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HomeMy WebLinkAbout4136 AN ORDINANCE of the City of Bremerton, Washington, authorizing the issuance of tax antici- pation notes for the purpose of paying City expenses pending the receipt of general City taxes; creating a note redemption fund; and providing for the sale of those notes to Prudential-Bache Securities Inc. of Seattle, Washington. 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 1988 will not be sufficient to meet necessary City expenses as they are incurred in 1988, 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 1987 for tax collection in the year 1988 is $838,838,748, and the City has $1,698,497 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 $1,329,000 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 not more than $1,500,000. Section 2. Authorization of Notes. There is created in the office of the City Treasurer a special fund called the Tax Anticipation Note Fund, 1988 (the "Note Fund"). Pending the collection of sales, excise and general ad valorem property taxes to be levied for collection in 1988 and other revenues anticipated to be received in 1988, the City shall issue and sell its tax anticipation notes to be designated Tax Anticipation Notes, 1988 (the "Notes") in a total maximum amount not exceeding $1,500,000. The Notes shall be issued in such amounts, shall be dated, shall be in such denominations, shall bear such interest at a rate or rates not exceeding 8% per annum computed on a 360-day or 365-day basis, and shall mature on such date, but not later than February 1, 1989, as determined by the City Treasurer acting under the authority of this ordinance. The Notes shall mature not more than one year after the date they are issued, with full obligation on the part of the City to pay interest at the Note rate from and after maturity until the Notes with interest are paid in full or until sufficient money for such payment in full is on deposit in the Note Fund and the Notes have been called for redemption. The City Council declares and finds that the fixing of the above maximum 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 pay- able in lawful money of the United States of America at either fiscal agency of the State of Washington in Seattle, Washington, or New York, New York. Section 3. Pledge of Taxes. 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 - 2 - of the City on all of the property in the City subject to taxation 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, an amount sufficient to redeem the Notes in full, both principal and interest, on the 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 Negotiable. 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 and Street 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 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. - 3 - Section 7. Compliance with Cash Flow Regulations. 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 and Street Funds (as that concept is defined in Income Tax Regulations Section 1.103-14(c) promulgated under the Internal Revenue Code of 1986 (the "1986 Code")) to be financed in 1988 from the City's sales, excise and general ad valorem property taxes and other revenues to be collected in 1988. Section 8. Preservation of Tax Exemption of Interest on Notes. The City covenants that it will neither make nor permit any use of proceeds of the Notes or other funds of the City at any time during the term of the Notes to be arbitrage bonds within the meaning of Section 148 of the 1986 Code and applicable regulations promulgated thereunder. 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 certifi- cations may not be relied upon. Section 9. Small Governmental Issuer Arbitrage Rebate Exemption 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 issue of Notes is a "private activity bond" within the meaning of Section 141 of the Internal Revenue Code of 1986 (the "1986 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 -- 4 -- 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 1986 Code or any predecessor provision of federal law by the City during the calendar year in which the Notes are issued does not exceed $10,000,000. The City therefore certifies that it is an issuer which qualifies for the small governmental issuer arbitrage rebate exemption under Section 148(f)(4)(C) of the 1986 Code and designates the Notes as "qualified tax-exempt obligations" for the purposes of Section 265(b)(3) of the 1986 Code. Section 10. Payment of 1987 Tax Anticipation Notes. The City finds that there have been deposited in the Tax Anticipation Note Fund, 1987, sufficient funds to redeem the City's Tax Anticipation Notes, 1987, in full, both principal and interest, on February 26, 1988, 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, 1987, or replace money used for that purpose. Section 11. Provision for Sale of Notes. The City Treasurer is authorized to negotiate the sale of the Notes with Prudential-Bache Securities Inc. of Seattle, Washington under the terms of this ordinance and under such terms and conditions as the City Treasurer deems to be in the best interests of the City. The sale price of the Notes must be such that it does not result in an effective interest rate greater than 8% per annum. The City shall furnish the typewritten Notes and the approving legal opinion of Roberts & Shefelman, municipal bond counsel of Seattle, Washington. Bond counsel shall not be required to -- 5 -- review or express any opinion concerning the completeness or accuracy of any official statement, offering circular or other sales material relating to the issuance of the Notes or otherwise used in connection with the Notes and bond counsel's opinion shall so state. APPROVED by the City Council on the first reading this 2nd day of December, 1987. 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 9th day of December, 1987, notice having been given as required by law.  - Mayor City Clerk APPROVED AS~.. O~M: city Atto rn y C~DI~~. 4136 PUBLISHED: 12/14/87 -- 6 -- I, KATHLEEN McCLUSKEY, City Clerk of the City of Bremerton, Washington, certify that the attached copy of Ordinance No. ~5~ is a true and correct copy of the original ordinance passed on the 9th day of December, 1987, as that ordinance appears on the Minute Book of the City. DATED this day of , 198__ KATHLEEN McCLUSKEY, Ci~ty Clerk ~3~2b - 7 -