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HomeMy WebLinkAbout4488 CITY OF BREMERTON, WASHINGTON AN ORDINANCE of the City of Bremerton, Washington, relating to contracting indebtedness; authorizing the issuance of a Limited Tax General Obligation Line of Credit Note, 1994, in the aggregate principal amount of not to exceed $500,000 at any one time outstanding, to provide funds necessary to pay costs relating to the enforcement of Ordinance No. 4418 and chapter 35.80 RCW concerning the abatement of unfit dwellings, buildings, structures and premises, and for other lawful City purposes pending the issuance of general obligation bonds or other sources of repayment; fixing the date, interest rate, form, maturity, terms, covenants and uses of the proceeds of the note; creating a note redemption fund; and approving the sale and providing for the delivery of that note to Seattle-First National Bank, Seattle, Washington. Passed October 26, 1994 Prepared By: Foster Pepper & Shefelman 1111 Third Avenue, Suite 3400 Seattle, Washington 98101 0148530.05 CITY OF BREMERTON, WASHINGTON AN ORDINANCE of the City of Bremerton, Washington, relating to contracting indebtedness; authorizing the issuance of a Limited Tax General Obligation Line of Credit Note, 1994, in the aggregate principal amount of not to exceed $500,000 at any one time outstanding, to provide funds necessary to pay costs relating to the enforcement of Ordinance No. 4418 and chapter 35.80 RCW concerning the abatement of unfit dwellings, buildings, structures and premises, and for other lawful City purposes pending the issuance of general obligation bonds or other sources of repayment; fixing the date, interest rate, form, maturity, terms, covenants and uses of the proceeds of the note; creating a note redemption fund; and approving the sale and providing for the delivery of that note to Seattle-First National Bank, Seattle, Washington. WHEREAS, the City of Bremerton, Washington (the "City") has enacted Ordinance No. 4418 providing for the repair and abatement of unfit dwellings, buildings, structures and premises pursuant to chapter 35.80 RCW; and WHEREAS, the City of Bremerton, Washington (the "City"), has determined it to be in the best interest of the City that the City borrow money by the issuance of short-term obligations for the purpose of providing the funds with which to pay part of the costs of enforcing Ordinance No. 4418; and WHEREAS, Seattle-First National Bank has offered to extend a line of credit to the City evidenced by a limited tax general obligation line of credit note under the terms and conditions set forth herein; NOW, THEREFORE, THE CITY OF BREMERTON DOES ORDAIN: Section 1. Definitions. As used in this ordinance, the following words shall have the following meanings: 0148530.05 --1-- "Bank" means Seattle-First National Bank in Seattle, Washington. "City" means the City of Bremerton, Washington. "Code" shall mean the Internal Revenue Code of 1986, as amended. "Note" means the Limited Tax General Obligation Line of Credit Note, 1994, of the City in the principal amount of not to exceed $500,000 at any one time outstanding, which is authorized to be issued by this ordinance. "Note Fund" means that special fund of the City known as the Limited Tax General Obligation Line of Credit Note Fund, 1994, created by this ordinance for the payment of the principal of and interest on the Note. "Note Registrar" means the City Treasurer. "Projects" means carrying out of enforcement procedures under Ordinance No. 4418 against any unfit dwellings, buildings, structures and premises identified by the City Council to be condemned and demolished with the proceeds of the Note. Section 2. Debt Capacity. The assessed valuation of the taxable property of the City as ascertained by the last preceding assessment for City purposes for the calendar year 1994 is $1,169,824,000, and the City has outstanding general indebtedness evidenced by limited tax general obligation bonds, notes, leases and installment contracts in the principal amount of $5,335,000 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 0148530.~ unlimited tax general obligation bonds in the principal amount of $2,045,000 incurred within the limit of up to 2-1/2% of the value of the taxable property within the City for strictly City capital purposes only, and the amount of indebtedness for which the note authorized herein to be issued is not to exceed $500,000. Section 3. Authorization of Bonds. For the purpose of providing the funds to pay a part of the cost of carrying out the Projects, the City shall issue limited tax general obligation bonds in the amount of not to exceed $500,000. Such bonds shall be issued in one or more series at such times as the City shall deem advisable; shall be in such denominations and form, shall be dated, shall bear such interest rate or rates, shall be payable at such time or times, shall have such option of payment prior to maturity, shall provide for such additional funds and accounts and shall contain and be subject to such provisions and covenants as hereafter shall be provided by ordinance. 