HomeMy WebLinkAbout5124 .
CITY OF BREMERTON, WASHINGTON
� ORDINANCE NO. 5124
AN ORDINANCE of the City of Bremerton, Washington, relating to
contracting indebtedness; providing for the issuance and sale of $9,920,000 par
value of Unlimited Tax General Obligation Refunding Bonds, 2010, of the City to
provide funds with which to pay , the cost of advance refunding the callable
portion of the City's outstanding Unlimited Tax General Obligation Bonds, 2002;
and fixing the terms and covenants of the bonds.
Passed October 20, 2010
This document prepared by:
� Foster Pepper PLLC
1111 Third Avenue, Suite 3400
`� Seattle, Washington 98101
(206) 447-4400
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TABLE OF CONTENTS
, PaQe
Section Definitions ................................................................................................................2
Section 2. Description of Bonds ...............................................................................................4
Section 3. Registration and Transfer of Bonds .........................................................................4
Section Payment of Bonds ....................................................................................................6
Section 5. Redemption Provisions and Open Market Purchase of Bonds ................................6
Section 6. Notice of Redemption ..............................................................................................7
Section 7. Failure to Redeem Bonds .........................................................................................8
Section Pledge of Taxes ........................................................................................................8
Section 9. Form and Execution of Bonds ............:....................................................................8
Section Bond Registrar .........................................................................................................9
Section 11. Refunding of the Refunded Bonds .........................................................................10
Section 12. Call for Redemption of the Refunded Bonds .........................................................13
Section 13. The City's Findings with Respect to Refunding ....................................................13
Section 14. Preservation of Ta�c Exemption for Interest on Bonds ...........................................13
Section 15. Designation of Bonds as "Qualified Tax Exempt Obligations." ...........................14
Section 16. Refunding or Defeasance of the Bonds .................................................................14
Section 17. Bond Fund and Deposit of Bond Proceeds ............................................................15
Section 18. Approval of Bond Purchase Contract ....................................................................15
Section 19. Preliminary Official Statement Deemed Fina1 .......................................................16
. �.
Section 20. Undertaking to Provide Continuing Disclosure .....................................................16
Section 21. General Authorization ............................................................................................19
Section 22. Effective Date of Ordinance ..................................................................................19
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CITY OF BREMERTON, WASHINGTON
ORDINANCE NO. 5124
AN ORDINANCE of the City of Bremerton, Washington, relating to
contracting indebtedness; providing for the issuance and sale of $9,920,000 par
value of Unlimited T� General Obligation Refunding Bonds, 2010, of the City to
provide funds with which to pay the cost of advance refunding the callable
portion of the City's outstanding Unlimited T� General Obligation Bonds, 2002;
and fixing the terms and covenants of the bonds.
WHEREAS, pursuant to Ordinance No. 4831, adopted on November 20, 2002, and the
results of a special election held within the City of Bremerton, Washington (the "City") on
September 17, 2002, the City heretofore issued its $12,979,000 par value Unlimited Tax General
Obligation Bonds, 2002 (the "2002 Bonds") for the purpose of providing the funds with which to
acquire additional police vehicles, fire trucks, apparatus and equipment, acquisition of land and
construction, remodeling and equipping new fire, police and court facilities, and by that
ordinance reserved the right to redeem the 2002 Bonds maturing on and after December l, 2013
prior to their maturity on December 1, 2012, at a price of par, plus accrued interest to the date
fixed for redemption; and
WHEREAS, there are presently outstanding $9,315,000 par value of 2002 Bonds
maturing on December 1 of each of the years 2013 through 2027, inclusive, and bearirig various
interest rates from 4.25% to 5.05% (the "Refunded Bonds"); and
WHEREAS, after due consideration, it appeaxs to the City Council that the Refunded
Bonds may be refunded by the issuance and sale of the unlimited tax general obligation
refunding bonds authorized herein (the "Bonds") so that a substantial savings will be effected by
the difference between the principal and interest cost over the life of the Bonds and the principal
and interest cost over the life of the Refunded Bonds but for such refunding, which refunding
will be effected by carrying out the Refunding Plan (as hereinafter defined); and
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WHEREAS, to effect that refunding in the manner that will be most advantageous to the
� City it is found necessary and advisable that certain Acquired Obligations (hereinafter def ned)
bearing interest and maturing at such time or times as necessary to accomplish the refunding as
aforesaid be purchased out of a portion of the proceeds of the Bonds; and
WHEREAS, the City Council deems it to be in the best interests of the City to issue and
sell the Bonds to pay part of carrying out the Refunding Plan and the costs of issuance and sale
of the Bonds; and
WHEREAS, D.A. Davidson & Co. of Seattle, Washington (the "Purchaser"), has offered
to purchase the Bonds on the terms and conditions set forth in this ordinance; NOW,
THEREFORE,
THE CITY COUNCIL OF THE CITY OF BREMERTON, WASHINGTON, DO
ORDAIN as follows: �
Section 1 Definitions
"Acquired Obligations" means those United States Treasury Certificates of Indebtedness,
Notes, and Bonds — State and Local Government Series and other direct, noncallable obligations
of the United States of America purchased to accomplish the refunding of the Refunded Bonds
as authorized by this ordinance.
