HomeMy WebLinkAbout5152 CITY OF BREMERTON, WASHINGTON
ORDINANCE NO
Jj
AN ORDINANCE of the City of Bremerton, Washington, authorizing the
issuance and sale of a limited tax general obligation note in the principal amount
of $9,675,000 of the City to provide funds to refund the Citys Weekly Rate
Demand Revenue Bonds, 2003 (Kitsap Regional Conference Center Parking
Garage), fixing the terms and covenants of the note, and approving the sale of the
note to Bank of America, N A
WHEREAS, the City of Bremerton, Washington (the "Cit}), heretofore issued its
$10,865,000 par value Weekly Rate Demand Revenue Bonds, 2003 (Kitsap Regional Conference
Center Parking Garage) (the`2003 Bonds), for the purpose of providing a portion of the costs of
constructing and equipping the parking garage including constructing the Plaza Areas, pursuant
to Ordinance No 4846 and a Trust Indenture dated as of February 1, 2003 (the`Indenturd), and
by the Indenture reserved the right to redeem the 2003 Bonds prior to their maturity, at a price of
par plus accrued interest to the date fixed for redemption, and
WHEREAS, there are presently outstanding $9,675,000 par value of 2003 Bonds
maturing on December 1, 2028, and bearing various weekly interest rates (the "Refunded Bondg),
and
WHEREAS, the 2003 Bonds are secured under'an irrevocable, direct -pay letter of credit
(the "Letter of Credit) issued by Bank of America, N A (the `BanR) dated February 20, 2003
pursuant to the Reimbursement Agreement dated February 1, 2003 between the Bank and the
City, and
WHEREAS, the Letter of Credit expires on August 10, 2011, and
WHEREAS, after due consideration, it appears to the City Council that the Refunded
Bonds may be refunded by the issuance and sale of the Limited Tax General Obligation Bond
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Anticipation Note, 2011 authorized herein (the ' Notd), which refunding will be effected by
carrying out the Refunding Plan (as hereinafter defined), and
WHEREAS, the City Council deems it to be in the best interests of the City to issue and
sell the Note to carry out the Refunding Plan, and
WHEREAS, the City Council deems it to be in the best interests of the City to borrow
money by the issuance of limited tax general obligation bonds and, pending the issuance of those
bonds, issue short term obligations in accordance with the provisions of chapter 39 50 RCW for
the purpose of providing the funds to pay the costs to refund the Citys Weekly Rate Demand
Revenue Bonds, 2003 (Kitsap Regional Conference Center Parking Garage), NOW,
THEREFORE,
THE CITY COUNCIL OF THE CITY OF BREMERTON, WASHINGTON, ORDAINS
as follows
Section 1 Definitions As used in this ordinance the following words and phrases
shall have the meanings set forth below unless the context clearly indicates that another meaning
is intended
` Authorized Office means the Mayor, Director of Financial Services or their designee of
the City
` Bank of America, N A, or its corporate successor
` BBA LIBOR Daily Floating Rath is a fluctuating rate of interest which can change on
each banking day The rate will be adjusted on each banking day to equal the British Bankers
Association LIBOR Rate (BBA LIBOR) for U S Dollar deposits for delivery on the date in
question for a one month term beginning on that date The Bank will use the BBA LIBOR Rate
as published by Reuters (or other commercially available source providing quotations of BBA
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LIBOR as selected by the Bank from time to time), as determined for each banking day at
approximately 11 00 a m London time two London Banking Days prior to the date in question,
as adjusted from time to time in the BanVs sole discretion for reserve requirements, deposit
insurance assessment rates and other regulatory costs If such rate is not available at such time
for any reason, then the rate for that interest period will be determined by such alternate method
as reasonably selected by the Bank
` BBA LIBOR Daily Floating Rate Modd 'means the rate per year equal to (a) 65 1 % of the
BBA LIBOR Daily Floating Rate, plus (b) 100%, which rate will be rounded upwards to the
nearest 1 /100th of one percent
` Bond Fund 'means the Bond Fund created pursuant to Section 7 01 of the Indenture
`Qly' 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
` means the United States Internal Revenue Code of 1986, as amended, and
applicable rules and regulations promulgated thereunder
` Director of Financial Service means the duly appointed and acting Director of Financial
Services of the City, or such person who shall have assumed the duties of the Director of
Financial Services
` Indentur means the Trust Indenture, dated as of February 1, 2003, by and between the
City and U S Bank National Association, as trustee for the 2003 Bonds
` LIBOR ' means, for any applicable LIBOR Interest Rate Period, the rate per annum equal
to the British Bankers Association LIBOR Rate`BBA LIBOR" as published by Reuters (or other
commercially available source providing quotations of BBA LIBOR as selected by the Bank
from time to time) at approximately 11 00 a m London time two London Banking Days before
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the commencement of the LIBOR Interest Rate Period, for U S Dollar deposits (for delivery on
the first day of such LIBOR Interest Rate Period) with a term equivalent to such LIBOR Interest
Rate Period If such rate is not available at such time for any reason, then the rate for that
LIBOR Interest Rate Period will be determined by such alternative method as reasonably
selected by the Bank
` LIBOR Fixed Rate Mod d' means the rate per year equal to (a) 65 1% of LIBOR, plus
(b) 100%, which rate will be rounded upwards to the nearest 1 /100th of one percent Advances
