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HomeMy WebLinkAbout4541 CITY OF BREMERTON, WASHINGTON AN ORDINANCE of the City of Bremerton, Washington, authorizing the issuance of tax anticipation notes for the purpose of paying City expenses pending the receipt of general City taxes; creating a note redemption fund; providing for the sale of those notes to Seattle-First National Bank of Seattle, Washington; and, because of its urgency, providing that this ordinance shall take effect immediately. Passed January 17, 1996 This document was prepared by: Foster Pepper & Shefelman 1111 Third Avenue, Suite 3400 Seattle, Washington 98101 (206) 447-4400 CITY OF BREMERTON, WASHINGTON ORDINANCE NO. ~5~ ~ AN ORDINANCE of the City of Bremerton, Washington, authorizing the issuance of tax anticipation notes for the purpose of paying City expenses pending the receipt of general City taxes; creating a note redemption fund; providing for the sale of those notes to Seattle-First National Bank of Seattle, Washington; and, because of its urgency, providing that this ordinance shall take effect immediately. 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 1996 will not be sufficient to meet necessary City expenses as they are incurred in 1996, and that it is in the best interest of the City to contract short-term debt pursuant to chapter 39.50 RCW to pay those expenses pending receipt of taxes and other revenue collected by the City; NOW, THEREFORE, THE CITY OF BREMERTON DOES ORDAIN: Section 1. Debt Capacity. The assessed valuation of the taxable property of the City as ascertained by the last preceding assessment for City purposes for the year 1995 for tax collection in the year 1996 is $1,239,563,247 and the City as of December 31, 1995, had $10,083,210 of outstanding general indebtedness evidenced by limited tax general 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, and unlimited tax general obligation bonds in the principal amount of $1,880,000 within the limit of up to 2-1/2% of the value of the 0~1~07.01 taxable property within the City for general capital purposes issued pursuant to a vote of the qualified voters of the City, and the amount of indebtedness for which the notes are herein authorized to be issued is $1,250,000. The general indebtedness to be incurred shall be within the limit of up to 1-1/2% of the value of the taxable property within the City permitted for general municipal purposes without a vote of the qualified voters therein. Section 2. Note Fund; Authorization and Description of Notes. There is created in the office of the City Treasurer a special fund called the Tax Anticipation Note Fund, 1996 (the "Note Fund"). Pending the collection of sales, excise and general ad valorem property taxes levied for collection in 1996 and other revenues anticipated to be received in 1996, the City shall issue and sell its tax anticipation notes to be designated Tax Anticipation Notes, 1996 (the "Notes"), in the principal amount of $1,250,000. The Notes shall be dated February 1, 1996; shall mature on January 31, 1997; shall be in the denomination of $50,000 or any integral multiple thereof; shall be numbered separately in the manner and with any additional designation as the Note Registrar (collectively, the fiscal agencies of the State of Washington located in Seattle, Washington, and New York, New York) deems necessary for purposes of identification; and shall bear interest at the rate of~5% per annum (computed on the basis of a 360-day year of twelve 30-day months), payable at maturity. If any Note is not redeemed when properly presented at its maturity, then interest shall continue to accrue at the same rate from and after maturity until that Note, with interest, is paid in full or until sufficient money for such payment in full is on deposit in the Note Fund and ~1~.01 --2-- the Note has been called for redemption. The City Council declares and finds that the fixing of the above interest rate is in the best interests of the City. The Notes shall be general obligations of the City. The Notes shall not be subject to redemption prior to their maturity date. Section 3. Registration and Transfer of Note~. 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 name and mailing address of the owner of each Note and the principal amount and number of each of the Notes held by each owner. Notes surrendered to the Note Registrar may be exchanged for Notes in any authorized denomination of an equal aggregate principal amount. Notes may be transferred only if endorsed in the manner provided thereon and surrendered to the Note Registrar. Any exchange or transfer shall be without cost to the owner or transferee. The Note Registrar shall not be obligated to exchange or transfer any Note during the 15 days preceding the maturity date. Section 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 offices of the Bond Registrar at the option of the owners. Section 5. Pledqe of