"Bond Fund" means the Unlimited Tax General Obligation Refunding Bond Fund, 2010,
created by this ordinance for the payment of the Bonds.
"Bond Register" means the books or records maintained by the Bond Registrar
containing the name and mailing address of the owner of each Bond and the principal amount
and number of Borids held by each owner.
"Bond Registrar" means the Fiscal Agent.
"Bonds" means the $9,920,000 par value Unlimited Tax General Obligat'ion Refunding
Bonds, 2010, of the City issued pursuant to and for the purposes provided in this ordinance. '
�
"City" means the City of Bremerton, Washington, a municipal corporation duly
organized and existing under and by virtue of the laws of the state of Washington.
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"Code" means the United States Internal Revenue Code of 1986, as amended, and <
� applicable rules and regulations promulgated thereunder.
"DTC" means The Depository Trust Company, New York, New York.
"Fiscal Agent" means the fiscal agent of the State of Washington, as the same may be
designated by the State from time to time.
"Letter of Representations" means the Blanket Issuer Letter of Representations dated
November 19, 1997, betuveen the City and DTC, as it may be amended from time to time.
"MSRB" means the Municipal Securities Rulemaking Board.
"Refunded Bonds" means the City's outstanding Unlimited Tax General Obligation
Bonds, 2002 maturing in years 2013 through 2027, inclusive, issued pursuant to Ordinance
No. 4831, the refunding of which has been provided for by this ordinance.
"Refunding Plan" means:
(a) the placement of sufficient proceeds of the Bonds that will acquire the Acquired
Obligations to be deposited, with cash, if necessary, with the Refunding Trustee.
(b) The payment of the principal of and interest on the Refunded Bonds when due up
to and including December 1, 2012, and the call, payment, and redemption on December 1, 2012
of all the then-outstanding Refunded Bonds at a price of par, plus accrued interest to the date
� fixed for redemption; and
(c) the payment of the costs of issuing the Bonds and the costs of carrying out the
foregoing elements of the Refunding Plan.
"Refunding Trust Agreement" means a Refunding Trust Agreement between the City and
the Refunding,Trustee substantially in the form of that which is on file with the City and by this
reference incorporated herein.
"Refunding Trustee" means U.S. Bank National Association of Seattle, Washington,
serving as trustee or escrow agent or any successor trustee or escrow agent.
"SEC" means the United States Securities and Exchange Commission.
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Section 2. Description of Bonds. The bonds shall be called Unlimited Taac General
Obligation Refunding Bonds, 2010 (the "Bonds"); shall be in the aggregate principal amount of
$9,920,000; shall be dated as of the date of their initial delivery; shall be in the denomination of
$5,000 or any integral multiple thereof within a single maturity; shall be numbered separately in
the manner and with any additional designation as the fiscal agent of the State of Washington (as
the same may be designated by the State of Washington from time to time) (the "Bond
Registrar") deems necessary for purposes of identification; shall bear interest (computed on the
basis of a 360 day year of twelve 30 day months) payable semiannually on each June 1 and
December 1, commencing June 1, 2011, to the maturity or earlier redemption of the Bonds; and
shall mature in years and amounts and bear interest at the rates per annum as follows:
Maturity Years Interest
(December 1) Amounts Rates
2011 $ 60,000 2.00%
2012 85,000 2.00
2013 530,000 2.00
2014 � 540,000 2.00
� �, 2015 550,000 2.50
2016 570,000 2.50
_ 2017 580,000 3.00
2018 600,000 3.00
2019 615,000 3.00
2020 630,000 3.50
2021 655,000 3.75
2022 680,000 4.00
2023 710,000 4.00
2024 735,000 4.00
2025 765,000 4.00
2026 � 795,000 3.50
2027 820,000 4.00
Section 3. Registration and Transfer of Bonds. The Bonds shall be issued only in
registered form as to both principal and interest and shall be recorded on books or records
maintained by the Bond Registrar (the "Bond Register"). The Bond Register shall contain the
name and mailing address of the owner of each Bond and the principal amount and number of
each of the Bonds held by each owner.
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Bonds surrendered to the Bond Registrar may be exchanged for Bonds in any authorized
denomination of an equal aggregate principal amount and of the same interest rate and maturity.
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Bonds may be transferred only if endorsed in the manner provided thereon and surrendered to
the Bond Registrar. Any exchange or transfer shall be without cost to the owner or transferee.
The Bond Registrar shall not be obligated to exchange or transfer any Bond during the 15 days
preceding any principal payment or redemption date.
