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01/15/97 AGENDA
BREMERTON CITY COUNCIL 239 4TH STREET BREMERTON, WA 98337 CITY COUNCIL AGENDA JANUARY 15t 1997 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. CLAIMS/CHECK REGISTERS 4. COUNCIL MEMBER REPORTS 5. MAYOR' S REPORT PUBLIC RECOGNITION -- (Comments Limited to 3 Minutes) NEW BUSINESS A. Resolution No. 2583, Awarding Contract for Callow Avenue Basin Priority 1, Phase 2, Storm Drainage Separation B. Animal Services Kenneling Contract - McDonald Farm Kennel #AB97-005 I #AB97-008 ~ ORDINANCES A. Ordinance (First Reading) Authorizing the Issue of a $1,250,000 Tax Anticipation Note, Accepting the Purchase Offer of Seafirst Bank #AB97-009 /~ AGENDA BILL - BREMERTON CITY COUNCIL 1. SUBJECT: APPROVAL OF PARTIAL SETTLEMENT FOR AGENDA OF: Jan. 15, 1997 ORIGINATING DEPT: Legal ORIGINATOR: I. Sievers, City DATE SUBMITTED: 1/5/97 -- 2. ~~~_>Comment on back if necessary) 3. EXHIBITS: Gene SampleyT--Dir. Public Works and Util. ~ec, ~ession 1/15/97 COUNCIL COMMITTEE ENDORSEMENT [] INFORMATION [] APPROVED BY COUNCIL PRESIDENT FOR SUBMITTAL: MAYOR COUNCIL PRESIDENT 4. SUMMARY STATEMENT AND REOUIREMENT FOR COUNCIL ACTION: Agreements have been reached, subject to Council authorization, with two parties in City of Bremerton v. CH2M Hill Northwest Inc,, et al, Kitsap county Superior Court No. 94-2 02364 2, Charleston Beach As. et al v City of Bremerton~ et al, Kitsap county, Sup. Ct. No. 94-2 02386 and~ ~GD/LO/~y Insurance Company v. Agri-Tech. Inc et al, Benton County, Oregon, Cir. Ct. No. 96- 10078 Administration proposes settlement of $500,000 to release Agritech from the above actions; and $1,180,000 to release CH2M Hill from the above actions. 8. RECOMMENDATION: Approve settlement of $500,000 with Agritech and $1,180,000 in the above actions subject to settlement agreement satisfactory to counsel and approval by the court. 9. RESPONSIBLE OFFICIAL: ENFORCEMENT OFFICIAL: EXPIRATION DATE: REVIEW DATE: 10. NOTICE OF ACTION PULLED [] TABLED [] APPROVED [] DISAPPROVED [] AMENDED [] DATE: ~-/- 2. '-~L~/~RANCE COMMENTS= 5. IMPACT OF NON-PASSAGE: Uncertain outcome as to these defendants. 6. IMPACT ON STAFFING, BUDGETS, FACILITIES, EQUIPMENT OR OTHER RESOURCES= Additional trial preparation 7. RESEARCH SOURCES= AGENDA BILL BREMERTON CITY COUNCIL 1. SUBJECT: CALLOW AVENUE BASIN PRIORITY 1, PHASE 2, STORM DRAINAGE SEPARATION - BID AWARD 2. CLEARANCES: (Comment on back ____if necessary), V~o~ks ~ 0tilities City Attom_~_2t ~ City Treasurer ~ FOR AGENDA OF: January 15, 1997 ORIGINATING DEPT: Public Works & Utils ORIGINATOR: R. Witt, City EngZJfP~ ~a- DATE SUBMITTED: December 23, 1996 3. EXHIBITS: 1. Location Map 2. Bid Summary 3. R.L. Alia' s Letter of 12/6/96 4. Budget Adjustment 5. Resolution No. 2583 Review by City Council at Executive Session of 12/23/96. ENDORSEMoENT~INFOR/MATION [l APPROVED BY COU. NCIL~-~SIDENT~_I:;}R SUBMITTAL: 4. SUMMARY STATEMENT AND REQUIREMENT FOR CO'f. JNCIL ACTION: Bids were opened for the Callow Avenue Basin Priority 1, Phase 2, Storm Drainage Separation on December 5, 1996. Nine bids for this project were received. The low bid from R. L. Alia was $3,458,034. However, R.L. Alia requested withdraw of their bid on December 6 claiming a bid error of $687,000. R.L. Alia's bid and claimed bid error total $4,145,034. The second low bid was from Thomco in the amount of $4,914,962.50. The City Attorney has reviewed this and recommended award to R.L. Alia at an amount of $ 3,4 5 8,0 3 4. The engineer's estimate for this project was $4,270,000. The 1997 budget included $3,534,000 for this project. Public Works Trust Fund and Centennial Clean Water Fund Loans totaling $5,344,000 have been approved to finance this project. To make adequate funds available for this project, a budget adjustment increasing the Wastewater sources and uses of funds in the amount of $1,810,000 is necessary. The action before the City. Council is approval of a budget adjustment establishing a project budget of $5,334,000 and approval of contract award with R.L. Alia. PULLED [] TABLED [] COUNCIL DIRECTIVE: 5. RECOMMENDATION: 1. The City Council approve the attached budget adjustment No. 97-1, establishing a project budget of $5,344,000. 2. The City Council approve contract award for $3,458,034 with R.L. Alia Company for Callow Avenue Basin Priority 1, Phase 2 Storm Drainage Separation, authorize the Mayor to execute the same and adopt Resolution # ~r~ 9. RESPONSIBLE OFFICIAL: Director Pub Wks & Util ENFORCEMENT OFFICIAL: Director Pub Wks & Util EXPIRATION DATE: REVIEW DATE: 10. NOTICE OF ACTION APPROVED 1] DISAPPROVED [1 AMENDED [] (OVER) 11. AGENDA BILL NO.: q'7-OO 2. CLEARANCE COMMENTS: 3. SUMMARY STATEMENT AND REQUIREMENT FOR COUNCIL ACTION - Continuation 5. IMPACT ON NON-PASSAGE: The construction of Callow Avenue Basin storm separation would not go forward at this time. The project would need to be rebid in the near future in order to maintain the Public Works Trust Fund and Centennial Clean Water Fund Loans. e IMPACT ON STAFFING. BUDGETS, FACILITIES. EQUIPMENT AND OTHER RESOURCES: Staffing: No Impact. Budget: An expenditure from the Wastewater Capital Fund of $ 5,344,000 is necessary. Facilities/Equipment: No impact. 7. RESEARCH SOURCES: CITY OF BREMERTON DEPARTMENT OF PUBLIC WORKS & Il'riLl'liES ENG~G DIVISION CALLOW AVENUE BASIN PRIORITY 1, PHASE 2, STORM DRAINAGE SEPARATION OstrlcO Oysfer Soy PROJECT V4214 $fncfO Ir NORTH SITE SOUTH SITE LOCATION MAP .3 BID TITLE: DATE OPENED: TIME OPENED: CITY OF BREMERTON BID TABULATION ,,l:uo ?,,,,, OPENED BY RECORDED BY BID BOND BIDDER REC'D ITEM 1 ITEM 2 ITEM 3 ITEM 4 ITEM 5 NET BID TAX TOTAL SUMMARY ] TOTAL BID ,~.:~ 1, COMMENTS LOW BI~ ~D L~ ~ GENERAL CONTRACTORS 9215 M. L. KING WAY SOUTH SEA~-~LE. WASHINGTON 981 (206) 722-4900 FAX (206) 722-2159 UNOERGROUND UTILITIES EQUIPMENT RENTAL COI~ ~b--I~E PAVING December 6, 1996 City of Bremerton Dept of Public Works :3027 Olympus Drive Bremerton, WA 98310 1996 Re~ Callow Ave Basin Project Claim of error in bid submitted 12/5/96 Dear Mr. Earl, We respectfully withdraw our bid for the Callow Ave Basir~ Project submitted yesterday, 12/5/96. As you can see our bid amount was extremely lower than the other eight bidders. In reviewing our work sheets and the bid submitted, we discovered that bid items 13 and 14 were inadvertently transposed resulting in an error of approximately $ 687,000. This error together with the bid amount would total approximately $ 4,145,000. This letter will serve as our official notice to withdraw our bid. For your records our original work sheets will be enclosed with this letter to be mailed today. Very truly yours, R. L. Alia Company President CONTRACTOR'S LICENSE NUMBER RL-AL-IC' 104PT CITY OF BREMERTON- BUDGET ADJUSTMENT REQUEST Requesting Department: WASTE WATER No.97-1 SOURCE OF FUNDS: Description PWTF LOAN USES OF FUNDS: Amount Description 1810000 CALLOW AVE. CSO PROJECT Amount 1810000 Total 1810000 Total 181OO00 This adjustment will provide for the bids received for the construction on this project. Department Head Signature Date Directo~ Treasurer Comments: [--] R~o~ended [-'~ Not Recommended Treasurer's Signature Date Mayor Comments: Recommended Approved Not Recommended Denied Fiscal & Budget Committee Comments: [Recommended Approved Not Recommended Denied Fiscal & Budget Committee Signature Date RESOLUTION A resolution awarding a construction contract for Callow Avenue Basin Priority I, Phase 2, Storm Drainage Separation WHEREAS, the City Council finds that R.L. Alia has claimed its bid was based on an error and has notified Bremerton it is withdrawing its erroneous bid; that said contractor would remain the lowest responsible bidder if it's bid is corrected for this reported error; and that the City's utility ratepayers will benefit by entering into a corrected contract and obtaining the improvement at reasonable cost, and WI-IF~REAS, the City has been temporarily restrained from awarding the contract at the corrected bid pending a decision on continued injunction in Kitsap County Superior Court Cause No. 97200329, now therefore BE IT RESOLVED BY THE BREMERTON CITY COUNCIL The Contract for Callow Avenue Basin Priority I, Phase 2, Storm Drainage Separation, Project No. V4214 is awarded to R.L. Alia Company of 3,458,034.00, provided the bid may be awarded to Alia for the corrected amount of $4,145,034 should Alia fail to execute the contract at its original bid and the corrected award is not otherwise enjoined in Kitsap County Superior Court Cause No. 97200329. BE IT FINALLY RESOLVED that if the contract is not executed by Alia as described above all bids shall be rejected and the project rebid. PASSED by City Council of the City of Bremerton this __ day of , 1997. JOHN E. LAW Council President AGENDA BILL BREMERTON CITY COUNCIL 1. SUBJECT: ~NIMAL SERVICES KENNELING CONTRACT FOR AGEND2Q OF: 1-15-97 ORIGINATING DEPT: Police/Animal Control ORIGINATOR: Deborah Goodell-Tl'~ DATE SUBMITTED: 1-3-97 -- -~ 2. CL~A3LANCES: (comment on back ,~z'-~ . if necessary) ~ ]Chief Paul DuFresne, Police "-~ich~ Hanna, Treasurer ~l'*dl~Sievers, City Attorney ~,-.Fiscal & Budget Committee ~, ~~perat ions Committee 3. E.XHIBITS: Contract & Exhibit "A" APPROVED BY COUNCIL P~SID~N~OR SUBMITTAL: COUNCIL PRESIDENT.~~i~. 4. S~Y STATEMENT AND REQUIRE~.ENT FOR'COUNCIL ACTION: This is a r~quest for changing the City Kenneling Contract from Olympic Kennels to McDonald Farm Kennels. The City has had a kenneling contract with Olympic Kennels in Belfair since 1992 and is currently paying $23,294.00 annually. The current kennel supplies 10 indoor dog kennels and 10 indoor cat cages with accommodations for 5 additional dogs @ $8.29 per dog per day and 5 additional cat units @ $3.29 per cat per day. (Approximately $24,407.75) It is necessary to make one to two trips to the kennel a day, usually around heavy traffic hours through the Gorst corridor. McDonald Farm Kennel has agreed to enter into a similar three year contract beginning March 1, 1997 for $23,000 annually and would supply 10 combination indoor and outdoor dog and 10 cat units along with 6 additional combination indoor/outdoor dog @ $6.00 per day 8. RECOM]4ENDATION: (continued) The City Council approve the change of the current kenneling contract from Olympic Kennel to the new proposed contract with McDonald Farm Kennel. 9. RESPONSIBLE OFFICIAL: ENFORCEMENT OFFICIAL: EXPIRATION DATE:' REVIEW DATE: PULLED TABLED COUNCIL DIRECTIVE: !0. ~OT!CE OF ACTION APPROVED DISAPPROVED DATE: A~MENDED 2. C~EARANCE COM/~ENTS: SUMMARY COMMENTS CONTINUED and 6 cat'units @ $3.00 per .day. McDonald Farm Kennel has several convenient routes, is closer and tares considerably less travel time. The McDonald Farm Kennel has more accommodations to offer than Olympic Kennel for less money, time and effort. 5. iMPkCT ON NON-PASSAGE: Continue with present contract, hiEher costs, more manpower ~ime and effort, 6. IMPACT ON STAFFING, BUDGETS, FACILITIES, EQUTPMENT OR OTHER RESOD-RCES: Included in Police Department budEet with savin§s of approximately $1,000.00 or more for the year 1997, and reduction in manpower effort and travel time, which allows for more covera§e time for citizens. More improved caEe space available for cats. l~re improved kennel space with both indoor and outdoor covered runs for does. Reduction in auxiliary rate for does (3.29 plus doE per day) and. for cats ($.38 plus per cat per day). 7. ~SEARCH SOURCES: KENNEL SERVICES AGREEMENT ANIMAL CONTROL AGREEMENT THIS AGREEMENT is between the City ofBremerton, a municipal corporation (herein after referred to as "City") and McDonald Farm Kennels, (herein after referred to as "Kennels"). WITNESSETH: OBLIGATIONS OF KENNELS: Kennels agree to provide the City with detention of dogs and cats as is required in order to enforce the City's animal control ordinances. Kennel's services shall include: a. The reservation of ten (10) dog units and ten (10) cat units for the sole use of the City, to be available and in good repair at all times. Kennels shall provide adequate heating and air exchange / ventilation to the dog and cat units. The length of stay for each animal shall be at the discretion of the City. Kennels shall adequately clean and disinfect with bleach or other appropriate disinfectant on a daily basis prior to 10 a.m. of each opening day. The City may elect to house more than one dog per run, and one cat per unit; however if any animals so enclosed are incompatible so as to cause harm to themselves, other animals or the employees, they sahll be separated into another kennel run or cage at the discretion of the Kennel management. b. Kennels will make available an additional six (6) dog units and six (6) cat units to be compensated in accordance with section 4. c. The care of animals, with adequate morning and evening provisions for food, water and shelter. d. The maintenance of an office open to the public and staffed by at least one qualified and trained adult employee from 9:00 a.m. to 6:00 p.m., from Monday through Saturday throughout the year, with the exception of Christmas Day, New Years Day, Labor Day, Memorial Day, Thanksgiving Day, Presidents Day, Veterans Day, Fourth of July, when the Kennels shall remain closed. Staff shall courteously assist the public by telephone or in person regarding the City's impounded animals and animals available for adoption. e. Bremerton Animal Control shall have access to animals twenty-four (24) hours each day, seven days per week, throughout the year. f. Kennels shall comply with the service specifications contained in Exhibit "A" which is attached hereto and incorporated herein by reference. e OBLIGATIONS OF CITY: City agrees to provide: a. The transportation of animals to and from Kennels at City's sole expense. t! b. The securing of animals in Kennels, with special instructions, if any, by City personnel. c. Performance of euthanasia may be performed, on an emergency basis, on the premises at the discretion of the City. 3. TERM: The term of this agreement shall commence March 1, 1997 and terminate February 29, 2000. 