HomeMy WebLinkAbout08/17/05 AGENDA
FILE
CITY COUNCIL 345 6th Street, Suite 603, Bremerton, WA 98337-1873 03 (360) 473-5280
* * AMENDED * *
AUGUST 17, 2005
CITY COUNCIL MEETING AGENDA
1. PRE-COUNCIL STUDY SESSION: 5:00 - 5:30 P.M. in COUNCIL CONFERENCE ROOM 603
A. General Council Business
B. 20-Minute Executive Session to discuss a "Real Estate Transaction" per R.C.W.
42.30.110(1 )(c) Information Only
2. CALL TO ORDER: 5:30 P.M. in MEETING CHAMBERS LOCATED ON FIRST FLOOR
A. Pledge 6f Allegiance
B. Invocation
3. MAYOR'S REPORT
4. PUBLIC SERVICE ANNOUNCEMENTS
5. CONSENT AGENDA
A. Claims & Check Register (#AB05-180)
B. Minutes of Meeting - July 20,2005 (#AB05-181)
C. Contract Award to HISEY CONSTRUCTION, INC. for Pump Station 4 Replacement and 12-inch
Transmission Main (#AB05-182)
D. Inter-Agency Agreement with the WASHINGTON MILITARY DEPARTMENT for Reimbursement of
West-650 Water Facilities Improvements (#AB05-183)
E. Resolution No. 2976 Setting a Hearing Date of September 21,2005 for Vacating the northerly
850-feet of Russell Road to Oyster Bay Avenue (#AB05-184)
6. GENERAL BUSINESS
A. Ordinance No. 4944, authorizing the Sale and Issuance of a 2005 Water and Sewer Revenue
Bond for the purpose of paying the costs of improvements related to Utility Local
Improvement District (ULlD) No. 2002-01 (#AB05-185)
8. Ordinance No. 4945, authorizing the Sale and Issuance of a 2005 Limited Tax General
Obligation (L TGO) Refunding Bond for the purpose of refinancing a portion of the outstanding
1993 Limited Tax General Obligation Bonds (#AB05-186)
C. Publio Safety Bond I!::cue Profe!::cional Services ^groement 'J':ith Nai Jaokcon Arohiteot!:: for
Polioe Department (Bur'Nell site) and Municipal Court (17th & Warron) Design (#/\B05 187)
7. PUBLIC RECOGNITION
8. EXECUTIVE SESSION regarding "Potential Litigation" per R.C.W. 42.30.110(1)(i) (#AB05-188)
9. COUNCIL MEMBER REPORTS
10. ADJOURNMENT OF CITY COUNCIL BUSINESS MEETING
It Americans with Disabilities Act (ADA) accommodations provided upon request. Those requiring special
accommodations should contact the City Clerk's Office at (360) 473-5323 by noon on the Monday preceding the
Council meeting.
Office of the Mayor
345 6th Street, Suite 600
Bremerton, WA 98337-1873
Telephone: 360-473-5266
Fax: 360-473-5883
mayor@ci.bremerton.wa.us
Cary Bozeman, Mayor
Mayor's 2005 Priority Issues
. Begin construction of Harborside waterfront condominiums.
. Agree with Navy on joint use of the downtown parking garage.
. Agree with Navy on Utility rates.
. Agree with Navy on access to property for the Harborside Park and Building 50.
. Secure funding for Harborside Park development.
. Sell the Fire Station.
. Secure funding for the 2006 USGA Public Links Golf Tournament.
. Find location and facility for the Municipal Court. ..
. Define a plan and strategy to fund and manage BKAT.
. Begin the redevelopment of West park Housing Community.
. Expansion of the Bremerton Marina.
. Sale of Eastpark and begin planning and development process for 300 new
homes in East Bremerton.
. Determine pros/cons of consolidating the Bremerton Housing Authority into the
Kitsap County Consolidated Housing Authority. Bring to City Council for vote.
. Establish Blue Ribbon Committee on Children and Family needs in our City.
. Begin construction of Kitsap Credit Union corporate headquarters.
. Begin renovation of Martin L. King Library.
. Begin construction of Anthony's restaurant.
. Acceptance of contribution of Chevron Property near Evergreen Park for future
expansion of park.
. Install new sign at entrance to Gold Mountain Golf Course.
. Begin Skate Board park construction.
. Sale of old City Hall.
. Design of Port Washington Trail.
. Sale of Tracy ton property.
. Support the Bremerton School Bond issue.
. Participate in Harrison Hospital long range plan.
· Consider Parks and Children Levy for 2006.
· Increase home ownership from 42% to 50%.
CITY COUNCIL 345 6th Street, Suite 600, Bremerton, WA 9833703 Phone (360) 473-5280
PROCLAMATION
WHEREAS, when USS CAMDEN AOE-2, the Powerful Pachyderm of the
Pacific, returns to homeport Naval Base Kitsap at Bremerton, after a seven month
deployment, the ship will have circumnavigated the world; and
WHEREAS, this will be the last official deployment of this great ship as it
will be retired soon; and
WHEREAS, a Global Combat Deployment in support of Operation Iraqi
Freedom, Operation Enduring Freedom and the Worldwide War on Terrorism is in
keeping with traditions of a free America, and
WHEREAS, USS CAMDEN AOE-2 has performed a mission of providing
high-speed, multiple commodity logistic support for over thirty eight years; and
WHEREAS, CAMDEN and a crew numbering over 600 officers and Sailors
has served as a fantastic neighbor and has been home ported in Bremerton since
1974; and
WHEREAS, this great ship supported six U.S. Navy aircraft carrier battle
groups, and. naval forces from five foreign countries while delivering nearly 30
millions of fuel, over 6,800 pallets of food and material and over 500 tons of
ammunition during 123 underway replenishments in 7 months is astounding; and
WHEREAS, CAMDEN had the rare opportunity to sail around the world,
transiting through both the Suez and the Panama Canals.
NOW, THEREFORE, be it resolved that we, the City Council of the City of
Bremerton do hereby proclaim the Week of August 15 through 20, 2005 as
WELCOME HOME USS CAMDEN WEEK
And encourage all Bremerton area citizens to meet, welcome and celebrate the
return of some of America's best young people and this great ship.
SIGNED this 17th day of August 2005
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Bremerton City Council
CITY COUNCIL MEETING
SPEAKERS LIST
PLEASE NOTE THAT ALL REQUESTS FOR INFORMATION FROM THE CITY OF
BREMERTON MUST BE SUBMITTED IN WRITING.
THANK YOU.
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Talking points for City Council meeting on August 17,2005
I am here tonight to discuss the letters sent to you in July. The letters were regarding the
Housing Authority's mismanagement of the recommendations of our group. You may
have seen the article in the paper. I have seen so much of this go on. The housing
authority has never given us the time of day and now they appear to care because of all
the press. I have researched both authorities and they are two different organizations but
their mission is essentially the same. I see no reason for two authorities in one county.
We the RAC have put together a petition based on the letters you saw and based on the
fact the upper management of BHA has brushed us off over and over again. It is our
understanding that people do not think we could have written those letters. No Housing
Authority is telling us what to do. Our actions are our own. We want the public dollars
spent more sensibly and we believe that KCCHA can do that.
All the arguments that BHA has presented as to why the merge should not happen, we
have been able to counter with our own research.
If it comes down to just dollars-than this consolidation just makes sense. One ofHUD's
top priorities is to decrease expenditures of administrative funds. If the two housing
authority's were to merge, only those at the 'top' ofBHA so to speak, would need to go
(lose their jobs). I am- and many of the residents are in favor of that. You don't see a
bunch of KCCHA residents revolting against the issue. I think that speaks for itself. I
am for the consolidation, and my hope is that you will listen to our concerns. The bottom
line is: 'We' the residents feel this way, or have we lost sight ofthat? I trust that you
have not and I appreciate your time. Thank: you.
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DATE SUBI.JITTED:
BILL# DS:- /YO
AGEt'IDA BILL
CITY OF BREMERTON
CITY COlnQCIL
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SUBJECT: Approval of Claims and Checks
Register
Committee Meeting Date:
COUr,JCIL l.,fEETnJG Date:
Department:
Presenter:
Phone:
?-/7-0~-
Financial Services
Cathy Jolmson
473-5296
SIJMMARY: Consent agenda item. Approval of payroll, checks and electronic fund transfers.
ATTACHlViENTS:
FISCAL IMPACTS (Include Budgeted Amount):.
('
APPROVALS:
DEPARTMENT DIRECTOR:
CITY ATTORNEY:
FINANCE DIRECTOR:
MAYOR:
FISCAL/BUDGET:
OPERATIONS:
COUNClL PRESIDENT:
RECOl\1MENDED MOTION:
CONSENT AGENDA ~
-p~ l~
Move to Approve:
$5J~ tln'ough ~dS-
.
in the amount of$ 36!/c;/L <t?
in the amount of$
1) Check #' s 30;;( 003 tln'ough 30.2 09- and EFT's
2) Regular Payroll for the pay period ending .
3) Retiree Payroll for the pay period ending
COUNCIL ACTION: ~ve D Deny
in the amount of $
D Table
D Continue D No Action
DATE SUBMITTED:
BILL#. OS~/g I
AGENDA BILL
CITY OF BREMERTON
CITY COUNCIL
713
........................................................................................
Committee Meeting Date: N/ A
COUNCIL MEETING Date: jtu~u.* 17 ,..lo05
Department: City Council'
Presenter: Daren Nygren,
Council President
Phone: (360) 473-5280
SUMMARY: Attached are the minutes for the Council Meeting held .3"" l( \ l( J..P I ~o 05
SUBJECT: Minutes of Meeting -
::ru.\y 2.0/ ;2.005
ATTACHMENTS: Minutes for -:J\A\y U; I :LaoS
FISCAL IMPACTS (Include Budgeted Amount): 0
APPROVALS:
DEPARTMENT DIRECTOR:
CITY ATTORNEY:
FINANCE DIRECTOR:
MAYOR:
FISCAL/BUDGET:
OPERATIONS:
COUNCIL PRESIDENT:
CONSENT AGENDA IZI
~~
RECOMMENDED MOTION: Move to pass the Consent Agenda as presented.
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DIGITAL RECORDING
CITY COUNCIL MEETING MINUTES
Wednesday, July 20, 2005
The weekly meeting of the City Council of the City of Bremerton was called to order in the City Council
Chambers, of the NORM DICKS GOVERNMENT CENTER 345 6th Street, Bremerton, Washington,
Wednesday, July 20, 2005, at 5:30 PM, with Council President Daren Nygren presiding. Council
members present were Mike Short, Will Maupin, Carol Arends, Dianne Robinson, Mike Shepherd,
Wendy Priest, Cecil McConnell, and Brad Gehring. Also present were City Attorney Roger Lubovich,
City Clerk Paula Johnston, and Legislative Assistant Lori Smith.