Taxes. The Notes shall be paid solely from the Note Fund. The City irrevocably pledges to budget and ~19407.01 levy taxes within the constitutional and statutory tax limitations provided by law without a vote of the electors of the city on all of the taxable property in the City in an amount sufficient, together with other money legally available and to be used therefor, to pay the principal of and interest on the Notes at maturity. The City further irrevocably pledges to set aside and deposit into the Note Fund from such taxes and other money on or before the maturity date of the Notes an amount sufficient to pay, both principal and interest, and redeem the Notes on their maturity date. The full faith, credit and resources of the City are pledged irrevocably for the payment of the principal of and interest on the Notes. Section 6. Form and Execution of Notes. The Notes shall be printed, typed or multicopied on good bond paper in a form consistent with the provisions of this ordinance and state law, shall be signed by the manual or facsimile signature of the City Treasurer, and shall have the seal of the City or a facsimile reproduction thereof impressed or printed thereon. Only Notes bearing a Certificate of Authentication in the following form, manually signed by the Note Registrar, shall be valid or obligatory for any purpose or entitled to the benefits of this ordinance: CERTIFICATE OF AUTHENTICATION This Note is one of the fully registered City of Bremerton, Washington, Tax Anticipation Notes, 1996, described in the Note Ordinance. 021940q.01 ~4~ WASHINGTON STATE FISCAL AGENCY Bond Registrar By Authorized Signer The authorized signing of a Certificate of Authentication shall be conclusive evidence that the Notes so authenticated have been duly executed, authenticated and delivered and are entitled to the benefits of this ordinance. If any officer whose facsimile signature appears on the Notes ceases to be an officer of the City authorized to sign notes before the Notes bearing his or her facsimile signature are delivered or issued by the City, those Notes nevertheless may be issued and delivered and, when issued and delivered, shall be as binding on the City as though that person had continued to be an officer of the City authorized to sign notes. Any Note also may be signed on behalf of the City by any person who, on the actual date of signing of the Note, is an officer of the City authorized to sign bonds, although he or she did not hold the required office on the date of issuance of the Notes. Section 7. Note Registrar. The Note Registrar shall keep, or cause to be kept, at its principal corporate trust office, sufficient books for the registration and transfer of the Notes, which shall be open to inspection by the City at all times. The Note Regi~tra~ i~ 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 0219407.01 City Ordinance No. 3862 establishing a system of registration for the City's bonds and obligations. The Note Registrar shall be responsible for its representations contained in the Note Registrar's Certificate of Authentication on the 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 any of its officers or directors to act as members of, or in any other capacity with respect to, any committee formed to protect the rights of Note owners. Section 8. Notes Neqotiable. The Notes shall be negotiable instruments to the extent provided by RCW 62A.8-102 and 62A.8-105. Section 9. Use of Proceeds. The principal proceeds received from the sale of the Notes shall be deposited in the General Fund of the City and used solely for the purpose of paying the cash flow deficits in the City's General Fund resulting from budgeted expenditures, and any interest received from the deposit or investment of such proceeds shall be applied and used solely for such purposes or for deposit in the Note Fund. Any proceeds resulting from authorized temporary investments of money on deposit in the Note Fund or such investment proceeds of any of the taxes hereafter levied for payment of the Notes and placed in the Note Fund shall be used for the sole purpose of retiring the Notes or paying the interest thereon. Section 10. Permitted Financing of Cumulative Cash Flow Deficit. Based upon the reasonably expected amounts of sales, excise and general ad valorem property taxes and other revenues to be collected in 1996 (including investment proceeds of the Notes) ~1~.01 ~6~ and that are expected to be available to make General Fund expenditures in 1996 (computed by treating a reasonable working capital reserve in an amount not exceeding 5% of the total General Fund expenditures in the prior fiscal year as not being available to make those expenditures), the City Council finds that the principal amount of the Notes does not exceed the maximum anticipated "cumulative cash flow deficit" (as defined by Section 148 of the Internal Revenue Code of 1986, as amended (the "Code"), and applicable Treasury Regulations thereunder) expected to occur in the City's General Fund during 1996 and that is to be financed with proceeds of the Notes. Section 11. Preservation of Tax Exemption of Interest on Notes. The City covenants that it will take all actions necessary to prevent interest on the Notes from being included in gross income for federal income tax purposes, and it will neither take any action nor make or permit any use of proceeds of the Notes or other funds of the City treated as proceeds of the Notes at any time during the term of the Notes which will cause interest on the Notes to be included in gross income for federal income tax purposes. The City certifies that it has not been notified of any listing or proposed listing by the Internal Revenue Service to the effect that it is a bond issuer whose arbitrage certifications may not be relied upon. Section 12. Small Governmental Issuer Arbitrage Rebate Exception and Designation of Notes as "Qualified Tax-Exempt Obligations." The City finds and declares that (a) it is a duly organized and existing governmental unit of the State of Washington and has general taxing power; (b) no Note which is part of this ~1~.01 ~7~ issue of Notes is a "private activity bond" within the meaning of Section 141 of the Code; (c) at least 95% of the net proceeds of the Notes will be used for local governmental activities of the City (or of a governmental unit the jurisdiction of which is entirely within the jurisdiction of the City); (d) the aggregate face amount of all tax-exempt obligations (other than private activity bonds and other obligations not required to be included in such calculation) issued by the City and all entities subordinate to the City (including any entity which the City controls, which derives its authority to issue tax-exempt obligations from the City or which issues tax-exempt obligations on behalf of the City) during the calendar year in which the Notes are issued is not reasonably expected to exceed $5,000,000; and (e) the amount of tax-exempt obligations, including the Notes, designated by the City as "qualified tax-exempt obligations" for the purposes of Section 265(b)(3) of the Code during the calendar year in which the Notes are issued does not exceed $10,000,000. The City therefore certifies that the Notes are eligible for the arbitrage rebate exemption under Section 145(f) (4) (D) of the Code and designates the Notes as "qualified tax-exempt obligations" for the purposes of Section 265(b)(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 the extent applicable to an issue of municipal securities with a stated maturity of 18 months or less under paragraph (d)(3) of the Rule, as applicable to a participating underwriter for the Notes, the City makes the following written ~1~.01 undertaking (the "Undertaking") for the benefit of holders of the Notes: (a) Undertaking to Provide Notice of Material Events. The City undertakes to provide or cause to be provided, either directly or through a designated agent, to each nationally recognized municipal securities information repository designated by the SEC in accordance with the Rule ("NRMSIR") or the Municipal Securities Rulemaking Board ("MSRB"), and to a state information depository, if any, established in the state of Washington (the "SID"), timely notice of the occurrence of any of the following events with respect to the Notes, if material: (i) principal and interest payment delinquencies; (ii) non-payment related defaults; (iii) unscheduled draws on debt service reserves reflecting financial difficulties; (iv) unscheduled draws on credit enhancements reflecting financial difficulties; (v) substitution of credit or liquidity providers, or their failure to perform; (vi) adverse tax opinions or events affecting the tax-exempt status of the Notes; (vii) modifications to rights of holders of the Notes; (viii) Note calls; (ix) defeasances; (x) release, substitution, or sale of property securing repayment of the Notes; and (xi) rating changes. (b) Amendment of Undertaking. The Undertaking is subject to amendment after the primary offering of the Notes without the consent of any holder of any Note, or of any broker, dealer, municipal securities dealer, participating underwriter, rating agency, NRMSIR, the SID or the MSRB, under the circumstances and in the manner permitted by the rule. The City will give notice to each NRMSIR or the MSRB, and the SID, of the substance (or provide a copy) of any amendment to the Undertaking and a brief statement of the reasons for the amendment. (c) Beneficiaries. The Undertaking evidenced by this Section 13 shall inure to the benefit of the City and any holder of Notes, and shall not inure to the benefit of or create any rights in any other person. (d) Termination of Undertaking. The City's obligations under this Undertaking shall terminate upon the legal defeasance of all of the Notes. In addition, the City's obligations under this Undertaking shall terminate if those provisions of the Rule which require the City to comply with this Undertaking become legally inapplicable in respect of the Notes for any reason, as 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 ~1~.01 notice of such termination to each NRMSIR or the MSRB and the SID. (e) Remedy for Failure to Comply with Undertaking. As soon as practicable after the City learns of any failure to comply with the Undertaking, the City will proceed with due diligence to cause such noncompliance to be corrected. No failure by the City or other obligated person to comply with the Undertaking shall constitute a default in respect of the Notes. The sole remedy of any holder of a Note shall be to take such actions as that holder deems necessary, including seeking an order of specific performance from an appropriate court, to compel the City or other obligated person to comply with the Undertaking. (f) Designation of Official Responsible to Administer Undertaking. The Treasurer of the City or his or her designee (or such other officer of the City who may in the future perform the duties of the City Treasurer) is authorized and directed in his or her discretion to take such further actions as may be necessary, appropriate or convenient to carry out the Undertaking of the City in respect of the Notes set forth in this Section 13 and in accordance with the Rule, including, without limitation, the following actions: (i) Determining whether any event specified in Section 13(a) has occurred, assessing its materiality with respect to the Notes, and, if material, preparing and disseminating notice of its occurrence; (ii) Determining whether any person other than the City is an "obligated person" within the meaning of the Rule with respect to the Notes, and obtaining from such person an undertaking to provide any notice of material events for that person in accordance with the Rule; (iii) Selecting, engaging and compensating designated agents and consultants, including but not limited to financial advisors and legal counsel, to assist and advise the City in carrying out the Undertaking; and (iv) Effecting any necessary amendment of the Undertaking. Section 14. Approval of Note Purchase Contract. Seattle- First National Bank of Seattle, Washington, has presented a purchase contract (the "Note Purchase Contract") to the City 0219407.01 -lO- 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 authorizes its execution by City officials. The Notes will be prepared at City expense and will be delivered to the purchaser in accordance with the Note Purchase Contract, with the approving legal opinion of Foster Pepper & Shefelman, municipal bond counsel of Seattle, Washington. Bond counsel shall not be required to review and shall express no opinion concerning the completeness or accuracy of any official statement, offering circular or other sales or disclosure material issued or used in connection with the Notes, and bond counsel's opinion shall so state. The proper City officials are authorized and directed to do everything necessary for the prompt delivery of the Notes to the purchaser and for the proper application and use of the proceeds of the sale thereof. Section 15. Preliminary official Statement Deemed Final. The City Council has been provided with copies of a preliminary official statement dated January 8, 1996 (the "Preliminary Official Statement"), prepared in connection with the sale of the Notes. For the sole purpose of the purchaser's compliance with SEC Rule 15c2-12(b)(1), the city "deems final" that Preliminary Official Statement as of its date, except for the omission of information as 0219407.01 to offering price, interest rate, selling compensation, delivery date and other terms of the Notes dependent on such matters. Section 16. Effective Date - Urqency. The City is in urgent need of obtaining funds to offset the City's deficit cash flow and has been advised that a favorable market exists at this time for the sale of the Notes resulting in a lower interest rate on the Notes and a savings to the City. Therefore, the City Council finds that sufficient urgency exists to require that this ordinance take effect immediately upon its passage and publication. PASSED UNANIMOUSLY by the City Council of the City of Bremerton, Washington, this 17th day of January, 1996. ~N E. LAW Council President APPROVED this ~¢lday of January, 1996. ON, Mayor ATTEST: KATHLEEN McCLUSKEY, City ~erk APPROVED AS TO FORM: George M. Mack, Bond Counsel Publication Date: /- ~.~.~z~ :~ ' Ordinance Number: z3 v / 0219407.01 -12- I, KATHLEEN L. McCLUSKEY, City Clerk of the City of Bremerton, Washington, certify that the attached copy of Ordinance No. ~/ is a true and correct copy of the original ordinance passed on the 17th day of January, 1996, as that ordinance appears on the Minute Book of the City. DATED this ~_~ day of January, 1996. Kathleen L. McCluskeyl City Clerk 021~07.01