HomeMy WebLinkAbout4945
CITY OF BREMERTON, WASHINGTON
ORDINANCE NO. ~~ l..\ ~
AN ORDINANCE RELATING TO THE INCURRENCE OF
INDEBTEDNESS; PROVIDING FOR THE SALE AND
ISSUANCE OF A LIMITED TAX GENERAL OBLIGATION
REFUNDING BOND, 2005 IN THE PRINCIPAL AMOUNT
OF $1,671,000 TO REFUND, ON A CURRENT BASIS, A
PORTION OF THE CITY'S OUTSTANDING LIMITED
TAX GENERAL OBLIGATION BONDS, 1993;
PROVIDING FOR THE DATE, DENOMINATION, FORM,
TERMS, REGISTRATION PRIVILEGES, MATURITY,
INTEREST RATE AND COVENANTS OF THE BOND;
PROVIDING FOR THE ANNUAL LEVY OF TAXES TO
PAY THE PRINCIPAL THEREOF AND THE INTEREST
THEREON; ESTABLISHING A DEBT SERVICE
ACCOUNT FOR THE BOND; AND PROVIDING FOR THE
SALE AND DELIVERY OF SUCH BOND TO BANK OF
AMERICA, N.A.
WHEREAS, pursuant to Ordinance No. 4429, the City of Bremerton (the "City") has
heretofore issued and sold its Limited Tax General Obligation Bonds, 1993 (the "1993 Bonds"),
of which $1,815,000 in aggregate principal amount are currently outstanding; and
WHEREAS, the City reserved the right to refund and defease all or a portion of the 1993
Bonds pursuant to a refunding or defeasance plan; and
WHEREAS, pursuant to chapter 39.53 RCW, the City is authorized to sell and issue,
without an election, limited tax general obligation refunding bonds of the City to refund the 1993
Bonds; and
WHEREAS, the refunding, on a current basis, and defeasance of a portion of the 1993
Bonds in accordance with the Refunding Plan (hereinafter defined) will provide a debt service
savings to the City; and
WHEREAS, the City deems it necessary and advisable that a limited tax general
obligation bond in the principal amount of$I,671,000 now be issued and sold to provide funds
for the Refunding Plan; 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 ^
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WHEREAS, Bank of America, N.A. (the "Purchaser") has proposed, by way of the non-
binding proposal letter dated July 8, 2005 (the "Proposal"), to purchase such bond upon the
terms and conditions hereinafter set forth; and
WHEREAS, the City Council deems it in the best interests of the City to accept an offer
by the Purchaser to purchase such bond on the same terms and conditions as the Proposal, and to
deliver such bond to the Purchaser; NOW, THEREFORE,
THE CITY OF BREMERTON DOES ORDAIN AS FOLLOWS:
Section 1. Finding, Purpose and Description of Bond. The City authorizes the sale and
issuance of its "Limited Tax General Obligation Refunding Bond, 2005" (the "Bond") for the
purpose of providing part of the funds necessary to refund, on a current basis, and defease the
1993 Bonds maturing on or after December 1,2006 (the "Refunded 1993 Bonds"), and to pay
certain "incidental costs and costs related to the sale and issuance" (as defined in RCW
39.46.070) ofthe Bond (the "Refunding Plan").
The Bond shall be issued as a single Bond in the principal amount of$I,671,000; shall be
dated its date of issue; shall mature on December 1, 2012; and shall bear interest (computed on
the basis of a 30/360-day year) at the rate of 3.690% per annum; provided, that from and after the
date of (a) any failure by the City to pay any principal of or interest on the Bond or any fees or
other amounts due to the Purchaser hereunder, when due, or (b) receipt by the Owner of written
notice of any final determination, decision or decree, all applicable appeals periods with respect
to which shall have expired, made by the commissioner or any district director of the Internal
Revenue Service or by any court of competent jurisdiction to the effect that interest on the Bond
is includable in gross income of the Owner for federal income tax purposes, the Bond shall bear
interest atthe rate of 5.690% per annum. Interest on the Bond shall be payable semi-annually on
each June 1 and December 1 to the maturity or earlier prepayment of the Bond, beginning on
December 1, 2005. Principal ofthe Bond shall be payable in annual installments on each
December 1, commencing on December 1,2005, to the maturity or earlier prepayment ofthe
Bond, in accordance with the amortization schedule attached hereto as Exhibit A and
incorporated herein by this reference. The Bond shall be issued in fully registered form as to
both principal and interest; shall be numbered in such manner and with any additional
designation as the City, in its capacity as registrar and paying agent for the Bond (the
"Registrar"), deems necessary for purposes of identification.