of monthly increments from 1 to 12 months will be available under the LIBOR Fixed Rate
Mode, but not extending beyond the Maturity Date
` LIBOR Interest Rate Penod 'means a period of monthly increments from one month to 12
months commencing on a London Banking Day, not to exceed the Maturity Date The date of
the last day of the LIBOR Interest Rate Period and the actual number of days during the interest
period will be determined by the Bank using the practices of the London inter -bank market
` London Banking Dad means any day on which banks in London are open for business
and dealing in offshore dollars
` Maturity Datd 'means a date that is two years from the date of delivery of the Note to the
Bank
`Notd' means the Limited Tax General Obligation Bond Anticipation Note, 2011
authorized to be issued by this ordinance
` Note Fund means the "Limited Tax General Obligation Bond Anticipation Note Fund'
created by Section 16 of this ordinance
` Note Registe means the registration records for the Note maintained by the Note
Registrar
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` Note Re ig stra t'means the Director of Financial Services of the City
` Operating and Maintenance Expense means all reasonable expenses, such as lighting,
concrete repair and painting, incurred by the City in causing the Parking System to be operated
and maintained in good repair, working order and condition, but excluding (a) depreciation,
(b) any City - imposed taxes or payments in lieu of taxes, (c) management fees to third parties,
(d) other costs of collection of parking fees, including but not limited to the expense, if any, of
having City employees collect parking fees and other administrative overhead and (e) debt
service on any obligations payable from Revenues of the Parking System
` Outstanding Principal Balance of the Notd means the aggregate of all funds that the City
has drawn from the Bank pursuant to the Note less the aggregate of all principal payments on the
Note made by the City
` Parking GqEag means the parking facility associated with the Kitsap Regional
Conference Center
` Parking System means the existing parking facilities and lots of the City, which is
comprised of the following properties the Parking Garage, Roosevelt lots, City parking garage,
Fifth and Park lot and the Craven lots, all metered on- street parking in the City and all fees
collected from parking violations, together with all additions thereto and betterments and
extensions thereof heretofore or hereafter made
` Proposa l' means the proposal dated June 17, 2011, submitted by the Bank to the City to
purchase the Note, attached hereto as Exhibit A
` Refunded Bond s'means the outstanding 2003 Bonds of the City maturing on December 1,
2028, issued pursuant to Ordinance No 4846 and the Indenture, the refunding of which has been
provided for by this ordinance
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` Refunding Plar means the repayment of the Refunded Bonds on August 1, 2011, with
proceeds of a draw on the Letter of Credit provided by the Bank, which draw will be reimbursed
with proceeds from the Note
` Request for DraW means a written request by an Authorized Officer for a draw on the
non - revolving line of credit authorized to be established by this ordinance, as more fully
described in Section 5
` Revenues of the Parking System means all the earnings and revenue received by the
Parking System from any source whatsoever, except general ad valorem taxes, grants from the
state or federal governments and bond proceeds
` the State of Washington
` 2003 Bond mean the Citys Weekly Rate Demand Revenue Bonds, 2003 (Kitsap
Regional Conference Center Parking Garage), issued pursuant to Ordinance No 4846 and the
Indenture, and currently outstanding in the principal amount of $9,675,000
Section 2 Debt Capacity The assessed valuation of the taxable property of the City
as ascertained by the last preceding assessment for City purposes for the calendar year 2011 is
$2,748,747,794, and the City has outstanding general indebtedness evidenced by limited tax
general obligation bonds, notes, leases and conditional sales contracts in the principal amount of
$24,883,185 incurred within the limit of up to 1 1/2% of the value of the taxable property within
the City permitted for general municipal purposes without a vote of the qualified voters therein,
unlimited tax general obligation bonds in the principal amount of $10,755,000 incurred within
the limit of up to 2 1/2% of the value of the taxable property within the City for capital purposes
only, issued pursuant to a vote of the qualified voters of the City The maximum amount of
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indebtedness for which bonds are authorized herein to be issued is $9,675,000, which is within
the 1 1/2% limitation of non -voted approved general obligation indebtedness of $41,231,217
Section 3 Authorization of Bonds The City shall borrow money on the credit of the
City and issue negotiable limited tax general obligation bonds and/or revenue bonds evidencing
that indebtedness in the amount of $9,675,000 or such other amount necessary (the `Bonds) to
provide the funds to repay the Note and to pay the costs of issuance and sale of the Bonds The
general indebtedness to be incurred shall be within the limit of up to 1 1/2% of the value of the
taxable property within the City permitted for general municipal purposes without a vote of the
qualified voters therein
Section 4 Description of the Note For the purpose of providing all or part of the
money required to refund the Refunded Bonds, and pay interest on and costs of issuing the Note
pending the issuance of the Bonds, the City shall issue its Limited Tax General Obligation Bond
