt ........................................................................................ 6 Taxing Powers and Limitations ............................................................................................ 7 Auditing of City Finances ..................................................................................................... 7 Authorized Investments ........................................................................................................ 7 Net Direct Debt and Estimated Net Overlapping General Obligation Debt ......................... 9 Noted Debt Ratios of the City ............................................................................................... 9 Statutory Debt Limit Calculation .......................................................................................... 10 Ad Valorem Tax Collection Record of the City .................................................................. 11 Ad Valorem Property Tax Rates 1 ......................................................................................... 11 Comparative Statement of General Fund .............................................................................. 12 Contingency Reserve fund .................................................................................................... 12 Year-End Balances ................................................................................................................ 12 General Fund Budget ............................................................................................................ 13 City Profile ............................................................................................................................ 14 Schedule of General Obligation Note Debt Service for the City .......................................... 15 General and Economic information ...................................................................................... 16 Kitsap County Population .................................................................................................... 19 Taxable Retail Sales ............................................................................................................. 19 City Of Bremerton Major Taxpayers .................................................................................... 19 Seattle-Bremerton Ferry Traffic Statistics ........................................................................... 20 Kitsap County And Washington State .................................................................................. 20 Kitsap County And Washington State .................................................................................. 20 Preservation of Tax Exemptior~ ............................................................................................. 20 Conflicts of Interest .......... : .................................................................................................... 21 Tax Exemption ...................................................................................................................... 2 l Certain Other Federal Tax Consequences ............................................................................. 22 Absence of Material Litigation .................................................................. i .......................... 22 Approval of Bond Counsel ................................................................................................... 23 Continuing Disclosure ........................................................................................................... 23 Underwriting ......................................................................................................................... 24 Concluding Statement ........................................................................................................... 24 Form of Legal Opinion ....................................................................................... Appendix A PRELIMINARY OFFICIAL STATEMENT CITY OF BREMERTON, WASHINGTON $1,250,000 TAX ANTICIPATION NOTES, 1998 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, 1998 (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, 1998 until their stated maturity. The Notes will mature on January 3 I, 1999, 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 30-day months. Optional Redemption The City has not reserved the right to redeem the Notes prior to maturity. 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 within a single maturity. 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. 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 Paying Agent of the City 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 each maturity of the Notes, in the aggregate principal amount of such maturity, 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 cleann, 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. 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 Fiscal Agent, 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 Fiscal Agent. Disbursement of such payments to Direct Participants will be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners will be the responsibility of Direct and Indirect Participants. 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 Fiscal Agent. 