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 4. Authorization and Description of Note. For the purpose of providing the funds with which to pay part of the costs of carrying out the Projects and the costs of issuance and sale of the Note pending the issuance of the limited tax general obligation bonds or other sources of repayment, the City may borrow money from time to time pursuant to a line of credit extended by the Bank under the terms of its commitment letter dated October 11, 1994 (the "Offer"), and shall issue the Note in an aggregate principal 0148530,05 amount not to exceed $500,000 at any one time outstanding. The Note shall be designated the Limited Tax General Obligation Line of Credit Note, 1994; shall be dated as of its date of delivery to the Bank; shall be in fully registered form; shall be numbered R-i; and shall mature four years from its dated date, unless the maturity is extended as hereinafter provided. Unless on or before each annual anniversary date, the Bank notifies the City Treasurer in writing of its intention not to extend the term of the Note for one additional year, such term automatically and conclusively shall be deemed to be extended to one year beyond the scheduled maturity date as the Bank shall acknowledge in writing by letter to the City Treasurer. Upon such an extension, no other terms or conditions of the Note shall be changed. The City may make incremental draws upon the Note (the "Loan Draws") in any amount of at least $1,000 and on any business day during the term of the Note for the purpose of providing the funds with which to pay the cost of carrying out the Projects and to pay all or a part of the costs of issuing the Note. No Loan Draw may exceed the total amount of the costs to be paid from such draw, and the proceeds of each Loan Draw shall be used immediately to pay those costs. Loan Draws shall be recorded on the Loan Draw Record attached to the Note, or in such other form as the City and the Bank may agree. Loan Draws are not subject to approval by the Bank, but shall be limited to an aggregate principal amount of $500,000 outstanding at any one time. Each Loan Draw shall bear interest at the rate of 250 basis points less than the rate of interest designated and published by 0148530.05 ~4~ the Bank as its prime rate, as such prime rate may change from time to time (the "Prime Rate"), and the interest rate to be paid on any Loan Draw shall be adjusted as of the first day of the month following adjustment in the Prime Rate. Interest on each Loan Draw shall accrue from the date of that Loan Draw and shall be computed on the principal amount of the Loan Draw outstanding on the basis of a 365/366-day year and actual days elapsed for the actual number of days the principal amount of the Loan Draw is outstanding. If the Note is not redeemed when properly presented at its maturity or call date, the City shall be obligated to pay interest on the Note at the full Prime Rate from and after the maturity or call date until the Note, both principal and interest, is paid in full or until sufficient money for that payment in full is on deposit in the Note Fund. The City Council finds that the fixing of the above interest rate is in the best interest of the City. Section 5. Designation of Officers to Make Loan Draws. The city Council has determined it to be in the best interest of the City that the City Treasurer or such other person as the City Treasurer may designate, is authorized to make Loan Draws against the Note in the amounts and at the times as the City Treasurer may determine hereafter, those Loan Draws to be made in accordance with the terms and provisions set forth herein. Section 6. Creation of Note Fund; Payment of Note. There is created in the office of the City Treasurer a special fund designated as the Limited Tax General Obligation Line of Credit Note Fund, 1994 (the "Note Fund"). 0148530.05 --5-- Both principal of and interest on the Note shall be payable in lawful money of the United States of America solely out of the Note Fund from the proceeds of limited tax general obligation bonds, from the proceeds of other short-term obligations to be deposited in such fund or from other money legally available and to be used therefor. Interest on the Note also may be paid from the proceeds of Loan Draws. The Bank shall present to the city a monthly statement of interest due on the Note. The City shall pay interest due on the Note at least annually, no later than the anniversary of the dated date of each year, by transfer to the Bank on the interest payment date from available money or from the proceeds of a Loan Draw on the Note on the interest payment date, at the option of the City. Prepayments of principal shall be paid by transfer to the Bank on the prepayment date. Note payments shall be recorded on a Loan Payment Record attached to the Note, or in such other form as the City and the Bank may agree. The final installment of principal, plus accrued interest, on the Note at maturity or prior repayment is payable at any Seattle-First National Bank office. Section 7. Pledge to Redeem Note and Levy Taxes. The City irrevocably pledges to redeem the Note from the proceeds of a sufficient amount of limited tax general obligation bonds, from the proceeds of additional short-term obligations, or from other money of the City legally available for such purpose, and to include in its budget and levy taxes annually 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 within the City 0148530.