Anticipation Note, 2011, in the principal amount of not to exceed $9,675,000 (the "Notd) The
Note shall be in fully registered form, shall be numbered R -1, shall be dated the date of its
delivery to the Bank, and shall mature on the Maturity Date
Each draw pursuant to a Request for Draw shall bear interest in the BBA LIBOR Daily
Floating Rate Mode or in the LIBOR Fixed Rate Mode If a Request for Draw is made in the
LIBOR Fixed Rate Mode, and no election is made to renew or change such rate mode at the
expiration, the draw will automatically convert to the BBA LIBOR Daily Floating Rate Mode
until the City makes a further election Interest on the Note shall accrue from the date money is
drawn, pursuant to a Request for Draw, until paid and shall be computed on the principal amount
outstanding on the basis of a 360 -day year and the actual days elapsed Interest on the Note shall
be payable quarterly, beginning September 1, 2011 and at maturity or upon early redemption
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Principal on the Note shall be paid on December 1, 2011 in the amount of $370,000, on
December 1, 2012 in the amount of $395,000 and in full at maturity
The Outstanding Principal Balance of the Note on any particular day shall be the
aggregate of all funds which the City has drawn from the date of the Note 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
Note proceeds pursuant to a Request for Draw by the City
The Note shall be issued in fully registered form Both principal of and interest on the
Note shall be payable in lawful money of the United States of America by check, warrant, wire
transfer or automatic clearinghouse funds, to the registered owner of the Note at the address
shown on the Note Register The Director of Financial Services shall act as Registrar
The Note may not be assigned or transferred by the Bank, except that the Bank may
assign or transfer the Note to any successor to the business and assets of the Bank
Section 5 Procedures for Request for Draw A Request for Draw pursuant to the
Note may be made by an Authorized Officer in writing A Request for Draw in the LIBOR
Fixed Rate Mode must be delivered to the Bank at least three London Banking Days prior to the
date designated for disbursement of Note proceeds, and must be in the minimum principal
amount of $100,000 A Request for Draw in the BBA LIBOR Daily Floating Rate Mode maybe
delivered to the Bank on any London Banking Day and disbursed on the same London Banking
Day The City hereby delegates to the Authorized Officers authority to make a written Request
for Draw in accordance with the terms and provisions of this ordinance in the amounts, in the
modes and at the times as the Authorized Officers may determine The initial tax - exempt draw
on the Note is subject to the written approval of Bond Counsel and must be accompanied by a
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tax certificate and an Internal Revenue Service Form 8038 Subsequent draws shall not require
approval of Bond Counsel The Bank shall incur no liability to the City or to any other person in
acting upon any written notice or other communication which the Bank believes in good faith to
have been given by an official or other person authorized to borrow on behalf of the City, or
otherwise acting in good faith in making advances pursuant to this ordinance Note proceeds
shall be deposited into the Bond Fund in the amount necessary to accomplish the Refunding
Plan, with any remaining to be deposited into the appropriate City account as determined by an
Authorized Officer
Section 6 Registration and Transfer of the Note The Note shall be issued only in
registered form as to both principal and interest and be recorded on books or records maintained
by the Director of Financial Services who is appointed to act as the note registrar (the "Note
Registef) The Note Register shall contain the name and mailing address of the owner of the
Note
A Note surrendered to the Note Registrar may be exchanged for a new Note in the
amount of not to exceed $9,675,000 A Note may be transferred only if endorsed in the manner
provided thereon and surrendered to the Note Registrar Any exchange or transfer shall be
without cost to the owner or transferee The Note Registrar shall not be obligated to exchange or
transfer a Note during the 15 days preceding the Maturity Date of the Note
The Note may be assigned or transferred only in whole by the registered owner to a
single investor that is a financial institution or a person who is reasonably believed to be a
qualified institutional buyer or accredited investor within the meaning of the applicable federal
securities laws
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Section 7 Prepayment The City may prepay the Note in whole or in part at any time
by paying the principal amount thereof to be prepaid together with accrued interest to the date of
prepayment Principal accruing interest in the BBA LIBOR Daily Floating Rate Mode may be
prepaid on any banking day without premium or penalty A prepayment fee equal to the amount
necessary to reimburse the Banks breakage and redeployment costs is required for the
prepayment, on a date other than the last day of a LIBOR Interest Rate Period, of principal
accruing interest in the LIBOR Fixed Rate Mode If the Note is prepaid in full, interest shall
cease to accrue on the date such prepayment occurs
Section 8 Establishment of Revenue Fund, Priority of Payments, Pledge of
Revenues and Taxes There has been created and established a Parking System for the City (the
`Parking System) to consists of the Parking Garage, other existing parking facilities and lots of
the City, all metered on- street parking in the City and all fees collected from parking violations,