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 $5,000 or any integral multiple thereof. Thereafter, the principal of the Notes will be payable upon due presentment and surrender thereof at the principal office of the Note Registrar; interest on the Notes will be payable by check or draft mailed or by wire transfer (wire transfer will be made only if so requested in writing and if the registered owner owns at least $1,000,000 par value of the Notes), to the persons in whose names such Notes are registered, at the address appearing upon the registration books on the 15th day of the month next preceding an interest payment date, and the Notes will be transferable as provided in the Note Ordinance. 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 January __, 1998. SECURITY The City irrevocably pledges to budget and levy taxes within the constitutional and statutory limitations provided by law without a vote of the electors of the City on all of the taxable property in the City in an amount sufficient, together with other money legally available and to be used therefor, to pay the principal of and interest on the Notes at maturity. The City further irrevocably pledges to set aside and deposit in to the Note Fund from such taxes and other money on or before the maturity date of the Notes an amount sufficient to pay, both principal and interest, and redeem the Notes on their maturity date. The full faith, credit and resources of the City are pledged irrevocably for the payment of the principal of and interest on the Notes. 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 1998, 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, 1998 (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. The City covenants to deposit in the Note Fund on or before maturity amounts sufficient, together with other monies otherwise available therein, to pay the principal of and interest due on the Notes. FAILURE TO REDEEM THE NOTES If any Note is not redeemed 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. 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 1994 Limited Tax General Obligation Bonds for development of the Gold Mountain Golf Course with revenue Notes sometime in 1998. ASSESSED VALUATION DETERMINATION In the State of Washington, the County Assessor (the "Assessor") determines the value of all real and personal 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 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 5? 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 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 6 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 (Chapter 84.55.010 RCW). The limitation provides that the regular property taxes payable in the following year shall not exceed 106% of the amount of the single highest regular levy amount lawfully levied by the municipal entity in the three immediately preceding calendar years plus an additional amount due to the incremental assessed valuation ~ncrease ~n the municipal entity caused by new construction and property improvements. The regular property taxes levied by a city may be increased above the 106% limitation upon the affirmative vote of a majority of the voters residing in the municipal entity at an election held for such purposes (Chapter 84.55.050 RCW). On November 4, 1997, voters approved a state-wide referendum, which limits a municipality's tax levy to an amount of 100% of the highest property tax levy of the three most recent years multiplied by a limit factor. The limit factor is defined in the Property Tax Act as (i) the lesser of 106% or 100% plus inflation, or (ii) 106% or less, if approved by a majority plus one vote of the governing body of the municipality upon a finding of substantial need. This limit is being imposed beginning with collection year 1998. 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 in 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 7 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 improvement 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 LGIP 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, repurchase and reverse repurchase 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 December 31, 1997) Direct Debt: Voted General Obligation Bonds Outstanding ...................... Non-Voted Bonds Outstanding .............................................. Non-Voted General Obligation Tax Anticipation Notes (this issue) ......................................................................... Bank Line of Credit Outstanding ........................................... Less: Debt Service Fund Balance ........................................... Net Direct Debt ......................................................................... 1,250,000 8,210 Estimated Net Overlapping Debt: Net G.O. Debt Percent of Amount of Outstanding Overlap Overlap Kitsap County Port of Bremerton Bremerton Sch. Dist. No. 100-C Central Kitsap Sch. Dist. No. 401 South Kitsap Sch. Dist. No. 402 $ 4.11% $ 25.66 73.96 1.12 .05 Estimated Net Overlapping Debt: .......................................... $ Net Direct Plus Estimated Net Overlapping Debt: ......................................... $ NOTEED DEBT RATIOS OF THE CITY Preliminary Assessed Valuation for collection Year 19982 .......................... $ 1,345,904,065 Estimated City Population (1997)3 ............................................................... 