, The Bonds initially shall be registered in ti�e name of Cede & Co., as the nominee of The
Depository Trust Company, New York, New York ("DTC"). The Bonds so registered shall be
held in fully immobilized form by DTC as depository in accordance with the provisions of a
Blanket Issuer Letter of Representations between the City and DTC (as it may be amended from
time to time, the "Letter of Representations"). Neither the City nor the Bond Registrar shall have
any responsibility or obligation to DTC participants or the persons for whom they act as
nominees with respect to the Bonds regarding accuracy of any records maintained by DTC or
DTC participants of any amount in respect of principal of or interest on the Bonds, or any notice
which is permitted or required to be given to registered owners hereunder (except such notice as
is required to be given by the Bond Registrar to DTC).
For as long as any Bonds are held in fully immobilized form, DTC, its nominee or its
successor depository shall be deemed to be the registered owner for all purposes hereunder and
all references to registered owners, bondowners, bondholders or the like shall mean DTC or its
nominee and, except for the purpose of the City's undertaking herein to provide continuing
disclosure, shall not mean the owners of any beneficial interests in the Bonds. Registered
ownership of such Bonds, or any portions thereof, may not thereafter be transferred except: (i) to
any successor of DTC or its nominee, if that successor shall be qualified under any applicable
laws to provide the services proposed to be provided by it; (ii) to any substitute depository
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appointed by the City or such substitute depository's successor; or (iii) to any person if the
Bonds are no longer held in immobilized form.
Upon the resignation of DTC or its successor (or any substitute depository or its
successor) from its functions as depository, or a determination by the City that it no longer
wishes to continue the system of book �entry transfers through DTC or its successor (or any
substitute depository or its successor), the City may appoint a substitute depository. Any such
substitute depository shall be qualified under any applicable laws to provide the services
proposed to be provided by it.
If (i) DTC or its successor (or substitute depository or its successor) resigns from its
functions as depository, and no substitute depository can be obtained, or (ii) the City determines
that the Bonds are to be in certificated form, the ownership of Bonds may be transferred to any
person as provided herein and the Bonds no longer shall be held in fully immobilized form.
Section 4. Payment of Bonds. Both principal of and interest on the Bonds shall be
payable in lawful money of the United States of America. Interest on the Bonds shall be paid by
checks or drafts of the Bond Registrar mailed on the interest payment date to the registered
owners at the addresses appearing on the Bond Register on the 15�` day of the month preceding
an interest payment date (the "record date") or, if requested in writing by a registered owner of
$1,000,000 or more in principal amount of Bonds prior to the applicable record date, by wire
transfer on the interest payment date. Principal of the Bonds_shall be payable upon presentation
and surrender of the Bonds by the registered owners to the Bond Registrar. Notwithstanding the
foregoing, for as long as the Bonds are registered in the name of DTC or its nominee, payment of
principal of and interest on the Bonds shall be made in the manner set forth in the Letter of
Representations.
Section 5. Redemption Provisions and Open Market Purchase of Bonds. Bonds
maturing in the years 2011 through 2020, inclusive, shall be issued without the right or option of
the City to redeem those Bonds prior to their stated maturity dates. The City reserves the right
and option to redeem the Bonds maturing on or after December 1, 2021, prior to their stated
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, maturity dates at any time on or December 1, 2020, as a whole or in part (within one or more
maturities selected by the City and randomly within a maturity in such manner as the Bond
Registrar shall determine), at par plus accrued interest to the date fixed for redemption
Portions of the principal amount of any Bond, in installments of $5,000 or any integral
multiple thereof, may be redeemed. If less than all of the principal amount of any Bond is
redeemed, upon surrender of that Bond to the Bond Registrar, there shall be issued to the
registered owner, without charge therefor, a new Bond (or Bonds, at the option of the registered
owner) of the same maturity and interest rate in any of the denominations authorized by this
ordinance in the aggregate principal amount remaining unredeemed.
Notwithstanding the foregoing, for as long as the Bonds are registered in the name of
DTC or its nominee, selection of Bonds for redemption shall be in accordance with the Letter of
Representations.
The City further reserves the right and option to purchase any or all of the Bonds in the
open market at any time at a price not in excess of par plus accrued interest to the date of
purchase. �
All Bonds purchased or redeemed under this section shall be canceled.
Section 6. Notice of Redemption. While the Bonds are held by DTC in book-entry
only form, any notice of redemption shall be given at the time, to the entity and in the manner
required by DTC in accordance with the Letter of Representations, and the Bond Registrar shall
not be required to give any other notice of redemption. If the Bonds cease to be in book-entry
only form, the City shall cause notice of any intended redemption of Bonds to be given by the
Bond Registrar not less than 30 nor more than 60 days prior to the date fixed for redemption by
first-class mail, postage prepaid, to the registered owner of any Bond to be redeemed at the
address appearing on the Bond Register at the time the Bond Registrar prepares the notice, and �
the requirements of this sentence shall be deemed to have been fulfilled when notice has been
mailed as so provided, whether or not it is actually received by the owner of any Bond.