4. COMPENSATION: City shall pay Kennels a flat annual fee regardless of the number of animals received from the City. The annual fee for 1997 shall be Twenty-three Thousand Dollars ($23,000.00), payable in equal monthly installments of One Thousand Nine Hundred and Sixteen and 66/100 Dollars ($1916.66) commencing March 1, 1997. In addition, City shall pay Kennels a flat daily rate of Three Dollars ($3.00) for cats and Six Dollars ($6.00) for dogs retained in units provided in lb. Commencing March 1, 1998, these fees shall be adjusted annually upon the anniversary date by using the revised Consumer Price Index (CPI-W) as published by the United States Department of Labor for U.S. City Average, all items (1982- 84=100). The index used shall be the most current period preceding the anniversary date. The percentage of change from the earlier index to the later index shall be multiplied by the annual flat rate at the beginning of the service year and the result added to the said beginning annual rate to arrive at the adjusted fee, which will apply to each of the twelve (12) months of the succeeding service year, except in no event shall the increase in the service fee be more than five percent (5%) annually. 4. RELATIONSIIlP OF PARTIES: The parties understand and agree that Kennels is an independent firm skilled in matters pertaining to animal kennel services, and will perform independent functions and responsibilities in the area of its particular field of expertise. Kennels and its personnel shall act as independent contractors and not employees of the City. Neither party to this Agreement shall have the authority to bind the other, nor direct or control the employees, contractors, or entities of the other party. Kennels shall work under the direction of the Chief of Police and the Animal Control Supervisor. 5. LICENSE AND TAXES: Kennels shall posses any regulatory license required to fulfill its obligations under this Agreement. B & O taxes shall be paid when due and Kennels, by this Agreement, assign any payments due under this Agreement to the City Clerk for payment of such taxes which have been declared delinquent. 6. INSURANCE AND HOLD ItARMLESS: Prior to and during the performance of the work covered by this Agreement, Kennels shall provide the Risk Manager for the City of Bremerton of evidence that it has obtained and maintains in full force and effect during this Agreement, a policy of professional liability insurance, providing coverage of at least $500,000.00 against professional liability for errors and omissions in connection with the work to be performed by the Kennels under this Agreement. Risk Manager shall be provided thirty (30) days' written notice of any cancellation of said professional liability insurance. Kennels agree to indemnify and save harmless the City, its appointed and elected officers and employees, from and against any and all liability, loss, costs, damage and expense, including costs and attorney fees in defense thereof because of actions, claims or lawsuits for damages resulting from personal or bodily injury, including death at any time resulting therefrom, sustained by any person or persons and on account of damage to property, arising directly or indirectly out of or in consequence of or the performance of this Agreement, due to the negligence of Kennels, its subcontractors, agents, successors or assigns. This provision shall be inapplicable to the extent the City is judicially found solely negligent for such damage or injury. 7. GENERAL CONDITIONS: a. Assignability - Kennels shall not assign any interest in the Agreement and shall not transfer any interest in same (whether by assignment or notation), without prior written consent of the City thereto; Provided, however, That claims for payment under this Agreement may be assigned. b. Entire Agreement - This Agreement constitutes the entire agreement between the parties and both parties acknowledge that there are no other agreements, written or oral, that have not been fully set forth in the text of this Agreement. There is attached hereto and incorporated by reference as part of this Agreement Exhibit "A" - Service Specification. c. Amendments - The parties hereby further agree that this Agreement cannot be amended or modified without the written concurrence of both parties. d. Notices - Any notices required to be given by the City to the Kennels or by Kennels to the City shall be in writing and delivered to the parties at the following addresses: ge Bremerton City Clerk McDonald Farm Kennels 239 Fourth Street 3502 NW Half Mile Road Bremerton, WA 98337 Silverdale, WA 98383 e. Waiver - Failure to insist upon strict compliance with any terms, covenants or conditions of this Agreement shall not be deemed a waiver of such, nor shall any waiver or relinquishment of such right or power at any time be taken to be a waiver of any other breach. f. Compliance with State, Local and Federal Laws - Kennels agrees to comply with all applicable local, state and federal laws in performance of all services under this Agreement. g. Applicable Law; Venue - This Agreement shall be construed and interpreted in accordance with the laws of the State of Washington and, in the event of dispute, the venue of any action brought hereunder shall be in Kitsap County Superior Court. h. Attorney Fees - The substantially prevailing party in any litigation arising hereunder shall be entitled to its reasonable attorney's fees and court costs, including appeals, if any. TERMINATION: This Agreement may be terminated by either party for convenience upon thirty (30) days' written notice to the other party, or for cause if either party fails substantially to perform through no fault of the other and does not commence correction within five (5) days of written notice and diligently complete the correction thereat'ter. Upon such termination, City will be entitled to reports showing the statues of all matters upon which Kennels is providing services to the City as of the effective date of termination. NONDISCRIMINATION: Kennels shall not discriminate in any manner on the basis of sex, race, color, creed, national origin, age, marital stares, physical, mental or sensory disability unless a bona fide occupational qualification applies to an employment action. IN WITNESS WHEREOF the parties hereto have executed this Agreement the date and year indicated. McDonald Farm Kennels Date: BY: Date: BY: City of Bremerton Lynn Horton, Mayor DEPARTMENTAL APPROVAL: Paul DuFresne, Chief of Police APROVED AS TO FORM: Ian R. Sievers, City Attorney Received for Filing: Kathleen L. McCluskey, Clerk f4 Exhibit No. "A" SERVICE SPECIFICATION Contractor agrees to provide the following facilities and services as specified here and in the attached services agreement. · · · · · · · · Site shall be located within thirty, (30) minutes driving time of Bremerton Animal Control Offices and will be in compliance with all zoning and Health Department regulations. Ten (10) chain link (dog) kennel runs with indoor/outdoor areas for exclusive use of the City of Bremerton impounds and adoptions. Ten (10) (cat) cages for exclusive use of the City of Bremerton impounds and adoptions. Six (6) dog units and six (6) cat units available for auxiliary, use. Facility shall be open to the public from Monday through Saturday from 9 a.m. to 6 p.m.. Animals shall be properly fed and maintained 24 hours per day, seven days per week, including weekends and holidays. Facility shall be staffed by personnel adequately trained and qualified to perform animal care and feeding. Maintain and submit written reports in content and form required by the City. Submittl shall set forth qualifications, name, address and phone number of owner (s) and operator(s) nd shall specify the providers experience in the kenneling nd animal control industry'. Proposing frans shall submit copies of appropriate licenses and certificates to qualification to provide facilities and services specified. /5 AGENDA BILL - BREMERTON CITY COUNCIL ORDINANCE NO. AUTHORIZING THE ISSUE OF A $1,250,000 TAX ANTICIPATION NOTE, ACCEPTING THE PURCHASE OFFER OF SEAFIRST BAN~ FOR AGENDA OF:Jan. 15,1997 ORIGINATING DEPT: Treasurer ORIGINATOR: R. Hanna DATE SUBMITTED: Jan. 8, 1997 2. CLEARANCES: Comment of back if necessary) Council Fiscal & Budget 3. EXHIBITS: Proposed Ordinance Cash Flow Projection Note Purchase Offer (at Council meeting) ENDORSEMENTS ~' INFORMATION APPROVED BY COUNCIL PRESIDENT FOR SUBMITTA COUNCIL PRESIDENT 4, SUMMARY STATEMENT AND REQUIREMENT FOR COUNCIL ACTION: As indicated in the exhibits attached, the City's General Fund vail 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 necessan/cash flow financing. 8. 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, 1998 REVIEW DATE: N/A PULLED COUNCIL DIRECTIVE: TABLED 10. NOTICE OF ACTION APPROVED DISAPPROVED AMENDED 11. AGENDA BILL NO: ~ 7" 0 0 q 8A 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. 7. RESEARCH SOURCES: Cash Flow Projections. Bond Counsel. Negotiations with underwriting bank. /7 01/08/97 13:21 FA,~ 2064479700 1 FP & S ~001,'025 FOSTER PEPPER & SHEFELMAN A Law Partnership Including Professional Service Corporations 1111 Third Avenue, Suite 3400 Seattle, WA 98101 (206) 447-4400 FAX (206! 447-9700 T_gO EAC iMILE COVER SHEET tLIJ ~.>', cO January 8, 1997 o:::~ FAx # VOICE CON- CONTACT.. FIRM 1. Rich Hanna and Kathleen McCluskey 2. Jane Towery and Shandra Tietzs (360) 478-5200 (360) 478-5290 Y 358-8818 358-8988 Y From: Attachment(s): Message: Tracy Becht Revised ordinance authorizing 1997 TANs, including blacklined copy This version of note ordinance reflects changes requested this morning. let me know of any other changes. · Direct Dial #: 447-8936 Please Pages including this cover page: 26 Hard Copy to Follow?: YESo-mail Return To/Location: Tracy Becht/33-59 User & Client/Matter #: 816/40080/1 tF YOU HAVE ANY QUESTIONS RL=GAROING THE TRANSlUlLS~ON OF THIS FAX. PLEASE CONTACT THE FAX DEPARTMENT AT: (206) 44-7-2903 THE INFORMATION CONTAINED iN 'I'Hi$ FACSIMILE COMMUNICATION IS PRIVILEGED AND/OR CONFIDENTIAL iNFORMATION INTENDED ONLY FOR THE USE OF EACH INDIVIDUAL OR ENTITY NAMED ABOVE. IF THE READER OF THIS COVER PAGE IS NOT AN INTENDED RECIPIENT, YOU ARE HEREBY NOT1FIED THAT ANY DISSEMINATION, DISTRIBUTION OR COPYING OF THIS COMMUNICATION OR THE INFORMATION CONTAINED IN THIS COMMUNICATION IS STRICTLY PROHIBITED. IF YOU HAVE RECEIVED THIS COMMUNICATION IN ERROR, PLEASE IMMEDIATELY NOTIFY US BY TELEPHONE AND RETURN THIS FACSIMILETO US AT THE ABOVE ADDRESS VIA THE U.S. POSTAL SERVICE. THANK YOU, 0~,'08/97 ~3:22 F~X 2084479700 ~ FP & S ~002,'028 CITY OF BRF~MERTOE, WASHINGTON ORDINANCE NO. AN ORDiNAnCE of uhe City of Bremer~on, Washington, authorizing the issuance of tax anticipation notes for the purpose of paying City expenses pending the receip~ of general city taxes; crea~ing a note redemption fund; providing for the sale of those notes ~o Bank of America NT&SA, doing business as Seafirst Bank of Seattle, Washington. Approved: January 15, 1997 Passed: January 22, 1997 This document was prepared by: Foster Pepper & Shefelman 1111 Third Avenue, Suite 3400 Seattle, Washington 98101 (206) 447-4400 01/05/97 13:22 FAX 2064479700 I FP&$ 003/028 CITY OF BRE~RTON, WASHINGTON ORDINANCE ~O. AN ORDINkNCE of the City of Bremerton, Washington, authorizing the i~suance 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 ~he sale of those notes to Bank of America NT&SA, doing business as Seafirst Bank of Sea~Die, Washington. 9~EREAS, the CiTy Council of the City of Sremerton, Washington (the "City"), finds that the periodic collections of sales, excise and general ad valorem taxes and other revenues in 1997 will not be sufficient to meet necessary City expenses as they are incurred in 1997, 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 coliec%ed by the City; NOW, T~EREFORE, T~E CITY OF BREMERTON DOES ORDAIN: Section 1. ~ebt CapDcitv. The preliminary assessed valuation of the taxable property of the City as ascertained by the last preceding assessmen~ for City purposes for the year 1996 for tax collection in the year 1997 is $1,302,580,919 and the City as o~ November 30, 1996, had $10,300,910 of outstanding general indebtedness evidenced by limited tax ~eneral obligation bonds and notes and tax anticipation notes 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, ~nd unlimited tax general obligation bonds in the principal amount of $!.710,000 within the limit of uD to 2-1/2% of the value o~ the taxable proper~y within the City for 01/08/97 13:23 FAX 2064479700 1 FP & S ~004,'025 general capital purposes issued pursuant to a Vote of the cF~alified voters of the City, and the amoun~ of indebtedness for which the notes are herein authorized to be issued is $i,250,000, The general indebtedness zo be incurred shall be within ",he 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 v~ers therein. Section 2. NQte Pund; Authorizer.ion and Description of Nc_res. There is created in the office of the City Treasurer a special fund called the Tax Anticipation Note Fund, 1997 (the "Note Fund"). Pending the collection of sales, excise and general ad valorem property taxes levied for collection in 1997 and other revenues anticipated to be received in 1997, the City shall issue and sell its tax anticipation notes to be designated Tax Anticipation Notes, 1997 (the "Notes"), in the principal amount of $1,250,000. The Notes shall be daUed February 1, 1997; shall mature on January 31, 1998; shall be in the denomination of $50,000 or any integral multiple thereof; zhaii 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 cf identification; and shall bear interest at the rate of % per annum (computed on the basis o~ a 360-day year of twelve 30-day months), payable at maturity. If any Note is not redeemed when proDerly presented at izs maturity, then interest shall continue to accrue at the same rate from and aft~-r maturity until that No~e, with interest~ is paid in full or un~il sufficient money for such paymen~ in full is on deposit in the Note 0~71217. ~Z 01/08/97 13:24 FAX 2064479700 1 FP & S ~005/028 Fund and the Note has been called for redemption. The city Council declares and finds that the fixing of the above interest rate is ±n the best interests oK 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. Reqistra.~ion a~d Transfe, r of Notgs. The Notes shall be issued only in registered fo.-m as to both principal and inZerest and shall be recorded cn books or records maintained by the Note Registrar (the "Note Register"). The Note Register shall contain the 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 amot~.t. 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. Sec.~ion 4. Payment of Notes. Both principal of and interest on the Bonds 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 o~fices of the Bond Registrar at the option of the owners. $~ction 5. Rled~e of_Taxes. The Notes shall be paid solely from the Note Fund. The City irrevocably pledges to budget and 02'./32:,7, ,02 -3- 0[/08/9T [3:24 F&~ 20644?9700 [ FY & $ ~006,'025 levy taxes within the constitutional and statutory tax limitations provided by law without a vote oX the electors cf 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 a~.d interest on the Notes az 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. Sectio~ ~. prin~ed, typed Form and Exe.