39,510 Assessed Valuation Per Capita .................................................................... $ 34,065 Net Direct Debt to Assessed Valuation .......................................................... % Net Direct and Estimated Overlapping Debt to Assessed Valuation ........... % Net Direct Debt Per Capita .......................................................................... $ Net Direct and Estimated Overlapping Debt Per Capita .............................. $ I Adjusted to reflect the issuance of the Notes. 2 Preliminary assessed valuation for tax collection year 1998 is stated as the full assessed value of all taxable real and personal property in the City. 3 Source: Washington State Office of Financial Management (August 1997). STATUTORY DEBT LIMIT CALCULATION (As of December 31, 1997)1 Preliminary Taxable 1997 Assessed Valuation for Collection Year 1998 ............. I. General Purposes a. Non-Voted Indebtedness (1.5% of Valuation) Limit ..................................................................................................... Less: Non-Voted Bonds Outstanding ............................................... Less: Non-Voted Notes Outstanding (the Notes) ............................. Less: Bank Line of Credit Outstanding ............................................. Plus: Cash and Investments in Debt Service Funds .......................... Remaining Capacity for General Purposes (Nonvoted) .............. b. Voted Indebtedness (2.5% of Valuation) Limit ........... : ......................................................................................... Less: Voted Bonds Outstanding ........................................................ Less: Non-Voted Bonds Outstanding ............................................... Less: Non-Voted Notes Outstanding (the Notes) ............................. Less: Bank Line of Credit Outstanding ............................................. Plus: Cash and Investments in Debt Service Funds .......................... Remaining Capacity for General Purposes (Voted) .................... II. Utility Purposes (2.5% of Valuation) Limit ..................................................................................................... Outstanding .......................................................................................... Remaining Capacity for Utility Purposes ................................... III. Parks and Open Space Purposes (2.5% of Valuation) Limit ..................................................................................................... Outstanding .......................................................................................... Remaining Capacity for Parks and Open Space Purposes .......... $1,345,904,065 $ 20,188,561 (1,250,000) (8,210) $ $ 33,647,602 (1,250,000) (8,210) $ 33,647,602 0 $ 33,647,602 $ 33,647,602 0 $ 33,647,602 Adjusted to reflect the issuance of the Notes. 10 Collection Y~ar 1998 1997 1996 1995 1994 1993 1992 NOTE: AD VALOREM TAX COLLECTION RECORD OF THE CITY I Taxable /YCollected Assessed Tax ~ Year of Levy Valuation2 Levy J AmQunt Percent 1,345,904,0653 N/A4/ N/A4 N/A4 1,299,548,001 t'- 1,223,940,521 $ 4,681,638 $4,478,455 95.66% 1,203,29%197 4,476,487 4,247,668 94.88% 1,169,824,600 4,144,873 3,973,275 95.86 1,072,545,656 4,292,888 4,1 I0,011 95.74 Collected as of December 31, 1997 AmQunt Percent N/A4 N/A4 949,107,196 3,544,019 3,397,651 95.87 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 RATES1 (Rates In Dollars per $1,000 of Assessed Valuation) City School Emergency Levy General City City State Kitsap Port of Dist. No. Medical Regional Year Fund Not~ Soecial School CountyBremert9n 100C PUD Services Literary Tqtal 1997 $3.3469 $.2153 $ 0 $3.6467 $1.6641 $.4338 $5.1331 $.0998 $.2500 $.9781 $15.7678 1996 3.3573 .2255 0 3.4848 1.6347 .4287 5.1551 .0939 .2500 .4677 15.0977 1995 3.2470 .2308 0 3.5508 1.2249 .4079 2.1387 .0940 .2500 .4595 11.6036 1994 3.0635 .2393 0 3.4297 1.1731 .3897 5.0440 .0865 .2490 .4447 14.1210 1993 3.0871 .2543 .4339 3.3978 1.2383 .3955 5.2311 .0904 .2500 .4283 14.8067 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 Preliminary, subject to change 4 Not available; to be collected COMPARATIVE STATEMENT OF GENERAL FUND REVENUES AND EXPENDITURES ~ (FISCAL YEAR ENDING DECEMBER 31) 1996 1995 1994 1993 1992 Revenues: Taxes $15,498,917 $14,501.567 $14,137,828 $13,340,322 $12,254.300 Licenses & Permits 312,203 298.989 390,454 362,968 367.369 Intergovernmental 742,432 847,272 728,407 778,927 1,199,015 Charges for Services 1,864,848 1,783,646 1,394,815 1,502,067 1,265,887 Fines & Forfeits 433,775 483,964 593,093 556,447 579,071 Miscellaneous 342,700 248.743 240.672 261.198 295.810 Total Revenues 19,194,875 $18,164,181 $17,485,269 $16,801,929 $15,961,452 Expenditures: General Government $5,313,516 $5,009,311 $4,843,656 $5,039,485 $4,702,330 Security of Persons & Prop. 9,3 ] 3,570 8,6 [ 4,262 8,219,945 7,850,957 7,326,703 Physical Environment 942,764 848,346 587,931 698,08i0 655,845 Transportation 959,327 850,639 840,530 879,838 805,809 Economic Environment 276,689 454,250 514,320 448,824 352,504 Mental & Physical Health 30,818 264,239 250,493 249,239 236,594 Culture & Recreation 1.867,204 1,566,669 1,426,763 1,323,285 1,178,13 l Redemption of Gen. L.T. 0 0 24,672 30,735 28,393 Debt Debt Service 85,540 59,860 44,593 18,414 125,479 Capital Outlay 404.888 486.0Q~ 385.414 277.113 228.162 Total Expenditures $19,194,316 $18,153,581 $17,138,317 $16,815,970 $15,639.950 Other Financing Sources (Uses) Operating Transfers In $196,671 $6.000 $6.000 $6,000 Operating Transfers Out (357,180) (307,836) (398,376) (236,725) General Fixed Assets Disposa! 