HomeMy WebLinkAbout4790 ORDINANCE NO. 4790
AN ORDINANCE of the City of Bremerton, Washington relating to the
incurrence of indebtedness; providing for the sale and issuance of a limited tax
general obligation bond, 2002, in a principal amount not to exceed $500,000 to
establish a revolving line of credit to finance costs relating to the enforcement of
Ordinance No. 4418 and chapter 35.80 RCW concerning the abatement of unfit
dwellings, buildings, structures and premises; providing for the date, form, terms,
registration privileges, maturity, interest rate and covenants of the bond;
establishing a debt service account for the bond; and providing for the delivery of
such bond to Bank of America, N.A., Seattle, Washington, in exchange for such
line of credit.
WHEREAS, the City of Bremerton, Washington (the "City") has enacted Ordinance No.
4418 providing for the repair and abatement of unfit dwellings, buildings, structures and
premises pursuant to chapter 35.80 RCW; and
WHEREAS, RCW 39.46.050 authorizes local governments to establish lines of credit
with any qualified public depository to be drawn upon in exchange for its obligations; and
WHEREAS, the City deems it necessary and advisable that that the City incur
indebtedness and issue its limited tax general obligation bond in a principal amount not to exceed
$500,000 to establish a revolving line of credit to finance costs relating to the enforcement of
Ordinance No. 4418 and chapter 35.80 RCW conceming the abatement of unfit dwellings,
buildings, structures and premises; and
WHEREAS, the incurrence of indebtedness by the City will not cause the total
indebtedness of the City to be incurred without the assent of the voters of the City to exceed the
limitations set forth in Chapter 39.36 RCW, and
WHEREAS, Bank of America, N.A. (the "Bank") has submitted a commitment letter to
establish a revolving line of credit on the terms and conditions set forth herein in exchange for
the bond; and
WHEREAS, the City Council deems it in the best interests of the City to accept such
offer, to deliver the bond to the Bank and to establish such line of credit; now therefore,
THE CITY OF BREMERTON DOES ORDAIN AS FOLLOWS:
Section 1. Definitions. As used in this ordinance, the following terms shall have the
following meanings:
"Bank" means Bank of America, N.A.
"Bond" means the "City of Bremerton, Washington, Limited Tax General Obligation
Bond, 2002" authorized by this ordinance.
"Bond Account" means the Limited Tax General Obligation Bond Account, 2002 created
in the Repair and Demolition Revolving Fund in this ordinance.
"Bond Register" means the registration books for the Bond maintained by the City.
"City" means the City of Bremerton, Washington.
"Code" means the Internal Revenue Code of 1986, as amended, together with all
applicable regulations thereunder.
"Draw Request" means the written request by any person authorized to make a draw from
the Line of Credit, as more fully described in Section 4 of this ordinance.
"Line of Credit" means the line of credit authorized by this ordinance to be established
with the Bank.
"Outstanding Principal Balance of the Bond" means the aggregate of all funds that the
City has drawn from the Line of Credit pursuant to the Bond less the aggregate of all principal
payments on the Bond made by the City.
"Owner" means the person who is named as the registered owner of the Bond on the
Bond Register.
"Repair and Demolition Revolving Fund" means the special revenue fund created by the
City by Ordinance No. 4388 for purposes of paying costs and expenses incurred by the City in
doing or causing to be done the necessary work of repair or demolition of dangerous buildings
and/or conditions.
Section 2. Finding, Purpose and Description of Bond. The City authorizes the sale and
issuance of its "Limited Tax General Obligation Bond, 2002" (the "Bond"), to establish a
revolving line of credit to finance costs relating to the enforcement of Ordinance No. 4418 and
chapter 35.80 RCW concerning the abatement of unfit dwellings, buildings, structures and
premises (the "Projects") and to pay the "incidental costs and costs related to the sale and
issuance" (as defined in RCW 39.46.070) of the Bond.
The Bond shall be issued as a single bond in the principal amount not exceeding
$500,000 at any time; shall be dated the date of the first Draw Request thereunder; shall be
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issued in fully registered form as to both principal and interest; and shall be numbered in such
manner and with any additional designation as the City deems necessary for purposes of
identification. The Bond shall mature on January 31, 2005, unless the maturity date is extended
as follows: the term of the Bond shall be conclusively extended for an additional year upon the
written request of the City Treasurer and the acceptance of the Bank at least 60 days prior to the
maturity date of the Bond. Upon such extension, no other terms or conditions of the Bond,
except its maturity date, shall be changed.
The Bond shall bear interest on the Outstanding Principal Balance of the Bond at the
variable rate of an amount equal to sixty-three percent (63 %) of the Bank's Prime Rate
(computed on the basis of a 365/366-day year), for the actual number of days the Outstanding
Principal Balance is Outstanding. The rate will be changed on the day on which an
announcement is made by the Bank of a change in the Prime Rate. Interest on the Bond shall be
payable on January 31, 2003, annually on each January 31 thereafter, and on the date of maturity.
At any time and without notice, principal may be prepaid, in whole or in part, with or without the
interest accrued thereon, without fee, and such principal amount prepaid shall then be available
to be drawn again under the Line of Credit until the maturity date of the Bond. The Outstanding
Principal Balance of the Bond, together with all interest accrued and unpaid thereon, shall be
payable upon maturity of the Bond.
Section 3. Place, Manner and Medium of Payment. Both principal of and interest on the
Bond shall be payable by the City in lawful money of the United States of America. Interest on
the Bond and any prepaid principal thereof shall, if requested by the Owner, be paid by
electronic debit by the Owner from a deposit account maintained by the City with the Owner,
and otherwise, shall be paid by check or draft mailed on or before the applicable payment date to
the Owner at the address for such Owner appearing on the Bond Register on the day such
payment is made. The Outstanding Principal Balance of the Bond, together with all interest
accrued thereon, shall be paid at maturity or prior prepayment to the Owner at the address for
such Owner appearing on the Bond Register on the day such payment is made. Upon request of
the City following receipt of payment, the Owner shall surrender of the Bond at the office of the
City. The City shall keep sufficient books for the registration of the Bond.
The Outstanding Principal Balance of the Bond on any particular day shall be the
aggregate of all funds that the City has drawn from the Line of Credit from the date of the Bond
to that day less the aggregate of all principal payments made by the City on or before that day.
Interest on a particular principal amount so advanced shall be determined from the date of the
advance of Bond proceeds pursuant to a Draw Request.
Section 4. Draw Requests. The City may make multiple Draw Requests under the Line
of Credit for the purpose of obtaining funds to pay the costs of the Projects and to pay the
incidental costs and costs related to the sale and issuance of the Bond. The Draw Requests may
be made on any business day prior to the maturity date of the Bond; provided, that the first Draw
Request shall be accompanied by the Bond and the other documents described in Section 12
hereof. Draw Requests are not subject to approval by the Bank, but shall be limited to an
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aggregate outstanding principal amount of $500,000 at any one time. No Draw Request may
exceed the total Projects Costs and issuance costs to be paid from the proceeds of such Draw
Request, and such proceeds shall be immediately applied to pay such costs. Amounts drawn
pursuant to Draw Requests shall be recorded in such form as the City and the Bank shall agree.
The City Treasurer or such other person as the City Treasurer may designate, are hereby
authorized to make a request for draw pursuant to the Bond. A Draw Request shall be made in
writing signed by any one of such authorized persons at any time prior to the maturity date of the
Bond.
Section 5. Debt Limit Not Exceeded. The City finds and covenants that the Bond is
issued within all constitutional and statutory debt limitations presently applicable to the City.
Section 6. Pledge of Full Faith, Credit and Resources. The Bond is a limited tax general
obligation of the City. Unless the principal of and interest on the Bond is paid from other
sources, so long as the Bond is outstanding, the City hereby irrevocably covenants to make
annual levies of taxes upon all property within the City subject to taxation without a vote in
amounts sufficient, together with any other money legally available therefor, to pay such
principal and interest as the same shall become due. The City hereby irrevocably pledges its full
faith, credit and resources to the annual levy and collection of such taxes and for the prompt
payment of such principal and interest.
The City hereby irrevocably covenants that the annual tax provided for herein to be
levied for the payment of the principal of and interest on the Bond shall be within and as a part of
the tax levy permitted the City without a vote and that a sufficient portion of each such annual
tax levy to be made so long as the Bond is outstanding, together with any other money legally
available therefor, will be and is hereby set aside, pledged and appropriated for the payment of
the principal of and interest on the Bond as the same shall become due.
Section 7. Form of Bond. The Bond shall be typewritten, printed or lithographed on
good bond paper in a form consistent with this ordinance and Washington law.
Section 8. Execution of Bond. The Bond shall be signed on behalf of the City with the
facsimile or manual signatures of the Mayor and the City Clerk, and shall have the seal of the
City impressed or a facsimile of such seal imprinted on the Bond.
In case either or both of the officers who shall have executed the Bond shall cease to be
such officer or officers of the City before the Bond so signed shall have been authenticated or
delivered by the Registrar or issued by the City, such Bond nevertheless may be authenticated,
delivered and issued and upon such authentication, delivery and issuance, shall be as binding
upon the City as though those who signed the same had continued to be such officers of the City.
The Bond also may be signed and attested on behalf of the City by such persons as at the actual
date of execution of the Bond shall be the proper officers of the City although at the original date
of the Bond such persons were not such officers of the City.
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Section 9. Registration; Nontransferability. The City shall keep, or cause to be kept, at
the City Treasurer's office, the Bond Register.
The City may deem and treat the Owner of the Bond as the absolute owner thereof for all
purposes, and the City shall not be affected by any notice to the contrary. Payment of the Bond
shall be made only as described in Section 3 hereof. All such payments made as provided in
Section 3 hereof shall be valid and shall satisfy and discharge the liability of the City upon the
Bond to the extent of the amount or amounts so paid.
The City covenants that, until the Bond shall have been surrendered and cancelled, it will
maintain a system of recording the ownership of the Bond that complies with the provisions of
the Code.
The registered ownership of the Bond may not be transferred, except for transfer to a
successor in interest to the Owner as a result of merger or consolidation.
Section 10. Mutilated, Lost, Stolen or Destroyed Bond. If the Bond becomes mutilated,
lost, stolen or destroyed, the City may authenticate and deliver a new Bond of the same maturity
and interest rate and of like tenor and effect in substitution for such mutilated, lost, stolen or
destroyed Bond, all in accordance with law. If such mutilated, lost, stolen or destroyed Bond has
matured, the City at its option, may pay the same without the surrender of the original Bond.
However, no such substitution or payment shall be made unless and until the applicant shall
furnish (a) evidence satisfactory to the City of the destruction or loss of the original Bond and of
the ownership of such original Bond, and (b) such additional security, indemnity or evidence as
may be required by or on behalf of the City. No substitute Bond shall be furnished unless the
applicant shall reimburse the City and the City for their respective expenses in the furnishing of
such substitute Bond. Any such substitute Bond so furnished shall be equally and
proportionately entitled to the security of this ordinance with any other Bond issued under this
ordinance.
Section 11. Defeasance. If money and/or "government obligations" (as such obligations
are defined in Chapter 39.53 RCW, as now in existence or later amended) maturing at such
times(s) and bearing such interest to be earned on such obligations (without any reinvestment
thereof) as will provide a series of payments which shall be sufficient, together with any money
initially deposited, to provide for the payment of all of the principal of and interest on all or a
portion of the Bond, when due in accordance with its terms in accordance with a refunding plan
adopted by the City, are set aside in a special fund (hereinafter called the "trust account") to
effect such payment and are pledged irrevocably for the purpose of effecting such payment, then
no further payments need be made into the Bond Fund for the payment of the principal of and the
interest on such Bond, the Owners thereof shall cease to be entitled to any lien, benefit or
security of this ordinance except for the right to receive the money and the principal and interest
proceeds on the obligations set aside in the trust account, and such Bond shall no longer be
deemed to be outstanding under this ordinance.
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Section 12. Sale of the Bond. The Bank has offered to establish the Line of Credit in
exchange for the Bond under the terms and conditions provided in its line of credit commitment
letter (the "Commitment Letter"), a copy of which is attached hereto, and is incorporated herein
by this reference. The City Council finds that accepting the Commitment Letter is in the City's
best interest and therefor accepts the offer contained in the Commitment Letter and authorizes
the execution of the Commitment Letter by City officials, including the City Treasurer, in
evidence thereof.
The Bond will be prepared at City expense and will be delivered to the Bank on the date
of the first Draw Request in accordance with the Commitment Letter, together with: (a) the
approving legal opinion of Gottlieb, Fisher & Andrews, PLLC, bond counsel, of Seattle,
Washington, (b) a copy of this Ordinance, (c) a Tax Exemption and Nonarbitrage Certificate and
a Closing Certificate of the City, and (d) a copy of the executed IRS form 8038G with respect to
the Bond. Bond counsel has not been retained to monitor, and shall not be responsible for
monitoring, the City's compliance with any federal law or regulations to maintain the tax-exempt
status of the interest on the Bond.
The proper City officials, including the City Treasurer, are authorized and directed to do
everything necessary for the prompt issuance, execution and delivery of the Bond to the Bank in
accordance with the Commitment Letter, and for the proper application and use of the proceeds
of the sale thereof.
Section 13. Delivery of Bond. The proper City officials are authorized and directed to
execute and/or approve, as appropriate, all documents, and to do everything necessary for the
preparation and delivery of a transcript of proceedings pertaining to the Bond, and the
preparation, execution and prompt delivery of the Bond to the Bank and for the proper
application and use of the proceeds of the sale thereof.
Section 14. Establishment of Bond Account; Application of Bond Proceeds. There is
hereby created and established in the office of the City Treasurer a special account to be
designated as the "Limited Tax General Obligation Bond Account, 2002" (the "Bond Account")
in the Repair and Demolition Revolving Fund.
The money and investments in the Bond Account shall be used by the City, together with
any other money legally available and designated therefor, to pay the principal of and interest on
the Bond, when due.
Net principal proceeds of the Bond shall be deposited, upon receipt, in the Repair and
Demolition Revolving Fund, and shall be applied solely to pay part of the costs of the Projects
and the incidental costs and the costs of issuance of the Bond.
Except as provided by the Code and Section 15 of this ordinance, the interest and profits
derived from the investment of Bond proceeds deposited into the Repair and Demolition
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Revolving Fund shall be deposited in the Repair and Demolition Revolving Fund and applied as
described in the preceding paragraphs.
Except as provided by the Code and Section 15 of this ordinance, if any money allocable
to the Bond proceeds in the Repair and Demolition Revolving Fund remains in such fund the
after payment of all the costs of the Projects or after termination of the Projects by the City, such
money shall be transferred to the Bond Account. Pending application as described in this
Section 14 and subject to the requirements of the Code and Section 15 of this ordinance, money
in the Repair and Demolition Revolving Fund may be temporarily deposited in such institutions
or invested in such investments as may be lawful for the investment of City funds.
Section 15. Tax-Exemption Covenants. The City covenants that it will not take or
permit to be taken on its behalf any action that would adversely affect the exclusion of the
interest on the Bond from gross income for purposes of federal income taxation, and will take or
require to be taken such acts as may be permitted by Washington law and as may from time to
time be required under applicable law to continue the exclusion of the interest on the Bond from
gross income for purposes of federal income taxation. Without limiting the generality of the
foregoing, the City will not invest or make or permit any use of the proceeds of the Bond or of its
other money at any time during the term of the Bond which would cause the Bond to be an
"arbitrage bond" within the meaning of section 148 of the Code.
The City further covenants that, if the City issues more than $5 million in tax-exempt
bonds in the calendar year 2002, the City shall calculate or cause to be calculated, and shall
rebate to the United States, all earnings from the investment of Bond proceeds that are in excess
of the amount that would have been earned had the yield on such investments been equal to the
yield on the Bond, plus income derived from such excess earnings, to the extent and in the
manner required by section 148 of the Code.
The City has not been notified of any listing or proposed listing by the Internal Revenue
Service to the effect that the City is a bond issuer the arbitrage certifications of which may not be
relied upon.
The City will take no actions and will make no use of the proceeds of the Bond or any
other funds held under this ordinance which would cause the Bond to be treated as a "private
activity bond" (as defined in section 141(b) of thc Code) subject to treatment under said
section 141(b) as an obligation not described in section 103(a) of the Code, unless the tax
exemption thereof is not affected.
The City covenants that it will not issue more than $10,000,000 of"qualified tax-exempt
obligations," as defined in Section 265 of the Code (relating to the partial interest expense
deduction authorized for banks, thrift institutions and certain other financial institutions) during
calendar year 2002. The City hereby designates the Bond as a "qualified tax-exempt obligation"
for such purposes and authorizes and directs the proper City officials to execute and deliver all
documents necessary to evidence such designation to any and all interested parties.
Section 16. Contract; Severability. The covenants comained in this ordinance shall
constitute a contract between the City and the Owner of the Bond. The City unconditionally
covenants that it will keep and perform all of the covenants of the Bond and this ordinance. If
any one or more of the provisions of this ordinance shall be declared unconstitutional or invalid
for any reason, such decision shall not affect the validity of the remaining provisions of this
ordinance or the Bond, and this ordinance and the Bond shall be construed and enforced as if
such unconstitutional or invalid provision had not been contained in this ordinance.
Section 17. Effective Date. This ordinance shall take effect and be in full force ten days
after passage and publication of an approved summary, consisting of the title.
APPROVED by the City Council of the City of Bremerton, Washington, the 22nd day of
January, 2002.
PASSED by the City Council of the City of Bremerton, Washington, this 30th day of
January, 2002.
CAROL ARENDS, Council President
APPROVED this /.~ day of Febmary~ ~
CARY BOZEM_AN, M-hyor
ATTEST:
Kathleen McCluskey, City Clerlt
APPROVED AS TO FORM:
By
Judith Andrews, Bond Counsel
PUBLISHED:
EFFECTIVE DATE:
ORDINANCE NO.
8
'.
AFFIDA VIT OF PUBLICATION
County of Kitsap, State of Washington
No. 175575
I, Melinda Monroe, being first duly sworn on oath, deposes and says: That she is now, and at all
times embraced in the publication herein mentioned was the principal clerk of the printers and
publishers of THE SUN; that said newspaper has been approved as a legal newspaper by order of
the /superior Court of the Count of Kitsap, in which County it is published and is now and has
been for more than six months prior to the date of the publication hereinafter referred to,
published in the English language continually as a daily newspaper in Bremerton, Kitsap County,
Washington, and is now and during all of said time, was printed in an office maintained in the
aforesaid place of publication of said newspaper; that the following is a true text of a legal
advertisement as it was published in regular issues (and not in supplement form) of said
newspaper on the following dates, to wit: February 7, 2002, during all of said period. That the
full amount of the fee charged for .the foregoing publication is the sum of $51.31 which amount
has not been paid in full.
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AN ORDINANCE of the City of Bremerton, Washington relating to the
incurrence of indebtedness; providing for the sale and issuance
of a limited tax general obligation bond, 2002, in a principal
amount not to exceed $500,000 to establish a revolving line of
credit to finance costs relating to the enforcement of Ordinance
No. 4418 and chapter 35.80 RCW concerning the abatement of unfit
dwellings, buildings, structures and premises; providing for the
date, form, terms, registration privileges, maturity, interest
rate and covenants of the bond; establishing a debt service
account for the bond; and providing for the delivery of such bond
to Bank of America, N.A., Seattle, Washington, in exchange for
such line of credit.-
0~ 4~~
(Signature of Principal Clerk)
Subscribed and sworn to before me this day of February 12, 2002.
~~
Notary Public in and for the State of Washington, Kitsap County.
ORDINANCE NO. 4790'
APPROVED by the City Council of the City of Bremerton,
Washington, the 22nd day of January, 2002.-
PASSED by the City Council of the City of Bremerton, Washington,
this 30th day of January, 2002.-
The full text of this ordinance is available from the City
Clerk's Office, 239 Fourth Street, Bremerton, WA 98337.-
February 7,