Section 2. Place, Manner and Medium of Payment. Both principal of and interest on the
Bond shall be payable in lawful money of the United States of America. Interest on the Bond
and annual principal installments and any prepaid principal thereof shall be paid by check or
draft mailed on or before the applicable payment date to the person who is named as the
registered owner thereof (the "Owner") on the registration books for the Bond maintained by the
Registrar (the "Bond Register") on the day such payment is made. Upon request ofthe City
following receipt of the final principal payment, the Owner shall surrender the Bond at the office
of the Registrar.
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Section 3. Prepayment. The Bond shall be subject to optional prepayment prior to
maturity, in whole or in part on any date, together with a prepayment fee, plus accrued interest to
the date fixed for prepayment, upon three days notice to the Owner. The prepayment fee shall be
in an amount sufficient to compensate the Owner for any loss, cost or expense incurred by it as a
result of the prepayment, including any loss of anticipated profits and any loss or expense arising
from the liquidation or reemployment of funds obtained by it to maintain the funding of the Bond
or from fees payable to terminate the deposits from which such funds were obtained. The City
shall also pay any customary administrative fees charged by the Owner in connection with the
foregoing. For purposes of calculating the prepayment fee, the Owner shall be deemed to have
funded the Bond by a matching deposit or other borrowing in the applicable interbank market,
whether or not the Bond was in fact so funded.
Section 4. 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 5. Pledge of Full Faith, Credit and Resources. The Bond is a limited tax general
obligation ofthe City. Unless the principal of and interest on the Bond are paid from other
sources, so long as the Bond is outstanding, the City hereby irrevocably covenants to make
annual levies oftaxes 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 6. Form of Bond. The Bond shall be typewritten, printed, lithographed or
multi copied on good bond paper in a form consistent with this Ordinance and Washington law.
Section 7. Execution of Bond. The Bond shall be signed on behalf ofthe 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 thereof imprinted thereon.
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 shall have been authenticated or delivered by
the Registrar or issued by the City, the 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 8. Registration. The Registrar shall keep, or cause to be kept, the Bond Register
at the office of the Registrar.
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 ofthe Bond
shall be made only as described in Section 2 hereof. All such payments made as provided in
Section 2 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 registered ownership of the Bond shall not be transferable, except for transfer to a
successor in interest to the Owner as a result of a merger or consolidation or sale of substantially
all assets of the Owner.
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 Internal Revenue Code of 1986, as amended (the "Code").
Section 9. Mutilated, Lost, Stolen or Destroyed Bond. If the Bond becomes mutilated;
lost, stolen or destroyed, the City may issue and deliver a new Bond of the same number and
interest rate, for the same principal amount, and of like tenor and effect in substitution therefor,
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 thereof. 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
thereof, 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 for its expenses in the furnishing thereof.
Section 10. Defeasance. Ifmoney and/or "Government Obligations" (as such
obligations are defined in Chapter 39.53 RCW, as now in existence or hereafter amended)
maturing at such times(s) and bearing such interest to be earned thereon (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 ofthe principal of and interest on
all or a portion of the Bond, when due in accordance with its terms and 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 the Bond, the Owner 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 the Bond shall no
longer be deemed to be outstanding hereunder.
Section 11. Sale of the Bond. The Purchaser has presented the Proposal to the City
pursuant to which the Purchaser has proposed to purchase the Bond, under the terms and
conditions provided in the Proposal, subject to credit approval, which has since been obtained,
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which written Proposal is on file with the City Clerk and is incorporated herein by this reference.
The City Council finds that selling the Bond according to the terms of the Proposal is in the
City's best interest and therefore authorizes the acceptance of an offer of the Purchaser to
purchase the Bond in accordance with the terms contained in the Proposal and authorizes the
execution by City officials of any written offer to purchase in accordance with the terms of the
Proposal. Upon purchase of the Bond, the City shall pay to the Purchaser an origination fee
equal to 0.10% of the original principal amount of the Bond, and shall payor reimburse the
Purchaser for the payment of its legal expenses with respect to the purchase of the Bond, not to
exceed $500.
The Bond will be printed or multicopied at City expense and will be delivered to the
Purchaser in accordance with the terms of the Proposal with the approving legal opinion of
Gottlieb, Fisher & Andrews, PLLC, bond counsel of Seattle, Washington, relative to the issuance
of the Bond, printed on or attached to the Bond. Bond counsel has not been engaged to
participate in the preparation or review of, or express any opinion concerning the completeness
or accuracy of any official statement or other disclosure documentation used in connection with
the offer or sale ofthe Bond by any person, and bond counsel's opinion shall so state. 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.