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In the case of an optional redemption, the notice may state that the City retains the right
to rescind the redemption notice and the related optional redemption of Bonds by giving a notice
of rescission to the affected registered owners at any time prior to the scheduled optional
redemption date. Any notice of optional redemption that is so rescinded shall be of no effect,
and the Bonds for which the notice of optional redemption has been rescinded shall remain
outstanding.
Interest on Bonds called for redemption shall cease to accrue on the date fixed for
redemption unless the Bond or Bonds called are not redeemed when presented pursuant to the
call. In addition, the redemption notice shall be mailed within the same period, postage prepaid,
to the MSRB, to any nationally recognized rating agency which at the time maintains a rating on
the Bonds at the request of the City, and to such other persons and with such additional
information as the City's Director of Financial Services shall determine, but these additional
mailings shall not be a condition precedent to the redemption of Bonds.
Section 7. Failure to Redeem Bonds. If any Bond is not redeemed when properly
- presented at its maturity or call date, the City shall be obligated to pay interest on that Bond at
the same rate provided in the Bond from and after its maturity or call date until that Bond, both
principal and interest, is paid in full or until sufficient money for its payment in full is on deposit
in the bond redemption fund hereinafter created and the Bond has been called for payment by
giving notice of that call to the registered owner of each of those unpaid Bonds.
Section 8. Pledge of Ta�ces. For as long as any of the Bonds are outstanding, the City
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irrevocably pledges to levy taxes annually without limitation as to rate or amount on all of the
taxable property within the City in an amount sufficient, together with other money legally
available and to be used therefor, to pay when due the principal of and interest on the Bonds, and
the full faith, credit and resources of the City are pledged irrevocably for the annual levy and
collection of those ta��es and the prompt payment of that principal and interest.
Section 9. Form and Execution of Bonds. The Bonds shall be prepared in a form
� consistent with the provisions of this ordinance and state law and shall be signed by the Mayor
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and City Clerk, either or both of whose signatures may be manual or in facsimile, and the seal of
the City or a facsimile reproduction thereof shall be impressed or printed thereon.
Only Bonds bearing a Certificate of Authentication in the following form, manually
signed by the Bond Registrar, shall be valid or obligatory for any purpose or entitled to the
benefits of this ordinance:
CERTIFICATE OF AUTHENTICATION
This Bond is one of the fully registered City of Bremerton, Washington,
Unlimited Ta�c General Obligation Refunding Bonds, 2010, described in the Bond
Ordinance.
WASHINGTON STATE FISCAL AGENCY
; Bond Registrar
By
Authorized Signer
The authorized signing of a Certificate of Authentication shall be conclusive evidence that the
Bond so authenticated has been duly executed, authenticated and delivered and is entitled to the
benefits of this ordinance.
If any officer whose facsimile signature appears on the Bonds ceases to be an officer of
the City authorized to sign bonds before the Bonds bearing his or her facsimile signature are
authenticated or delivered by the Bond Registrar or issued by the City, those Bonds nevertheless
may be authenticated, issued and delivered and, when authenticated, issued and delivered, shall
be as binding on the City as though that ,person had continued to be an officer of the City
authorized to sign bonds. Any Bond also may be signed on behalf of the City by any person
who, on the actual date of signing of the Bond, is an officer of the City authorized to sign bonds,
although he or she did not hold the requireci office on the date of issuance of the Bonds.
Section 10. Bond Re istrar. The Bond Registrar shall keep, or cause to be kept,
sufficient books for the registration and transfer of the Bonds, which shall be open to inspection
by the City at all times. The Bond Registrar is authorized, on behalf of the City, to authenticate
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and deliver Bonds transferred or exchanged in accordance with the provisions of the Bonds and
this ordinance, to serve as the City's paying agent for the Bonds and to carry out all of the Bond
Registrar's powers and duties under this ordinance.
The Bond Registrar shall be responsible for its representations contained in the Bond
Registrar's Certificate of Authentication on the Bonds. The Bond Registrar may become the
owner of Bonds with the same rights it would have if it were not the Bond Registrar and, to the
extent permitted by law, may act as depository for and permit any of its officers or directors to
act as members of, or in any other capacity with respect to, any committee formed to protect the
rights of Bond owners.
Section 11. Refundin� of the Refunded Bonds.
(a) A�pointment of Refunding Trustee. U.S. Bank National Association of Seattle,
Washington, is appointed Refunding Trustee.
(b) Use of Bond Proceeds; Acquisition of Acquired Obligations. All of the proceeds
of the sale of the Bonds, shall be deposited immediately upon the receipt thereof with the
Refunding Trustee and used to discharge the obligations of the City relating to the Refunded
Bonds under Ordinance No. 4831 by providing for the payment of the amounts required to be
paid by the Refunding Plan. To the extent practicable, such obligations shall be discharged fully
by the Refunding Trustee's simultaneous purchase of the Acquired Obligations, bearing such
interest and maturing as to principal and interest in such amounts and at such times so as to
provide, together with a beginning cash balance, if necessary, for the payment of the amount
required to be paid by the Refunding Plan. The Acquired Obligations are listed and more
particularly described in Exhibit B attached to the Refunding Trust Agreement between the City
and the Refunding Trustee, but are subject to substitution as set forth below. Any Bond proceeds
or other money deposited with the Refunding Trustee not needed to purchase the Acquired
Obligations and provide a beginning cash balance, if any, and pay the costs of issuance of the
Bonds shall be returned to the City at the time of delivery of the Bonds to the initial purchaser
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thereof and deposited in the Bond Fund to pay interest on the Bonds on the first interest payment
date.