The Pledge of Allegiance was led by Council Member Cecil McConnell followed by the invocation
provided by Council Member Dianne Robinson.
President Nygren announced that a Pre-Council session was held in Council Conference Room 603
from 5:00 to 5:30 P.M; and a 10-Minute Executive Session was also held to discuss "LABoR NEGOTIATIONS".
MAYOR'S REPORT /jAayor Bozeman...
o Introduced Cynthia Enaelgau and "Denny the DraQon", who personally invited the Council
Members and the public to "draw on the sidewalks" and "dance to the music" at the 20th Anniversary
Festival of Arts for Children on Tuesday, July 26 from 5:00 to 8:00 PM at Evergreen Park with
entertainment by Clave con Jazz sponsored by the WESTSOUND ARTS COUNCIL.
o Provided a very favorable Financial Report on the first anniversary of the Bremerton Harborside
Conference Center & Plaza; and brought forward Richard Hayes, Executive Director with KITSAP
TRANSIT, who added additional good news;
o Chris Hugo, Director of Community Development, presented the Mayor and Council an award from
the American Planning Association and the Planning Association of Washington which recognized .
the City of Bremerton with a Merit Award in the Implementation Plans Category for the "Downtown
Bremerton Revitalization Programs".
PUBLIC SERVICE ANNOUNCEMENTS
o Torey Robinson, granddaughter of Dianne Robinson, stated that she was here to visit Bremerton,
and commented that she thought this was a very nice place.
o President Nyaren announced that Council Member Brad Gehrina selected a recipient for the City
Pride Award for the Month of May, which he accepted on behalf of the recipients from District 1.
o President Nyaren also selected a recipient for the City Pride Award for the Month of June which he
presented to Bill and Val Mus of Nipsic Avenue who were present to accept their award.
o Read a Proclamation for the Week of August 1 through 6, 2005 to commemorate Kitsap Regional
Library Week which was accepted by Ruth Bond, Branch Manager of Downtown Bremerton and
Sylvan Way Branches of KITSAP REGIONAL LIBRARY. Ms. Bond was pleased to announce plans for
the library's 5(jh Anniversary Jubilee Celebration; and .that renovations to the Downtown Library
would begin September 6.
o Betsy Howe of the City's CDBG Program and Bob Tulp with the City's Public Works Department,
as well as World Changers, announced the return of the World Changers program to the City -of
Bremerton for the summer of 2005.
CONSENT AGENDA
A. Check Numbers 301213 through 301465 and EFT-8455 through EFT-8466 in the amount of
$1,658,027.65; (#AB05-151) .
B. Minutes of Meeting - June 15, 2005 (#AB05-152)
C. Minutes of Meeting - June 29, 2005 (#AB05-153)
D. Minutes of Meeting - July 6,2005 (#AB05-154)
E. Minutes of Meeting - July 13, 2005 (#AB05-155)
F. Purchase of Vermeer BC1400XL Brush Chipper from VERMEER NORTHWEST SALES of Tacoma
City Council Reg. Mtg. Minutes
Wednesday, July 20, 2005
Page 2 of 5
(#AB05-156)
G. Approval of Land Lease between the City of Bremerton and Donna Hammargren for Sewage Pump
Station EB-4 (#AB05-157)
H. Interlocal Agreement for Professional Services between Kitsap County and the City of Bremerton for
environmental assessments on Charleston Beach Road (#AB05-158)
I. Amendment to Interlocal Agreement between the City of Bremerton and Kitsap County for Permitting
Application Computing (#AB05-159)
J. Appointments of Debra Barnes (BREMERTON HOTEL) and David Tufts (HAMPTON INN) to the Lodging
Tax Advisory Committee (#AB05-160)
5:54:32 M/S/C/U (Priest/McConnell/Priest) Move to approve the Consent Agenda as presented.
6A - 2006 DRAFT CDBG/HOME POLICY PLAN AND APPLICATION (#AB05-161): Huah Moraan of
Financial Services and Betsy Howe of Community Development, summarized that for the past 30 years,
federal block grants have been given to cities with needs to serve especially low-income residents. The
City of Bremerton undertakes a yearly public allocation process to distribute funds made available the
following spring by the U.S. Congress. This policy plan, as amended and approved, will be used by staff
to carry out the allocation process.
There were no comments from the public.
5:58:04 (Robinson/Arends) Move to approve the 2006 CDBG/HOME Policy Plan.
7A - ORDINANCE NO. 4940. ESTABLISHING A CITY OF BREMERTON ARTS COMMISSION AND
ONE PERCENT (1%) FOR THE ARTS PROGRAM FOR CITY FUNDED CAPITAL PROJECTS
(#AB05-162): Council Member Wendy Priest explained that public art is recognized as a stimulus to the
vitality, economy, and culture of our community, enhancing the quality of life for all citizens because of
its public nature. The proposed ordinance establishes a City of Bremerton Arts Commission and a One'-
Percent (1 %) for Arts Program for the City. Further, the proposed ordinance establishes procedures for
the acquisition and display of art for the One-Percent (1 %) for Arts Program. Ms. Priest further
discussed the issues that were reworked after the initial presentation was made in May of 2004.
President Nygren noted that phone calls, letters, and e-mails received from Sheridan Moser; Janet
Tracy; Gary Smith; Ed Rollman; Scott Lindquist, Director of Health; and Chris Endresen, County
Commissioner were entered into the record.
Helen Miller read a statement to present her views opposed to this proposed ordinance.
Provided comments or read statements in favor of the proposed ordinance:
Stewart Dempswood, Artist; Gwendolyn Atwood, Board Member for Kitsap County 1 % for the Arts
Commission; Hazel Witte, Artist; Pat Cooper, Manager of Metropolis Art Gallery; Gail Goodrick, Board
Member for Kitsap County 1 % for the Arts Commission; Robert Dietz, assisted in drafting this
ordinance; Richard Hayes, Executive Director for KITSAP TRANSIT; Jill Johnston, provided an
"engineering perspective"; Richard Nerf; and Dee Molenaar.
Mrs. Arends stated that although she is in support of spending public funds for art, she would like to see
this item come back in a few weeks after further discussion on the language used in the ordinance. Mr.
Short agreed, pointing out specific areas of the ordinance that he did not agree with. Ms. Priest
explained that the ordinance from the County, as well as several other cities, was reviewed prior to
creating this proposed document that would be the best for the City of Bremerton.
Mr. Maupin discussed points to express his support for this ordinance, believing that it was the job of a
Council member to not only provide essential services, but also provide a City "we can all be proud of'.
He also clarified that funding for art will come from funding earmarked for construction projects, from the
Real Estate Excise Tax. He also pointed out that every project will come to Council for final approval.
City Council Reg. Mtg. Minutes
Wednesday, July 20, 2005
Page 3 of 5
Mr. Nyaren added that the Council will be able to modify or amend this ordinance at any time.
Mr. McConnell could not support this ordinance as it is written, particularly because of issues with
maintenance cost for the art, and agreed that he would like to see another Study Session to allow the
Council time to examine all aspects of the ordinance. Ms. Priest responded that the sample contract
was modeled after the same contract used for the State, schools, and colleges; and reiterated that the
Council can modify the language at any time. She further explained that the Parks Department and
Community Development Department were included in regard to the maintenance of the projects
because most of the projects would be contained in government buildings.
Mr. Gehring was concerned with the "nuts and bolts" of the ordinance such as no designation of
ownership; the Parks and Public Works Departments' assignment of maintenance; and the additional
expense for art projects when there are other more pressing needs of the City.
Mr. Shepherd observed risks the Council took to adopt the new revitalization plan for the City, with no
clear guarantee, and feels that the Council, as leaders in the community, must again "take a chance" on
this ordinance.
Ms. Robinson stated that she could support this ordinance if performing arts could be included. Ms.
Priest offered an explanation why performing arts were not originally included, but stated that she could
support an amendment to include it.
Carol Arends summarized that the concerns were not about whether or not the Council supported art,
which she feels they do, but that the issues are with the way the current ordinance is written.
7:04:53 (Priest/Robinson) Move to pass Ordinance No. 4940 establishing a City of Bremerton Arts
Commission and a One-Percent (1 %) for Arts Program, as amended to include "PERFORMING ARTS" to
Sections 3.12.010(1) and 3.12.060(g).
Voted in favor of Motion: Priest, Shepherd, Robinson, Maupin, Nygren
Voted opposed to Motion: Short, Gehring, McConnell
Abstained: Arends
Motion carried: 5-Yes; 3-No; 1-Abstention
A brief recess was taken from approx. 7:10 to 7:18 PM
7B - PROFESSIONAL SERVICES AGREEMENT WITH RDg PLANNING AND DESIGN FOR PHASE
II FOR BUILDING 50 MUSEUM AND HARBORSIDE MEMORIAL PLAZA (#AB05-148): Gary Sexton,
Economic Development Director, stated that staff recommends the City of Bremerton enter into a
Professional Services Agreement with RDg PLANNING & DESIGN for Phase II of the Maritime Park Naval
Museum, also known as Building 50. Phase II includes completion of the architect's instrument of
service; the construction documents of Building 50 and its immediate surroundings resulting in the
adaptive reuse into a museum building. Phase II also includes all the build-out including design for
casework, cabinets, counters, and exhibit display items. Additionally, Phase II includes the completion
of construction documents for Bremerton Harborside Memorial Plaza. Phase II compensation not to
exceed $520,000.
There were no comments from the public.
Once the concerns and questions of the Council were addressed, the vote passed unanimously.
7:46:40 (Arends/Robinson) Move to approve the Professional Services Agreement with RDg PLANNING &
DESIGN for Phase II of the Maritime Park Naval Museum and Memorial Plaza; and authorize the Mayor
to execute the agreement in substantially the same form as presented, not to exceed $520,000; and to
include the amended date of 12/31/05 to Section II "TERMS" of the original agreement
City Council Reg. Mtg. Minutes
Wednesday, July 20, 2005
Page 4 of 5
7C - CONTRACT BETWEEN THE CITY OF BREMERTON AND KITSAP TRANSIT FOR USE OF
CITY-OWNED RIGHTS OF WAY FOR A PORTION OF CALLOW AVENUE AND FIFTH STREET
(#AB05-163): Roger Lubovich, City Attorney said that pursuant to RCW 36.57A.080, a public
transportation benefit area such as Kitsap Transit may contract with a City for use of rights-of-way.