~ution of NoteS. The Notes shall be or mu!~icopied on good bond paper in a form consistent with the provisions of ~his 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 facsimils reproduction thereof impressed or prin~ed thereon. Only Notes bearing a Certificate of Authentication in the followin~ form, manually si~ned by the Note Registrar, shall be valid or obligatory for any purpose or entitled to the benefits of this ordinance: CERTIFICATE OF At~HEh~ICATION This Note is one of the fully registered City of Bremerton, Washington, Tax A~tlcipation Notes, 1997, described in the Rote Ordinance. WASHINGTON STATE PISCAL AGENCY Bond Registrar 0~713:i?. 02, -4- 01;05~97 13:25 FAX 20644?9?00 1 FP & $ ~007;025 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 ordinar, ce. If any officer whose facsimile signature appears on the Notes ceases to be an of£icer of the City authorized to sign notes before the Notes bearing his cr 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 uhat person had continued to be an officer cf the City authorized to sign nones. Any Note also may be sigT. ed 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 ~ate of issuance of the Notes. ~tion 7. N_ote Registrar. The Note Registrar shall keep, or cause to be kept, at its principal corDorate trus~ 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 authcrized~ on behalf of the City, to authenticate and deliver Notes transferred or exchanged in accordance with the provisions of the Notes and this ordinance, serve as the city's paying agent for the ~otes and to carryout all of the Note Registrar's powers and duties under this ordinance City Ordinance No. 3862 establishing a system of registration for the City's bonds and obligations. -5- 13:26 FA[ 20644?9?00 [ F? & S ~008,'025 The Note Registrar shall be responsible £or its representations contained in the Note Re~istrar's Certificate of Authentication on the Notes.. The Note Registrar may become the owner of Notes with the same rights it would have if it were no5 the Note Registrar and, to the exten5 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 tc, any committee fcrmed to protect the rights of Note owners. Sec%ion 8. No~es Neqc~iable. The Notes shall be negotiable instruments to the extent prcvided by RCW 62A.8-102 and 62A. B-i05. Section 9.. Use of Proceeds. The principal proceeds received from the sale cf the Notes shall be deposited in the General Fund of the City and used solely ~or the purpose of paying the cash flow deficits in the City's General Fund resulting from budgeted expenditures, and any interest received from the deposi% or investment of such proceeds shall be applied and used solely ~or 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 cf the Notes and placed in the Note Fund shall be used for the sole pu .rpose of retiring the Notes or paying the interes~ thereon. Section 1~. ~ermi~ted Fi~ancinq of ©amulative Oash Flo~ Deficit. Based upon the reasonably expected amounts of sales, excise and general ad valorem property taxes and other revenues to be collecned in 1997 (including in%'estment procee6s o~ =he Notes) and that are expected to be available to make General Fund expenditures in 1997 (computed by treating a reasonable working 027~217 . ~2 -6- 01/08,'g7 13:26 FAX 2064479700 1 FP~ S ~ oo9,'o28 capital reserve in an amount not exceeding 5% of the total General Fund expenditures in the prior fiscal year as not being available tc make those expenditures), the City Council finds that the principal amount of the Notes does not exceed %he maximum anticipated "cumulative cask flow deficit" (a~ defined by Section 148 of the Internal Revenue Code of ~9~6, as amended (the "Code"~, and applicable Treasury Regulations thereunder) expected to occu: in the City's General Fund during 1997 and that is to be financed with proceeds of the Notes. ~ection .lb. Preservation .~f Tax_ExemDtio.n of I~terest ~ Motes. The City covenants that it will take all actions necessary to prevent inzerest on the Notes from bein~ included in g~oss income for federal income 5ax purposes, and it will neither take any action nor make o~ permit any use of proceeds of the No, es or o~her funds o~ the City treated as proceeds o~ the Notes at any time during the term of the Notes wkich will cause interest on the Notes to be included in gro~s income for federal income tax purposes. The City certifies that it has not been notified of any listing or proposed lis~in~ by the In~ernal Revenue Service to the effect that it is a bond issuer whose arbitra~e certifications may not be relied upon. Section 12. ~mall Governme. ntal E~ception and Designation of No%es I.$suer Arbitrage Rgbate ..as' 'Qualified ..Tax-ExeDot Obligations." The City find~ a_nd declares that (al it is a duly organized and existin~ governmen.uai uni5 of the State of Washington and has ~enera! taxin~ power; (b) no Note which is part of this issue of Note~ is a "private activity bond" within ~he meaning cf Section _1.41 of the Code; (c) at least S5% of ~he net proceeds cf -7- 01/08/97 13:27 FAX 2064479700 1 FP & $ ~010,'025 the Notes will be used for local governmental activities cf the City (or of a governmental uni~ the jurisdiction of which is entirely within the jurisdiction of the City); (d) the aggregate face amount of all tax-exempt obiigaticns (cther 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 an}' 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 nct reasonably expected to exceed $5,000,000; and (e) the amount cf tax-exempt obligations, including the Notes, designated by the City as ,'qualified tax-exempt obligations" for the purposes of Section 265 (b) (3) of the Code during the calendar year in which the Notes are issued does not exceed $10,000,000. The City there~ore certifies '~hat the Notes are eligible for the arbitrage rebate exemption under Section 148 (f) (4} (D) of the Code and designates the Notes as ".cualified tax-exempt obligations" for the purposes of Section 265(b)(3) of the Code. Section 13. Undertakinq to Provide Cont_inuinq Disclosure.. To meet the requirements of paragraph (b) (5) o~ United States Securities and Exchange Commission ("S~.C") Rule 15c2-12 (the ,'Rule" ) , to the extent applicable to an issue of m~nicipal 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 writuen undertaking (the ,,Undertaking") ~or the benefit of holders cf the Notes: 27 01108/~? 12:27 F&X 206447~700 I FP & S (a) Under~akinq :p Provide Not±ce of Material Events. The City u~dertakes to provide or cause to be provided, either directly or through a designated agent, to each nationally recognized municipal securities infozTaation repository designated by the SEC in accordance with the Rule ("NRMSIR") or the Municipal Securities Rulemaking Board ("MSRB"), and %o a stmte information depository, if ~ny, established in the state of Washington (the "SID"), timely notice of the occurrence cf any of =he 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 reserues reflecting financial difficulties; (iv) u~.scheduled draws on credit enhancements reflecting financial difficulties; (v) substitution of credit or liquidity providers, or their failure to perform; (vi) adverse uax opinions or events affecting the tax-exempt status of :he 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) Amendme. nt of UDdertak. inq- 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 NP~4SIR or the MSAB, and the SID, of the substance (or provide a copy) of any amendment to the Undertaking and a brief statement of =he reasons for the amendment. (c) ~eneficiaries. The Undertaking evidenced by this Section 13 shall inure to the benefit of the City and any holder of Notes, and shall not inure %o the benefit of or create any rights in any osher person. (d) TerminaDion of Undert~kinq. The City's obligations under this Undertaking shall terminate upon the legal defeasance of ali of the Notes. In addition, the City's obligations under this Undertaking shall terminate if ~hose provisions of the Rule which require the City to comply with this Under=eking become legally inapplicable in respect of the Notes for any reason, as confirmed by an opinion of nationally recognized bond counsel or other counsel familiar with federal securities laws delivered to the City, and the City provides timely no,ice of such termination :c each NRMSIR or the MSRB and the SID. 92732~.7,92 -9- 13:28 FAX 2064479700 1 FP&S (e) Remedy for Failure to CDmDly with Undg~takinq. 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 co~ply wi~h the Undertaking shall constitute a default in respect of the Notes. The sole remedy of any holder of a Note shall be ~o take such actions as that holder deems necessary, including seeking an order of specific performance from an appropriate court, tc compel the City or other obligated person to comply with the Undertaking. (f) Desiqn~tion of Official ResDcn~ibie _~Q Administer UndertDkinq. The Treasurer of the City or his or her designee (or such other officer of the City who may in ~he ~uture 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 ~o 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, ~he fo!lowin~ actions: (i) Deuermining whether any event specified in Section lB(a) has occurred, assessing its materiality with respect to the Notes, and, if material, preparing and disseminating notice of its occurrence; (ii) Determinlng whether any person other than the City Zs an "obligated person" within the meaning of the Rule with respect to the Notes, and obtaining from such person an undertaking ~o 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 :o 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. Se~%ion 14. Approval.~f Note.. purchase Contract. ~ank of America NT&SA, doing business as Seafirst Bank of Seattle, Washington, has presented a purchase con5racn (the "Note Purchase Contract") to the City o[fering to purchase the Notes under zhe terms and conditions provided in the None Purchase Contract, which 027~217.02 -10- 01/05/97 13:29 FAX 20644?9700 I FP & S written Note Purchase Contract is on ~iie with the City Clerk and is incorporated herein by this reference. The City Council finds that enterin~ into the Note Purchase Contract is in the City's besn interes~ 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, m~nicipal bond counsel of Seattle, Washington. Bond counsel shall not be recfuired to review and shall express no opinion concerning the completeness or accuracy of any official statement, offering circular or other sales cr disclosure material issued or used in connection with the Notes, and bond cou~.sel's opinion shall so state. The proper City officials are authorized and directed to do everything necessary for the prompt delivery of the ~otes to 5he purchaser and for the proper application and use of the proceeds of the sale thereof. Sec.tlon 15. Preliminary Offi~iDl Statement Deemed Final.. The City Council has been provided with copies of a preliminary official statement dated January ., 1997 (the "Preliminary Official Statement"), prepared in connection with the sale of the Notes. For the sole purpose of the purchaser's compliance with $~C Rule 15c2-12(b) (1), the City "deems final" tha~ Preliminary Official Statement as of its date, except for the omission of information as to offering price, interest rate, selling compensation, delive-~y da~e and other terms of the Notes dependent on such matters. ~1/05/97 FP & S [~014/025 1~:29 FAX 20644?9?00 1 Section_~6. E.~fective Date. This ordinance shall take effect ten (10) days after its passage and publication. APPROVED by the City Council of the City of ~remerton, Washingzcn, this !Sth day of January, !997. PASSED by the City Council oX the City of ~remerton, Washington, this 22nd day of January, 1997. APPROVED this Co~r.¢il President day of January, 1997. ATTEST: LY~ MORTON° Mayor KAT~LEEN McCLUSKEY, City Clerk APPROVED AS TO FORM: George M. Mack, Bond Counsel Publication Date: Ordinance Number: 02752'17. ~2 -12 - 01z05/97 13:30 FAX 20644?9?00 ! FP& S 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 22nd day of January, 1997, as that ordinance appears on the Minute Book of the City. DATED this day of January, 1997. Kathieen L. McCluskey City Clerk 02732~.7.02 32- 01/05/97 ~016/025 13:30 FAX 2064479700 1 FP & S CITY OF BRF.3IERTON, WASHINGTON ORDINANCE NO. AN ORDINANCE of the City of Bremerton, Washington, authorizing the issuance of tax amicipation notes for thc purpo~ of paying City expenses pending . the receipt of general City taxes; creating a note redemption fund; providing for the sale of these notes to Bank of America ,.mac..", -"",..-':" ~ ~, doing business as Seafirst Bank of Seattle, Was to ; ..._, ......... '_'rgency; [A, vroved: January 15, 1997l Pass~[ .[~1 January {4-S~ [221, 199/ This document was prepared by: Foster Pepper & Shef¢lman 111 Third Avenue, Suite 3400 Sear'de, Washington 98101 (206) 4474400 01~05/97 ~017,025 13:31 F.~X 2064479700 ! FP & S CITY OF BKEMERTON, WASHINGTON ORDLNANCti NO. AN ORDINANCE of the Ciq, of Brenmnon, Washir~ton, authorizing thc issuance of tax anticipation notes for the purpose of payin8 City expenses pending the receipt of general City taxes; creating a note redemption fund; providing for the sale of those notes to Bank of Americ~ {,"~.V, ''~..,...~* ~ INT&SA], doing bus~.ss as Scafh'~t Bank of Seattle, Wa~ ton; .... , .......... WHEREAS, the City Council of the City of Bremerton, Washington (the "City"), finds that the periodic collections of sales, excise and general ad valorem taxes and other revenues in 1997 will not be sufficient to meet necessary City expenses as they are incurred in 1997, and thai 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, THEKEFOKE, THE CITY OF B~RTON DOES ORDAIN: S~,tion 1. _D~bt 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 I996 for tax collection in the year 1997 is $1,302,580,919 and the City as of November 30, 1996, had $10,300,910 of outstanding genera1 indebtedness evidenced by limited tax general obligation bonds and notes and Tax anticipation notes incur:ed within the lirait of up to 1-t/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 $1,710,000 within the limit of up to 2-I/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 ~he Ci~', and the amount of indebtedae~s for which the notes are herein authorized to be ~.ssued is 0273ZI7,0Z 01/08/'97 13:31 FA% 2064479~00 1 FP & S ~018/025 $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 get, rat municipal purposes without a vote of the qualified voters therein. Section 2. N.ote Fund; Au.thoril. ation and Descriptip. n of Notef. There is created in the off.me of the City Treasurer a special fund called the Tax Anticipation Note Fund, 1997 (the "Note Fund'). Pending the collection of sales, excise and general ad valorem property taxes levied for collection in 1997 and other revenues anticipated to be received in 1997, the City shall issue and sell its tax anticipation notes to be designated Tax .