together with all additions thereto and betterments and extensions thereof heretofore or hereafter
made There has been created and established in the office of the Director of Financial Services
a special fund to be designated as the`Parkmg System Revenue Fund'(the "Revenue Fund) The
City shall deposit the Revenues of the Parking System into the Revenue Fund
The City will use, pay out and distribute the Revenues of the Parking System in the
following order of priority
(A) To pay Operating and Maintenance Expenses,
(B) To make payments into the Bond Fund in order to meet the required debt
service payments on the Bonds or to pay Reimbursement Obligations as provided in the
Indenture,
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(C) To meet the required debt service on the Note, and any other debt secured
by Revenues of the Parking System and approved by the Bank,
(D) To pay management fees or other costs of collection of parking fees,
including but not limited to the expenses, if any, of having City employees collect parking fees
and other administrative overhead related to the Parking System, and
(E) To redeem and retire any then outstanding revenue bonds or to purchase
any or all of those bonds in the open market, or to make necessary betterments and replacement
of or repairs, additions or extensions to the Parking System, or to transfer to the Street Fund or
Park Fund of the City as authorized by the City Council or for any other lawful purpose
The Revenues of the Parking System are hereby pledged for the payment of the Note
This pledge shall constitute a lien and charge upon such Revenues of the Parking System prior
and superior to any other liens and charges whatsoever, subject only to Operating and
Maintenance Expenses, and to a panty lien pledge to the Bank to secure the Reimbursement
Obligations
Section 9 Pledge of Taxes The City irrevocably pledges to redeem the Note on or
before the Maturity Date from the proceeds of a sufficient amount of Bonds authorized by this
ordinance, from the proceeds of additional short term obligations, an installment loan or from
other money of the City legally available for such purpose, and to include in its budget and levy
taxes annually within the constitutional and statutory tax limitations provided by law without a
vote of the electors of the City on all of the taxable property within the City in an amount
sufficient, together with the Revenues of the Parking System, the Bonds or other short tern
obligation proceeds and other money legally available and to be used therefor, to pay when due
the principal of and interest on the Note and the Bonds, and the full faith, credit and resources of
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the City are pledged irrevocably for the annual levy and collection of those taxes and the prompt
payment of that principal and interest
Section 10 Use of Note Proceeds All of the proceeds of Requests for Draws on the
Note shall be deposited immediately upon the receipt thereof with the Trustee for the Refunded
Bonds and used to discharge the obligations of the City relating to the Refunded Bonds under
Ordinance No 4846 and the Indenture by reimbursing the Bank for a draw on the Letter of
Credit or otherwise providing for the payment of the amounts required to be paid by the
Refunding Plan, and the costs of issuance of the Note Any amounts not needed for such
purposes shall be returned to the City at the time of delivery of the Note to the initial purchaser
thereof and deposited in the Note Fund to pay interest on the Note on the first interest payment
date
Section 11 Call for Redemption of the Refunded Bonds The City calls for
redemption on August 1, 2011, all of the Refunded Bonds at par plus accrued interest
The Trustee for the 2003 Bonds is 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 4846 and the Indenture in order to effect the redemption prior to their maturity of the
Refunded Bonds
Section 12 City Findings with Respect to Refundmg The City Council of the City
finds and determines that the issuance and sale of the Note at this time is in the best interest of
the City and its taxpayers and in the public interest
Section 13 Other Covenants of the City The City covenants and agrees with the
Bank as follows
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(A) The City shall maintain, preserve and keep the Parking System in good
repair, and operate the Parking System in an efficient manner and at a reasonable cost
(B) The City shall not incur any obligations secured by a lien on the Revenues
of the Parking System that is superior or on a panty to the lien and pledge of the Revenues
securing the Note without the prior written consent of the Bank Nothing herein contained shall
prevent the City from issuing revenue bonds or other obligations which are a charge upon the
Revenues of the Parking System junior or inferior to the charge of the Note upon the Revenues
of the Parking System
(C) To the extent that insurance coverage is available with responsible
insurers, the City shall keep the Parking System and the operation thereof insured against the
risks of direct physical loss, damage or destruction, and against accidents, casualties or
negligence, including liability insurance and employer's liability, at least to the extent that similar
insurance is usually carried by cities operating like properties (such insurance may include a
program of self insurance)
(D) The City will keep proper and separate accounts and records in which
complete and separate entries shall be made of all transactions relating to the Parking System
(E) The City my sell, transfer or otherwise encumber or dispose of any or all
of the properties, facilities or other part of the Parking System or any real or personal property
comprising a part of the System only consistent with one or more of the following
(1) The City in its discretion may carry out such a sale, transfer or
disposition (each, as used in this subparagraph, a'transfef) if the facilities or property
transferred are not material to the operation of the Parking System, or shall have become
unserviceable, inadequate, obsolete or unfit to be used in the operation of the Parking
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System or are no longer necessary, material or useful to the operation of the Parking
System, or
(n) The City in its discretion may carry out such a transfer if the
aggregate depreciated cost value of the facilities or property being transferred under this
subparagraph (n) in any fiscal year comprises no more than 3% of the total assets of the
Parking System, or
(iii) The City in its discretion may carry out such a transfer if the City
receives from the transferee an amount equal to the greater of the following
(a) An amount which will be in the same proportion to the net
amount of the Note then outstanding that the Revenues of the Parking System from the portion of
the Parking System sold or disposed of for the preceding year bears to the Revenues of the
Parking System for that period, or
(b) An amount which will be in the same proportion to the net
amount of the Note then outstanding that the Net Revenue from the portion of the Parking
System sold or disposed of for the preceding year bears to the total Net Revenue for such period,
or
(c) An amount equal to the fair market value of the portion of
the Parking System transferred As used herein, "fair market value" means the most probable
price that a property should bring in a competitive and open market under all conditions requisite
to a fair sale, the willing buyer and willing seller each acting prudently and knowledgeably and
assuming that the price is not affected by coercion or undue stimulus
The proceeds of any transfer under this subparagraph (iii) shall be used first, to
promptly redeem, or irrevocably set aside for the redemption of the Note and if any proceeds
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remain, second, to provide for part of the cost of additions to and betterments and extensions of
the Parking System
Section 14 Form and Execution of the Note The Note shall be prepared in a form
consistent with the provisions of this ordinance and state law, shall be signed by the Mayor 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 the Note bearing a Certificate of Authentication in the following form, manually
signed by the Note Registrar, shall be valid or obligatory for any purpose or entitled to the
benefits of this ordinance
CERTIFICATE OF AUTHENTICATION
This Note is the fully registered City of Bremerton, Washington, Limited
Tax General Obligation Bond Anticipation Note, 2011, described in the Note
Ordinance
CITY OF BREMERTON, Note Registrar
By
Authorized Signer
The authorized signing of a Certificate of Authentication shall be conclusive evidence
that the Note 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 Note ceases to be an officer of the
City authorized to sign notes before the Note bearing his or her facsimile signature are
authenticated or delivered by the Note Registrar or issued by the City, the Note 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 notes The Note also may be signed on behalf of the City by any person who, on the actual
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date of signing of the Note, is an officer of the City authorized to sign notes, although he or she
did not hold the required office on the date of issuance of the Note
Section 15 Note Registrar The Note Registrar shall keep, or cause to be kept,
sufficient books for the registration and transfer of the Note The Note Registrar is authorized,
on behalf of the City, to authenticate and deliver the Note transferred or exchanged in accordance
with the provisions of the Note and this ordinance, to serve as the Citys paying agent for the
Note and to carry out all of the Note Registrar's powers and duties under this ordinance
Section 16 Note Fund, Disposition of Note Proceeds There is authorized to be
created in the office of the Director of Financial Services a special account designated as the
`Limited Tax General Obligation Bond Anticipation Note Account, 201 r ( the `Note Fund) All
Bond proceeds, Revenues of the Parking System and taxes collected for and allocated to the
payment of the principal of and interest on the Note shall be deposited in the Note Fund
Both principal of and interest on the Note shall be payable in lawful money of the United
States of America solely out of the Note Fund
Payment of interest on each interest payment date, and of principal on December 1, 2011,
December 1, 2012, at maturity or prepayments of principal, shall be paid by immediately
available funds delivered on or before each interest payment date or the maturity or prepayment
date to the registered owner at the address appearing on the Note Register on the last day of the
month preceding the payment date Upon the final payment of principal of and interest on the
Note the registered owner shall surrender the Note at the principal office of the Note Registrar
for destruction or cancellation in accordance with law
Section 17 Sale of the Note The sale of the Note to the Bank, under the terms and
conditions of this ordinance and the Proposal dated July 17, 2011, which is attached hereto as
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Exhibit A, to purchase the Note, is hereby approved and confirmed Upon delivery of the Note,
the City shall pay to the Bank a fee of $5,000, and reimburse the Bank for its legal fees in the
amount of $1,200
Section 18 Default If (A) there occurs any nonpayment of principal, interest, fees or
other amounts when due under the Note or this ordinance, or (B) the failure to maintain the tax -
exempt status of the Note, then the Bank at its option may increase the interest rate on the Note
by three percentage points
Section 19 Consent to Governing Law, Waiver of Jury Trial The City consents and
agrees to the election of Washington law to govern the Note The City irrevocably and
voluntarily waives, and the Bank by purchase of the Note irrevocably and voluntarily waives,
any right they may have to a trial by fury in respect of any controversies or claims between the
City and the Bank, whether arising in contract, tort or by statute, including but not limited to
controversies or claims that anse out of or relate to (i) this ordinance, (ii) the Note or (iii) any
document related to the Note and this ordinance The City and the Bank agree and understand
that the effect of this agreement is that they are giving up the right to trial by fury to the extent
permitted by law
Section 20 Reporting Requirements The City will provide the following information
to the Bank
(a) The Citys audit report from the State within 10 days of receipt from the
State Auditor
(b) The Citys internally prepared unaudited annual financial statements within
270 days after fiscal year end, which will include the Parking System,
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(c) The Citys annual budget due no later than 90 days of the new budget
cycle, andSuch other information as may be reasonably requested by the Bank from time to time
Section 21 Tax Covenants Designation of Bonds as `Qualified Tax - Exempt
Obligations'
(a) Preservation of Tax Exemption for Interest on Bonds The City covenants
that it will take all actions necessary to prevent interest on the Note from being included in gross
income for federal income tax purposes, and it will neither take any action nor make or permit
any use of proceeds of the Note or other funds of the City treated as proceeds of the Note at any
time during the term of the Note which will cause interest on the Note 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 "Codd), is applicable to the Note, take all actions necessary to comply (or to be treated as
having complied) with that requirement in connection with the Note, 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 Note from being included in gross income for federal income tax
purposes
(b) Designation of the Note as a "Qualified Tax - Exempt Obligation The City
has determined and certifies that (a) the Note is not a`�nvate activity bond'withm 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
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obligations on behalf of the City) will issue during the calendar year in which the Note is issued
will not exceed $10,000,000, and (c) the amount of tax- exempt obligations, including the Note,
designated by the City as "qualified tax - exempt obligahons'for the purposes of Section 265(b)(3)
of the Code during the calendar year in which the Note is issued does not exceed $10,000,000
The City designates the Note as a "qualified tax - exempt obligation' for the purposes of
Section 265(b)(3) of the Code
Section 22 Severability If any provision in this ordinance is declared by any court of
competent ,jurisdiction to be contrary to law, then such provision shall be null and void and shall
be deemed separable from the remaining provision of this ordinance and shall in no way affect
the validity of the other provisions of this ordinance or of the Note
Section 23 General Authorization The Citys Mayor and Director of Financial
0
Services and other appropriate officers of the City are authorized to take any actions and to
execute documents as in their . judgment may be necessary or desirable in order to carry out the
terms of, and complete the transactions contemplated by, this ordinance All acts taken pursuant
to the authority of this ordinance but prior to its effective date are hereby ratified
Section 24 Effective Date of Ordinance This ordinance shall take effect and be in
force from and after its passage and ten days following its publication as required by law
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i
PASSED by the City Council this 6 day of July, 2011
WILL MAUP , Councif4resident
Approved this 6 day of July, 2011
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PATTY =,VED Mayor
ATTEST AS TO FORM
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CAROL TGE , City Jerk Foster Pepper PLLC, as Bond Council
PUBLISHED the //- day of 1 2011
EFFECTIVE tha V5day of , 2011
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51150466 2
EXHIBIT A
PROPOSAL OF THE BANK
511504662
Bank of America `` '
Merrill Lynch
Batik of Anieuca, N A.
Government Banking
OR1 t29A715
121 SW Morrison Street
Suite 1700
Portland OR 91701 1111
Douglas Bowhby
Senior Vice President
June 17, 2011 Tel 503 705 6459
Fax 206 535 9223
dougias b bovAshynbanil com
Becky Hasart
Finance Director
City of Bremerton
Becky Hasart@ci bremerton wa us
Re $9,675,000 Tax - Exempt Limited Tax General Obligation Note, 2011
Dear Becky
We enclose a term sheet outlining the proposed terms under which Bank of America, N A ('Bank ") may
extend credit to the City of Bremerton, Washington This term sheet is not a commitment to lend by Bank
Please call meat (503)795 -6459 to discuss this proposal We look forward to working with you
Very truly yours,
BANK OF AMERICA, N A
_-D ' � o _ �� Ad / i-e—L
Douglas Bowlsby Pete Sullivan
Senior Vice President Senior Vice President
Cc Cathy Johnson, City of Bremerton
David Trageser, D A Davidson
Suzanne Eide, D A Davidson
Shandra Tietze, D A Davidson