Through the proposed contract, the City of Bremerton conveys to Kitsap Transit the right to use a portion
of Callow Avenue and Fifth Street rights-of-way as described in the agreement. He further explained
that maps were handed out to show each of the two areas.
Helen Miller asked to view a map to see the exact location of the bowling alley. Mr. Lubovich clarified
that this was the former location of the "WESTPARK BOWLING LANES".
7:54:24 (McConnell/Short) Move to approve the Contract for Use of City-Owned Rights-of-Way between
the City of Bremerton and Kitsap Transit, as amended.
7D - TAKE HOME VEHICLE POLICY (#AB05-164): Cecil McConnell, Council Member,_emphasized
that this policy has been revised to ensure that the expenditure of public funds for use of City vehicles to
be taken home after normal work hours is in the best interests of the City, provides consistency in the
way Take Home vehicles are assigned and utilized by employees, and to comply with IRS regulations.
The resultant policy is the product of the combined efforts of the Audit and Take Home Vehicle
Committees.
There were no comments from the public.
7:59:10 (McConnell/Robinson) Move to approve revised Take Home Vehicle policy, and provide for an
effective date, as amended.
PUBLIC RECOGNITION
Matthew St. Carroll provided comments on the BKA T Plan that was presented to the Council at a Study
Session on June 14, 2005, and asked the Council to reconsider the proposed Interlocal Agreement.
Mike Eliason asked that the City would reconsider allowing entities to check out the video equipment;
and thanked the Council staff for providing the Council packet on the website. Asked if there would be
time for the public to comment on the proposal to reduce the Council size. Suggested the revisions
raised by several Council members regarding the arts ordinance be considered.
Helen Miller read a statement opposed to the proposal to reduce the Council size from 9 to 7.
COUNCIL MEMBER REPORTS
Brad GehrinQ was proud to announce that the 400-foot replica of the Vietnam Veterans Memorial "Wall"
was arriving tonight, and would be open for viewing at the Kitsap County Fairgrounds from 8:00 AM to
8:00 PM this Friday, July 22 to Sunday, July 24.
Cecil McConnell thanked all of the Department Directors for their contributions to the Take-Home
Vehicle Policy.
Wendy Priest announced that Kitsap Community Resources is in need of donations of blankets, sheets,
and towels for its emergency shelters. For more information, please contact Chuck at (360) 473-2046,
Paul at (360) 473-2048, or Garry at (360) 473-2052.
Mike Shepherd reminded the Council and the public to join him for the annual District 5 Picnic at
Evergreen Rotary Park on Saturday, July 30 from 12:00 Noon to 2:00 PM.
Dianne Robinson was pleased at the success of the first Hewitt Street Block Party in District 6 last
Saturday on July 16, and thanked the Council members who attended; and also members of the Police
Department and Parks Department.
City Council Reg. Mtg. Minutes
Wednesday, July 20,2005
Page 5 of 5
Carol Arends noted there are a lot of interesting things going on this time of year.. .she thanked Dianne
Robinson for hosting the District 6 Block Party on Hewitt; and thanked Brad Gehring for announcing
information about the Vietnam Veterans Memorial "Wall" that is coming to Bremerton.
Will Maupin reported on his attendance at the Puget Sound Regional Council Growth Management
Policy Board meeting last Thursday.
Mike Short thanked all those who attended the meeting last night to discuss "Safety on Kitsap Lake"
Daren Nygren invited citizens to attend the District 3 Community Meeting along with Council Members
and residents from District 1, 2, and 5 on Tuesday, July 26, 2005 from 7:00 to 8:30 P.M. to hear a
presentation on the community plan for East Park by representatives from MITHUN ARCHITECTS at the
Manette Senior Center located at East 13th Street & Nipsic Avenue.
With no further business, the meeting of the City Council was adjourned at 8:17 P.M.
pre~
LORI SMITH
Legislative Assistant
Attest:
PAULA JOHNSTON, City Clerk
DAREN NYGREN, City Council President
DN/PJ/ls/cge
DATE SUBMITTED: August 2, 2005
BILL# 05 -led-
AGENDA BILL
CITY OF BREMERTON
CITY COUNCIL
5(,
........................................................................................
SUBJECT: Award Contract for Pump
Station 4 Replacement and 12 Inch
Transmission Main.
Committee Meeting Date: August 10, 2005
COUNCIL MEETING Date: August 17, 2005
Department: PW & U, Engineering
Presenter: . Michael Mecham
Phone: 473-5288
SUMMARY: Sealed bids for construction of the project titled "Pump Station 4 Replacement and 12
Inch Transmission Main" were opened on August 2, 2005. The engineer's estimate for construcion of
the project is $576,123.00. Three bids were received for this project. Hisey Construction, Inc. was the
lowest responsive, responsible bidder with a bid of $ 580,032.60 (including sales tax).
ATTACHMENTS: 1) Bid Tabulation 2) Council Summary 3) Aerial Photograph
FISCAL IMPACTS (Include Budgeted Amount): The project is funded by a Drinking Water State
Revolving Funds (DWSRF) Loan (Loan # 02-65102-004) for $1,038,000. The total 2005 project is
$1,050,000. This project is included in the capital projects list for the recently completed rate study,
the current Water System Comprehensive plan, and the CIP.
APPROV ALS:
DEPARTMENT DIRECTOR:
CITY ATTORNEY:
FINANCE DIRECTOR:
MAYOR:
,/ .~"" CONSENT AGENDAI-.
-;Pth~ Vlrv- 0/
RECOMMENDED MOTION: Move to award a contract in the amount of$ 580,032.60 (including
sales tax) with Hisey Construction, Inc. for construction of the project titled "Pump Station 4
Replacement and 12 Inch Transmission Main" and authorize the Mayor to finalize and execute the
necessary contract documents for construction.
FISCAL/BUDGET:
OPERATIONS:
COUNCIL PRESIDENT:
COUNCIL ACTION: D Approve D Deny D Table
ab, Agenda Bills 2005, Pump Station 4 Bid Award
D Continue D No Action
CITY OF BREMERTON
BID TABULATION
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\ NAME OF BIDDER I BOND Is~~ 1 \ ITEM 2 liTEM 3 \ ITEM 4 I, ITEM 5 liTEM 6 \ s~~s I TOTAL
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I SUMMARY
I AP"PA~ENT LOW BIDDER
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\ SECOND LOW BIDDER--
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PUMP STATION 4 REPLACEMENT & 12-INCH TRANSMISSION MAIN
EXHIBIT A
Contract Summary
This project will rebuild Pump Station 4, which is at the end of Jones Street in the West
Hills area of Bremerton. The existing pump station is a deteriorating timber frame .
building on a concrete foundation. The capacity of the pump station is approximately
800 gpm. In order to meet future demands a capacity of 2,100 gpm will be required at
Pump Station 4. The existing building is too small to accommodate the required pumps,
and it will be demolished and replaced with a new building.
Hisey Construction, Inc. was the low bidder in the amount of $580,032.60 (including
sales tax). There were two other bidders. The construction will be completed within 180
days of Notice to Proceed. The estimated completion date is mid March, 2006.
This project is included in the capital projects list for the recently completed rate study,
the current Water System Comprehensive plan, and the CIP.
Fiscal Summary
The project is funded by Drinking Water State Revolving Fund (DWSRF) Loan No. 02-
65102-004. The loan has been executed and the loan terms are as follows:
Loan Amount =
Loan Fee (included in Loan Amount) =
Match Required =
Term =
I nterest Rate =
Annual Debt Service (Approx) =
$1,058,760.00
$20,760
$0
20-years
1.5%
$61,668
City of Bremerton
Pump Station 4 Replacement & 12-inch Transmission Main
August 2005
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AGENDA BILL
CITY OF BREMERTON
CITY COUNCIL
BILL #
05-/93
51)
DATE SUBMITTED: July 28, 2005
........................................................................................
SUBJECT: Inter-Agency Agreement With
the Washington Military Department for
Reimbursment ofWest-650 Water Facilities
Improvements.
Committee Meeting Date: August 10, 2005
COUNCIL MEETING Date: August 17, 2005
Department:, PW &U, Engineering
Presenter: Michael Mecham
Phone: 473-5288
SUMMARY: When the Washington Military Department was planning the construction of the
Readiness Center, they committed to assist in the proportional share of construction costs ofthe West
650 Water Facilities Improvements. The proportional share of $400,000 for reimbursement was
determined in lieu of General Facilities fees, Front Footage fees and Tapping and Connection fees.
ATTACHMENTS: 1.) Inter-Agency Agreement between the Washington Military Department and
the City of Bremerton; 2.) Council Summary; 3.) Site Map
FISCAL IMPACTS (Include Budgeted Amount): $400,000 will be paid from the Washington
Military Department to the Water Utility Fund.
APPROVALS: ~~
DEPARTMENT DIRECTOR -"':"
CITY ATTORNEY:
FINANCE DIRECTOR:
MAYOR:
/t;.J~ CONSENT AGENDA ~
~~ ~
RECOMMENDED MOTION: Move to appr~ve he Inter-Agency Agreement between the
Washington Military Department and the City of Bremerton for Reimbursement of $400,000 for
construction of the West 650 Water Facilities Improvements and Ofprove.. G\.Me..vvJ.W'\erd- 0+ ~e...
~oo5 61A.tJ.~tt 1""0 re.flt.c.+ f'ec..e.ip+ -+'v\~of j l.lV\d. ~lA.:~or,'1.:e... -tke. Mo..l.(or TO
~;V\",,\it..e... O\.htJ e"ec.u..te +"'e. V'-ec.~ss(\,r'f doc.v..V"\eV\..ts -for *"".e.. "3V"€.,~~'
FISCAL/BUDGET:
OPERATIONS:
COUNCIL PRESIDENT:
COUNCIL ACTION: D Approve D Deny D Table
ab, Agenda Bills 2005/Inter-Agency with WMD
D Continue D No Action
INTER-AGENCY AGREEMENT REGARDING UTILITY
(WATERLINE) CONSTRUCTION (West 650 Pressure Zone)
THIS INTER-AGENCY AGREEMENT is entered into between the
Washington Military Department ("WMD"), located and doing business at Camp
Murray, Building #1, Washington 98430-5000 and the City of Bremert,on, a Washington
municipal corporation, located and doing business at 239 Fourth Street, Bremerton,
Washington 98337 ("City").