~nticipation Notes, 1997 (the "Notes"), in the principal amount of $1,250,000. The Notes shall be dated February 1, 1997; shall mature on January 31, 1998; shall be in the denom~tion 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 f'~.qe, al 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 ca 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., ~en 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 ~e fixing of the above interest rate is in the best interests of thc 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.. Reeistration ,nd Transfer. ~.f 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 -2- 35 01/05/97 13:32 FAX 2064479700 1 FP & S 019/028 ns.mc and mailing address of thc owner of each Note and thc principal mount and number of each of the Notes held by each owner. Notes surrender~l to thc Note Registrar may be exchanged for Notes in any authorized denomination of an equal aggregate principal amount. Notes may be tramferred only if endorsed in the manner provided thereon and surrendered to ~ Note Registrar. Any exclmuge or wamfer shall be without cost to the owner or transferee. The Note Registrar shall not be obligated to exchange or transfer any No~e during the 15 days preceding the maturity date. _Section a. Payment of Notes. Both principal of and interest on the Bonds shall be payable in lawful money of the Unil~ States of America upon presentation and surrender of tbe Notes by the registered owners at either of the primSpal offices of the Bond Regi~ar at the option of the owners. Section $. Pledge of. Taxes. The Notes shall be paid solely from the Note Fund. The City irrevocably pledge~ to budget and levy taxes within the eor~titutionaI and statutory tax 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 in, rest on the Notes at maturity. The City further irrevocably pledges to set aside and deposit into the Note Fund fzom such taxes and other money on or before the matttri.ty date of the No,es an amount sufficient to pa5', 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. S. ec,tign fi. Form .and Execution 9f Notes. The Notes shall be printed, typed or multicopied ou good bond paper La a form consistent with the provisions of this ordinance and O273217.0g -3- 3(o O1/08,'g? 15;3~ FAX 2064479700 1 FP & S ~020/028 state law, shall be signed by thc manual or facsimile signature of the City Treasurer, and shall have the seal of the City or a facsimile reproduction then:cf impressed or primed thereon. Only Notes bearing a Certif'~.ate of Authentication in the following form, manually signed by the Note Registrar, shall be valid or obligatory for any purpose or entitled to thc benefits of CERTIFICATE OF AUTH]ENTICATION This Note is one of the fully registered Ci~ of Bremenon, W~shington, Tax Anticipation Notes, 1997, described in the Note 0rdL~nce. WASHINGTON STATE FISCAL AGENCY Bond Registrar By Authorized Signer The auth~riz~ signing of a Certificate of Authentication shall be conclusive evidence that the Notes so authenticated have been duty executed, authenticated and delivered and are entitled to thc benefits of this ordinance. 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 fac.s~m~le signature delivered or issu~l by the City, those Notes nevertheless may b~ issued argl delivered arid, 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 Cit5~ authorized to sign bonds, although he or she did not hold the required office on the date of issu~ce of thc Section 7. Note_Registrar. principal corporate trugt 0273217.02 The Note Registrar shall keep, or cause to be kept, at its office, sufficient books for the registration and tramfer of the Notes, -4- FAX 2064479700 I FP which shall be open to inspection by the City at ali 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 No~e Registrar's Certificate of Authentication on the Notes. 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 az~y of its officers or ~dL,~ectors to act as members of, or in any other capacity with reef"ct to, any committee formed to protect the rights of Note owners. .Section 8. Not.es Negotiab. l.e.. The Notes shall be negotiable instruments to the extent provided by RCW 62A.8-10~ and Section 9. _Use of Proc~e~. 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 deficit~ in the City's General Fund resulting from budgeted expenditures, and any b~terest recei'~ed ~rom 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 o~' the Notes .~nd placed in the Note Fund shall be used for the sole purpose of retiring the Notes or paying the interest thereon. S.ection 10. Perr~itted Financing: of Cumulative Cash F1.0w Deficit. Based upon the reasonably expected amounts of sales, excise and general oar valorem property taxes and other revenues to be collected in 1997 (including investment proceeds of the Notes) and that are 01/05/97 13:34 FA[ 20644?9?00 1 FP & S ~022/~28 expecled to be available to make General Fund expenditures in 199'] (computed by treating a reasonable working capital reserve in an amount not exceeding 5 % of th~ total General Fund expenditures in the prior f~.al year as not being available to make those expenditures), the City Council f'mds that the principal amount of thc Notes does not exceed t~ 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 1997 and that is to be financed with proceeds of the Notes. Section 1 I. Preservation of Tax _Exemption of Interest on Nptes. 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 thc City treated as proceeds of the Notes at any time during the term of th~ Notes which will cause interest on the Notes to be included in gross incoro~ 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. Sect[on 12. S_ma!l .G~vernmen~! I~suer Arbitrage Rebate Exception a.nd Dcsignati.'on of Notes.,a,s "Qualified Tax-Exemvt Obligations." The Cits' finds and declares that (a) it is a duly organized and existing governmental u_nit of the State of Washington and has general taxing power; Co) no Note which is part of this issue of Notes is a "private activity bond" within tl:e meaning of Section ].,ti 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 emirely within the jurisdiction of the City); (d)the aggregate face amount of all tax-exempt obligations (other than private activity bonds and other obligatiom not required to be included in such calculation) issued by the City and all entities subordinate to the City -6- 0~/05/97 ~:$$ F~X 20544?9?00 ! FP & $ ~02~;025 (including amy 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 mount of tax-exempt obligations, M. cluding thc Notes, designated by thc City as "qualified tax-exempt obligations" for the purposes of Section Z65(b)(3) of the Code dm'lng the emlendar year in which the Notes age iisued does not exc~zd $I0.000.000. The Ci~' 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 2650a)(3) of the Code. 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 t. tte 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 Ma~rial EvenB. The City nr~clertakes to provide or cause to be prodded, either directly or through a designated agent, to each nationally recognized municipal securities information repository designated by the SEC in accordance with the Rule ("NRM$IR") or the Municipal Securities Rulemaking Board ("MSRB"), and to a state Lnformation depository, if any, established in the state of Washington (the "SID"), timely notice of the occurrencr, of any of the following events with respect to the Notes, if material: (i) principal and interest payment ctelhaquencies; (ii) nor-payment related defaults; (iii) unseheduIed 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 opiniom 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. 0~3217.0~ -7- 0[/05/97 [3:36 F.~X 2064479700 1 FP & S ~024/028 (b) Amendmeat of Undertaking. The Undertaking is subject to amendment after the primary offering of the Notes without the consent of any hol~r of any Note, or of any bwker, dealer, municipal securities dealer, participating underwriter, rating agency, NRMSIR, the SID or the MSRB, under the circumstan~s and in the manner pemaitted by the rule. Th~ 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) _Bc_nefic.'.mries. The Undertaking evide~ed by this Section 13 shall in~e 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) T__ermination of Undfl~akine. The City's obligations under this UndeiXaking shall terminate upon the legal defeasance of all of the Notes. In addition, the City's obligations under tlxis Undertaking shall terminate if those provisions of the Rule which require the City to comply with this Undertaking become legally inapplicable La respect of the Notes for any reason, as confmned by an opillion of nationally r~oguized bond counsel or other counsel familiar with fedet'al securities laws delivered to the City, and the City provides timely notice of such termimtion to each NRMSIR or th~ MSRB and the SID. (e) Remexly..for Failure tO Comply .with Undertaking. As soon as practicable after the City learns of any failuxe to comply with the Undertaking, the City will proceed with due diligence to cause such noncomplia _ncc to be corrected. No failure by the City or other obligated person to comply with the Undertaldllg shall constitute a default ~ respect of the Notes. The sole remedy of any holder of a Note shall be to take such actions as that holder deems necessary, includi.ug seeking an order of specific performance from an appropriate court, to compel the City or otl~r obligated person to comply with the Undertaking. (f) De. si~nation of .Official Res_~ns~t¢ tO Administer Un!ienak, in_~. 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 dimc~ 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 th~ Notes set forth in this $cc~on 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 th~ Notes, and, if material, preparing and disseminating notic.~ of its occurrence; (ii) Determining whether any person other thaxt the City is an "obligated person" within the meaning of the Rule with respect to the 01,'08/97 13:36 FAX 2064479700 1 FP & S ~025/025 Notes, and obtaining from such person an undertaking to provide any notice of material events for that person in accordance with the Rule; (iff) Selecting, engaging and compensating designated agents and consultants, including but not limited to £maneial advisors and legal counsel, to assist and advise the City in carrying om the Undertaking; Md (iv) Effecfing any necessary amendment of the Ugdenaking. Section 14. Ao~roval of NoB Purchase Contract. Bank of America {.~.~./, N,A.] INT&$AI, doing business as $eafL,'st Bank of Seattle, Washington, has presenmd 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 Note Purchase Contract is in the City's best interest and therefore accepts the offer contained therein and authoriz~ 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 & ghefelman, 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 ~ny official statement, offering circula 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 Md directed to do eveuflxing necessary for the prompt delivery of the Notes to the purchaser a"ld for the proper application and use of the proceecls of the sale thereof. Section 15. Preliminary Qffici. al Statement Deemed.Final. The City Council has been provided with copies of a preliminary official statement dated January. , 1997 (the "Preliminary Official Statement"), prepared in connection with the sale of the Notes. For the 0[/08/97 13:37 FAX 2064479700 [ FP & S ~028/028 sole purpose of ~e purchaser's compliance with SEC Rule 15c2-12(b)(1), the City "deems final" rtmt Preliminary Official Statement as of its date, except for the omission of information as to offering price, interest rote, selling compensation, delivery date and other terms of the Notes deperdent on such matters. {4~-} Section 16. Effective Date{ ^..a: ...... ,-~-- -~--+ :-----~ , ....... ~, Thk ordinan~ shall take effect t~ (10) dam al~, er] its passag~ mad ~blication. [APPRO.I~E,D by the Ci,tv Counc~ o.f the Ci~ of Bremerton~ Washington. this lSth (lay of Janu.,ar.. I~.] p^.~=n r~x~. ~..-~,e, v~ by the Ci~ Council oft2~ City of Brem~rtoa, Washington, this $_a_~.~ ['221~ day of January, 1997. APPROVt/D this _ day of January, I997. [ 1, Council President ATTEST: LYNN HORTON, Mayor KATHLEEN McCLUSKEY, City Clerk APPROVED AS TO FORM: 02~3217.~Z Ol,~08/g? 15:$$ FAX 206~79700 i F'~ & $ ~027<'025 C-cor/¢ M. Mack, Bond Counsel Publication Date: O~dinance Number: -11- 01/08/97 13:38 2064479700 1 FP & S ~028,'028 I, KATHI.I:.I:N L. McCLUSKEY, City Clerk of the City of Bremcrton, Washington, certify that the attached copy of Ordinance No. is a true and correct copy of thc original ordinance passed on the _{15~) [22ndl day of ~anuary, 1997, as that ordinance appears on the Minute Book of the City. DATED this __ day of January, 1997. Kathle. en L. McCluskey City Clerk 0'2T3217.~2 CITY OF BREMERTON 1997 GENERAL FUND CASH FLOW PROJECTION Thousands 2000 1500 1000 5OO 0 -5OO -1000 DEC JAN FEB MAR APR MAY JUN JUL AUG SEP I+PROJECTION I OCT NOV DEC .JAN-- 8--97 [4 E D I 6 : S S S E A F I R S T C A P I T A L M R K T S P . 02 PRELIMINARY OFFICIAL STATEMENT DA TED JANUARY 14, I937 NEW ISSUE RATING: N=t Applied For NEGOTIATED ~n ~h~ o~ln~n of ~ C~n~, assuming c~mptl~nce by ~e Ci~ with a~oilco~le r~o~remeflt~ of ~e fnfemal ~ve~ue Code of 158~, as e~nCOd, tnduding a~rage [~ulr~ents, ~rorost on the ~loles 1~ excluOeE f~m gross I~com~ of rendered own~ for ~e[al l~ccme tax purposes u~der exlst~g fode~ ~aw ~0 Is n~t an ff~m of ~x proleronce lot pu~= O~ the alternative ~ifli~m tax ~lica~le :o in~uals. However, w~le I~temst on ~e Notes efso ~ n~ an t~m of ~ax p~efefen~ 1o~ pur~ses ~ ~e al~matlve ~mum t=x ap~llca~e ~ corrals, Interest on ~e Not~ rec~ved by ~pofations Is taken l~to accent In the c~t~lon of a~usteO c~.feflt comings for pu~o~ ~ ~e all.five m~lmum tax app~ce~le ~ co. omCcc, .