36,67 ! 2,886 59,640 0 Proceeds & General L.T. Debt 237.700 Total Other Financing Sources (Uses) $113,916 $(298,950) $(323.736) $(230,725) $6,000 (334,764) ,893 0 $326,87 Fund Balance, January 1 $709,671 $1,064,368 $(44,548) $206.399 $217,464 Prior Year's Corrections 0 0 0 0 0 Residual Equity Transfers 6,435 (65,128) 9,717 (6,108) (1,545) Other Equity Changes 30.554 ( 1,219) 1.084.983 (7)) (4.149) TOTAL ENDING FUND $860.576 $709,671 $1,064,368 $(44,548) $206.401 BALANCE CONTINGENCY RESERVE FUND YEAR-END BALANCES~,2 Ending Fund Balance 1996 1995 1994 1993 1992 $673,110 $709,040 $704,922 $387,205 $360,523 Source: City of Bremerton Annual Financial Reports. All years have been audited by the Washington State Auditor's Office. Money in this fund in excess of $650,000 is transferred to the General Fund to finance capital purchases. 12 GENERAL FUND BUDGET FOR 1997 AND 19981 (Fiscal Year Ending December 31 ) REVENUES Beginning Fund Balance .......................... ~ ............................. $ Taxes ...................................................................................... Licenses and Permits .............................................................. Intergovernmental Revenue ................................................... Charges for Services ............................................................... Fines and Forfeitures .............................................................. Miscellaneous and Other ........................................................ Total Revenue ............................................................................ $ 1997 458,500 15,778,000 342,625 666,098 1,634,794 430,361 2,964,095 22,274,473 EXPENDITURES General Government City Council ........................................................................... $ Executive ................................................................................ Administrative Services2 ....................................................... Police & Fire Pension ..................................................... Intergovernmental Service .............................................. Misc. Non-Departmental ................................................ Legal Department ................................................................... Human Resources ................................................................... Community Development ...................................................... City Auditor ........................................................................... Public Safety Police Department .................................................................. Fire Department ..................................................................... Public Works General Facilities ................................................................... Engineering ............................................................................ Transportation ........................................................................ Leisure Services General Parks ......................................................................... Recreation ............................................................................... Senior Center .......................................................................... Pool ......................................................................................... Cemetery Services .................................................................. Athletics ................................................................................. Tax Anticipation Note Debt Service ...................................... Total Current Expenditures ................................................... $ 146,675 204,162 1,915,763 1,315,057 110,986 1,349,771 460,133 222,867 700,189 84,983 5,793,222 3,571,381 454,908 466,986 977,105 1,026,162 198,462 154,625 264,694 69,938 286,404 2.500.000 22,274,473 Source: City of Bremerton. City Clerk, Treasurer and Information Services are combined under Administrative Services. 13 1998 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. Kev Personnel Lynn Horton, Mayor: Ms. Horton began her first term as Mayor of the City in 1994. 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. 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; 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 Teamsters Local 589 130 Patrolman's Association 53 Police Management Association 5 International Association of 44 Fire Fighters Local 437 Contract Period Expiration Date 3 yr. ~.