RECITALS
WHEREAS, the City is constructing a group of projects collectively known as
the West650 Pressure Zone (W650); and
WHEREAS, the City W650 project included a water main extension, a reservoir
and a pump station, and the WMD desires to build office facilities, known as the
Bremerton Readiness Center, adjacent thereto; and
WHEREAS, the WMD and the City have determined that the costs for both
parties could be reduced if construction of the water improvements for the Bremerton
Readiness Center facilities is managed by the City and the WMD reimburses the City.
NOW, THEREFORE, in consideration of the terms, conditions, covenants, and
performances contained herein, or attached and incorporated and made part hereof, it is
mutually agreed by the WMD and the City as follows:
AGREEMENT
A. WASHINGTON MILITARY DEPARTMENT'S OBLIGATIONS
1. If the WMD contracts other construction work to be completed on the site of work
of the utilities contemplated under this Agreement, the WMD will include a
clause in their construction contracts that requires their contractor to coordinate its
work with the City's contractor and others who may be operating on the same site
at the same time.
2. The WMD shall reimburse the City four hundred thousand dollars and no cents
($400,000) for the construction of the Reservoir, Pump Station, and Water
Distribution Main. This payment is in lieu of General Facilities fees, Front
Footage Fees and Tapping and Connection fees.
3. Within thirty (30) days following the execution of this Agreement the WMD shall
make payment to the City.
B. THE CITY OF BREMERTON'S OBLIGATIONS:
Inter-Agency Agreement
1
15 March 2005
1. The City of Bremerton will complete or contract for all construction work for the
Water Main extension, Reservoir, and Pump Station for the W-650 Zone as
identified in the construction plans and specification. Bremerton will manage the
project by use of its staff resources and by use of consultants determined by the
City to be appropriate for the project.
2. The City will assume the lead role in construction phase of the Water Main
extension, Reservoir and Pump Station, and will advertise the project, either as a
single complete project or in various construction sequences or segments, for
construction bids and will provide construction project management through
physical completion, and final acceptance. The City maintains complete control
over schedule, means and methods.
3. The City will provide inspection reports, daily reports, pay estimates and other
normal construction reports generated during the project to the WMD upon
request.
C. MISCELLANEOUS
1. Governing Law. This Agreement shall be governed and constructed in
accordance with the laws of the State of Washington. If any disputes arise
between the WMD and the City under any of the provisions of this Agreement,
resolution of that dispute shall be available only through the jurisdiction, venue
and rules of the Kitsap County Superior Court, Kitsap County, Washington.
2. Modification. No wavier, alteration, or modification of any provision of this
Agreement shall be binding unless in writing and signed by a duly authorized
representative of each party.
3. Severability. If anyone or more sections, subsections or sentences of this
Agreement are held to be unconstitutional or invalid, that decision shall not affect
the validity of the remaining portions of this Agreement and the remainder shall
remain in full force and effect.
4. Entire Agreement. Written provisions and terms of this Agreement, together with
any attached exhibits, supersede all prior verbal statements by any representative
of either party, and those statements shall not be construed as forming a part or
altering in any manner this Agreement. This Agreement and any attached
exhibits contain the entire Agreement between the parties. Should any language
in any exhibit to this Agreement conflict with the language contained in this
agreement, the terms of this Agreement shall prevail.
5. Indemnification. The WMD shall defend, indemnify and hold the City, its
officers, officials, employees, agents and volunteers harmless from any claims,
injuries, damages, losses or suits including all legal cost and attorney fees, arising
Inter-Agency Agreement
2
15 March 2005
out of or in connection with the performance of this Agreement, to the extent
caused by the WMD's negligence. The City shall defend, indemnify and hold the
WMD, its officers, officials, employees, agents and volunteers harmless from any
claims, injuries, damages, losses or suits including all legal cast and attorney fees,
arising out of or in connection with the performance of this Agreement, to the
extent caused by the City's negligence.
6. Insurance. The parties to this Agreement are public entities, which are self-
insured for the purposes of this Agreement. Should a court of competent
jurisdiction determine that this Agreement is subject to RCW 4.24.115, then, in
the event of liability for damages to property caused by or resulting from the
concurrent negligence of the WMD and the City, its officials, employees, agents
and volunteers, the WMD's liability hereunder shall be only to the extent of the
WMD's negligence.
7. Recordation. This Agreement shall be recorded by the City Clerk with the
Auditor of Kitsap County.
Dated this
day of
,2005.
CITY OF BREMERTON
By(t?zlli ~
Cary Bozeman
Mayor
City of Bremerton
WASHINGTON MILITARY
DEPARTMENT
-
Attested By:
Paula Johnston
City Clerk
State of Washington )
) ss:
Pr..EIZ CE
County of Kit5aH,..) )
I certify that I know or have satisfactory evidence that/I"fll.tJrJJ.t .:T, l,w&N~is the
person who appeared before me, and said person acknowledged that he signed this
instrument, on oath stated that he was au orized to execute the instrument and
acknowledged it as theAchJ"tlJo.t tnlhol Dlli c::/6rof the Washington Military Department,
to be free and voluntary act of said part for the uses and purposes mentioned in the
instrument.
Dated this Jo 1f; day of Ap/l irL , 2005.
Inter-Agency Agreement
3
15 March 2005
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IN WITNESS WHEREOF, I have hereunto set my hand and official seal the day and year
above written.
~~.J
Printed Name: ~""He/e..f.A.I G M. S6AJ...J
NOTARY PUBLIC, in and for the State
Washington, residing at ~c..-
My appointment expires ~ - 08 _0 IS""
APPROVED AS TO FORM:
~ - ~- -
OGERA.~
City Attorney
City of Bremerton
~/[ ~ l);;;;/.:, ~ 11- 22 ..p5
S encer W. Daniels
Assistant Attorney General
State of Washington
Jir~r
CPT, JAG, W AARNG
Staff Judge Advocate
Inter-Agency Agreement
4
15 March 2005
COUNCIL SUMMARY
INTER LOCAL AGREEMENT
WITH
WASHINGTON STATE MILITARY DEPARTMENT
FOR
REIMBURSEMENT OF THE W-650 WATER FACILITIES
During the planning process for the Washington State Military Department
Readiness Center (located adjacent to Pendergast Park) it was determined that
improvements need to be made to supply sufficient water for fire suppression.
Initially the Military Department was planning to construct a pump station.
In further planning and negotiations with the City it was determined that the
proposed W-650 water facilities would provide the needed flow and pressure for
fire suppression and that the Military Department pump station would not need to
be built. During these negotiations it was determined the proportion that the
Military Department would be obligated to pay was $400,000.
All construction has been completed and the Readiness Center is in use. The
attached Inter Local Agreement ratifies all previous negotiations between the City
and the Military Department. This agreement has been reviewed and approved
by the State Attorney General's Office and City Attorney. These funds will be
deposited in the Water Utility. Other funds used to finance this project were an
economic development grant form the Department of Commerce (EDA Grant), a
utility local improvement district (ULlD), Kitsap County, and funds from the water
utility.
PROPOSED BOOSTER
PUMP STATION .....
EXISTING RESERVOIR #8 .. .
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Werner Rd.
Werner Hd.
TRANSMISSION
MAIN
(DISTRIBUTION
I MAIN
READINESS
/ CENTER
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PROPOSED
RESERVOIR #23
WEST 650 PRESSURE ZONE IMPROVEMENTS
AGENDA BILL
CITY OF BREMERTON
CITY COUNCIL
BILL# 05-181
Sf.
DATE SUBMITTED: July 28,2005
........................................................................................
SUBJECT: Resolution # ~ '11 (Q Setting
a Hearing Date of September 21,2005, for
Vacating the northerly 850 feet of Russell
Road to Oyster Bay Avenue.
Committee Meeting Date: August 10, 2005
COUNCIL MEETING Date: August 17,2005
Department: PW &U, Engineering
Presenter: . Michael Mecham
Phone: 473.5288
SUMMARY: The City received a petition from Bremerton Housing Authority to vacate the
northerly 850 feet of Russell Road to Oyster Bay Avenue for development of an assisted senior
housing complex in Westpark. The road will be relocated south of its current position. Bremerton
Housing Authority is dedicating like-kind right-of-way in the anticipated redevelopment of West park.
Therefore, no compensation is required for this right-of-way vacation. The City Council is being
requested to establish a hearing date of September 21, 2005, to consider the proposed vacation.
ATTACHMENTS: 1.) Resolution # c? '11(, ; 2.) Aerial Exhibit; 3.) Engineering Staff Report
FISCAL IMP ACTS (Include Budgeted Amount): There is no immediate budget impact. The City
will receive like-in-kind property or payment as compensation.
APPROVALS: (~~._"..."...~,. '"
I _-. 1
DEPARTMENT DIRECTOR: \.~. .w
CITY ATTORNEY: ,/
......
FINANCE DIRECTOR:
MAYOR:
.'l~...1'-1:-~ CONSENT AGENDA 0
~~~
RECOMMENDED MOTION: .
Move to pass Resolution # 1.0..1" setting a hearing date of September 21,2005, for vacating the
northerly 850 feet of Russell Road to Oyster Bay Avenue.
FISCAL/BUDGET:
OPERATIONS:
COUNCIL PRESIDENT:
COUNCIL ACTION: 0 Approve 0 Deny 0 Table
ab. Agenda Bills 2005, Russell Rd Reso/Vac
o Continue D No Action
RESOLUTION NO. ~ q 7 (p
A RESOLUTION of the City Council of the City of
Bremerton, Washington, establishing a hearing date for the
proposed vacation of the northerly 850 feet of Russell Road to
Oyster Bay Avenue.
WHEREAS, the City received a petition to vacate the northerly 850 feet of
Russell Road to Oyster Bay Avenue.
THE CITY COUNCIL OF THE CITY OF BREMERTON, WASHINGTON;
DOES HEREBY RESOLVE AS FOLLOWS:
- SECTION 1. A public hearing will be held on September 21,2005, at 5:30 p.m.
or later in the City Council Chambers at the Norm Dicks Government Center, First Floor, 345
Sixth Street, Bremerton, Washington, to take public comment or consider written objections to
the vacation.
SECTION 2. If fifty percent or more ofthe property owners abutting said right-
of-way file written objections to this action prior to the time set for public hearing herein, the
hearing shall be canceled and there shall be no further proceedings under this resolution.
SECTION 3. Severability. If anyone or more sections, subsections, or
sentences of this Resolution are held to be unconstitutional or invalid, such decision shall not
affect the validity of the remaining portion ofthis Resolution and the same shall remain in full
force and effect.