~torost on t~ ~lotes recelva~ fly ce~ ~r~tlonS ~y Ye su~t ~ ~ ~nlal mx, I~temst ~ ~e ~ote$ rocetv~ ~y ~ffaiA $ ~r~rat~ns racy bo ~t to ~ ~ interest c,~ ~a Notes r~o~od by ~r~'gn c~aflons w~ Uflit~ States Oranges may ~e subj~t ~ a ~.elec ~ranc~ profits tax. Ro~lpt of mteres~ on ~e ~t~ may ~ o~f ~derat tax ~eq~flces for ~alfl taxpay~. See ~e c~c~ "TAX EXEMPTIO~ ~ld ~ERTWN OTHER FEDE~L T~ CONSEQUENCES' herein. CITY OF BREMERTON KITSAP COUNTY,WASHINGTON $1,250,000' TAX ANTICIPATION NOTES, 1997 DATED: February 1, 19~J7 DUE: January 31~ 1998 The Notes will be issued in fully registered form in the denomination of $50.000 or integral mulltiples thereol. Principal of and inlerest on the Notes will be paia l~y the Fiscal Agent of the State of Washington (the "Paying Agent"}, currently The Bank of New YorK, New York, New York, and Wells Fargo Bank, National Association, Seattle, Washington upon presentation and surrender of the Notes att maturity. Due A~unt Bate_ price Janua~'/31, 1998 $1,250,000 % The Notes will not be subject to redemption prior to their stated maturity. The Notes are direct eno general obligations of the City. For as long as Any of the Notes are outstanding, Pe City irrevocably pledges to low taxes annually available to it without a vote of' the electorate residing therein on all of the taxable prope.'ty within the City in an amount sufficient, together with other money legally available and to be used therefor, to pay when due the principal of and interest on the Notes, and the full faith, credit and resources ct the City are pledged irrevocably for the annual levy and collection of those taxes and the prompt payment of the principal of and the interest on the Notes. See "SECURITY" herein. The 0fly has designated the Notes as "qualified tax-exempt obligations" for banks, thrift institutions and other financial institutions. See ~CERTAJN OTNEIR FEDERAL TAX CONSEQUENCES" herein. The approving legal opinion of Foster Pepper & Shefelman, Bond Counsel, Seattle, Washington, w;ll De delivere~l with the Notes. The closing of the Notes is expected to occur on February. 1, 1997, The Notes definitive form will be ready for delivery at the facilities of. The Depository Trust Company in New York, New Yort(, on or around February 2, 1997. This cover page contains certain information fof quick reference only, it ls not a summary of this issue. Investors must read the e,'Itlre Official Statement to obtain information essential to making an infor,'ned investment decision. JAN-- 8--97 WED 1 ? : 5 1 SEAF I RST CAP I TAL MRKT$ P . 02 Representations Neither the City nor the Underwriter has authorized any dealer, broker, salesperson or other persons to give any information or make any represcntation~ other than those made in this Preliminary Official Statement, and, if given or made, such other information or representations must not be relied upon as having been authorized by the City or the Underwriter. This Preliminary Official Statement cloe~ not constitute an offer to sell, nor ~hall 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 int'ormation contained ia this Preliminary Official Statement has been obtained from City Officials and other source, believed to be reliable. Neither a representation, warranty nor guarantee is made by the~nderwri~er as to the accuracy or completeness of any informat?n in this Preliminary Official ~Iatemcnt and nothing contained in this Preliminary Official Statement is or shall be relied upon as a protnise or representation by the Underwriter. The delivery of this Preliminary Official Statement does not imply that the information contained herein is correct as ef any time subsequent to the date of the Preliminary Official Statement as shown on the cover page. Disclosure Statement The City will deliver to the Underwriter at the time of delivery of the Notes a signed ~tatement substantially to the effect that this Preliminary Official Statement, as of its date and as of thc 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 there[n, 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 .o, per..ations or financial condition of the City nor,.to the best of the City's knowledge, in the gener,d e,;onotny of the City since the date el' the Preliminary Official Statement. Secondary Market It has been the practice of the Underwriter ~o maintain a secondary market in municipal seeuritie~$ which it sells. The Underwriter intcnds t,o_ engage in secondary market trading of the Notes, .subject to applicable securities laws. The Underwriter, however, is neither obligated to engage.in ~ccondary trading nor te 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 connec!ion with the offering of the ,Votes, the Underwriter may over-allot or effect transactions that stabilize or mab~min the market price of the Notes at a level above that '~.hich might otherwise prevail itt the open market. Such stabilizing, if cotumenced, may be discontinued a~ any time. The' Prelvmnary Official Staternent, as of t,s date, nas been dee,,~ed final by the City for purposes of SEC Rul, 15c2-12(b)(2) but i., ~ubject to revision, amenatnent, a~.~d completion in a final Official Statement which will be available within seven business days of tl~e sale date. JRH-- $--9? WED 1 ~ ~ 42 SEPF : ~$T ¢~P I TRL MRKT$ P . 02 Lynn Ho~on $ohn Law Al Colvin David Fart Shertil Huff-Menee.q Ge¢il M¢Conncil Carlos Montgomery Richard Neville Lon Ovcrson Robert Winters CITY OF BREMERTON KITSAP COUNTY, WASHINGTON MAYOR CITY COUNCIL Chairperson Member Member Member Member Member Member Member Member Term Expires December 31 1997 1997 1997 1997 1999 1999 1997 I999 1997 Richard Hanna Kathleen McCluskey John Koch Ion Sicvcrs APPOINTED OFFICIALS BOND COUNSEL Foster Pepper & Sh~£elman Seattle, Washington Treasurer Admiaistrative Sccviccs Director/City Clerk Auditor Attorney UNDERWRITER Bank of America NT&$A doing business as Seafirst Bank ("Seafirst Bank") Capital Markets Division Seattle, Washin~on iii .5'o TABLE OF CONTENTS Tntroducfion ........................................................................................................................... 1 Description of thc Notes ....................................................................................................... ! Authorization ........................................................................................................................ ! Security ................................................................................................................................. Purpose .................................................................................................................................. 2 Note Fund .............................................................................................................................. Failure to Rcdccm ~ Notes ................................................................................................. 2 DeN Paymon~ R~o~d ........................................................................................................... Futuro ~inancing ................................................................................................................... 2 Assessed Valuation ~tenuiuation ....................................................................................... 2 Tax Collection Pr~ ...................................................................................................... 3 AuthoNzation of ~bt ........................................................................................................... 3 Oenor~ Obligation Indebtedness .......................................................................................... 3 Limits on Amount of Oeneral ON igation Indebtedn~s~ ....................................................... 4 Authorization of Short-Term D~bt ........................................................................................ T~ing Power, ~d Limitations ............................................................................................ 5 Auditing of City Finite, ..................................................................................................... Not Direct D~bt and Es~mate~ N~t Overlapping General Obligation ~bt ......................... 6 Bonded ~bt Ratios of thc City ............................................................................................ 6 Statutory ~bt Limb C~lculation .......................................................................................... Tax Collection R~ord of the City. ...................................................................................... Propgrty T~ Rates ................................................................................................................ Comp~ative Statement of General Fund Revenues ~d Expenditures ............................... 9 Ocn~ral Fund Budgeted ~x~nditure~ 19% and 1997 ......................................................... City Profile ............................................................................................................................ l 1 Schedule of General Obligation Bon~ Debt Sera'ice for the City ......................................... General and Economic Infomtation ...................................................................................... Preservation of Tax Exemp~on ............................................................................................. 17 Federal Income Tax Exemption ............................................................................................ Ce~ain O~r Federal T~x Consequences ............................................................................. 18 Absence of Materi~ Litigation ............................................................................................. CUSIP Numbers .................................................................................................................... 19 Approval of Bond Counsel ................................................................................................... Continuing Disclosure ........................................................................................................... 19 Underwriting ......................................................................................................................... 20 Concluding S~tement ........................................................................................................... 20 Form of Legal Opinion .................................................................................................. Appendix A iv jAN-- 8--9? WEB 16~4~ SEAFIRST CAPITAL MRKT$ P.84 PRELIMINARY OFFICIAL STATEMENT CITY OF BREMERTON Kitsap County, Washington $1,250,000 TAX ANTICIPATION NOTES, 1997 INTRODUCTION The City of Bremerton, Washington (the "City"), a municipal corporation duty 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, 199'/(the "Notes"). Thru Official Statement provides information concerning the City and the Notcs. DESCRIPTION OF THE NOTES Principal Amount, Dates, Interest Rates, and Maturities The Notes will be issued in the principal amount of $I,250,000 an,d; will be dated and bear interest from Feb,'uary 1, 1997 until their stated maturity. Th~ Notes v, ill mature on Janu,m:y 3t, 1998, and will bear interest, payable at maturity, at the rate ~f %pe annum. Interest on the Notes will be computed on the basis of a 360-day year of twelve 30-dayr months. Optional Redemption The City has not reserved thc right to ~edeem 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. Registrar, Paying Agent and Transfer Agent Principal of and interest on tae Note~ ~s payable m Ltwfui money of the United states of America, by the Fiscal Agent of the State of Washington, thc ("Rcgistr,'u"' and "Paying Agent" and the Transfer Agent") upon presentation and surrender et' the Notes, at maturity, at either of the principal offices of thc Fiscal Agent in Seattle, Washington or New York, New York, currently The Bank of New York, New Yolk, New York and Wells Fargo Bank, National Association, Seattle, Washington. AUTHORIZATION The Notes are issued in accordance with the provi.sions of the Constitution and applicabfe statutes of the State of Washington, pursuant to Ordinance No .... (the "Ordinance") of the City Council, adopted on January _, 1997. ~ A P I T F-IL M R K T $ P . 0 $ WED 1 6 : ~-$-~ S E A F I RoT C SECURITY For as long as any of tta~ Notes are outsta~.?ng, the Cit~ irrevocably pledges to levy ~axes annually available to it without a vote of th~ electorate residing therein on all of' the taxable property within the City in an amount sufficient, together with other money legally available and to be. used therefor, to pay when due the principal of and interest on the Notes, and the full faith, credit and resources of the City are pledged irrevocably for the, annual levy and collection of thom taxe~ and the prompt payment of the principal of and the in[crest or: the Notes. PURPOSE Thc proceeds of the Notes wiil be used to provide cash flow matlagement of the City's General Fund revenues and expenditures, in anticipation of' the c~llection of general ad valorem property taxes and other money clue the Ci~'s Ocher'al Fund in 1997, 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 th~ or, ce of the City Treasurer a .qpcc!~,}l fund to ~e known and designated as the Tax Anticipation Note Fund, 199'7 (~h¢ "Note Fund ) for the sore purpose of payment of the principal of and interest on the Notes. Accrued interest, if any, received from th~ sale of' tho Notes shall be deposited in thc Note Fund. The City covenants to deposit in the, Not~ Fund on or befor~ maturity amounts sufficient, together with other monies otherwise available [herein, to pay the principal of and interest duc on die Not¢~. 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 fi'om and after its maturity until that No[c, both principal and interest, is paid in full or until .~u¢ficient money for its payment in furl is on deposit in the Note Fund. DEBT PAYMENT RECORD Thc City has always promptly met principal and in[crest p',a,]~ments on outstanding obligations when due. Additionally, no refunding bonds have been imue'd for the purpos¢ of preventing an impendbg default. FUTURE FINANCING The City has no other general obligation financing plans for 199% ASSESSED VALUATION DETERMINATION In thc State of Washington, the County Assessor (the "Assessor") determines thc value of all rca; and personal property t?oughout the County (including thc City) which is subject to ad '~'alorem taxation, The Assessors 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 5'2t JAN-- 8--97 WED i 6 : ~4 SEAF I RST CAP I TAL MRKTS F' . 06 ' P 'y . p ~:om ty ~s revalued annually based on market sales and rccei,~,es an on-site appraisal every six vents. The property is listed b.,7 the ..