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HomeMy WebLinkAbout4446 CITY OF BREMERTON, WASHINGTON oRDINANCE NO. 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 1994 will not be sufficient to meet necessary city expenses as they are incurred in 1994, 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 from taxes and other revenue collected bythe City; NOW, THEREFORE, BE IT ORDAINED BY THE CITY OF BREMERTON, WASHINGTON, as follows: 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 1993 for tax collection in the year 1994 is $1,180,271,814 and the City has $4,101,765 of outstanding general indebtedness evidenced by limited tax general obligation bonds, tax anticipation notes and installment purchase contracts incurred within the limit of up to 3/4 of 1% 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 $2,200,000 within the limit of up to 2-1/2% of the value of the taxable property within the City for general capital purposes O11~.~ 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. Section 2. ~uthorization and Description of Notes. There is created in the office of the City Treasurer a special fund called the Tax Anticipation Note Fund, 1994 (the "Note Fund"). Pending the collection of sales, excise and general ad valorem property taxes to be levied for collection in 1994 and other revenues anticipated to be received in 1994, the City shall issue and sell its tax anticipation notes to be designated TaxAnticipation Notes, 1994 (the "Notes"), in the principal amount of $1,250,000. The Notes shall be dated February 1, 1994; shall mature on January 31, 1995; shall be in the denomination of $100,000 or any integral multiple thereof except that one Note shall be in the denomination of $50,000 or $100,000 or any integral multiple thereof plus $50,000; and shall bear interest at the rate of ~__% per annum (computed on the basis of a 360-day year of twelve 30-day months), payable at maturity. If any Note is not redeemed, when properly presented at its maturity, then interest shall continue to accrue at the same rate from and after maturity until that Note with interest is paid in full or until sufficient money for such payment in full is on deposit in the Note Fund and the Note has been called for redemption. The City Council declares and finds that the 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. 0114526.02 ~2~ Both principal of and interest on the Notes shall be payable in lawful money of the United States of America at the principal office of either of the fiscal agencies of the State of Washington in Seattle, Washington, or New York, New York. Section 3. Pledge of Taxes. The Notes shall be paid solely from the Note Fund. The City irrevocably pledges to budget and levy taxes within the constitutional and statutory tax limitations provided by law without a vote of the electors of the City on all of the taxable 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 4. Form and Execution of Notes. The Notes shall be 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 signature of the City Treasurer, and shall have the seal of the City impressed thereon. Section 5. ~otes Neqotiable. The Notes shall be negotiable instruments to the extent provided by RCW 62A.8-102 and 62A.8-105. Section 6. Use of Proceeds. The principal proceeds received from the sale of the Notes shall be deposited in the General Fund 0114526.02 of the City heretofore created 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 7. Permitted Financinq o~ Cumulative Cash Flow Deficit. Based upon the reasonably expected amounts of sales, excise and general ad Yalorem property taxes and other revenues to be collected in 1994 (including investment proceeds of the Notes) and that are expected to be available to make General Fund expenditures in 1994 (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 1994 and that is to be financed with proceeds of the Notes. Section 8. 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 O114:~2~.02 ~4~ 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 also covenants that it will, to the extent the arbitrage rebate requirement of Section 148 of the Code is applicable to the Notes, take all actions necessary to comply (or to be treated as having complied) with that requirement in connection with the Notes, including the calculation and payment of any penalties that the City has elected to pay as an alternative to calculating rebatable arbitrage, and the payment of any other penalties if required under Section 148 of the Code to prevent interest on the Notes from being 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 9. Approval of Note Purchase Contract. Seattle- First National Bank of Seattle, Washington, has presented a purchase contract (the "Note Purchase Contract") to the City offering to purchase the Notes under the terms and conditions provided in the Note Purchase Contract, which written Note Purchase Contract is on file with the City Clerk and is incorporated herein by this reference. The City Council finds that entering into the Note Purchase Contract is in the City's best interest and therefore accepts the offer contained therein and authorizes its execution by City officials. O114~2~.02 ~5~ 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 material issued or used in connection with the Notes, and bond counsel's opinion shall so state. The City Council has been provided with copies of a preliminary official statement dated January , 1994 (the "Preliminary Official Statement"), prepared in connection with the sale of the Notes. For the sole purpose of the purchaser's compliance with Securities and Exchange Commission Rule 15c2-12(b)(1), the City "deems final" that Preliminary Official Statement as of its date, except for the omission of information as to offering price, interest rate, selling compensation, delivery date and other terms of the Notes dependent on such matters. 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 10. Effective Date - Urqency. In order to have money available to offset the City's deficit cash flow, the proceeds of the Notes authorized by this ordinance are to be received before thirty days after publication of this ordinance. Therefore, the City Council finds that sufficient urgency exists to require that this ordinance take effect immediately. For the reasons stated,. Ol 1~.~ this ordinance shall take effect immediately upon its passage and publication. PASSED unanimously by the City Council of the City of Bremerton on this 26th day of January, 1994. APP~OyED this \~% day of · 1994. ATTEST: KATHLEEN McCLUSKEY~ City Clerk O11452~.02 I, KATHLEEN 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 26th day of January, 1994, as such ordinance appears on the Minute Book of the City. DATED this ~ day of January, 1994. KATHLEEN McCLUSKEY, City C~erk 0114~26.02