~7 ~ \ 2 yr. 12/31/961 3 yr. 12/31/99 3 yr. 12/31/98 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. Under negotiation 14 SCHEDULE OF GENERAL OBLIGATION BOND DEBT SERVICE FOR THE CITY~ (As of December 31, 1997) Outstanding Voted General Obligation Bonds Non-Voted General Obligation Bonds Total Year Principal Interest Principal Interest All Bonds 1998 . $ 230,000 $ 53,871 $ 428,769 $ 518,715 $1,231,355 1999 220,000 58,561 452,391 496,105 1,227,057 2000 170,000 48,352 480,758 471,815 I, 170,925 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 16,308 810,000 317,252 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 20 ! 1 0 0 335,000 37,017 372,017 2012 0 0 275.000 15.537 290.537 Total $1,625,000 $ 424,014 $ 8,551,918 $ 3,933,699 $14,534,631 Does not include the Notes. 15 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 1997 population of 39,510. Kitsap County, covering 393 square miles of land, also includes the following other incorporated areas: Bainbridge Island (1997 population 18,920), Port Orchard (1997 population 6,965) and Poulsbo (1997 population 6,175). 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 9,002 civilian employees, 10,219 military personnel, and 12,500 military family members, thc shipyard is also the only facility capable of decommissioning and recycling nuclear submarines which are being disassembled in accordance with Strategic Arms Limitations Treaties. The shipyard is the largest naval employer in the State. The economic impact of PSNS locally is $700 million per year. The Naval Supply Center is another local military facility in the City, with about 200 employees. The addition of two admirals to PSNS in 1997 reflects the Navy's commitment to the area. Puget Sound is now the third largest Navy fleet concentration in the U.S. 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 5,500 military personnel. Another 10,000 military family members are connected to the base. As the only operational base of its kind on the Pacific Coast, Bangor is considered to be very important to the country by the Department of Defense. 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 1,950 civilian,'150 military and 200 military family members are local residents. Recent base closures in other geographic regions outside of Washington have had a positive impact on growth in the City and Kitsap County. PSNS is the new home of the Carrier Group Three staff with 70 additional personnel and the USS Bridge AOE (10) with an additional 650 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 Among the larger planned Navy Construction projects over the next five years in Kitsap County are the following: Fiscal Project Location Estimated Value Range Year ($Million) 1998 1999 2000 2001 2002 Utility Monitor and Control System Child Development Center W/S Housing Revitalization Keyport W/S Housing OlallaJJP Security Upgrade (SWFPAC) Naval Hospital Addition Motor Transfer FACMODS U&SI (SWFPAC) RB Magazine Modifications (SWFPAC) Servmart QAO Facility Dredging Piers 3B&3D Kitchens/Baths, Phase V (Housing) W/S Revitalization Community Support Facility Oily Wastewater Collection Hazardous Waste Storage Pier Delta Expansion Ammunition Wharf (SWFPAC) Shore Power (TRF) Waterfront Shops (TRF) Waterfront Service Supply Bldg. W/S Revitalization FY75 Phase II Keyport 0-1 PSNS 1-5 Bangor 1-5 PSNS 5-10 Bangor 1-5 Bremerton 10+ Bangor 0-1 Bangor 1-5 Bangor 1-5 FISC 1-5 PSNS 5-10 PSNS 5-10 Bangor 5-10 Jackson Park 5-10 PSNS 1-5 PSNS 5-10 PSNS 5-10 PSNS 10+ Bangor 0-1 Bangor 1-5 Bangor 1-5 PSNS 1-5 Jackson Park 5-10 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 22 firms which employ a total of approximately 500 people. The Port has recently been designated a foreign trade zone, which is expected to enhance international trade locally. Several companies are undergoing expansion near or adjacent to the Bremerton National Airport, including an aircraft parts recycling company, and an electro-mechanical products manufacturer, which would employ up to 65 people within five years. Bremerton National Airport is the largest airport in the County, with a 6,200-foot runway and full instrumentation and lighting systems. The airport can handle all general aviation aircraft 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 airport is currently undergoing improvements. Health care needs are met by several facilities in the Bremerton area including the Naval Hospital - Bremerton with 380 civilian, 750 military and 2,500 military family members. Harrison Memorial Hospital in Bremerton has 1,300 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. 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. 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. 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. New Developments Among the projects recently completed or proposed for development in Bremerton are the following: · Development of the first phase of a Planned Unit Development, Sinclair Landing, will soon begin on the 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 80-room inn, a six-plex cinema and multi-family housing, all connected with pedestrian corridors. The majority of the project is expected to take three years to complete and will include private investment of over $150 million. The transportation center will constitute the first element of the project to be constructed. A new ferry terminal, new dock for two new passenger-only ferries and adjacent transit center will be constructed with funding from Kitsap Transit Authority and