Nancy Neraas, Foster Pepper
Merlean Locke, Bank of America
Alan Schulkin, Schulkin Rein PLLC
511304662
TERM SHEET PROPOSAL
CITY OF BREMERTON, WASHINGTON
June 17, 2011
This Term Sheet Proposal is presented for discussion purposes only It is not a commitment to lend
by Bank of America or any of its affiliates Bank of America may withdraw or amend it at any time in
Its sole discretion If Bank of America does extend a loan commitment, the actual terms and
conditions (including pricing and financial covenants) will be subject to completion of due diligence,
Bank of America's credit and documentation standards, necessary credit approval, market
conditions and other considerations determined by Bank of America in its sole discretion
BORROWER City of Bremerton, Washington (the "Borrower")
LENDER Bank of America, N A ( "Bank of America" or "Bank ")
CREDIT FACILITY $9,675,000 Tax - Exempt Limited Tax General Obligation Note (the "Credit
Facility")
PURPOSE The proceeds of the Credit Facility shall be used to refund the principal
balance outstanding on Borrower's Weekly Rate Demand Revenue Bonds,
2003 (Kitsap Regional Conference Center Parking Garage) (the "Bonds "),
including draws on Bank of America Irrevocable Transferable Letter of Credit
No 3053581
INTEREST RATE The following interest rate options will be available to Borrower, based upon
the tenor selected
BRA LIBOR Daily Floating Rate A rate per year equal to 651 % of the BBA
LIBOR Daily Floating Rate, plus 1 00% The BBA LIBOR Daily Floating Rate
will be rounded upwards to the nearest 11100" of one percent
LIBOR Fixed Rate A rate per year equal to 65 1 % of the LIBOR Fixed Rate,
plus 1 00% The LIBOR Fixed Rate will be rounded upwards to the nearest
1110e of one percent LIBOR Fixed Rate advances with interest periods of 1
to 12 months will be available, not to exceed the expiration/matunty date of the
Credit Facility Minimum LIBOR Fixed Rate advance is $100,000
The BBA LIBOR Daily Floating Rate is a fluctuating rate of interest which can
change on each banking day The rate will be adjusted on each banking day
to equal the British Bankers Association LIBOR Rate ( "BBA LIBOR ") for U S
Dollar deposits for delivery on the date in question for a one month term
beginning on that date The Bank will use the BBA LIBOR Rate as published
by Reuters (or other commercially available source providing quotations of
BBA LIBOR as selected by the Bank from time to time) as determined at
approximately 11 00 a m London time two (2) London Banking Days prior to
the date in question, as adjusted from time to time in the Bank's sole discretion
for reserve requirements, deposit insurance assessment rates and other
regulatory costs If such rate is not available at such time for any reason, then
the rate will be determined by such alternate method as reasonably selected
by the Bank A "London Banking Day" is a day on which banks in London are
open for business and dealing in offshore dollars
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311504662
"LIBOR" means, for any applicable interest period, the rate per annum equal to
the British Bankers Association LIBOR Rate ( "BBA LIBOR "), as published by
Reuters (or other commercially available source providing quotations of BBA
LIBOR as selected by the Bank from time to time) at approximately 11 00 a m
London time two (2) London Banking Days before the commencement of the
interest period, for U S Dollar deposits (for delivery on the first day of such
interest period) with a term equivalent to such interest period, as adjusted from
time to time in the Bank's sole discretion for reserve requirements, deposit
insurance assessment rates and other regulatory costs If such rate is not
available at such time for any reason, then the rate for that interest period will
be determined by such alternate method as reasonably selected by the Bank
A "London Banking Day" is a day on which banks in London are open for
business and dealing in offshore dollars
INTEREST All calculations of interest and fees shall be made on the basis of actual
CALCULATION number of days elapsed in a 360 -day year
ORIGINATION FEE $5,000 payable at closing
REPAYMENT /MATURITY The Credit Facility will expire two years after closing
Interest on the outstanding principal balance of the Credit Facility is payable
quarterly in arrears on the first day of each March, June, September and
December, and at Maturity
Principal outstanding on the Credit Facility is payable
• $370,000 on 12/1/2011,
• $395,000 on 12/1/2012,
Upon receipt of proceeds from issuance of refunding bonds (to the extent
that such proceeds have been received), and
• In full at Maturity
SECURITY Borrower shall agree to pay the Credit Facility from the Revenues of the
Parking System If and to the extent the Revenues of the Parking System are
insufficient for such purpose, the City agrees to pay the Obligations, as a
general obligation, from any other money of the City legally available, subject
to an aggregate limit on such general obligation payments of $9,675,000 over
the term of the Credit Facility, and the Borrower shall pledge its full faith and
credit to the prompt payment thereof
PREPAYMENTS The Borrower may prepay any variable rate loan under the Credit Facility in
whole or in part at any time without fee, except for reimbursement of Bank of
America's breakage and redeployment costs in the case of prepayment of
LIBOR based borrowings (does not apply to the BBA LIBOR Daily Floating
Rate)
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511504662
REPRESENTATIONS Usual and customary for transactions of this type
AND WARRANTIES
COVENANTS Usual and customary for transactions of this type, including but not limited to
the following
• On or before the Maturity date, Borrower agrees to issue debt obligations