Section 12. Delivery of Bond; Temporary Bond. The proper City officials, including,
but not limited to, the Director of Financial Services, 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 printing, execution
and prompt delivery ofthe Bond to the Purchaser and for the proper application and use of the
proceeds of the sale thereof.
If the definitive Bond is not ready for delivery by the date established for closing (the
"Closing"), the City Director of Financial Services, upon the approval ofthe Purchaser, may
cause to be issued and delivered to the Purchaser a temporary Bond with appropriate omissions,
changes and additions. Any temporary Bond shall be entitled and subject to the same benefits
and provisions of this ordinance with respect to the payment, security and obligation thereof as
the definitive Bond authorized hereby. Such temporary Bond shall be exchangeable without cost
to the Owner thereof for the definitive Bond when the latter is ready for delivery.
Section 13. Call of Refunded 1999 Bonds for Redemption. The City hereby calls the
1993 Bonds maturing on or after-December 1, 2006 for redemption on December 1, 2005, at a
redemption price of par plus accrued interest. Such call for redemption shall become irrevocable
upon delivery of the Bond at Closing.
Section 14. Acquisition of Escrow Obligations. The proper City officials, including, but
not limited to, the Director of Financial Services, shall, at or prior to closing, make appropriate
arrangements for the payment for and delivery of any Escrow Obligations (defined in the Escrow
Agreement hereinafter defined) which are to be purchased in the open market pursuant to the
Refunding Plan; and shall, prior to closing, deliver or cause to be delivered to the Federal
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Reserve Bank in Seattle, Washington, subscriptions for any Escrow Obligations which are to be
acquired from the United States Bureau of Public Debt pursuant to the Refunding Plan described
in the Escrow Agreement (the "Escrow Agreement"), dated as of the date of Closing, between
the City and The Bank of New York, as escrow trustee (the "Escrow Trustee"). The maturing
principal of and the interest on such Escrow Obligations, together with the Initial Cash to be
provided to the Escrow Trustee pursuant to the Refunding Plan, shall be sufficient to pay all of
the interest to become due on the Refunded 1993 Bonds from Closing to and including
December 1,2005, when due, and to redeem on said date, all of the outstanding Refunded 1993
Bonds at a redemption price of par and interest accrued thereon to the date of redemption.
The Escrow Trustee shall designate in any such subscriptions that all the principal of and
interest on the Escrow Obligations subscribed for with the United States Bureau of Public Debt
shall be payable to the Escrow Trustee. Such subscription may be amended as permitted by
federal law .
Section 15. Escrow Agreement. The Escrow Agreement, in substantially the same form
as the draft dated August 17,2005, on file with the City Clerk, is hereby approved in order to
accomplish the defeasance of the Refunded 1993 Bonds. The Director of Financial Services is
authorized and directed to (a) execute and to deliver said Escrow Agreement, on behalf of the
City, to the Escrow Trustee on or before Closing, with such changes as the Director of Financial
Services deems to be in the best interests of the City; and such execution and delivery of the
Escrow Agreement shall evidence irrevocably the approval of the executed Escrow Agreement
by the City; and (b) cause the Escrow Trustee to deliver notices of defeasance and redemption of
the Refunded 1993 Bonds in accordance with the Escrow Agreement.
Section 16. Establishment of Bond Fund; Application of Bond Proceeds. There is
hereby created and established in the office of the Director of Financial Services a special
account to be designated as the "Limited Tax General Obligation Refunding Bond Account,
2005" (the "Bond Account") in the Bond 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.
Any rounding amount received by the City upon the sale of the Bond shall be deposited
into the Bond Fund and shall be applied to the payment of interest coming due on the Bond.
All of the net proceeds of the Bond (net of the origination fee to be retained by the
Purchaser and any rounding amount) shall be paid by the City to the Escrow Trustee at Closing
to be applied as set forth in the Escrow Agreement.
Section 17. Tax-Exemption Covenants. The City covenants that it will noUake 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
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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 covenants that, ifthe City issues more than $5,000,000 in tax-exempt bonds in
the calendar year 2005 and all the proceeds of the Bond have not been spent within six months
from the date of issuance of the Bond, it will 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 fr.om 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 the Code) subject to treatment under said
Section 141(b) as an obligation not described in Section 103(a) ofthe Code, unless the tax
exemption thereof is not affected.