the Washington State Department of Transportation ("DOT"). Construction is expected to begin by the end of 1997. · The Port of Bremerton is developing a 128-acre light industrial business complex known as West Puget Tech Park. The first phase of the project includes the construction of a 30,000 square-foot incubator building on 2.45 acres with infrastructure. Potential employment is 85 to 100 people for this phase. The remainder of the park is intended to be developed over a 10-year period, on a demand basis. · A Downtown Revitalization Task Force has been formed in Bremerton as a volunteer group of downtown business and government representatives and interested citizens. Its purpose is to improve the appearance of and bring new business and art concerns to the area. Projects to date include flower barrels, relocation of the Kitsap Historical Museum to downtown Bremerton, an adopt-a-block program, local concerts and festivals. · 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 is expected to be submitted to the City for permit review soon. · The Kitsap County Economic Development Council (EDC) has begun a five-year program to recruit 2,001 new primary jobs in Kitsap County, in a major effort to diversity the local economy. It is expected that at least 2,400 new secondary jobs will result from this campaign, and will generate more than $80 million a year to the local economy. Known as "Business Connection 2001", this campaign is being patterned after other successful programs undertaken in communities throughout the state. The EDC's program began in 1997 with solicitation of funds needed to attract new businesses. · Other new developments in the City include the $3 million renovation of the historic Admiral Theater, a new art gallery, computer game store and restaurant, all in the downtown area. · The Doctors Clinic, a regional health care provider, recently relocated its headquarters and 70 of its employees from various sites to an existing downtown office building. · A permit application has been received by the City for the development of a 34-unit Alzheimer's care facility on a 2.4-acre site. · 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. Following are economic indicators of the City and the County. City of Year Bremerton 1997 38,600 1996 38,496 1995 39,610 1994 35,920 1993 36,380 1992 38,990 1991 37,040 1990 38,142 KITSAP COUNTY POPULATION Other Incorporated 32 060 31 210 29 915 28 625 28 160 27 405 26 639 2 12913 Kitsap County Unincorporated 158 740 155 120 151 075 148 655 145 460 139 205 132821 138.676 Kitsap County Total 229.400 224.700 220.600 213.200 210.000 205600 196.500 189 731 TAXABLE RETAIL SAI: ES 3 Year Kitsap CounW City of Breme~on 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 1992 1,551,862,692 409,553,371 1991 1,438,615,382 390,094,567 CiTY OF BREMERTON MAJOR TAXPAYERS4 Taxpayer Business Assessed Valuation for 1998 Collection Year Puget Sound Energy US West Inc. HMI, Inc. Michael Connolley Viewcrest Villages Limited Partnership Merit Company FirLane Terrace Conveniion Center East Towne Center Cascade Natural Gas Bremerton Cascade Associates Electric Utility $ Telecommunications Developer Olympic College Business Svcs. Apartments Retail Convention Center Community Center Gas Utility Apartments 21,832,996 18,316,212 11,039,360 8,036,000 7,828,000 6,729,000 6,504,000 6,231,000 5,918,012 5,775,000 Source: Washington State Office of Financial Management and U.S. Census. The large increase is due to the annexation of the unincorporated areas of Bainbridge Island to the new City of Bainbridge Island. Source: Washington State Department of Revenue. Source: Kitsap County Assessor's Office. SEATTLE-BREMERTON FERRY TRAFFIC STATISTICS 1 Year Number of Vehicles Number of Passengers 1996 731,926 1,863,596 1995 751,266 1,820,433 1994 719,125 1,719,414 1993 676,031 1,694,234 1992 667,251 1,856,310 1991 659,827 1,806,744 Year 1996 1995 1994 1993 1992 1991 KITSAP COUNTY AND WASHINGTON STATE LABOR FORCE AND AVERAGE ANNUAL UNEMPLOYMENT2,3 ResidentCivilian Labor Force 93500 89600 88600 89 600 88 500 85 200 Average Annual Total Unemployment Employment Kitsap County (%) Washington (%) 6,300 87,200 6.7 6.5 6,000 83,600 6.7 6.4 5,300 83,300 6.0 6.4 6,100 83,500 6.8 7.6 5,300 83,200 6.0 7.6 4,200 81,000 4.9 6.4 KITSAP COUNTY AND WASHINGTON STATE INCOME ESTIMATES4 Kitsap County Year Personallncome($000) Kitsap County 1995 $ 4,529,000 $ 20,004 1994 4,293,000 19,802 1993 4,108,000 19,272 1992 3,902,000 18,607 1991 3,601,000 17,971 Per Capita Income Washington $ 23,709 22,715 22,010 21,333 20,168 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 treated as proceeds of the Notes 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 Note issuer whose arbitrage certifications may not be relied upon. Source: Washington State Department of Transportation, Marine Division. Passengers total includes the passenger-only ferries and vehicle ferries. Includes nonagricultural wage and salm'y, self-employed, unpaid family workers, domestics, agricultural workers, labor disputants. Source: Washington State Department of Employment Security. Source: U.S. Bureau of Economic Analysis. 