(c) Substitution of Acquired Obli at� ions. Prior to the purchase of any Acquired
Obligations by the Refunding Trustee, the City reserves the right to substitute other direct,
noncallable obligations of the United States of America ("Substitute Obligations") for any of the
Acquired Obligations and to use any savings created thereby for any lawful City purpose if, (i) in
the opinion of Foster Pepper PLLC, the City's bond counsel, the interest on the Bonds and the
Refunded Bonds will remain excluded from gross income for federal income tax purposes under
Sections 103, 148, and 149(d) of the Code, and (ii) such substitution shall not impair the timely
payment of the amounts required to be paid by the Refunding Plan, as verified by a nationally
recognized independent certified public accounting firm.
After the purchase of the Acquired Obligations by the Refunding Trustee, the City
reserves the right to substitute therefor cash or Substitute Obligations subject to the conditions
that such money or securities held by the Refunding Trustee shall be sufFicient to carry out the
Refunding Plan, that such substitution will not cause the Bonds or the Refunded Bonds to be
arbitrage bonds within the meaning of Section 148 of the Code and regulations thereunder in
,
effect on the date of such substitution and applicable to obligations issued on the issue dates of
the Bonds and the Refunded Bonds, as applicable, and that the City obta.in, at its expense: (1) a
verification by a nationally recognized independent certified public accounting firm acceptable
to the Refunding Trustee confirming that the payments of principal of and interest on the
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substitute securities, if paid when due, and any other money held by the Refunding Trustee will
be sufficient to carry out the Refunding Plan; and (2) an opinion from Foster Pepper PLLC, bond
counsel to the City, its successor, or other nationally recognized bond counsel to the City, to the
effect that the disposition and substitution or purchase of such securities, under the statutes,
rules, and regulations then in force and applicable to the Bonds, will not cause the interest on the
Bonds or the Refunded Bonds to be included in gross income for federal income tax purposes
and that such disposition and substitution or purchase is in compliance with the statutes and
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regulations applicable to the Bonds. Any surplus money resulting from the sale, transfer, other
disposition, or redemption of the Acquired Obligations and the substitutions therefor shall be
released from the trust estate and transferred to the City to be used for any lawful City purpose.
(d) Administration of Refunding Plan. The Refunding Trustee is authorized and
directed to purchase the Acquired Obligations (or substitute obligations) and to make the
payments required to be made by the Refunding Plan from the Acquired Obligations (or
substitute obligations) and money deposited with the Refunding Trustee pursuant to this
ordinance. All Acquired Obligations (or substitute obligations) and the money deposited with
the Refunding Trustee and any income therefrom shall be held irrevocably, invested and applied
in accordance with the provisions of Ordinance No.4831, this ordinance, chapter 39.53
RCW and other applicable statutes of the State of Washington and the Refunding Trust
Agreement. All necessary and proper fees, compensation, and expenses of the Refunding
Trustee for the Bonds and all other costs incidental to the setting up of the escrow to accomplish
the refunding of the Refunded Bonds and costs related to the issuance and delivery of the Bonds,
including bond printing, verification fees, bond counsel's fees, and other related expenses, shall
be paid out of the proceeds of the Bonds.
(e) Authorization for Refundin� Trust Agreement. To carry out the Refunding Plan
provided for by this ordinance, the Mayor or the Interim Director of Financial Services of the
City is authorized and directed to execute and deliver to the Refunding Trustee a Refunding
Trust Agreement substantially in the form on file with the City and by this reference made a part
hereof setting forth the duties, obligations and responsibilities of the Refunding Trustee in
connection with the payment, redemption, and retirement of the Refunded Bonds as provided
herein and stating that the provisions for payment of the fees, compensation, and expenses of
such Refunding Trustee set forth therein are satisfactory to it. Prior to executing the Refunding
Trust Agreement, the Mayor or the Interim Director of Financial Services of the City is
authorized to make such changes therein that do not change the substance and purpose thereof or
that assure that the escrow provided therein and the Bonds are in compliance with the
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requirements of federal law governing the exclusion of interest on the Bonds from gross income
for federal income tax purposes. -
Section 12. Call for Redemntion of the Refunded Bonds. The City calls for
redemption on December 1, 2012, all of the Refunded Bonds at a price of par plus accrued
interest to the date fixed for redemption. Such call for redemption shall be irrevocable after the
�
delivery of the Bonds to the initial purchaser thereof. The date on which the Refunded Bonds are
herein called for redemption is the first date on which those bonds may be called.