in an amount sufficient to generate net proceeds, together with other
available resources of Borrower, to payoff the Credit Facility in full
• Borrower may not issue additional debt obligations with a superior or parity
lien on the Revenues of the Parking System without the prior written
consent of Bank of America
• To at all times maintain and keep the Parking System in good repair,
working order and condition, and also will at all times operate the Parking
System and the business in connection therewith in an efficient manner
and at a reasonable cost
DOCUMENTATION All documentation, including the form of legal opinion to be issued by
Borrower's bond counsel, is subject to review and approval by Bank of
America's legal counsel
Documentation to include
• An unqualified legal opinion of nationally recognized bond counsel, in
form and substance acceptable to Bank and its legal counsel, that (i)
the resolution and all documents related to the Credit Facility have
been properly adopted, authorized and executed, (1i) the resolution and
all documents related to the Credit Facility constitute a legally binding
obligation of the Borrower, payable from the Security and enforceable
according to their terms (subject to standard exceptions), (iii) interest
payable on the Credit Facility is excludable from gross income for
purposes of federal and state income taxes, and (iv) Borrower has
designated the Credit Facility as a "qualified tax- exempt obligation"
• A copy of the Resolution /Ordinance passed by the Board authorizing
the issuance of the Credit Facility,
• Receipt of the original signed Note at closing
REPORTING Financial Information from Borrower Borrower to provide financial
REQUIREMENTS information and statements in form and content acceptable to Bank of America
indicated below
• State Audit Report of the Borrower within 10 days of receipt from State
auditor
• Borrower's internally prepared unaudited annual financial statement within
270 days of its fiscal year end, to include the Parking System
• Within 90 days of commencement of the new budget cycle, a copy of
Borrower's budget for the new period
EVENTS OF DEFAULT Usual and customary in transactions of this type
In addition to other legal remedies, if an event of default occurs due to (1)
nonpayment of principal, interest, fees or other amounts when due, or (ii)
failure to maintain the tax exempt status of the Credit Facility, then Bank of
America may increase the interest rate spread by three percent (3 0 %)
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GOVERNING LAWIJURY State of Washington The Borrower agrees to waive a fury trial in any
TRIAL WAIVER proceeding against Bank of America
EXPENSES Borrower will pay all reasonable costs and expenses associated with the
preparation, due diligence, administration and enforcement of all
documentation executed in connection with the Credit Facility, including Bank
of America's attorneys' fees Bank of America's attorneys' fees for initial
review and approval of documentation are estimated at $1,200
This Term Sheet Proposal contains confidential and proprietary loan structuring and pricing information
Except for disclosure on a confidential basis to your accountants, attorneys and other professional advisors
retained by you in connection with the credit facilities contained in this Term Sheet Proposal or as may be
required by law, the contents of the Term Sheet Proposal may not be disclosed in whole or in part to any
other person or entity without our prior written consent, provided that nothing herein shall restrict disclosure
of information relating to the tax structure or tax treatment of the proposed credit facilities
ORAL AGREEMENTS OR ORAL COMMITMENTS TO LOAN MONEY, EXTEND CREDIT, OR TO
FORBEAR FROM ENFORCING REPAYMENT OF A DEBT ARE NOT ENFORCEABLE UNDER
WASHINGTON LAW
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511504662
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 (the "Ordinancd) 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 July 6, 2011, as that ordinance appears on the minute
book of the City, and the Ordinance will be in full force and effect ten days after publication in
the Citys 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 lay of
2011
CITY OF BREMERTON, WASHINGTON
L" ' 9&, � �, x 2
Carol Etge , City Clerk
511504662
I
AFFIDAVIT OF PUBLICATION
Account #71044 AD #273561
STATE OF WASHINGTON
COUNTY OF KITSAP
I, Jessica Zuehl - Miller, being first duly sworn on oath, deposes and says That she is now, and at all times
embraced in the publication herem 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 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 July 11, 2011 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 Tlus amount has not
been paid in full
(Signature of Principal Clerk)
Subscribed and sworn to before me this day of August 9, 2011
"tt 1V1 1M's"
O VA R
ZC
Notary Public in and for the State of Washington, Kitsap County •
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• Jul 8 2 ; -
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ORDINANCE NO 5152
AN ORDINANCE of the City Council of the City of Bremerton, Washington, authorizing the issuance and
sale of a limited tax general obligation note in the principal amount of $9,675,000 of the City to provide
funds to refund the City's Weekly Rate Demand Revenue Bonds, 2003 (Kitsap Regional Conference Center
Parking Garage), fixing the terms and covenants of the note, and approving the sale of the note to Bank of
America, N A PASSED by the City Council on the 6th day of July, 2011 The full text of this ordinance is
available from the City Clerk's Office, 345 Sixth Street, Suite 600, Bremerton, WA 98337
July 11, 2011 AD #20114749