20 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 have interests in the issuance of the Bonds that are prohibited by applicable law. TAX EXEMPTION Exclusion from Gross Income In the opinion of Bond Counsel, assuming compliance by the City with applicable requirements of the Internal Revenue Code of 1986, as amended (the "Code"), including arbitrage requirements under Section 148 of the Code, interest on the Notes is excluded from gross income of registered owners for federal income tax purposes under existing federal law and is not an item of tax preference for purposes of the alternative minimum tax applicable to individuals. Continuing Requirements The City is required to comply with certain requirements of the Code after the date of issuance of the Notes in order to maintain the exclusion of the interest on the Notes from gross income for federal income tax purposes, including, without limitation, requirements concerning the qualified use of Note proceeds and the facilities financed or refinanced with Note proceeds, limitations on investing gross proceeds of the Notes in higher yielding investments in certain circumstances and the requirement to calculate and rebate to the United States certain investment earnings on gross proceeds of the Notes in the event that all Note proceeds have not been spent within certain periods prescribed by the Code. The City has covenanted in the Ordinance to comply with those requirements, but if the City fails to comply with those requirements, interest on the Notes could become taxable retroactive to the date of issuance of the Notes. Bond Counsel has not undertaken and does not undertake to monitor the City's compliance with such requirements. Corporate Alternative Minimum Tax While interest on the Notes also is not an item of tax preference for purposes of the alternative minimum tax applicable to corporations, under Section 55 of the Code, tax-exempt interest, including interest on the Notes, received by corporations is taken into account in the computation of adjusted current earnings for purposes of the alternative minimum tax applicable to corporations (as defined for federal income tax purposes). Under the Code, alternative minimum taxable income of a corporation will be increased by 75% of the excess of the corporation's adjusted current earnings (including any tax-exempt interest) over the corporation's alternative minimum taxable income determined without regard to such increase. A corporation's alternative minimum taxable income, so computed, that is in excess of an exemption of $40,000, which exemption will be reduced (but not below zero) by 25% of the amount by which the corporation's alternative minimum taxable income exceeds $150,000, is then subject to a 20% minimum tax. For taxable years beginning after December 31, 1997, the corporate alternative minimum tax is repealed for a small business corporation that had average gross receipts of less than $5 million for the 3-year period beginning after December 31, 1994, and such a small business corporation will continue to be exempt from the corporate alternative minimum tax so long as its average gross receipts do not exceed $7.5 million. Tax on Certain Passive Investment Income of S Corporations Under Section 1375 of the Code, certain excess net passive investment income, including interest on the Notes, received by an S corporation (a corporation treated as a partnership for most 21 federal tax purposes) that has Subchapter C earnings and profits at the close of the taxable year may be subject to federal income taxation at the highest rate applicable to corporations if more than 25% of the gross receipts of such S corporation is passive investment income. Foreign Branch Profits Tax Interest on the Notes may be subject to the foreign branch profits tax imposed by Section 884 of the Code when the Notes are owned by, and effectively connected with a trade or business of, a United States branch of a foreign corporation. CERTAIN OTHER FEDERAL TAX CONSEQUENCES Notes are "Qualified Tax-Exempt Obligations" for Financial Institutions Section 265 of the Code provides that 100 percent of any interest expense incurred by banks and other financial institutions for interest allocable to tax-exempt obligations acquired after August 7, 1986, will be disallowed as a tax deduction. However, if the tax-exempt obligations are obligations other than private activity bonds or notes, are issued by a governmental unit that, together with all entities subordinate to it, does not reasonably anticipate issuing more than $10,000,000 of tax-exempt obligations (other than private activity bonds or notes and other obligations not required to be included in such calculation) in the current calendar year, and are designated by the governmental unit as "qualified tax-exempt obligations," only 20 percent of any interest expense deduction allocable to those obligations will be disallowed. The City is a governmental unit that, together with all subordinate entities, reasonably anticipates issuing less than $10,000,000 of tax-exempt obligations (other than private activity bonds or notes and other obligations not required to be included in such calculation) during the current calendar year, and has designated the Notes as "qualified tax-exempt obligations" for purposes of the 80 percent financial institution interest expense deduction. Therefore, only 20 percent