~sscs.sor on a tax roll at its cuncn! assessed value and the tax roll is filed in d~e Assessor s The Assessor's determinations are subject to revision by the County Board of Equalization and, )'or certain property, subject to further revision by the State gom'd of Equalization. After all administrative procedure~ are completed, the taxing unit received the Assessor's final ccrtific~tte of assessed value of property within the taxing unit. TAX COLLECTION PROCEDURE Property taxes are levied in specific amounts, and tile 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 c~ties. 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 Kit~ap County Treasurer by lanu.a,,'~ 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 Colm'nissioners at thc .qume time, All taxes am 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. accouming for the money collected, thc division of the taxes among lhe various taxing cities, giving notice of delinquency, and collection procedure are all covered by detailed s 'tatutes. 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 prOl2C,'ty 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 m;:y eommenc~ foreclo.iur~of h tax lien on real property after ttu'ee (3) years have passed since thc first delinquency. Washington Stat? cour!s have not decided whether the Homestead Exemption may give the occupying hom~. owner a right in the forced sale cf t~e family residence for delinquent general property taxes to retain the first $30,000 of p~'oceeds of the sale, (Se, Algeria v.,. Shar£, 30 Wn. App. 837, 638 P.2d 627 (1982), holding the homestead right superior to lien~ for local improvement district assessments). AUTHORIZATION OF DEBT The power of the City to contract debt of any kind is controlled and limited by state law. Ali debt must be set fo~lh in accordance with detailed budget procedures and paid for out of identifiable receipts and revenues. The budget must be balanced for each fiscal year. It is unlawful for an officer or employee of the City to incur liabilities in excess of budgetary appropriations. GENERAL OBLIGATION INDEBTEDNESS Under the Constitution and statutes of the State, the City slay incur two types of general obligation indebtedness (including bonds). The two types are primarily differentiated lay the limits on the real and period:mi property taxes which may be collected for the payment thereof. Limit, ed tax general obligation indebtedness is payable from taxes upon all the taxable property in the City' which may bc imposed by th~ City within the limitations prescribed by State statute without a x'ote of the peopl~ (sometimes referred to as "non-voted debt" or "non-voted bonds" or 5'4 JAN-- 8--9~ WED 1 6 : ~5 SEAF I RST CAP I TAL M~KT$ P . "councih'nanic bonds"). The statutory limits on thc levy o£ such taxes are d¢,~cribed in the section herein entitled "LIMITS ON AMOUNT OF GENERAL OBLIGATION INDEBTEDNESS." Unlimited tax general obligation indebtedness i,~ payable from taxes without limitation a~ to rate or amount, imposed u~n all taxable pro~rty in the city, Unlimited t~ indebtedne~ may incurred only after approv~ by ~% of the City voters at ~ el~tlon in which th~ total vote exceeds ~% of the votes cast at the l~t preceding general election of the City or State. Such unlimited tax indebtedness Js sometimes mfc~d to as "voted deb~," "voted bonds" or "unlimited t~ bonds." Bonds issued to refund outstanding general obligation indebtedness of either type may be ~sucd without voter approve. LIMITS ON AMOUNT OF GENERAL OBLIGATION INDEBTEDNESS State statutes ]trmt the total ptmcip~u amount of all C~ty general obhgatton indebtedness mcurrcd for "general" purposes, both limited tax and unlimited tax, to 2.5% of the actual value of taxable property within the City. Within the 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 thc 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 thc City: water, tu'tificial light ~d sewers: 2.5%; open space and park facilities: 2.5%. The combination of unlimited tax and limited tax general obligation debt rot 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 mom restrictive than those contained ~.n the State Constitution. Both the Constitutional and statutory~ debt limits may be exceeded if necessary to meet obligations made mandatory by Stat~ law o,', ff necessary, to maintain the corporate existence of tl~ City. In computing total general obligation indebtedness, the following "assets" may be deducted against the princil~al amount of indebtedness cutstanding: (a) money and investments on deposit in general obligat~on bond retirement fund~: (b) taxes (both current and delinquent) levied for the payment of general obligation indebtedness; and (c) delinquent (but not currant) 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 ~,tatutes of the State impose other limitations on the City's levy of taxes upon real and per.~ona] property (See section heroin entitled "TAXING POWERS AND LIMITATIONS".) AUTHORIZATION OF SHORT-TERM DEBT As a result of t982 legislation, any Washington municipal corporation may borrow money and issue ~hort-tcrrn obligations, the proceeds of which may be used for any lawful purpose, Short- term obligations may be issued in anticipation of d~e receipt of revenues, taxes, br pr- ants or the sale or (I) general obligation bonds if ;he 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 author[zed by ordinance or resolution; or (3) local improvement district bor~ds if thc bonds have been authorized by ordinance or resolution. Thcs, short4erm obligations shall be repaid out of money derived from the source or sources in anticipation of which they wer~ issued or from any money lc,ally available for thi.~ purpose. Additionally, the City may incur short-term indebtedness h~ the following ways: first, in an emergency, thc Council members may put a plan into effect and authorize indebtedness outside 8--97 WED 16 : 46 SEAF I RST CAP I T~L MRKT$ thc current budget, All expenditures for emergency purpose shall be paid by warrants form any available money in thc fund properly chargeable with such. expenditures. If there i~ insufficient money on hand in the fund, thc warrants become registered interest-bearing wac'rants. In adopting the budget for any fiscal yea~', the Council members shall appropriate funcls to retire any outstanding registered warranta issued since the adoption of the last preceding budget. Second, the City' may, without a vote ?.,f, the electors, purchase prol~ertv on a conditioner sales contract, if the ?,tel contract ~m~ount, together with [he other non-voted ~cnet'al obligation indebtedness of the C~ty, does not exceed 314 of'one percent et' the value of taxable property in the City; any item ,~o 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 d~crcin, a maximum of $3,375 per thousand for general city purposes (the "reguhu' [e, vy"). Cidc$ with full-dine f'a'¢men may lcvy ar~ additional $.225 per thousand to fund the city ~ Fireman's Pension Fund (Ch,aptqr ~ll. 16,060 RCW), thus creating a maximum annual levy rate of $3.60 per thousand. Thc Ctty is currently levying $3,3573 per thousand dollars of taxable assessed valuation, A.,cco[ding to RCW 2'7.12,390, any city or town annexed to a rural library district, island library district, or inter-co.,unty ~ral library d~,strict, such as the City, shall be entitled to levy up to three dollars and sixty cents pet' thousand dollars of assc..qsed valuation le.qs any regular levy made by such library district in the incorporated area, notwithstanding any o~hcr provision of law, A city's regular property taxes are subject to the provisions of a si'ate statute l~fiting the growth of annual property taxes (Chapter 84.55.010 RCW). The limitation provides tha~ the regular property taxe.q payable in the following year shall not exceed one-hundred and ,qix percent (106%) of d~e amount of the single highest regular levy muount lawf'ully levied by ~l~e municipal entity in the three immedia?ly preceding calendar, ye~ plus an addihonal amount due to the incremental assessed valuation increase in tl~e municipal entity caused by new con,true[ion and propert,y improvements, The rcgula~ property taxes levied by a city may be increased above the 106% hmitadon upend, the affirmative vote of ~ majority of the voters residing in [he municipal entity at an election held for such purposes (Chapter 84,5,5.050 RCW). 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, ~he financial condition and resource~ of the City~ wh~:[l~er the law~ and consthution of the State are being complied with, and the mett~ods and accuracy of the account~ and reports of the City. Reports of the Auditor's examinations are required to be filed in the office et' the State Auditor andln the auditing d, cpartmer~t of the City. P ~9 NET DIRECT DEBT AND ESTIMATED NET OVERLAPPING GENERAL OBLIGATION DEBT (As of Nevember 30, 1996)t Direct Debt: Voted Gcneral Obligation Bonds Outstanding ...................... Non-Voted Bonds Outstanding .............................................. Non-Voted General Obligation Tax Anticipation Notes Outstar~ding (this issue) ..................................................... Bank Line of Credit Outstanding ........................................... Less: Debt 5ervice Fund Balance ........................................... Net Direct Debt ......................................................................... $ :,710,000 9,042,700 1,250,000 8,210 $ Estimated Net Overlapping Debt Kitsap County Port of Bremcr~on Bremeaon Sch. Dist. No, 100-C Central Kit,qap Sch. Dist. No. 401 South Kitsap Sch. Dist. No. 402 Not CLO. Debt Peroent of Amount of 51,188, t40 4,11% $ 2,105,258 2,105,000 25.66 540,081 30,130,000 '73.96 22,284,386 90,490,000 1.12 ! ,016,704 I 1,694,000 .05 5,849_ Estimated Net Overlapping Debt: .......................................... Net Direct plus Estimated Net Overlapping Debt: ......................................... $ 11,731,973 25,952,278 37,684,251 BONDED DEBT RATIOS OF THE CITY Preliminary Assessed Valuation £er collcctioa Year [9972 .......................... $ 1,302,580,919 Estimated City Populaden (1996)J ............................................................... 38,496 Assessed Valuatior~ Per Capita .................................................................... $ 33,837 Net Direct Debtto A.qses~cd Valuation ........................................................... 90% Net Db'ect ,~nd Estimated Overlapping Debt to Assessed Valuation ........... 2.89% Net Direct Debt Per Capita .......................................................................... $ 305 Net Direct and Estimated Overlapping Debt Per Capita .............................. $ 979 pmpc~y in thc City. ,1 So~rcc: Washed, on S~ate Offic~ .f Fimmcial Managem,nt (August 1996). 5'7 J A N-- :B --'B 7 WED 1 6 : 5-~-~ $ E A F I R'$ T CAP I T A L _M_.~: K T ~J F' . 8'2 STATUTORY DEBT LIMIT CALCULATION (As of November 30, 1996)1 Preliminary Taxable 1996 Assessed Valuation for Collection year 1997 ............ 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 (Nonvotcd) .............. 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 Cr,dit Outstanding ............................................. Plus: Cash and Investments in Debt Service Funds ......................... Remainil~g Capacity for General Pu¢ose~ ('Voted) .................... il. Utility Purposes (2.5% of Valuation) Limit ..................................................................................................... Outstanding .......................................................................................... Remaining Capacity for Utility Purposes ................................... Itl. Parks and Open Space Purposes (2.$% of Valuation) Limit ..................................................................................................... Out,tending .......................................................................................... Remaining Capacity for Pm'ks and Open Space Purposes .......... $I,302,580,919 $ 19,538,714 (9,042,700) (1,250,0(30) (8,210) $ 9:237,804 $ 32;5~,523 (t ,710,000) (9,042,700) (I 250,000) (8,210) 278.937 $ 20,832,550 $ 32,564,523 $ 32,564,523 32,564,523 32,564,523 1 Actjustcd to rcflccl the issuance of tl~e Notes, 5'8' J ~ ~-- 8 -- 97 ~J E_ B 16 : 54- S E ~.~ F I R S T C ~-~ P I -~o_.~_ L M R K T $ P . 03 TAX COLLECTION RECORD OF THE CITY Collected Collected as of Taxable ~ ~.ovember._3.0. ~ 9.~ Collection Assessed Tax ~ .V..,~2 kR.Y~ Amount ~..ed,~ o. nt Amount ~ !997 $ 1,302,580,9193 N/A4 N/A4 N/A4 N/A~I N/An 1996 1,223,940,521 $ 4,681,638 N/A¢ N/A4 N/A4 N/A~, 1995 1,203,299,197 4,476357 $ 4,247,668 94.88% $ 4306,862 98.45% 1994 1, t 69,824,600 4, [ 44.$73 3,973,275 95.86 4,103,.~ 64 99,05 1993 1,072,$45,6.56 4.292,888 4, 110,0l I 95.74 4,284,049 99.80 1992 949,107,I96 3,544,0!9 3,397,651 95.87 3,533,]98 99.70 ! 991 $55,620,~09 3,21 ?,059 3,071,970 95.49 3,214,247 99.9 i NOTE: T~xc,~ ,'u'e clue a~]d payable on April 30, of each year. At least one halt' of thc tax amounl duc ~'nust be paid dj) ox' bct'vm April .30, or else thc tolat amount becomes dclinClUC~)t c.,n ~ay I. Thc ~-:;o~d half of (l~c tax duc is payable on or before Oc:o~r 3 I, becoming delinquent November I. PROPERTY TAX RATES~ (Rates In Dollars per $1,000 of Assessed Valuation) City School Emergency Levy General City City State Kltsap Port of District No. Meclical Regional ~ear Fund_ Bonds 1996 $3.3573 $.2255 S 0 $3.4~4~ $1.634'7 S,4257 S5.1551 $3939 $,2500 $.4677 $15.0977 1995 3.2470 ,2308 0 3,5508 1,2249 .4079 2.1387 .0940 .2500 .~595 I 1.6036 1994 3,0635 ,2393 0 3.4297 I. ) 731 .3 $97 5.0440 ,0~65 ,2490 ,4.~.47 14.1210 1993 3.087) .2543 .4339 3.3978 1.2383 .3935 5.231 I .090~ .2500 .4283 14.8067 1992 3.2614 .2325 3.3849 1.2673 .4184 5.3694 .0926 ,2447 .4375 I4,7087 2 A~sc~scd v~tlu~tdon i~ ~[~tcd ~z~ [lt¢ as~c~cd valuation of ail taxable real a~ld personal property in thc City. 3 R'climinary 4 Not a'/~;il~blc; to be collcc~c~ JAH-- 8--9 , WED 16 : 54 SEAFIRST CAPITAL MRKT~ P 84 Revenues: Licenses & T'¢rmits lntc~governnmntal Charges for Services COMPARATIVE STATEMENT OF GENERAL FUND REVENUES AND EXPENDITURES ~ (Fiscal Year Ending Decem0er 31) 1995 1994 1993 1992 991 Total Revenuoa 14,50],567 $ !4,137,828 $ 13,3.40,322 $ 12,254,300 S 2911,989 390,454 362,968 367,369 314,209 847,272 728,407 77t:1,927 I, 199.015 t, 196,304 1,783,~6 1,394315 1,502,067 1,265,887 1,200,';04 &83,964 593,093 $$6,447 579,07 ~ 495,204 $ 18,164.181 $ 1'/.4~5,269 $ 16.801,929 $ 15.961.452 $ 14,569.0d6 Expenditures: General Govcmment $ 5.O09,311 $ 4,$43.656 S 5.039,485 $ 4,702330 $ 4,452,251 Security of Persons & Prop. R,6~4,262 8,219,945 7,830,957 7326,703 6,742,632 Physical ~nviruna~nC 848.3~ 587,g31 698,08i0 655.845 675.231 Transportation ~50.639 840,530 879,838 805.8~ 78~.332 Economic Environment 454,=30 514,3~ ~8,824 352,504 397,~79 Mental & Physical Hcal[13 2(~,=39 250.493 ~9,339 236,594 Cai(utc & Recreation 1,5~,6~9 [,4~,703 t.3~3,285 1.1783 31 I, ! 