The proper City officials are authorized and directed to give or cause to be given such
notices as required, at the times and in the manner required, pursuant to Ordinance No. 4831 in
order to effect the redemption prior to their maturity of the Refunded Bonds.
Section 13. The City's Findings with Respect to Refundin�. The City Council finds
and determines that the issuance and sale of the . Bonds at this time will effect a savings to the
City and is in the best interest of the City and its taxpayers and in the public interest. In making
such finding and detertnination, the City Council has given consideration to the fixed maturities
of the Bonds and the Refunded Bonds, the costs of issuance of the Bonds and the known earned
income from the investment of the proceeds of the issuance and sale of the Bonds pending
payment and redemption of the Refunded Bonds.
The City Council further finds and determines that the money to be deposited with the
Refunding Trustee for the Refunded Bonds in accordance with Section 11 of this ordinance will
discharge and satisfy the obligations of the City under Ordinance No. 4831 with respect to the
Refunded Bonds, and the pledges, charges, trusts, covenants, and agreements of the City therein
made or provided for as to the Refunded Bonds, and that the Refunded Bonds shall no longer be
deemed to be outstanding under such ordinance immediately upon the deposit of such money
with the Refunding Trustee.
, Section 14. Preservation of Tax Exemption for Interest on Bonds. The City covenants
that it will take all actions necessary to prevent interest on the Bonds from being included in
gross income for federal income tax purposes, and it will neither take any action nor make or
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permit any use of proceeds of the Bonds or other funds of the City treated as proceeds of the
Bonds at any time during the term of the Bonds, which will cause interest on the Bonds to be
included in gross income for federal income tax purposes. The City also covenants that it will, to
the extent the arbitrage rebate requirement of Section 148 of the Internal Revenue Code of 1986,
as amended (the "Code"), is applicable to the Bonds, take all actions necessary to comply (or to
be treated as having complied) with that requirement in connection with the Bonds, including the
calculation and payment of any penalties that the City has elected to pay as an alternative to
calculating rebatable arbitrage, and the payment of any other penalties if required under
Section 148 of the Code to prevent interest on the Bonds from being iricluded in gross income
for federal income tax purposes.
Section 15. Designation of Bonds as "Qualified Tax Exempt Obli�ations." The City
has determined and certifies that (a) the Bonds are not "private activity bonds" within the
meaning of Section 141 of the Code; (b) the reasonably anticipated amount of tax exempt
obligations (other than private activity bonds and other obligations not required to be included in
such calculation) which the City and any entity subordinate to the City (including any entity that
the City controls, that derives its authority to issue tax exempt obligations from the City or that
issues tax exempt obligations on behalf of the City) will issue during the calendar year in which
the Bonds are issued will not exceed $30,000,000; and (c) the amount of tax exempt obligations,
including the Bonds, designated by the City as "qualified ta�c exempt obligations" for the
purposes of Section 265(b)(3) of the Code during the calendar year in which the Bonds are
issued does not exceed $30,000,000. The City designates the Bonds as"qualified t� exempt
obligations" for the purposes of Section 265(b)(3) of the Code.
Section 16. Refunding or Defeasance of the Bonds. The City may issue refunding
bonds pursuant to the laws of the State of Washington or use money available from any other
lawful source to pay when due the principal of and interest on the Bonds, or any portion thereof
included in a refunding or defeasance plan, and to redeem and retire, refund or defease all such
then-outstanding Bonds (hereinafter collectively called the "defeased Bonds") and to pay the
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costs of the refunding or defeasance. If money and/or "government obligations" (as defined in
chapter 39.53 RCW, as now or hereafter amended) maturing at a time or times and bearing
interest in amounts (together with money, if necessary) sufficient to redeem and retire, refund or
defease the defeased Bonds in accordance with their terms are set aside in a special trust fund or
escrow account irrevocably pledged to that redemption, retirement or defeasance of defeased
�
Bonds (hereinafter called the "trust account"), then all right and interest of the owners of the
defeased Bonds in the covenants of this ordinance and in the funds and accounts obligated to the
payment of the defeased Bonds shall cease and become void. The owners of defeased Bonds
shall have the right to receive payment of the principal of and interest on the defeased Bonds
from the trust account. The City shall include in the refunding or defeasance plan such
provisions as the City deems necessary for the random selection of any defeased Bonds that
constitute less than all of a particular maturity of the Bonds, for notice of the defeasance to be
� given to the owners of the defeased Bonds and to such other persons as the City shall determine,
and for any required replacement of Bond certificates for defeased Bonds. The defeased Bonds
shall be deemed no longer outstanding, and the City may apply any money in any other fund or
account established for the payment or redemption of the defeased Bonds to any lawful purposes
as it shall determine.
If the Bonds are registered in the name of DTC or its nominee, notice of any defeasance
of Bonds shall be given to DTC in the manner prescribed in the Letter of Representations for
, notices of redemption of Bonds.