SECTION 4. Effective Date. This Resolution shall take effect and be in force
immediately upon its passage.
of
PASSED by the City Council of the City of Bremerton, Washington this
,2005.
day
DAREN NYGREN, Council President
APPROVED AS TO FORM:
ATTEST:
ROGER A. LUBOVICH, City Attorney
P AULA JOHNSTON, City Clerk
ab!2005 Agenda Bills! Russell Road VacalReso
1
Russell Road - Public Hearing
EXHIBIT FOR
RUSSEL ROAD
VACATION
CHECKED BY:
DATE
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SHEET
1 OF 1
STREET VACATION REQUEST
PORTION OF RUSSELL ROAD
ENGINEERING STAFF REPORT
CITY COUNCIL HEARING DATE:
PREPARED BY:
September 21,2005
Gunnar Fridriksson
SUMMARY
Applicant: Bremerton Housing Authority
c/o Ted Johnson, Marathon Senior Living Services
- P.O. Box 4460
Bremerton, WA 98312
Location: The northerly 850 feet of Russell Road to Oyster Bay Avenue
BACKGROUND
The applicant for this right of way vacation is also the developer of the Firs II assisted
senior housing complex within Westpark. The project occupies portions of the existing
right-of-way of Russell Road. The applicant petitioned the City to vacate the right-of-
way within the project and relocate the street southerly of its current position. No other
property owners abut this portion of the right-of-way. The connection to Oyster Bay
Avenue from Russell Road is currently within 100 feet of the intersection of Kitsap Way
and Oyster Bay Avenue. The relocated street will provide better sight distance for the
two intersections, better overall operating characteristics and superior function to the
existing Russell Road.
RIGHT-OF-WAY CONDITIONS
EXISTING ROADWAY
NEW ROADWAY
. Functional Classification
. R-O-W Width
. R-O-W Areas
. Pavement Width
. Surface Type
. Curb and Gutter
. Sidewalks
Local Access
43 feet
35,154 sq. ft.
34 feet
Concrete
Standard curb
4 foot sidewalk
Local Access
74 feet
55,781 sq. ft.
50 feet
Asphalt
Standard curb
5 foot sidewalk
August 2005
Portion of Russell Road Vacation
Page 1 of 5
HEARING CONSIDERATIONS
BMC 11.20.120 sets forth issues that the City Council needs to determine at the
conclusion of the Vacation Hearing. These issues and the staff position are:
1. Whether the street, alley or portion thereof is no longer required for public
use and vacation of the described portion will better serve the public good.
Staff Position:
With the relocation of Russell Road, this portion of the right-of-way will not be
required for public use. The relocated roadway will be superior in public access
and function, and will be designed to be consistent with future redevelopment of
Westpark.
2. Whether the vacation is consistent with the City Comprehensive Plan.
Staff Position:
The proposed vacation does not conflict with the Comprehensive Plan, and
facilitates development of the Westpark project. .
3. Whether continued use of the proposed vacation as a public way is not of
such public benefit as to justify the costs of maintenance. .
Staff Position:
Maintenance costs of the newly constructed portion of Russell Road will be
comparable to the cost to maintain the existing street.
4. Whether substitution of a new and different thoroughfare would be more
useful to the public.
Staff Position:
Russell Road is being relocated. Traffic circulation characteristics for the new
alignment are superior to the existing streets.
5. Whether conditions may so change in the future as to provide a greater
public use or need than presently exists.
Staff Position:
The relocated roadway will be consistent with future redevelopment of Westpark
and is expected to meet future public transportation needs.
6. Whether objections to the proposed vacation are made by owners of
private property abutting the same.
Staff Position:
The petitioner, Bremerton Housing Authority, is the only abutting property owner.
August 2005
Portion of Russell Road Vacation
Page 2 of 5
SHORELINE ACCESS
This portion of right-of-way does not provide shoreline access.
UTILITIES
All private utility companies have been contacted. Cascade Natural Gas, Owest,
Comcast and .Wave will retain easements. Permanent utilities easements are to be
reserved for the existing City water, sewer and storm lines. All existing utilities will be
relocated when Russell Road is reconstructed. Said easements will be vacated upon
dedication of the new alignment for Russell Road.
SUFFICIENCY OF SIGNATURES
The request for the vacation was made by 100% of the owners abutting the property to
be vacated.
COMPENSATION
This right-of-way is Class 1, as it was conveyed to the City in fee title by quit claim dated
August 10, 1951. The value of the vacated right of way is $62,222.58, which is based
on the average property value of the abutting properties weighted on a front footage
basis. Compensation will be paid in the form of a dedication of like-kind in Westpark to
the satisfaction of the City for the relocation of the roadway for the anticipated
redevelopment of Westpark. If a like-kind dedication is not made within five (5) years,
then the City may, upon demand, require payment of the then current assessed value.
STAFF RECOMMENDATION
City Attorney, Police, Fire, Engineering and Community Development staff notes no
objections to the proposal.
Staff recommends that this Street Vacation be approved as requested with easements
reserved for all existing and future utilities. Said easements to be vacated upon
relocation of the roadway and utilities.
August 2005
Portion of Russell Road Vacation
Page 3 of 5
Looking northeasterly from approximate end of vacation along Russell Road
Looking northerly along Oyster Bay from approximate location of new intersection.
August 2005
Portion of Russell Road Vacation
Page 4 of 5
Looking southerly from Oyster Bay/Kitsap Way intersection towards existing Oyster Bay/Russell
Road intersection. Note short distance between two intersections. New intersection will be
approximately 270 feet southerly of existing.
August 2005
Portion of Russell Road Vacation
Page 5 of 5
i\
AMENDED
DATE SUBMITTED: 8-3~05
AGENDA BILL
CITY OF BREMERTON
CITY COUNCIL
BILL #_
OS-/<a.5
7t4
..............................-...............................................e........J
NO. 4q 44-
SUBJECT: Ordinance authorizmg the sale
and issuance of a 2005 Water and Sewer
revenue bond for the purpose of paying the
costs of improvements related to Utility
Local Improvement District No. 2002-01
Committee Meeting Date: 8-10-05
COUNCIL MEETING Date: 8-17-05
Department: Financial Services
Presenter: Laura Lyon
Phone: 473-5722
SUMMARY: The City established UUD No. 2002-01 by Ordinance No. 4837. After notice and
hearing required by law, the City approved and confirmed the final assessments and assessment roll of
UUD No. 2002-01 in the total amount of $467,841.00 by Ordinance No. 4935. Assessments in the
amount of$61,i54.17 were paid during the 30-day period for making cash payments without penalty,
interest or costs. This Ordinance authorizes tht1/sale and issuance of a 2005 \Vater and Sewer
Revenue Bond to repay and retire the interfund'loan incurred to pay the costs of the improvements,
make a deposit into the reserve account, and to pay costs incurred to -issue such debt. Bank: of
America, N.A has proposed, by way of non-binding proposal letter to purchase such revenue bond
upon the terms and conditions set forth therein.
ATTACHMENTS: Ordinance, Discussion Memo, Proposed Term Sheet from Bank of A.'11erica,
Ceritificate Regarding Prepayment of Assessments, and Council Summary of the Hearing for
Approval and Confirmation UUD Assessment Rols for ULID 2002-01.
FISCAL IMPACTS (Include Budgeted Amount): Proceeds from the sale and issuance of this
revenue bond, in combination with funds on hand provide for repayment of the interfund loan (plus
accrued interest through 8/31/05) and anticipated debt issuance costs.
APPROVALS: / -'/:;f~;/' ~
DEPARTMENTDIRECTOI9';::~fl. ~
// ._r"./ " ..---.... - ~
CITY ATTORNEY: i/ ./ __ ..._0. ~
FINANCE DIRECTOR:
MAYOR: ;::;//
J/ .
~
FISCAL/BUDGET:
OPERATIONS:
COUNCIL PRESIDENT:
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RECOMMENDED MOTION:
CONSENT AGENDA /rJ
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Move to approve Ordinance No...4 9 +4 authorizing the sale and issuance of a 2005 water and
sewer revenue bond with a par amount of $ 40~" ~~.., for the purpose of repaying and retiring the
interfund loan incUITed to pay the costs of the UUD No. 2002-01 improvements, make a deposit into
the reserve account, and to pay costs incurred to issue such debt.
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Memorandum
To:
City Council
Mayor Cary Bozeman
From:
Laura Lyon, Oirector of Financial Services
Re:
2005 Water and Sewer Revenue Bond - ULlO 2002-01
Date:
August 03,2005
The City established ULlO No. 2002-01 by Ordinance No. 4837 and further
provided for an interfund loan to cover the costs of the improvements until such
time as the assessment process was formally concluded and bonds could be
issued. The interfund loan has been extended until September 1, 2005 by
previous council actions.
After notice and hearing (required by law), the City approved and confirmed the
final assessments and assessment roll of UUO No. 2002-01 in the total amount
of $467,841.00 and subsequently received $61,254.17 during the 30-day period
for making cash payments of assessments without penalty, interest or costs.
The remaining assessments of $406,487 are to be financed through the issuance
of a water and sewer revenue bond. The proceeds of the debt issuance in
combination with funds on hand from prepayments provides for the repayment of
the outstanding interfund loan (plus accrued interest thereon through 8/31/05),
plus reserve requirements and issuance costs. Bank of America, N.A. has
proposed to purchase these revenue bonds under terms and conditions set out in
their non-binding proposal letter (which is enclosed). The par amount of the
borrowing will be finalized prior to council action on August 17th. Pending is a
determination of whether the current reserve insurance policy for water and
sewer revenue bonds can be amended to include this parity revenue bond
reserve requirements. If not, additional proceeds will be required to fund the
specified reserve level for this debt.
Bond counsel (Judy Andrews of Gottlieb Fisher & Andrews) has prepared the ordinance
and will be providing necessary opinions and support as we proceed to conclude the
debt issuance and closing process.
Cc: Cathy Johnson
CITY OF BREMERTON, WASHINGTON
ORDINANCE NO. L..\ ~ ~ L.\
AN ORDINANCE of the City of Bremerton, Washington,
relating to the waterworks utility of the City, including the
sewerage system as a part thereof; providing for the issuance of
a Water and Sewer Revenue Bond, 2005 of the City in tl].e
principal amount of $406,587 to pay part of the costs of
constructing improvements to the City's water system,
including improvements related to Utility Local Improvement
District No. 2002-01; fixing the date, form, terms, interest rate,
maturity and covenants of such bond; providing for the sale
and delivery of such bond to Bank of America, N.A. and.
establishing the interest rate on installments and delinquent
payments of special assessments in said district.