83.371 Redemption of Gen. L.T, Debt O 24.672 30.735 28,393 o Debt Service 59.8c~ 4~.593 18.eta 125.47g 187,110 Capi{alOutlay 48a.~5 _ . 385.4i4 277.J~ 22R~162 _ $ I8.153,581 $ 17,138~17 $ 16,$t5.970 $ 15,639,950 $ 15.593.380 Total Expenditures $ 6,0OO $ 6,0O0 $ 6~0 $ 6,000 $ t07400 (307,836) (398,376) (236,925) (334,764) 2,~$6 59,640 0 1,893 0 ~ 0 __~ 0 7~0,000 Other Financing Sources (Uses) Operating Transfers In General Fixed Asscu D~Sl)OSa] Proceeds & General L,T. Debt $ (298,950) $ (323,735) $ (230.725) $ 326.871 Total Other Financing Sources (UsGs) Fund Balance, January I Prior Year's Corrections RcsiduaI Equity Tranfcrs Other Equi:y Changes $ 5~8,356 $ 1,064,~6~ $ (~l,5~8) $ 206,399 $ 21~A64 $ 572,130 0 0 0 0 78,717 ~65,128} 9,717 (6,!08} (t,545) 0 _ _ (1..22.9_.) L084.95~ ~_'~(J~ . (4.i49) ..... TOTAL ENOING FUND BALANCE S 7{29,rj71 $ 1,(?,61~368 $ ~44~54~) $ 206,401 $ 217,464 Ending Fund Balance CONTINGENCY RESERVE FUND YEAR-END BALANCES 1 ~)05 1 $,~4 1993 1992 1 $91 709,040 $ 704,922 $ 387,205 S 360,523 $ 221,152 S~urcc: Ci*,y of ~lrClncrton Anrn, l:l~ Pin:mci~d RClWn{s. All yeai'.q have hccn audited by thc Wa~hinglOn State Office, Money in Ibis fund in ~xcess u( S650,0~ is transfer'red to tile Oeacral F~nd to financ~ capital pamha~s. ._TAN-- 8-- 97 WED I 6 : 55 ~$ E A ~' I R $ T C A P I T..._A L r4 R K T $ F' . ~-35 GENERAL FUND BUDGETED EXPENDITURES 1996 AND 1997 i (Fiscal Year Ending December 31) ,O. gncra[ (~ovcrnmen! Ci[y Council ........................................................................... Executive ................................................................................ ^dminisirativ¢ Scrvlccs2 ....................................................... Po]ice & Fire Pension ..................................................... Irtier§ovcrnmcnlal Service .............................................. Misc. Non-Dcpaa,ncn[a[ ................................................ Legal Depamn~;nt .................................................................. Human Resources .................................................................. Communi[y Dcv¢lopmcm ...................................................... City Auditor ........................................................................... ~ubllc Police Dcpm'tm~nt .................................................................. Fire Depm'~men[ ..................................................................... ~ublic General Fa¢itidcs ................................................................... Engineering ........................................................................... Transporlal io~1 ........................................................................ General Parks ......................................................................... Rccrculiol3 ............................................................................... Senior Cch[er ......................................................................... Pool ......................................................................................... Cemetery Services .................................................................. Athletics ................................................................................. T;'~ Anticipation Note Debt $crvlcc ...................................... Total Current Expendilures ............................................ 1996 135,455 196,065 2,196,107 1,228,069 116,35[ 1,31 ?,895 447,358 210,582 ~65,$06 79,141 1536.247 3,365,56 5a0,464 a51,903 96%350 1,024,459 185,439 144,844 240.~65 66.~36 243,354 $._.2L849,46! 1997 $ 116,675 2(24,162 1.915,763 1,315,057 110,986 1,3,.19.771 460,133 222,$67 700,189 84,983 5,/ 3,571,381 454,908 466,986 977, i05 1,026,!62 195,462 154,625 26~,69& 69.93g 2~6,404 22.274,473 Source: City of B~cmcrton. City Cl.-'rk, Trea.~m'¢r and hffommtion Services are combined un~r Administra;iv¢ Services, 10 J A N-- 8 -- 9 ,~ W E D 16 : 55 $ E A F I R ~ T~ _--oCA P I T A L M R K T $ P . 86 CITY PROFILE The City was incorporated irt 1901 and operates as Home Rule Charter Cit~ with a Mayor Council forrn of government. The Council is comprised of nine members, elected by district by the citizens of the City, each serving a four-year term. Thc Council Members are part-time elected officials who exercise the l~gislative powers of the ,City and determine matter~ at policy. The Mayor, a full-time elected offtcial, is the chief executzve 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, them are 322 full-time employees of the City. Ke~' Pe~onnel Lynn ltorton, Mayor: M~, 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 i~ the past Chair and current Board Member of the Kitsap Regional Planning Council. and, a board member of Kitsap Transit, trdtsap County Cen-Com m'td the Bremerton-Kit~ap County Health Department. M~. Herren is a graduate of the University of Washington and has been a resident of the City sine, 1974. Richard Hanna, City Treasurer: Mr. Hanna h~ been the Treasurer of the City of Bremerton since 1986. Before joining the City, he wa.q Treasurer of the City of Centralia. Washington. Mr. Hanna received his Bachelor's Degree in Accounting ftm,'n Western Washington University in 1974 and a Masters of Business Administration Degree m Finance from University of ~uget Sound in t983. Mr. Hanna is a member of the Washington Finance Officer~ Association, Washington Municipal Treasurcr.q Association and Puget Sound Finance Officer~ A~sociation. ~al~r Relations The City ha~ entered into written agreements with ,ach 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 thc City represented by bargaining units are as follows: [Jnion Member,qhip Teamsters Local 589 130 Patrolman's A.qsociation 53 Police Management Association :5 Imemational Association ef 44 Fire Fighters Local 437 ~~ F. xpiration Date 3 yr. 12/31/97 2 yr. 12/31/961 3 yr. 12/31/961 3 yr. 12131/98 In accordance with State requirements, the Cit7 conducts full negotiations with all bargaining units. Thc City's management considers it~ relations with employees to be satisfactory. 1 Under ncgoliation 11 J A V;-- 8 -- q ? W E D I 6 .' 58 -D E A F I R $ T C A P I T A L M R K T $ P . 0 2 SCHEDULE OF GENERAL OBLIGATION BOND DEBT SERVICE FOR THE CITY1 (As of Oeceml:,er 31, 1996) 1997 2003 2004 200~ ~006 2007 2008 2009 2010 2011 2012 Total Outstanding Voted General Obi;gallon Bonds Non-Voted General Obttgatlon Bonds Totat Principal Interest Principal interest All Bonds $ 165,C~ $ 105,560 $ 365,7~t $ 537,438 $ 1,173,779 195,000 94,655 428,769 518,715 1,237,139 205,000 82,369 452.39 ! 496,105 1,235,865 155,000 7~, I t5 480,758 47 ] ,g 15 I, 178,688 175,0,')0 60,551 680,000 445,850 1,361,401 180,000 49,013 720,000 406,057 i ,355,070 200,000 36,468 760,000 363,213 1,359,681 135,000 25,261 810,0C~3 3 [ 7,252 1,287,513 145,M0 15,739 $55,000 267,563 1,283,.R)2 155,000 5.3i~6 g IO,OC~ 2 i 3,872 1.284,258 0 0 965,000 155,663 I, 120,663 0 0 275,000 92,475 367,475 0 0 290,000 75,370 365,370 0 0 3i.5,000 57, I95 372,195 0 0 335,000 37,017 372,0}7 .~ 0 275,00~ L~.537 200.59.7_ $ 1~71_0=~=~ $. 546.!17 $ 8,917,699 $. aA?i,}3~- $._.,Jg,6_~_9,.~53 Doca not include ,,he Notes. 12 63 JAN-- 8--97 WED I 6 = 58 sEAF I RST CAP I TAL MRKT$ F' . 05 GENERAL AND ECONOMIC INFORMATION The City of Bremer~on, is located on Puget ,Sound, approximately 15 miles west of Sea(tie and 35 miles north of Tacoma. The largest city in Kitsap County (the "County"), Bremerron was incorporated in 1901 and has an estimated 1996 population o~' 38,496. Kit.~ap County, covering 393 ~quare miles of' land, al~ includes the following other incorporated areas: Bainbridge [,sland (population 18,350), Port Orchard (population 6,610) and Poulsbo (population 6,O70). Military Presence The economy of the City is closely tied to the United State~ Navy. The Puget Sound Naval Shipyard m Brcmcrton ( PSNS ) ,s the largest Naval shipyard on the Pact[re Coast and is the only West Coast shipyard capable of win'king on nuclear ships. With 9,395 civilian employees, 9,758 milita~, ,pers°nnel' and .925 contractors,, . the shipyard is also. the only_ facility_ ca~ablc_ of decomm~ssi,omng and ,recycling nuclear suomarine$ which are being disassembled in accordance with Strategic Arms Lmfitauons Treaties. Thc economic impact of PS. NS locally is $700 million per year. The Naval Supply Center is another local military facility in the City, with about 200 employees, Located a few miles north of th,~ Cit[ of gremerton is the Naval Submarine Base at Bangor. The Base serves as a home base for Tridcm submarines and provides employment to 3,111 civilian~. Additionally, 5,600 military and 1,665 contracted personnel are employ®d at the Base. As the ont¥ open~tional base of its kind on the Pacific Coast, it is considered to be very important to thc country by the Department of Defense. Annual local economic impact of Bangor is $230 million. Another military installation located near tho City is the Naval Undersea War'fi:re Engineering Station at Keyport. The station tests and maintains torpedoes, ~rovidc~ maintenance support for fire control equipment and mines, and provides other engineermg-rela~d service~ for undersea warfare. The Undersea Warfare Station employs approximately 2.148 c~vilian, 150 military and 700 contracted personnel. Recent base closures in other geographic regions outside of Washington have had a positive hnpact on gro~'th in the City and Kitsap County. PSNS will be tho new home of the Carrier Group Three staff which will arrive in 1997 with '70 personnel and the USS Bridge ACE (10) now under construction, which i.q due to arrive in the summer of 1997 with 650 personnel. Current PSN$ Projects In the fall ,o,f 1996, app[oximatlcy S37 million for four new projects was appropriated for the PSNS. These projects will increase th,> workload in 1997 by 8 to 10% over 1996, mine of which will continue in 1998. The aircraft carrier USS Nimkz, lead ship in the world's largest old,ss of aircraft carrie,'~, and its escort ships are temporarily homer)orted in Bremerton. Current Navy plans have t~e USS Nirnitz leaving the Puget Sound Area iff 1997 whcn it becomes due for a refueling overhaul. The nuclear cruisers USS Arkansas and USS California and thre, combat support ships, USS Camden, USS Sacramento and the newly commissioned USS Rainier are also homcported at PSNS. Thc USS Abraham Lir~coln and USS Carl Vinson, both. Nirnitz class airca'aft carriers, eacl~ with crews of' over 3,000 ~ersonnel (net o£ air wing personnel), ar.e,, cur;'ently being overhauled al the shipyard and are exp,~ctcd to be re-homcported ¢itl~:r in Everett or Brcmcrton at the completion of that overhaul since their current home ports are ~ing closed. There are 15 military base construction/renovation projects in Kitsap County under construction with an estimated comb[r~ed cost of St00 million. 'Projects include two bachelors quarters buildings with a total of' 686 beds, 3 i 8 housing units at Bangor for support carrier families and 13 ._T A I'-I-- S -- 9'F N E I~l I 6 : 5 9 S E A F i R S T C A P I T A L l'~l~ K T S P - ~-'~ 170 housing units near the Naval Hospital and a I,gl$-space parking garage at the entrance to PSNS and expansion of another parking lot. Other Nla, ior Employers The Port of Bremerton (the "Port") operates the Brcmerton National Airport and the $60-acr¢ Olympic V!~w Industrial Park, both located approximately I0 miles southwest of the City. The park inc]ud,~s 22 firms which employ a tot',fl of approximatcly 500 people. The Port has r¢cent]y been designated a foreign trade zone, which is expected to enhance international trade locally. Sever~fl companie~ are undergoing expansion near or adjacent to the Bmmerton National Airport, in,c!u.ding ap. airc,?ft parts re.c. ycliag, comp-an~ and an electro-mechanical products manufacturer, wmcn womo ernpJoy up to o~ people wimin nye ycars. Bremerton National Airport is the largest airport in the County, with a 6,200-foot runway and full hmrumentation and lighting systems. The airport can h,'mdle all general aviation aircraft and most transport and military planes. Charter passenger and air freight services are available to SeaTae Airport, the major inte,'national aiv'.'.';, crt in the Puget Sound area. The ahport i$ currently undergoing improvements. Health care needs are mci by several facilities in the Bremerton arcs including the Naval Hospital - Brcmerton with 389 civilian, 709 military and 120 contracted employecs. Harrison Memorial Hospital in Bremerton has 1,300 employee~. In lat~ I993, Harrison .Memorial completed a $20.5 million expansion project which'doubled the number of operating rooms; expanded the laboratory and administration areas; and provid.ed ad.difional space for patient education and an outpatient mental health clinic. A number or nursing homes and reit,'ement complexes are also located in Brcmerton. Olympic College is a two-year public community college located in Bremerton, with an enrollment of approximately 4,310 (full-time equivalent.q) and 600 employees. The coIIcge offers associate of art~ 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 :s associated with the Umvemt5 of Washington, Tacoma branch. The Olympic College campus will b~ 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 Brcmcrton are the following: · A Planned Unit Dcvelopmc}~,t application has been submitted to the City for the multi-use development of Bremcrton s downtown waterfront, known as Sinclair Landing. A combination of public and privat~ uses make up this 38.acre project, including: a transit center, new ferry terminal, expansion of the waterfront park, expansion of tho marina, a new terminal for,passenger-only ferry ser,,,'ice, parking, retail use, restaurants, offices, an 80-room inn, a s:x~plex cinema and mukl-family housing, all connected with pedestrian corridors, The project is e~pectcd to take three years to complete at a co~t of $130 million. At this time it is net known when thi~ project will b~ completed, but construction is expected to begin as early as the spring of 1997. · 2'he Washington State Department of Transportation ("DOT") provides ferry sc.-rvices between Seattle and Bremerton. Bremerton became the headquarters for all ferries with routes south of Seattle in 1994. DOT is designing a new $21,3 million ferry tenninat for Bmmerton, for constructicm after the yea' 2000. · Wal-Mart recently ¢ornpleted a new store in East Bremcrton and Port Orchard. 