~ 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 Note and the full faith, credit and resources of the City are pledged irrevocably for the annual levy and collection of those taxes and the prompt payment of that principal and interest. Section 8. Prepayment and Redemption Provisions. The City reserves the right and option to prepay and redeem at any time prior to its stated maturity date any or all of the principal amount of the Note outstanding at par plus accrued interest to the date of prepayment and redemption. Written notice to the Bank of any intended prepayment or redemption of the Note shall not be required. Interest on the Note or the portion thereof so prepaid shall cease to accrue on the date of such prepayment. Section 9. Form and Execution. The Note shall be printed, lithographed, typed or multicopied on good bond paper in a form consistent with the provisions of this ordinance, shall be manually signed by the Mayor and City Clerk, and shall have the seal of the City impressed thereon. The Note shall bear thereon a Certificate of Authentication in the following form, manually signed by the Note Registrar, and only if so executed shall the Note be valid or obligatory for any purpose or entitled to the benefits of this ordinance: 0148530.05 CERTIFICATE OF AUTHENTICATION This note is the fully registered City of Bremerton, Washington, Limited Tax General Obligation Line of Credit Note, 1994, described in the Note Ordinance. CITY OF BREMERTON, WASHINGTON City Treasurer, Note Registrar The authorized signing of a Certificate of Authentication shall be conclusive evidence that the Note so authenticated has been duly executed, authenticated and delivered and is entitled to the benefits of this ordinance. Section 10. Registration and Transfer of Note; Note Registrar. The Note shall be issued to the Bank only in registered form as to both principal and interest and recorded on the 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 the Note. The Note may not be assigned or transferred by the Bank, except that the Bank may assign or transfer the Note to any successor to the business and assets of the Bank. When the Note has been paid in full, both principal and interest, the Note shall be surrendered by the Bank to the Note Registrar, who shall cancel the Note. The Note Registrar shall keep, or cause to be kept, at his office, sufficient books for the registration of the Note. The Note Registrar shall serve as the City's authenticating trustee, transfer agent, registrar and paying agent for the Note and shall comply fully with all applicable federal and state laws and 0148530.05 --8-- regulations respecting the carrying out of those duties. The Note Registrar is authorized, on behalf of the City, to authenticate and deliver the Note in accordance with the provisions of the Note and this ordinance, to serve as the City's paying agent for the Note 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. No assignment or transfer of the Note shall be effective until the name of the new owner and the new owner's mailing address, together with such other information deemed appropriate by the Note Registrar, shall be recorded on the Note Register. The Note shall state on its face that the principal of and interest on the Note shall be paid only to the owner thereof registered as such on the Note Register as of the record date set forth therein and to no other person or entity, and that the Note may not be assigned except on the Note Register. Section 11. Preservation of Tax Exemption for Interest on Note. The City covenants that it will take all actions necessary to prevent interest on the Note 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 Note or other funds of the City treated as proceeds of the Note at any time during the term of the Note which will cause interest on the Note 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 Internal Revenue Code of 1986, as amended (the "Code"), is applicable to the Note, take all 0141~530.05 ~9~ actions necessary to comply (or to be treated as having complied) with that requirement in connection with the Note, 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 Note 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 12. Sale and Delivery of Note. The Bank has submitted an offer to purchase the Note under the terms and conditions of its Offer, which Offer is on file with the City Treasurer and incorporated herein by this reference. The City Council finds that it is in the City's best interest that such Offer be accepted and accepts the same. The Note will be prepared at City expense and will be delivered to the Bank in accordance with the Offer, with the approving legal opinion of Foster Pepper & Shefelman, municipal bond counsel of Seattle, Washington, regarding the Note. 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 Note, and bond counsel's opinion shall so state. 0148530.05 -'lO- The proper city officials are authorized and directed to do everything necessary for the prompt delivery of the Note to the Bank and for the proper application and use of the proceeds of the sale thereof. Section 13. Effective Date. This ordinance shall become effective ten (10) days from passage and publication. APPROVED by the city Council of the City of Bremerton this 19th day of October, 1994. PASSED by the City Council of the City of Bremerton, Washington, this 26th day of October, 1994. SHERRIL HUF~NEES~ Council President ATTEST: APPROVED this ~ day of <~,~'~ 1994 KA~LEEN ~c~LUSKEY, Clerk LYNN HORTON, Mayor APPROVED AS TO FORM: GEORGE M. MACK, '! Counsel to the City EFFECTIVE BATE ?/ o,4,5,o.o~ PUBLICATION DATE /o'/3o/¢¥ -~-~-- ORDINANCE NUMBER ~,~, 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 day of October, 1994, as that ordinance appears on the Minute Book of the City. DATED this ,~ day of October, 1994. K~t~leen McCluskey, City ~lerk 0~48530.05