WHEREAS, the City now owns, maintains and operates the System, which has from time
to time required various additions, betterments and extensions; and
WHEREAS, pursuant to Ordinance No. 4451, the City issued its $11,000,000 par value
Water and Sewer Revenue Bonds, 1994, and, by Section 12 of Ordinance No. 4451, reserved the
right to issue additional water and sewer revenue bonds on a parity oflien with the 1994 Bonds if
the certain conditions were met and complied with at the time of issuance of those bonds; and
WHEREAS, by Ordinance No. 4837, the City established ULID No. 2002-01; ordered to
be carried out the proposed improvements of such district as set forth therein; and provided that
payment for the improvements be made by special assessments upon the property within UUD
No. 2002-01; and .
WHEREAS, pursuant to Ordinance No. 4935, after notice and hearing required by law,
the City approved and confirmed the final assessments and assessment roll ofULID No. 2002-01
in the total amount of $467,841.00; and
WHEREAS, assessments in the amount of $61 ,254.17 were paid during the 30-day
period for making cash payments of assessments without penalty, interest or costs; and
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WHEREAS, the City Council has determined that it is necessary to issue and sell a water
and sewer revenue bond to repay and retire the interfund loan incurred to pay the costs of the
Improvements and to pay the incidental costs and costs of issuing such bond; and;
WHEREAS, the Purchaser has proposed, by way of the Proposal, to purchase such bond
upon the terms and conditions hereinafter set forth; and
WHEREAS, the City Council deems it in the best interests of the City to accept an offer
by the Purchaser to purchase such bond on the same terms and conditions as the Proposal, and to
deliver such bond to the Purchaser; NOW, THEREFORE,
THE CITY OF BREMERTON, WASHINGTON DOES ORDAIN AS FOLLOWS:
Section 1. Definitions. As used in this ordinance (including the recitals hereto), the
following words shall have the following meanings:
"Annual Debt Service" means, in any year, that year's total of principal and interest
requirements for the then outstanding bonds (except the principal maturity of Term Bonds) to
which the term Annual Debt Service refers, plus the principal of any bonds subject to a
mandatory prior redemption or mandatory sinking fund payment for that year, less all capitalized
interest payable that year from such bonds.
"Average Annual Debt Service" means the sum of the Annual Debt Service for the
remaining years to the last scheduled maturity of the applicable issue or series of the 1994
Bonds, the Bonds and Future Parity Bonds divided by the number of those years.
"Bond Fund" means the Water and Sewer Revenue Bond Fund, 1985, created by
Ordinance No. 3989 for the purpose of paying and securing the principal of and interest on the
1994 Bonds, the Bond and any Future Parity Bonds.
"Bond" means the Water and Sewer Revenue Bond, 2005, authorized to be issued by this
Ordinance.
"Bond Register" means the registration books of the Registrar on which are maintained
the name and address of the Owner of the Bond.
"Bond Registrar" means the City, in its capacity as registrar and paying agent for the
Bond.
"City" means the City of Bremerton, Washington, a first class city ofthe State of
Washington.
"City Council" means the City Council ofthe City.
"Code" means the Internal Revenue Code of 1986, as amended, and any applicable
regulations promulgated thereunder.
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"Coverage Requirement" means Net Revenue of the System at least equal to 1.30 times
the actual Annual Debt Service on alll994 Bonds, the Bond and any Future Parity Bonds. For
purposes of detennining the Coverage Requirement for the issuance of Future Parity Bonds with
respect to variable rate indebtedness, such debt shall be assumed to bear interest at a fixed rate
equal to the higher of 9.2% and the highest variable rate borne by outstanding variable rate debt
issued during the preceding 24 months, or if no variable rate debt is outstanding at the time of
calculation but is then proposed to be issued, the rate borne by other variable rate debt the
interest rate for which is determined by reference to an index comparable to the index to be used
to determine the interest on the variable rate debt to be issued.
"Current Water Fund" means the fund (and subfunds and accounts therein) ofthe City of
that name heretofore created into which fund shall be paid all Gross Revenue of the System.
"Future Parity Bonds" means any and all revenue bonds of the City issued after the date
of the Bond pursuant to the provisions of Section 18 of Ordinance No. 4451 and Section 15 of
this Ordinance, the payment of the principal of and interest on which constitutes a lien and
charge upon the Gross Revenue of the System on a parity with the lien and charge upon such
Gross Revenue for the 1994 Bonds and the Bond.
"Government Obligations" means noncallable direct obligations ofthe United States of
America.
"Gross Revenue ofthe System" means all the earnings and revenue received by the
System from any source whatsoever, including from the sale of forest products from System-
owned lands, except general ad valorem taxes, grants from the state, federal or local
governments, earnings in any refunded bond escrow account or fund, gifts to the System for
capital purposes, proceeds from the sale of City or System property, and proceeds of City or
System obligations.
"Improvements" means those certain capital improvements to the City's water system,
including the improvement of the West 650 Zone distribution water main, authorized by and
carried out through UUD No. 2002-01.
"Maximum Annual Debt Service" means the maximum amount of Annual Debt Service
which shall become due in any future year on any outstanding 1994 Bonds, the Bond and any
Future Parity Bonds.
"Net Revenue of the System" means the Gross Revenue of the System less Operating and
Maintenance Expenses.
"1994 Bond Insurance Policy" means the municipal bond new issue insurance policy
issued by the 1994 Bond Insurer that guarantees the timely payment of principal of and interest
on the 1994 Bonds.
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"1994 Bond Insurer" means Financial Guaranty Insurance Company, a New York stock
insurance company, or any successor thereto, as issuer ofthe 1994 Bond Insurance Policy.
"1994 Bonds" means the Water and Sewer Revenue Bonds, 1994, authorized to be issued
by Ordinance No. 4451.
"Operating and Maintenance Expenses" means all reasonable expenses incurred by the
City in causing the System to be operated and maintained in good repair, working order and
condition, including without limitation payments (other than payments out of proceeds of the
Bond or Future Parity Bonds) of premiums for insurance on the System, and any State-imposed
taxes, and also including all payments made to another agency for treatment or disposal of
sewerage or acquisition of water, but excluding depreciation and amortization, and any City-
imposed utility taxes or payments in lieu of taxes payable from the Gross Revenue of the
System.
"Owner" means the person named as the registered owner of the Bond on the Bond
Register.
"Permitted Investments" means the following to the extent the same are legal for the
investment of money of the City: (1) bonds, notes and other evidences of direct indebtedness of
the United States of America and securities unconditionally guaranteed as to the timely payment
of principal and interest by the United States of America ("Govemment obligations"); (2)
obligations of the Federal National Mortgage Association, the Federal Home Loan Mortgage
Corporation, the Govemment National Mortgage Association, Federal Home Loan Banks, or the
Export-Import Bank ofthe United States; (3) direct obligations of, or obligations unconditionally
guaranteed by, any state of the United States, or any subdivision, agency, instrumentality or
authority thereof rated Aa3 or better by Moody's Investors Service ("Moody's") and AA- or
better by Standard and Poor's Corporation ("S&P"); (4) commercial paper rated Prime-1 by
Moody's and A-I + by S&P; (5) deposits with any federally-, or state-, chartered savings and
loan association which has combined capital, surplus and undivided profits of not less than $3
million if the principal plus interest to accrue over the term of the deposit is fully insured by
FSLIC or secured by instruments described in (1), (2) and (3) above; (6) deposits with any
federally-, or state-, chartered commercial bank, the deposits of which are insured by the FDIC
and which (i) has, or is the lead bank of a parent holding company which has, unsecured,
uninsured and unguaranteed obligations which are rated Aa2 or better by Moody's and AA or
better by S&P, or (ii) has combined capital, surplus and undivided profits of not less than $3
million if the principal plus interest to accrue over the term of the deposit is fully insured by the
FDIC or secured by instruments described in (1), (2) and (3) above; (7) investments in a money
market or other fund, the investments of which fund are exclusively in obligations or securities
described in subsections (1), (2) and (3) above; (8) repurchase agreements with a registered
broker/dealer subject to the Securities Investors' Protection Corporation Liquidation in the event
of insolvency, or any commercial bank (A) whose unsecured indebtedness is rated A2 or better
by Moody's or A or better by S&P, or (B) which is the lead bank of a parent bank holding
company whose unsecured indebtedness is rated A2 or better by Moody's and A or better by
S&P, or (C) having a combined capital, surplus and undivided profits of not less than $100
million and acceptable to the Trustee, which repurchase agreement shall provide that:
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(i) the repurchase obligation of the bank is collateralized by
the securities described in (1) above, themselves which shall be held by
the Trustee (unless the Trustee is obligated under the repurchase
agreement) or third party which is a Federal Reserve Bank or a
commercial bank with capital, surplus and undivided profits of not less
than $50 million and the Trustee shall have received written confirmation
from that third party that it holds those securities for the benefit of the
City;
(ii) a perfected security interest in favor of the Trustee in the
securities has been created under the Unifonn Commercial Code or
pursuant to the book entry procedures described in 31 C.F.R. 306.1 et seq.
or 31 C.F.R. 350.0 et seq.;
(iii) the securities on the date of execution of the repurchase
agreement have a fair market value of at least 100% of the amount of the
repurchase obligation, including both principal and interest; and
(iv) the repurchase obligation is to be performed within 30 days
of the date described in (iii) above, or throughout the term of the
repurchase agreement the securities have a fair market value equal to at
least 100% of the amount of the repurchase obligation;
(9) an investment agreement with (a) an insurance company with unsecured, uninsured and
unguaranteed obligation (or claims paying ability) rated Aa2 by Moody's and AA by S&P, or
(B) a commercial bank (i) with unsecured, uninsured and unguaranteed obligations rated Aa2 or
better by Moody's and AA or better by S&P, respectively, or (ii) which is the lead bank of a
bank holding company whose unsecured, uninsured and unguaranteed obligations are rated Aa2
or better by Moody's and AA or better by S&P, but only if such agreement shall provide that it is
not subordinated to any other obligations of such insurance company or banking institution; or
the State of Washington Local Government Investment PooL
The above investments shall be valued as frequently as deemed necessary by the City, in
any event not less than quarterly, at the market value thereof.
"Principal and Interest Account" means the account of that name created in the Bond
Fund by Ordinance No. 3989 for the payment of the principal of and interest on the 1994 Bonds,
the Bond and any Future Parity Bonds.
"Proposal" means the non-binding proposal letter dated August 3,2005, ofthe Purchaser.
"Purchaser" means Bank of America, N.A., the purchaser ofthe Bond.
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"Reserve Account" means the account of that name created in the Bond Fund by of
Ordinance No. 3989 for the purpose of securing the payment of the principal of and interest on
the 1994 Bonds, the Bond and any Future Parity Bonds.