14 J A N -- 8-- 9 ~ WED I -~ : 0 0 $ E A ~ I R $ T CAP I T AL M R K T S · The Port of Bremerton is developing a 128-acre light industrial business complex known as West Puget Tech Parle. The first phase o.r the project i~cludes the construction of a 30,000 square-foot incubator bailding on 2.45 acres with infl'astru¢ture, Potemial employment is 85 to 100 people for this pho. qc. The remainder of tile park would be dev¢lope,.l ove~ a 10- year period, on a demand basis. · A Downtown Revitalization Task Force has been refined in Bremerton a~ a volunteer §mup of downtown business and go,~'¢mment representatives and interested citizens. Its purpose is to improve th~. appearance et' and bring new business and art concern,; [o the area. Projects to date include flower btu'tel,, relocaticm of the Kitsap Historical Museum to downtown Brcmerton, an adopt-a-block program, local concerts and festivals. o Two Safeway ~uper$tore~ were r¢centiy completed: one in least Bremerton, and the other in the City. · The Bremertoa Black Entrepreneurs Association is reviving the Kox¥ Theatre in downtown Bremerton for use as a concert hall and for other live entertainment. Tmal cost of thc project is $3 million, approximately $1.3 of which has been spent to dar,. Completion i~ expected by the end of 1997. Following are economic it~dicamr, of the City and the County. CITY OF BREMERTON AND KFrSAP COUNTY POPULATION Kitsap Number of City of Olhee Kltsap County County Resident Armed Year Br~merton Incorgo~ate~ Unincorporated Total Forces Personnel~' 1996 38,496 31,210 155,120 224,700 N/A~ 1995 39,610 29,915 151,075 220,600 1t,916 1994 35,920 28,625 148,655 213,200 9,716 1993 36,380 28,160 145,460 210,000 [[,817 1992 38,990 27,405 139,205 205,600 15,631 1991 37,040 26,639 ~ 132,821 196,500 !2,310 1990 38,142 12,913 138,676 [89,731 15,050 TAXABLE RETAIL SALES Year Ki~ap County City of Breme~on 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 1,438,6!5,382 390,094,567 Source: Watqllngton ,Slate Office o1' Fh::,:c:~ Management and U,S, Censua. Est[mated. ~e large il~¢[cas~ ~s duc to ~h¢ BRllCgadOn Of thc uni~l~r~utatcd a~as ~t' Rninbritlgc Island ~o the new City of Bainbridge IslaM. Soum~: Washington State Depl~'tt~ttt of Revenue, 15 Fo& SEAF I RST CAP I TAL MRK TS P . 06 JAN-- 8--99 WED 1 'T :01 CITY OF BREMERTON MAJOR TAXPAYERSI Taxpayer Puget Sound Power and Light US West Inc. l[MI, Inc. Michael Connollcy V[¢wcrcst ViLlages Limited Partaershlp Charles & Joan Hase[wood Merit Company Ovcrlake Mz, nagemcnt Company Cascade Natural Gas Homing Thicry Panncrsh. ip Assessed Valuation for Business 1997 Collection Year Electric Utility $ 26,528,942 Tetccommunication~ 19,5 [0,781 Developcr 9,735,140 Olympic College Buaittess Svcs 8,022,400 Apartments 7,800,000 Retail 7,010,000 Retail 6,032,900 , Retail 6,000,000 Ga~ Utility 5,910,993 Apartments 5,765,000 SEATTLE-BREMERTON FERRY TRAFFIC STATISTICS Year Number o~ Vehicles Number of Passengers 1995 751,266 1,545,417 1994 719,125 1,456,706 1993 676,031 t,399,354 1992 667,25! 1,493,650 1991 659,827 ~,439,648 1990 635,689 1,484,629 KITSAP COUNTY WASHINGTON STATE AND USA LABOR FORCE AND AVERAGE ANNUAl,. UNEMPLOYMENT Kitsap County Unemp}oyment as a Petcenl of Labor Force United Resident Civilian Average Annual Total States Year Labor Force Unemployment Ernp!oyment Kitsap County {%) Washington (%) (%) ] 995 90,900 6,000 84,900 5.5 6.¢ 5.6 1994 39,500 5,400 84, 100 6.0 6.4 6. ! 1993 90,100 6,000 84, 100 6,? 7,5 8.8 1992. 88,900 5,400 83,500 6, [ 7.5 7.4 1991 ~5,800 4,200 81,600 4, 9 7,$ 6.7 1990 84,600 3,400 81,200 4, t 6,3 5.5 3 tncludc~ nonagricultural wage a.d ~,ht~, ~ctt-cmploycd, unpaid family wotkcr~, domestics, agricultut~ workers, labor disput~nt,, 4 Source: Wa~hingto~ $~tc Dcp~ttmcnt o~ Emp!eymc:~t ficcmity, 16 j A ~ -- ~-- 9 7 l~ E D 1 7 : 0 2 :~ E A F ][ R S T CAP I T A L M R IK~T S P . 0 ? KITSAP COUNTY, WASHINGTON STATE AND USA INCOME ESTIMATES~ Kitsap County Year Personal Income ($000) Per Ca~ita Income Kitsap County Washington USA 1994 $ 4,246,000 $ 19,264 $ 22,526 $ 2t,896 1993 4,019,000 t 8,676 21,774 20,800 1992 3,902,000 18,607 21,333 20,i 37 1991 3,601,000 17,971 20,168 19,201 1990 3,323,997 t7,318 19,268 ! 8,677 1989 2,966,841 ! 6,129 18,085 17,690 PRESERVATION OF TAX EXEMPTION The City has covcnat:~ted, by the Ordinance, to take all actions necessary to prevent imcrest on the Notes from being included in gross income for federal income tax pu .rpose, and it will neither t;~k~ any action nor make or pc.milt any use of proceeds of the Notes or other funds of the City treated as proccccL~ of the Notes at any Limo during the term of tile 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 propose,d, listing by the Internal Revenue Service to thc effect that it i.q a bond issuer whose arbitrage cerufications may not be relied upon. FEDERAL INCOME TAX EXEMPTION Exclusion from Gross Income In the opinion of Bond Counsel, assumir~g compliance by the City with applicable requirement~s of the Code; including arbitrage requirements under Section 148 of' tlxe Code, interest on th,, Note~ is exc2uded fi'om gross income of re.,gistercd owners for federal income t..ax purpo.~¢s under existing fcdc,'al law and is not an item of tax preference for purposes of the alternative minimum tax applicable to individuals. Corporate Alternative Minimum Tax While interest on th, Notes also ia not an item o~[ tax p:'¢ference for purposes of the alternative minimurn 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 c~f the alternative mini. mum tax applicable re corporations (as defined for federal income tax purposes). Under the Code, alternative minimum taxable income of a corporation will be increased by 7:5 percent of the excess of thc corporatiot:'s adjusted current earnings (including any tax-exempt interest) over thc corporation's altcx'native rni'nimum taxabl: income determined without regard to tach increase. A corporatLoa'a ',alternative minimum taxable income, so computed, that ia in excess of an exemption of $40,000, which exemption will be reduced (but not below zero) by 25 percent of the amount by which the corporation's alternative minimum taxable income exceeds $t50,000, is then subject to a 20 pement minimum tax. 17 JAr4-- 8--97 WED I 7 : 02 SEAF I RST CAP I TAL MRK TS P . 05 Corporate Envlronmcntal Tax $cction 59A of th~ Code imposes for ta~ years beginning on or before Sanuary 1, 1996. an en, vi.romnental ~ of 0.12 pcrcen~ ($1.20 ~r $1,0~)on the amount ora corp0mtion's alternative mm~mum taxable income (increased for certain ~ok income and adjusted current earnings, including any t~4xempt interest) that exceeds $2,0~.~, Tax on Certain Passive Investment Income o~ S Corporations Under Section 1375 of the Code, certain e~c~ss net pasive invesu~ent income, including interest on the Notes, received by an $ co~orae~on (a corporation treated as a paanership for most federal tax pu~se~) tha h~ 5ubchapter C ~amings ~nd profits at ~e close of the taxable year may ~ subject to federfl income taxation at ~e highest rate applicable to corporations if more than 25 percent of ~e gmss mzeip~ of such S corporation is passive investment income, Forelgn Branch Profi~ Tax Interest on the Notes may be subject to the foreign bn~ch profits tax ~osed by Section 884 of the Code when the Notes a~ owned by, ad eff~tively eonnecmd with a U'ade or business o~, a United $tates branch of a foreign corporation. CERTAIN OTHER FEDERAL TAX CONSEQUENCES Notes are "Qualified Tax-Exempt Obligations" for Financial Institutions Section 265 of thc Code provides that lO0 percent of any interest ex,nsc 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, are is.~ued by a governmental unit that, together with all entities subordinate to it, docs not reasonably anticipate issuing mo~? than $10,000,000 of tax-exempt obligations (other titan ~rivate actMty t~onds and other obligations not requixed to be included in such calculation) in' thc current calendar year, and are designated by the ov'r tal s ual, t, ex , h g e nmcn unit a. q ' 'fled ax- enip ob 'gations, only 20 percent of any interest expense deduction allocable to those obligaiov, s will be disallowed. The City is a governmental unit that, together with all subordinate entities, reasonably anticipates issuing less than $ I0,000,00O of tax-exempt obligations (other than private activity bonds and other obligations not required to be i,n, cluded in such calculation) during the current calendar )'ear. and has designated the Notes as ' qualified tax-exempt obligations" for purposes of the 80 percent financial institution interest expense deduction. Therefore, only 20percent of the interest expense deduction of a financial institution allocable to ti:e 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 ioss reserves otherwise avadable 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 bone[its to take receipt or accruals of interest en the Notes into account in determining gross income, Other Possible Federal Tax Consequences Receipt of interest ,on the Note~; may have other federal tax con~quenees as to which prospective purchasers of the Notes may wish to consult their own tax advisors. 15 8--9? WED I ? : 0 ~ S E A F I R S T ,3 A p I T A L _.~ R ~ T S P . 0 9 ABSENCE OF MATERIAL LITIGATION There is no litigation of ax:>' kind now oending or, to the knowledge of the City, threatened to rc~train or enjoin the issuance or delivery of the Notes o,' ia any manner questioning the proceedings and authority under which tho Notes are issued or affecting Ibc ability of the City to pay thc princip',d of or the interest on the Notes. CUSIP NUMBERS CUSIP identification numbers will be printed on the Notes. However, neither the failure to print such numbel'~ on any Note nor any error with respect thereto ~tia[l constitute cause for a hilure or refusal by the purchaser of the Notes to accept delivery and pay for the Notes in accordance with the terms of any agreement to purchase. Expenses related to the printing and assignment of CUSIP numbers on theNotes sl~all be paid for b~/the City. APPROVAL OF BOND COUNSEL Legal matter, incident to the authorization, issuance and sale of Notes by thc City are subject to the approving legal opinion of Foster Pepper & Shefeh'nan, bond coun~eI. A. copy of the opinion of bond counsel will be delivered with the Notes. Bond counsel has reviewed ttn~ 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 Undertaklng to Provide Notice or Specified Material Evems To meet the requirements of paragraph (b)(5) of the United Sutle~ Securities and E.,~chang¢ Commission (",SEC") Rule 15c2-12 (the "Rule"), to the extent applicable to an issue of municipal securities with a stated maturity of },8 months or less under paragraph (d) (3) of thc Rule, as applicable to a participating underwriter for the Notes, tho 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 designated agent, to each nationally recognized municipal securitie, s s nate~ v ~e E w u " ~SIR" t information rope, itory desig d b. ti ,S,, C in a~cordance ith the Rle ( NR; ~ ) or to he Municipal Securities Rulemaking Bo;u'd ( MSRB ') and to a state inforrnatio~ depository, if any, established in the State of Wa;hington (thc "Si'D"), 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 [elated defaults; (iii) unscheduled draws on debt service reserves reflecting financial difficulties, (iv) unscheduled draw~ on credit enhartcements reflecting financitd difficulties; (v) ~ubstitution of credit or liquidity providers, or their faiture to perform; (vi) adverse tax opinion.q or event~ affecting the tax-exempt status of the Notes; (;'ii) modifications to rights of holders of the Notes; (viii) Note calls (other than scheduled mandatory redemption of Term Notes); (ix) dcfeasances; (x) release, substitution, or sale of property securing repayment of thc Notes; and (xi) rating change.~. Amendment of Undertaking The Undertaking is subject to amendment after thc primary offering of the Notes without the consent of any holder of any Note, or of any broker, dealer, municipal securities dealer, pm:ticipating underwriter, rating agency, NKMS!R, the SID or the MSRB, under the circumstances and in the manner permitted 5ay the Rule. 19 --7o The City will give notice to each NRMStR or the MSRB and the S1D, of tile substance (or provide a copy) of any amendment to the Undert;aking and a brief statement of the reasons for amendment, If the amending:at changes the type of annual financial information to be provided, the notice also will include a n:u'rative explanation of thc 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 l,gal defeasance of all of the Notes. In addition, the City's obligations under the Undertaking shall tem'~!nate it' those provisions of the Rule whic.h., ,equire the City to comply with the Und. ertaking become legally inapplicable in respect of the Notes for any reason, as confirmed by ar[ opinion of nat[mxallv recognized bond counsel or other counsel familiar with federal securities laws delivered to th~ City, and the City provides timely notice of such termination to each NRM$1R or the MSRB and the SID. Remedy for Failure to Comply with Undertaking. If thc 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 ,~oon as practlcab[e after the City learn~ of that f, ailur~. No failure by the City er other obligated person to comply with the Undertaking will constitute a default in respect of the Notes. Th, 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 obli§ated person to comply with th~ Undertaking. UNDERWRITING The Underwriter has agreed, subject to certain conditions, to purchase all of the Notes, if any arc purchased, at a price of ~% of the par value of the Notes, plus accrued interest from the datcd date to the ~ettlemcnt date. The Notes will be rcoffcred 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 matter~ of .opinion, or estimates of future expenses and income, whether or not expressly so stated, they ar~ intended merely as such and not as representations of fact. The infer'marion contained herein ~hould not be construed as representing all condition,s, ,'u'fectmg the City or the Notes. Additional information may be obtained directly from the Cay 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 appendices, comprise the entire Official Statement, which has been approved by the City. Thc City has rept'esente6 to the Underwriter that the portions of this Official Statement directly pertaining tO the City neither contain nay mlsrepmscntat, ion et* material f~t nor omit any material her necessary to understand the financial, economic or legal nature of the City or any infomaation presented herein. 2o 71 ~ 7,= 05 SE~F I RST C~P ] ~L ~RKTS P . 1 1 APPENDIX A FORM OF LEGAL OPINION