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HomeMy WebLinkAbout4306 A/~ 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 1991 will not be sufficient to meet necessary City expenses as they are incurred in 1991, 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 by the 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 1990 for tax collection in the year 1991 is $858,728,317, and the City has $527,065 of outstanding general indebtedness evidenced by limited tax general obligation bonds 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 $1,110,000 within the limit of up to 2-1/2% of the value of the taxable property within the City for general capital purposes issued pursuant to a vote of the qualified voters of the City, and the amount of indebtedness for which the notes are herein authorized to be issued is $1,750,000. Section 2. Authorization and Description of Notes. There is created in the office of the City Treasurer a special fund called the Tax Anticipation Note Fund, 1991 (the "Note Fund"). Pending the collection of sales, excise and general ad valorem property taxes to be levied for collection in 1991 and other revenues anticipated to be received in 1991, the City shall issue and sell its tax anticipation notes to be designated Tax Anticipation Notes, 1991 (the "Notes"), in the principal amount of $1,750,000. The Notes shall be dated February 1, 1991, shall mature on January 31, 1992, 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 ~b~% 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. 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. -2- Section 3. Pledqe 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. Notes 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 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 -3- 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. Compliance with Cash Flow Requlations. The City Council finds that the principal amount of the Notes does not exceed the City's maximum anticipated cumulative cash flow deficit in the General Fund (as that concept is defined in the Internal Revenue Code of 1986, as amended (the "Code"), and Income Tax Regulations Sections 1.103-13, 1.103-14 and 1.103-15) to be financed in 1991 from the City's sales, excise and general ad valorem property taxes and other revenues to be collected in 1991. Section 8. Preservation of Tax Exemption of Interest on Notes. The City covenants that it will take all actions necessary to prevent the 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 at any time during the term of the Notes which will cause the interest on the Notes to be included in gross income for federal income tax purposes. The City further covenants 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. Small Governmental Issuer Arbitraqe Rebate Exemption and Desiqnation 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 --4-- part of this 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) issued by the City and all entities subordinate to the City (including any entity which the City controls or which derives its authority to issue tax-exempt obligations from the City) during the current calendar year is not reasonably expected to exceed $5,000,000; and (e) the amount of tax-exempt obligations, including the Notes, designated 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 $5,000,000. The City therefore certifies that the Notes are eligible for the arbitrage rebate exemption under Section 148(f)(4)(C) of the Code and designates the Notes as "qualified tax-exempt obligations" for the purposes of Section 265(b)(3) of the Code. Section 10. Payment of 1990 Tax Anticipation Notes. The City finds that there have been deposited in the Tax Anticipation Note Fund, 1990, sufficient funds to pay, both principal and interest, and redeem the City's Tax Anticipation Notes, 1990, on January 25, 1991, the maturity date of those notes, and that the proceeds of the Notes will not be used to pay principal of or interest on the Tax Anticipation Notes, 1990, or replace money used for that purpose. Section 11. Approval of Bond Purchase Contract. Seattle- First National Bank of Seattle, Washington, has presented a purchase contract (the "Purchase Contract") to the City offering to purchase the Notes under the terms and conditions provided in the Purchase Contract, which written Purchase Contract is on -5- file with the City Clerk and is incorporated herein by this reference. The City Council finds that entering into the 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 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 8, 1991 (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 15-2-12(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 12. Effective Date - Urgency. 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 --6-- ordinance. Therefore, the City Council finds that sufficient urgency exists to require that this ordinance take effect immediately. For the reasons stated, this ordinance shall take effect immediately upon its passage and publication. PASSED by the City Council of the City of Bremerton, signed by the Mayor and attested by the City Clerk in authentication of such passage this [~T~_ day of January, 1991, notice having been given as required by law. HORTON, Council President APPROVED this __ day of January, mi991. LOUIS MENTOR, ATTEST: KATHLEEN McCLUSKEY, City Clerk gPROVED/A~ TO FORM: IAN SIEVERS, City Attorney MLC-1437' -7-