Section 17. Bond Fund and Deposit of Bond Proceeds. There is created and
established in the office of the Interim Director of Financial Services a special fund designated as
the Unlimited Tax General Obligation Refunding Bond Fund, 2010 (tlie "Bond Fund"), for the
purpose of paying principal of and interest on the Bonds. All ta�ces collected for and allocated to '
the payment of the principal of and interest on the Bonds shall be deposited in the Bond Fund.
Section 18. A�proval of Bond Purchase Contract. D.A. Davidson & Co. of Seattle,
Washington, has presented a purchase contract (the "Bond Purchase Contract") to the City
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offering to purchase the Bonds under the terms and conditions provided in the Bond Purchase
Contract. The City Council finds that entering into the Bond Purchase Contract is in the City's
best interest and therefore accepts the offer contained therein and authorizes its execution by City
officials.
The Bonds will be printed at City expense and will be delivered to the purchaser in
� accordance with the Bond Purchase Contract, with the approving legal opinion of Foster Pepper
PLLC, municipal bond counsel of Seattle, Washington, regarding the Bonds.
The proper City officials are authorized and directed to do everything necessary for the
prompt delivery of the Bonds to the purchaser and for the proper application and use of the
proceeds of the sale thereof.
,
Section 19. Preliminary Official Statement Deemed Final. The City Council has been
provided with copies of a preliminary official statement dated October 13, 2010 (the
"Preliminary Official Statement"), prepared in connection with the sale of the Bonds. For the
sole purpose of the Bond purchaser's compliance with Securities and Exchange Commission
Rule 15c2-12(b)(1), the City "deems final" that Preliminary Official Statement as of its date,
except for the omission of information as to offering prices, interest rates, selling compensation,
aggregate principal amount, principal amount per maturity, maturity dates, options of
redemption, delivery dates, ratings and other terms of the Bonds dependent on such matters.
Section 20. Undertaking to Provide Continuin� Disclosure. To meet the requirements
of United States Securities and Exchange Commission ("SEC") Rule 15c2-12(b)(5) (the "Rule"),
as applicable to a participating underwriter for the Bonds, the City makes the following written
undertaking (the "Undertaking") for the benefit of holders of the Bonds:
(a) Undertaking to Provide Annual Financial Information and Notice of Material
Events. The City undertakes to provide or cause to be provided, either directly or through a
designated agent, to the Municipal Securities Rulemaking Board (the "MSRB"), in an electronic
format as prescribed by the MSRB, accompanied by identifying information as prescribed by the
MSRB:
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(i) Annual financial information and operating data of the type included in
the final official statement for the Bonds and described in subsection (b) of this section ("annual
financial information"); �
(ii) Timely notice of the occurrence �of any of the following events with
respect to the Bonds, if material:� (1) principal and interest payment delinquencies; (2) non-
payment related defaults; (3) unscheduled draws on debt service reserves reflecting financial
difficulties; (4) unscheduled draws on credit enhancements reflecting financial difficulties;
(5) substitution of credit or liquidity providers, or their failure to perform; (6) adverse taa�
opinions or events affecting the tax-exempt status of the Bonds; (7) modifications to rights of
holders of the Bonds; (8) Bond calls (other than scheduled mandatory redemptions of Term
Bonds); (9) defeasances; (10) release, substitution, or sale of property securing repayment of the
Bonds; and (11) rating changes; and
(iii) Timely notice of a failure by the City to provide required annual financial
information on or before the date specified in subsection (b) of this section.
- (b) Type of Annual Financial Information Undertaken to be Provided. The annual
financial information that the City undertakes to provide in subsection (a) of this section:
(i) Shall consist of (1) annual financial statements prepared (except as noted
in the financial statements) in accordance with applicable generally accepted accounting
principles promulgated by the Government Accounting Standards Board ("GASB"), as such
principles may be changed from time to time, which statements shall not be audited, except,
however, that if and when audited financial statements are otherwise prepared and available to
the City they will be provided; (2) authorized, issued and outstanding balance of general
obligation bonds; (3) assessed valuation for the fiscal year; and (4) regular property tax levy rate
and regular property tax levy rate limit for the fiscal yeaz;
(ii) Shall be provided not later than the last day of the ninth month after the
end of each fiscal year of the City (currently, a fiscal year ending December 31), as such fiscal
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`
.�
year may be changed as required or permitted by State law, commencing with the City's fiscal
year ending December 31, 2010; and
(iii) May be provided in a single or multiple documents, and may be
incorporated by specific reference to documents available to the public on the Internet website of
the MSRB or filed with the SEC.
(c) Amendment of Undertaking. The Undertaking is subject to amendment after the
primary offering of the Bonds without the consent of any holder of any Bond, or of any broker,
dealer, municipal securities dealer, participating underwriter, rating agency or the MSRB, under
the circumstances and in the manner permitted by the Rule. The City will give notice to the
MSRB of the substance (or provide a copy) of any amendment to the Undertaking and a brief �
statement of the reasons for the amendment. If the amendment changes the type of annual
financial information to be provided, the annual financial information containing the amended
financial information will include a narrative explanation of the effect of that change on the type
of information to be provided.