of the interest expense deduction of a financial institution allocable to the Notes will be disallowed for federal income tax purposes. Reduction of Loss Reserve Deductions for Property & Casualty Insurance Companies Under Section 832 of the Code, interest on 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 tax-exempt interest received during the taxable year. Effect on Certain Social Security and Retirement Benefits Section 86 of the Code requires recipients of certain Social Security and certain Railroad Retirement benefits to take receipt or accruals of interest on the Notes into account in determining gross income. Other Possible Federal Tax Consequences Receipt of interest on the Notes may have other federal tax consequences as to which prospective purchasers of the Notes may wish to consult their own tax advisors. 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 Foster Pepper & Shefelman PLLC, Note counsel. A copy of the opinion of Note counsel will be delivered with the Notes. Note counsel has reviewed this document only to confirm that the portions of it describing the Notes and the City's authority to issue them conform to the Notes and the applicable laws under which they are issued. CONTINUING DISCLOSURE Undertaking to Provide Notice of Specified Material Events To meet the requirements of paragraph (b)(5) of the United States Securities and Exchange Commission ("SEC") Rule 15c2-12 (the "Rule"), to the extent applicable to an issue of municipal securities with a stated maturity of 18 months or less under paragraph (d) (3) of the Rule, as applicable to a participating underwriter for the Notes, the City will undertake (the "Undertaking") for the benefit of holders of the Notes to provide or cause to be provided, either directly or through a d~signated agent, to each nationally recognized municipal securities information repository designated by the SEC in accordance with the Rule ("NRMSIR") or to the Municipal Securities Rulemaking Board ("MSRB") and to a state information depository., if any, established in the State of Washington (the "SID"), timely notice of the occurrence of any of the following events with respect to the Notes, if material: (i) principal and interest payment delinquencies; (ii) non-payment related defaults; (iii) unscheduled draws on debt service reserves reflecting financial difficulties; (iv) unscheduled draws on credit enhancements reflecting financial difficulties; (v) substitution of credit or liquidity providers, or their failure to perform; (vi) adverse tax opinions or events affecting the tax-exempt status of the Notes; (vii) modifications to rights of holders of the Notes; (viii) Note calls (other than scheduled mandatory redemption of Term Notes); (ix) defeasances; (x) release, substitution, or sale of property securing repayment of the Notes; and (xi) rating changes. Amendment of Undertaking The Undertaking is subject to amendment after the primary offering of the Notes without the consent of any holder of any Note, or of any broker, dealer, municipal securities dealer, participating underwriter, rating agency, NRMSIR, the SID or the MSRB, under the circumstances and in the manner permitted by the Rule. The City will give notice to each NRMSIR or the MSRB and the SID, of the substance (or provide a copy) of any amendment to the Undertaking and a brief statement of the reasons for the amendment. If the amendment changes the type of annual financial information to be provided, the notice also will include a narrative explanation of the effect of that change in the type of information to be provided. Termination of Undertaking. The City's obligations under the Undertaking shall terminate upon the legal defeasance of all of the Notes. In addition, the City's obligations under the Undertaking shall terminate if those provisions of the Rule which require the City to comply with the Undertaking become legally inapplicable in respect of the Notes for any reason, as confirmed by an opinion of nationally recognized Note counsel or other counsel familiar with federal securities laws delivered to the City, and the City provides timely notice of such termination to each NRMSIR or the MSRB and the SID. Remedy for Failure to Comply with Undertaking. If the City or any other obligated person fails to comply with the Undertaking, the City will proceed with due diligence to cause such noncompliance to be corrected as soon as practicable after the City learns of that failure. No failure by the City or other obligated person to comply with the Undertaking will constitute a default in respect of the Notes. The sole remedy of any holder of a Note will be to take such actions as that holder deems necessary, including seeking an order of specific performance from an appropriate court, to compel the City or other obligated person to comply with the Undertaking. Prior Compliance with Continuing Disclosure Undertakings. The City is in compliance with prior written undertakings under the Rule with respect to its obligations. 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__%. 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 CITY OF BREMERTON 1998, CASH FLOW PROJECTION Thousands 2OOO 1500 1000 5OO 0 -500 -1000 -1500 DEC JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC