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HomeMy WebLinkAbout4662 CITY OF BREMERTON, WASHINGTON ORDINANCE NO. 4662 AN ORDINANCE of the City of Bremerton Washington relating to the incurrence of indebtedness; providing for the sale and issuance of $4,520,000 principal amount limited tax general obligation refunding bonds, 1999, to advance refund and defease a portion of the City's Limited Tax General Obligation Bonds, 1994; providing for the date, denominations, form, terms, registration privileges, maturity, interest rates and covenants of the bonds; establishing a debt service account for the bonds; authorizing the execution of an escrow agreement and providing for the sale and delivery of such bonds to Banc of America Securities LLC, Seattle, Washington WHEREAS, pursuant to Ordinance No. 4491, the City has heretofore issued and sold its 1994 Bonds, of which $4,605,000 in aggregate principal amount are currently outstanding; and WHEREAS, the City reserved the right to advance refund and defease all or a portion of the 1994 Bonds pursuant to a refunding or defeasance plan; and WHEREAS, pursuant to chapter 39.53 RCW, the City is authorized to sell and issue, without an election, limited tax general obligation bonds of the City to refund the 1994 Bonds; and WHEREAS, the refunding of the 1994 Bonds will provide for a modification and restructuring of the debt service requirements; and WHEREAS, the incurrence of such indebtedness by the City will not cause the total indebtedness of the City to be incurred without the assent of the voters of the City to exceed the limitations set forth in Chapter 39.36 RCW; and WHEREAS, the City deems it necessary and advisable that $4,520,000 in principal amount of Bonds now be sold and issued to provide funds for the Refunding Plan; and WHEREAS, Banc of America Securities LLC has offered, by way of the Purchase Agreement, to purchase such limited tax general obligation refunding bonds upon the terms and conditions hereinafter set forth; NOW, THEREFORE, THE CITY OF BREMERTON DOES ORDAIN AS FOLLOWS: Section 1. Definitions. Unless the context otherwise requires, the terms defined in this section, for all purposes of this Ordinance (including the recitals hereto) and of any ordinance supplemental hereto, shall have the meanings herein specified; words importing the singular number include the plural number and vice versa: "Beneficial Owner" means, with respect to any Bond, the Person named on the records of the Custodian as having the right, without a physical certificate evidencing such right, to transfer, to hypothecate and to receive the payment of the principal of, premium, if any, and interest on such Bond as the same becomes due and payable. "Bonds" means the City of Bremerton, Washington, Limited Tax General Obligation Refunding Bonds, 1999, dated August 15, 1999, in an original aggregate principal amount of $4,520,000, the sale and issuance of which are authorized by this Ordinance. "Bond Register" means the registration books on which are maintained the names and addresses of the owners or nominees of the owners of the Bonds. "Book-Entry Termination Date" means the fifth business day following the date of receipt by the Registrar of the City's request to terminate the book-entry system of registering the beneficial ownership of the Bonds. "City" means the City of Bremerton, Washington, a first class city, organized and existing under State law. "City Council" means the City Council of the City. "Closing" means the date and time when the Bonds are delivered to the Purchaser in exchange for payment in full therefor. "Code" means the Internal Revenue Code of 1986, as heretofore or hereafter amended, together with all applicable rulings and regulations heretofore or hereafter promulgated thereunder. "Custodian" means (a) The Depository Trust Company, New York, New York, or (b) any successor thereto engaged by the City to operate a book-entry system for recording, through electronic or manual means, the beneficial ownership of the Bonds, in which system no physical certificates are issued to the Beneficial Owners of the Bonds, but in which a limited number of physical certificates are issued to and registered in the name of the Custodian or its nominee, and delivered to the Custodian; provided, that such book-entry system operated by the Custodian may include the use of subsystems of recording the beneficial ownership of Bonds which are operated by parties other than the Custodian and the use of a nominee for the Custodian; and the term "Custodian," as used herein, includes any party operating any such subsystem. 2 "Depositories" means the following registered securities depositories: (a) The Depository Trust Company, 711 Stewart Avenue, Garden City, New York 11530; (b) Midwest Securities Trust Company, Capital Structures-Call Notification, 440 South LaSalle Street, Chicago, Illinois 60605; and (c) Philadelphia Depository Trust Company, Reorganization Division, 1900 Market Street, Philadelphia, Pennsylvania 19103, Attention: Bond Department. "Escrow Agreement" means that certain agreement between the City and the Escrow Trustee, dated as of Closing. "Escrow Trustee" means U.S. Bank Trust National Association, acting in its fiduciary capacity as escrow trustee pursuant to the Escrow Agreement. "Escrow Obligations" means those certain Government Obligations necessary to accomplish the Refunding Plan, as set forth on Schedule 1 to the Escrow Agreement. "Government Obligations" means "government obligations," as defined in Chapter 39.53 RCW, as now in existence or hereafter amended. "Letter of Representations" means the Blanket Issuer Letter of Representations, dated November 19, 1997, between the City and the Custodian pertaining to the payment of the Bonds and the "book-entry" system for evidencing the beneficial ownership of the Bonds prior to the Book-Entry Termination Date. "MSRB" means the Municipal Securities Rulemaking Board. "1994 Bonds" means the City of Bremerton, Washington, Limited Tax General Obligation Bonds, 1994, in the outstanding aggregate principal amount of $4,605,000 as of this date. "NRMSIR" means a nationally recognized municipal securities information repository designated by the SEC. "Owner" means the person named as the registered owner of a Bond on the Bond Register. "Preliminary Official Statement" means the Preliminary Official Statement pertaining to the Bonds, dated July 22, 1999. "Purchase Agreement" means the Bond Purchase Agreement for the Bonds by and between the City and the Purchaser, which written Purchase Agreement is on file with the City Clerk and is incorporated herein by this reference. "Purchaser" means Banc of America Securities LLC. "RCW" means the Revised Code of Washington, as amended. "Refunded Bonds" means the outstanding 1994 Bonds maturing on December 1 in the years 2001 through 2007, inclusive. "Refunding Plan" means the plan to refund all of the Refunded Bonds with a portion of the proceeds of the Bonds and to pay the incidental costs and costs related to the sale and issuance of the Bonds, all as more particularly defined and described in the Escrow Agreement. "Registrar" means either of the fiscal agencies of the State in Seattle, Washington (as of the date of Closing, Wells Fargo Bank, National Association), and New York, New York (as of the date of Closing, The Bank of New York), which Fiscal Agencies are appointed from time to time by the State Finance Committee pursuant to chapter 43.80 RCW; and "Fiscal Agencies" means both such fiscal agencies. "Ordinance" means this Ordinance No. 4662 of the City. "Rule" means SEC Rule 15c2-12. "SEC" means the United States Securities and Exchange Commission. "Secretary" means the Secretary of the Board. "SID" means a state information depository. "State" means the State of Washington. Section 2. Finding, Purpose and Description of Bonds. The City Council hereby finds that the City will benefit from modifying and restructuring the debt service requirements ora portion of the 1994 Bonds. The City authorizes the sale and issuance of its "Limited Tax General Obligation Refunding Bonds, 1999" for the purpose of advance refunding and defeasing the outstanding Refunded Bonds and to pay certain "incidental costs and costs related to the sale and issuance" (as defined in RCW 39.46.070) of the Bonds. The Bonds shall be in the aggregate principal amount of $4,520,000; shall be dated August 15, 1999; shall be issued in fully registered form as to both principal and interest; shall be in the denomination of $5,000 each or any integral multiple thereof 4 single maturity, shall be numbered separately in such manner and with any designation as the Registrar deems necessary for purposes of identification; bear interest at the rates; and shall mature on the dates and in the principal as set forth below: Maturity Dates (December 1) Principal Amounts Interest Rates 1999 $ 65,000 3.80% 2000 45,000 4.00 2001 165,000 4.10 2002 170,000 4.20 2003 175,000 4.30 2004 185,000 4.40 2005 195,000 4.50 2006 200,000 4.60 2007 210,000 4.70 2008 220,000 4.75 2009 230,000 4.80 2010 240,000 4.85 2011 255,000 4.90 2012 265,000 4.95 2013 280. 000 5.00 2014 300 000 5.05 2015 300000 5.10 2016 325 000 5.15 2017 340 000 5.20 2018 355 000 5.25 Bonds shall bear interest (computed on the basis of a 360-day year of twelve months) from their date or from the most recent interest payment date to which been paid or duly provided for, whichever is later, payable on December 1, semiannually thereafter on December 1 and June 1 of each year to the maturity redemption thereof. If any Bond is not paid upon proper presentment at its date, the City shall have the obligation to pay interest at the same rate from and maturity date until such Bond, both principal and interest, is paid in full. 5 The Bonds shall be negotiable instruments to the extent provided by RCW 62A.8-102 and RCW 62A.8-105. On the date of issue of the Bonds, all Bonds maturing in the same maturity year shall be issued in the form of a single certificate, which certificate shall be registered in the name of the Custodian or its nominee, and delivered to the Custodian. The Custodian shall hold each such Bond certificate in fully immobilized form for the benefit of the Beneficial Owners pursuant to the Letter of Representations until the earliest to occur of either (1) the date of maturity of the Bonds evidenced by such certificate, at which time the Custodian shall surrender such certificate to the Registrar for payment of the principal of and interest on such Bonds coming due on such date, and the cancellation thereof; (2) the Book-Entry Termination Date; or (3) the date the City determines to utilize a new Custodian for the Bonds, at which time the old Custodian shall (provided the City is not then in default of any payment then due on the outstanding Bonds) surrender the immobilized certificates to the Registrar for transfer to the new Custodian and cancellation as herein provided. For so long as any outstanding Bonds are registered in the name of the Custodian or its nominee and held by the Custodian in fully immobilized form as described in this Section 2, the rights of the Beneficial Owners shall be evidenced solely by an electronic and/or manual entry made from time to time on the records established and maintained by the Custodian in accordance with the Letter of Representations, and no certificates evidencing such Bonds shall be issued and registered in the name of any Beneficial Owner or such Beneficial Owner's nominee. The City may terminate the "book-entry" system of registering ownership of the Bonds at any time (provided the City is not then in default of any payment then due on the outstanding Bonds) by delivering to the Registrar: (a) a written request that it issue and deliver Bond certificates to each Beneficial Owner or such Beneficial Owner's nominee on the Book-Entry Termination Date; (b) a list identifying the Beneficial Owners as to both name and address; and (c) a supply of Bond certificates, if necessary for such purpose. Upon surrender to the Registrar of the immobilized certificates evidencing all of the then outstanding Bonds, the Registrar shall issue and deliver new certificates to each Beneficial Owner or such Beneficial Owner's duly appointed agent, naming such Beneficial Owner or such Beneficial Owner's nominee as the Owner thereof. Such certificates may be in any integral multiple of $5,000 within a single maturity. Following such issuance, the Owners of such Bonds may transfer and exchange such Bonds in accordance with Section 10 hereof. Neither the City nor the Registrar shall have at any time any responsibility or liability to any Beneficial Owner of Bonds or to any other person for any error, omission, action or failure to act on the part of the Custodian with respect to payment, when due, to the Beneficial Owner of the principal and interest on the Bonds, proper recording of beneficial ownership of Bonds, proper transfers of such beneficial ownership, or any notices to Beneficial Owners or any other matter pertaining to the Bonds. Section 3. Place, Manner and Medium of Payment. Both the principal of and interest on the Bonds shall be payable in lawful money of the United States of America. Prior to the Book-Entry Termination Date, the principal and interest on the Bonds shall 7 be paid by the Registrar to the Custodian as the Owner thereof, for the benefit of the Beneficial Owners thereof, in accordance with the Letter of Representations. From and after the Book-Entry Termination Date, interest on the Bonds shall be paid by check or draft mailed on or before the interest payment date, to the persons identified as the Owners on the fifteenth day of the month preceding the interest payment date at the addresses shown for the Owners on the Bond Register. From and after the Book-Entry Termination Date, principal of the Bonds shall be payable upon presentation and surrender of the Bonds by the Owners at the principal corporate trust office of either Registrar. Section 4. Optional Redemption; Partial Redemption; Notice; Open Market Purchase; Cancellation. The Bonds maturing in the years 1999 through 2009, inclusive, shall not be subject to redemption prior to maturity. The Bonds maturing on or after December 1, 2010 shall be subject to redemption prior to maturity at the option of the City, in whole or in part on any date (maturities to be selected by the City and by lot within a maturity in such manner as the Registrar shall determine), commencing on December 1, 2009, at a price of par plus accrued interest to the date of redemption. Any Bond in the principal amount of greater than $5,000 may be partially redeemed in any integral multiple of $5,000. Prior to the Book-Entry Termination Date, Bonds shall be partially redeemed in accordance with the Letter of Representations. From and after the Book-Entry Termination Date, in the event of a partial redemption of a Bond, upon surrender of such Bond the principal corporate trust offices of the Registrar, a new Bond or Bonds (at the option of the Owner) of the same maturity and interest rate and in the aggregate principal amount remaining unredeemed shall be authenticated and delivered to the Owner, without charge to the Owner therefor, in any denomination authorized by this Ordinance and selected by the Owner. Prior to the Book-Entry Termination Date, the Registrar shall give, or cause to be given, notice of a call for redemption of any Bonds to the Custodian, as the Owner thereof, for the benefit of the Beneficial Owners thereof, in accordance with the Letter of Representations. From and after the Book-Entry Termination Date, notice of any such intended redemption shall be given by or on behalf of the City not less than 30 nor more than 60 days prior to the date fixed for redemption by first-class mail, postage prepaid, to the Owner of each Bond to be redeemed at the address appearing on the Bond Register on the day the notice is given. The requirements of this section shall be deemed to be complied with when notice is mailed as herein provided, whether or not it is actually received by the Owner. In addition, such redemption notice shall be mailed within the same time period, postage prepaid, to the Depositories, to each NRMSIR and to MBIA Insurance Corporation or their successors, but such mailings shall not be a condition precedent to the redemption of such Bonds. If such notice to the Owners shall have been given and the City shall have set aside sufficient money for the payment of all Bonds called for redemption on the date fixed for redemption, the Bonds so called shall cease to accrue interest after such redemption date, and all such Bonds shall be deemed not to be outstanding hereunder for any purpose, except that the Owners of such Bonds shall be entitled to receive payment of the redemption price and interest accrued on the principal of the Bonds to the redemption date from the money set aside for such purpose. 9 The City reserves the right to purchase any or all of the Bonds on the open market at any time and at any price. All Bonds purchased or redeemed by the City shall be surrendered to the Registrar for cancellation. Section 5. Debt Limit Not Exceeded. The City finds and covenants that the Bonds are issued within all constitutional and statutory debt limitations presently applicable to the City. Section 6. Pledge of Full Faith, Credit and Resources. The Bonds are limited tax general obligations of the City. The City hereby irrevocably covenants to include in its budgets and to make annual levies of taxes within the constitutional and statutory tax limitations provided by law without a vote upon all property within the City subject to taxation in amounts which, together with any other money legally available therefor, shall be sufficient to pay the principal and interest on the Bonds as the same shall become due. The City hereby irrevocably pledges its full faith, credit and resources to the annual levy and collection of such taxes and for the prompt payment of such principal and interest. The City expects that revenues from the operation of the Gold Mountain Golf Complex will be available and will be used to pay the debt service requirements on the Bonds. The City hereby irrevocably covenants that the annual tax provided for herein to be levied for the payment of the principal of and interest on the Bonds shall be within and as a part of the tax levy permitted the City without a vote of the people and that a sufficient portion of each such annual tax levy to be made so long as the Bonds are outstanding, together with any other money legally available therefor, shall be and is 10 hereby set aside, pledged and appropriated for the payment of the principal of and interest on the Bonds as the same shall become due. Section 7. Form of Bonds. The Bonds shall be typewritten, printed or lithographed on good bond paper in a form consistent with this ordinance and Washington law. Section 8. Execution of Bonds. The Bonds shall be signed on behalf of the City with the facsimile or manual signatures of the Mayor and the City Clerk, and shall have the seal of the city impressed or a facsimile thereof imprinted thereon. In case either or both of the officers who shall have executed any Bond shall cease to be such officer or officers of the City before the Bond so signed shall have been authenticated or delivered by the Registrar or issued by the City, such Bond nevertheless may be authenticated, delivered and issued and upon such authentication, delivery and issuance, shall be as binding upon the City as though those who signed the same had continued to be such officers of the City. Any Bond also may be signed and attested on behalf of the City by such persons as at the actual date of execution of such Bond shall be the proper officers of the City although at the original date of such Bond such persons were not such officers of the City. Section 9. Authentication and Delivery_ of Bonds by Registrar. The Registrar are authorized and directed, on behalf of the City, to authenticate and deliver Bonds initially issued or transferred or exchanged in accordance with the provisions of such Bonds and this Ordinance. Only such Bonds as shall bear thereon a "Certificate of Authentication" manually executed by an authorized signatory of the Registrar shall be valid or obligatory for any 11 purpose or entitled to the benefits of this Ordinance. Such Certificate of Authentication shall be conclusive evidence that the Bonds so authenticated have been duly executed, authenticated and delivered hereunder and are entitled to the benefits of this Ordinance. The Registrar shall be responsible for its representations contained in the Certificate of Authentication on the Bonds. Section 10. Registration: Transfer and Exchange. The Registrar shall keep, or cause to be kept, the Bond Register at its principal corporate trust office. The City and the Registrar, each in its discretion, may deem and treat the Owner of each Bond as the absolute owner thereof for all purposes, and neither the City nor the Registrar shall be affected by any notice to the contrary. Payment of any such Bond shall be made only as described in Section 3 hereof, but such registration may be transferred as herein provided. All such payments made as provided in Section 3 hereof shall be valid and shall satisfy and discharge the liability of the City upon such Bond to the extent of the amount or amounts so paid. The registered ownership of any Bond may be transferred. Prior to the Book- Entry Termination Date, the beneficial ownership of the Bonds may only be transferred on the records established and maintained by the Custodian. On and after the Book-Entry Termination Date, no transfer of any Bond shall be valid unless it is surrendered at any principal corporate trust office of the Registrar, with the assignment form appearing on such Bond duly executed by the Owner or such Owner's duly authorized agent, in a manner satisfactory to the Registrar. Upon such surrender, the Registrar shall cancel the surrendered Bond and shall authenticate and deliver, without charge to the Owner or transferee therefor (other than any governmental fees or taxes payable on account of such 12 transfer), a new Bond or Bonds (at the option of the new Owner), of the same maturity and interest rate and for the same aggregate principal amount, in any authorized denomination, naming as Owner the person or persons listed as the assignee on the assignment form appearing on the surrendered Bond, in exchange for such surrendered and cancelled Bond. On and after the Book-Entry Termination Date, any Bond may be surrendered at the principal corporate trust office of the Registrar and exchanged, without charge, for an equal aggregate principal amount of Bonds, in any authorized denomination. The Registrar shall not be obligated to transfer or exchange any Bond during the 15 days preceding an interest or principal payment or redemption date. The Registrar may become the Owner of any Bond with the same rights it would have if it were not a Registrar and, to the extent permitted by law, may act as depository for and permit any of its officers or directors to act as a member of, or in any other capacity with respect to, any committee formed to protect the rights of the Owners of the Bonds. The City covenants that, until all Bonds shall have been surrendered and cancelled, it will maintain a system of recording the ownership of each Bond t0hat complies with the provisions of the Code. Section 11. Mutilated, Lost, Stolen or Destroyed Bonds. If any Bond becomes mutilated, lost, stolen or destroyed, the Registrar may authenticate and deliver a new Bond of the same maturity and interest rate and of like tenor and effect in substitution therefor, all in accordance with law. If such mutilated, lost, stolen or destroyed Bond has matured, the City at its option, may pay the same without the surrender thereof. 13 However, no such substitution or payment shall be made unless and until the applicant shall furnish (a) evidence satisfactory to the Registrar of the destruction or loss of the original Bond and of the ownership thereof, and (b) such additional security, indemnity or evidence as may be required by or on behalf of the City. No substitute Bond shall be furnished unless the applicant shall reimburse the City and the Registrar for their respective expenses in the furnishing thereof. Any such substitute Bond so furnished shall be equally and proportionately entitled to the security of this Ordinance with all other Bonds issued hereunder. Section 12. Defeasance. If money and/or "Government Obligations" (as such obligations are defined in Chapter 39.53 RCW, as now in existence or hereafter amended) maturing at such times(s) and bearing such interest to be earned thereon (without any reinvestment thereof) as will provide a series of payments which shall be sufficient, together with any money initially deposited, to provide for the payment of the principal of and interest on all or a portion of the Bonds, when due in accordance with their terms in accordance with a refunding plan adopted by the City, are set aside in a special fund (hereinafter called the "trust account") to effect such payment and are pledged irrevocably for the purpose of effecting such payment, then no further payments need be made into the Bond Fund for the payment of the principal of and the interest on such Bonds, the Owners thereof shall cease to be entitled to any lien, benefit or security of this Ordinance except for the right to receive the money and the principal and interest proceeds on the obligations set aside in the trust account, and such Bonds shall no longer be deemed to be outstanding hereunder. 14 Section 13. Sale of the Bonds. The Purchaser has presented the Purchase Agreement to the City pursuant to which the Purchaser has offered to purchase the Bonds, under the terms and conditions provided in the Purchase Agreement, which written Purchase Agreement is on file with the City Clerk and is incorporated herein by this reference. The City Council finds that entering into the Purchase Agreement is in the City's best interest and therefore accepts the offer contained in the Purchase Agreement and authorizes the execution of the Purchase Agreement by City officials. The Bonds will be prepared at City expense and will be delivered to the Purchaser in accordance with the terms of the Purchase Agreement with the approving legal opinion of the City's bond counsel relative to the issuance of the Bonds printed on each Bond or attached thereto. Bond counsel has not been engaged to participate in the preparation or review of, or express any opinion concerning the completeness or accuracy of the official statement or other disclosure documentation used in connection with the offer or sale of the Bonds by any person, and bond counsel's opinion shall so state. Bond counsel has not been retained to monitor, and shall not be responsible for monitoring, the City's compliance with any federal law or regulations to maintain the tax-exempt status of the interest on the Bonds. Section 14. Delivery of Bonds; Temporary Bonds. The proper City officials are authorized and directed to execute and/or approve, as appropriate, all documents, including but not limited to, the final Official Statement pertaining to the Bonds and the commitment with MBIA Insurance Corporation for the issuance of a municipal bond insurance policy, and to do everything necessary for the preparation and delivery of a transcript of proceedings pertaining to the Bonds, and the printing, execution and prompt 15 delivery of the Bonds to the Purchaser and for the proper application and use of the proceeds of the sale thereof. If definitive Bonds are not ready for delivery by the date established for Closing, the City Treasurer, upon the approval of the Purchaser, may cause to be issued and delivered to the Purchaser one or more temporary Bonds with appropriate omissions, changes and additions. Any temporary Bond or Bonds shall be entitled and subject to the same benefits and provisions of this ordinance with respect to the payment, security and obligation thereof as definitive Bonds authorized hereby. Such temporary Bond or Bonds shall be exchangeable without cost to the Owners thereof for definitive Bonds when the latter are ready for delivery. Section 15. Call of Refunded Bonds for Redemption. The City hereby calls the Refunded Bonds maturing on or after December 1, 2003 for redemption on December 1, 2002, at a redemption price of 102% of the principal amount plus accrued interest. Such call for redemption shall become irrevocable upon delivery of the Bonds at Closing. Section 16. Acquisition of Escrow Obligations. The proper City officials, including, but not limited to, the City Treasurer shall, at or prior to closing, make appropriate arrangements for the payment for and delivery of any Escrow Obligations which are to be purchased in the open market pursuant to the Refunding Plan; and shall, prior to closing, deliver or cause to be delivered to the Federal Reserve Bank in Seattle, Washington, subscriptions for any Escrow Obligations which are to be acquired from the United States Bureau of Public Debt pursuant to the Refunding Plan. The maturing principal of and the interest on such Escrow Obligations, together with the Initial Cash to be provided to the Escrow Trustee pursuant to the Refunding Plan, shall be sufficient to 16 pay all of the principal of and interest to become due on the Refunded Bonds from Closing to and including December 1, 2002, when due, and to redeem on said date, all of the remaining outstanding Refunded Bonds at a redemption price of 102% of the principal amount due on the Refunded Bonds to be redeemed and interest accrued thereon to the date of redemption. The Escrow Trustee shall designate in any such subscriptions that all the principal of and interest on the Escrow Obligations subscribed for with the United States Bureau of Public Debt shall be payable to the Escrow Trustee. Such subscription may be amended as permitted by federal law. Section 17. Verification of Sufficiency of Escrow. The proper City officials, including, but not limited to, the City Treasurer are authorized and directed to obtain, prior to Closing, independent verification from a firm of independent certified public accountants that, among other things, the cash flow scheduled to be received from the Escrow Obligations, together with any uninvested initial cash, shall be sufficient to make the payments described in Section 16 hereof. At Closing, if there has been any change in Escrow Obligations or cash deposited with the Escrow Trustee under this Ordinance and the Escrow Agreement, the City Treasurer shall cause the sufficiency of the Escrow Fund (as defined in the Escrow Agreement) to be verified in such manner as he shall deem necessary. Section 18. Escrow Agreement. The Escrow Agreement, in substantially the same form as the draft dated July 12, 1999, on file with the City Clerk, is hereby approved in order to accomplish the defeasance of the Refunded Bonds. The City Treasurer is authorized and directed to (a) execute and to deliver said Escrow Agreement, 17 on behalf of the City, to the Escrow Trustee on or before Closing, with such changes as the City Treasurer deems to be in the best interests of the City; and such execution and delivery of the Escrow Agreement shall evidence irrevocably the approval of the executed Escrow Agreement by the City; and (b) cause the Escrow Trustee to deliver notices of defeasance and redemption of the Refunded Bonds in accordance with the Escrow Agreement. Section 19. Establishment of Bond Fund; Application of Bond Proceeds. There is hereby created and established in the office of the City Treasurer a special fund to be designated as the "Limited Tax General Obligation Refunding Bond Fund, 1999" (the "Bond Fund"). The accrued interest on the Bonds received by the City upon the sale of the Bonds, if any, and any rounding amount shall be deposited into the Bond Fund and shall be applied to the payment of interest coming due on the Bonds. All of the remaining net proceeds of the Bonds shall be paid by the City to the Escrow Trustee at Closing, to be applied as set forth in the Escrow Agreement. Section 20. Tax-Exemption and Bank Qualification. The City covenants that it will not take or permit to be taken on its behalf any action that would adversely affect the exclusion of the interest on the Bonds from gross income for purposes of federal income taxation, and will take or require to be taken such acts as may be permitted by Washington law and as may from time to time be required under applicable law to continue the exclusion of the interest on the Bonds from gross income for purposes of federal income taxation. Without limiting the generality of the foregoing, the City will not invest or make or permit any use of the proceeds of the Bonds or of its other money at 18 any time during the term of the Bonds which would cause the Bonds to be "arbitrage bonds" within the meaning of Section 148 of the Code. The City covenants that it will calculate or cause to be calculated, and shall rebate to the United States, all earnings from the investment of Bond proceeds that are in excess of the amount that would have been earned had the yield on such investments been equal to the yield on the Bonds, plus income derived from such excess earnings, to the extent and in the manner required by Section 148 of the Code. The City has not been notified of any listing or proposed listing by the Internal Revenue Service to the effect that the City is a bond issuer the arbitrage certifications of which may not be relied upon. The City will take no actions and will make no use of the proceeds of the Bonds or any other funds held under this ordinance which would cause any Bond to be treated as a "private activity bond" (as defined in Section 141(b) of the Code) subject to treatment under said Section 141 (b) as an obligation not described in Section 103(a) of the Code, unless the tax exemption thereof is not affected. The City hereby designates the Bonds as "qualified tax-exempt obligations" for purposes of Section 265 of the Code (relating to the deduction by financial institutions of the interest incurred to carry tax-exempt debt), and authorizes and directs the proper City officials to execute and deliver all documents necessary to evidence such designation to any and all interested parties. The City further covenants not to issue more than $10,000,000 of such "qualified tax-exempt obligations" during 1999. Section 21. Preliminary_ Official Statement Declaration. The City has been provided with copies of Preliminary Official Statement, prepared in connection with the 19 sale of the Bonds. For the sole purpose of the Purchaser's compliance with Securities and Exchange Commission Rule 15 c2-12(b)(1), the City "deems final" the Preliminary Official Statement, as of its date, except for the omission of information on offering prices, interest rates, selling compensation, delivery dates, ratings, other terms of the Bonds dependent on such matters. Section 22. Undertaking to Provide Continuing Disclosure. This section constitutes the City's written undertaking for the benefit of the Owners and the Beneficial Owners of the Bonds required by subsection (d)(2)(ii) of the Rule. The City hereby agrees to provide or cause to be provided upon request to any person or at least annually to the SID, if one is created: (a) financial statements prepared in accordance with the generally accepted accounting principles applicable to governmental units, as such principles may be changed from time to time and as permitted by State law; which statements will not be audited, except that if and when audited financial statements are otherwise prepared and available to the City, they will be provided; and (b) other operating data that may be prepared by the City (the "Financial Information"). In its provision of such Financial Information, the City may cross-reference to any "final official statement" (as defined in the Rule) available from the MSRB or any other documents theretofore provided to each then existing NRMS1R or the SID, if one is created. The City further agrees to provide or cause to be provided, in a timely manner, to the SID, if one is created, and to either the MSRB or each then existing NRMSIR, notice of any of the following events with respect to the Bonds, if material: 20 1. Principal and interest payment delinquencies; 2. Non-payment related defaults; 3. Unscheduled draws on debt service reserves reflecting financial difficulties; 4. Unscheduled draws on credit enhancements reflecting financial difficulties; 5. Substitution of credit or liquidity providers, or their failure to perform; 6. Adverse tax opinions or events affecting the tax-exempt status of the Bonds; 7. Modifications to rights of the Owners of the Bonds; 8. Optional redemptions of the Bonds; 9. Defeasances of the Bonds; 10. Release, substitution or sale of property securing repayment of the Bonds; and 11. Rating changes. After the issuance of the Bonds, so long as the interests of the Owners or Beneficial Owners of the Bonds will not be materially impaired thereby, as determined by a party unaffiliated with the City (including, without limitation, a trustee for the Owners, nationally recognized bond counsel or other counsel familiar with the federal securities law), or pursuant to a favorable "no-action letter" issued by the SEC, this Section 22 may only be amended in connection with any change in legal requirements, change in law, or change in the identity, nature or status of the obligated person, or type of business 21 conducted, and only in such a manner that the undertaking of the City, as so amended, would have complied with the requirements of the Rule at the time of the primary offering, after taking into account any amendments or interpretations of the Rule, as well as any change in circumstances. The City's obligations to provide Financial Information and notices of certain events shall terminate without amendment upon the defeasance, prior redemption or payment in full of all of the then outstanding Bonds. This Section 22 or any provision hereof, shall be null and void if the City (i) obtains an opinion of nationally recognized bond counsel or other counsel familiar with the federal securities laws to the effect that those portions of the Rule which require this Section 22 or any such provision are invalid, have been repealed retroactively or otherwise do not apply to the City; and (ii) notifies and provides the SID, if any, and either the MSRB or each then existing NRMSIR with copies of such opinion. The right of each Owner and Beneficial Owner of Bonds to enforce the provisions of this Section 22 shall be limited to the right to obtain specific enforcement of the City's obligations under this Section 22, and any failure by the City to comply with the provisions of this undertaking shall not be a default with respect to the Bonds under this Ordinance. The City Treasurer is authorized and directed to take such further action on behalf of the City as may be necessary, appropriate or convenient to carry out the requirements of this Section 22. Section 23. Contract; Severability. The covenants contained in this ordinance shall constitute a contract between the City and the Owners of each and every Bond. The 22 City unconditionally covenants that it will keep and perform all of the covenants of the Bonds and this Ordinance. If any one or more of the provisions of this Ordinance shall be declared unconstitutional or invalid for any reason, such decision shall not affect the validity of the remaining provisions of this Ordinance or the Bonds, and this Ordinance and the Bonds shall be construed and enforced as if such unconstitutional or invalid provision had not been contained herein. Section 24. Effective Date. This Ordinance shall take effect and be in full force ten days after passage and publication of an approved summary, consisting of the title. APPROVED by the City Council of the City of Bremerton, Washington, this 21st day of July, 1999. PASSED by the City Council of the City of Bremerton, Washington, this 28th day of July, 1999. MIKE'SrHEI~, CoUnCil President APPROVED this ~ay o(t~~ 1999. LYNN HORTON, Mayor ATTEST: Kathleen McCluskey, City Clerk OT!VE DATE __ PU UOATiON DATE -- 23 APPROVED AS TO FORM: ith Andrews, Bond Counse~ PUBLISHED: EFFECTIVE DATE: ORDINANCE NO. 4662 24 SUMMARY OF ORDINANCE NO. 4662 AN ORDINANCE of the City of Bremerton Washington relating to the incurrence of indebtedness; providing for the sale and issuance of $4,520,000 principal amount limited tax general obligation refunding bonds, 1999, to advance refund and defease a portion of the City's Limited Tax General Obligation Bonds, 1994; providing for the date, denominations, form, terms, registration privileges, maturity, interest rates and covenants of the bonds; establishing a debt service account for the bonds; authorizing the execution of an escrow agreement and providing for the sale and delivery of such bonds to Banc of America Securities LLC, Seattle, Washington Approved by the City Council of Bremerton, Washington, this 21~tday of July, 1999. Passed by the City Council of Bremerton, Washington, this 28th day of July, 1999. The full text of this ordinance is available in the City Clerk's office at 239 Fourth Street, Bremerton, Washington 98337.