(d) Beneficiaries. The Undertaking evidenced by this section shall inure to the
benefit of the City and any holder of Bonds, and shall not inure to the benefit of or create any
rights in any other person. •
(e) Termination of Undertaking. The City's obligations under this Undertaking shall
terminate upon the legal defeasance of all of the Bonds. In addition, the City's obligations under
this Undertaking shall terminate if those provisions of the Rule which require the City to comply
with this Undertaking become legally inapplicable in respect of the Bonds for any reason, as
confirmed by an opinion of nationally recognized bond counsel or other counsel familiar with
federal securities laws delivered to the City, and the City provides timely notice of such
termination to the MSRB.
(� Remedy for Failure to Comply with Undertaking. As soon as practicable after the
City learns of any failure to comply with the Undertaking, the City will proceed with due
diligence to cause such noncompliance to be corrected. No failure by the City or other obligated
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1�
person to comply with the Undertaking shall constitute a default in respect of the Bonds. The
sole remedy of any holder of a Bond shall be to take such actions as that holder deems necessary,
including seeking an order of specific performance from an appropriate court, to compel the City
or other obligated person to comply with the Undertaking.
(g) Designation of O�cial Responsible to Administer Undertaking. The Director of
Financial Services of the City (or such other officer of the City who may in the future perform
the duties of that office) or his or her designee is authorized and directed in his or her discretion
to take such further actions as may be necessary, appropriate or convenient to carry out the
Undertaking of the City in respect of the Bonds set forth in this section and in accordance with
the Rule.
Section 21. General Authorization. The Mayor and Interim Director of Financial
Services and each of the other appropriate officers of the City are each authorized and directed to
do everything as in their judgment may be necessary, appropriate, or desirable in order to carry
out the terms and provisions of, and complete the transactions contemplated by, this ordinance.
Section 22 . Effective Date of Ordinance This ordinance shall take effect and be in ,
force from and after its passage and five days following its publication as required by law.
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PASSED by the City Council this 20�' day of October, 2010.
.
Coun i sident /iV T'��
G�! LL f� �P!
Approved this 20`�' day of October, 2010.
PATTY L Mayor
ATTEST: APPROVED AS TO FORM:
. /��� �-� G �
CAROL ETGEN, City Clerk Foster Pepper PLLC, as Bond Council
PUBLISHED the day of , 2010
EFFECTIVE the day of , 2010
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CERTIFICATION
I, the undersigned, City Clerk of the City of Bremerton, Washington (the "City"), hereby
certify as follows:
1. The attached copy of Ordinance No. 5124 (the "Ordinance") is a full, true and
correct copy of an ordinance duly passed at a regular meeting of the City Council of the City
held at the regular meeting place thereof on October 20, 2010, as that ordinance appears on the
minute book of the City; and the Ordinance will be in full force and effect five days after
publication in the City's official newspaper; and
2. A quorum of the members of the City Council was present throughout the
meeting and a majority of those members present voted in the proper manner for the passage of
the Ordinance.
IN WITNESS WHEREOF, I have hereunto set my hand this day of October, 2010.
CITY OF BREMERTON, WASHINGTON
Carol Etgen, City Clerk
51095615 4 �
. AFFIDAVIT OF PUBLICATION
Account #42742 AD#266583 (20106955)
STATE OF WASHINGTON
COUNTY OF KITSAP
I, Laura Wessels, 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 SiJN; 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 Bremerton, 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 an advertisement as it was
published in regular issues (and not in supplement form) of said newspaper on the following date, to wit:
And on October 29, 2010 such newspaper was regularly distributed to its subscribers during all of said
period. The full amount of the fee charged for the foregoing publication is the sum of $43.26. This amount
has not been paid in full.
(Signature of Principal Clerk)
���„�„� � �,����.
Subscribed and sworn to before me this day of November 4, 2010. �.•'y M�O �'',.
``,���� • � � ..... � F�.,�
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- • Ju16 2012 % =
Notary Public in and for the State of Washington, Kitsap County. : N• ; Z:
.
�• • •
% PUBL1G ; �.:
.,� �, .� �. ���s
��.�`0•....••���
ORDINANCE NO. 5124 ,,i ���� i �� n�
AN ORDINANCE of the City Council of the City of Bremerton, Washington, relating to contracting
indebtedness; providing for the issuance and sale of $9,920,000 paz value of Unlimited Tax General
Obligation Refunding Bonds, 2010, of the City to provide funds with which to pay the cost of advance
refunding the callable portion of the City's outstanding Unlimited Tax General Obligation Bonds, 2002; and
fixing the terms and covenants of the bonds. PASSED by the City Council on the 20th day of October, I
2010.
The full text of this ordinance is available from the City Clerk's Office, 345 Sixth Street, Suite 600,
Bremerton, WA 98337.
Oct. 29, 2010 AD#20106955