"Reserve Account Instrument" means, for the 1994 Bonds, the Debt Service Reserve
Fund Policy or Policies issued by Financial Guaranty Insurance Company, and for the Bond and
any Future Parity Bonds means any ofthe following:
A surety bond or insurance policy issued to the Bond Registrar as agent of the
bondowners, by a company licensed to issue an insurance policy guaranteeing the
timely payment of debt service on the bonds (a "municipal bond insurer") if the
claims paying ability of the insurer thereof shall be rated "AAA" or Aaa" by S&P
or Moody's, respectively.
A surety bond or insurance policy issued to the bond registrar for such bonds, as
agent of the bond owners, by an entity other than a municipal bond insurer.
An unconditional irrevocable letter of credit issued to the bond registrar for such
bonds, as agent of the bondowners, by a bank if the issuer thereof is rated at least
"AA" by S&P. The letter of credit shall be payable in one or more draws upon
presentation by the beneficiary of a sight draft accompanied by its certificate that
it then holds insufficient funds to make a required payment of principal or interest
on the bonds. The draws shall be payable within two days of presentation of the
sight draft. The letter of credit shall be for a term of not less than three years. The
issuer of the letter of credit shall be required to notify the City and the bond
registrar, not later than 30 months prior to the stated expiration date ofthe letter of
credit, as to whether such expiration date shall be extended, and if so, shall
indicate the new expiration date. If such notice indicates that the expiration date
shall not be extended, the City shall deposit in the Reserve Account an amount
sufficient to cause the cash or Permitted Investments on deposit in the Reserve
Account together with any other qualifying credit instruments, to equal the
Reserve Requirement on all outstanding bonds, such deposit to be paid in equal
installments on at least a semiannual basis over the remaining term of the letter of
credit, unless the Reserve Account Instrument is replaced by a Reserve Account
Instrument meeting the requirements in any of the above. The letter of credit
shall permit a draw in full not less than two weeks prior to the expiration or
termination of such letter of credit if the letter of credit has not been replaced or
renewed.
The Reserve Account Instrument obtained by the City must be equal to part or all of the Reserve
Requirement for any bond or Future Parity Bonds then outstanding for which such instrument is
obtained. The use of a Reserve Account Instrument in the future is subject to the conditions set
forth in Section 11 of Ordinance No. 4451, as long as the 1994 Bonds are outstanding.
"Reserve Insurer" means Financial Guaranty Insurance Company, a New York stock
insurance company, or any successor thereto.
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"Reserve Requirement" means:
(1) For the Bond, the difference between the lesser of the Maximum Annual
Debt Service or 125% of the Average Annual Debt Service on the 1994 Bonds, and the
lesser of the Maximum Annual Debt Service or 125% of the Average Annual Debt
Service on the 1994 Bonds and the Bond.
(2) For any issue of Future Parity Bonds, the lesser ofthe Maximum Annual
Debt Service or 125% of the Average Annual Debt Service on the then outstanding 1994
Bonds, the Bond, any Future Parity Bonds theretofore issued and outstanding, and such
issue of Future Parity Bonds. Such amount shall be accumulated within five years ofthe
date of issuance ofthe proposed Future Parity Bonds and, to the extent it is not
capitalized as a part of such Future Parity Bonds, shall be deposited in approximately
equal annual payments commencing one year after the date of issuance of such Future
Parity Bonds.
(3) For purposes of calculating the Reserve Requirement for the issuance of
Future Parity Bonds bearing interest at a variable rate, the requirement shall be the lesser
of 11 % per annum and the highest rate permitted, in the opinion of bond counsel,
consistent with maintaining the tax-exempt status of the Bond and the Future Parity
Bonds.
"State" means the State of Washington.
"System" means the existing combined water and sewerage systems ofthe City, together
with any storm drainage system or refuse disposal system now or hereafter combined therewith,
as the same may be added to, improved and extended for as long as the Bond and any Future
Parity Bonds are outstanding.
"Term Bond Maturity Year" means any year in which Term Bonds are scheduled to
mature.
"Term Bonds" means any Future Parity Bonds .of any single issue or series designated as
Term Bonds in the ordinance authorizing the issuance of Future Parity Bonds.
"UUD No. 2002-01" means Utility Local Improvement District No. 2002-01.
Section 2. Findings Regarding Parity Provisions and Determination Regarding Lien
Position; Storm Drainage System. The City Council finds that:
a. There is no deficiency in either the Principal and Interest Account or the
Reserve Accountin the Bond Fund;
b. Provision is made in Section 10 of this Ordinance for the payment of
principal of and interes't on the Bond from the Principal and Interest Account.
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c. The Reserve Requirement for the 1994 Bonds and the Bond shall be fully
funded by a Reserve Account Instrument.
d. There will be on file on the date of the delivery of the Bond to the initial
purchaser thereof a certificate of an independent, licensed professional engineer or a
certified public accountant that the estimated Gross Revenue of the System, after
deducting Operating and Maintenance Expenses, will meet the Coverage Requirement.
The City Council has determined that all of the conditions of Section 18 of Ordinance
No. 4451 will have been met and complied with on the date of delivery ofthe Bond to the
Purchaser and that the Bond shall be issued on a parity of lien with the 1994 Bonds.
Section 3. Description of the Bond. For the purpose of repaying the interfund loan
incurred to pay part of the cost of carrying out the Improvements and paying the incidental costs
and the costs of issuance and sale of the Bond, the City authorizes the issuance and sale of its
"Water and Sewer Revenue Bond, 2005."
The Bond shall be issued as a single Bond in the principal amount of$406,587; shall be
dated the date of issue; shall mature on September 1, 2015; and shall bear interest (computed on
the basis of a 30/360-day year) at the rate of 5.10% per annum; provided, that from and after the
date of (a) any failure by the City to pay any principal of or interest on the Bond or any fees or
other amounts due to the Purchaser hereunder, when due, or (b) receipt by the Owner of written
notice of any final determination, decision or decree, all applicable appeals periods with respect
to which shall have expired, made by the commissioner or any district director of the Internal
Revenue Service or by any court of competent jurisdiction to the effect that interest on the Bond
is includable in gross income of the Owner for federal income tax purposes, the Bond shall bear
interest at the rate of7.10% per annum. Interest on the Bond shall be payable semi-annually on
each March 1 and September 1 to the maturity or earlier prepayment of the Bond, beginning on
September 1, 2006. Principal ofthe Bond shall be payable in annual installments on each
September 1, commencing on September 1, 2006, to the maturity or earlier prepayment ofthe
Bond, in accordance with the amortization schedule attached hereto as Exhibit A and
incorporated herein by this reference. The Bond shall be issued in fully registered form as to
both principal and interest; shall be numbered in such manner and with any additional
designation as the Bond Registrar deems necessary for purposes of identification.
Section 4. Place, Manner and Medium of Payment. Both principal of and interest on the
Bond shall be payable in lawful money of the United States of America. Interest on the Bond
and annual principal installments and any prepaid principal thereof shall be paid by check or
draft mailed on or before the applicable payment date to the Owner on the Bond Register on the
day such payment is made. Upon request of the City following receipt of the final principal
payment, the Owner shall surrender the Bond at the office of the Bond Registrar. The Bond shall
be payable solely out of the Bond Fund and shall not be a general obligation ofthe City.
Section 5. Prepayment. The Bond shall be subject to optional prepayment prior to
maturity, in whole or in part on any date, together with a prepayment fee, plus accrued interest to
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the date fixed for prepayment, upon three days notice to the Owner. The prepayment fee shall be
in an amount sufficient to compensate the Owner for any loss, cost or expense incurred by it as a
result of the prepayment, including any loss of anticipated profits and any loss or expense arising
from the liquidation or reemployment of funds obtained by it to maintain the funding of the Bond
or from fees payable to terminate the deposits from which such funds were obtained. The City
shall also pay any customary administrative fees charged by the Owner in connection with the
foregoing. For purposes of calculating the prepayment fee, the Owner shall be deemed to have
funded the Bond by a matching deposit or other borrowing in the applicable interbank market,
whether or not the Bond was in fact so funded.
Section 6. Form of Bond. The Bond shall be typewritten, printed, lithographed or
multicopied on good bond paper in a form consistent with this Ordinance and Washington law.
Section 7. Execution of Bond. The Bond shall be signed on behalf of the City with the
facsimile or manual signatures of the Mayor and the City Clerk, and shall have the seal of the
City impressed or a facsimile thereof imprinted thereon.
In case either or both of the officers who shall have executed the Bond shall cease to be
such officer or officers of the City before the Bond shall have been authenticated or delivered by
the Bond Registrar or issued by the City, the Bond nevertheless may be authenticated, delivered
and issued and upon such authentication, delivery and issuance, shall be as binding upon the City
as though those who signed the same had continued to be such officers of the City. The Bond
also may be signed and attested on behalf of the City by such persons as at the actual date of
execution of the Bond shall be the proper officers of the City although at the original date of the
Bond such persons were not such officers ofthe City.
Section 8. Registration. The Bond Registrar shall keep, or cause to be kept, the Bond
Register at the office ofthe Bond Registrar.
The City may deem and treat the Owner of the Bond as the absolute owner thereof for all
purposes, and the City shall not be affected by any notice to the contrary. Payment of the Bond
shall be made only as described in Section 4 hereof. All such payments made as provided in
Section 4 hereof shall be valid and shall satisfy and discharge the liability of the City upon the
Bond to the extent of the amount or amounts so paid.
The registered ownership of the Bond shall not be transferable, except for transfer to a
successor in interest to the Owner as a result of a merger or consolidation or sale of substantially
all assets of the Owner.
The City covenants that, until the Bond shall have been surrendered and cancelled, it will
maintain a system of recording the ownership of the Bond that complies with the provisions of
the Code.
Section 9. Mutilated, Lost, Stolen or Destroyed Bond. If the Bond becomes mutilated;
lost, stolen or destroyed, the City may issue and deliver a new Bond of the same number and
interest rate, for the same principal amount, and oflike tenor and effect in substitution therefor,
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all in accordance with law. If such mutilated, lost, stolen or destroyed Bond has matured, the
City, at its option, may pay the same without the surrender thereof. However, no such
substitution or payment shall be made unless and until the applicant shall furnish (a) evidence
satisfactory to the City of the destruction or loss of the original Bond and of the ownership
thereof, and (b) such additional security, indemnity or evidence as may be required by or on
behalf ofthe City. No substitute Bond shall be furnished unless the applicant shall reimburse the
City for its expenses in the furnishing thereof.
