HomeMy WebLinkAbout06/06/2007 AGENDA
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CITY COUNCIL 345 6th Street, Suite 600, Bremerton, WA 98337-1873 0 (360) 473-5280
JUNE 6, 2007
CITY COUNCIL MEETING AGENDA
1. PRE-COUNCIL STUDY SESSION: 5:00 - 5:30 P.M. in COUNCIL CONFERENCE ROOM 603
A. General Council Business
B. 15-Minute Executive Session to "Review Labor Negotiations" per RCW 42.30.140 (4)(b)
2. CALL TO ORDER: 5:30 P.M. in CHAMBERS LOCATED ON FIRST fLOOR
A. Pledge of Allegiance
B. Invocation
3.
MAYOR'S REPORT
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4. PUBLIC RECOGNITION & ANNOUNCEMENTS
5. CONSENT AGENDA
A. Claims & Check Register (#AB07-131)
B. Minutes of Meeting - May 16, 2007 (#AB07-132)
C. Minutes of Meeting - May 23;~2007 (#AB07-133)
D. Amendment No.1 to the Professional Services Agreement with URS for Engineering
Services for the SW Bremerton Residential Sewer Extension Project (#AB07-134)
E. Contract Amendment NO.3 to Management Agreement with COLUMBIA HOSPITALITY, INC.
for Harborside Fountain Park Facilities Operations; and Budget Adjustment (#AB07 -135)
F. Lease Agreement with S.G.K. CORPORATION for Commercial Retail Operations at 140
Washington Avenue (#AB07-136)
G. Appointment of M. Blair Scheutz to the Arts Commission (#AB07-137)
H. Appointment of PRO and CON Committee for West Hills Annexation Ballot Measure
(#AB07-138)
I. Real Estate Purchase and Sale Agreement for the Sale of the former West Precinct
Building located at 4846 Auto Center Way (#AB07 -139)
6. GENERAL BUSINESS
/\.. Hiring of Municip31 Court Services M3n3ger 3t B3nd 15, R3te 6 3nd with 6 Month
Sever3noe P3ok3ge (ff/\B07 110) ITEM WAS PULLED AT THE REQUEST OF THE APPLICANT...
B. Ordinance No. 5011, authorizing the issuance of Water & Sewer Revenue and Refunding
Bond in the Principal Amount of $5,375,000 (#AB07-141)
7. COUNCIL MEMBER REPORTS
8. EXECUTIVE SESSION
A. 15-Minute Executive Session to discuss "Potential Litigation" per RCW 42.30.110 (1 )(i)
Action is anticipated (#AB07 -142)
9. ADJOURNMENT OF CITY COUNCIL BUSINESS MEETING
rI Americans with Disabilities Act (ADA) accommodations provided upon request. Those requiring special
accommodations should contact the City Clerk's Office at (360) 473-5323 by noon on the Monday preceding the Council
meeting
CITY COUNCIL MEETING
SPEAKERS LIST
PLEASE NOTE THAT ALL REQUESTS FOR INFORMATION FROM THE CITY OF
BREMERTON MUST BE SUBMITTED IN WRITING.
THANK YOU.
PLEASE PRINT YOUR NAME BELOW IF YOU PLAN TO
SPEAK DURING THE COUNCIL MEETING TONIGHT
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To the Bremerton city council Members.
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6-6-07 . (pI (p~"i'-~
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RE: Tweed industrial park
WHAT SAFETY PRECAUTIONS ARE BEING TAKEN AT
THE INTERSECTION OF TWEED LN & HARLOW DR.?
WILL THERE BE SIGNS OR FLASHING LIGHTS TO WARN
OTHER DRIVERS ON HARLOW DR? HARLOW DR. IS A
RESIDENTIAL AREA
WILL THE INTERSECTION OF HARLOW DR. BE WIDEND
OUT TO ACCOMATE LARGE COMMERCIAL TRUCKS &
SIDEWALKS FOR THE SAFTEY OF THE CITZENS?
HARLOW DR. IS AN URBAN COLLECTOR ROAD WITH NO
SIDEWALKS OR SREET LIGHTING FROM TWEED LANE
TO FIRST STREET TO PROTECT THE CITZENS &
CHILDREN, WHAT SAFETY PRECAUTIONS ARE BEING
TAKEN?
THERE IS LIMITED STREET LIGHTING ON HARLOW DR. &
NO STREET LIGHTING ON TWEED LANE TO OPERATE
LARGE TRUCKS SAFELY, WHAT SAFETY PRECAUTIONS
ARE BEING TAKEN?
WHAT IS THE PURPOSE OF A SIDEWALK, IS IT NOT SO
THE PEDESTRIAN CAN BE OFF THE ROADWAY? IS IT
NOT SO THAT A EVEN SURF ACE IS EAlSER TO WALK ON
THAN AN UNEVEN SURFACE?
Page--l
With the city of Bremerton accepting a substandard sidewalk made
gravel & not of asphalt or concrete will it be the responsibility of
the city or the homeowner for maintenance & liability? How is a
disabled person able to navigate a substandard gravel sidewalk?
Since the city of Bremerton is allowing the construction of a
substandard street for the sole purpose of egress & ingress to an
industrial park area i.e. Chico Towing Tweed Lane industrial &
two private residents which said residents where living there prior
to all permits & construction work of industrial area. When the city
of Bremerton excepts the construction of this street & sidewalk,
will it be the city of Bremerton & tax payers responsibility to
solely maintain & be liable for future upgrades to this street do the
fact that it does not meet the city's own minimum industrial
. standards or codes & R.C.W. laws?
If this is to be an exception for Chico Towing & its subcitories
where do they stop? Who else is eligible for these sub standard
exceptions?
Please respond in writing to the address below.
Thank You
William T. Duke
5820 Harlow DR.
Bremerton, W A.
Zip-98312
Page-- 2
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PUBLIC WORKS & UTILITIES
Engineering Division
June 21, 2007
William T Duke
5820 Harlow Drive
Bremerton, WA 98312
Re: Chico Towing Impound Lot - Tweed Lane
Dear Mr. Duke:
The following letter is in response to the list of questions you sent to the Bremerton City Council
dated June 6, 2007. Your specific questions are related to our development requirement for the
undeveloped gravel road known as Tweed Lane. Tweed Lane historically has served only one
single family parcel (your existing home).
Each question has been itemized below with the specific response. The original list of questions
is also attached for reference.
1) What safety precautions are being taken at the intersection of Tweed Lane and
Harlow Drive?
Standard traffic safety warrants based on the relatively limited number of vehicle trips will
require a Stop Sign.
2) Will there be signs or flashing lights to warn other drivers on Harlow Drive?
Non-typical flashing lights and warning signs are not required. MUTCD Federal traffic
safety guidelines do not warrant any additional requirements. Based on existing residential
traffic volumes (Harlow Drive), daily vehicle trips generated from the impound yard, and a
posted speed limit of 25 mph, required standard signage are the only requirements
mandated by the MUTCD.
3) Will the intersection of Harlow Drive be widened to accommodate large commercial
trucks and sidewalks for the safety of the citizens?
The proposed intersection is adequate for the impound yard use and capable of serving
large commercial trucks, trailers, and buses.
Sidewalks did not exist prior to the proposed development on Tweed lane. Tweed Lane
was existing as partially developed public right-of-way.
June 20, 2007
Re: Chico Towing Impound Yard-Tweed Lane
Page 1
Given that the right-of-way does not front the length of the proposed commercial
development, the development is only responsible legally to mitigate for its impact. An
impound yard does not generate pedestrian traffic therefore sidewalks are not required on
the off site existing public right-of-way. A legal nexus does not exist to require the
development to install off site sidewalk improvements. They have been required to pave the
street to its full existing width and add additional gravel shoulders. This requirement
provides a safer pedestrian access than was present on Tweed Lane prior to the proposed
development.
4) Harlow Drive is an Urban Collector Road with no sidewalks or street lighting from
Tweed Lane to 1st Street to protect the citizens and children. What safety
precautions are being taken?
This are is not an Urban Collector. It is a Minor Residential Collector. It is part of an island
of Kitsap County within the City of Bremerton.
Specifically, it is considered a rural residential area by Kitsap County and as such does not
have public street lighting or sidewalks. Until this area annexes into the City of Bremerton it
is unlikely that urban services will be installed in the area.
Safety precautions within this area are not the responsibility of the off-street development.
5) There is limited street lighting on Harlow Drive and no street lighting on Tweed Lane
to operate large trucks safely. What safety precautions are being taken?
Street Lighting does not exist on Tweed Lane and Harlow Drive. The proposed impound
yard typically functions as a 9:00 a.m. to 5:00 p.m. operation. The proposed development
cannot be legally required to upgrade the existing surrounding City and County Streets.
6) What is the purpose of a sidewalk? Is it not so the pedestrian can be off the
roadway? Is it not so that a even surface is easier to walk on than an uneven
surface?
Yes. It also serves to control stormwater. If the neighborhood is interested in installing curb,
gutters and sidewalks in the area, the City can provide information on how to form a
neighborhood LID to pay for said improvements.
7) With the city of Bremerton accepting a substandard sidewalk made of gravel and not
of asphalt or concrete, will it be the responsibility of the City or the homeowner for
maintenance and liability? How is a disabled person able to navigate a substandard
gravel sidewalk?
The City and County are responsible for maintenance of their respective public streets and
rights-of-way. Public Streets located outside urban centers typically do not have curb,
gutter and sidewalk. Developments that are fronting on these undeveloped public streets
are required to develop their frontage. If they do not front the street they are not required
(based on existing case law) to develop other property owner's frontage. Given that no
sidewalk exists in the area, if you have a concern about handicap accessibility you may
want to consider organizing a neighborhood LID to fund sidewalk improvements in the
community.
June 20, 2007
Re: Chico Towing Impound Yard- Tweed Lane
Page 2
8) Since the city of Bremerton is allowing the construction of a substandard street for
the sole purpose of egress and ingress to an industrial park area (ie...Chico Towing)
will it be the City of Bremerton and tax payers responsibility to solely maintain and
be liable for future upgrades to this street given that it does not meet the City's
minimum industrial standards, code and RCW laws?
The City of Bremerton will maintain public right-of-way under its jurisdiction. Tweed Lane is
not required to meet an industrial street standard primarily due to the fact that it serves a
mix of residential as well as the proposed impound lot. The goal for approval of this
development was to keep impacts to the surrounding residential community to a minimum.
This meant the goal was to provide safe access based of traffic demand while maintaining
the residential character of the surrounding neighborhood. Installing an industrial street was
not necessary to maintain safe access to the development and would destroy the rural
residential character of the community.
9) Who is eligible for substandard exceptions?
Traffic safety is ultimately the responsibility of the City Engineer. The Bremerton Municipal
Code Title 11 specifically defines Right-of-Way Development Standards and also outlines a
process for applying for variances. These codes have been established through a public
hearing process and have been adopted by City Council. However, no variance was
required or given in the case of Tweed Lane.
If you have any other questions please call me at (360) 473-2351.
Sincerely,
Y -"- C c=>---~
Paul Wandling, P.E.
Development Engineer
pw/aw
Enc.
cc: Phil Williams, Director, Department of Public Works & Utilities
Michael C. Mecham, P.E., City Engineer
Andrea Spencer, Director, Department of Community Development
City Council
Development Files
27332
June 20, 2007
Re: Chico Towing Impound Yard-Tweed Lane
Page 3
DATE SUBMITTED:
BILL# 07-/3 j
AGENDA BILL
CITY OF BREMERTON
CITY COUNCIL
5t1
.....................'....~.....m...a....c~...............D......R....~..m........E....E.1
SUBJECT:
Claim & Checks Register Approval
Committee Meeting Date:
COUNCIL MEETING Date:
Department:
Presenter:
Phone:
(P-~-o7
Financial Services
Cathy Johnson
SUMMARY:
ATTACHMENTS:
FISCAL IMPACTS (Include Budgeted Amount):
APPRO V ALS:
DEP ARTMENT DIRECTOR:
CITY ATTORNEY:
FINANCE DIRECTOR:
MAYOR:
FISCAL/BUDGeT.
..eI'1':l<ATION8. . . ~ .
COUNCIL PRESIDENT: ~ ~ . ~ v ' .
RECOMMENDED MOTION: Move to approv :"7'
I CONSENT AGENDA ~ I
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2) Regular Payroll for ~-/ s=- 07
3) Retiree Payroll for 5"""- ~':5 / -07
COUNCIL A~TION: ~prove
o Deny 0 Table
o Continue D No Action
DATE SUBMITTED:
BILL # 07- 13~
AGENDA BILL
CITY OF BREMERTON
CITY COUNCIL
S8
........................................................................................
SUBJECT: City Council Meeting Minutes
for meeting of tl\qy l(p} ,).007
Committee Meeting Date:
COUNCIL MEETING Date:
Department:
Presenter:
Phone:
N/A
J"""u ne.. t:;" ;20 0 7
City Council'
Will Maupin,
Council President
(360) 473-5280
SUMMARY: Attached is a summary of the City Council Meeting held Ma.y , (, / 2-007
ATTACHMENTS: Meeting Minutes for MCt1 (ft?, 20 07
FISCAL IMPACTS (Include Budgeted Amount): N/A
APPROV ALS:
DEPARTMENT DIRECTOR:
CITY ATTORNEY:
FINANCE DIRECTOR:
MA YOR:
COMMITTEE CHAIR
COUNCIL PRESIDENT:
Council President
N/A
N/A
N/A
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CONSENT AGENDA G:J
GENERAL BUSINESS 0
PUBLIC HEARING 0
RECOMMENDED MOTION: Move to approve the Consent Agenda as presented.
COUNCIL ACTION: 0 Approve 0 Deny D Table
o Continue 0 No Action
DIGITAL RECORDING
CITY COUNCIL MEETING MINUTES
Wednesday, May 16, 2007
The weekly meeting of the City Council of the City of Bremerton was called to order in the City
Council Chambers, of the NORM DICKS GOVERNMENT CENTER 345 6th Street, Bremerton, Washington,
Wednesday, May 16, 2007, at 5:30 PM, with Council President Will Maupin presiding. Council
members present were Nick Wofford, Dianne Robinson, Carol Arends, Wendy Priest, Adam Brockus,
Cecil McConnell, and Brad Gehring. Council Member Mike Shepherd was absent. Also present were
City Attorney Roger Lubovich; City Clerk Paula Johnston; and Legislative Assistant Lori Smith.
The Pledge of Allegiance was led by Council Member Brad Gehrinq followed by the invocation
provided by Pastor Roqer Henniqan of Apostolic Life Tabernacle.
President Maupin announced that a Pre-Council Session to discuss General Council Business was
held prior to the meeting; Item 6A was pulled from the agenda; and announced that the City Council
will be holding a Joint Study Session with the Bremerton School Board on Tuesday, May 22nd
beginning at 5:30 PM at the Bremerton School District Administration Office located at 134 North
Marion Avenue.
MAYOR'S REPORT
. Mayor Bozeman thanked Finance Director Laura Lyon and Public Works & Utilities Director Phil
Williams for their work on developing a Water and Sewer Bond; and
. Introduced Senator Derek Kilmer to provide a wrap-up on the current Legislative Session, who
first asked for those in attendance to observe a moment of silence in honor of former Senator
Bob Oke who passed away recently. The wrap-up included an update on proposed support for
economic development; pilot programs for improving infrastructure; and improved communication
in the permitting process. He also mentioned local projects eligible for funding including the
expansion of Evergreen Park and Kitsap Community Resources projects; employment protection
for military and veterans; and was hopeful for consideration of higher education at the next
session. Senator Kilmer also encouraged people to pick up a transponder card for use at the
Tacoma Narrows Bridge to limit toll traffic; and thanked Council Members for their service to the
community.
PUBLIC RECOGNITION & ANNOUNCEMENTS
Brad Gehrinq announced the Armed Forces Day Festival was this weekend from May 18 to 19 in
downtown Bremerton and invited the public to attend the Armed Forces Day Golf Tournament on
Friday; the Bremerton Central Lions Pancake Breakfast, Masonic Lodge Pancake Breakfast, Armed
Forces Day Parade, Military Culinary Arts Competition, Heroes Barbeque and Street Fair all on
Saturday; and Kitsap Hydrofest on Saturday and Sunday at Kitsap Lake.
Council recessed from 5:54 PM to 5:57 PM to correct sound related technical difficulties.
Adam Brockus announced that the Parks Department will be hosting a public meeting on Tuesday,
May 22 beginning at 5:30 PM in the Meeting Chambers to take comments on the Open Space Plan;
and that there will be no District 3 Meeting in May but a meeting would be held in September to
discuss "Biodiesel".
CONSENT AGENDA
A. Check Numbers 316698 through 316926; and EFT-7123 through EFT-7137 in the amount of
$1,122,393.64 for the period ending May 15, 2007 (#AB07 -109)
B. Minutes of Meeting - May 2,2007 (#AB07-110)
C. Minutes of Meeting - May 9,2007 (#AB07-111)
2
City Council Reg. Mtg. Minutes
Wednesday, May 16, 2007
Page 2 of 5
D. Renewal of Pollution Liability Insurance (#AB07-112)
E. Contract Extension between the City of Bremerton and SOREN NORTHWEST, INC. for Lobbying and
Consulting Services (#AB07 -113)
F. Interlocal Agreement for Mutual Aid and Establishing a Traffic Safety Task Force (AB#07-114)
G. Requisitioning 15 Intergraph Licenses for Mobile Computers in Police Vehicles (#AB07-115)
H. Basic Life Support Services Agreement between the City of Bremerton and HANDLERS RACING
ASSOCIATION (#AB07-116)
I. Resolution No. 3031 providing for an election on the West Hills Island Annexation during the
August 21,2007 Primary Election (#AB07-117)
J. Amendment No.1 to the Professional Services Agreement GEoENGINEERS, INC. for the
Bremerton Gasworks Phase II - Environmental Site Assessment (#AB07-118)
K. Ordinance No. 5009, creating Chapter 15.05; and amending Section 15.03.210 of the Bremerton
Municipal Code relating to Fats, Oils, and Grease (FOG) Wastewater Pre-Treatment for Food
Service Establishments (#AB07 -119)
L. Grant Agreement with the Washington State Department of Ecology to develop Blueberry Park
and Budget Adjustment of $195,170 (#AB07-120)
M. Application by Seattle Outboard Association for 2007 Hydro Fest to be held on Kitsap Lake May
19 and 20, 2007 (#AB07-121)
N. Real Estate Purchase and Sale Agreement with Earnest Money Provision between the City of
Bremerton and United Association Local 26 Building Association (#AB07 -122)
There were no comments from the public.
06:02:55 M/S/C (Priest/Arends) Move to approve the CONSENT AGENDA as presented.
Voted in favor of Motion: Gehring, McConnell, Priest, Shepherd, Robinson, Arends, Wofford, Maupin
Abstained: Brockus
Motion carried: 7-Yes; 1-Abstention
GENERAL BUSINESS
6/\. ORDINANCE NO. 5003 AMENDING SECTION 2.09.020 AND CHAPTER 2.30 OF THE
8REMERTON MUNICIPAL CODE (8MC) RELATING TO CITY EMPLOYEES COVERED UNDER
THE CITY'S CIVIL SERVICE SYSTEM (#/\807 076): Item was pulled from the agenda and
postponed until the meeting on June 20, 2007...
6B - ARTIST SELECTION FOR THE "ART MORKEN LAW ENFORCEMENT CENTER" AT 1025
BURWELL STREET TO PREPARE ARTWORK UNDER THE "1% FOR THE ARTS PROGRAM"
(#AB07-123): Steve Priest summarized that the Arts Commission is recommending that the City
Council select artists for the preparation of public art at the Art Morken Law Enforcement Center
(1025 Burwell Street), a project that is subject to the 1 % for the Arts program. The commission
conducted interviews, has entered into findings, and recommends that the City Council choose
Sculptor James Kelsev and James D. Francis of Phoenix Design to prepare the artwork. Upon
completion of a scope of work for the art, the proposal will be submitted to the Council for final
approval.
Mr. McConnell asked for clarification on the appearance of the art. Mr. Priest responded and added
that the address of the building would be included in the "badge" artwork.
City Council Reg. Mtg. Minutes
Wednesday, May 16, 2007
Page 3 of 5
Mr. Shepherd asked when the artwork would be completed and when we could expect the showings
to occur. Mr. Priest answered that the work would take about 2-months. Mr. Kelsey added that
some project materials may take time to be shipped which could range from 30-days to a few months.
There were no comments from the public.
Ms. Priest was pleased to see this action tonight after the Council first approved the 1 % for the Arts
Ordinance a week before her daughter was born almost 2-years ago; and thanked Community
Development Director Andrea Spencer and staff for bringing this proposal forward.
06:15:32 M/S/C/U (Priest/Robinson) Move to accept the findings of the Arts Commission to select
James Kelsey and James Francis to prepare artwork for the Art Morken Law Enforcement Center at
1025 Burwell Street; and authorize the Arts Commission to work with these artists to prepare a scope
of work for public art for Council approval.
6C - ORDINANCE NO. 5012 TO ESTABLISH A CABLE TELEVISION FRANCHISE AGREEMENT
WITH COMAST OF WASHINGTON IV, INC. (#AB07-124): Laura Lyon, Financial Services Director,
explained that culminating over a year of negotiations, the City and COMCAST OF WASHINGTON IV, INC.
have finalized a franchise agreement that grants Comcast a non-exclusive franchise to operate a
cable television system within the City for the next five year period. Provisions in this agreement
ensure the availability and reliability of the cable system within Bremerton, establishes customer
service standards to be adhered to, provides for a wide range of programming services to be offered,
establishes conditions and requirements for the grantee's use of the City's rights-of-way, and ensures
the availability of local programming (including public, educational, and governmental access
programming). It was also announced that all televisions will be required to upgrade to High
Definition digital programming in 2009, but incentives and a thorough educational campaign will take
place.
Sheldon Parr, Director of WEST SOUND PUBLIC TELEVISION was here to congratulate the City and
Comcast for negotiating such an excellent agreement.
Mr. GehrinQ expressed his concerns about the lack of competition and the increase in fees. Ms.
Lyon responded that the City is non-exclusive and in fact encourages competition; and explained that
there is other competition with the use of HD, satellite TV, and the internet.
06:32:00 M/S/C (Priest/Shepherd) Move to approve Ordinance No. 5012, which establishes a non-
exclusive franchise agreement authorizing the operation of a cable television system within
Bremerton with COMCAST OF WASHINGTON IV, INC.
Voted in favor of Motion: Priest, Shepherd, Robinson, Arends, Wofford, Gehring, McConnell, Maupin
Voted opposed to Motion: Brockus
Motion carried: 8-Yes; 1-No
6D - BUDGET ADJUSTMENT FOR INSTALLATION AND MAINTENANCE OF 28 POLE MOUNTED
FLOWER BASKETS ON CALLOW AVENUE BETWEEN BURWELL STREET & 9TH STREET
(#AB07-125): Wyn Birkenthal, Parks & Recreation Director, mentioned that expanding the City's
floral color program in the Charleston District located on Callow Avenue between Burwell & 9th Street
will beautify a highly visible entryway to Bremerton and help make the area more attractive for
shopping and commerce. If approval is received by the Council, it is expected the flowers will be in
place by the end of June.
Beth Shea, President of the Charleston Business Association; and members David Farr and Lena
Swanson urged the Council to support this item.
City Council Reg. Mtg. Minutes
Wednesday, May 16, 2007
Page 4 of 5
Mr. McConnell suggested that the Council discuss a new policy to provide funding for a flower
basket program for other areas of the City; and Mr. Shepherd agreed. Mr. Birkenthal responded
that he will work to bring a proposal to the Council in the near future.
Mrs. Arends briefly discussed how she first came to live in the Charleston District years ago, and has
never regretted it. She believes the flower baskets will only improve the beautification of this area.
06:50:40 M/S/C/U (Arends/Robinson) Move to approve the Parks & Recreation Department's request
for a budget adjustment of $7,400 to install and maintain 28 pole mounted flower baskets on Callow
Avenue between Burwell & 9th Street; and to budget $7,400 from the 2007 General Fund ending
balance to the Parks fund.
6E - JUSTICE ASSISTANCE GRANT FOR 2007 (#AB07-126): Tim Sholtis, Administrative Support
for the Bremerton Police Department, announced that the City of Bremerton Police Department
applied for an Edward Byrne Memorial Justice Assistance Grant (JAG) that will allow the City of
Bremerton to support a broad range of activities to prevent and control crime based on our own local
needs and conditions. These needs are to purchase training equipment needed to protect and
preserve valuable Police and City provided resources. Funds will also purchase ancillary prevention
and education equipment which is needed to improve community policing services. The grant is from
the Department of Justice, and no matching funds are required of the City. The total grant amount is
$63,798.00, and the grant duration is through September 2011.
There were no comments from the public.
06:53:00 M/S/C/U (Gehring/McConnell) Move to approve the Justice Assistance Grant for 2007 for
equipment and training funding.
PUBLIC HEARINGS
7 A - ORDINANCE NO. 5013. VACATING A PORTION OF THE ALLEYS LYING ADJACENT TO
FORMER CITY HALL BETWEEN BURWELL & 4TH STREETS AND WASHINGTON & PACIFIC
AVENUES (#AB07-127): Phil Williams, Director of Public Works & Utilities, explained that the City
has initiated a vacation of portions of the alleys lying adjacent to former City Hall between Burwell &
4th Streets and Washington & Pacific Avenues; and scheduled this Public Hearing for this date (May
16, 2007). The proposed ordinance vacates portions of the alleys lying adjacent to former City Hall
between Burwell & 4th Streets and Washington & Pacific Avenues.
President Maupin opened the Public Hearing for comment. After there were no comments from the
public, President Maupin closed the Public Hearing.
06:59:25 M/S/C/U (Brockus/Shepherd) Move to pass Ordinance No. 5013 vacating portions of the
alleys lying adjacent to former City Hall between Burwell & 4th Streets and Washington & Pacific
Avenues.
7B - ORDINANCE NO. 5014. VACATING A PORTION OF FORMER COUNTY ROAD NO. 305
ADJACENT TO MARINE DRIVE (#AB07-128): Phil Williams, Director of Public Works & Utilities,
explained that as part of the dedication and construction of Marine Drive in 1933, Kitsap County was
required to vacate County Road No. 305 back to the adjacent property owners. The vacation was
never completed by the County and the City annexed this area in 1961. As such, the responsibility
for the vacation transferred from the County to the City. A Public Hearing for this date (May 16, 2007)
was scheduled regarding the vacation. The proposed ordinance vacates a portion of former County
Road No. 305 adjacent to Marine Drive.
There were no comments from the public.
City Council Reg. Mtg. Minutes
Wednesday, May 16, 2007
Page 5 of 5
07:03:34 M/S/C/U (Shepherd/Arends) Move to pass Ordinance No. 5014 vacating a portion of County
Road No. 305.
COUNCIL MEMBER REPORTS
Brad Gehrinq welcomed a new development called Tweed Business Park in the Kitsap Lake area.
Adam Brockus announced that due to several other events scheduled on Tuesday, May 22nd, the
next District 3 Meeting would be postponed until Tuesday, September 25th. Other events happening
on May 22 include the Open House for Everest College [formerly Bryman College] from 3:00 to 5:00
PM; and the Joint Session with the Council and the Bremerton School District Board of Directors
would begin at 5:30 PM at the District Office located at 134 Marion Avenue.
Mike Shepherd reported on the successful West Sound Arts Council fundraising event held last
Saturday.
Carol Arends was pleased to see a nice article in the Seattle P.1. that recognized the Bremerton
Symphony and specifically their program of Beethoven's 9th Symphony held last Saturday, which she
was able to attend and noted that it was excellent and well received.
Will Maupin provided a briefing on several meetings he has attended over the past two weeks,
including the Kitsap Transit Board Meeting where several actions were taken; enjoyed his attendance
at the City Employee Appreciation Breakfast; and tomorrow he was looking forward to representing
the Mayor at the National Active Retired Federal Employees Association Conference.
With no further business, President Maupin adjourned the Council Meeting at 7: 1 0 PM.
p~~~
L I SMITH
Legislative Assistant
Attest:
PAULA JOHNSTON, City Clerk
WILL MAUPIN, City Council President
WM:PJ:ls:cg
DATE SUBMITTED:
BILL# D7-/33
AGENDA BILL
CITY OF BREMERTON
CITY COUNCIL
SG
........................................................................................
Committee Meeting Date: N/ A
COUNCIL MEETING Date: crUV\~ C:? d-007
Department: City Council'
Presenter: Will Maupin,
Council President
Phone: (360) 473-5280
SUMMARY: Attached is a summary of the City Council Meeting held MCA..<{ ~'3) ;Lt.:Jo7
SUBJECT: City Council Meeting Minutes
for meeting of MtAl.(13,l.1:>o7
ATTACHMENTS: Meeting Minutes for M. tt'( 2.3/ :;2-007
FISCAL IMPACTS (Include Budgeted Amount): N/A
APPROV ALS:
DEP ARTMENT DIRECTOR:
CITY ATTORNEY:
FINANCE DIRECTOR:
MA YOR:
Council President
N/A
N/A
N/A
COMMITTEE CHAIR
COUNCIL PRESIDENT:
CONSENT AGENDA IT
GENERAL BUSINESS 0
PUBLIC HEARING 0
RECOMMENDED MOTION: Move to approve the Consent Agenda as presented.
COUNCIL ACTION: 0 Approve 0 Deny 0 Table
o Continue 0 No Action
DIGITAL RECORDING
CITY COUNCIL MEETING MINUTES
Wednesday, May 23,2007
The weekly meeting of the City Council of the City of Bremerton was called to order in the City
Council Chambers, of the NORM DICKS GOVERNMENT CENTER 345 6th Street, Bremerton,
Washington, Wednesday, May 23, 2007, at 5:30 PM, with Council President Will Maupin
presiding. Council members present were Nick Wofford, Carol Arends, Dianne Robinson, Mike
Shepherd, Wendy Priest, Adam Brockus, Cecil McConnell, and Brad Gehring. Also present
were City Clerk Paula Johnston; City Attorney Roger Lubovich; and Legislative Assistant Lori
Smith.
The Pledge of Allegiance was led by Council Member Brad Gehrinq followed by the
invocation provided by Reverend Ron Anderson of Manette Community Church.
President Maupin announced that a Pre-Council Session was held at 5:00 PM in the Council
Conference Room to discuss General Council Business; an item was added to the agenda to
approve a public display of fireworks on May 27; and the Council will reconvene in the Council
Conference Room following this brief business meeting for a STUDY SESSION to hear
presentations on upcoming agenda items.
PUBLIC RECOGNITION & ANNOUNCEMENTS
Dianne Robinson announced that a Pre-Memorial Day Ceremony would be held at 7:00 PM at
Miller Woodlawn Cemetery, and encouraged members of the public to attend.
Wendy Priest announced that four Council seats were available for office, and because she
has decided that she would not be seeking a second term, she highly encouraged anyone
interested to apply during the first week of June at the Kitsap County Elections Office.
CONSENT AGENDA
A. Check Numbers 316927 through 317045; and EFT-7137 through EFT-7153 in the amount
of $1 ,295,769.96 (#AB07-129)
There were no comments from the public.
05:34:10 M/S/C/U (Priest/Arends) Move to approve the CONSENT AGENDA as presented.
GENERAL BUSINESS
5A - APPROVAL OF PUBLIC DISPLAY OF FIREWORKS AT MILLER WOODLAWN
CEMETERY FOR THE CANDLELIGHT SERVICE ON MAY 27.2007 (#AB07-130): Ken
Baqwell, Assistant City Attorney explained that a request was recently received to have a
professional public display of fireworks on May 27, 2007 in honor of a Memorial Day Candlelight
Service. Because the City's ordinance is silent on this issue, State Law requires that the City
Council must approve this type of display. Therefore, they are seeking authorization from the
City Council to approve this action subject to the Fire Marshal completing his investigation to
make sure that all the proper paperwork is in place and that there are no safety issues.
There were no comments from the public.
05:36:00 M/S/C/U (Wofford/Arends) Move to approve a public display of fireworks on May 27,
2007 at Miller Woodlawn Cemetery subject to the Fire Marshal's approval.
City Council Reg. Mtg. Minutes
Wednesday, May 23,2007
Page 2 of 2
President Maupin asked the Council Members to reconvene in the Council Conference Room
for a STUDY SESSION to hear presentations on upcoming agenda items, and mentioned the
public was welcome to attend. With no further business, the Council Meeting was adjourned at
5:40 PM.
Prepared and Submitted by:
LORI SMITH
Legislative Assistant
Attest:
PAULA JOHNSTON, City Clerk
WILL MAUPIN, City Council President
WM:PJ:ls:cg
DATE SUBMITTED: May 15,2007
BILL 11 CJ7- 13~_
AGENDA BILL
CITY OF BREMERTON
CITY COUNCIL
S1)
........................................................................................
SUBJECT: Amendment No. I to
Professional Services Agreement with URS
for Engineering Services for the Southwest
Bremerton Residential Sewer Extension
project
Committee Meeting Date: 5/23/2007
COUNCIL MEETING Date: 6/6/2007
Department: PW &U, Engineering
Presenter: Mike Mecham
Phone: 473-5288
SUMMARY: This amendment adds scope of work and budget to the agreement with URS to
complete additional design and surveying for the SW Bremerton Residential Sewer Construction
project. Additional work is required because the abandoned water main locations were not known at
the time the PSA was executed and because WSDOT requested additional submittals that were not
anticipated for approval of the utility franchise application.
ATTACHMENTS: 1.) Council Summary; 2.) Amendment No.1
FISCAL IMPACTS (Include Budgeted Amount): The amount of the Professiomil Services
Agreement is being increased by $186,800 to a total not to exceed $555,289.80. The design is funded
by a Public Works Trust Fund Loan.
APPROVALS:
DEP ARTMENT DIRECTOR:
CITY ATTORNEY:
FINANCE DIRECTOR:
MAYOR:
ltt' r: ~
_At -iR77f= / '-
CONSENT AGENDA
GENERAL BUSINESS 0
PUBLIC HEARING 0
COMMITTEE CHAIR
COUNCIL PRESIDENT:
RECOMMENDED MOTION: Move to approve the Amendment No. I to the Professional Services
Agreement with URS and authorize the Mayor to finalize and execute the same.
COUNCIL ACTION: D Approve lJ Deny D Table
D Continue D No Action
SOUTHWEST BREMERTON RESIDENTIAL SEWER EXTENSION
AMENDMENT NO.1
Contract Summary
This project will construct a sewer pump station to intercept waste water flow from
residential developments in Southwest Bremerton and a force main to convey it to the
Bremerton Waste Water Treatment Plant. Southwest Bremerton is the area within the
city limits south of SR 16 and west of Anderson Hill Road between Gorst and Port
Orchard. A developer is preparing preliminary plats for residential developments in the
area totaling approximately 1100 single family units and there is currently no sewer
service in the area.
The original design and construction concept was to utilize a series of out of service City
water mains as casing pipe to slip-line the proposed sanitary sewer force main along the
shoulder of SR 16 and SR 3. Once the project began and the out of service water mains
were located, it was apparent that the water mains along SR 16 and a portion of SR 3
were not in the highway shoulder. The water mains in this location were located close to
or in the highway travel lanes, or removed by WSDOT during the construction of the SR
16 and SR 3 overpasses. Because of the changed conditions, WSDOT requested
submittal of a conceptual force main installation plan that was not included in the original
design budget. In addition, alternative installation methods need to be designed
including open trenching and horizontal directional drilling. The WSDOT submittal
consists of a detailed conceptual plan of the entire 17,000 feet of force main and open
cut and fully controlled limited access variance requests.
Fiscal Summary
The Engineer's estimate for design of the project is $650,000. A PWTF Pre-construction
loan in the amount of $550,000 will pay for 85% of the design and the remaining 15%
will be paid by rates. The cost of this amendment is $186,800 for a total cost for the
PSA of $555,289.80. The terms of the loan are as follows:
Loan Amount =
Loan Fee =
Match Required =
Term =
$550,000
$0
15%
5 years, or 20 years with proof
of construction financing
0.5% with 15% match
$28,966.55
Interest Rate =
Annual Debt Service (20 year, approx) =
The construction estimate for the entire project is $4.6M and is funded by a proposed
revenue bond to be issued by the City.
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AMENDMENT NO. I
TO
PROFESSIONAL SERVICES AGREEMENT
FOR
SW BREMERTON RESIDENTIAL SEWER EXTENSION
The City of Bremerton, Washington, (the ''City''), and URS, ("Consultant") have entered into a
PROFESSIONAL SERVICES AGREEMENT, hereinafter referred to as AGREEMENT for a
project described as SW Bremerton Residential Sewer Extension.
This AMENDMENT NO. 1 modifies the Scope of Work and Budget set forth m the
AGREEMENT dated October 13, 2006, as follows:
The Scope of Work shall be modified to add additional scope items as outlined in the attached
Amendment No.1.
The Compensation for services shall be increased by $186,800 and the total fees under this
Agreement shall not exceed Five Hundred Fifty Five Thousand and Two Hundred Eight Nine
Dollars and Eighty Cents ($555,289.80.)
Except as herein modified, the terms of the AGREEMENT shall remain in full force and effect.
In WITNESS WHEREOF, the parties hereto have executed the AMENDMENT NO. I to the
Professional Services Agreement the date and year indicated.
For URS, dated this
day of
,2007.
By:
For the City of Bremerton, dated this
day of
,2007.
By:
Cary Bozeman, Mayor
DEP ARTMENT AL APPRO V AL:
Phil Williams, Director of Public Works and Utilities
APPROVED AS TO FORM:
City Attorney
RECEIVED FOR FILING:
Paula Johnston, City Clerk
AMENDMENT NO.1
CITY OF BREMERTON
SW BREMERTON RESIDENTIAL SEWER EXTENSION
ADDITIONAL SCOPE ITEMS
Task 200 - Pump Station Design
Consultant Responsibilities:
1. Conduct a boundary survey, including title report, of the pump station site (A-l
Roofing Company property).
2. Prepare a legal description and exhibit of the proposed pump station site for purchase
of the site from the current owner.
Work Products:
1. Boundary survey and title report for the pump station site.
2. Legal description of the property to be purchased for the pump station.
Task 300 -Force Main Design
Consultant Responsibilities:
1. Recreate SR16 and SR3 alignments from available surveying and construction
records.
2. Perform a topographic survey, including utility locates, from Bay View Drive to the
wastewater treatment plant, including topographic surveying inside the treatment
plant.
3. Perform additional topographic surveying, including utility locates, in areas that the
abandoned water mains are within or too close to the roadway for use as host pipes
for slip lining.
4. Prepare conceptual force main installation plans for submittal to WSDOT for
approval of the franchise applications.
5. Revise conceptual force main installation plans based on feedback from the City and
WSDOT comments.
6. Design force main installation by alternative means, including open trenching and
horizontal directional drilling (HDD).
Assumptions:
1. Approximately 7,700 feet of the total force main length of 17,000 feet wi 11 be
installed by sliplining existing abandoned water mains.
2. Approximately 7,350 feet of pipe will be installed by open trenching.
3. Approximately 1,950 feet of pipe will be installed by HOD.
4. Approval of conceptual plans by WSDOT will require an initial submittal and one
resubmittal to address comments n'om the initial submittal.
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SIF Brt.'lIlerlo/l Reside/llial Sell'iT Erl(!/lsio/i
Scope oj'/Fork
Work Products:
I. Conceptual plans for submittal to WSDOT.
2. Plan/profile sheets for opcn trcnching.
3. Pcrformance specifications for horizontal directional drilling.
Task 500 - Additional Services
I. Additional design or bidding and construction support services as authorized in
writing by the City of Bremerton. The total cost of additional services shall not
exceed $30,000.
Estimated Costs
Task 200 - Pump Station Design
Task 300 - Force Main Design
Task 500 - Additional Services
$ 3,100
$ 153,700
$ 30,000
TOTAL
$ 186,800
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DATE SUBMITTED: May 15, 2007
BILL # 01- 13,('
AGENDA BILL
CITY OF BREMERTON
CITY COUNCIL
SE
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SUBJECT: Approval of Conference Center
management agreement contract amendment
no. 3 and 2007 budget a.djustment
Committee Meeting Date:
COUNCIL MEETING Date:
Department:
Presenter:
Phone:
5/2312007
6/612007
Financial Services
Laura Lyon
473-5722
SUMMARY: The Harborside Park and Memorial Naval Museum project includes the construction of an
annex building to the Naval Museum (Building 50). The new building is designed to provide overflow and
additional event and meeting venue options for the existing City Conference Center operations - with a kitchen
facility and additional conference/meeting room space provided. The City has previously entered into a
Management Agreement with Columbia Hospitality, Inc. for the purposes of operating and managing the City's
Conference Center Facilities. An amendment to the existing management agreement is required to incorporate
the Fountain Park facilities into the list of facilities managed by Columbia Hospitality on the City's behalf and
to provide for pre-opening services associated with the start up and opening of the Fountain Park Facilities. A
budget adjustment is also required to transfer $125,000 from the General Capital Improvement Fund to the
Conference Center Operating Fund to fund the pre opening and initial furniture, fixture, and equipment
expenditures.
ATTACHMENTS: Explanatory Memo and Contract Amendment No.3
FISCAL IMPACTS (Include Budgeted Amount): The budget for 2007 requires amendment to authorize
the transfer of $125,000 from the General Capital Improvement Fund to the Conference Center Operating Fund
and to authorize additional expenditures in the Conference Center Operating Fund for pre-opening costs and
initial furniture, fixture, and equipment expenditures. Funds are available for this purpose in the Capital
Improvement Fund from the residual Conference Center Construction Funds which were transferred into the
Capital Improvement Fund at the end of 2005 when the construction fund was closed out.
APPROVALS:
DEPARTMENT DIRECTOR:
CITY ATTORNEY:
FINANCE DIRECTOR:
MAYOR:
.~.
11~/.
CONSENT AGENDAB
GENERAL BUSINESS D
PUBLIC HEARING D
COMMITTEE CHAIR
COUNCIL PRESIDENT:
RECOMMENDED MOTION: Move to approve Contract Amendment No.3 between the City of
Bremerton and Columbia Hospitality, Inc. to incorporate the Fountain Park Facilities into the list of facilities
managed by Columbia Hospitality on the City's behalf under the Conference Center Management Agreement
and authorize the Mayor to fmalize and execute the amendment in substantially the same form as presented,
and approve a 2007 budget amendment and transfer of $125,000 from the General Capital"Improvement Fund
to the Conference Center Operating Fund and authorize expenditure of these funds for the purpose of
providing for pre-opening services and furniture, fixtures, and equipment.
COUNCIL ACTION: D Approve D Deny D Table
D Continue D No Action
m'j
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. .', ",'
Memorandum
To:
From:
City Council Members
Mayor Cary Bozeman
Laura Lyon, Director of Financial service;!
Conference Center Management Agreement Contract Amendment
No.3 and 2007 Budget Adjustment
Re:
Date:
May 15, 2007
The Harborside Park and Memorial Naval Museum project includes the
construction of an annex building to the Naval Museum (Building 50). The new
building is designed to provide overflow and additional event and meeting venue
options for the existing City Conference Center operations - with a kitchen facility
and additional conference/meeting room space provided. The Fountain Park
facility is a 1,650 square foot facility that greatly expands options for groups,
individuals, and meeting-and-event planners hosting special events in
Bremerton. Overlooking the City's Harborside Fountain Park, this facility will
accommodate from 10 to 200 ,attendees and is expected to be a popular venue
and enhance the City's conference center operations financially once established
and promoted successfully.
The City has entered into a Management Agreement with Columbia Hospitality,
Inc. on June 4, 2003 for the purposes of operating and managing the City's
Conference Center Facilities. Two amendments have subsequently been made
to this agreement. Amendment No.1 clarified that the legally insurable interest
in the conference center and the furniture and fixtures resides with the City. The
second amendment addressed housekeeping items noted in a City internal audit
report - specifically referencing rooms by room number rather than name,
renaming the "capital reserve" to the "reserve account" for clarity given that many
items intended to be paid for from the reserves did not meet the City's
capitalization criteria, changed the approval date for the submitted budget to
coincide with the adoption of the City's annual budget, and finally, updated the
confidentiality statements to conform to lawfully enforceable language.
A third amendment to the existing management agreement is now required to
incorporate the Fountain Park facilities into the list of facilities managed by
Columbia Hospitality on the City's behalf and to provide for pre-opening services
associated with the start up and opening of the Fountain Park Facilities.
Amendment NO.3 defines the primary premises of the Fountain Park Facilities to
be added to the managed facilities and describes the "additional" areas that will
be accessible and usable by Columbia Hospitality - such as the common area
bathrooms between the Building 50 Museum and Fountain Park Facilities as well
as the Harborside Park area itself - so that events may spill out into the park area
if needed (such as wedding ceremonies by the fountains). This is similar to the
additional premises language in the primary management agreement that allows
the use of the plaza area by the Conference Center. Additionally, the
amendment calls for a planned commencement of operations on August 1, 2007
under the assumption that occupancy is granted by July 7, 2007. The current
fixed fee in the original Management Agreement is increased by $1,000 a month
from it's current $6,000 a month to $7,000 a month. The amendment also
specifies the pre-opening services to be provided by Columbia Hospitality and
provides for the contractor to purchase required furniture, fixture, and equipment
for the facilities on the City's behalf and the provision of an initial opening working
capital amount of $15,000. The FF&E purchases are estimated at
approximately $105,000 and the contractor is to be paid a 9% procurement fee
as compensation for performing those duties. Finally, the amendment provides
that the contractor will supply a separate financial proforma for the new facilities
operations for the initial short operating year (August 1, 2007 through December
31, 2007) and that for future periods the financial proforma and budget will be
included in the overall conference center operations budget submitted for City
approval. The short period financial proforma is attached to this memo. It
shows an initial operating loss for this short period of $15,685 but the monthly
losses in the last two months are significantly less than the first months as the
facilities use and promotion is slowly ramped up. It is expected that this venue
will financially cover it's costs during it's first full year of operation and should
provide a positive net financial contribution to the conference center operations in
the coming years.
In addition to the third contract amendment, a budget adjustment is also required
to authorize the transfer of $125,000 from the General Capital Improvement Fund
to the Conference Center Operating Fund and to authorize additional
expenditures in the Conference Center Operating Fund for pre-opening costs
and initial furniture, fixture, and equipment expenditures. There are funds
available for this purpose in the Capital Improvement Fund from the residual
Conference Center Construction Funds which were transferred into the Capital
Improvement Fund at the end of 2005 when the construction fund was closed
out. The original amount transferred and set aside was $410,088. Since then
the City Council has approved the use of $250,000 for constructing and
equipping the kitchen in the new annex building, and $36,000 for the remodel of
the Oyster Bay Room at the Kitsap Conference Center, leaving a net available of
the original funds transferred of $124,088. This amount plus interest earnings
that have accumulated on these funds is sufficient to cover the requested
transfer and budget amendment of $125,000. This action will conclude the use
of conference center construction funds that were remaining upon close out of
the fund.
I am asking for the City Council to approve this contract amendment and budget
adjustment at its June 6th business meeting.
2
FOUTAIN ROOM AT HARBORSIDE FOUNTAIN PARK
2007 BUDGET INCOME STATEMENT
AUG SEP OCT NOV DEC BUDGET
# OF MEETING ATTENDEE 50 50 50 50 50 250
# OF F & B COVER 100 100 150 100 200 650
TOTAL 150 150 200 150 250 900
GROSS REVENUE
CONFERENCE 0 0 0 0 0 0 0.0%
AN RENTAL 0 0 0 0 0 0 0.0%
MISCELLANEOUS CONFERENCE 406 406 604 406 801 2623 9.3%
FOOD 3424 3424 4874 3424 6324 21469 76.3%
BEVERAGE 625 625 938 625 1250 4063 14.4%
TOTAL GROSS REVENUE 4455 4455 6415 4455 8375 28154 100.0%
COST OF SALES
FOOD 856 856 1218 856 1581 5367 25.0%
BEVERAGE 163 163 244 163 325 1056 26.0%
TOTAL COST OF SALES 1018 1018 1462 1018 1906 6423 25.2%
DIRECT EXPENSES
CONFERENCE SERVICES PIR & RELATED 5223 1032 1032 1032 1032 9350 .33.2%
CONFERENCE SERVICES OTHER DIRECT 7 7 11 7 14 46 0.2%
FOOD & BEVERAGE PIR & RELATED 1165 1911 2250 1911 2589 9826 34.9%
FOOD & BEVERAGE OTHER DIRECT 277 677 395 277 912 2539 9.0%
TOTAL DIRECT EXPENSES 6673 3627 3687 3227 4548 21761 77.3%
DEPARTMENT PROFIT (3236) (191) 1266 209 1922 (30) -0.1%
-72.6% -4.3% 19.7% 4.7% 22.9% -0.1%
UNDISTRIBUTED OPERATING EXPENSES
PROPERTY OPERATION & MAINTENANCE 16 541 547 541 554 2199 7.8%
ENERGY COSTS 0 0 0 0 0 0 0.0%
ADMINISTRATIVE & GENERAL EXPENSE 160 1027 1098 1027 1168 4481 15.9%
MARKETING EXPENSE 442 442 442 442 442 2209 7.8%
TOTAL UNDISTRIBUTED OPERATING EXPENSES 618 2010 2087 2010 2164 8888 31.6%
GROSS OPERATING PROFIT (3854) (2200) (821) (1800) (243) (8918) -31.7%
FIXED EXPENSES
GENERAL INSURANCE 100 100 100 100 100 500 1.8%
BASE MANAGEMENT FEE 1000 1000 1000 1000 1000 5000 17.8%
INCENTIVE MANAGEMENT FEE 67 67 96 67 126 422 1.5%
CAPITAL RESERVE 134 134 192 134 251 845 3.0%
1300 1300 1389 1300 1477 6767 24.0%
INCOME BEFORE INTEREST, TAXES & DEPRECIATION (5154) (3501) (2210) (3101) (1720) (15685) -55.7%
-115.7% -78.6% -34.5% -69.6% -20.5% -55.7%
AMENDMENT NO.3
TO MANAGEMENT AGREEMENT
This Amendment No.3 to Management Agreement ("Amendment") is entered into as of
this ~ day of June, 2007 ("'Effective Date"), between the City of Bremerton ("City") and
Columbia Hospitality, Inc. ("Contractor").
RECIT ALS
A. The City and Contractor entered into a Management Agreement on June 4, 2003,
as amended by Amendment No.1 dated July 26, 2004, and Amendment No.2 dated February
26, 2007, collectively the ("Agreement"). Capitalized tem1S not otherwise defined herein shall
have the same meanings as set f0l1h in the Agreement.
B. The City owns and is developing certain facilities located within Harborside
Fountain Park, which consist of (1) a meeting/event room and adjoining deck and associated
kitchen facilities ("Event Facilities"), (2) restrooms serving the facilities together with
connecting hallways ("Bathroom Areas") and (3) adjacent open areas ("Park,"), collectively
the ("Fountain Park Facilities"). The Harborside Fountain Park is legally described in Exhibit
A-I and depicted in the site plan attached hereto as Exhibit B-1. The Fountain Park Facilities
are also depicted in Exhibit B-1.
C. The parties desire to make certain additional amendments to the Agreement to
incorporate the Fountain Park Facilities into the list of facilities managed by Contractor on the
City's behalf under the Agreement and to provide for certain pre-opening services associated
with the opening of Fountain Park Facilities, all on the terms and conditions set forth herein.
AGREEMENT
NOW THEREFORE, and in consideration of the mutual agreements contained herein,
the City and Contractor amend the Agreement as follows:
1. Primary Premises Redefined. Section 2.1.1, "Primary Premises", is hereby
amended to include the Event Facilities in the list of areas exclusively managed by Contractor
under Section 2.1.1 (a) through (k) of the At,'Teement.
2. Additional Premises Redefined. Section 2.1.2, "Additional Premises", is hereby
redefined to include the Bathroom Areas and Park in the list of areas accessible and usable by
Contractor under Section 2.1.2 of the Agreement.
3. Commencement of Operating Year for Fountain Park Facilities. For purposes of
calculating Net Income, Operating Expenses and the Percentage Fee, the Fountain Park Facilities
shall not be considered a pm1 of the Facility until August I, 2007 ("'Harborside
Commencement Date"), assuming that a Certificate of Occupancy is issued for the Fountain
Park Facilities on or bdlJre July 7, 2007. Any delay in the issuance of a certiticate of occupancy
beyond July 7, 2007 shall operate to delay the Harborside Commencement Date by the same
:11115 1'14112. DOC;}:
number of days. Notwithstanding the foregoing, the City shalI be responsible for directly
contracting with and paying utility service providers for utilities serving the Fountain Park
Facilities, provided that the City may alIocak as an Operating Expense a share of the utility costs
ti.H" the Fountain Park Facilities proportionate to Contractor's use or occupancy of the Fountain
Park Facilities.
4. Increase to Fixed Fee. Commencing on the Effective Date, the Fixed Fee shalI
increase to Seven Thousand DolIars ($7,000) per month during the Term.
5. Pre-Opening Services for Fountain Park Facilities. Section 6.2 of the Agreement
shall not apply to the Fountain Park Facilities. Contractor shall perf 01111 only the folIowing pre-
opening services for the Fountain Park Facilities in accordance with further specifications and a
budget to be agreed upon by the parties:
a. Purchase limited ot1ice/meeting room, restroom, and cleaning supplies and
equipment.
b. Provide staff to perf 01111 labor for pre-opening services.
c. Provide various management services related to pre-opening.
d. Train service personnel.
e. Prepare marketing package.
6. FF&E Procurement and Pre-opening Expenses for Event Facilities. Contractor
shall purchase on the City's behalf approximately One Hundred and Five Thousand Dollars
($ 105,000) of FF &E and Fifteen Thousand Dollars ($15,000) for use by Contractor as pre-
opening working capital for the Fountain Park Facilities, in accordance with an equipment list
and service expenses to be agreed upon by the parties. In consideration for this service, City
shall pay Contractor nine percent (9%) of Total FF&E Costs. "Total FF&E Costs" are the sum
of all costs associated with FF&E purchased by or through Contractor, including costs for
design, manufacturing, transportation and storage. Fees owed under this Section shall be paid by
the City upon installation of the subject FF &E.
7. Pro Forma. Except for the period between August 1,2007, through December 31,
2007, for which Contractor shall provide a separate Pro Forma for the Fountain Park Facilities,
Section 6.5 of the Agreement shall apply to the Facility, as that term has been redefined pursuant
to the provisions of this Amendment.
8. Counterparts. This Amendment may be executed in counterparts each of which
shall be deemed and original and alI of which together shall constitute one and the same
document. The patiies may execute and deliver facsimile signature pages.
9. Contlict of Provisions. To the extent that the terms of this Amendment contlict
with the terms of the Agreement, the terms of this Amendment shalI control.
10. Ratitication. Except as speciticalIy moditied by the terms hereot~ the Agreement
remains in fulI tlJrce and effect and is hereby ratitied.
ISigllafllres all FolIO\\'illg Pagel
: (0) I tJ402 DOC'J :
2
IN WITNESS WHEREOF, this Amendment is dated as of the day and date tirst set forth
above.
COLUMBIA HOSPITALITY, INC.
CITY OF BREMERTON
By: Bret Matteson
Its: Chief Operating Offker
By: Cary Bozeman
Its: Mayor
APPROVED AS TO FORM:
Roger A. Lubovich, City Attorney
RECEIVED FOR FILING:
Paula Johnston, City Clerk
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I'.\RCEL ..\
11I:\1 1'( 1)(/10i\' or TIlE Pf,\T or "TUWN OF IlRl:illLX)(l:--';". IZECCJ1WUJ Ii'< \ULL'\lL 2 ()j
J'I.:\ IS, !':\Cil: JU. SI IlI.\II: WITI-I!.\! (iU\'LI\.,'-!!\lENT LOT -' or SECTION 24. TOWNSlIIP 2.'
01URTlL R,\NCiE 1 L\ST, \\'1'.1. CITY (JI BRFi\ll)nUN, KITS '\I' COli\JTY. \\,\SIIINCilUN.
lJrSCIWIFlJ\S l'CJLI.U\vS;
CO\ll\!ENC1!\G AT !\ C:\SED l\IONL'MLNT:\ 1 TIlL INlERSUTIUN UF llRS 1 STRIT 1 AND
PACIFIC A VENUE;
THENCE SOUT/-! ,~,~c24'E' b\ST ALONG THE CENTERLINE OF SAID FIRST STREET 149.02
FEET '1'0;\ BRASS MONL!MENT;
THENCE SOL!TH OJ "36'57" WEST 35,00 FEET TO THE SOUTHERLY RIGHT-OF-Wi\ Y tvlARGIN
OF SAID FIRST STREET;
THENCE NORTH 88"24'32" WEST ALONG SAID SOUTHERL Y R1GHT-OF-WA Y MARGIN 14.00
FEET TO THE WESTERL j' LINE OF THE ALLEY IN BLOCK 10 OF SAID PLAT Al\'D THE POINT
OF BEGINNING;
THENCE SOUTH 01035'20" WEST ALONG SAlD WESTERLY LINE 87.24 FEET;
THENCE NORTH 29014 '24" WEST 44.17 FEET;
THENCE SOUTH 60046'07" WEST 96.34 FEET TO THE BEGINNING OF A NON-TANGENT
CURVE CONCAVE TO THE SOUTHWEST FROM WHENCE ITS CENTER BEARS SOUTH
41029'40" WEST 150.00 FEET DISTANT;
THENCE NORTHWESTERLY ALONG THE ARC OF SAID CURVE 35.20 FEET THROUGH A
CENTRAL ANGLE OF 13026'40";
THENCE NORTH 61057'00" WEST 43.68 FEET TO THE BEGINNING OF A CURVE CONCAVE TO
THE NORTHEAST FROM WHENCE ITS CENTER BEARS NORTH 28003 '00" EAST 67.00 FEET
DlST ANT;
THENCE NORTHERLY ALONG THE ARC OF SAID CURVE 74.31 FEET THROUGH A CENTRAL
ANGLE OF 63032'46" TO THE SOUTHERLY RlGHT-OF-WAY MARGIN OF SAID FIRST STREET;
THENCE SOUTH 88024'32" EAST ALONG SAID SOUTHERLY MARGIN 21 1.01 FEET TO THE
POINT OF BEGINNING.
CONTAINING 14,58 I SQUARE FEET OR 0.33 ACRES, MORE OR LESS.
{00519402.DOC;3 }t
Exhibit A-I
PARCEL B
PORTIONS OF TIlE PlAT OF 'TOWN OF HRF1\lERTON", RECCJIUJED IN \lULU!\IL :2 ell' PLATS.
PACiF .30, GOVERNMENT Lln .3 SECTION 24. TOW1\;S11lP 24 NORTH, RANGE 1 EAST. \\I.1vl..
AND TIDELANDS SITUATE WITHIN TIlE CITY OF BREJ\.IFRTON. KITSAP C:OU:'iTY.
WASHINGTON. DESCRIBED /\S FUJLOWS:
COMMENCING AT ;\ CASU) MONUMENT !\T ['liE INTERSECTION OF FIRST STREET AND
PACIFIC AVENUE;
THENCE SOUTH 88')24'32" EAST AUJNG THE CENTERLINE OF SAID FIRST STREET 149.02
FEET TO A BRASS MONUMENT;
Tl-IENCE SOUTH 01"36'57" WEST 35.00 FEET TO THE SOUTHERLY RIGHT-OF-WAY ivlARGIN
OF SAID FIRST STREET;
THENCE NORTH 88"24'32" WEST ALONG SAID SOUTHERLY MARGIN 14.00 FEET TO THE
\VESTERL Y LINE OF THE ALLEY IN BLOCK 10 OF SAID PLAT:
THENCE SOUTH 01"35'20" WEST ALONG SAID WESTERLY LINE 108.35 FEET TO A BRASS
MOj\,LIMENT ST MIPED PSNS2;
THENCE SOUTH 38018'20" EAST 26.28 FEET TO THE POINT OF BEGINNING;
THENCE CONTINUING SOUTH 38"18'20" EAST 44.49 FEET;
THENCE SOUTH 29019' IS" EAST 585.51 FEET TO THE LINE OF ORDINARY HIGH TIDE;
THENCE SOUTH 46033'33" WEST ALONG SAID LINE OF ORDINARY HIGH TIDE 214.46 FEET;
THENCE NORTH 42058'09" WEST 13.67 FEET;
THENCE NORTH 00000'23" EAST 208.76 FEET;
THENCE NORTH 29014'02" WEST 237.36 FEET;
THENCE NORTH 60045'58" EAST 61.05 FEET;
THENCE NORTH 29014'02" WEST 210.48 FEET;
THENCE NORTH 60045'58" EAST 36.72 FEET;
THENCE NORTH 29023'31" WEST 38.79 FEET;
THENCE NORTH 60033' 18" EAST 3.60 FEET TO THE POINT OF BEGINNING.
CONTAINING 62,512 SQUARE FEET OR 1.44 ACRES, MORE OR LESS.
{00519402.DOC;3 }
Exhibit A-I
I'\/{CEL C
ill\"! PUI<TIU~ 01' PI.\T ()iC 'TU\\"(\ or 13F~E.\II:!~T()>:', i~L(,UFU[[) 1.\ \-(JL.i,\IL :2 OII'L\TS.
1'\(jE: 30, SITL.'.\TE: WiTlil", COVERN\/ENT LOT -' OF Si:Cl!Ui'i 2-L TO\\;',SIIII' 2.[ \()RTH.
1Z\i\(j[ 1 EAST. \\:\l.. (TIY OF IJRE.\I[)(/lJN. I,-ITS.\I' CO!",TY. W.\Sj-!!,'-i(iIUi\, DESC'IW3LD
\S 17UU,OWS.
CU!\I:\IU-iC!NCi AT .\ CASED \IONI';i\IENT :\T THE INTr::J<sr:crION OF 1:'IRSi STIUTTY\!j)
1'\('IFIC :\ \TNUI::
THENCE SOUTH i\X"2..r32" EAST .\LONCi THE CENn:-:RLlNE CW SAID FIRST STREET i4l)(n
FEET TO :\ BRASS MONl;,\IENT;
THENCE SOUTH lJl"3ii'57" WEST 35.1)0 I=EET TO THE SOUTHERLY RICil-IT-OF-WA '{ ,v!ARCJIN
OF SAID FIRST STREET;
THENCE NORTH 88"24'32" WEST ALONG SAID SOUTHERL Y MARGIN 14.1)() FEET TO THE
WESTERL Y LINE OF nlE ALLEY IN BLOCK 10 OF SAID PLAT;
THENCE SOUTH 0] 035'20" WEST ALONG SAID WESTERL Y LINE 87.24 FEET TO THE POINT OF
BEGINNING;
THENCE CONTINUING SOUTH 01035'20" WEST ALONG SAID WESTERLY LINE 21.11 FEET TO
A BRASS MONUMENT STAMPED PSNS2;
THENCE SOUTH 38018'20" EAST 26.28 FEET
THENCE SOUTH 60033'18" WEST 3.60 FEET;
THENCE SOUTH 29023'3]" EAST 38.79 FEET;
THENCE SOUTH 60045'58" WEST 82.77 FEET;
THENCE NORTH 29014'02" WEST 45.85 FEET TO THE BEGINNING OF A NON-TANGENT
CURVE CONCA VE TO THE SOUTHWEST HAVING A RADIUS OF ] 03.00 FEET FROM WENCE
THE CENTER BEARS SOUTH 7804] '30" WEST;
THENCE NORTHERLY ALONG THE ARC OF SAID CURVE 32.22 FEET THROUGH A CENTR/\.L
ANGLE OF 1 r55'3J" TO THE BEGINNING OF A COMPOUND CURVE CONCAVE TO THE
SOUTHWEST HAVING A RADIUS OF 150.00 FEET FROM WENCE THE CENTER BEARS SOUTH
60045'38" WEST;
THENCE NORTHERLY ALONG THE ARC OF SAID CURVE 50.45 FEET THROUGH A CENTRAL
ANGLE OF 19016'/8";
THENCE NORTH 60046'07" EAST 96.34 FEET;
THENCE SOUTH 29014'24" EAST 44.17 FEET TO THE POINT OF BEGINNING.
CONTAINING 10,870 SQUARE FEET OR 0.25 ACRES, MORE OR LESS.
{00519402.DOC;3 }
Exhibit A-I
PARCEL n
PORTIONS OF THE PLAT OF "TUWN OF BREMEETON". RECORDED IN VOLU!\IE ~ UF PLATS.
P:\CiE 30, AND CiOVERN!\IENT LOT 3 SECTION 24, TUWNSHIP 24 NORTH, RA1\GE I EAST,
\~:.!\l.. SlTUATE WITHIN THE CITY OF BREIvIERTON, KITSAP COUNTY. WASIIINCiTON.
DESCRlBEU AS FOLLOWS;
COI\II'\'lENCINCi AT A CASED MONUh1ENT A 1 TlIE INTERSECTION OF FIRST STREET AND
PACIFIC AVENUE;
THENCE SOUTH 88024'32" EAST ALONG THE CENTERLINE OF SAID FIRST STREET ]49.02
FEET TO A BRASS MONUMENT;
THENCE SOUTH 0] 036'57" WEST 35.00 FEET TO THE SOUTHERLY RIGHT-OF-\VA Y MARCilN
OF SAID FIRST STREET;
THENCE NORTH 88024'32" WEST ALONG SAID SOUTHERLY MARGIN 14.00 FEET TO THE
WESTERl Y LINE OF THE ALLEY IN BLOCK 10 OF SAID PLAT;
THENCE SOUTH 01035'20" WEST ALONG SAID WESTERLY LINE 108.35 FEET TO A BRASS
MON1JMENT STAMPED PSNS2;
THENCE SOUTH 38018'20" EAST 26.28 FEET;
THENCE SOUTH 60033' 18" WEST 3.60 FEET;
THENCE SOUTH 29023'31" EAST 38.79 FEET;
THENCE SOUTH 60045'58" WEST 36.72 FEET TO THE POINT OF BEGINNING;
THENCE SOUTH 29014'02" EAST 210.48 FEET;
THENCE SOUTH 60045'58" WEST 61.05 FEET;
THENCE NORTH 29014'02" WEST 197.92 FEET TO THE BEGINNING OF A CURVE CONCAVE TO
THE EAST FROM WHENCE ITS CENTER BEARS NORTH 60045'58" EAST 110.00 FEET DISTANT;
THENCE NORTHERLY ALONG THE ARC OF SAID CURVE 48.05 FEET TIIROUGH A CENTRAL
ANGLE OF 25001 '40" TO THE BEGINNING OF A REVERSE CURVE CONCAVE TO THE
SOUTHWEST FROM WHENCE ITS CENTER BEARS SOUTH 85047'38" WEST 103.00 FEET
DISTANT;
THENCE NORTHERLY ALONG THE ARC OF SAID CURVE ]2.77 FEET THROUGH A CENTRAL
ANGLE OF 07006'08";
THENCE SOUTH 29014'02" EAST 45.85 FEET;
THENCE NORTH 60045'58" EAST 46.05 FEET TO THE POINT OF BEGINNING.
CONTAINING 13,229 SQUARE FEET OR 0.30 ACRES, MORE OR LESS.
{00519402.DOC;3 }
Exhibit A-I
I ()()~ 1')402 D( )C:~ I
EXHIBIT B-1
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DATE SUBMITTED: May 14,2007
BILL # D1- 13"
AGENDA BILL
CITY OF BREMERTON
CITY COUNCIL
SF
.mmm.aaam.aa.......a.sa...m...BD....Bas.......BD..a.aa.am..s.a....am..a.a.m.mmmemm......
SUBJECT: Lease Agreement between the
City ofBremerton and S.G.K. Corporation.
Committee Meeting Date: May 23, 2007
COUNCIL MEETING Date: June 6, 2007
Department: City Attorney's Office
Presenter: Roger A. Lubovich
Phone: 473-2345
SUMMARY: The proposed lease between the City of Bremerton and S.G.K. Corporation is a 5-year
lease with an option for an additional5-year term for commercial retail operations at 140 Washington
Avenue.
ATTACHMENTS: Proposed lease.
FISCAL IMPACTS (Include Budgeted Amount): The City will receive $700.00 per month not
including leasehold tax.
APPROVALS:
DEPARTMENT DIRECTOR:
CITY ATTORNEY:
FINANCE DIRECTOR:
MAYOR:
COMMITTEE CHAIR
COUNCIL PRESIDENT:
Af~~ ;:7.
CONSENT AGENDA
GENERAL BUSINESS 0
PUBLIC HEARING 0
RECOMMENDED MOTION: Move to approve the lease between the City of Bremerton and
S.G.K. Corporation and authorize the Mayor to execute the lease with substantially the same terms
and conditions as presented.
COUNCIL ACTION: 0 Approve 0 Deny 0 Table
o Continue 0 No Action
LEASE
This Lease is entered into this day of ,2007, between the CITY OF
BREMERTON, a municipal corporation, (hereinafter referred to as "Lessor"), and S.G.K.
CORPORATION, a Washington corporation, (hereinafter referred to as "Lessee").
WHEREAS, Lessor owns certain real property and a building situate thereon, and
WHEREAS, Lessee desires to lease a portion of the building for retail space for the sale
goods and food,
NOW, THEREFORE, the Lessor and Lessee agree as follows:
1. PREMISES. Lessor does hereby lease to the Lessee that portion of a building
consisting of approximately 450 square feet located at 140 Washington Avenue, Bremerton,
Washington ("Premises") and situated on real property owned by Lessor. The location of the
Premises is depicted on Exhibit A attached hereto and incorporated by reference.
2. TERM. The term of this lease shall be for five years commencing
,2007, ("Commencement Date") and ending ,2012, unless
otherwise extended or terminated. Lessee and Lessor, by and through the Mayor, may extend this
Lease for one additional five year term, subject to mutual agreement of the lease payment and
other terms and conditions. To exercise this option, Lessee shall deliver to Lessor a notice to
exercise said option within 90 days prior to the expiration of the original term of this lease. If
Lessee remains in possession of the Premises or any part thereof after the expiration of the term
of this Lease, including any exercised option, without the express written consent of Lessor, such
occupancy shall be a tenancy from month-to-month which may be terminated by either Lessor or
Lessee by delivering written thirty (30) day notice oftermination.
3. LEASE PAYMENT.
(a) Monthly Payment. During the term ofthis Lease, Lessee agrees to pay
Lessor, without notice or demand, the sum of Seven Hundred Dollars and No/1 00 ($700.00) per
month ("Lease Payment") plus the leasehold tax as set forth in Section 3(e) below, in advance, on
or before the first day of the first full calendar month of the term hereof and a like sum on or
before the first day of each and every successive calendar month thereafter during the term
hereof.
(b) Lease Payment Adjustments. The monthly Lease Payment shall be adjusted
every year during the term(s) of this Agreement in the amount of three percent (3%) per year. The
adjustment will occur on the anniversary date of this Lease each year.
1
Conference Center Plaza
(c) Overdue Lease Payment. Unpaid installments of the Lease Payment or
other sums due hereunder shall, ifnot timely paid, be subject to a later charge of Fifty and
Noll 00 Dollars ($50.00) to cover the excess costs of administration and shall bear interest from
the date due of 12 percent (12%) until all rent and interest has been paid in full. Lessee hereby
further agrees to pay any attorneys' fees and expenses incurred by Lessor by reason of Lessee's
failure to pay Lease Payment or other charges when due hereunder.
(d) Holding Over. If Lessee remains in possession of the Premises or any
part thereof after the expiration of the term of this Lease without the express written consent of
Lessor, such occupancy shall be a tenancy from month-to-month at a Lease Payment in the
amount of 120% of the last Lease Payment, plus all other charges and additional amounts
payable hereunder, and upon all the terms hereof applicable to a month-to-month tenancy.
(e) Leasehold Excise Tax, Other Taxes and Assessments. In addition to the
Lease Payment, Lessee shall pay a leasehold excise tax, pursuant to RCW 82.29A.030, on all
Lease Payment amounts paid to the City, currently in the amount of 12.84 percent of the base
Lease Payment and as may be adjusted pursuant to Ch. 82.29A RCW. Lessee shall pay the
Leasehold tax with the monthly payment. Lessee shall also pay all taxes assessments, and all
other governmental charges, of any kind whatsoever, applicable or attributable to the Premises,
Lessee's leasehold interest, the improvements, or Lessee's use and enjoyment of the Premises.
Lessee shall pay these taxes and assessments when due or as otherwise requested by the Lessor.
(f) Payment Place. Payment is to be made to the City of Bremerton, Attn:
Director of Financial Services, 345 Sixth Street, Suite 600 Bremerton, Washington 98337.
4. USE OF PREMISES. Lessee's use and occupancy of the Premises shall be for
retail space for the sale goods and food.
5. UTILITIES. Lessee agrees to pay all charges for water and sewer service,
power, garbage pickup, janitorial, telephone and for all other utilities which shall be used in the
Premises during the full term of this Lease.
6. IMPROVEMENTS.
(a) Specifically. Lessee accepts the Premises "as is". Lessee may install
signage subject to Lessor's approval.
(b) Generally. Lessee shall not make or allow to be made any alterations,
improvements, or changes to or of the Premises or any party thereof without the prior written
consent of Lessor, and all improvements, alterations, or changes so made shall become a part of
the lease Premises and shall belong to Lessor upon expiration or sooner termination of this
Lease. With respect to such alterations, improvements or changes to the Premises requested by
Lessee, Lessor's consent shall not be unreasonably withheld. In the event Lessor consents to the
making of any alterations, additions, or improvements to the Premises by Lessee, the same shall
2
Conference Center Plaza
be made by Lessee at Lessee's sole cost and expense, the Premises and Lessee's leasehold interest
therein shall remain free from any lien of any kind whatsoever, and construction of such
alterations, additions or improvements shall be done in compliance with all laws and
governmental requirements by qualified city staff or licensed and bonded contractors.
(c) Construction. Prior to Lessee commencing any construction, alteration,
replacement, removal or major repair of any improvements (whether City-Owned or Lessee-
Owned), Lessee shall submit to the City plans and specifications which describe the proposed
activity. Construction shall not commence until the City has approved those plans and
specifications in writing and Lessee has obtained a performance and payment bond in an amount
equal to 100% of the estimated cost of construction. The performance and payment bond shall
be maintained until the costs of construction, including all laborers and material persons, have
been paid in full. The City shall have thirty (30) days in which to review the proposed plans and
specifications. The plans and specifications shall be deemed approved and the requirement for
the City's written consent shall be treated as waived, unless the City notifies Lessee otherwise
within the thirty (30) days. Upon completion of construction, Lessee shall promptly provide the
City with as-built plans and specifications. The City's consent and approval shall not be required
for any routine maintenance or repair of improvements made by the Lessee pursuant to its
obligation to maintain the Property in good order and repair that does not result in the
construction, alteration, replacement, removal, or major repair of any improvements on the
Property. The provisions of this section do not obviate any permit requirements that may apply
to the proposed activity.
(d) Removal. Unless otherwise agreed by the City in writing, Lessee-Owned
hnprovements shall not be removed by Lessee during the Lease term or upon expiration or
termination of this Lease and upon expiration or termination of this Lease, shall become the
property of the City without payment by the City.
(e) Unauthorized Improvements. hnprovements made on the Premises
without the City's prior consent pursuant to Subsection 7(b) or which are not in conformance
with the plans submitted to and approved by the City ("Unauthorized hnprovements") shall
immediately become the property of the City, unless the City elects otherwise. Regardless of
ownership of Unauthorized hnprovements, the City may, at its option, require Lessee to sever,
remove, and dispose of them, charge Lessee rent for the use of them, or both. If Lessee fails to
remove an Unauthorized hnprovement upon request, the City may remove it and charge Lessee
for the cost of removal and disposal.
(1) Liens. Lessee shall keep the Property and Lessee's leasehold interest free
from any liens arising out of any work performed, materials furnished, or obligations incurred by
Lessee.
3
Conference Center Plaza
7. MAINTENANCE AND REPAIRS.
(a) Lessee's Obligations. By taking possession ofthe Premises, Lessee shall
be deemed to have accepted the Premises as being clean and in good order, condition, and repair.
Lessee shall, at Lessee's expense, keep the Premises and every part thereof in good condition and
repair (except as hereinafter provided with respect to Lessor's obligations set forth in paragraph
7(b) below). Lessee shall, upon the expiration or sooner termination of this Lease, surrender the
Premises to Lessor in good condition, clean, excepting only ordinary wear and tear and
destruction or damage by such conditions over which Lessee has no control, or such damage as
may be due to the failure of Lessor to comply with any covenant herein contained to be
performed by Lessor. Damage caused by Lessee's use ofthe Premises shall be repaired at the
sole cost and expense of Lessee.
(b) Lessor's Obligations. Lessor shall, at Lessor's expense, repair and
maintain the structural portions of the Building, including the roof, foundation, bearing and
exterior beams and supports and exterior walls (excluding glass). There shall be no abatement of
Rent and no liability for Lessor by reason of any injury to or interference with Lessee's business
arising from the making of any repairs, alterations, or improvements in or to any portion of the
Building or the Premises or in or to fixtures, appurtenances, and equipment if Lessor shall have
taken every reasonable measure to avoid any such injury and interference.
8. LIENS. Lessee shall keep the Premises, Lessee's leasehold interest therein and
the Building and Land on which the Premises are situated free from any liens arising out of any
work performed, materials furnished, or obligations incurred byLessee.
9. INDEMNIFICATION. Lessee shall indemnify, defend and hold Lessor
harmless from all loss damage, liability or expense resulting from any injury to any person or any
loss of or damage to any property caused by or resulting from any act or omission of Lessee or
any officer, agent, employee, guest, invitee or visitor of Lessee in or about the Premises or the
Building, butthe foregoing provision shall not be construed to make Lessee responsible for
injuries to third parties caused by the negligence of Lessor or any officer, agent, employee, guest,
invitee or visitor of Lessor. Lessor shall not be liable for any loss or damage to person or
property sustained by Lessee, or other persons, which may be caused by theft or any act of
neglect of Lessee or occupant of the building, or of any other person, or by any other cause,
unless caused by the negligence of Lessor or its officers, licensees, agents, employees, guests,
invitees or visitors.
10. LIABILITY INSURANCE; HAZARD INSURANCE.
(a) Liability Insurance. Lessee, at its own expense, shall provide and keep
in force comprehensive general liability insurance in the amount of not less than One Million
Dollars ($1,000,000.00 per occurrence for bodily injury and property damage. Lessee shall
furnish Lessor with a certificate of such policy within thirty (30) days of the Commencement
Date of this Lease and whenever required shall satisfy Lessor that such policy is in full force and
4
Conference Center Plaza
effect. Such policy shall name Lessor as an additional insured and shall be primary and
noncontributing with any insurance carried by Lessor. The policy shall further provide that it
shall not be canceled without twenty (20) days prior written notice to Lessor.
(b) Hazard Insurance. Throughout the term of this Lease, Lessor shall
procure and maintain fire, hazard and extended coverage insurance on the Improvements.
Should the property become uninhabitable due to loss or become uninhabitable for any other
reason the City shall have the option of terminating this lease.
11. PERSONAL PROPERTY. Where furnished by or at the expense of Lessee, all
movable property, furniture, furnishings and trade fixtures, other than those affixed to the
Premises so that they cannot be removed without material damage, shall remain the property of
and be removable by Lessee, and in case of damage by reason of such removal, Lessee shall
restore the Premises, Building or common areas to good order and condition. Lessee shall payor
cause to be paid before delinquency any and all taxes levied or assessed and which become
payable during the term hereof upon all Lessee's Improvements, equipment, furniture, fixtures,
and other personal property located in the Premises. Lessee shall be responsible for all personal
property insurance coverage during the term of this Lease.
12. ENTRY BY LESSOR. At any and all reasonable times during regular business
hours, upon one (1) day's prior notice to Lessee, Lessor reserves and shall have the right to enter
the Premises to inspect the same a reasonable number of times, to submit the Premises to
prospective purchasers or Lessees, to repair the Premises and any portion of the Building that
Lessor may deem necessary or desirable, without abatement of Rent, and may for the purpose
erect scaffolding and other necessary structures where reasonably required by the character of the
work to be performed, always providing that the entrance to the Premises shall not be blocked
thereby and further providing that the business of Lessee shall not be interfered with
unreasonably. Lessee hereby waives any claim for damages or for any injury or inconvenience to
or interference with Lessee's business or any loss of occupancy or quiet enjoyment of the
Premises, and any other loss occasioned thereby, if Lessor shall have taken every reasonable
measure to avoid any such injury, inconvenience or interference. Lessor shall have the right to
use any and all means which Lessor may deem proper to open any doors or otherwise obtain
access to the Premises in an emergency, without liability to Lessee except for any failure to
exercise due care for Lessee's property, and any entry to the Premises obtained by Lessor by any
of said means or otherwise shall not under any circumstances be construed or deemed to be a
forcible or unlawful entry into or a detainer of the Premises or an eviction of Lessee from the
Premises or any portion thereof.
13. ASSIGNMENT AND SUBLETTING.
(a) City Consent Required. Lessee shall not either voluntarily or by
operation of law assign, transfer, mortgage, pledge hypothecate, or encumber this Lease or any
interest therein and shall not sublet the Premises or any part thereof or any right or privilege
appurtenance thereto or allow any person (the employees, agents, servants, and invitees of Lessee
5
Conference Center Plaza
excepted) to occupy or use the Premises or any portion thereof, without the prior written consent
of Lessor, which consent by Lessor shall not be unreasonably withheld. Any such assignment or
subletting without compliance with the terms of this paragraph shall be void and shall, at the
option of Lessor, constitute a default under the terms of this Lease. Consent to one assignment,
subletting, occupation, or use by any other person shall not be deemed to be consent to any
subsequent assignment, subletting, occupation, or use by another person. Consent to any such
assignment or subletting shall in no way relieve Lessee of any liability under this Lease. Lessor
may assign the Rent herein provided to any person, partnership, corporation, or bank, and Lessee
agrees when notified in writing by the assignee of such assignment to make the Rent paYments to
assignee under the terms of said assignment.
(b) Rent Payments Following Assignment. The acceptance by the City ofthe
paYment of rent following an assignment or other transfer shall not constitute consent to any
assignment or transfer.
14. LESSEE'S DEFAULT. The occurrence of anyone or more of the following
events shall constitute a default and breach of this Lease by Lessee.
(a) Abandonment. Lessee vacates or abandons the Premises;
(b) Failure to Pay Lease Payment. Lessee fails to make any paYment of the
Lease PaYment or any other paYment required to be made by Lessee hereunder;
(c) Failure to Observe Other Covenants. Lessee fails to observe or perform
any of the covenants, conditions, or provisions of this Lease to be observed or performed by
Lessee where such failure shall continue for a period of thirty (30) days after written notice
thereof by Lessor to Lessee; provided, however, that if the nature of Lessee's default is such that
more than thirty (30) days are reasonably required for such cure, then Lessee shall not be deemed
to be in default if Lessee commences such cure within said thirty (30) days and thereafter,
diligently prosecutes such cure to completion.
15. REMEDIES ON DEFAULT.
(a) Termination. In the event Lessee fails to cure such default, Lessor may,
at any time thereafter, terminate this Lease by written notice to Lessee. Lessor may also seek any
other remedy provided by law.
(b) Removal of Personal Property. In the event ofa retaking of possession
of the Premises by Lessor, Lessee shall remove all personal property located thereon and upon
failure to do so upon demand of Lessor, Lessor may remove and store the same in any place
selected by Lessor, including but not limited to a public warehouse, at the expense and risk of
Lessee. If Lessee shall fail to pay the cost of storing any such property after it has been stored for
a period of thirty (30) days or more, Lessor may sell any or all of such property at a public or
private sale and shall apply the proceeds of such sale first to the cost of such sale, secondly to the
6
Conference Center Plaza
payment of the charges for storage, if any, and thirdly to the payment of any other sums of money
which may be due from Lessee to Lessor under the terms of this Lease, and the balance, if any, to
Lessee. Lessee hereby waives all claims for damages that may be caused by Lessor's lawfully
reentering and taking possession of the Premises or lawfully removing and storing the property of
Lessee as herein provided and will save Lessor harmless from loss or damages occasioned by
Lessor thereby, whether such lawful reentry shall be considered or construed to be a forcible
entry.
(c) Remedies Cumulative. The remedies hereinafter described shall be
cumulative and Lessor shall be entitled to pursue any other remedy now or hereafter available to
Lessor under the law or judicial decisions of the State of Washington.
16. LESSOR'S DEFAULT. Lessor is in default if Lessor fails to observe or perform
any of the covenants, conditions, or provisions of this Lease to be observed or performed by
Lessor, where such failure shall continue for a period of thirty (30) days after written notice
thereof by Lessee to Lessor; provided, however, that if the nature of Lessor's default is such that
more than thirty (30) days are reasonably required for such cure, then Lessor shall not be deemed
to be in default if Lessor commences such cure within said thirty (30) days and thereafter,
diligently prosecutes such cure to completion. In the event Lessor fails to cure such default,
Lessee may, at any time thereafter, terminate this Lease by written notice to Lessor. Lessee may
also seek any other remedy provided by law.
17. EMINENT DOMAIN. Ifthe whole of the Premises (or the whole or part of the
Building or Improvements) shall be acquired or condemned by eminent domain for any public or
quasi-public use, or if a part ofthe Premises is so taken so that the Premises are rendered
unsuitable for the business of Lessee, then the term of this Lease shall terminate as of the date
title or possession shall be transferred in such proceeding, whichever shall occur first. In the
event of a partial taking or condemnation which is not extensive enough to render the Premises
unsuitable for the business of Lessee, then Lessor shall restore the Premises to a condition
comparable to its condition immediately prior to such taking less the portion lost in the taking,
and this Lease shall continue in full force and effect provided, however, that the monthly Rent
shall abate in the same ratio that the portion of the Premises so taken bears to the whole of the
Premises.. Lessor shall have the right to receive the compensation of damages awarded upon
either such total or partial taking and Lessee shall have no claim thereto; provided that Lessee
may independently pursue an award or compensation to Lessee for the taking of Lessee's
personal property or fixtures or for the interruption of or damage to Lessee's business and for any
other interest of Lessee.
18. HAZARDOUS SUBSTANCES. Lessee shall not generate, release, spill, store,
deposit, transport, or dispose of (collectively "Release") any hazardous substances, sewage,
petroleum products, hydrocarbons, radioactive substances, medicinal, bacteriological, or disease-
producing substances, hazardous materials, toxic substances or any pollutants or substances
defined as hazardous or toxic in accordance with applicable federal, state, and 10ca11aws and
regulations ("Hazardous Substances") in, on or about the Premises. Lessee shall indemnify,
7
Conference Center Plaza
defend and hold Lessor harmless from any and all claims, liabilities, losses, damages, cleanup
costs, response costs, and expenses (including reasonable attorneys' fees) arising out of or in any
way related to the Release by Lessee, or any of its agents, representatives, or employees, or the
presence of such Hazardous Substances in, on or about the Premises occurring at any time after
the Commencement Date and arising out of the activities of Lessee, or any of its agents,
representatives or employees. The provisions of this paragraph shall survive termination or
expiration of this Lease.
19. GENERAL PROVISIONS. Lessor and Lessee agree to the following general
provIsIOns:
(a) Waiver. No waiver of default by either party of any of the terms,
covenants and conditions hereof to be performed, kept and observed by the other party shall be
construed as, or operate as, a waiver of any subsequent default of any of the terms, covenants and
conditions herein contained, to be performed, kept and observed by the other party. The
subsequent acceptance of Rent hereunder by Lessor shall not be deemed to be a waiver of any
preceding default by Lessee of any term, covenant, or condition of this Lease other than the
failure of Lessee to pay the particular rental so accepted, regardless of Lessor's knowledge of
such preceding default at the time of the acceptance of such Rent.
(b) Time. Time is of the essence of this Lease and each and all of its
provisions in which performance is a factor.
(c) Paragraph Headings. The paragraph or section headings of this Lease
are not a part of this Lease and shall have no effect upon the construction or interpretation of any
part hereof.
(d) Successors and Assigns. The covenants and conditions herein contained,
subject to the provisions as to assignment, apply to bind the heirs, successors, executors,
administrators, and assigns of the parties hereto.
(e) Recordation. Neither Lessor nor Lessee shall record this Lease, but a
short form memorandum hereof may be recorded at the request of Lessor.
(t) Quiet Possession. Upon Lessee paying the Rent reserved hereunder and
performing all of the covenants, conditions, and provisions on Lessee's part to be observed and
performed hereunder, Lessee shall have quiet possession ofthe Premises for the entire term
hereof, subject to all the provisions of this Lease. The Premises are leased subject to any and all
existing encumbrances, conditions, rights, covenants, easements, restrictions, rights-of-way, and
any matters of record, applicable zoning and building laws, and such matters as may be disclosed
by inspection or survey.
(g) Prior Agreements. This Lease contains all of the agreements of the
parties hereto with respect to any matter covered or mentioned in this Lease and no prior
8
Conference Center Plaza
agreements or understandings pertaining to any such matters shall be effective for any purpose.
No provision of this Lease may be amended or added to except by agreement in writing signed by
the parties hereto or their respective successors in interest. This Lease shall not be effective or
binding upon any party until fully executed by both parties hereto.
(h) Inability to Perform. The time period within which any party is to fulfill
an obligation of such the party under this Lease shall be extended by such time period that any
party is unable to fulfill any of its obligations hereunder or is delayed in doing so, if such
inability or delay is caused by reason of strike, labor troubles, acts of God, or any other cause
beyond the reasonable control of such party.
(i) Severability. Any provisions of this Lease which shall prove to be
invalid, void, or illegal shall in no way affect, impair, or invalidate any other provision hereof
and such other provision shall remain in full force and effect.
(j) Cumulative Remedies. No remedy or election hereunder shall be deemed
exclusive but shall whenever possible be cumulative with all other remedies at law or in equity.
(k) Choice of Law. This Lease shall be construed under all of the applicable
laws, statutes, ordinances, rules and regulations of the United States, the State of Washington,
County of Kitsap, and the City of Bremerton. In the case of a dispute between the parties, venue
over such dispute shall be with the Superior Court of Kitsap County, Washington.
(I) Execution. This Lease may be executed in several counterparts, each of
which shall be deemed an original instrument.
(m) Notices. All notices to be given hereunder shall be in writing and shall be
personally delivered and receipt acknowledged, sent by United States certified mail, return
receipt requested, sent by facsimile, with original delivered within three (3) days, or sent by
overnight delivery through public or private service, delivery charge prepaid, and addressed to
the party at the respective mailing address as herein set forth.
To Lessor:
Mayor
City of Bremerton
345 6th Street, Suite 600
Bremerton, W A 98337
To Lessee:
Gurdarshan Kaberwall and Dharmjit Kaur
S.G.K. Corporation
789 lih Street
Bremerton, W A 98337
It is understood that each party may change the address to which notice may be sent by giving a
written notice of such change to the other party hereto in the manner herein provided.
9
Conference Center Plaza
(0) Lessee's Corporate Authority. Lessee is a Washington corporation, and
each individual executing this Lease on behalf of said corporation represents and warrants that he
or she is duly authorized to execute and deliver this Lease on behalf of said corporation, in
accordance with a duly adopted resolution of the board of directors of said corporation or in
accordance with the bylaws of said corporation, and that this Lease is binding upon said
corporation in accordance with its terms. Lessee further represents and warrants that it is fully
registered and qualified to do business in the State of Washington.
IN WITNESS WHEREOF, the parties hereto have executed this Lease the day and year
first above written.
LESSOR
LESSEE
CITY OF BREMERTON
S.G.K. CORPORATION
By: Cary Bozeman
Its: Mayor
By: Guardashan Kaberwall
Its: Owner
By: Kharmjit Kaur
Its: Owner
Notaries on Next Two Pages
Remainder of This Page Intentionally Blank
10
Conference Center Plaza
STATE OF WASHINGTON)
) ss.
COUNTY OF KITSAP )
I certify that I know or have satisfactory evidence that CARY BOZEMAN is the person who
appeared before me, and said person acknowledged that he signed this instrument, on oath stated
that he was authorized to execute the instrument, and acknowledged it as the Mayor of the City
of Bremerton to be the free and voluntary act of such City for the uses and purposes mentioned in
the instrument.
DATED:
NOTARY PUBLIC in and for the State of
Washington, residing at
My commission expires / / .
11
Conference Center Plaza
STATE OF WASHINGTON )
) ss.
COUNTY OF KITSAP )
I certify that I know or have satisfactory evidence that Guardashan Kaberwall is the
person who appeared before me, and said person acknowledged that he signed this instrument, on
oath stated that he was authorized to execute the instrument, and acknowledged it as the
of S.G.K. Corporation to be the free and voluntary act of such
Corporation for the uses and purposes mentioned in the instrument.
DATED:
NOTARY PUBLIC in and for the State of
Washington, residing at
My commission expires / / .
STATE OF WASHINGTON)
) ss.
COUNTY OF KITSAP )
I certify that I know or have satisfactory evidence that Kharmjit Kaur is the person who
appeared before me, and said person acknowledged that she signed this instrument, on oath
stated that she was authorized to execute the instrument, and acknowledged it as the
of S.G.K. Corporation to be the free and voluntary act of such
Corporation for the uses and purposes mentioned in the instrument.
DATED:
NOTARY PUBLIC in and for the State of
Washington, residing at
My commission expires / / .
R:\Legal\Legal\Contracts\ECONOMIC DEVELOPMENTlPlaza Store Lease.doc
12
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S.G.K. LEASE
PREMISES
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DA TE SUBMITTED: May 22, 2007
AGENDA BILL
CITY OF BREMERTON
CITY COUNCIL
BILL#1frE7
6~
.....S.......S......8.....8............................8.................0.........s.m..
SUBJECT: Appointment to the Arts
Commission
Committee Meeting Date: May J..3) ,;loo/
COUNCIL MEETING Date: June 6, 2007
Department: Executive
Presenter: Mayor Bozeman
Phone: 473-5266
SUMMARY: There is a vacancy on the Arts Commission due to the resignation of Steve Goupil. It
is recommended the vacancy be filled by M.Blair Scheutz.
A TT ACHMENTS: Application for Appointment available in the Mayor's office.
FISCAL IMPACTS (Include Budgeted Amount): N/A
APPROVALS:
DEPARTMENT DIRECTOR:
CITY ATTORNEY:
FINANCE DIRECTOR:
MA YOR:
~.~
~
FISCAL/BUDGET:
OPERATIONS:
COUNCIL PRESIDENT:
j(
."J / ._.
I CONSENT AGENDA ~I
RECOMMENDED MOTION: Move to confirm
Commission.
COUNCIL ACTION: 0 Approve 0 Deny 0 Table
o Continue 0 No Action
.
.
.
56-
Blair Schuetz, Arts Commission Applicant
Summary for City Council
June 6, 2007
. Associate of Arts degree from St. Mary's Junior College, Raleigh, NC
. Attended art classes at the University of Washington prior to transferring to
Evergreen State College.
. Bachelor of Arts/Libera1 Arts from Evergreen State College, Olympia, W A
. Resident ofBremerton since 1999; has lived in Kitsap County since 1985;
. Member of the St. Paul's Episcopal Church's Arts & Liturgy Commission;
. Created the altar linens and vestments for Lent for St. Paul's;
. Continues to be active in weaving, batik, and fiber art.
. Believes there should be an increase in public art that is representative of our
culture.
. Feels that public art can draw people to public spaces, attract tourists, and start
conversations by being exciting and interesting.
DATE SUBMITTED: May 30,2007
BILL # 07- /36
.
AGENDA BILL
CITY OF BREMERTON 5 H
CITY COUNCIL
I.......................................................................................
SUBJECT: Appointments to pro and con
committees for the West Hills Island
Annexation Ballot Measure.
Committee Meeting Date: June 6, 2007
COUNCIL MEETING Date: June 6, 2007
Department: OeD
Presenter: Andrea Spencer
Phone: 473-5283
SUMMARY: City Council is required to formally appoint Committeees to write statements "For"
and "Against" Primary Election Ballot Measures. A Ballot Measure on whether the West Hills Island
Annexation should be approved will be a Ballot Measure during the August 21, 2007 election.
Committee members do not have to be residents of the City, or reside within the geographic area of
the Ballot Measure. Each Committee may have up to three members, however, a Committee may
seek the advice of any person in preparing their statement(s).
A TT ACHMENTS: Specifications for Committee Statements for Ballot Measures for 2007.
. FISCAL IMP ACTS (Include Budgeted Amount): None
APPROV ALS:
DEPARTMENT DIRECTOR:
CITY ATTORNEY:
FINANCE DIRECTOR:
MA YOR:
COMMITTEE CHAIR
COUNCIL PRESIDENT:
M-;~~'
CONSENT AGENDA 5?J
GENERAL BUSINESS 0
PUBLIC HEARING 0
RECOMMENDED MOTION: I move to appoint BytA.u,.. f1t\st; 1"\) ,
Va I~ I'd ~ y.~~d" , and. . to the
Committee tor wntIng the "For statement for the West Hills Island AnnexatIOn Ballot Measure.
I move to appoint PamAlonia McCrary, N.e i / A/ I~~ ,and
. tJ(;l V\ tIeL. G e 'l~V' to the Committee for writing the "Against" statement for
the West Hills Island Y\nnexation Ballot Measure.
COUNCIL ACTION: 0 Approve 0 Deny 0 Table
o Continue 0 No Action
.
.
.
West Hills Island Annexation
August 21, Primary Election
For Committee Members
Chairperson: R Bruce Hankins.
5709 1 st Street
Bremerton, WA 98312
rbruce(Qltelebyte.com
David Raymond
PO Box 5761
Bremerton, WA 98312
271-7814
relayloq isticsqu y@yahoo.com
Against Committee Members
Chairperson: PamAlonia McCrary
1110 Dorothy Ave.
Bremerton, WA 98312
pamalonia@donobi.net
Neil Allen
106 Sunnyhill Rd. W
Bremerton, WA 98312
470-4704
Danita Geyer
226 Broad St. W.
Bremerton, WA 98312
792-9748 or 271-8301
Specifications for Committee Statements for Ballot Measures - 2007
Last Day fo." District to Submit Measures:
<<) Primary Election Measure - Tuesday, May 29, 2007 - 2:00 p.m.
Explanatory Statement due Monday, June 4, 2007
· General Election Measure - Tuesday, August 14,2007 - 2:00 p.m.
Explanatory Statement due Monday, August 20, 2007
Last Day for Committees to Submit Statements:
· Primary Election Measure Statements - Monday, June II, 2007 - 2:00 p.m.
· General Election Measure Statements - Monday, August 27, 2007 - 2:00 p.m.
Committees to Write Statements "For" and "Against" Ballot Measures
The legislative authority of a jurisdiction that submits a ballot measure that is included in the
Local Voters' Pamphlet shall:
~ Formally appoint a committee to prepare a statement advocating the voters'
approval of the measure; and
~ Formally appoint a committee to prepare a statement advocating the voters'
rejection of the measure.
The authority shall appoint persons known to favor the measure to serve on the committee
advocating approval and shall, whenever possible, appoint persons known to oppose the measure
to serve on the committee advocating rejection. Committee members do not have to be residents
of the district. If the authority fails to make such appointments, the County Auditor shall, in
coni unction with the Local Voters' Pamphlet Advisory Committee, make the appointments.
No committee shall have more than three members; however, a committee may seek the advice
of any person or persons in preparing their statement(s).
The committee shall elect from among their members a chairperson and shall immediately notify
the County Auditor of the names, addresses and telephone numbers of the committee members.
All statements for and against measures will also appear on the Kitsap County On-Line Voters'
Guide.
Length of Statements and Rebuttals:
Statements "for" and" against" measures appearing in the Local Voters' Pamphlet shall not
exceed 200 words, except that the committee may use up to 4 headings to summarize and
identify major arguments or portions of the statement for the convenience of the reader. Words
contained within headings that number more than eight shall be included in the computation of
the number of words in the statement.
Rebuttals to the statements "for" and "against" measures appearing in the Local Voters'
Pamphlet shall not exceed 75 words and must address only issues raised in the opposing
statement without injecting issues not previously discussed by either the statement "for" or
"against" that measure. Headings are not permitted in connection with rebuttal statements.
Resft'ictions on the Style of Statements
All statements published in the Local Voters' Pamphlet shall be of substantially similar format
and style. To promote such consistency, the tbllowing standards of fonnat have heen
established:
>- Statements shall be typed, single-spaced, on white, 8 1'2 X II" paper.
, The chairperson's name, address and telephone numher, measure name and whether
statement is "for" or "against" shall appear on the top of each page of the statement.
>- The statement shall be typed in paragraph style without tables, lists, graphs or other
material requiring multiple indentations.
>- Words, phrases and sentences, which are italicized, bold, underlined, or emphasized in
some other manner, will be typeset the same as the rest of the text. Such exaggerations
reduce the readability of the statement. However, headings may be in bold and all capital
letters.
Deadline for Submission of Statements and Rebuttals
Primary Election
Statements "for" or "against" measures appearing in the Primary Election Local Voters'
Pamphlet shall be submitted to the County Auditor by Monday, June 11,2007. The County
Auditor will submit a draft copy back to the committee for verification by Tuesday, June 12,
2007. If the statement is rejected by the Auditor's Office, the committee has until Wednesday,
June 13,2007 to appeal the decision.
Rebuttals to the statements "for" and "against" measures appearing in the Local Voters'
Pamphlet shall be submitted to the County Auditor by a member of the committee by Monday,
June 18,2007. If the rebuttal is rejected by the Auditor's Office, the committee must appeal the
same day.
Extensions to deadlines may be made as deemed necessary by the County Auditor and shall
apply to all jurisdictions equally. Decisions on appeals are final.
General Election
Statements "for" or "against" measures appearing in the General Election Local Voters'
Pamphlet shall be submitted to the County Auditor by Monday, August 27,2007. The County
Auditor will submit a draft copy back to the committee for verification by Tuesday, August 28,
2007. If the statement is rejected by the Auditor's Office, the committee has until Wednesday,
August 29. 2007 to appeal the decision.
Rebuttals to the statements "for" and "against" measures appearing in the Local Voters'
Pamphlet shall be submitted to the County Auditor by a member of the committee by Tuesday,
September 4,2007. If the rebuttal is rejected by the Auditor's Office, the committee must appeal
the same day.
Extensions to deadlines may be made as deemed necessary by the County Auditor and shall
apply to all jurisdictions equally. Decisions on appeals are final.
:2
F e(~s
No fees shall be charged to committees submitting materials to be included in the Local Voters'
Pamphlet.
The cost of the Local Voters' Pamphlet shall be considered an election cost to those jurisdictions
included in the pamphlet and shall be prorated in the manner provided in RCW 29A.32.270 and
RCW 29A.04.41 o.
Content
By law, the County Auditor is required to reject any statement which contains any obscene,
vulgar, profane, scandalous, libelous or defamatory matter, or any language which in any way
cites, counsels, promotes or advocates hatred, abuse, violence, and hostility toward, or which
tends to cause ridicule or shame upon any person or group of persons by reason of sex, race,
color, religion or manner of worship.
Editing of Statements
In a publication of this magnitude, material submitted for publication may contain some
inadvertent errors in spelling, punctuation or syntax, which could adversely affect the readability
of the statement and/or unfairly prejudice the statement or confuse the voters. The County
Auditor may correct such incidental errors as long as this does not affect the content of the
statement. The Auditor's Office is not obligated, however, to make such corrections and will
assume no responsibility for errors, which result from inaccuracies in the original statement
submitted by the committee.
Rejection of Unacceptable Statements
If any portion of the statement is rejected, only that rejected portion may be re-written and
submitted for inclusion in the statement.
The committee proposing the statement may appeal any rejection to the County Auditor or
submit a revised statement. The County Auditor shall render a decision within one working day
of the appeal. This decision shall be considered final due to time constraints.
Mailing Address for Statement:
Kitsap County Auditor - Elections Division
Attn: Local Voters' Pamphlet MS-31
614 Division Street
Port Orchard, W A 98366-4687
OR
Bring Your Statement To:
Kitsap County Administration Building
619 Division Street
Office hours are 8:00 a.m. to 4:30 p.m.
3
2007 Local Voters' Pamphlet
Kitsap County Elections Division Phone: (360) 337.7128
Committees For Ballot Measures - Statement Identification
J uriscl iction:
Proposition:
Check One:
FOR
I AGAINST I
Committee Members
Chairperson Name:
Title / Organization
Address:
Telephone Number:
Phone Number listed in the Pamphlet
FAX Number:
Email
Name:
Title / Organization:
Address:
Telephone Number:
Phone Number listed in the Pamphlet
Name:
Title / Organization:
Address:
Telephone Number:
Phone Number listed in the Pamphlet
I hereby certify that the above-named individuals have been appointed and have consented to
serve as indicated and the name, titles and organizations should be listed in the official Local
Voters' Pamphlet in the manner set forth above.
Chairperson of Comm ittee
Date
4
DATE SUBMITT'ED: May 24,2007
BILL if bf - '3q____
AGENDA BILL
CITY OF BREMER TON
CITY COUNCIL
5J:.
.mm.g.ammamaG~....m..m&mqaRQ...aagaamag.Ba.mD8.aaa..am.mgDaaB.aamma.mmaDDD...aaaaggaQaal
SUBJF~CT: Real Estate Purchase and Sale
Agreement for the sale of the former West
Precinct Building located at 4846 Auto
Center Way
Committee Meeting Date:
COUNCIL MEETING Date:
Department:
Presenter:
Phone:
May 30, 2007
June 6, 2007
Economic
Development
Gary Sexton
473-5282
SUMMARY: The City has received a purchase and sale agreement from Soon H. and Pyong D. An
offering to purchase the former West Precinct Building for $500,100.
ATTACHMENTS:
1. Council Summary
2. Proposed Commercial and Investment Real Estate Purchase and Sale Agreement
FISCAL IMPACTS (Include Budgeted Amount): The proceeds of the sale ($500,100 less costs of
closing) will be deposited into the contingency reserve fund.
APPROV ALS:
DEP ARTMENT DIRECTOR:
CITY ATTORNEY:
FINANCE DIRECTOR:
MA YOR:
COMMITTEE CHAIR
COUNCIL PRESIDENT:
CONSENT AGEND;l'
GENERAL BUSINESS D
PUBLIC HEARING D
RECOIVIMENDED MOTION: Move to approve the Commercial and Investment Real Estate
Purchase and Sale agreement and authorize the Mayor to finalize and execute the agreement with
substantially the same terms and conditions as presented and further to authorize the Mayor to finalize
and execute any and all documents necessary to close the transaction.
COUNCIL ACTION: D Approve D Deny 0 Table
o Continue 0 No Action
COUNCIL SUMMARY
SALE OF WEST PRECINCT
The City has received an offer from Soon H. and Pyong D. An to purchase the forn1er
West Precinct Building for $500,100. Following are the significant details of the offer:
· City's deadline to accept the offer is June 13,2007
· $30,000 earnest money has been provided
· The sale is contingent upon City Council approval
· The sale is contingent upon the purchasers securing certain financing
· Buyer has a 30 day feasibility period from the date of mutual acceptance
· Land Title will prepare the title report and close the sale
· Escrow fees will be split by the parties; the Seller will pay all costs of financing; all
other closing costs will be pro-rated and paid by the appropriate party
· Buyer's will be entitled to possession on closing, which is scheduled for July 31,
2007
· Seller's representation that there are no hazardous substances, underground storage
tanks, or pending or threatened remedial action regarding the release of hazardous
substances
· All personal property remaining at the site will become property of Seller
· In the event of Buyer's default, earnest money equaling up to 5% of the purchase
price will represent liquidated damages to the City
· The City agrees to pay a 2.75% commission to the listing agent, Reid Real Estate
· The City agrees to provide the names and addresses of the utility provides having
lien rights affecting the property
NWMLS hlrln ~4
CBA FOlm f'S-IA
Purchase & Sale Agreement
Rn~. 121(J9
Page 1 of G
COMMERCIAL AND INVESTMENT REAL ESTATE
PURCHASE AND SALE AGREEMENT
rt; Copyright lOOn
Commercial Brok'HS ASSCl,,;.lti(
All RiglltS Reserved
rt1lS 11as bct1n prepared for submission 10 YOlJr allornny for re~lew and ap~;ro~al prior 10 signing
No representation IS Illade by licensee as 10 Its sufflcienoy or tax consequences.
Date
May
")')
..........
2007
The undersigned Buyer, Soon II, & Pyong D. An . agrees to buy and
Seller agreos to sell. on the following terms, the commercial real estate and all impro~ements thereon (collectively, Ihe "Property") commonly known as
..! X..!fl ;\ 1110 Cenfer \Vav in the City of Bremerton
Kitsap County, Washington. legally desoribed on attached Exhibit A.
(Buyer and Seller authorize the listing Agent or Selling Licensee to insert and/or correct, over their signatures, the legal description of the Property,)
1. PURCHASE PRICE. The lotal purchase price is Five Hundred Thousand One Hundn.:d
Dollars ( $<;00 100 00 ). including the earnest money, payable as follows (chock only one):
I ': All cash at closing. including the earnest money, with no financing contingency.
~ All cash at closing, including the earnest money, contingent on new financing under Section 4a below. 1{
[1 $ / % of the purchase price in cash at closing. including the earnest money. with the balance of the purchase 11
price paid as follows (check one or both. as applicable): Ll Buyer's assumption of any underlying note and deed of trust. or real estate contract, 12
under Section 4b below; [J Buyer's delivery at closing of a promissory note for the balance of the purchase pnce, secured by a deed of trust 13
encumbering the Property. as described in Section 4c below, 14
[J Other:
IS
16
2. EARNEST MONEY. Buyer agrees to deliver the earnest money $30,000 00 in the form of 17
[] Cash 0 Personal check 0 Promissory note [J Other: 18
If the earnest money is in the form of a promissory note. it shall be due no later than: 19
n days after mutual acceptance. 20
[] Upon removal of the inspection contingencies in Section 5 below. 21
[J Other: 22
The earnest money shall be held by 0 Selling Licensee 0 Closing Agent. 23
Buyer shall deliver the earnest money no later than: 24
1.;zJ 2 days after mutual acceptance. 25
o Upon removal of the inspection contingencies in Section 5 below. 26
o Other: 27
Selling Licensee may, however. transfer the earnest money to Closing Agent. 28
If the earnest money is 10 be held by Selling Licensee and is over $10,000. it shall be deposited to: [1 Selling Licensee's pooled trust aocount 29
(with interest paid to the State Treasurer) 0 A separate interest bearing trust account in Selling licensee's name. The interest. if any, shall be 30
credited at closing 10 Buyer whose Social Security or taxpayer 10 Number is: , If this sale fails to close. 31
whoever Is entitled to the earnest money is entitled to interest. 32
Selling Licensee shall deposit any check to be held by Selling Licensee within 3 days after receipt or mutual acceptance. whichever occurs later, 33
Buyer agrees to pay financing and purchase costs Incurred by Buyer. If all or part of the earnest money is to be returned to Buyer and any such 34
costs remain unpaid, Selling Licensee or Closing Agent may deduct and pay them therefrom. Unless otherwise provided In this Agreement. the 35
earnest money shall be applicable to the purChase price and shall be non-refundable except where a condition to Buyer's obligation under this 36
Agreement is not satisfied through no fault of Buyer. 37
3. EXHIBITS AND ADDENDA. The following Exhibits and Addenda are made a part of this Agreement: 38
Exhibit A - Legal Description 39
[i Earnest Money Promissory Nole. CBA Form EM 40
lJ Promissory Note. LPB Form No. 28A/CBA Form Nl-A 41
C] Stlort Form Deed of Trust. lPB Form No. 20 42
Deed of Trust Rider, CBA Form DTR 43
I.{! Utility Charges Addendum. CBA Form UA
r- i FIRPTA Certification. CBA Form 22E
L! Assi(Jnment and Assumption. CBA Form PS-AS
Addendum/Amendment. COA Form PSA
[J Back-Up Addendum, CBA Form BU-A
Ii Vacant Land Addendum. CBA Form VLA
17 Other_Ad(.ICn1~ill
I~JlriALS Buyer Date:
Buyer ~~ - Date:
44
4~
46
47
$"(1-2-107
_~tll-(O 7
Seller:
Dilte:
~4i2;
48
49
50
"
JI
Seller:
Date
52
N\NMIS FOll11 24
CSA Fonn PS.1A
Purchase I~ Sale Aureern~~nl
Rev 12iG9
Piloe 7 nf ()
COMMERCIAL AND INVESTMENT REAL ESTATE
PURCHASE AND SALE AGREEMENT
(CONTINUED)
,p COPYlilltlt 1999
Commercial Rrokers ASSOCliltlC
All 1"g11l5 Hns",veo
4. FINANCING. 5:
a. Applh;;allon for New financIng, If pllymenl Of lhe purChase prictj i:j wfllillgmil on Buyer Obtaining new flnancing, then Buyer's obligation Co 5'
close IS conditioned upon Buyer accepling a wntten commitment for financing Buyer will not reject those terms of a commitment which provide for :..~
a Inan ilnlOlJnl of at least percent ( 7'5 '!o) of the purc11ase price, Interest nottc exceed _________. 5t
f'",c"nl \ 7,2 %) per annum, a payment schedule calling for monthly payments amortized over not less Chan (------.lLL-) 5,'
YCiJI S, "nd total pliJcernent rees and points not more than percenl (--L- '!O) of the lOan amounl Bllyer shalll11ake immediate ~Jfj
application fOl said commitment, pay required costs amI make a good faith effort to procure such financing. This Agreement shall terminate and ~9
Buyer shall receive a refund of the earnest money unless Buyer gives Seller wfllIen notice thatlhls condition is satisfied or waiVed on or tefore 50
( ) days (60 days, if not completed) following mutual acceptance of this Agreement. 51
b, Assumption of Existing Financing. If payment of the purchase price Includes Buyer's assumption of a note and mortgage or deed of trust. or 52
a reai estate contract, Seller shall promptly deliver to Buyer a COpy of the underlying debt Instrument(s) to be assumed, and Buyer shall be deem- 63
ed to have approved all Of the terms of the debt instrument(s) unless Buyer gives notice of disapproval within five (5) days after receiVing such Instru- 64
menl(s) If any Of the debt instrument(s) requires the consent of a third party to the assumption by Buyer, then Buyer shall apply for such consent 65
within seven (7) days after receiving the debt instrument(s). Upon Buyer's request, Seller shall assist Buyer by requesting the third party's consent Uti
to the assumption on Buyer's behalf. This Agreement shalitermlnate and Buyer shall receive a refund of the earnest money unless Buyer gives 67
Seller wrillen notice within ( ) days (30 days, If not completed) of receiving the debt instrument(s) stating 58
that such consent is available. Buyer shall pay any assumption fees or other out-of-pocket expenses attributable to the assumption of the under- 69
lying Indebtedness, 70
c. Seller Financing. If Seller is financing a portion of the purchase price by promissory note and deed of trust, unless different forms are allach- 71
ed to this Agreement, Buyer shall execute and submit to the ClOSing Agent: (I) LPB Form No. 26A Promissory Note and the DUE ON SALE and 72
COMMERCIAL PROPERTY optional clauses in that form shall apply; (Ii) UCC-1 Financing Statement covering the personal property described in 73
Section 14 below; (ill) LPB Form No. 20 Short Form Deed of Trust; and (Iv) CBA Form No. DTR Deed of Trust Rider, The promissory note shall 74
bear interest at the rate of ____ % per annum, and shall be payable as follows (choose onel= [J monthly Installments of interest only, 75
[J monthly installments of , [J equal monthly installments of principal and interest in an amount sufficient to fully amortize 76
the outstanding principal balance at the stated interest rate over years, 77
IJ other 76
Payments shall commence on the first day of the first month after closing and shall continue on the same day of each succeeding month until 79
(choose one): [J months from the date of closing. 0 other. 80
on which date all outstanding principal and interest shall be due. The principal shall, at Seller's option, bear interest at the rate of 61
% per annum (18% or the maximum rate allowed by law, whichever Is less, If not filled In) during any period of Buyer'S default. If Seller receives any 82
monthly payment more than days (15 days if not filled in) after its due date, then a late payment charge of 83
I % of the delinquent amount (5% of the delinquent amount if not filled In) shall be added to the scheduled payment. Buyer shall have 84
- days (5 days If not filled in) after written notice to cure a default before Seller may declare all outstanding sums to be imme- 85
diatery due and payable. 86
(Note to Buyer and Seller: If the Property is currently used primarily for agricultural purposes, then a nonjudicial foreclosureltorfeiture remedy is 67
available to Seller only by using a real estate contract and Is not available wilh a deed of trust.) 88
d. Section 1031 like-Kind Exchange. If either Buyer or Seller Intends for this transaction to be a part of a Section 1031 like-kind exchange. 69
then the other party agrees to cooperate in the complellon of the like-kind exchange so long as the cooperating party Incurs no additional liability 90
in doing so, and so long as any expenses (including attorney's fees and costs) incurred by the cooperating party that are related only to the ex- 91
change are paid or reimbursed to the cooperating party at or prior to closing. 92
6. INSPECTION CONTINGENCY. This Agreement shall terminate and Buyer shall receive a refund of the earnest money unless Buyer gives written
notice to Seller within 30 days (20 days If nol filled In) of mutual acceptance of this Agreement stating that
Buyer is satisfied, in Buyer's reasonable discretion, concerning all aspects of the Property, including withoutlimitalion, its physical condition; the
presence of or absence of any hazardous substances; the contracts and leases affecting the property; the potential financial performance of the
Property; the availability of government permits and approvals; and the feasibility of the Property for Buyer's intended purpose. If such notice Is
timely given, the inspection contingencies stated in this Section 5 shall be deemed to be satisfied.
a, Books, Records, Leases, Agreements. Seller shall make available for Inspection by Buyer and Its agents as soon as possible but no later
than ten (10) days after mutual acceptance of this Agreement all documents available to Selier relating to the ownership, operation, renovation or
development of Ihe Properly, including without limitation: slatements for real estate taxes, assessments, and ulllilles; property management
agreements, service contracts, and agreements with professionals or consultants entered into by the Seller Or any predecessor 10 tllle to the
Seller: leases of personal property or fixtures; leases or other agreements relating to occupancy of all or a portion of the Property and a schedule
of tenants, rents. and deposits; plans, specifications, permits. applicalions, drawings, surveys, studies and maintenance records; and accounting
records and audit reports Buyer shall determine within the contingency period slated in the preceding introductory paragraph whether it wishes
and is able to assume, as of closing. aff of the foregOing leases, contracts, and agreements which have terms extending beyond clOSing. Buyer
shall be solely responsible for obtaining any required consents to such assumption. Seller shall transfer the leases, contracts and agreements as
proVided in Section 17 of ttlis Agreement
b. Access. Seller shall permit Buyer and its anents, at Buyer's sole expense and risk, 10 enter the Property at reasonable times after legal
notice to tenants, 10 conduct inspections concerning the Property and improvements, including without limitation. the structural condition Of
improvements, hazardous materials (limited 10 a Phase I audit only), pest infestation, soil condilions, senSitive areas, wellands, or other matters
affecting the feaSibility of Ihe Property for Buyer's intended use, Buyer shall schedule any entry onto the Property with Seller In advance Buyer
shilll not perform any invasive testing or r.onlaelthe tenants wlthOlJt obtaining the Seller's prior written consent, which shall not be UI~reasonably
Withheld. 13uyor sholl restore the Property and improvements 10 Ihe same condition they were in pnor to inspection. l:Juyer agrees to mdf!/Ilnlfy
<Jnd defend Seller from all liens, costs. claims, <lnd expenses, including attorneys' una ~rts' fees/I~ing fr~m or rela. tir~_t.o e. ntf./,Y onlo Of
INITI.A.Ui [iuyor - ~ Dale S-(~ 07 Seller: ~~ Date: ~.~l{f42--__
8uyer -f A 0.- Oate S:(l,-;J...,I 07 Seller: [jate:
93
94
95
96
97
96
99
100
101
102
103
104
105
106
107
108
10l!
110
111
112
113
114
115
116
117
NWMLS ['Vim 24
CllA ferm 1',;,tA
Pur<".hase " S;]le ,\greernent
I,ev '2199
hlgc 3016
COMMERCIAL AND INVESTMENT REAL ESTATE
PURCHASE AND SALE AGREEMENT
(CONTINUED)
<P COPYright 19;19
Comrnercial 8r(lkers A!;SOClJtln
All Ri[jhls f<f!sp.rved
Inspf!clinn of the Property by Buyer and ils agents 'Ihis agreemenllo indemnify and defend Seller shall survive c!osing Buyer nJay CcnlinLJc 10 11:
enter the P,operly and interview tenants in accordance with Ine foregoing terms and conditions after removal 01 sillisfi:lctiun uf tile Il1spectirJII ; I;
cOlltingency ollly for Ihe purpose of re-sale. leasing or to satisfy conditions of financing, ,2\,
6, TITLE INSURANCE, 12'
a, Title Report, Seller authorizes Lender and listing Agent. Selling Licensee or Closing Agent, at Seller's e~pense. 10 apply for and doliver to 12,
Buyer a71 standard e~tended (standard. if not com pIe led) coverage owner's policy of tille insurance If an e~tended coverage ownor's pOlicy is 12::
specified''- 'Buyer shall pay the increased costs associated with that policy including the e~cess premium over that cl1arged for a standard 124
policy, and the cost of any survey required by the title, insurer, The tille report shall be issued by Pa\.i t-~~w6st Title M------ ~ ~5
126
b. Permitted Exceptions. Buyer shall notify Selier of any objectionable matters in the title commitment or any supplemenlal report within len (10) ~ 27
days after receipt of such commitment or supplement. This Agreement shall terminate and Buyer shall receive a refund of the earnest money, less 128
any costs advanced or committed for Buyer. unless (i) within ten (10) days of Buyer's notice of such objections, Seller agrees to remove all ob- 1 i9
jectionable provisions. or (ii) within fifteen (15) days after Buyer's notice of such objections, Buyer notifies Seller in writing that It waives any objec- 130
tions which Seller does not agree to remove, The closing date shall be extended to the extent necessary to permit time for these notices Those 131
provisions not objected to or for which Buyer waived its objections shall be referred to collectively as the "Permitted Exceptions' The title policy 132
shall contain no exceptions other than the General Exclusions and E~ceptions common to such form of policy and the Permitted E~ceplions, 133
7. CLOSING OF SALE. This sale shall be clo on or before 07/31/2007 ("closing") by 134
("Closing Agent"), Buyer and Seller will. immediately on 135
~)> demand, deposit with Closing Agent in ruments and monies required to complete the purchase in accordance with this Agreement, "Closing" 136
shall be deemed to have occurred when all documents are recorded and the sale proceeds are available to Seller. Time is of the essence in the 137
performance of Ihls Agreement. 138
8. CLOSING COSTS. Seller shall pay the excise tax and premium for the owner's standard coverage title policy Seller and Buyer shall each pay 139
one-half of the escrow fees Real and personal property laxes and assessments payable in the year of Closing; rents on any existing tenancies; 140
interest; mortgage reserves; utilities; and other operating e~penses shall be pro-rated as of closing, Buyer shall pay all costs of financing 141
including the premium for Ihe lender's title policy, Security, cleaning, and any other unearned deposits on tenancies, and remaining mortgage or 142
other reserves shall be assigned to Buyer at closing, The real estale commission is due on closing or upon Seller's defaull under this Agreement. 143
whichever occurs first. and neither the amount nor due date thereof can be changed without Listing Agent's written consent. 144
a. Unpaid Utility Charges. Buyer and Seller [J WAIVE 0 DO NOT WAIVE the right to have the Closing Agent disburse closing funds 145
necessary to satisfy unpaid utility charges affecting the Properly pursuant to RCW 60.80. If "do not waive" is checked, then attach CBA Form UA 146
("Utility Charges" Addendum). If neither box Is checked, then the "do not waive" option applies, 147
9. POST-CLOSING ADJUSTMENTS, COLLECTIONS, AND PAYMENTS. After closing, Buyer and Seller shall reconcile the actual amount of reve- 148
nues or liabilities upon receipt or payment thereof to the extent those Items were prorated or credited at closing based upon eslimales, Any bills 149
or Invoices received by Buyer after closing which relate to services rendered or goods delivered to the Seller or the Property prior 10 closing shall 150
be paid by Seller upon presentation of such bill or Invoice. AI Buyer's option, Buyer may pay such bill or Invoice and be reimbursed Ihe amount 151
paid plus interest at the rate of 12% per annum beginning fifteen (15) days from the date of Buyer's wrlllen demand to Seller for reimbursement 152
until such reimbursement is made, Rents collected from each tenant after clOSing shall be applied first to rentals due most recently from such 153
tenant for the period after closing. and the balance shall be applied for the benefit of Seller for delinquent rentals owed for a period prior to closing, 154
The amounts applied for the benefit of Seller shall be turned over by Buyer to Seller promptly after receipt. 155
10. OPERATIONS PRIOR TO CLOSING. Prior to closing, Seller shall continue to operate the Property in the ordinary course of its business and 156
maintain the Property in the same or better condition Ihan as existing on the date of mutual acceptance of this Agreement, but shall not be 157
required to repair material damage from casualty except as otherwise provide In this Agreement. Seller shall nol enter into or modify existing renlal 158
agreements or leases (except that Seller may modify or terminate residential renlal agreements or leases in the ordinary course of ils business). 159
service contracls. or other agreements affecting the Property which have terms extending beyond Closing without first obtaining Buyer's consent, 160
which shall not be unreasonably withheld, 1I11
11. POSSESSION. Buyer shall be entitled to possession. subject to e~istlng tenancies (if any). f?J on closing [J 162
(on closing, ir not completed), 163
12. SELLER'S REPRESENTATIONS AND WARRANTIES. Seller represents and warrants to Buyer that, to the best of Seller's knowledge. nach of the 164
following is true as of the date hereof and shall be true as of closing: (a) Seller is authorized to enter into the Agreement. to sell the Property, and 165
to perform its obligations under the Agreement; (b) All books, records, leases, agreements and other ilems delivered to Buyer pursuant to thiS 166
Agreement are accurate and complete; (c) The Property and the business conducted thereon comply with all applicable laws. ,egulations, codes 167
iJnd ordinances; (d) Seller has all certificates of occupancy, permits. and other governmental consents necessary to own and operate the Property 1 GIl
lor its current use; (el There is no pending or threatened liligatlon which would adversely affect the Property or Buyer's ownerShip Ihereof after 1 tir!
closing; (f1 There are no covenants, condilions, restriclions, or contractual obligations or Seller which will adversely affect Buyer's ownership of the 170
Property after closing or prevent Seller from performing its obligations under the Agreement, e~cepl as disclosed in the preliminary corllmitmenl for 171
filii; insllrance or as otherWise disclosed to Buyer In wrrting prior to the end of Ihe inspecting contingency stated in Section 5 above; (g) There IS l1u 172
pending or Ihreatened condemnation or similar proceedings atfecling the Property, and except as otherwise dlsclcsed in the preliminary 173
commitment for title insurance as or otherwise disclosed to Buyer in wriling prior to closing, the Property is not within the boundaries of any 1/4
planned or iJuthorrzed local Improvement district; (h) Seller has paid (e~cept 10 the e~telll prorated at closieg) all local, stale dnd fede,al tJxns 175
lather nlan real and personal plOperly ta~es and assessmenls described in Seclion II above) attributable to the period prior 10 closin(l which, If lIet liD
Pilir1, cc;uld conslltute a lien on Prcperty (including any personal property), or for which Buyer milY be held liable after closing, and (i) Seller 1 n
IV,wants that thero iJle no pelldll1g or Ituealened notices of vlolahon of blJlhll11!J. zonll1~o~nd use r.odefi applicable to thp. Property dnd (Jl Seller f78
INiTIAl S fltlYcr k- - Date <s/:p---/O 7 Seller ~_ _______ [}ate 5~ tLtJ.I_____,_ 1'i!i
Buyer ____ Date S-/J.l..jo7 Seller Date 1110
( , -- -'- -----
NWMLS Form 24
CBA Form PS.1A
Purchase & Sale A.\Jreernent
Rev 12/99
Page 4 016
COMMERCIAL AND INVESTMENT REAL ESTATE
PURCHASE AND SALE AGREEMENT
(CONTINUED)
<C Copyright1999
Commercial Brokers Association
All Rights Resefiled
15 not aware 01 any concealed material delects In the Property except:
181
182
183
184
Seller makes no representations or warranties regarding the Property other than those specified in this Agreement, Buyer otherwise takes the
Property' AS IS: and Buyer shall otherwise rely on its own pre-closing inspections and Investigations.
13. HAZARDOUS SUBSTANCES. Except as disclosed to or known by Buyer prior to the satisfaction or waiver of the inspection contingency steted 165
in Section 5 above, Seller represents and warrants to Buyer that, to the best of lis knowledge: (I) there are no Hazardous Substances (as defined 186
belOW) currently located In, on, or under the Property In a manner or quantity that presently vlolales any Environmental Law (es defined below); (ii) 187
there are no underground storage tanks located on the Property; and (III) there Is no pending or threatened investigation or remedial action by any 188
governmental agency regarding the release of Hazardous Substances or the violation of Envlronmenlal Law at the Property. As used herein. the 189
term "Hazardous Substences" shall mean any substance or material now or hereefter defined or regulated as a hazardous substance, hazardous 190
weste, toxic substance, pollutant, or contaminant under any federal, slate, or local law, regulation, or ordinance governing any substance that 191
could cause actual or suspected harm to human health or Ihe environment C'Envlronmental Law"). The term "Hazardous Substances" specifically 192
includes, bul is not limited to, petroleum, petrOleum by-products, and asbestos. 193
14, PERSONAL PROPERTY. 194
a. This sale includes all right, title and interest of Seller to the following tangible personal property: 0 None [lJ That portion of the personal 195
property located on and used In connection with the Properly, which Seller will itemize in an Addendum to be aUached to this Agreement within 196
ten (10) days of mutual acceptance (None, if not completed). The value assigned to the personal property shall be the amount agreed upon by the 197
parties and, If they cannot agree, the County-assessed value If available, and if not available, the fair market value determined by an appraiser 198
selected by the listing Agent and Selling licensee. Seiler warrants tltte to, but not the condition of, the personal property and shall convey It by 199
bill of sale. Buyer shall pay any sales or use tax arising from the transfer of the personal property. 200
b, In addition to the leases, contracts and agreements assumed by Buyer pursuant to Section Sa above, this sale Includes all right, litle and Int- 201
erest of Seller to the following intangible property now or hereafter exisling with respect to the Property Including withoutllmitalion: all rights-of- 202
way, rights of Ingress or egress or other interests In, on, or 10, any land, highway, street, road, or avenue, open or proposed, in, on, or across, in 203
front of, abutting or adjoining the Property; all rights to utilities serving the Property; all drawings, plans, specifications and other architectural or 204
engineering work product; all governmental permits, certificates, licenses, authorizations and approvals; all utility, security and other deposits and 205
reserve accounts made as security for the fulfillment of any of Seller's obligations; any name of or telephone numbers for the Property and related 206
trademarks, service marks or trade dress; and guaranties, warranties or other assurances of performance received. 207
15. CONDEMNATION AND CASUAL TV. Buyer may 'ermlnate this Agreement and obtain a refund of the earnest money, less any costs advanced 208
or commiUed for Buyer, If Improvements on the Property are destroyed or materially damaged by casualty before closing, or if condemnation pro- 209
ceedings are commenced against all or a portion of the Property before closing. 210
16_ FIRPTA" TAX WITHHOLDING AT CLOSING. Closing Agent is Instructed to prepare a certification (CBA or NWMLS Form 22E, or equivalent) that 211
Seller Is not a "foreign person" within the meaning of the Foreign Investment in Real Property Tax Act. Seller agrees to sign this certification. If 212
Seller is e foreign person, and this transaction is not otherwise exempt from FIRPTA, ClOSing Agent Is Instructed to withhold and pay the required 2t3
amount to Ihe Internal Revenue Service. 214
17 . CONVEYANCE. Title shall be conveyed by a Statutory Warranty Deed subject only to the Permitted Exceptions. If this Agreement Is for convey- 215
ance of Seller's vendee's Interest In a Real Estate Contract, the Statutory Warranty Deed shall include a contract vendee's assignment sufficient 216
to convey after acquired title. At closing, Seller and Buyer shall execute and deliver to Closing Agent CBA Form No. PSoAS Assignment and 217
Assumption Agreement transferring all leases, contrac.s and agreements assumed by Buyer pursuant to Section Sa and all intangible property 218
transferred pursuant to Section 14b. 219
18. SEATTLE REQUIREMENTS. If the Property Is In the City of Seattle, Seller shall deliver to Buyer a Certificate of Land Use and Local Assessments 220
(not applicable to single family dwellings not represented to be a lawful site for more than one dwelling unit). 221
19_ NOTICES AND COMPUTATION OF TIME. Unless otherwise specified, any notice required or permitted In, or related to, this Agreement (Including 222
revocations of offers and counteroffers) must be in writing. Notices to Seller must be signed by at least one Buyer and must be delivered to Seller 223
and Listing Agent. A notice to Seller shall be deemed delivered only when received by Seller, Listing Agent, or the licensed office 01 Listing Agent. 224
Notices to Buyer must be signed by at least one Seller and must be delivered to Buyer and Selling Licensee. A notice to Buyer shall be deemed 225
delivered only when received by Buyer, Selling Licensee, or the licensed office of Selling Licensee. Selling Licensee and Listing Agent have no 226
responsibility to advise of receipt of a notice beyond either phoning the party or causing a copy of the notice to be delivered to the party's address 227
on this Agreement. Buyer and Seller must keep Selling Licensee and Listing Agent advised of their whereabouts to receive prompt notification of 228
receipt of a notice. 229
Unless otherwise specified in this Agreement, any period of time in this Agreement shall begin the day after the event starting the period and shall 230
expire at 5:00 pm Pacific time of the last calendar day of the specified period of time. If the lasl day Is a Saturday, Sunday or legal holiday as 231
defined in RCW 1 16.050. the specified period of time shall expire on the next day that is not a Saturday, Sunday or legal holiday Any speCified 232
period uf five (5) days or less shall not include Saturdays, Sundays or legal holidays. 233
INITIALS: Buyer: __c;'" Date: -~-/..!!:l---- Seller: f:}{ Date: 5/~rk- 234
Buyer: -fJXJt\ Date: -::r:~).-/a7 Seller: Date: 235
NWMLS Form 24
eRA Form PS-1A
Purchase & Sale Agreement
Rev 12/99
Page 5 of 6
COMMERCIAL AND INVESTMENT REAL ESTATE
PURCHASE AND SALE AGREEMENT
(CONTINUED)
'0 Copyright 1999
Commercial Brokers Association
All Righls Reserved
20. AGENCY DISCLOSURE. AI the signing of this Agreement,
Selling licensee Global R.E. Express
(Insert names of Licensee and the Company name as licensed)
236
237
238
represented
Buver
(Insert Seller, Buyer, both Seller and Buyer or Neither Seller nor Buyer)
239
240
and the Listing Agenl Reid Real Estate
(Insert names of Licensee and the Company name as licensed)
241
242
represented
Seller
(Insert Seller, Buyer, both Seller and Buyer or Neither Seller nor Buyer)
243
244
If Selling Licensee and Lisllng Agenl are different salespersons affiliated with the same Broker, then Seller end Buyer confirm their consent to
Broker acting as a dual agent. If Selling Licensee and Listing Agent are the same person representing both parties, then Seller and Buyer
confirm their consent to that person and his/her Broker acting as dual agents. If Selling Licensee, listing Agent, or their Broker are dual agents,
then Seller and Buyer consent to Selling Licensee, listing Agent and their Broker being compensated based on a percentage of the purchase
price or as otherwise disclosed on an attached addendum. In addition, Seller and Buyer hereby consent to Listing Broker or Selling Broker
receiving compensalion from more than one party. Buyer and Seller confirm receipt of the pamphlet entitled "The law of Real Estate Agency."
245
246
247
248
249
250
21. ASSIGNMENT. Buyer 0 may 0 may not (may not, If not completed) assign this Agreement, or Buyer's rights hereunder, without Seller's prior 251
wrillen consent, unless provided otherwise herein. 252
22. DEFAULT AND ATTORNEY'S FEE. In the event Buyer fails, without legal excuse, to complete the purchase of the Property, then (check one):
IZJ that portion of the earnest money which does not exceed five percent (5%) of the purchase price shall be kept by Seller as liquidated damages
(subject to Seller's obligation to pay certain costs or a commission. if any) as the sole and exclusive remedy available to Seller for such
failure; or
o Seller may, at its option, (a) keep the earnest money as liquidated damages (subject to Seller's obligation to pay certain costs or a commis-
sion, if any) as the sole and exclusive remedy available to Seller for such failure, (b) bring sull against Buyer for Seller's actual damages. (c)
bring suit to specifically enforce this Agreement and recover any incidental damages, or (d) pursue any other rights or remedies available at
law or equity.
If Buyer or Seller institutes suit concerning this Agreement, the prevailing party is entitled to reasonable attorneys' fees'and expenses. In the
event of trial, the amount of the attorney's fee shall be fixed by the court. The venue of any suit shall be the county in which the Property is
located. and this Agreement shall be governed by the laws of the state where the Property is located.
253
254
255
256
257
258
259
260
261
262
263
23. MISCELLANEOUS PROVISIONS.
s. Complete Agreement. The Agreement and any addenda and exhibits to it state the entire understanding of Buyer and Seller regarding the
sale of the Property. There are no verbal or written agreements which modify or affect the Agreement.
b. No Merger. The terms of the Agreement shall not merge in the deed or other conveyance instrument transferring the Property to Buyer at
closing. The terms of this Agreement shall survive closing.
c. Counterpart Signatures. The Agreement may be signed in counterpart, each signed counterpart shall be deemed an original, and all
counterparts together shall constitute one and the same agreement.
d. Facsimile and E-mail Transmission. Facsimile transmission of any signed original document, and retransmission of any signed facsimile
transmission, shall be the same as delivery of an original. At the request of either party, or the Closing Agent, the parties will confirm
facsimile transmitted signatures by signing an original document. E-mail transmission of any document or notice shall not be effective unless
the parties to the Agreement otherwise agree In writing.
264
265
266
267
268
269
270
271
272
273
274
24. ACCEPTANCE; COUNTEROFFERS. Seller has until midnight of 06/] 3/2007
not filled in, the third business day following the last Buyer signature date below) to acceplthis offer, unless sooner withdrawn. If this offer is not
timely accepted, it shall lapse and the earnest money shall be refunded to Buyer. If either party makes a future counteroffer, the other party shall
have until 500 p.m. on the business day (if not filled in, the second business day) following its receipt to accept the
counteroffer, unless sooner withdrawn. If the counteroffer is notlimely accepted or countered, this Agreement shall lapse and the earnest money
shall be refunded to the Buyer. No acceptance, offer or counteroffer from the Buyer is effective until a signed copy is received by the Seller. the
Listing Agent or the licensed office of the Listing Agent No acceptance, offer or counteroffer from the Seller Is effective until a signed copy is
received by the Buyer, the Selling Licensee or the licensed office of the Selling Licensee.
(if 275
276
277
278
279
280
281
282
25. INFORMATION TRANSFER. In the event this Agreement Is terminated. Buyer agrees to deliver to Seller within ten (10) days of Seller's wrllten reo 283
quest copies of all materials received from Seller and any plans, studies, reports, inspections, appraisals, surveys, drawings. permits. application 284
or other development work product relating to the Property in Buyer's possession or control as of the dale this Agreement is terminated. 285
INITIALS:
',yo< -~~ DOl' 1;~~o;
Buyer: ~ Date: ~ 0
Seller:
bf
Date:
.~ b '14?
,
286
Seller:
Date:
287
-.."-.---------.-.----"-.--.-~'"-- -.--.. -'-. -- -__.___._____.u
NWMLS Form 24
CBA Form PS.1A
Purchase & Sale Agreement
Rev. 12/99
Page 6 of 6
COMMERCIAL AND INVESTMENT REAL ESTATE
PURCHASE AND SALE AGREEMENT
(CONTINUED)
Il:J Copyright 1999
Commercial Brokers Association
All Rights Reserved
28. CONFIDENTIALITY. Until and unless closing has been consummated, Buyer will treat alllnformallon obtained In connection with 288
the negotiation and performance of this Agreement as confidential (except for any Information that Buyer is required by law to dls. 289
close and then only after giving Seller written notice at least three (3) days prior to the disclosure) and will not use or knowin\lly 290
permitlhe use of any confidential information in any manner detrimental to Seller. 291
27. SELLER'S ACCEPTANCE AND BROKERAGE AGREEMENT. Seller agrees to sell the Property on the terms and conditions here-292
in, and further agrees to pay a commission in a total amount computed in accordance with the listing agreement. If there is no 293
written listing agreement, Seiler agrees to pay a commission of 2.75 % of the sales price or 294
. The commission shall be apportioned between Listing Agent and Selling licensee as specified in 295
the listing agreement or any co.brokerage agreement. Seller assigns 10 Listing Agent and Selling Licensee a portion of the sales 296
proceeds equal to the commission. If the earnest money Is retained as liquidated damages, any costs advanced or committed by 297
Listing Agent or Selling Licensee for Buyer or Seller shall be reimbursed or paid therefrom. and the balance shall be paid one. half 298
to Seller and one-half to Listing Agent and Selling Licensee according to the listing agreement and any co.brokerage agreement. 299
In any action by Listing Agent or Selling Licensee to enforce this Section, the prevailing party Is entitled to reasonable attorneys' 300
fees and expenses. Neither L1sllng Agent nor Selling Licensee are receiving compensation from more than one party to this 301
transaction unless disclosed on an attached addendum, in which case Buyer and Seller consent to such compensation. The 302
Property described In attached Exhibit A, is commercial real estate. Notwithstanding Section 26 above, the pages containing this 303
section, the parties' signatures and an attachment describing the Property may be recorded. 304
28. LISTING AGENT AND SELLING LICENSEE DISCLOSURE. EXCEPT AS OTHERWISE DISCLOSED IN WRITING TO BUYER
OR SELLER, THE SELLING LICENSEE, LISTING AGENT, AND BROKERS HAVE NOT MADE ANY REPRESENTATIONS OR
WARRANTIES CONCERNING THE LEGAL EFFECT OF THIS AGREEMENT, BUYER'S OR SELLER'S FINANCIAL STRENGTH,
OR THE PROPERTY, INCLUDING WITHOUT LIMITATION, THE PROPERTY'S ZONING, COMPLIANCE WITH APPLICABLE
LAWS (INCLUDING LAWS REGARDING ACCESSIBILITY FOR DISABLED PERSONS). OR HAZARDOUS MATERIALS.
SELLER AND BUYER ARE EACH ADVISED TO SEEK INDEPENDENT LEGAL AND TAX ADVICE ON THESE AND OTHER
~ATTERS R LATED TO nH/I~SJREEMNT'
BBuUyyeer ~ ;E.. Date s-/.u-/o 7
--- - Date ~/~/07
Office Phone 253-226-6038 Fax No. Home Phone 253-581-3331
305
306
307
308
309
310
311
312
313
MLS Office No. 4699
Fax No, 253-584-9442
314
315
316
317
318
319
320
321
Buyer's Emell Address
Print Buyer's Name Soon H. & Pyong D. An
Buyer's Address 7214 93rd Ave Lakewood W A 98498
Selling Office Global R E. Express
53-682-4032 Other Phone 253-232-9402
By
~ ~~
Seller Date
.-SsUer ]S ::7J/t. ..Ib"f,'" ?> &:1Ilil..;)ML~;-Date
Hom. P'~. -- n - O~ P..... ~e:6 Y7 3 ~~ No
Print Name Pyong D.An
SP'Y'/"7
322
323
324
325
326
Seller's Emall Address
Print Seller's Name City of Bremerton
Seller's Address
Listing Office Reid Real Estate
Office Phone 360-692-3000
MlS Office No.
327
Other Phone 360-308-2250
Fax No. 360-692-5393
328
29. BUYER'S RECEIPT. Buyer acknowledges receipt of a Seller-signed copy of this Agreement, on
329
BUYER
BUYER
330
-----.----.-.--~-.-- _._--....-~ '.'.._"_'_.__n_' ___u
NWMLS Form 34
Addendum/Amendment to P & S
Rev. 5/96
Page 1 of 1
@Copyright 1996
Northwest Multiple listing Service
ALL RIGHTS RESERVED
ADDENDUM/AMENDMENT TO PURCHASE AND SALE AGREEMENT
The following is part of the Purchase and Sale Agreement dated May 22 ~007
between Soon H & Pyong D An
and City of Bn:merton
concerning 4846 Auto Center Way Brcmerton W A 98310
("Buyer")
("Seller')
("the Property")
IT IS AGREED BETWEEN THE SELLER AND BUYER AS FOLLOWS:
LuJ
1. This offer subject to purchaser obtaining commercial loan from the bank.
-
1
1
1
1
1
1
1
1
1
1
2. Ruyer is W A State licensed agent.
J, )pttfi. J? J'JI) ~q-
o 121irr~,.:> C I rt1
Tn I7PPlZ/.)v~
Co t../ AJ C- Ii.. j 't
B'1
~~ ? //3/J 7
pi
,
.
,
.
~
ALL OTHER TERMS AND CONDITIONS of said Agreement remain unchanged.
AGENT (COMPANY) Global R.E. Express
BY: ~~~~
Initials: BUYER: g
BUYER: -f~ tA.
OAT: ;j::t7
OAT: "7--
SELLER: _#
SELLER:
DATE: ,;6t~l' '
DATE:
~JWMI.S r <JIm 22K
Idel1tikiltll)11 of I.lli/llies AddendlJlll
Hcv 0;03
f-'agH 1 of t
IDENTIFICATION OF UTILITIES
ADDENDUM TO PURCHASE AND SALE AGREEMENT
is} Copyrl[l111 2003
Nortl1west Mli/tiplo {Istinil Sell
All Rlgl;t~ Rc~clvcd
The following is part of the Purchase and Sale Agreement dated
between SQ!.-~!l1j. & PYQ!u02. An
Cl n d .__ __~:itb21J3 rl: rn c rt 0 n
concerning-.iBJ~_Al~L~_Centcr W1!LBremcrton W ^ 98310
[\'1<1)' ::?2 ]007
___1"811'/8
("Selle
__________.Ithe "Propert)
Pursuant to RCW 60.80, Buyer and Seller request the Closing Agent to administer the disbursement of closing funds
necessary to satisfy unpaid utility charges affecting the Property, The names and addresses of all utilities providing servicE
to the Property and having lien rights are as follows
WA TER DISTRICT: Listing Agent completes/Buver agent kaves blank
Name
Addres!
CIty, State, Zip
SEWER DISTRICT
Name
Address
IRRIGATION DISTRICT:
City, Slat., Zip
Name
Address
City, State, Zip
GARBAGE:
Name
Addres.
City, Slate, lip
ELECTRICITY:
Name
Addr...
City, Slat., Zip
GAS:
Name
Address
City, Slate, Zip
SPECIAL DISTRICT(S):
(local improvement districts or utility local improvement districts)
.Name
Address
City, Slat.: lip
If the above information has not been filled in at the time of mutual acceptance of this Agreement, then (1) within
days (5 if not fjlled in) of mutual acceptance of this Agreement, Seller shall provide the Listing Agent or Selling Licensee
with the names and addresses of all utility providers having lien rights affecting the Property and (2) Buyer and Seller
authorize Listing Agent or Selling Licensee to insert into this Addendum the names and addresses of the utility providers
identified by Seller
Nothing in this Addendum shall be construed to diminish or alter the Seller's obligation to pay all utility charges (including
unbilled charges). Buyer understands that the Listing Agent and Selling Licensee are not responsible for, or to insure
payment of, Seller's utility charges
Initials BUY~R ___.'~"
BUYER ~ ,,_
DATE: S(l-~ 07
DA TE C;;:-I ~/Q-:t-
SELLER
SELLER:
~
DA TE~~!?:J62_
DATE:
HI II:) ;:IIUi Ii: III F.U :J60 69.~ 95iij LTC (TSrOHER SVC
ex t, I h / T (1/ '
:\'letroScan FuH Legal APN:3745 000 001 00
::IJ--ui)i) 1,'.)'('-')0: D-l),j T:-L:"T ?-::-,! Of SEe 21 cr-,r;'u BY 'l(lL 69~/:<~3 !;
"32"12 & 'i-'i2,dji) D.t.E', E-.r...AP ON TH::: !J BDRY Of ;:"FS~l';,~ \.u~y ~.n-! 27 Is S
'0~.39fT & W 444.Q~fT fR THE NE COR Of SEe 21 TH A:G THE N EDRY OF
.:,FSE:~-r;'.L \J.;Y I1c9~27'::::O!'; 24S.97FT?H N6o'- 11'2CJ\'J 68S.;7FT TO THE '-':;'C.B
':H N23"HI' .JOE 200.45lT TH li66"oa'50vl 95.93FT TO THE 3ELY HGN OF
SEARLE S1' ?H S\'lLY 160.58 FT F.LG THE SLY t--!GN OF SE.~RljE 5T TC 'rHJ;; ;\ OF
S&~~L::: 51' 1: A?SEN.l\L tV?! TH SELl' ALG THE !ELY HG11 OF ?l~.SEN.::U !'I!\Y
S:J.IF26' 20E 97 .12FT I'H Sc0146109E 34 .42FT TO THE TPC3 SUBJ TO ESHTS
.:)F PEe TGI-l THAT Plll Of LOT 1 PLi\T OF FERl-HVOOD IN THE NEll'1 NEl/ 4 O.~F,
3.'".J\.P ON THE N BDRY OF ARSEnAL WAY r'm PT IS S 703.39FT &. W 444. ()6FT
FR THE HE COR oJ F 5 EC 21 TH ALG THE N BDRY OF .ll..RS ENAL l'iAY N 6 '9 * 27 ' 2ljr'j
2..]5.97 !:-T TH ?166*11 '201'1 688.27FT TI1 N23+t18'40E 200.45FT TH N66....06'50H
95.98FT 1'0 SELY MGN OF SEARLE: ST BEING THE TPOB 'ra NLY ALG SE.l\F,LE 5T
100FT TH S66*06'50E 170FT FR THE TPOB TH N66-r1)8'50w 170FT 'I'O TH.E TP05
ALSO THAT PTH OF LO'TS 22 ~ 23 PLAT OF FERNtvOOD IN THE NE1/4 HEl/1
DAF, BAAP ON THE N BDRY OF ARSENAL WAY tm PT IS S 703.39FT II. W
-144.06FT FR THE NE COR OF THE NE1/4 NEl/4 SEe 21 TH N ALG N BDRY OF
ARSENAL WAY N69*27'20W 24S.97FT TH N66*1l'20W S88.27FT TO THE TPOB TH
CONT N66*11'20W 100FT TH N23*48'40E 200.4SFT TH S66*08'50E 100FT MIL
TAP N23*48'40E 200FT MIL FR THE TPOB TH S23-r48'40W 200FT MIL to THE
TPOB
rSlAy.etr
Se~J-
~
@00.1
#j {",'I b1
DATE SUBMITTED: May 14,2007
BILL # --'21~J:L____
AGENDA BILL
CITY OF BREMERTON
CITY COUNCIL
'A
.........................................................................................
SUBJECT: Hiring Court Services Manager
at Band 15 Rate 6
Committee Meeting Date:
COUNCIL MEETING Date:
Department:
Presenter:
Phone:
SUMMARY: TeIma Hauth has been selected as the Court Services Manager fI the Bremerton
Municipal Court. Ms. Hauth has 26 years experience as a professional judici employee and is the
current president of the Washington State Municipal/District Court Manag lent Association. She
has been the Bainbridge Island Court Administrator for 13 years. Her e ertise with municipal courts
is extensive and the Court believes it is appropriate to hire Ms. Hauth ove Rate 1 in Pay Band 15.
The Court is requesting City Council approval pursuant to BMC 2.5 .032(a) to hire Ms. Hauth at
Band 15 Rate 6. Additionally, Ms. Hauth has requested a six-mo severance package in the event
her job is eliminated within the next six years due to the dissolu . n of the Municipal Court and that
she receive 20 days vacation per year upon initial hire.
:r+W'\Pu.\\~J
A TT ACHMENTS:
FISCAL IMP ACTS (Include Budgeted Amoun
position.
The 2007 budget is sufficient to fund this
APPROVALS:
DEPARTMENT DIRECTOR:
CITY ATTORNEY:
FINANCE DIRECTOR:
MA YOR:
COMMITTEE CHAIR
COUNCIL PRESIDENT:
M1#/f p7'
CONSENT AGENDA D
GENERAL BUSINESS ~
PUBLIC HEARING D
RECOMMENDED lOTION:
Move:
1.
2.
to app ye the hiring of the Court Services Manager at Band 15, Rate 6 pursuant to BMC
2.50 32(a);
to a Ithorize a six-month severance package in the event the position is climinated within
the next six years due to the dissolution of the Municipal Court; and
to authorize 20 days vacation per year upon hire.
3.
COUNCIL ACTION: D Approve D Deny D Table
D Continue D No Action
Telma Hauth
Objective
Profile
Position as Court Service Manager for a larger court.
o 2Ci years experience as professional judiCIal employee.
o i\bility to direct complex projects from concept to fully operational status.
o Goal-oriented individual \"i.th strong leadership/ management capabilities.
o Highly motivated, and detail. directed problem solver.
o Proven ability to work in unison \\i.th staff, judge, other departments, city council and mayor.
Institute of Court Management, National Center of State Courts, courses in Case-flow
i\hnagement, Budget and 1,Ianaging Financial Resource, Trial Court Performance Sta11llards,
Managing Human Resource,
Olympic College, Bremerton, WA, bookkeeping, accounting, auditing courses
North Kitsap High School, Poulsbo, WA , general education
Relevant Experience & Accomplishments
Education
Employment
Membership
Honors &
Awards
o Current president Washington State Municipal/District Court Management i\ssociation
o Court Administrator Bainbridge Island Municipal Court, 1994 to present
o Court Administrator Poulsbo Municipal Court, 2004-2006
o Certificate of Qualification - District Court Commissioner, November 1985
o Developed and balanced yearly budgets
o Managed 13 years of fmancial resources with no audit exceptions.
o Successfully established systems to streamline workflow.
Management/ Supervision
o Directed recruitment and retention of staff.
o Trained, supervised and evaluated staff, coached improvement management skills.
o Managed and developed staff into goal-oriented, cohesive group.
o Successfully refmed and implemented new projects.
Court Administrator, Bainbridge Is AJllnicipal COllrt, Bainbridge Is, Wi\.
District Court Supervisor, Kitsap County Distrid COllrt, Port Orchard, WA
Asst Operation Supervisor/ Auditor, Rainier Nat'l Bank, Poulsbo, W.-\
1994-present
1982-1994
197+-1982
\~'ashington State District and Municipal Court Management Association
National ,\ssociation of Court l\Ianagers
Kitsap County Trial Court Coordinating Council
"Excellence in Judicial Education", Board of Court Educltion,.J une 200 I
IJAIl:SUI{MlI'THIJ: May I(], 2007 BIU~#___Q] - t<tl
AGENDA BILL
CITY OF BREMERTON /.... B
CITY COUNCIL (Q
........................................................................................
SlJBJECT: Ordinance No. 50 II
authorizing the issuance of water and sewer
refunding and revenue bonds in the principal
amount of $5,175,000
Committee Meeting Dale:
COUNCIL MEETING Date:
Department:
Presen ter:
Phone:
5/n/2007
6/6/2007
Financial Services
Laura Lyon
473-5722
SUMMARY: The City's wastewater utility system requires a bond issue to finance the sewer system
expansion project to Southwest Bremerton. In addition, the City desires to refund and retire the
currently outstanding 1994 Water and Sewer Revenue Bonds maturing on September 1,2007 with
principal amount of $2,655,000 outstanding, and the 2005 ULID Revenue Bond which has a final
maturity of September I, 2015 and with the principal amount of $365,928 outstanding. In order to
finapce these City capital improvements of the water and sewer utilities and to refund -the and retire
the \1994 and 2005 revenue bonds outstanding, the Director of Financial Services is recommending
that the City Council issue a water and sewer revenue and refunding bond with a lien on the revenues
of the combined utility system. The City has received a proposal from Bank of America, N. A. to
purchase such a bond and on terms and conditions that are acceptable to the Director of Financial
Services and is now recommended for approval by the City Council.
ATTACHMENTS: Explanatory Memo and Ordinance No. 5011
FISCAL IMPACTS (Include Budgeted Amount): The adopted 2007 budget included additional debt
for the wastewater utility for this purpose and is sufficient in amount for the issuance as finalized.
The bond issue provides net proceeds for the sewer expansion project of approximately $.w million
and provides debt service savings on the refunded bonds having a net present value of $ ~.
Interest rate on the bonds is ~ with a final maturity on 12/01121. ~"C'"
4.Z.~O/..
APPRO V ALS:
DEPARTMENT DIRECTOR:
CITY ATTORNEY:
FINANCE DIRECTOR:
MAYOR:
COMMITTEE CHAIR
COUNCIL PRESIDENT:
t~/;~
CONSENT AGENDA 0
GENERAL BUSINESS t
PUBLIC HEARING 0
/"
RECOMMENDED MOTION: Move to approve ordinance No, 50 II authorizing the issuance of a water
and sewer revenue and refunding bond in the principal amount of $5,175,000 to funcl capital improvements
and expansion of the City's water and sewer system and to defease the City's outstanding water and sewer
revenue bonds; providing the form, terms, and covenants of the Bond; and approving the sale of the Bond,
COUNCIL ACTION: ~)prove
o Deny
o Table
o Continue 0 No Action
(DB
Memorandum
To:
City Council
Mayor Cary Bozeman
From:
Laura Lyon, Director of Financial Services
Re:
Final Pricing Results and Bond Ordinance Updates for the 2007
Water and Sewer Revenue and Refunding Bond Issue
Date:
June 6, 2007
In preparation for the Council's action this evening regarding approval of the
2007 Water and Sewer Revenue and Refunding Bond issue, the rates for the
bonds and the subscription to purchase required securities for the refunding
escrow account were locked in by mid morning today (June 6, 2007) - in
accordance with the terms of the purchase offer provided by Bank of America.
This is a bank qualified bond issue with a par amount of $5.375 million. Bank of
America N.A. has presented a proposal to the City to purchase the bonds as a
direct placement purchase.
Interest Rate on the Bonds
The final rate for the bonds as locked in today is 4.28% which is an increase from
the last indicative pricing estimates (dated May 11 th) of 0.23%. Unfortunately
for the City, the Federal Reserve Chairman (Ben Bernanke) made public remarks
on June 5th regarding his continued inflation concerns - which coupled with the
European Central Bank action to raise interest rates today (also due to
inflationary concerns) - has sparked a significant jump in bond interest rates and
triggered a broad sell-off in the U.S. stock markets. Essentially, the markets
(both equity and bonds) have priced in an expectation that rates will not only
NOT be reduced any further by the Federal Reserve but may now actually be
increased before the year is ended. This can be seen in the rapid jump in the
Municipal Market Data (MMD) "A" rate scale for 15 year maturities (same as the
City's 2007 bond maturity). The MMD rate for June 6 (today) is 25 basis points
higher than on May 11 which was the date of the most recent indicative pricing
received by the City from Bank of America. The following is a recap of MMD
rates for selected dates in this recent time period:
MMD "A" rate scale -15
As of date
A ril 16, 2007
Ma 1, 2007
Ma 11, 2007
June 6, 2007
ear maturit
Rate
4.28
4.18
4.16
4.41
The initial selection of Bank of America's proposal for the bond transaction was
based upon their response to the City's request for proposals. Bank of
America's proposal was the lowest cost proposal for the City and their indicative
rates provided were competitive to those provided by other respondents to the
request. The spread of the initial indicative pricing rates to the Municipal Market
Data (MMD) "A" rate scale varied by proposal but was within a range of 13 to 22
basis points. Based on a review of other recent bond transactions at that time, it
appeared these were reasonable spreads to this municipal bond index.
The final rate proposed by Bank of America on the lock in date of June 6, 2007 is
23 basis points higher than the last indicative pricing rate of 4.05 quoted on May
11, 2007. This increase is comparable to and slightly lower than the basis point
increase of the MMD for these same two points in time.
It is the opinion of the Director of Financial Services that the rate proposed is
competitive and reasonable in relation to the current market conditions.
Final Bond Ordinance Updates
The City Council agenda bill package has been updated to include a revised
memo with the rates and bond summary statistics as finalized. In addition, the
bond ordinance has been finalized and updated from the draft previously
provided to the Council and the Finance Committee for review. The following
are the changes made to the bond ordinance from the version previously
provided to the City Council:
1. Throughout the document - brackets were removed from the principal or
par amounts ( i.e. $f5,375,000} )- as the amount is now finalized.
2. The interest rate which was previously left open (shown as a blank in the
previous draft) was changed to 4.28% in Section 3 and Section 14.
3. In Section 18, the following housekeeping language change was made to
provide better clarity;
S.:c:io:,", is
:l t1DFi'i'inon c.f Bc:"lrl n::"orp.,:d~ Th~ pI~(tH-d:. of m@ Bond ;lHlI! be :'l~!ied
as folJow';,:
(A) The i'-TJ!;o-mH ~'toQ'~1b:.r 't"ri'!n i1'j}i\iJi1bl~ G1&:.S Re'il;:lll"ll~;") ~equ:i;ed ~o re:i1:md
,h;; R"fund:a Bee::"]i shall be depe;lled illt" ,h€ R:fLilldillg AC':Q,l~l ami \I;.:d ;c.,;[{(;mp]lili l:he
refml'diu~ of eh.; Rerunc:::d. 30ll~.s iUl ac{OrdiH.1Ce t,"ith me pr~:rt:i=filn; of Secrit:m 25 of thLi
orron,illce.
4. In Section 25, the following housekeeping language change was made to
provide better clarity;
lmde, OrcrimdLce NO.445] of the CiIY. by prQi.'illillg fm ille paymewt of the prilldJX.1 of,lld
fmeresr Oil ,11e 1994 Reflmded Billlti; a i iEt fD,,!; be~Dw. The Gty iE."lJ Mf;;,,;e s11ch boCidsmd
di;clHJ~ :l1ch: o!lh:;ations by' mE ~;e of Gro~'i R~1.te:::rue;. dmm.ited intu-lt: m 011'11:" t1 tile
P,..efll!.jdiI!:~ ACC011nt ~o 5Jtn:Ch:~Ae- (,:-mit: -(io';'~m..TI!:n; Ob~ifiltiOn.i.'" iH ::11cn cbli,g?,rions !.Ct?
d:filled ill Cli~p1e, 39.53 ?-CiV a; lIOW or l~re"fl2r am;;nded (whid; e])liga,ioEi ;0 purcMsed.
a;e b:reillca!IEd ".!l.cquired Oioligationi"). b"arillo; iud, illleresl ami mowrbg as 10 prilldpal1lRd
m'!ere::.t in ,;ud!: ilffioumr; M!.d '~1t inch tim.;: whidl tag ether \tiili M:Y DeC€:.ia.:)' beginllillg (1':=11
b,.laZlce. I'oll ]fro'ride to, lh~ p~jmen; of:
(A} bt;;ml Oll ami !Jlillci~",1 of the lil94 R:flmded Bil::'G:i tiue all& pOy/.b]e
l.mli1 i:l!d OE Seprember L ]{lOi; and
(3) The red"mpl1il::' priCE (!60% of the prilldJ!ill Oil101ll1~) jlO1ywletlll
SEf;lt:1ub:r !. 2(l!)j. of ill" !994 ?-efdnded Bc::.&s.
SlKh Acquired Ob!ipnolls ;h1.lJ be !JOO{ l:.a,ed 1.1 01 }ie!1i ~1 gre.1rer mall rhe y::ld
p:lll1fne& b}' th: Code m.:! r:g;I!Miom r:lafillg [0 acqLti,ed Clbligarions ill COlll1eGW;:l vdr.ij
renmilil!:; ~ond i::,;t1~s.
The 2005 R:fl!.l1d:Q; 30nd wiE b: p,.ld ill fuE on lhe c!O;fi;; do,: of me Bend.
To ca.;;)" C'll, r.ije ref,lndii;g all.:! .;iefe?,;~.l1ce of me ] 994 Refiluded 30~ds. m;; mrec,or of
Ffua.ncfai Sef'j'ices ~~ her~by z-umoriz:d ::0 ?ip:point ?:: ~~cro':r ~lg~!lt iJ b:m!-; OJ u~;)'i (o~any
qll.aEfied by law ;0 p:rfOTIll ,he d\1UES de;uilmi h:reill (rb" ~E;iCT01'i Ag:~;'l Ai;)' b:g:illllillg
co;!; b"laoce aCid the Aripued Obligatiolls ;:hail be ar:\"Ocilbly deposiled wiill d~ E,UIlW Ag:~t
ill Olll amOlml mffiCieut [l} ~..f:1,;E the 1994 Refl.1~ded B'O::.tii. )my ,JDOUW[S describEd abol.e '.ha1
are 1I01 pro\~ded for ill fdlJ by such b"gilllJillg cash ba!m.:e 1I1ld thE pur':Mie O1nd dep"Oiir of The
)"q'.lfml Oblig0.110w; &e;crib"d ill llils ;ectlil::' sh~lI be provided fur 1fJ me L'Tevocoble d:posis of
me L:.~ ~S~iJ:Y IImOtmi om 'Of the proceeds of 5mi:! of 1he Boud or ilny o:tnE-1 mOll=Y of ::b= City
!:gaJfy ai!?jiJabl~ ~he:r=ioo l'iir.h mo: Escr,o't'," Ag-=!l~. The ~nLLi1j" Df -kJ B DEli r:mai..nfng
m the REfil~dillg AC<IEmr ofs"r,.',q.:di;fnon of lh: AcqLtired Ob!ipriom <l.J!d p,o\isior: fOI the
D~ce;iory begl:nDillo; (/I;h b~k!lCE "ILal! be mi!ized 10 p~j' E1I:pemes of r.ije ~cqlii;llio::. ?illd
s"feli:~ping of Ibe Acql1IT;:1 Obllgodoll; nmi me costs of l;suil!g the 3o~-:l. The Cfty =y. from
,im;; Sl> rime. rr~ll;fE,. or callie to be t@Ci;fmeti. frilill r.ije Ref..mdi:n:g ACCOllilS any money DOl
mere,.fIEr r;;ql;ired for me p1.U1l0;;; ,,:t forth ill mtl'il,..g,01pl;; (A} - (B} O1b01'e (iT for ilL: !l!l)1I!:~1
of e:sp:ll;E.;. The Cfry reier'i'e; the ri.;:h.l ;0 ,.w;lil\lte olber ;ecl.1lill~; fllr me .!l.cqliired
Obllgollo::.; ill rbe Evellt [I may do ;0 !JliT,\1a::'1 [0 S:crion HZ- of ,IL;; Cod;;. \lpO::' com:9li~CiCe wfth
me ((!!1dil[OCi; ;e. fo!ili b Utr. ELcroll' Ag,e;;m"n
5. Section 17 is updated with the final Bank legal fee amount as follows:
3&11aw Ii, S~l~ af ill~ Rima.. The Bond .hall ioe >'O~d 10 R~ID: of Amfficz, NA. (the
"8ank") in accoroaI:'te wiill ~t; ]Jropos'u to p'drchase 1be Bond attached a. E:(ffi"bi! A (the
"Proposal") aJld m'2 acc'2yt~I:ce of Sli.ch ]Jroposal i; he''21JY rallfied alld co"fh"1l:'2d.. The Cil}'lball
p~ i:he Bd an Ori~@tfDll fee ofnottD e~eedi S5.375.Gtij aI:d 1be B.~o;', lepl fees of$900,ClO,
up 19 a 1l::l3llii_ lIf Sl.:WQ.9~. tl]J"" the dosmg aI:d deliver)' of the Bond. Saw. of A~ei{a
Secm~ti.e, LiC sh;!)1 ilI:t as the lln1ctm',ng agal! awo, ;;hall al"TaJlge lhe pla:.e~wt of m'2 Bond
Wilh Sank of ."'-meric~, N.A. The Cit)' ih;!)1 pi!]' a f'2e of $16,875,1l0 to BaI:i: of AI!l.erica
Se,:m"itie, lle U]JO" tlIe c1otiI:g <Uld de!i'i'el}" of ill'2 Bond to Baul; of Jl...merka, N.A.
6. The last page of Appendix A "Attachment 1" was updated to reflect the
final principal repayment schedule.
7. Exhibit B was updated with the final debt service schedule.
m'!
u
. t.. 11i
".. ! '
,1
11
"
,',
11
: : Memorandum
To:
From:
City Council Members
Mayor Cary Bozeman .,#'"
Laura Lyon, Director of Financial servic:l
2007 Water and Sewer Revenue and Refunding Bond Issue
(Updated Memo with Final Pricing)
Re:
Date:
June 6, 2007
There are three components to the 2007 Water and Sewer bond issue that is
proposed for Council's approval on June 6, 2007:
1. Provide Funds for Project Financing - Revenue Bond Issue
2. Cash Defeasance of the Final Payment on the 1994 Water Sewer
Bonds
3. Refund (refinance) the 2005 ULlD Revenue Bonds
Revenue Bond Issue - Proiect Financing
The City Wastewater Utility system requires a revenue bond issue to finance the
sewer system expansion project to Southwest Bremerton. This project is
included in the adopted 2007 budget and provides for the construction of a
sanitary sewer pump station to intercept sewer flows from new developments in
Southwest Bremerton and a force main to convey those flows to the Bremerton
Waste Water Treatment Plant (WWTP). Two large developments are planned
for the area at this time. The first, Bayside, has received preliminary plat
approval and consists of approximately 294 single-family lots. The second,
Sinclair Ridge, has applied for preliminary plat approval and will consist of
approximately 611 lots. Both projects are being developed by Barclay's North,
Inc. of Everett, Washington. The developer has indicated that build-out is
expected to occur over the next 7 years. At current rates, the City will collect
General Facilities Charges (GFCs) of $3,712 for each sewer connection in these
two developments, for a total of approximately $3,360,000 over seven years. As
houses are built the City will also begin to collect rate revenue. Rate revenues
will be approximately $600,000 per year at full build-out. Approximately 35% of
projected rate revenue will be required for operation and maintenance of the
system, leaving 65%, or $390,000/year (using current rates) available for other
things such as debt service and capital improvements. In addition to these two
developments there are a number of additional areas that could be served by this
project including existing development in and around Gorst, undeveloped
property in these same areas, and an existing inventory of currently platted but
undeveloped lots. Capital programs which generate revenues from new service
provisioning (such as this sewer expansion to Southwest Bremerton) are very
well suited to bond financing because the additional debt service expense is
covered by the additional revenues provided from the project being financed and,
therefore, does not deteriorate the financial health of the utility system by the
addition of the debt obligation.
Cash Defeasance of Outstanding 1994 Water Sewer Bonds -
A defeasance is a financing tool by which outstanding bonds may be
retired without an early bond redemption. In a defeasance, cash is used
to purchase government securities for deposit in an escrow account. The
government securities are irrevocably pledged to the payment of the
outstanding bonds. The government securities are in a principal amount
such that the principal and interest earned are sufficient to retire the
principal of and interest on the outstanding bonds as they come due. The
government securities and all costs related to the defeasance are paid
with funds accumulated in the various accounts established for the
outstanding bonds or with other available funds. If the defeasance is
consistent with generally accepted accounting principles and complies
with the outstanding bond document requirements, the bonds will no
longer be treated as debt for accounting purposes nor for purposes of
computing any statutory or constitutional debt limitation.
Currently, the City has outstanding parity revenue bonds for the
Water/Wastewater system comprised of the final maturity of the 1994 Revenue
Bonds (matures 9/1/07) principal amount of $2,655,000 and the 2005 ULlD
Revenue Bonds (final maturity is 9/1/15) principal amount outstanding of
$365,928. The 1994 bonds are a publicly issued revenue bond with no call
feature. The 2005 ULlD revenue bonds are a private placement debt obligation
held by Bank of America. So long as these revenue bonds are outstanding, the
City is required to issue parity (same terms and conditions as existing debt)
bonds. Any desired changes in terms and conditions as described in the bond
covenants can only be made on a "springing" basis (which means they only
become effective when the last of the current bonds are retired - soonest would
be 9/1/15 in this case).
There is an opportunity at this time to do a cash defeasance of the final
maturity of the 1994 revenue bonds and refinance the 2005 ULlD
Revenue Bonds directly with Bank of America (the sole bond holder). By
retiring the small amount of existing revenue bonds now (in their entirety)
we can issue the new revenue bonds with revised and updated bond
covenants and immediately begin enjoying the benefits that this provides
to the City.
The final maturity of the 1994 Water and Sewer Revenue bonds will be
cash defeased by using the City's final 2007 principal repayment amount
2
plus accrued interest to date to purchase noncallable government
obligations in amounts and maturities that, together with the known
earned income therefrom, are sufficient to pay the final maturity and
interest obligation when due on September 1, 2007. The purchased
securities are placed in escrow and are irrevocably pledged for that
purpose. Therefore, the bonds will be technically outstanding until
September 1, 2007 but are considered fully retired at the point the escrow
is properly executed (closing date of this transaction).
The City's Wastewater Utility budget provides for the full debt service payment in
2007 for these bonds. The cash defeasance does not add additional debt
service obligations for the utility but does require the cash payment on the
principal amount and accrued interest to date to occur approximately 3 months
sooner than otherwise would have been required. The Wastewater Utility has
sufficient cash to make this payment on the earlier date.
Refinancing the 2005 ULlO Revenue Bonds -
As noted in the previous discussion, there is an opportunity at this time to
refinance the 2005 ULlO Revenue Bonds directly with Bank of America
(the sole bond holder). A refinancing of the 2005 ULlO Revenue Bonds
combined with the cash defeasance of the 1994 Water and Sewer
Revenue Bonds results in a full and immediate retirement of the existing
water and sewer parity revenue bond issues that are currently
outstanding. By retiring the small amount of existing revenue bonds now
(in their entirety) we can issue the new revenue bonds with revised and
updated bond covenants and immediately begin enjoying the benefits that
this provides to the City.
There is currently $365,928 of 2005 ULlO Revenue Bonds outstanding.
These bonds have a final maturity of September 1, 2015 and have a
coupon interest rate of 5.10%. The refinancing portion of the 2007 Water
and Sewer Refunding and Revenue Bonds has the debt service for the
refunding concluded in the same remaining time period - i.e. September
1, 2015 (not extending the maturity date) and is at an interest rate of
4.28% (final rate locked in on June 6th). This is why the annual debt
service payments on the total bond issue decreases beginning in 2016 by
approximately $45,000 per year - as the refunding portion of the debt is
fully repaid in 2015. The refunding provides debt service savings over
the remaining life of the refunded bonds due to the lower interest rate.
The net present value of debt service savings is $6,707. In addition to the
financial savings achieved, this refunding in combination with the cash
defeasance of the last maturity of the 1994 Water and Sewer Revenue
Bonds allows the City to implement updated bond covenants with the
issuance of the 2007 Water and Sewer Refunding and Revenue Bonds.
3
Bond Transaction Summarv-
The par amount of the bonds is $5.375 million and is being issued as a direct
placement with Bank of America (they are the sole bond holder). Five million of
the par amount is related to the Southwest Bremerton sewer system expansion
project. Net proceeds for the project after payment of all issuance costs and the
required deposit to the debt reserve account is approximately $4.454 million.
$375,000 of the par amount is for the refunding of the 2005 ULlO bonds. Net
proceeds after payment of issuance costs and the required deposit to the debt
reserve account is $371,267.80 which will be paid to the sole bond holder (Bank
of America) to retire the bonds early and refinance them into the new bond 2007
bond issuance.
The following tables summarize the sources and uses of proceeds and recaps
the interest, maturities, and the "all-in" true interest cost (factoring in issuance
expenses etc) for the bonds. The bonds have a 15 year maturity and a coupon
rate of 4.28%. This rate is the final locked in rate as of June 6 and is based on
the City recently receiving an A2 rating from Moody's on this bond issue.
Wl'RCES .-\}.;n USES OF Ft.l,1}$
CITY OF B?n~_TON
Wa:er &: Sew!!'!" P~f S:: ?.evem.le Bcmd. 2007
C'.n:1:il::.1:'.ng full 2007 p~mett
'A2' R'ti:1g. BQ
Da:e<! Dale
Deli\~'D3t@
06.'1+2007
06d~.'2007
Source>;:
200iBA
P.EF94
REF05
5.375.0JO.00
Bcmd P!\:cHds:
P3T.~1.lDt
5.000.0(':>.00
375.000.00
Other Source: .:;fFuuds:
1 >-94 Bow:! C"mri1:'U\'loo
2005 P.es~"''e .<\eCI
2.703.415.39
~0.658. 70
~O.658. 70
8.l19.074.OO
2.703.415.39
5.0(;,).0((.).00
2.703.41539
415.658.70
Total
2.703.415.39
';'U5S.71)
2.744.074.00
l'se>;:
REF05
Tota!
2007BA
REF94
ProJec! F'lUld Dep~lt;:
Pr'':iecT Flmd #1
4.453.7@.31
P.eToIDding Escrow Dej:"sits:
CJ.,h~()si:t
SLG Pt:rcb3~s
0.39
2.703.415.00
2.703.415.39
37 !,267.80
37U67.80
Other Fuud Depoli:s:
Debl Se-r.ice ?.e,a\'e FUllil
493.160.93
36.987.07
Di!li'..ery Da:e E~"pe::l>es:
Smlcn:r.:.!lg Ageilt
OriEioaci":'!l Fee
300d C~'1mse=
:\!,:cd:'- '; Fee
3JJJl.; Co\~el
Tmsree F~
15.0('000
5.0('0.00
l1.09301
1O.139.53
837.11
l.875..00
37500
9(16.98
76('.-17
61.79
45{O.00
4.430.24
53.06;.76
Other L'ses of F\IZlds:
Addici<:-!lJl Proceeis
1.97359
S.1l9.07.;CJ;l
5.0C'O,0('H'(o
2.703.4]5.39
4! 5,658.70
4.453.769.31
371.163.19
2.7oJ3.415.00
3.074,63319
530. 143.CQ
16.S75.CO
5.375.CD
]~.C.JIJ.()I)
] I}, 91Jl} CO
::Oo).C<J
450.C')
57. S')O.C'J
2:973.59
4
BOhTI ai).G,L~_~.Y ';TATISTIU,
cm' 0: BRDEP.TOl\
\VJ.~er & SE,\-er ?'~ef & P..e1.'E~t1e BOLo..d. 2007
("'::1'lC'.I:mg f<l.ll 200, pavUlelll
'.01..2' P.:;ti:1g. BQ
Dated D.1:e
Detiv~,' D3te
Last M.lt.u1ty
(i~' l4/2007
CI5/!4"~JJ07
i 2:0 i'202l
Arbirrage Yiel..;.
Tme lutErest Cost (TIC)
Net ill,e:'e:( Co:, 0\1(')
..!ill-ill TIC
A';erage Coq.;)!l
4.1 002 2?~/~
4.10022'7%
4.2 &1:.)')0%
4A44456%
4.180000%
..;.;enge Life (yem)
Dworio:! of Is~ \.\'1!az'i)
8.162
6.706
P.l.~,mt
&'lld PIoceeds
T oral IDtere;t
Net In~ere,:i
Tor;!! Deb! Se,,;;ce
}!3~ ..!um'aJJJ Debt Sm'ice
Avenge Almual Debt Smice
5j 75.000.00
5,j 75.000.00
!'an 78l,64
1.377.781.6-!
7.251.781.64
5jO,J4&.00
501.+W.64
BOND DEST SE?,'.'ICE
em' OF 3?EMERTOl\'
,ra:er So: S,-;wer F.,-;f &: ?..e';'-;:!lI:e Booo. 10C-7
CO:lt:bu~ full 2007 p,,)"mEot
'A2'll.JIting. BQ
Da:ec! Date
Beliver)' Da:e
1)~-li4J2CtJ7
Ofd4,2CI.l7
~eri\lcl .-%mlua.!
E:.ili1g ?r'.JLCipal COUJ:Oll. Inter!;.. Det.. Smice DNt SA..I'tke
!~/C'1.'2~07 160.000 ':'.28(f~/. lC6.717.64 266.7i 7.64 266.71764
O~,\fr!/2C08 jJ 1.~')1.00 111..501.00
i2/0i/l.C08 j05.000 ,U80~"~ il i.~,) 1.00 416.601.00 523.11)2.0')
061'{}!,!2C09 Hl5.07-1.00 105.1)7400
12101.. 200\1 31'),000 ~.280'!~ 105,074.00 425.1)74.01) 530.14&,00
O~'Oi..:-{liO ;S.~2f..OO 98.21.5.(1)
i~,'l}!/liHO 330.000 4.280% 93.126.00 428,21~(1) 526.-151.00
OMll!2>O!l 9U~HO 91.lf":.Oll
!~l~i/1Oi 1 335.000 ';.280% 9U~-IC0 416.16-4.00 517,32&00
OMH/2IH2 8H>il5.01) 5l99-5.0ll
i2:0!ilvi:! 350,001) 4.280~:. 8H'ilHO 433,995.00 51 i,NO.OO
O~,\{)iilv ij 76,5')5.00 76.505.(1)
!2;'Oi/l'v13 365,000 -'.280'i. 76.5')5.00 441.505.00 513.010.01)
OMlii2>014 63.ft~-I.00 68,~9';.OO
121O!i21H4 375.000 ".280~"~ tM9-1.00 443..5N.OO 512.33&.00
06,>Qi/2fr i 5 60,659.CO 6()o.~6il.OO
11.'01/20015 390.000 4.280~-'. 60.6-5900 4:.0.~69.00 51U3S00
06,'011201:5 52.31301) 5:!.~1;.OD
i2:01/2!H 6 365.000 4.1St)';~ 52.32300 41ij13.00 469.f.;600
06:01/2vj 7 44.51100 44.512.00
!2,'{H..20i7 38J),OOO -'.280~"~ 44.511.01) 424.512.00 469,024C1)
06.101/20! 8 36.330.00 36.38000
~:!.\v~:}OiS ..;(,).OCO ";.la(r'r~ 36.3S000 ~~-63S0.00 472.76(1.00
061~!.' :V! 9 2U2C-.CO 27.310.00
!1,'O~,;}O!9 ':'15.000 ';.280~/. ~].S'2(t,C(t 442.31'lOI) 470,f":C'.CO
O~;o-~'<';'G1i} 13,9:.,'00 i 8.939.00
~2:0!lJvM ..:.35.000 ..:..}SO~;~ 13."3,'.00 453,939.00 47?S7S ~t)
(I~-I'O~;.::021 9.~.3000 9.,53-l00
!~/{:-t,'2~,21 ":'~O.I)OO ~.2g0~/. 9,630.00 4S9..;30.0G 4-69.~.50 CO
5j:5,OOO l,37i.7~U4 7.252.78164 7.252."SL~4
The following is a summarized recap section-by-section of the bond ordinance:
5
Section 1. Definitions
Pertinent terms, phrases and words, are defined including the following key
items:
· "Assessments" - added to address ULlD assessments and their
specific pledge beyond the pledge of Gross Revenues to the
repayment of ULlD debt obligations
· "Combined Utility System Fund" - describes the combination of the
Water System and the Wastewater System as the combined system
supporting the issuance of parity revenue bonds.
· "Government Obligations" - more broadly defined as permitted by law
and references directly to the authorizing RCW establishing those
permitted investments.
. "Payment Agreement", "Payment Agreement Payments", and
"Payment Agreement Receipts" - provides definitions of agreements
that could be entered into by the City in connection with an interest rate
swap or other financing arrangement that is designed to cap interest
rate fluctuations if variable rate debt bonds were to be issued on a
parity basis in the future.
· "Permitted Investments" - describes the lawful investments the City
may make by reference to authorizing law. Previous bond ordinances
listed all the investment options separately by name.
· "Qualified Counterparty", "Qualified Insurance", and "Qualified Letter of
Credit" - defines the criteria by which each of these instruments or
counterparties must meet in order to be valid for purposes of the
requirements of the parity bond issues. These are new additions and
provide clarity and definition on important risk management
considerations.
· "Reserve Account Requirement" - establishes the industry standard
"least of three" criteria for amount of financial reserves required to be
provided for in the issuance of parity bonds. Previous bond ordinances
only included the first two criteria measures.
· "Resource Obligations" - establishes that the City will pay for
purchased resources (such as purchased water supply) as an O&M
expense which defines it to be a payment that takes priority over debt
service expense. This is a new addition to the bond ordinance and,
while it does not apply in the City's situation today, it provides financial
flexibility and priority in the future if our situation should change and
resources for supplying services must be purchased outside of our
own production capabilities.
6
Section 2. Plan of Improvements
Describes the Southwest Bremerton sewer expansion project and the project is
broadly defined to be inclusive of any other capital improvement of the combined
system so that bond proceeds not used or needed for the sewer expansion
project may be lawfully used for other sewer capital programs.
Section 3. Authorization of the Bond
Authorizes the issuance of the bonds and the date, par amount, interest rate,
basis of interest computation, interest payment dates, and final maturity. This
section also authorizes the Director of Financial Services to act as transfer agent,
paying agent, and registrar for this private placement bond issue.
Section 4. Prepayment
Reserves the right of the City to prepay the principal amount of the bonds
together with any accrued interest thereon at any time. If prepayment is
exercised the sole bond holder (Bank of America) shall be afforded a prepayment
fee in an amount sufficient to compensate for any loss incurred as a result of the
prepayment, however, in no case shall a prepayment fee apply if the Bank's
internally derived cost of funds is higher on the date of prepayment than it was on
the date the fixed rate of the bonds was set.
Section 5. Combined Utility System Fund
Pledges the combined revenues of the Water and Wastewater Utilities to the
repayment of the parity bond debt obligations and establishes the priority use of
such funds - with O&M expenses having first priority and debt service (principal &
interest payments) on the parity bonds being second. Third in priority are
payments to ensure the Reserve Account is fully funded followed by subordinate
debt obligation payments and lastly to pay for capital programs and any other
lawful and appropriate use of utility system revenues.
Section 6. Rate Stabilization Account
This is a new section with this bond ordinance and permits the City to establish a
rate stabilization account at it's discretion. It is not the intent of the Financial
Services Department to recommend such an action in the near term but this
section establishes in the parity bond covenants the right and expectation that
the City may do so in the future. The benefit of a rate stabilization account is
that during periods of good debt service coverage and cash flows, funds may be
set aside in a rate stabilization account (reducing the debt service coverage by
that amount in the "good" year) and it can then be set aside and used for cash
and debt service coverage requirements in a less than adequate financial
performance year. Not only providing a rainy day cash savings account - but
ensures debt service coverage requirements will be met. This is a good financial
7
tool to have in the City's "tool basket" and the addition of this section gives us
those options.
Section 7. Bond Account
Establishes the bond account in the Utility System for the purposes of
accumulating funds and making payments of principal and interest on the parity
bonds. The bond account also includes the reserve account and describes the
various forms available to the City in meeting the Reserve Account Requirement
including surety bonds and the manner by which any deficiency in such accounts
will be addressed. This section also includes the City covenant and agreement
that it will properly fund the Bond Account for the current and all future parity
bonds that may be issued.
Section 8. Adequacv of Revenue
This section makes declaration that the City (after taking into consideration
operating expenses of the Combined Utility System) has determined there are
sufficient resources available to honor the payment commitments related to the
parity bonds now and in future periods.
Section 9. General Covenants
/
This section is the general bond covenants undertaken by the City to the bond
holders (current and future parity bonds). The City agrees and commits to:
· Establish, maintain, and collect sufficient rates and charges for utility
system services to meet debt service payment obligations and maintain a
minimum debt service coverage factor as defined of 1.3 times annual debt
service on a combined system basis. This section permits the use of an
established rate stabilization account to be used for meeting such
requirements.
· Maintain the System in good repair.
· Will not sell or dispose all or substantially all of the assets of the system
unless such proceeds are then used to retire all outstanding parity bond -
with the exceptions that items less than 5% of the total value may be sold
if determined to have become unserviceable, inadequate, or obsolete.
Beyond that, anything that is in excess of 5% it must be determined to
have become obsolete or no longer needed and certified by the Director of
Financial Services that it would not impair the ability of the City to comply
with the rate covenants or in the absence of that, that a provision is made
for the retirement or redemption of outstanding principal in an amount
proportionate to the assets sold.
· The City will maintain books and records and subject them to annual
audits. The City is required to prepare an annual financial and operating
statement.
· The City agreements to maintain fire and extended coverage insurance on
the combined utility system as is ordinarily carried on property of similar
public utilities by other municipal corporations in the same operations, as
8
well as liability insurance under the same "good practices" expectation.
This section is permissive of a self-insurance program for any of the
identified risks.
· The City will pursue collection of accounts owed to the utility systems in a
timely manner and using necessary legal action to enforce collection of
delinquencies.
· The City will not provide free services, except as permitted by law.
Section 10. Tax Covenants; Special Designation
The City covenants to take all actions required to maintain the tax-exempt status
of the interest on the Bonds under the Section 103 of the IRS tax code. This
section also provides for the City's designation of the 2007 Water and Sewer
Refunding and Revenue Bonds as "qualified tax-exempt obligations" under the
code for banks, thrift institutions, and other financial institutions. The City states
in this section that we do not expect to issue more than $10,000,0000 of qualified
tax-exempt obligations during 2007 - thus ensuring the bank qualified status of
these bonds.
Section 11. Payment Aqreements
Establishes the terms and manner under which the City may enter into Payment
Agreements for future parity bond issues. This section provides the mechanics
of such agreement calculations under a variety of possible agreement provisions.
This currently has no impact on the 2007 Water and Sewer Refunding and
Revenue Bond issue - but provides the structure to allow the City to consider
variable rate debt and related interest rate fluctuation control agreements
(interest rate swap agreements) in the future.
Section 12. Future Parity Bonds
This section commits that the City will not issue bonds in the future with a pledge
and lien on gross revenue superior to the parity bonds. This section also
provides that the City may issue future parity bonds if the purposes are for capital
improvements and repairs of the System or for the purpose of refunding
outstanding revenue bonds. This section requires that future parity bonds may
only be issued if there is no deficiency in the Bond Account and all specific
revenue additions are dedicated to the repayment of such debt (such as a ULlD
assessment), and that the Director of Financial Services shall either provide
certification showing that the net revenues after the issuance of such additional
bonds would be sufficient after making all other priority use payments to maintain
at least a 1.30 times annual debt service coverage in each year. In the absence
of the Director of Financial Services making such certification, a certificate to the
same effect from a Professional Utility Consultant may also serve that purpose.
Finally, this section permits the City to issue other debt obligations which are
subordinate to the lien and pledge of system revenues.
9
Section 13. Bond Deemed to Be No Longer Outstandinq
Establishes that the City may retire debt that may be technically outstanding
through a cash or refunding bond defeasance.
Section 14. Form of the Bond
Describes the actual form of the bond to be issued - showing a sample bond.
Section 15. Execution and Authentication of the Bond
Describes the form and manner of the signatures of the bonds and the required
authentications. The designated and certified officers of the City at the date of
the bond shall be authorized to execute and sign the bonds.
Section 16. Lost or Stolen Bond
Permits the issuance of a replacement bond in the event of loss or theft upon
satisfactory evidence of such loss or destruction, and upon receipt of the City of
an indemnification regarding such bonds.
Section 17. Sale of the Bond
This section is specific to the 2007 bond issue and describes the sale of the bond
to Bank of America, N.A. in accordance with it's proposal which is attached as
Exhibit A to the ordinance.
Section 18. Application of Bond Proceeds
Describes how the proceeds of the bonds will be used. First attending to the
refunded bonds, then ensuring the Reserve Requirements are met, with the
balance then being available to provide for the issuance costs and the Project of
the combined utility system.
Section 19 Events of Default
Describes and defines what constitutes a default under the bond covenants. In
general terms - the inability to make payments on interest and principal or a
declaration of inability to pay future obligations (bankruptcy) are "default"
conditions.
Section 20 Bondowners' Trustee
Provides that if an event of default has occurred and has not been remedied by
the City, a bond owners' trustee may be appointed by the registered owners of
25% of the principal amount of bonds to act as trustee for the registered parity
10
bond owners and is empowered to exercise all the rights and powers conferred
by sections 21, 22, and 23 of this ordinance.
Section 21 Suits a Law or in Equity
Upon the event of default and upon the request of registered owners in the
amount of not less than 25% of the principal amount of parity bonds outstanding
suits, actions other proceeds may be instituted as deeded appropriate for the
protection and enforcement of the rights of the registered owners. However,
notwithstanding the right to sue, acceleration of the maturity of principal on the
bonds is NOT authorized and expressly denied to the registered owners under
any circumstances.
Section 22 Application of Money Collected by Bondowners' Trustee
Describes the priority use of money collected by a bond owner's trustee in'the
event of a default and the establishment of such bond owner's trustee.
Section 23 Duties and Obliqation of Bondowners' Trustee
Describes the specific duties and responsibilities of a trustee if one is so
appointed by the registered bond holders upon an event of default.
Section 24 Suits bv Individual Bondowners Restricted
This section denies individual bond holders the right to sue individually if an
event of default has occurred and a bondowner's trustee has been appointed and
such owners have been properly notified thereof. This provision essentially
keeps a discipline to a default scenario by having the remedy process
coordinated through the bond owner's trustee.
Section 25. Refundinq Account
Establishes the refunding account for the 1994 Water and Sewer Revenue
Bonds cash defeasance. This section directs the Director of Financial Services
to appoint an escrow agent and to irrevocably deposit cash and investments with
such escrow agent for the purposes of making the final principal and interest
payments on the defeased bonds.
Section 26. Redemption of Refunded Bonds
This declares that the City has irrevocably set aside sufficient funds through the
purchase of investments and initial cash deposit to make payments as required.
This section calls for the redemption on September 1, 2007 of the 1994 Water
and Sewer Revenue Bonds as well as the payment and redemption of the 2005
ULlD Revenue Bonds upon the closing date of the 2007 Water and Sewer
Refunding and Revenue Bonds. This section directs how this should be
11
accomplisheq and provides for the payment of the Escrow Agent for fees and
expenses when due.
Section 27. Findinq of Defeasance
Declaration of the City Council that the defeasance and refunding complies with
the covenants contained in the original authorizing bond ordinances and that the
amounts so designated to be set aside for that purpose are sufficient to redeem,
discharge, and satisfy the obligations of the City in accordance with those
ordinances.
Section 28. Ongoinq Disclosure; Reportinq Requirements
Declaration that the City is exempt from the ongoing disclosure requirements of
the SEC for this bond issue due to the size of the bond issue. This section
requires though that the City provide Bank of America on an annual basis 1) the
audited financial statement within 10 days of receipt, 2) the City's internally-
prepared unaudited financial statement within 180 days of the end of the fiscal
year, 3) the City's budget for the new period within 90 days of commencement of
the new budget cycle, and 4) an annual certification by the Director of Financial
Services affirming compliance with all terms of this ordinance.
Section 29. Authorization to Officials and Aqents
City Council authorizes the proper City officials to authorize and approve
disclosure statements and take all actions necessary for the prompt issuance,
execution, and delivery of the bonds in conformance with the provisions of this
ordinance.
Section 30. Supplements and Amendments
The Council may from time to time adopt future ordinances that amend this
ordinance for the purpose of adding additional covenants and agreements which
shall not adversely affect the interest of bond owners or to surrender a right or
power herein reserved or conferred upon the City - or for the purpose of curing
ambiguities or correcting provisions deemed necessary or desirable and again
not inconsistent with the ordinance and which shall not adversely affect the
interest of the owners of the parity bonds in any material respect.
Provisions are made for amendments that can be made with the consent of
owners and the requirement that such consent must be a majority consent. The
items subject to such amendment are specifically provided for in this section.
Section 31. Severability
If a section is determined to be null and voice subsequently, the other provisions
of the ordinance shall remain valid and enforceable.
12
Section 32. Ratification
Any action consistent with the authority but prior to the effective date of the
ordinance is ratified and confirmed.
Section 33. Effective Date
Ordinance takes effect 10 days after it's passage, approval and publication as
required by law.
The 2007 Water and Sewer Refunding and Revenue Bond Issue ordinance will
be discussed with the Finance Committee at the May meeting. We are asking
for the City Council to approve this bond sale and ordinance at its June 6th
business meeting.
13
CITY OF BREMERTON, WASHINGTON
WATER AND SEWER REVENUE AND REFUNDING BOND, 2007
ORDINANCE NO. 50 II
AN ORDINANCE of the City of Bremerton, Washington,
authorizing the issuance of a water and sewer revenue and refunding
bond in the principal amount of $5,375,000 to obtain funds for certain
capital improvements to the City's water and sewer system and to
provide a portion of the funds necessary to defease the City's
outstanding water and sewer revenue bonds; providing the form,
terms and covenants of the Bond; and approving the sale of the Bond.
Passed: June 6, 2007
PREPARED BY:
K&L PRESTON GATES ELLIS LLP
Seattle, Washington
TABLE OF CONTENTS
Page
Sect ion I. Defi nit ions................................................................................................................2
Section 2. Plan of r mprovcmcnts .............................................................................................. 9
Section J. Authorization of the Bond .....................................................................................10
Scet ion 4. Prepaynlcnt............................................................................................................ .11
Section 5. Combincd Utility System Fund..............................................................................12
Scction 6. Rate Stabilization Account ....................................................................................1 J
Scction 7. Bond Account........................ .............................................................................. ..14
Section 8. Adequacy of Revenue ............................................................................................17
Section 9. General Covenants............................................................................................... ..18
Section 10. Tax Covenants; Special Designation .....................................................................22
Section II. Payment Agreements............................................................................................. 22
Section 12. Future Parity Bonds.............................................................................................. .24
Section 13. Bond Deemed to Be No Longer Outstanding ........................................................28
Section 14. Form of the Bond ...................................................................................................29
Section 15. Execution and Authentication of the Bond ............................................................31
Section 16. Lost or Stolen Bond ...............................................................................................32
Section 17. Sale of the Bond................................................................................................... ..32
Section 18. Application of Bond Proceeds............................................................................... 32
Section 19 Events of Default................................................................................................. ..33
Section 20 Bondowners' Trustee........................................................................................... ..34
Section 21 Suits a Law or in Equity.........................................................................................35
Section 22 Application of Money Collected by Bondowners' Trustee ...................................37
Section 23 Duties and Obligation of Bondowners' Trustee ....................................................37
Section 24 Suits by Individual Bondowners Restricted ...........................................................38
Section 25. Refunding Account. ........... ...... ........... .............. ......... ............... ............ ...... ......... ..39
Section 26. Redemption of Refunded Bonds ............................................................................41
Section 27. Finding of Defeasance...........................................................................................43
Section 28. Ongoing Disclosure; Reporting Requirements ......................................................43
Section 29. Authorization to Officials and Agents ...................................................................44
Section 30. Supplements and Amendments..............................................................................44
Scction 31. Sevcrabi I ity .......................................................................................................... ..46
Sect ion 32. Rati ficalion............................................................................................................ .46
Section 33. Effecti vc Date...................................................................................................... ..46
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Oe/OGI07
CITY OF I3REMERTON, WASHINGTON
ORDINANCE NO. 50 II
AN ORDINANCE of' the City of Brcmerton, Washington,
authorizing the issuance of a water and sewer revenue and refunding
bond in the principal amount of $5,375,000 to obtain funds for certain
capital improvements to the City's water and sewer system and to
provide a portion of the funds necessary to defease the City's
outstanding water and sewer revenue bonds; providing the form,
terms and covenants of the Bond; and approving the sale of the Bond.
WHEREAS, the City of Bremerton, Washington (the "City") owns, operates and
maintains a combined waterworks and sewerage system (the "System"); and
WHEREAS, it is in the best interest of the City that the City undertake various capital
improvements at the System; and
WHEREAS, the City now has outstanding its Water and Sewer Revenue Bonds, 1994
issued under the date of March I, 1994 (the" 1994 Bonds"); and
WHEREAS, there is currently outstanding $2,655,000 of the 1994 Bonds maturing on
September 1,2007 (the" 1994 Refunded Bonds"); and
WHEREAS, the City now also has outstanding its Water and Sewer Revenue Bond, 2005
issued under the date of August 31, 2005 (the "2005 Bond"); and
WHEREAS, Ordinance No. 4944 authorizing the 2005 Bond (the "2005 Ordinance")
provides that the 2005 Bond may, be prepaid in whole or in part of any date, together with a
prepayment fee, plus accrued interest to the date of redemption upon three days notice to Bank of
America, N .A., as owner of the 2005 Bond; and
WHEREAS, there is currently outstanding $365,928.30 of the 2005 Bond (the "2005
Refunded Bond," and together with the] 994 Refunded Bonds, the "Refunded Bonds"); and
WHEREAS, in order to finance capital improvements to the System and to refund the
Refunded Bonds, it is hereby found necessary and advisable tllat the City issue a water and sewer
revenue and refunding bond (the "Bond") with a lien on the revenues of the System; and
WHEREAS, the Council has received a proposal from Bank of America, N.A., to purchase
the Bond on the terms and conditions that are acceptable to the Council;
NOW THEREFORE, THE CITY COUNCIL OF THE CITY OF BREMERTON,
WASHINGTON, DOES ORDAIN as follows:
Section 1.
Definitions. As used in this ordinance the following words shall have the
following meanings:
"Acquired Obligations" means the obligations acquired pursuant to Section 25 hereof to
refund the Refunded Bonds.
"Annual Debt Service" for any fiscal year or calendar year means the sum of:
(a) the interest due in such year on all outstanding Parity Bonds excluding,
however, interest to be paid from the proceeds of Parity Bonds, and any Payment Agreement
Payments due in such year,
(b) the principal of all outstanding Serial Bonds due in such year, and
(c) the Sinking Fund Requirement, if any, for such year.
If the interest rate on any such bonds is other than a fixed rate, the rate applicable at the
time of the computation shall be used.
Notwithstanding the foregoing, debt service on Parity Bonds with respect to which a
Payment Agreement is in force shall be calculated by the City to reflect the net economic effect
on the City intended to be produced by the terms of such Parity Bonds and the terms of such
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Payment Agreement, 111 accordance with the requirements applicable to sllch Payment
Agreement.
"Assessments" means assessments (including interest and penalties) levied in any utility
local improvement district of the City for the acquisition or construction of additions and
improvements to and extension of the System, if such assessments are pledged to be paid into the
Bond Account, including ULID No. 2002-0 I.
"A verage Annual Debt Service" means the amount determined by dividing (a) the sum of
all interest and principal to be paid on all Parity Bonds from the date of determination to the last
maturity date of such Parity Bonds, by (b) the number of fiscal years or calendar years from and
including the fiscal year or calendar year in which the determination is made to the last fiscal
year or calendar year in which any of such Parity Bonds will be outstanding.
"Bank" means Bank of America, N.A., its successors or assigns.
"Bond" means the $5,375,000 principal amount of "Water and Sewer Revenue and
Refunding Bond, 2007" authorized to be issued by the City pursuant to this ordinance.
"Bond Account" means that special fund of the City to be known as the "Utility Debt
Service Account," created for the purpose of paying and securing the principal of and interest on
the Bond and any Future Parity Bonds.
"Bond Register" means the registration records for the Bond maintained by the Bond
Registrar.
"Bond Registrar" means the Director of Financial Services of the City.
"City" means the City of Bremerton, Washington, a first class city of the State of
Washington.
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"Code" means the federal Internal Revenue Code of 1986, as amended, and applicable
regulations thereunder.
"Council" means the City Council of the City, the general legislative authority of the
City, as the same shall be duly and regularly constituted from time to time.
"Combined Utility System Fund" means both the water system revenue fund and the
sewer system revenue fund (and sub-funds and accounts therein) of the City heretofore created
into which fund shall be paid the Gross Revenue of the System.
"Director of Financial Services" means the duly qualified, appointed and acting Director
of Financial Services of the City or any other officer who succeeds to the duties now delegated to
that office.
"Escrow Agent" means the bank or trust company appointed by the Director of Financial
Services pursuant to Section 25 hereof.
"Escrow Agreement" means the agreement between the City and the Escrow Agent
entered into pursuant to Section 26 hereof.
"Future Parity Bonds" means all revenue bonds or other revenue obligations of the City
issued after the date of the issuance of the Bond and having a lien upon Gross Revenue for the
payment of the principal thereof and interest thereon equal to the lien upon Gross Revenue for
the payment of the principal of and interest on the Bond.
"Government Obligations" has the meaning given to sllch term in RCW Chapter 39.53, as
the same may be amended from time to time.
"Gross Revenue" means all earnings and revenue, except Assessments, received by the
System from any source whatsoever, including proceeds from the sale of forest products from
System-owned lands, except general ad valorem taxes, grants from the state, federal or local
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governments, earnll1gs 111 any refunded bond escrow account or fund, gifts to the System for
capital purposes, proceeds from the sale of City or System property, and proceeds of City or
System obligations.
,/'
"Maximum Annual Debt Service" means the maximum amount of Annual Debt Service
which shall become due in any future year on any outstanding Bond or Future Parity Bonds.
"Moody's" means Moody's Investors Services or its comparably recognized business
successor.
"Net Revenue" means Gross Revenue less the Operating and Maintenance Expenses.
"1994 Bonds" means the City' s "Water and Sewer Revenue Bonds, 1994" issued under
date of March I, 1994, pursuant to Ordinance No. 4451.
"1994 Refunded Bonds" means the $2,655,000 of 1994 Bonds maturing on September I,
2007.
"Operating and Maintenance Expenses" means all reasonable expenses incurred by the
City in causing the System to be operated and maintained in good repair, working order and
condition, including without limitation payments (other than payments out of proceeds of the
Bond or Future Parity Bonds) of premiums for insurance on the System, and any State-imposed
taxes, and also including all payments made to another agency for treatment or disposal of
sewerage or acquisition of water, but excluding depreciation and amortization, and any City-
imposed utility taxes or payments in lieu of taxes payable from the Gross Revenue of the System.
"Parity Bonds" means the Bond and any Future Parity Bonds.
"Payment Agreement" means, to the extent permitted from time to time by applicable
law, a written agreement entered into by the City (i) in connection with or incidental to the
issuance, incurring or carrying of any Parity Bonds; (ii) for the purpose of managing or reducing
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PINMNINMN2YS
the City's exposure to fluctuations or levels of interest rates, currencies or commodities or for
other interest rate, investment. asset or liahility management purposes; (iii) with a Qualified
Counterparty; and (iv) which provides, on either a current or forward basis, for an exchange of
payments determined in accordance with a formula specified therein.
"Payment Agreement Payments" means the amounts periodically required to be paid by
the City to the Qualified Counterparty pursuant to a Payment Agreement. The term "Payment
Agreement Payments" does not include any termination payment required to be paid with respect
to a Payment Agreement.
"Payment Agreement Receipts" means the amounts periodically required to be paid by
the Qualified Counterparty to the City pursuant to a Payment Agreement.
"Permitted Investments" means any investments or investment agreements permitted for
cities under the laws of the State of Washington as amended from time to time.
"Principal and Interest Account" means the account of that name created in the Bond
Account for the payment of the principal of and interest on the Bond and any Future Parity
Bonds.
"Professional Utility Consultant" means the independent person(s) or firm(s) selected by
the City having a favorable reputation for skill and experience with water and wastewater
systems of comparable size and character to the System in such areas as are relevant to the
purposes for which they are retained.
"Project" means the improvements to the System identified in Section 2 hereof.
"Qualified Counterparty" means with respect to a Payment Agreement an entity (i) whose
senior long term debt obligations, other senior unsecurecllong term obligations or claims paying
ability or whose payment obligations uncleI' a Payment Agreement are guaranteed by an entity
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whose senior long term debt obligations, other senior unsecured long term obligations or claims
paying ability are rated (at the time the Payment Agreement is entered into) at least as high as A3
by Moody's and A- by S&P, or the equivalent thereof by any successor thereto, and (ii) who is
otherwise qualified to act as the other party to a Payment Agreement under any applicable laws
of the State.
"Qualified Insurance" means any unconditional municipal bond insurance policy or surety
bond issued by any insurance company licensed to conduct an insurance business in any state of
the United States or by a service corporation acting on behalf of one or more such insurance
companies, which insurance company or service corporation, as of the time of issuance of such
policy or surety bond, is currently rated in one of the two highest rating categories by Moody's
and S&P.
"Qualified Letter of Credit" means any irrevocable letter of credit issued by a financial
institution for the account of the City on behalf of the owners of any Parity Bonds, which
institution maintains an office, agency or branch in the United States and as of the time of
issuance of such letter of credit, is currently rated in one of the two highest rating categories by
Moody's or S&P.
"Rate Stabilization Account" means the account of that name authorized to be created
within the Combined Utility System Fund pursuant to Section 5 of this ordinance.
"Refunded Bonds" means the 1994 Refunded Bonds and the 2005 Refunded Bond.
"Refunding Account" means the City of Bremerton 2007 Water and Sewer Revenue
Bond Refunding Account established by Section 25 hereof.
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"Reserve Account" means the account of that name authorized to be created in the Bond
Account pursuant to Section 7 hereof to secure the payment of principal of and interest on the
Parity Bonds.
"Reserve Account Requirement" means with respect to all outstanding Parity Bonds the
lesser of (a) 125% of Average Annual Debt Service or (b) maximum Annual Debt Service;
provided, however, that at the time of issuance of any series of Parity Bonds, the Reserve
Account Requirement allocable to a series of Parity Bonds shall not exceed 10% of the initial
principal amount of that series of Parity Bonds.
"Resource Obligation" means an obligation of the City to pay the following costs
associated with a resource from Gross Revenue as (a) Operating and Maintenance Expenses for
any month in which any Resources were made available to the System during such month
(regardless of whether or not the System actually scheduled or received Resources during such
month) and (b) at all other times as an indebtedness of the System payable from Gross Revenue
on a parity of lien with Parity Bonds:
(i) costs associated with the System and any Resources hereafter acquired,
purchased or constructed by the City and declared by the Council to be a separate system, which
such costs shall include but are not limited to costs of normal operation and maintenance,
renewals and replacements, additions and betterments and debt service on the bonds or other
obligations of such separate system but shall exclude costs paid or to be paid from the proceeds
of the sale of bonds or other obligations of such separate system, and
(ii) costs associated with the purchase of Resources under a contract.
"Resources" means facilities or resources of the System.
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"S&P" mcans Standard & Poor's Rating Services, a Division of the McGraw-Hili
Companies, or its comparably recognized busincss successor.
"Serial Bonds" means Parity Bonds other than Term Bonds.
"Sinking Fund Requirement" means, for any fiscal year or calendar year, the principal
amount of Term Bonds required to be purchased, redeemed or paid at maturity in such year as
established by the ordinance of the City authorizing the issuance of such Term Bonds.
"System" means the existing combined water and sewerage system of the City, together
with any storm drainage system or refuse disposal system or other utility system now or hereafter
combined therewith, as the same may be added to, improved and extended for as long as the
Bond and any Future Parity Bonds are outstanding, but shall not include any separate utility
system established by the City.
"Term Bonds" means any Future Parity Bonds identified as Term Bonds in the ordinance
authorizing the issuance thereof, the payment of the principal of which is provided for by a
mandatory schedule of deposits of money equal (in the aggregate) to the full principal amount of
such Term Bonds, into the Bond Account, and by a mandatory redemption schedule
corresponding (as to time and amounts) to such mandatory schedule of deposits.
"2005 Bond" means the City's "Water and Sewer Revenue Bond, 2005" issued under
date of August 31, 2005, pursuant to Ordinance No. 4944.
"2005 Refunded Bond" means all of the $365,928.30 currently outstanding 2005 Bond.
"ULID No. 2002-0 I" means Utility Local Improvement District No. 2002-0 I established
by the City pursuant to Ordinance No. 4837.
Section 2.
Plan of Improvements. The City hereby specifies and adopts a system or
plan of additions to and betterments and extensions of the System, consisting of the following
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P:INMNINMN2YS
capi tal i mprovcments (collcct i vcl y, the "Projcct"): thc sout hwest Bremcrton sewcr cx panslon
projcct, which includcs construction of a scwcr main and pump station in southwest Brcmcrton
to pump and convey sewagc from thc southwest Bremcrton arca to thc City's wastewater
trcatmcnt plant, and any othcr capital improvemcnts to the Systcm. The Project will be
undcrtaken in accordance with spccifications and contracts for acquisition and construction
approvcd by the Council from timc to time. It is hereby provided that the Project shall be subject
to such changes as to details as may be authorized by the Council either prior to or during the
actual course of construction. The City may proceed with the construction and installation of the
Project as herein authorized, either alone or in conjunction with the construction of other
facilities of the System, and in whole, or in successive parts from time to time as may be found
advisable.
The estimated cost of the Project is declared to be approximately $4,480,000.
Section 3.
Authorization of the Bond. The City shall now issue and sell its water and
sewer revenue and refunding bond to provide funds to pay costs of the Project and to refund the
Refunded Bonds. The Bond shall be designated as the "City of Bremerton, Washington, Water
and Sewer Revenue and Refunding Bond, 2007," shall be dated as of the date of its initial
delivery to the Bank; shall be in fully registered form in the denomination of $5,375,000, and
shall bear interest on unpaid principal from its date at a per annum rate of 4.28% (computed on
the basis of a 360-day year of twelve 30-day months), payable on the first days of June and
December, commencing Dcccmber I, 2007. The principal of the Bond shall be payable in the
amounts as shown in Exhibit B to this ordinance with final maturity on December I, 2021. If
thcre occurs (i) any nonpaymcnt of principal, intcrest, fcc or other amounts whcn due under the
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Bond or this ordinance, or (ii) any failure to maintain the tax-exempt status of thc Bond, thcn the
interest rate under the Bond shall increase by two (2.0) percentage points.
The Bond shall not be a gencral obligation of the City. The Bond shall be an obligation
only of the Bond Account and shall be payable and secured as provided herein. The Bond does
not constitute an indebtedness of the City within the meaning of the constitutional provisions and
limitations of the State of Washington.
The Director of Financial Services shall act as transfer agent, paying agent and registrar
for the Bond (the "Bond Registrar"). Both principal of and interest on the Bond shall be payable
in lawful money of the United States of America. Upon final payment of all principal and
interest thereon, the Bond shall be submitted to the Bond Registrar for cancellation and
surrender.
The Bond Register shall be maintained by the Bond Registrar, and shall contain the name
and mailing address of the registered owner of the Bond or nominee of such registered owner.
The Bond may be transferred only on the Bond Register maintained by the Bond
Registrar for that purpose upon the surrender thereof by the registered owner or nominee or his or
her duly authorized agent and only if endorsed in the manner provided thereon and thereupon a
new fully registered Bond of like principal amount, maturity and interest rate shall be issued to
the transferee in exchange therefore. Such exchange or transfer shall be without cost to the
owner or transferee.
Section 4.
Prepayment. The City reserves the right to prepay the Bond in whole or
in part at any time by paying the principal amount thereof to be prepaid together with accrued
interest to the date of prepayment. If the Bond is prepaid, the prepayment shall be accompanied
by the amount of accruecI interest on the amount prepaid, and a prepayment fee. The prepayment
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fee shall be in an amount sufficient to compensate the Bank for any loss incurred by it as a result
of the prepayment, as documented by the Bank, including any loss arising from the liquidation or
reemployment of funds obtained by it to maintain the funds used to purchase the Bond or from
fees payable to terminate the deposits from which such funds were obtained. For purposes of this
paragraph, the Bank shall be deemed to have funded the purchase of the Bond by a matching
deposit or other borrowing in the applicable interbank market, whether or not the Bond was in
fact so funded. In no case shall a prepayment fee apply if the Bank's internally derived cost of
funds is higher on the date of prepayment than it was on the date the fixed rate of the Bond was
set.
Section 5.
Combined Utility System Fund. The City pledges to pay all of the Gross
Revenues of the System as collected into the Combined Utility System Fund. The Gross
Revenue deposited in the Combined Utility System Fund shall be used only for the following
purposes and in the following order of priority:
FIRST, to pay the Operating and Maintenance Expenses and costs associated with
a Resource Obligation (to the extent payable as Operating and Maintenance Expenses);
SECOND, to make all required payments into the Principal and Interest Account
for all Parity Bonds and to make Payment Agreement Payments;
THIRD, to make all required payments into the Reserve Account for all Parity
Bonds and to make all payments required to be made pursuant to a reimbursement agreement in
connection with a Qualified Insurance or Qualified Letter of Credit, except that if there is not
sufficient money to make all payments uncler reimbursement agreements, the payments will be
made on a pro rata basis;
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FOURTH, to make all required payments into any revenue bond redemption fund
created to pay and secure the payment of the principal of and interest on any revenue bonds or
short-term obligations of the City having a lien and charge upon the Gross Revenue of the
System subordinate and inferior to the lien thereon for the payment of principal of and interest on
any Parity Bonds; and
FIFTH, to redeem and retire any water and sewer revenue bonds of the City then
outstanding or to purchase any or all of those bonds in the open market at a price not in excess of
the price at which those bonds could be redeemed at the next call date; to make necessary
additions, betterments, repairs, extensions and replacements of the System or other purposes
proper to its maintenance and operation, including the payment of any City-imposed utility taxes
or payments in lieu of taxes payable from Gross Revenue of the System, or for any other lawful
City purpose.
The City may transfer from any funds or accounts of the City legally available therefore,
except bond redemption funds, any money therein to meet the required payments to be made into
the Bond Account.
Section 6.
Rate Stabilization Account. A special account of the City to be designated
the "Water and Sewer Rate Stabilization Account" (the "Rate Stabilization Account") may be
created within the Combined Utility System Fund, at the discretion of the Director of Financial
Services, to cope with future increases in revenue requirements of the System. In accordance
with the provisions of Section 5 of this ordinance, the City may from time to time appropriate or
budget amounts in the Combined Utility System Fund for deposit in the Rate Stabilization
Account and may from time to time withdraw amounts therefrom to prevent or mitigate water
and sewer rate increases or for other lawful purposes of the City related to the System. Amounts
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withdrawn from the Rate Stabilization Account shall increase Gross Revenue for the period for
which they are withdrawn, and amounts deposited in the Rate Stabilization Account shall reduce
Gross Revenue for the period for which they are deposited. Credits to or from the Rate
Stabilization Account that occur within 90 days after the end of a fiscal year may be treated as
occurring within such fiscal year. Earnings on the Rate Stabilization Account shall be credited to
the Combined Utility System Fund.
Section 7.
Bond Account. There has heretofore been created in the office of the
Director of Financial Services a fund of the City known as the "Utility Debt Service Account"
(the "Bond Account"), which fund shall be drawn upon for the sole purpose of paying the
principal of, premium if any, and interest on the Parity Bonds. The money in the Bond Account
shall be kept separate and apart from all other funds and accounts of the City.
A. Debt Service Account. A special account known as the Debt Service
Account is hereby authorized to be created in the Bond Account for the purpose of paying the
principal of, premium, if any, and interest on the Parity Bonds.
As long as the Bond remains outstanding, the City hereby irrevocably obligates and binds
itself to set aside and pay from the Combined Utility System Fund into the Debt Service
Account, on or before the date due, those amounts necessary, together with Gross Revenue
collected and deposited and such other money as is on hand and available therefor in the Debt
Service Account, to pay the interest or principal and interest next coming due on the outstanding
Parity Bonds.
The City covenants and agrees that in the event it issues any Future Parity Bonds that are
Term Bonds, it will provide in each ordinance authorizing the issuance of the same for annual
payments to be made from the Combined Utility System Fund into the Debt Service Account
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sufficient togclher with Gross Revcnuc collected and deposited and such other money as is on
hand and available therefor in such account to satisfy the Sinking Fund Requirement with respect
to such Term Bonds.
B. Reserve Account. A Reserve Account has been created in the Bond
Account for the purposc of securing the paymcnt of the principal of and interest on the Bond and
any Future Parity Bonds. The City hereby covenants and agrees that it will transfer into the
Reserve Account from the reserve accounts within the City's Water and Sewer Construction and
Refunding Revenue Bond Fund, 1974 or other available funds, a sum equal to the Reserve
Account Requirement for the Bond.
The City further covenants and agrees that in the event it issues any Future Parity Bonds
it will provide in each ordinance authorizing the issuance of such Future Parity Bonds for the
payment into the Reserve Account out of Future Parity Bond proceeds, Gross Revenue or
Assessments (or, at the option of the City, out of any other funds on hand and legally available
therefor) approximately equal additional annual installments so that by five years from the date
of issuance of such Future Parity Bonds there will have been paid into the Reserve Account an
amount that, together with money already on deposit therein, will be at least equal to the Reserve
Account Requirement. The City may substitute Qualified Insurance or a Qualified Letter of
Credit for amounts required to be deposited into the Reserve Account. Such Qualified Letter of
Credit or Qualified Insurance shall not be cancellable on less than five years' notice. In the event
of any cancellation, the Reserve Account shall be funded in accordance with the provisions of
this section providing for payment in the event of a deficiency therein, as if the Parity Bonds that
remain outstanding had been issued on the date of such notice of cancellation. The City may
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create a separate reserve account for a series of Future Parity Bonds, in which case the Reserve
Account shall not secure Future Parity Bonds.
The City further covenants and agrees that when the required deposits have been made
into the Reserve Account, it will at all times maintain therein an amount at least equal to the
Reserve Account Requirement, as redetermined in each calendar year with respect to the Parity
Bonds secured by such Reserve Account. Whenever there is a sufficient amount in the Bond
Account, including all accounts therein, to pay the principal of, premium, if any, and interest on
all outstanding Parity Bonds, the money in the Reserve Account may be used to pay the principal
of, premium, if any, and interest on the Parity Bonds secured thereby. Money in the Reserve
Account may also be withdrawn to redeem and retire, and to pay the premium, if any, and interest
due to such date of n;demption, on the outstanding Parity Bonds secured by such Reserve
Account, as long as the money remaining on deposit in such Reserve Account is at least equal to
the Reserve Account Requirement determined with respect to the Parity Bonds then outstanding.
In the event the Bond outstanding are ever refunded, the money set aside in the Reserve
Account to secure the payment thereof may be used to retire Bond or may be transferred to any
other reserve account that may be created to secure the payment of any bonds issued to refund the
Bond.
In the event there shall be a deficiency in the Debt Service Account to meet maturing
installments of either interest on or principal of and interest on the outstanding Parity Bonds
payable out of such Account, such deficiency shall be made up from the Reserve Account by the
withdrawal of money therefrom and by the sale or redemption of obligations held in the Reserve
Account, if necessary, in such amounts as will provide cash in the Reserve Account sufficient to
make up any such deficiency, and if a deficiency still exists immediately prior to an interest
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payment date and after the withdrawal of cash, the City shall then draw from any Qualified Leiter
of Credit, Qualified Insurance, or other equivalent credit facility in sufficient amount to make up
the deficiency. Such draw shall be made at such times and under such conditions as the
agreement for such Qualified Letter of Credit or such Qualified Insurance shall provide. If more
than one Qualified Letter of Credit or Qualified Insurance is available, draws shall be made
ratably thereon to make up the deficiency. Any deficiency created in the Reserve Account by
reason of any such withdrawal shall then be made up from money in the Combined Utility
System Fund first available after making the payments required to be made under paragraphs
"FIRST" through "FOURTH" of Section 5 of this ordinance.
C. Lien of Bond Account. The Bond, together with the interest thereon, shall
be payable from Assessments, if any, and Gross Revenue, and such Assessments and Gross
Revenue are hereby pledged and set aside out of the Combined Utility System Fund into the
Bond Account. The amounts so pledged are hereby declared to be a lien and charge upon
Assessments, if any, and Gross Revenue equal to the lien and charge thereon to secure and pay
the principal of and interest on any Future Parity Bonds and superior to all other charges of any
kind or nature, except the Operating and Maintenance Expenses.
D. Investment of Money in Bond Account. All money in the Debt Service
Account or Reserve Account may be kept in cash or invested in Permitted Investments maturing
not later than the maturity of the Bond outstanding at the time of such purchase. Interest earned
on or profits made from the sale of such investments shall be deposited in and become a part of
the Bond Account or the Combined Utility System Fund.
Section 8.
Adequacy of Revenue. The Council hereby declares that in fixing the
amounts to he paid into the Bond Account it has considered and has due regard for the Operating
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and Maintenance Expenses and payments associated with Resource Obligations in any month in
which any Resources were made available to the System during such month (regardless of
whether or not the System actually scheduled or received energy from such Resources during
such month) and has not obligated the City to set aside and pay into the Bond Account more
money from the Combined Utility System Fund than in its judgment will be available over and
above such Operating and Maintenance Expenses.
Section 9.
General Covenants. The City hereby covenants with the owner of the
Bond for as long as the same remains outstanding as follows:
A. Rates and Charges. The City will establish, maintain and collect lawful
rates and charges for the use of the services and facilities of the System, and shall adjust such
rates and charges from time to time so that:
(i) Gross Revenue will at all times be sufficient (a) to pay all
Operating and Maintenance Expenses and to pay all taxes, assessments or other governmental
charges lawfully imposed on the System or the revenue therefrom or payments in lieu thereof and
all other amounts that the City may now be and hereafter become obligated to pay from Gross
Revenue by law or contract, and, together with Assessments actually collected, (b) to pay the
principal of and interest on all outstanding Parity Bonds as and when the same become due and
payable, to make all payments required to be made into the Bond Account to satisfy the Sinking
Fund Requirement, and to make when due all payments required to be made into the Reserve
Account; and
(ii) the Net Revenue in each calendar year will equal at least 1.30 times
Annual Debt Service for such year (after deducting Assessments actually collected for such year).
For the purpose of meeting the requirement of this paragraph there may be added to Net Revenue
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for any calendar year any amount withdrawn from the Rate Stabilization Account and credited to
Gross Revcnue as provided in Section 6 of this ordinance. There shall be subtracted from Net
Revenue for any calendar year any amounts in such year withdrawn from thc Combined Utility
System Fund and deposited into the Rate Stabilization Account in such calendar year.
The failure to collect Gross Revenue in any fiscal year sufficient to comply with the
covenant contained in this subsection shall not constitute an event of default if the City, before
the 90th day of the following fiscal year, both (I) employs a Professional Utility Consultant to
recommend changes in the City's rates which are estimated to produce Gross Revenue sufficient
(once the rates recommended by the Professional Utility Consultant have been imposed by the
City) to meet the requirements of this subsection; and (2) imposes rates at least as high as those
recommended by such Professional Utility Consultant at the time or times so recommended.
8. Maintenance of System. The City will at all times keep and maintain the
System in good repair, working order and condition, and will at all times operate the same and
the business in connection therewith in an efficient manner and at a reasonable cost.
C. Sale or Disposition of the System. The City will not sell, mortgage, lease
or otherwise dispose of or encumber all or any portion of the System, except as follows:
(i) The City may sell, mortgage, lease or otherwise dispose of all or
. substantially all of the System if, simultaneously with such sale, mortgage, lease or other
disposition or encumbrance, provision is made for the payment into the Bond Account of cash or
Government Obligations sufficient, together with interest to be earned thereon, to pay the
principal of and interest on all then outstanding Parity Bonds.
(ii) Except as provided in subsection (iii) below, the City will not sell,
mortgage, lease or otherwise dispose of or cncul1loer any part of the useful operating propcrties
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of the System in excess of 51to of the value of the net utility plant of the System unless prior to
such sale, mortgage, lease or other disposition or encumbrance:
(a) there shall have been filed with the Director of Financial
Services a certificate of a Professional Utility Consultant stating that such sale, mortgage, lease
or other disposition or encumbrance will not impair the ability of the City to comply with the rate
covenants set forth in Section 9.A of this ordinance; or
(b) provision is made for the payment, redemption or other
retirement of a principal amount of outstanding Parity Bonds equal to the greater of the following
amounts: (Y) an amount that will be in the same proportion to the net principal amount of Parity
Bonds then outstanding (defined as the total principal amount of the Parity Bonds less the
amount of cash and investments in the Bond Account and accounts therein) that the Net Revenue
from the portion of the System sold or disposed of for the 12 preceding months bears to the total
Net Revenue for such period; or (Z) an amount that will be in the same proportion to the net
principal amount of Parity Bonds then outstanding that the book value of the part of the System
sold or disposed of bears to the book value of the entire System immediately prior to such sale or
disposition.
(iii) The City may sell or otherwise dispose of any of the works, plant,
properties and facilities of the System or any real or personal property comprising a part of the
same with a value less than 5% of the net utility plant of the System or which shall have become
unserviceable, inadequate, obsolete or unfit to be used in the operation of the System, or no
longer necessary, material to or useful in such operation, without making any deposit into the
Bond Account.
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D.
Collection of Assessmcnts.
The City shall promptly collect all
Asscssments levicd in any utility local improvcmcnt district now or hcrcaftcr creatcd to sccure
the paymcnt of the principal of and intercst on any Parity Bonds and shall pay the samc into the
Bond Account without allocation of such Assessments to any particular scries of Parity Bonds. It
is hercby provided further, however, that nothing in this ordinance or in this subsection shall be
construed to prohibit the City from issuing revenue bonds having a lien on Gross Revenue junior
to the lien on such revenue for the payment of the principal of and interest on Parity Bonds and
pledging as security for the payments of such junior lien bonds assessments levied in any utility
local improvement district that may have been created to pay part or all the cost of improvements
to the System for which such junior lien revenue bonds were specifically issued.
E. Books and Accounts. The City will maintain complete books and records
relating to the operation of the System and its financial affairs, and will cause such books and
records to be audited annually, and cause to be prepared an annual financial and operating
statement.
F. Insurance. The City will carry fire and extended coverage insurance on the
System as is ordinarily carried on the property of similar public utilities by other municipal
corporations engaged in the operation of the same if such insurance can be obtained at a
reasonable cost, to the full insurable value thereof, and will also carry adequate public liability
insurance and other kinds of insurance as under good practices are ordinarily carried on the
properties of similar public utilities by private companies engaged in the operation of the same;
provided, however, that the City may if decmed necessary and advisablc by the Council, institute
or continue a self-insurance program with rcspcct to any or all of thc aforementioned risks. Thc
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prem llIms paid for all such IllSLlrance shall bc regardcd and paid as an Opcrat i ng and
Maintenance Expense.
G. Delinqucncies. The City will promptly collect all service charges and
Assessments, determine in a timely manner all delinquencies, and take allnccessary legal action
to enforce collection of sLlch delinquencies.
H. No Free Service. Except as permitted by law, the City will not furnish any
service of the System to any customer free of charge.
Section 10. Tax Covenants; Special Designation. The City covenants to undertake all
actions required to maintain the tax-exempt status of interest on the Bond under Section 103 of
the Code as set forth in the Federal Tax Certificate that will be executed upon the issuance of the
Bond.
The City hereby designates the Bond as a "qualified tax-exempt obligations" under
Section 265(b)( c) of the Code for banks, thrift institutions and other financial institutions. The
City does not expect to issue more than $10,000,000 in qualified tax-exempt obligations during
2007.
Section 11.
Payment Agreements.
General. To the extent and for the purposes permitted from time to time
A.
by Chapter 39.96 RCW and other applicable provisions of State law, the City may enter into
Payment Agreements with respect to any Parity Bonds, subject to the conditions set forth in this
section and in other provisions of this ordinance.
B. Manner and Schedulc of Paymcnts. Each Paymcnt Agreement shall set
forth the manner III which the Payment Agrcemcnt Payments and the Payment Agreemcnt
Receipts shall be calculated and a schedulc of payment datcs.
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C. Authorizing Ordinance. Prior to entering into a Payment Agreement, the
Council shall pass an ordinance authorizing such agreement and selling forth such provisions as
the Council deems necessary or desirable and are not inconsistent with the provisions of this
ordinance.
D. Calculation of Payment Agreement Payments and Debt Service on Junior
Lien Obligations with Respect to which a Payment Agreement is in Force. It is the intent of the
City, for purposes of the rate coverage requirement set forth in Section 9.A(ii) of this ordinance
and the Future Parity Bonds test set forth in Section 12.A(v) of this ordinance, that debt service
on Parity Bonds with respect to which a Payment Agreement is in force shall be calculated to
reflect the net economic effect on the City intended to be produced by the terms of the Parity
Bonds and the terms of the Payment Agreement. In calculating such amounts, the City shall be
guided by the following requirements:
(i) The amount of interest deemed to be payable on any Parity Bonds
with respect to which a Payment Agreement is in force shall be an amount equal to the amount of
interest that would be payable at the rate or rates stated in those Parity Bonds plus Payment
Agreement Payments minus Payment Agreement Receipts.
(ii) For any period during which Payment Agreement Payments are not
taken into account in calculating interest on any outstanding Parity Bonds because the Payment
Agreement is not then related to any outstanding Parity Bonds, Payment Agreement Payments on
that Parity Payment Agreement shall be calculated based upon the following assumptions:
(a) City Obligated to Make Payments Based on Fixed Rate. If
the City is obligated to make Payment Agreement Payments based on a fixed rate and the
Qualified Counterparty is obligated to make payments based on a variable rate index, payments
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by the City will be based on the assumed fixed payor rate, and payments by the Qualified
Counterparty will be based on a rate equal to the average rate determined by the variable rate
index specified by the Payment Agreement during the fiscal quarter preceding the quarter in
which the calculation is made; and
(b) City Obligated to Make Payments Based on Variable Rate
Index. If the City is obligated to make Payment Agreement Payments based on a variable rate
index and the Qualified Counterparty is obligated to make payments based on a fixed rate,
payments by the City will be based on a rate equal to the average rate determined by the variable
rate index specified by the Payment Agreement during the fiscal quarter preceding the quarter in
which the calculation is made, and the Qualified Counterparty will make payments based on the
fixed rate specified by the Payment Agreement.
Section 12.
Future Parity Bonds. The City hereby further covenants with the owner of
the Bond for as long as the same remains outstanding as follows:
A. That it will not issue any bonds with a lien on Gross Revenue superior to
the lien on such revenues of the Bond. The City may issue Future Parity Bonds and to incur
Resource Obligations and obligations under reimbursement agreements related to the provision
of credit enhancement devices that secure any Parity Bonds for:
FIRST, the purpose of acquiring, constructing and installing additions and
improvements to and extensions of, acquiring necessary equipment for, or making necessary
replacements or repairs and capital improvements to the System, or for any other lawful purpose;
or
SECOND, the purpose of rcfunding or purchasing and retiring at or prior to their
maturity any outstanding revenue bonds or other obligations payable out of Gross Revenuc; and
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to pledge that paymcnts be made into thc Bond Account for the payment of the principal thereof
and intcrcst thercon out of the Combincd Utility System Fund sufficicnt to pay the principal of
and intcrest on such Future Parity Bonds and to maintain the reserves required therefor, which
such payments may rank equally wi th the payments out of such Combi ncd Uti I i ty System Fund
into the Bond Account and the Reserve Account to pay and secure the payment of the principal
of and interest on any Parity Bonds then outstanding, upon compliance with the following
conditions:
(i) That at the time of the issuance of such Future Parity Bonds there
is no deficiency in the Bond Account.
(ii) If there are Assessments levied in any utility local improvement
district in which additions and improvements to and extensions of the System will be constructed
from the proceeds of such Future Parity Bonds, the ordinance authorizing such Future Parity
Bonds shall require that such Assessments be paid into the Bond Account.
(iii) If there are Assessments pledged to be paid into a warrant or bond
redemption fund for revenue bonds or warrants being refunded by Future Parity Bonds, the
ordinance authorizing such Future Parity Bonds shall require such Assessments to be used for the
refunding or paid into the Bond Account.
(iv) The principal of and interest on the Future Parity Bonds shall be
payable out of the Bond Account, and the ordinance authorizing their issuance shall further
provide for payments into the Bond Account to satisfy the Sinking Fund Requirement and
payments into the Reserve Account to satisfy the Reserve Account Requirement, all as required
by Section 7 of this ordinance.
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(v) Prior to the delivery of any Future Parity Bonds, the City shall have
on file in the office or the Director of Financial Services either:
(a) a certificate of the Director or Financial Services showing
that the Net Revenue determined as hereafter provided for each calendar or fiscal year after the
issuance of such Future Parity Bonds will equal at least 1.30 times the Annual Debt Service (after
deducting Assessments, allocated to the years in which they would be received if the unpaid
balance of each assessment roll were paid in the remaining number of installments with interest
on the declining balance at the times and at the rate provided in the ordinance confirming the
assessment roll) for each such calendar or fiscal year for all Parity Bonds plus the Future Parity
Bonds proposed to be issued. For purposes this certificate, "Net Revenue" shall be the Net
Revenue for "a period of any 12 consecutive months (which may include amounts withdrawn
from the Rate Stabilization Account, as provided in Section 6 of this ordinance) out of the 24
months immediately preceding the date of delivery of such proposed Future Parity Bonds.
(b) a certificate of a Professional Utility Consultant showing
that the Net Revenue determined and adjusted as hereafter provided for each calendar or fiscal
year after the issuance of such Future Parity Bonds (the "Adjusted Net Revenue") will equal at
least 1.30 times the Annual Debt Service (after deducting Assessments, allocated to the years in
which they would be received if the unpaid balance of each assessment roll were paid in the
remaining number of installments with interest on the declining balance at the times and at the
rate provided in the ordinance confirming the assessment roll) for each such calendar or fiscal
year for all Parity Bonds plus the Future Parity Bonds proposed to be issued.
The Adjusted Net Revenue shall be the Net Revenue for a period of any] 2 consecutive
months (which may include amounts withdrawn from the Rate Stabilization Account, as
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provided in Section 6 of this ordinance) out of the 24 months immediately preceding the date of
delivery of such proposed Future Parity Bonds as adjusted by such Professional Utility
Consultant to take into consideration changes in Net Revenue estimated to occur under the
following conditions for each year after such delivery for so long as any Parity Bonds, including
the Future Parity Bonds proposed to be issued, shall be outstanding:
(a) the additional Net Revenue that would have been received
if any change in rates and charges adopted prior to the date of such certificate and subsequent to
the beginning of such 12-month period, had been in force during the full 12-month period;
(b) the additional Net Revenue that would have been received
if any facility of the System that became fully operational after the beginning of such 12-month
period had been so operating for the entire period; and
(c) the additional Net Revenue esti mated by such Professional
Utility Consultant to be received as a result of any additions, betterments and improvements to
and extensions of any facilities of the System that are (a) under construction at the time of such
certificate or (b) will be constructed from the proceeds of the Future Parity Bonds to be issued.
Such Professional Utility Consultant may rely upon, and his or her certificate shall have
attached thereto, financial statements of the System certified by the Director of Financial
Services showing income and expenses for the period upon which the same is based.
B. Notwithstanding the foregoing requirement, if Future Parity Bonds are to
be issued for the purpose of refunding at or prior to their maturity any part or all of the then
outstanding Parity Bonds and the issuance of such refunding Future Parity Bonds will result in a
debt service savings and does not require an increase of more than $5,000 in any fiscal or
calendar year for principal of and interest on such refunding Future Parity Bonds over and above
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the amount required in such year for the principal of and interest on the bonds being refunded
thereby, the condition stated in subsection A(v) of this section need not be met.
C. Nothing herein contained shall prevent the City from issuing any revenue
bonds, warrants or other obligations that are a charge upon the money in the Combined Utility
System Fund junior or inferior to the payments required by this ordinance to be made into the
Bond Account and the Reserve Account.
Section 13.
Bond Deemed to Be No Longer Outstanding. In the event that the City, to
effect the payment, retirement or redemption of the Bond, sets aside in the Bond Account or in
another special account, held in trust by a trustee, cash or noncallable Government Obligations,
or any combination of cash and/or noncallable Government Obligations, in amounts and
maturities that, together with the known earned income therefrom, are sufficient to redeem or pay
and retire such Bond in accordance with its terms and to pay when due the interest and
redemption premium, if any, thereon, and such cash and/or noncallable Government Obligations
are irrevocably set aside and pledged for such purpose, then no further payments need be made
into the Bond Account for the payment of the principal of and the interest on such Bond. The
owner of the Bond so provided for shall cease to be entitled to any lien, benefit or security of this
ordinance except the right to receive payment from such special account of the principal of,
premium, if any, and interest on such Bond, and such Bond shall be deemed not to be
outstanding under this ordinance.
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Section 14.
Form of the Bond. The Bond shall be in substantially the following form:
No.1
$5,375,000
UNITED STATES OF AMERICA
STATE OF WASHINGTON
CITY OF BREMERTON
WATER AND SEWER REVENUE AND REFUNDING BOND, 2007
REGISTERED OWNER:
INTEREST RATE:
MATURITY DATE:
PRINCIPAL AMOUNT:
Bank of America, N.A.
4.28%
December 1, 2021
Five Million Three Hundred Seventy-Five Thousand and No/IOO
Dollars
The City of Bremerton, Washington (the "City"), for value received, hereby promises to
pay to the Registered Owner identified above, or registered assigns, on the Maturity Date
identified above, the Principal Amount indicated above and to pay interest thereon from June 14,
2007, or the most recent date to which interest has been paid or duly provided for until payment
of this Bond at the Interest Rate set forth above, payable on December 1, 2007, and semiannually
thereafter on the first days of each June and December. The principal of and interest on this
Bond are payable solely out of the special account of the City known as the "Utility Debt Service
Account" (the "Bond Account").
Principal and interest are payable solely out of the Bond Account, into which fund the
City hereby irrevocably binds itself to pay certain fixed amounts out of the Gross Revenue of the
System, as the same is defined in Ordinance No. 5011 of the City (the "Bond Ordinance"),
without regard to any fixed proportion, namely, amounts sufficient to pay the principal of and
interest on the outstanding Bond and any additional and/or refunding water and sewer revenue
bonds issued on a parity of lien with the Bond and to accumulate a reserve, all at the times and in
the manner set forth in the Bond Ordinance. Reference is made to the Bond Ordinance for
definitions of capitalized terms not otherwise defined herein.
This Bond is issued by the City under and pursuant to the laws of the State of Washington
and the Bond Ordinance for the purpose of providing funds to pay the cost of certain capital
improvements to the water and sewer system of the City and to refund certain outstanding bonds
all as specified in the Bond Ordinance.
Thc Bond is subject to prepaymcnt as provided in the Bond Ordinance.
The Gross Rcvenue is hereby pledged to the payment of principal of and interest on the
Bond, and the Bond constitute a charge or lien upon such revenues prior and superior to any
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other charges whatsoever, excluding charges for Operating and Maintenance Expenses of the
System and payments associated with Resource Obligations, if any, and equal to the lien and
charge thereon of any Future Parity Bonds. The Bond is not a general obligation of the City.
The City has designated the bond as a qualified tax-exempt obligations for purposes of
Section 265(b) of the Internal Revenue Code of 1986.
The City hereby covenants and agrees with the owners of the Bond to carry out fully all
covenants and meet all obligations of the City as set forth herein and in the Bond Ordinance, and
reference is hereby made to the Bond Ordinance for a complete statement of such covenants.
This Bond shall not become valid or obligatory for any purpose until the registration
certificate set forth hereon has been signed by the Bond Registrar.
It is hereby certified and declared that the Bond is issued pursuant to and in strict
compliance with the Constitution and laws of the State of Washington and the ordinances of the
City and that all acts, conditions and things required to be done precedent to and in the issuance
of this Bond have happened, have been done and have been performed as required by law.
IN WITNESS WHEREOF, the City has caused this Bond to be signed by the manual or
facsimile signature of its Mayor and attested by the manual or facsimile signature of its City
Clerk, and its corporate seal to be impressed or a facsimile thereof imprinted hereon this 14th day
of June, 2007.
CITY OF BREMERTON, WASHINGTON
By:
/s/
Mayor
ATTEST:
/s/
City Clerk
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REGISTRATION CERTIFICATE
This Bond is registered in the name of the Registered Owner on the books of the City, in
the office of the Director of Financial Services (the "Bond Registrar"), as to both principal and
il1\erest, as noted in the registration blank below. ;AII payments of principal of and interest on
this Bond shall be made by the City with full acquittance by the Bond Registrar's wire transfer,
made payable to the last Registered Owner as shown hereon and on the registration books of the
Bond Registrar at his/her address noted hereon and on the registration books of the Bond
Registrar.
Date of
Registration
Name and Address of
Registered Owner
Bank of America, N .A.
800 Fifth A venue, Floor 34
Seattle, W A 98104
Signature of
Bond Registrar
June 14,2007
Director of Financial Services
Section 15.
Execution and Authentication of the Bond. The Bond shall be signed on
behalf of the City by the manual or facsimile signature of the Mayor and attested by the manual
or facsimile signature of the City Clerk and shall have the seal of the City impressed or a
facsimile thereof imprinted thereon.
Only such Bond as shall bear thereon a Registration Certificate in the form hereinbefore
. recited, manually executed by the Bond Registrar, shall be valid or obligatory for any purpose or
entitled to the benefits of this ordinance. Such Registration Certificate shall be conclusive
evidence that the Bond so authenticated has been duly executed, authenticated and delivered
hereunder and are entitled to the benefits of this ordinance.
In case either of the officers who shall have executed the Bond shall cease to be an officer
or officers of the City before the Bond so signed shall have been authenticated or delivered by the
Bond Registrar, or issued by the City, such Bond may nevertheless be authenticated, delivered
and issued and upon such authentication, delivery and issuance, shall be as binding upon the City
as though those who signcd the samc had continued to be such officers of the City. The Bond
may also be signed and attested on behalf of the City by such persons as at the actual date of
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execution of such Bond shall bc the proper officers of the City although at the original date of
such Bond any such person shall not have been such officer of the City.
Section 16.
Lost or Stolen Boncl. In case the Bond shall be lost, stolen or destroyed,
the Bond Registrar may del i vcr a new bond of like amount, date, maturi ty, interest rate, tenor,
and effect to the registered owner or nominee thereof upon the owner paying the expenses and
charges of the City in connection therewith and upon filing with the Bond Registrar evidence
satisfactory to the Bond Registrar that such bond was actually lost, stolen or destroyed and or
ownership thereof, and upon furnishing the City with indemnity satisfactory to both.
Section 17.
Sale of the Bond. The Bond shall be sold to Bank of America, N.A. (the
"Bank") in accordance with its proposal to purchase the Bond attached as Exhibit A (the
"Proposal") and the acceptance of such proposal is hereby ratified and confirmed. The City shall
pay the Bank an origination fee of not to exceed $5,375.00 and the Bank's legal fees of $900.00,
upon the closing and delivery of the Bond. Bane of America Securities LLC shall act as the
structuring agent and shall arrange the placement of the Bond with Bank of America, N.A. The
City shall pay a fee of $26,875.00 to Bane of America Securities LLC upon the closing and
delivery of the Bond to Bank of America, N.A.
Section 18. Application of Bond Proceeds. The proceeds of the Bond shall be applied
as follows:
(A) The amount (together with available Gross Revenues) required to refund
the Rcfunded Bonds shall be deposited into the Refunding Account and used to accomplish the
refunding of the Refunded Bonds in accordance with the provisions of Section 25 of this
ard i nance.
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(B) The amount necessary to satisfy the Reserve Account Requirement shall
be deposited into the Reserve Account.
(C) The balance of the Bond proceeds shall be deposited into the COl1lbil~d
Utility System Funds and applied to pay costs of the Project and costs of issuing the Bond.
Section 19
Events of Default. The City hereby covenants and agrees with the owners
of the Bond, in order to protect and safeguard the covenants and obligations undertaken by the
City securing the Bond, that the following shall constitute "Events of Default":
(A) If default shall be made in the due and punctual payment of the principal
of and premium, if any, on any of the Parity Bonds when the same shall become due and payable,
either at maturity or by proceedings for mandatory redemption or otherwise;
(B) If default shall be made in the due and punctual payment of any
installment of interest on any Parity Bond;
(C) If the City shall fail to purchase or redeem any Term Bonds, if any, in an
aggregate principal amount at least equal to the Sinking Fund Requirement for the applicable
Fiscal Year;
(D) If the City shall default in the observance and performance of any other of
the covenants, conditions and agreements on the part of the City contained in this ordinance and
the default or defaults shall have continued for a period 90 days after the City shall have received
from the Bondowners' Trustee (hereinafter defined) or from the owners of not less than 20% in
principal amount of Parity Bonds outstanding, a written notice specifying and demanding the
cure of such default;
(E) If an order, judgment or decree shall be entered by any court of competent
jurisdiction: (i) appointing a receiver, trustee or liquidator for the City or the whole or any
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substantial part of the Systcm; (ii) approving a petition filed against the City seeking the
bankruptcy, arrangemcnt or reorganization of the City under any applicable law of the United
States or the State; or (iii) assuming custody or control of the City or of the whole or any
substantial part of the System under the provisions of any other law for the relief or aid of debtors
and such order, judgment or decree shall not be vacated or set aside or stayed (or, in case custody
or control is assumed by said order, such custody or control shall not be otherwise terminated)
within 60 days from the date of the entry of such order, judgment or decree; or
(F) If the City shall: (i) admit in writing its inability to pay its debts generally
as they become due; (ii) file a petition in bankruptcy or seeking a composition of indebtedness
under,any state or federal bankruptcy or insolvency law; (iii) make an assignment for the benefit
of its creditors; (iv) consent to the appointment of a receiver of the whole or any substantial part
of the System; or (v) consent to the assumption by any court of competent jurisdiction under the
provisions of any other law for the relief or aid of debtors of custody or control of the City or of
the whole or any substantial part of the System.
Section 20
Bondowners' Trustee. So long as an Event of Default has not been
remedied, a bondowners' trustee (the "Bondowners' Trustee") may be appointed by the
registered owners of 25% in principal amount of the Parity Bonds, by an instrument or
concurrent instruments in writing signed and acknowledged by such registered owners of the
Parity Bonds or by their attorneys-in-fact duly authorized and delivered to such Bondowners'
Trustee, notification thereof being given to the City. That appointment shall become effective
immediately upon acceptance thereof by the Bondowners' Trustee. Any Bondowners' Trustee
appointed under the provisions of this section shall be a bank or trust company organized under
the laws of the State of Washington or the State of New York or a national banking association.
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The hank or trust company acting as Bondowners' Trustee may be removed at any time, and a
successor Bondowners' Trustee may be appointed, by the registered owners of a majority in
principal amount of the Parity Bonds, by an instrument or concurrent instruments in writing
signed and acknowledged by such registered owners of the Bond or by their attorneys-in-fact
duly authorized. The Bondowners' Trustee may require security and indemnity as may be
reasonable against the costs, expenses and liabilities that may be incurred in the performance of
its duties.
In the event that any Event of Default in the sole judgment of the Bondowners' Trustee is
cured and the Bondowners' Trustee furnishes to the City a certificate so stating, that Event of
Default shall be conclusively deemed to be cured and the City, the Bondowners' Trustee and the
registered owners of the Parity Bonds shall be restored to the same rights and position which they
would have held if no Event of Default had occurred.
The Bondowners' Trustee appointed in the manner herein provided, and each successor
thereto, is declared to be a trustee for the registered owners of all the Parity Bonds and IS
empowered to exercise all the rights and powers herein conferred on the Bondowners' Trustee.
Section 21
Suits at Law or in Equity. Upon the happening of an Event of Default and
during the continuance thereof, the Bondowners' Trustee may, and upon the written request of
the registered owners of not less than 25% in principal amount of the Parity Bonds outstanding
shall, take such steps and institute such suits, actions or other proceedings, all as it may deem
appropriate for the protection and enforcement of the rights of the registered owners of the Parity
Bonds, to collect any amounts due and owing to or from the City, or to obtain other appropriate
relief, and may enforce the specific performance of any covenant, agreement or condition
contained in this ordinance or in any of the Parity Bonds.
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Nothing contained in this section shall, in any event or under any circumstance, be
dcemedlo authorize the acceleration of maturity of principal on the Parity Bonds, and the remedy
of acceleration is expressly denied to the registered owners of the Parity Bonds under any
circumstances including, without limitation, upon the occurrence and continuance of an Event of
Default.
Any action, suit or other proceedings instituted by the Bondowners' Trustee hereunder
shall be brought in its name as trustee for the registered owners of the Parity Bonds and all such
rights of action upon or under any of the Parity Bonds or the provisions of this ordinance may be
enforced by the Bondowners' Trustee without the possession of any of those Parity Bonds and
without the production of the same at any trial or proceedings relative thereto except where
otherwise required by law. Any such suit, action or proceeding instituted by the Bondowners'
Trustee shall be brought for the ratable benefit of all of the registered owners of those Parity
Bonds, subject to the provisions of this ordinance and the ordinances authorizing the issuance of
other outstanding Parity Bonds. The respective registered owners of the Parity Bonds, by taking
and holding the same, shall be conclusively deemed irrevocably to appoint the Bondowners'
Trustee the true and lawful trustee of the respective registered owners of those Parity Bonds, with
authority to institute any such action, suit or proceeding; to receive as trustee and deposit in trust
any sums becoming distributable on account of those Parity Bonds; to execute any paper or
documents for the receipt of money; and ,to do all acts with respect thereto that the registered
owner himself or herself might have done in person. Nothing herein shall be deemed to
authorize or empower the Bondowners' Trustee to consent to accept or adopt, on behalf of any
registered owner of the Parity Bonds, any plan of reorganization or adjustment affecting the
Parity Bonds or any right of any registered owner thereof, or to authorizc or cmpower the
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Bondowners' Trustee to vote the claims of the registered owners thereof in any receivership,
insolvency, liquidation, hankruptcy, reorganization or other proceeding to which the City is a
party.
Section 22
Application of Money Collected hy Bondowners' Trustee. Any money
collected hy the Bondowners' Trustee at any time shall be applied in the following order of
priori ty:
(A) first, to the payment of the charges, expenses, advances and compensation
of the Bondowners' Trustee and the charges, expenses, counsel fees, disbursements and
compensation of its agents and attorneys; and
(B) second, to the payment to the persons entitled thereto first of required
interest and then of unpaid principal amounts on any Parity Bonds which shall have become due
(other than Parity Bonds previously called for redemption for the payment of which money is
held pursuant to the provisions hereto), whether at maturity or by proceedings for redemption or
otherwise, in the order of their due dates and, if the amount available shall not be sufficient to
pay in full the principal amounts due on the same date, then to the payment thereof ratably,
according to the principal amounts due thereon to the persons entitled thereto, without any
discrimination or preference.
Section 23
Duties and Obligation of Bondowners' Trustee. The Bondowners' Trustee
shall not be liable except for the performance of such duties as are specifically set forth herein.
During an Event of Default, the Bondowners' Trustee shall exercise such of the rights and
powers vested in it hereby, and shall use the same degree of care and skill in its exercise, as a
prudent person would exercise or use under the circumstances in the conduct of his or her own
affairs. The Bondowners' Trustee shall have no liability for any act or omission to act hereunder
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except for the 130ndowners' Trustee's own negligent action, its own negligent failure to act or its
own willful misconduct. The duties and obligations of the 130ndowners' Trustee shall he
determined solely by the express provisions of this ordinance, and no implied powers, duties or
obligations of the Bondowners' Trustee shall he read into this ordinance.
The Bondowners' Trustee shall not be required to expend or risk its own funds or
otherwise incur individual liability in the performance of any of its duties or in the exercise of
any of its rights or powers as the Bondowners' Trustee, except as may result from its own
negligent action, its own negligent failure to act or its own willful misconduct.
The Bondowners' Trustee shall not be bound to recognize any person as a registered
owner of any Parity Bond until his title thereto, if disputed, has been established to its reasonable
satisfaction.
The Bondowners' Trustee may consult with counsel and the opinion of such counsel shall
be full and complete authorization and protection in respect of any action taken or suffered by it
hereunder in good faith and in accordance with the opinion of such counsel. The Bondowners'
Trustee shall not be answerable for any neglect or default of any person, firm or corporation
employed and selected by it with reasonable care.
Section 24
Suits by Individual Bondowners Restricted. Neither the registered owner
nor the beneficial owner of anyone or more of Parity Bonds shall have any right to institute any
action, suit or proceeding at law or in equity for the enforcement of same unless:
(a) an Event of Default has happened and is continuing; and
(b) a Bondowners' Trustee has been appointed; and
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(c) such owner previously shall have given to the Bondowners' Trustee written notice
of the Event of Default on account of which such suit, action or proceeding is to be instituted;
and
(d) the registered owners of 25% in principal amount of the Parity Bonds, after the
occurrence of such Event of Default, have made written request of the Bondowners' Trustee and
have afforded the Bondowners' Trustee a reasonable opportunity to institute such suit, action or
proceeding; and
(e) there have been offered to the Bondowners' Trustee security and indemnity
satisfactory to it against the costs, expenses and liabilities to be incurred therein or thereby; and
(f) the Bondowners' Trustee has refused or neglected to comply with such request
within a reasonable time.
No registered owner or beneficial owner of any Parity Bond shall have any right in any
manner whatever by his action to affect or impair the obligation of the City to pay from the Net
Revenue the principal of and interest on such Parity Bonds to the respective owners thereof when
due.
Section 25.
Refunding Account There is hereby established a special account or
accounts of the City to be maintained with the Escrow Agent (as hereinafter defined) to be
known as the "City of Bremerton 2007 Water and Sewer Revenue Bond Refunding Account"
(the "Refunding Account"), which account shall be drawn upon for the sole purpose of paying
the principal of and interest on the 1994 Refunded Bonds and of paying costs related to issuance
of the Bond and refunding the 1994 Refunded Bonds.
Money in the Refunding Account shall be used immediately upon receipt thereof to
defease the 1994 Refunded Bonds and discharge the other obligations of the City relating thereto
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under Ordinance No. 4451 of the City, by providing for the payment of the principal of and
interest on the 1994 Refunded Bonds as set forth below. The City shall defease such bonds and
discharge such obligations by the use of Gross Revenues deposited into the Refunding Account
to purchase certain "Government Obligations," as such obligations are defined in Chapter 39.53
RCW as now or hereafter amended (which obligations so purchased, are herein called "Acquired
Obligations"), bearing such interest and maturing as to principal and interest in such amounts and
at such times which, together with any necessary beginning cash balance, will provide for the
payment of:
(A) interest on and principal of the 1994 Refunded Bonds due and payable
until and on September 1, 2007; and
(B) the redemption pnce (100% of the principal amount) payable on
September I, 2007, of the 1994 Refunded Bonds.
Such Acquired Obligations shall be purchased at a yield not greater than the yield
permitted by the Code and regulations relating to acquired obligations in connection with
refunding bond issues.
The 2005 Refunded Bond will be paid in full on the closing date of the Bond.
To carry out the refunding and defeasance of the 1994 Refunded Bonds, the Director of
Financial Services is hereby authorized to appoint as escrow agent a bank or trust company
qualified by law to perform the duties described herein (the "Escrow Agent"). Any beginning
cash balance and the Acquired Obligations shall be irrevocably deposited with the Escrow Agent
in an amount sufficient to defease the 1994 Refunded Bonds. Any amounts described above that
are not provided for in full by such beginning cash balance and the purchase and deposit of the
Acquired Obligations described in this section shall be provided for by the irrevocable deposit of
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the necessary amount out of the proceeds of sale of the Bond or any other money of the City
legally available therefor with the Escrow Agent. The amounts remaining in the Refunding
Account after acquisition of the Acquired Obligations and provision for the necessary beginning
cash balance shall be utilized to pay expenses of the acquisition and safekeeping of the Acquired
Obligations and the costs of issuing the Bond. The City may, from time to time, transfer, or
cause to be transferred, from the Refunding Account any money not thereafter required for the
purpose set forth in subparagraphs (A) - (B) above or for the payment of expenses. The City
reserves the right to substitute other securities for the Acquired Obligations in the event it may do
so pursuant to Section 148 of the Code, upon compliance with the conditions set forth in the
Escrow Agreement.
Section 26.
Redemption of Refunded Bonds. The City hereby irrevocably sets aside
sufficient funds through the purchase of Acquired Obligations and an initial cash deposit to make
the payment specified in subparagraphs (A) - (B) of Section 25 above.
The City hereby irrevocably calls for redemption on September I, 2007, the 1994
Refunded Bonds in accordance with the provisions of Ordinance No. 4451. The City hereby also
irrevocably calls for redemption on the closing date for the Bond, the 2005 Refunded Bond in
accordance with the provisions of Section 5 of Ordinance No. 4944.
Said defeasance and call for redemption of the 1994 Refunded Bonds shall be irrevocable
after the final establishment of the Refunding Account and delivery of the Acquired Obligations
and the requisite cash deposit, if any, to the Escrow Agent, except as provided herein relating to
the substitution of securities.
The Escrow Agent is hereby authorized and directed to notify the paying agent for the
1994 Refunded Bonds to. give notice of the redemption of the 1994 Refunded Bonds in
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accordance with the applicable provIsions of Ordinance No.4451. The Director of Financial
Services is authorized and requested to provide whatever assistance is necessary to accomplish
such redemption and the giving of notice therefor. The costs of publication of such notice shall
be an expense of the City.
The Escrow Agent IS hereby authorized and directed to pay to the fiscal agency or
agencies of the State of Washington, as paying agent for the 1994 Refunded Bonds, and the City
as paying agent for the 2005 Refunded Bond, sums sufficient to pay, when due, the payment
specified in subparagraphs (A) - (B) of Section 25 above. All such sums shall be paid from the
money and Acquired Obligations deposited with the Escrow Agent pursuant to Section 25 of this
ordinance, and the income therefrom and proceeds thereof. All such sums so paid shall be
credited to the Refunding Account. All money and Acquired Obligations deposited with the
Escrow Agent and any income therefrom shall be held, invested and applied in accordance with
the provisions of this ordinance and with the laws of the State of Washington for the benefit of
the City and the owners of the 1994 Refunded Bonds.
The City will take such actions as are found necessary to see that all necessary and proper
fees, compensation and expenses of the Escrow Agent shall be paid when due. The proper
officers and agents of the City are directed to obtain from the Escrow Agent an agreement setting
forth the duties, obligations and responsibilities of the Escrow Agent in connection with the
redemption and retirement of the ] 994 Refunded Bonds as provided herein and making provision
for payment of the fees, compensation and expenses of such Escrow Agent as may be satisfactory
to it. To carry out the purposes of this section of this ordinance, the Mayor or Director of
Financial Services are authorized and directed to execute and deliver to the Escrow Agent such
an escrow agreement in form approved by bond counsel to the City.
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Section 27.
Finding of Defeasance. The Council hereby finds and determines that the
issuance and sale of the Bond permits the City to comply with covenants contained in the
ordinances that authorized issuance of the 1994 Refunded Bonds and permits the City to satisfy
its defeasance obligations under such ordinances.
The Council hereby also finds and determines that the Acquired Obligations to be
deposited with the Escrow Agent and the income therefrom, together with any necessary
beginning cash balance, are sufficient to redeem the 1994 Refunded Bonds and will discharge
and satisfy the obligations of the City under Ordinance No. 4451 authorizing the issuance of the
1994 Refunded Bonds and the pledge of the City therein. Immediately upon the delivery of such
Acquired Obligations to the Escrow Agent and the deposit of any necessary beginning cash
balance, the 1994 Refunded Bonds shall be deemed not to be outstanding under
Ordinance No. 4451 and shall cease to be entitled to any lien, benefit or security under such
ordinance except the right to receive payment from the Acquired Obligations and beginning cash
balance so set aside and pledged.
Section 28.
Ongoing Disclosure: Reporting Requirements. The City is exempt from
the ongoing disclosure requirements of Securities and Exchange Commission Rule 15c2-12 by
reason of the exemption set forth in subsection (d)(i) of that rule with respect to the issuance of
securities in authorized denominations of $100,000 or more.
The City hereby covenants and agrees for as long as the Bond remains outstanding that it
will provide annually to the Bank copies of (a) its audited financial statements for each fiscal
year, within 10 days of receipt thereof; (b) the City's internally-prepared, unaudited annual
financial statement, within 180 days of the end of the fiscal year, (c) the City's budget for the
new period within 90 days of commencement of the new budget cycle and (e1) certificate signed
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by the Director of Financial Services affirming compliance with all terms of [his ordinance,
including the calculation of debt service coverage requirement, annually within 180 days of fiscal
year end.
Section 29.
Authorization to Officials and Agents. The proper City officials are
hereby authorized and directed to approve an official statement or other disclosure documcnt; and
to do everything necessary and proper for the prompt issuance, execution and delivery of the
Bond in conformance with the provisions of this ordinance and for the proper use and application
of the proceeds of the sale thereof as provided in this ordinance.
Section 30.
Supplements and Amendments.
The Council from time to time and at any time may adopt an ordinance or
A.
ordinances supplementing or amending this ordinance, which ordinance or ordinances thereafter
shall become a part of this ordinance, for anyone or more or all of the following purposes:
(i) To add to the covenants and agreements of the City in this
ordinance other covenants and agreements thereafter to be observed, which shall not adversely
affect the interests of the owners of any Parity Bonds in any material respect, or to surrender any
right or power herein reserved to or conferred upon the City.
(ii) To make such provisions for the purpose of curing any ambiguities
or of curing, correcting or supplementing any defective provision contained in this ordinance in
regard to such matters or questions as the Council may deem necessary or desirable and not
inconsistent with this ordinance and which shall not adversely affect the interests of the owners
of any Parity Bonds in any material respect.
(iii) To amcnd or supplemcnt any provision containcd in this ordinance
for thc purpose of obtaining or maintaining a rating on thc Bond so long as such amcndmcnt or
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supplement is not inconsistent with this ordinance and will not adversely affect the interests of
the owners of any Parity Bonds in any material respect.
Any such supplemental ordinance of the Council may be adopted without the consent of
the owners of any Parity Bonds at any time outstanding, notwithstanding any of the provisions of
subsection B of this section; provided, however, that the City shall obtain an opinion of
nationally recognized bond counsel to the effect that such supplemental ordinance complies with
this subsection A and will not adversely affect the interests of the owners of any Parity Bonds in
any material respect.
B. With the consent of the owners of not less than a majority in aggregate
principal amount of the Parity Bonds at the time outstanding, the Council may adopt an
ordinance or ordinances supplemental hereto for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of this ordinance or of any
supplemental ordinance; provided, however, that no such supplemental ordinance shall:
(i) Extend the fixed maturity of any Parity Bond, or reduce the rate of
interest thereon, or extend the time of payments of interest from their due date, or reduce the
amount of the principal thereof, or reduce any premium payable on the redemption thereof,
without the consent of the owner of each Parity Bond so affected; or
(ii) Reduce the aforesaid percentage of owners of Parity Bonds
required to approve any such supplemental ordinance, without the consent of the owners of all
Parity Bonds then outstanding.
It shall not be necessary for the consent of bondowners under this subsection B to
approve the particular form of any proposed supplemental ordinance, but it shall be sufficient if
such consent shall approve the substance thereol'.
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C. Upon the adoption of any supplemental ordinance pursuant to the
provisions of this section, this ordinance shall be dccmed modified and amended in accordance
therewith, and the respective rights, dutics and obligations of the City under this ordinancc and
the owner of the Bond outstanding hercunder shall thcreaftcr bc determined, cxercised and
enforced thereunder, subject in all respects to such modification and amcndments, and all thc
terms and conditions of any such supplemcntal ordinance shall be deemed to be part of the terms
and conditions of this ordinance for any and all purposes.
Section 31.
Severability. If anyone or more of the covenants or agreements provided
m this ordinance to be performed on the part of the City shall be declared by any court of
competent jurisdiction to be contrary to law, then such covenant or covenants, agreement or
agreements shall be null and void and shall be deemed separable from the remaining covenants
and agreements of this ordinance and shall in no way affect the validity of the other provisions of
this ordinance or of the Bond.
Section 32.
Ratification. Any action consistent with the authority but prior to the
effective date of this ordinance is hereby ratified and confirmed.
Section 33.
Effective Date. This ordinance shall take effect ten days after its passage,
approval and publication as required by law.
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APPROVED by the City Council of the City of Bremerton, Washington the 6th clay of
June, 2007.
PASSED by the City Council of the City of Bremerton, Washington this 6th clay of June,
2007.
APPROVED this
day of June, 2007.
Cary Bozeman, Mayor
ATTEST:
Paula Johnston, City Clerk
APPROVED AS TO FORM:
Nancy M. Neraas, Bond Counsel
PUBLISHED
EFFECTIVE DATE
ORDINANCE NO.
-47-
PINMNINMN2YS
CER'fIFICATE
I, thc undersigned, City Clerk of the City of Bremerton, Washington, (the "City") ancl
keeper of the records of the City Council (the "Council"), DO HEREBY CERTIFY:
I. That the attached ordinance is a true and correct copy of Ordinance No. 50 II of
the Council (the "Ordinance"), duly passed at a regular meeting thereof held on the 6th day of
June, 2007.
2. That said meeting was duly convened and held in all respects in accordance with
law, and to the extent required by law, due and proper notice of such meeting was given; that a
quorum was present throughout the meeting and a legally sufficient number of members of the
Council voted in the proper manner for the passage of said Ordinance; that all other requirements
and proceedings incident to the proper passage of said Ordinance have been duly fulfilled, carried
out and otherwise observed; and that I am authorized to execute this certificate.
IN WITNESS WHEREOF, I have hereunto set my hand this 6th day of June, 2007.
City Clerk
EXHIBIT A
BANK OF AMERICA, N.A. PIU)POSAL
BankofAmerica ~
~,
Nancy Nuerenbel'!l
Senior Vice r-'resident
Govcnuncnt Banking
WAI-SOl-34-0J
800 Slh Avenue, J4" Floor
Seattle. WA 98104
rei 206.358.6279
Fa>: 206.358.8818
nancy. d, nu er enberg@bankofamenc3.com
May 2, 2007
Ms. Laura Lyon
Director of Fin ancial Services
City of Bremerton
345-6th Street Suite 600
Bremerton, WA 98337-1873
Re: $5,375,000 (estimated) INater & Sewer Revenue Bond, 2007
Dear Laura:
Bank of America, N. A. is pleased to provide the attached proposal for a Bond for the City of
Bremerton. The Bond will finance various improvements to the water and sewerage system and
defease and retire outstanding water and sewer revenue bonds.
The rates and terms for the Bond are attached to this letter, as Exhibit A, Summary of Terms and
Conditions. The terms and conditions are not all-inclusive, but generally describe the proposal
offered to the City.
We appreciate the opportunity to present you Vvith this proposal and look forward to working with you
to complete the transaction. Please call me either me at (206) 358-6279, or Dave Trageser at
(206) 358-8922 to discuss any questions or comments you may have regarding this proposal.
Sincerely,
Bank of America, NA
17 f/~~7
Nancy D. Nuerenberg, SVP
Senior Credit Products Officer
cc: Nancy Neraas, K&L Preston Gates Ellis LLP
Stacie Amasaki, K&L Preston Gates Ellis LLP
Dave Trageser, Banc of America Securities LLC
Suzanne Eide, Banc of America Securities LLC
Tana Aardal, Bank of America
Brennan Church, Bank of America
A-2
P:INMNINMN2YS
City of Bremerton
May 2, 2007
Page 2 of6
BORROWER:
LENDER:
BOND:
PURPOSE:
MATURITY DATE:
CLOSING DA TE:
SECURITY:
RESERVE ACCOUNT
REQUIRMENT:
INTEREST RATE:
REPA YMENT:
BankofAmerfca ~
~
Exhibit A
Summary of Terms and Conditions
(For Discussion Purposes Only)
City of Bremerton, Washington (the "Borrower")
Bank of America N .A. ("Bank of America ")
$5,375,000 (estimated) Water and Sewer Revenue and
Refunding Bond, 2007. Tax-Exempt Bank Qualified (the "Bond").
Proceeds ofthe Bond INiIl be used to provide funds for certain
capital improvements to the Borrower's water and sewerage
system (the 'System"), to defease and retire Borrower's
outstanding water and sewer revenue bonds, and to pay costs
associated INith issuing the Bond.
December 1, 2021.
Estimated to close on June 1,2007.
Borrower to pledge the following security for repayment of all
outstanding principal, interest and fees due on the Bond:
Pledge of Assessments, if any, and Gross Revenue of the
System. Assessments and Gross Revenue shall have the
meaning as defined per Borrower's Ordinance to be
adopted on May 23, 2007 approving the issuance of the
Bond (the "Ordinance"). This pledge shall constitute a lien
and charge upon such Assessments, if any, and Gross
Revenue of the System equal to the lien and charge
thereon to secure and pay the principal of and interest on
any Future Parity Bonds and superior to all other charges of
any kind or nature, except the Operating and Maintenance
Expenses.
All capitalized terms contained herein shall have the meaning as
defined in the Ordinance.
Borrower to establish and maintain a Reserve Account in
accordance IlVith the terms of the Ordinance.
Indicative Fixed Rate 4.06% as of April 25, 2007, calculated on
a 30/360-day basis. Final pricing to be set upon approval of the
Bond Ordinance by Borrower, as mutually agreed by Borrower
and Bank of America.
Interest on the Bond shall be repaid semi-annually each June 1
and December 1, beginning December 1, 2007.
Principal on the Bond shall be repaid in equal annual
installments on December 1 each year, beginning
December 1,2007 as outlined in Attachment 1.
A-3
P:\NMN\NMN2YS
City of Bremerton
May 2, 2007
Page 3 of 6
BlInkofAmerlca ~
~
ORIGINA TION FEE:
Borrower agrees to pay Bank an origination fee capped at
10 bp ($5,375) of the principal amount of the Bond. This fee
shall be deemed fully eamed and payable upon closing.
EXPENSES:
Borrower will pay all reasonable costs and expenses associated
with the preparation and review of all documentation executed in
connection with the Bond, including Bank of America's
attorneys' fees, whether or not the Bond is closed (capped at
$1,200); Borrower's outside legal counsel fees; fees incurred by
Bank of America for structuring services provided by Banc of
America Securities LLC (capped at 0.5% of the principal
amount of the Bond); and any other costs associated with
documenting and closing the Bond.
PREPAYMENT FEES:
Any prepayment of this Bond prior to its scheduled maturity
may result in the imposition of a prepayment fee. The
prepayment fee shall be in an amount sufficient to compensate
the Bank for any loss incurred by it as a result of the
prepayment, as documented by the Bank, including any loss
arising from the liquidation or reemployment of funds obtained
by it to maintain the funds used to purchase the Bond or from
fees payable to terminate the deposits from which such funds
were obtained. For purposes of this paragraph, the Bank shall
be deemed to have funded the purchase of the Bond by a
matching deposit or other borrowing in the applicable interbank
market, whether or not the Bond was in fact so funded. In no
case shall a prepayment fee apply if the Bank's internally
derived cost of fu nds is higher on the date of prepayment th an it
was on the date the fIXed rate ofthe Bond was set.
COVENANTS:
Borrower agrees to comply .....;th all covenants outlined in Section
9 of the Ordinance which includes, but is not limited to, the
following:
Borrower will establish, maintain and collect lawful rates and
charges for the use of the services and facilities of the System,
and shall adjust such rates and charges from time to time so
that:
Gross Revenue ""';11 at all times be sufficient (a) to pay
all Operating and Maintenance Expenses and to pay
all taxes, assessments or other governmental charges
lawfully imposed on the System or the revenue
therefrom or payments in lieu thereof and all other
amounts that the City may now be and hereafter
become obligated to pay from Gross Revenue by law
or contract, and, together with Assessments actually
collected, (b) to pay the principal of and interest on all
outstanding Parity Bonds as and when the same
become due and payable, to make all payments
required to be made into the Bond Account to satisfy
the Sinking Fund Requirement, and to make when due
all payments required to be made into the Reserve
Account; and
A-4
P:\NMN\NMN2YS
City of Bremerton
May 2, 2007
Page40f6
CONDITIONS PRECEDENT
TO CLOSING:
EVE/IITS OF DEFAULT:
FINANCIAL REPORTING
REQUIREMENTS:
BankofAmerica ~
~
the Net Revenue in each calendar year will equal at
least 1.30 times Annual Debt Service for such year
(after deducting Assessments actually collected for
such year). For the purpose of meeting this
requirement there may be added to Net Revenue for
any calendar year any amount \Mthdrawn from the
Rate Stabilization Account and credited to Gross
Revenue as provided in Section 6 of the Ordinance.
There shall be subtracted from Net Revenue for any
calendar year any amounts in such year withdrawn
from the Combined Utility System Fund and deposited
into the Rate Stabilization Account in such calendar
year.
Borrower will at all times keep and maintain the
System in good repair, working order and condition,
and \Mil at all times operate the same and the business
in connection there\Mth in an efficient manner and at a
reasonable cost.
As long as the Bond is outstanding, Borrower
covenants th at it \Mil not issue any bonds with a lien
on Gross Revenue superior to the lien on such
revenues of the Bond. Borrower may issue Future
Parity Bonds and incur Resource Obligations and
obligations under reimbursement agreements
related to the provision of credit enhancement
devices that secure any Parity Bonds for the
purposes and upon compliance with the conditions
outlined in the Ordinance.
Borrower to obtain a long term, unenhanced debt rating on the
Bond from Moody's (or other rating agency acceptable to Bank)
of at least A3.
Usual and customary in transactions of this type, to include
without limitation: (i) nonpayment of principal, interest, fees or
other amounts; (ii) violation of covenants; (iii) inaccuracy of
representations and warranties; (iv) bankruptcy and other
insolvency events; (v) creditor or forfeiture proceedings; and (vi)
actual or asserted invalidity of any loan documentation or
security interests.
If an event of default occurs due to (i) nonpayment of prin cipal,
interest, fees or other amounts when due, or (ii) failure to
maintain the tax exempt status of the Bond, then Bank of
America may increase the interest rate by two percentage
points.
Annual State Audit Report of the Borrower within 10 days of
receipt from State Auditor.
Borrower's internally prepared unaudited annual financial
statement within 180 days of its fiscal year end.
Within 90 days of commencement of the new budget cycle,
a copy of Borrower's budget for the new period.
A-)
P:\NMN\NMN2YS
City of Bremerton
May 2, 2007
Page 5 of6
BankofAmerica ~
~,
Certificate signed by Director of Financial Services affirming
compliance with all terms of the Ordinance and including
calculation of Debt Service Coverage requirement, annually
with in 180 days of fiscal year end,
DOCUMENTATION:
All documentation, including the form of legal opinion to be
issued by Borrower's legal counsel, is subject to review and
approval by Bank of America's legal counsel.
Documentation to include:
A legal opinion of nationally recognized bond counsel,
in form and substance acceptable to Bank and its legal
counsel, that (i) the Ordinance and all documents
related to the Bond have been properly adopted,
authorized and executed; and (ii) the Ordinance and all
documents related to the Bond constitute a legally
binding obligation of the Borrower, enforceable
according to their terms (subject to standard
exceptions); (iii) interest payable on the Bond is
excludable from net income for purposes of federal
income taxes; and (iv) Borrower has designated the
Bond as a "qualified tax-exempt obligation".
A copy of the Ordinance passed by the City Council
authorizing the issuance ofthe Bond;
Receipt of the original signed Bond at closing.
This Summary of Terms and Conditions does not constitute a commitment to lend by Bank of
America or any of its affiliates and is presented for discussion purposes only. The actual terms and
conditions upon which Bank of America may extend credit to Borrower is subject to satisfactory
completion of due diligence, necessary credit approval and such other terms and conditions as
determined by Bank of America, in its sole discretion.
ORAL AGREEMENTS OR ORAL COMMITMENTS TO LOAN MONEY, EXTEND CREDIT, OR TO
FORBEAR FROM ENFORCING REPAYMENT OF A DEBT ARE NOT ENFORCEABLE UNDER
WASHINGTON LAW.
A-6
P:INMNINMN2YS
City of Bremerton
June 6, 2007
Page 1 of 1
ATTACHMENT 1
PRINCIPAL PAYMENT SCHEDULE
12/1/2007
12/1/2008
12/112009
12/1/2010
12/112011
12/1/2012
12/112013
12/1/2014
12/112015
12/112016
12/1/2017
12/112018
12/112019
12/112020
12/112021
$160,000
$305,000
$320,000
$330,000
$335,000
$350,000
$365,000
$375,000
$390,000
$365,000
$380,000
$400,000
$415,000
$435,000
$450,000
$5,375,000
A-7
BankofAmerlca ~.
~,
PINMNINMN2YS
EXHIBIT B
PRINCIPAL PA YIVIENT SCHEDULE
~_.- .-..- .. "_._-"_.._-~-_. -.--- ~- ------ ______H___
HO!\11 !lEBT SI'H VICE
CITY UF BRF\IERTON
\Vater & SC'\\'~r Ref & RC'VC'1H1C' Hond, 2007
ClIlllibutiJlg filII 2007 payml'llt
'A2' Ibtill~. BQ
D:lled Date 06/1'+12007
f)1..~livay DatC' 0(,/1'+.'2007
Period Annual
Ending Principal Coupon rntl~rest DC'bt SC'n.icc Dcht Service
12/01/2007 160,000 4.2S0~1., 106,717.6-+ 266,717.6'+ 266,717.6-+
06/01/2008 111,601.00 111.601.00
12/01/2008 305,000 4.280%, 111,601.00 '+16,601.00 528,202.00
06iO 1/2009 105,074.00 105,07400
12/0112009 320,000 4.2801~/(1 105,074.00 '+25,074.00 530,148.00
06/0 1/2010 98,226.00 98,226.00
12/0112010 330,000 4.2S0~/~ 98,226.00 428,226.00 526,452.00
06/01/2011 91,16400 91,16-+00
12/0112011 335,000 4.280% 91,164.00 420,164.00 517,328.00
06/0 I /20 12 83,995.00 83.99500
12/01/2012 350,000 4.280% 83,99500 433,99500 517,990.00
06/01/2013 76,505.00 76,50500
12/01/2013 365,000 4.280% 76,505.00 441.505.00 518,010.00
06101/2014 68,69400 68,694.00
12/0112014 375,000 4.280% 68,694.00 44.1,694.00 512,388.00
06/0112015 60,669.00 60,669.00
12/01/2015 390,000 4.280%1 60,609.00 450,66900 511.33800
06/0112016 52,323.00 52,323.00
12/01/2016 365,000 4.280% 52,323.00 417,32300 469,6-+6.00
06/0112017 44,512.00 44,512.00
12/01i2017 380,000 4.280% 44,512.00 424,512.00 469.024.00
06/01/2018 36,380.00 36,380.00
12/01/2018 400,000 4.280%, 36,380.00 436,380.00 472.76000
06/01/2019 27,820.00 27,82000
12/01/2019 415,000 4.280% 27,82000 442,820.00 470,6-+000
06/01/2020 18,939.00 18,939.00
12/01/2020 435.000 4.280%, 18,939.00 453,939.00 472,878.00
06/0112021 9,630.00 9,63000
12/01/2021 450,000 4.280% 9,630.00 459,630.00 469,260.00
5,375,000 1,877.781 .64 7,252,7S164 7,252,18 1.6-+
.Il1n (i. 2007 S:.15 :1111 Prcpar('d hy Ihnc of !\Illt:ri"::l Sccmiti('s J J.e
(Fin:lI1ee (,002 fjKI'\IRTON:20(7) 1':J~e 5
I move to authorize the City Attorney to file and prosecute in the
Kitsap County Superior Court the following code enforcement
matters:
. Bremerton v. Donna Joyce and Mike Fisher
. Bremerton v. N atacha Sesko
. Bremerton v. Joshua Vandegrift
RPr