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HomeMy WebLinkAbout4015 ORDINANCE NO..;~tOl$ AN ORDINANCE of the City of Bremerton, Washington, relating to the combined water and sewerage system of the City; amending Ordinance No. 3887, as amended; and, because of its urgency, providing that this ordinance shall take effect immediately. BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF BREMERTON, WASHINGTON, as follows: Section 1. Section 5 of Ordinance No. 3887, as previously amended by Ordinance No. 3948, is further amended to read as follows: Section 5. There is created and established in the Office of the City Treasurer a special fund to be known as the Water and Sewer Revenue Bond Anticipation Note Fund (the "Note Fund"). Pending the issuance of water and sewer revenue bonds authorized herein, the City shall issue and sell its Water and Sewer Revenue Bond Anticipation Notes (the "Notes") in the principal amount of $1,000,000, or such lesser amount deemed necessary by the City Treasurer. The Notes shall be dated, be in such denominations, bear such interest at a rate or rates not exceeding 12% per annum, payable at maturity, have such redemp- tion provisions and shall mature within three years of the date of the initial issue of such Notes, all as determined by the City Treasurer acting under the authority of this ordinance. Both principal of and interest on the Notes shall be payable solely out of the Note Fund from the proceeds of the water and sewer revenue bonds authorized by this ordinance to be issued to be deposited in such fund, from the proceeds of other short-term obligations issued under the terms of this ordinance to redeem previously issued and then outstanding Notes, or from other money legally available and to be used therefor, and the City irrevocably pledges to redeem the Notes on or before their respective maturities from the proceeds of such bonds, addi- tional short-term obligations or other money available for such purpose. The Notes shall be payable in lawful money of the United States of America at the office of the City Treasurer in Bremerton, Washington. 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 may be paid from the gross earnings and revenue of the combined water and sewerage system of the City, but shall be subordinate to the claims on that revenue of the normal expenses of maintenance and operation of the combined system, the outstanding Water and Sewer Revenue Bond Anticipa- tion Notes, 1984 (U.S. Navy Issue), and the outstanding water and sewer revenue bonds of the City and any bonds hereafter issued either on a parity of lien therewith or to refund such bonds. The Notes shall be printed or llthographed on good bond paper or may be in typewritten or multicopled form in a form consistent with this ordinance and State law. The Notes shall be signed by the City Treasurer and shall have the seal of the City affixed thereto. Section 2. Section 6 of Ordinance No. 3887 is amended to read as follows: Section 6. The City Treasurer is authorized to nego- tiate the sale of the Notes with a financial institution or investment banking firm of his choice, including short-term obligations to redeem the initial Notes, under the terms of this ordinance and under such terms and conditions as the City - 2 - 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 the Notes having an effective interest rate greater than 12% per annum. Section 3. Section 7 of Ordinance No. 3887 is amended to read as follows: Section 7. The City covenants that it will not take or permit to be taken on its behalf any action which would adversely affect the exemption from federal income taxation of the interest on the Notes and will take or require to be taken such acts as may reasonably be within its ability and as may from time to time be required under applicable law to continue the exemption from federal income taxation of the interest on the Notes. Without limiting the generality of the foregoing, and except to the extent the investment of any Note proceeds is limited to a yield required to comply with federal arbitrage regulations, the City will spend the proceeds of the Notes with due diligence to completion of the purposes specified in this ordinance and will not invest or make other use of the proceeds of the Notes or of its other money at any time during the term of the Notes which, if such use had been reasonably expected at the date that the Notes are issued, would have caused such Notes to be arbitrage obligations within the meaning of Section 103(c) of the United States Internal Revenue Code of 1954, as amended, and applicable regulations thereunder. In addition, the City covenants that if future federal laws or regulations require the payment of any federal tax or rebate or the observing of any other requirement to maintain the exemption from federal income taxation of the interest on the Notes, it shall make any such payment and observe any such requirement. If the interest on the Notes shall become subject - 3 - to federal income taxation because of the City's not spending note proceeds or the proceeds of investments thereof in the amounts and within periods of time required by any future federal law or regulations or for any other reason due to the enactment of future federal law or the promulgation of regula- tions thereunder, or if the City's bond counsel gives an opinion to the City at that time that the interest on the Notes may or will be taxable either from the date of issuance or as of some later date, then the City shall call for redemption at par plus accrued interest all of the Notes then outstanding within 75 days after the date that law becomes law. The City has not been notified of any listing or proposed listing by the Internal Revenue Service to the effect that it is an issuer whose arbitrage certifications may not be relied upon. Section 4. The City must redeem its outstanding Water and Sewer Revenue Bond Anticipation Notes, 1985, on February 12, 1986, and in order to have money available to redeem such Notes, it is urgently needed that the proceeds of additional notes authorized by this amendatory ordinance 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. - 4 - For the reasons stated, this ordinance shall take effect immedi- ately upon its passage and publication. PASSED UNANIMOUSLY by the City Council of the City of Bremerton0 Washington, at a regular open public meeting thereof and APPROVED by the Mayor on the ~_~ day of~, 1986. ~._~.~/ Mayor ATTEST: City Clerk APPROVED AS TO FORM: 1071b - 5 -