The City hereby designates the Bond as a "qualified tax-exempt obligation" for purposes
of Section 265 of the Code (relating to the deduction by financial institutions of the interest
incurred to carry tax-exempt debt) 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. The City further covenants not to issue more than $10,000,000 of such "qualified tax-
exempt obligations" during 2005.
Section 18. Financial Reports. The City agrees to provide the Owner (a) a copy of the
City's annual State Audit Report as soon as such report is available, together with unaudited
annual financial statements within 180 days of the completion of each fiscal year; and (b) a copy
ofthe City's annual budget within ninety days ofthe budget cycle.
Section 19. Contract; Severability. The covenants contained in this Ordinance shall
constitute a contract between the City and the Owner of the Bond. The City unconditionally
covenants thatit will keep and perform all of the covenants of the Bond and this Ordinance. If
anyone 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 ofthis
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 herein.
Section 20. 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.
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APPROVED by the City Council of the City of Bremerton, Washington, the ~day
of August, 2005.
PASSED by the City Council of the City of Bremerton, Washington, this Iz;tl.; day of
August, 2005.
~
Daren Nygren, Council
APPROVED thi~, day of AUguS~
Cary Boze an, Mayor
--
:P~~
Damel S. GoLheb, Bond Counsel
PUBLISHED: ~ t9..0, ~ooS
EFFECTIVE DATE: C?~ 4h j(), ~()()S
ORDINANCE NO. ~9J.j6
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BOND DEBT SERVICE
CITY OF BREMERTON
L TGO Refunding Bond, 2005 (ref 93L T)
Period Annual
Ending Principal Coupon Interest Debt Service Debt Service
09/06/2005
12/01/2005 26,000 3.690% 14,558.59 40,558.59 40,558.59
06/01/2006 30,350.25 30,350.25
12/01/2006 207,000 3.690% 30,350.25 237,350.25 267,700.50
06/01/2007 26,531.10 26,531.10
12/01/2007 215,000 3.690% 26,531.10 241,531.10 268,062.20
06/01/2008 22,564.35 22,564.35
12/01/2008 226,000 3.690% 22,564.35 248,564.35 271,128.70
06/01/2009 18,394.65 18,394.65
12/01/2009 233,000 3.690% 18,394.65 251,394.65 269,789.30
06/01/2010 14,095.80 14,095.80
12/01/2010 244,000 3.690% 14,095.80 258,095.80 272,191.60
06/01/2011 9,594.00 9,594.00
12/01/2011 255,000 3.690% 9,594.00 264,594.00 274,188.00
06/01/2012 4,889.25 4,889.25
12/01/2012 265,000 3.690% 4,889.25 269,889.25 274,778.50
1,671,000 267,397.39 1,938,397.39 1,938,397.39
Sep 12, 2005 12:53 pm Prepared by Banc of America Securities LLC
(Finance 5.015 BREMRTON:BREM-05REFL,05REFL) Page 6
AFFIDAVIT OF PUBLICATION
i
Account #42742 / Ad # 100166944
STATE OF WASHINGTON
COUNTY OF KITSAP
I, Robin Alexander, 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
KITSAP SUN; that said newspaper has been approved as a legal newspaper by order of the Superior Court
of the County 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 Brelllerton, Kitsap County, Washington, a weekly newspaper in 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: ,
August 20, 2005 and that such newspaper was regularly distributed to its subscribers during all of said
period. That the full amount of the fee charged for the foregoing publication is the sum of $45.19 which
amount has not been paid in full.
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Subscr~~ ~ntl:sworn t~e~~e this day of August 30, 2005.
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ORDINANCE NO. 4945'
AN ORDINANCE relating to the incurrence of indebtedness; providing for the sale and issuance of-a
Limited Tax General Obligation Refunding Bond, 2005 in the principal amount of $1,671,000 to refund, on
a current basis, a portion ofthe City's outstanding Limited Tax General Obligation Bonds, 1993; providing
for the date, denomination, form, terms, registration privileges, maturity, interest rate and covenants of the
bond; providing for the annual levy of taxes to pay the principal thereof and the interest thereon;', .
establishing a debt service account for the bond; and providing for the sale and delivery of such,.bond to
Bank of America, N.A.-
PASSED by the City Council the 17th day of August, 2005.-
The full text of this ordinance is available from the City Clerk's Office, 345 6th Street, Suite 600,
Bremerton, W A 98337.-
August 20, 2005"#100166944-