Section 10. Bond Fund. There has been created in the office of the City Treasurer a
special fund ofthe City known as the Water and Sewer Revenue Bond Fund, 1985 (herein
defined as the "Bond Fund"), which fund has been divided into two accounts, a Principal and
Interest Account and a Reserve Account. So long as the Bond is outstanding against the Bond
Fund, the City obligates and binds itself to set aside and pay into the Bond Fund, in addition to
the amounts required to be paid therein for the 1994 Bonds and any Future Parity Bonds, on or
before the 20th day of each month, out of the Net Revenue ofthe System certain fixed amounts
(including the assessments on ULID No. 2002-01) without regard to any fixed proportion,
namely:
a. Into the Principal and Interest Account, (a) beginning with the month of
October 2005, 1/11 ofthe interest payment due on the Bond on September 1, 2006; (b) beginning
with the month of September 2006, and continuing thereafter until the Bond, both principal and
interest, is paid in full, 1/6 of the next semiannual interest payment due on the Bond, beginning
with the interest payment due on March 1, 2007, and continuing thereafter until the Bond, both
principal and interest are paid in full; (c) beginning with the month of October 2005, 1/11 of the
principal payment due with respect to the Bond on September 1,2006; and (d) beginning with
the month of September 2006, and continuing thereafter until the principal of the Bond is paid in
full, 1/12 ofthe next annual principal payment due with respect to the Bond.
b. Into the Reserve Account an amount necessary to fund the Reserve
Requirement of the 1994 Bonds, the Bond and Future Parity Bonds within the time permitted by
this ordinance to fund the Reserve Requirement. The Reserve Requirement for the 1994 Bonds
and the Bond shall be fully funded by a Reserve Account Instrument.
The City covenants and agrees that it will at all times maintain in the Reserve Account an
amount equal to the Reserve Requirement, except for withdrawals therefrom as authorized
herein, until there is a sufficient amount in the Principal and Interest Account and Reserve
Account to pay the principal of and interest on all outstanding bonds payable from the Bond
Fund, at which time the money in the Reserve Account may be used to pay any such principal
and interest so long as the money remaining on deposit in the Reserve Account is no less than the
Reserve Requirement of the remaining outstanding bonds payable from the Bond Fund.
If there shall be a deficiency in the Bond Fund to meet maturing installments of either
principal of or interest on any ofthe 1994 Bonds, the Bond and/or Future Parity Bonds, such
deficiency shall be made up from the Reserve Account by the withdrawal of cash therefrom and
then by drawing from any Reserve Account Instrument. Any deficiency created in the Reserve
Account, including the value of any Reserve Account Instrument, by reason of any such
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withdrawal or resulting from any revaluation of investments in the Reserve Account will then be
made up from the Net Revenue of the System which shall be first available after making
necessary provisions for the required payments into the Principal and Interest Account and after
repayment of any Reserve Account Instrument. Any such deficiency shall be restored by the
close ofthe next succeeding fiscal year.
All money in the Bond Fund may be kept in cash or invested in Permitted Investments
maturing not later than the date when needed (for investments in the Principal and Interest
Account) or maturing not later than five years from the date of the investment or the last maturity
of any remaining outstanding bonds payable from the Bond Fund, whichever is the lesser (for
investments in the Reserve Account). In no event shall any money in the Bond Fund or any
other money reasonably expected to be used to pay principal and/or interest on the Bond be
invested at a yield which would cause the Bond to be arbitrage bonds within the meaning of
Section 103(c) of the United States Internal Revenue Code of 1954, as amended, and applicable
regulations thereunder. Income from investments in the Principal and Interest Account shall be
deposited in that account. Income from investments in the Reserve Account shall be deposited in
that account until the amount therein is equal to the Reserve Requirements of all bonds payable
from the Bond Fund, and thereafter shall be deposited in the Principal and Interest Account.
In. addition, the City reserves the right to substitute for all or for a portion of the Reserve
Account a Reserve Account Instrument which when combined with any money or investments in
the Reserve Account equals an amount not less than the Reserve Requirement for all then
outstanding 1994 Bonds, the Bond and Future Parity Bonds.
The City may create sinking fund accounts or other accounts in the Bond Fund for the
payment or securing the payment of bonds payable from the Bond Fund as long as the
maintenance of such accounts does not conflict with the rights of the owners of bonds payable
from the Bond Fund.
It is declared that in creating the Bond Fund and in fixing the amounts to be paid into it as
aforesaid, the City Council has had due regard for Operating and Maintenance Expenses (and the
cost of operation and maintenance as used in RCW 35.92.100) and the debt service requirements
of the 1994 Bonds and the Bond, and declares that the City Council is not setting aside into the
Bond Fund a greater amount than in its judgment will be available over and above such
Operating and Maintenance Expenses and debt service requirements;
If the City fails to set aside and pay into the Bond Fund the amounts set forth above, the
owner of any of the outstanding bonds payable out of the Bond Fund may bring action against
the City and compel the setting aside and payment.
Section 11. Pledge of Revenue and Lien Position. The Gross Revenue of the System is
pledged for the payment ofthe 1994 Bonds, the Bond and any Future Parity Bonds which may
be issued hereafter. This pledge shall constitute a lien and charge upon such Gross Revenue of
the System prior and superior to any other liens and charges whatsoever, subject only to
Operating and Maintenance Expenses.
-11-
Section 12. Deposit of Bond Proceeds. All of the net proceeds of the Bond (net of the
origination fee retained by the Purchaser) shall be deposited in the UUD No. 2002-01 Fund in
accordance with the direction of the City Director of Financial Services and used to repay the
interfund loan incurred to pay part of the costs of carrying out the Improvements.
Section 13. Covenants. The City covenants and agrees with the Owner of the Bond as
follows:
a. It will establish, maintain, revise as necessary and collect such
rates and charges for water and sewer service furnished which will produce Net
Revenue of the System available for debt service each calendar year at least equal
to the Coverage Requirement.
b. It will at all times maintain and keep the System in good repair,
working order and condition, and also will at all times operate such utility and the
business in connection therewith in an efficient manner and at a reasonable cost.
c. It will not sell, lease, mortgage, or in any manner encumber or
dispose of all of the property of the System unless provision is made for the
payment into the Bond Fund of an amount sufficient to pay the principal of and
interest on the 1994 Bonds, the Bond and any Future Parity Bonds then
outstanding and that it will not sell, lease, mortgage, or in any manner encumber
or dispose of any part of the property of the System that is used, useful and
material to the operation thereof, unless provision is made for replacement
thereof, or for payment into the Bond Fund of the total amount of Gross Revenue
of the System received which shall not be less than an amount which shall bear
the same ratio to the amount of the 1994 Bonds, the Bond and any Future Parity
Bonds then outstanding as the Gross Revenue of the System available for debt
service for such outstanding bonds for the twelve months preceding such sale,
lease, encumbrance or disposal from the portion of the utility sold, leased,
encumbered or disposed of bears to the Gross Revenue of the System available
for debt service for the outstanding 1994 Bonds, the Bond and Future Parity
Bonds from the entire System for the same period. Any such money so paid into
the Bond Fund shall be used to retire such 1994 Bond, the Bond and/or Future
Parity Bonds at the earliest possible date.
d. It will, while the Bond remains outstanding, keep proper and
separate accounts and records in which complete and separate entries shall be
made of all transactions relating to the System, and it will furnish the owner ofthe
Bond or any subsequent owner thereof, at the written request of such owner,
complete operating and income statements of the System in reasonable detail
covering any calendar year not more than ninety days after the close of such
calendar year and it will grant the owner of the Bond the right at all reasonable
times to inspect the entire System and all records, accounts and data of the City
relating thereto. Upon request of any owner of the Bond, it also will furnish to
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such owner a copy of the most recently completed audit of the City's accounts by
the State Auditor of Washington.
e. It will not furnish any service of the System to any customer
whatsoever free of charge.
f. It will at all times carry fire and such other forms of insurance on
such of the buildings, equipment, facilities and properties of the City as under
good practice are ordinarily carried on such buildings, equipment, facilities, and
properties by utilities engaged in the operation of water and sewerage systems to
the full insurable value thereof, and also will carry adequate public liability
insurance (and war risk insurance if available at reasonable rates) at all times. The
premiums on such insurance policies are declared to be a normal part of
Operating and Maintenance Expenses.
g. It will pay all Operating and Maintenance Expenses and otherwise
meet the obligations of the City as h~rein set forth.
h. It will not change any rate or charge for System services as now
established by the existing rate ordinance or ordinances of the City that will
substantially reduce the annual Gross Revenue of the System below that which
would have been obtained before such change unless the City shall have on file a
certificate from a licensed professional engineer experienced in the design,
construction and operation of municipal utilities, stating the rates and charges as
so changed will provide Gross Revenue of the System sufficient to comply with
all the covenants and requirements of this ordinance, including the Coverage
Requirement.
Section 14. Tax Exemption Covenants. The City covenants that it will not take or permit
to be taken on its behalf any action that would adversely affect the exclusion of the interest on
the Bond from gross income for purposes of federal income taxation, and will take or require to
be taken such acts as may be permitted by Washington law and as may :from time to time be
required under applicable law to continue the exclusion ofthe interest on the Bond from gross
income for purposes of federal income taxation. Without limiting the generality of the
foregoing, the City will not invest or make or permit any use of the proceeds of the Bond or of its
other money at any time during the term of the Bond which would cause the Bond to be an
"arbitrage bond" within the meaning of Section 148 of the Code.
The City covenants that, ifthe City issues more than $5,000,000 in tax-exempt bonds in
the calendar year 2005 and all the proceeds of the Bond have not been spent within six months
from the date of issuance of the Bond, it will calculate or cause to be calculated, and shall rebate
to the United States, all earnings from the investment of Bond proceeds that are in excess ofthe
amount that would have been eamed had the yield on such investments been equal to the yield
on the Bond, plus income derived from such excess earnings, to the extent and in the manner
required by Section 148 of the Code.
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The City has not been notified of any listing or proposed listing by the Internal Revenue
Service to the effect that the City is a bond issuer the arbitrage certifications of which may not be
relied upon.
The City will take no actions and will make no use of the proceeds of the Bond or any
other funds held under this Ordinance which would cause the Bond to be treated as a "private
activity bond" (as defined in Section 141(b) ofthe Code) subject to treatment under said
Section 141(b) as an obligation not described in Section 103(a) of the Code, unless the tax
exemption thereof is not affected.
The City hereby designates the Bond as a "qualified tax-exempt obligation" for purposes
of Section 265 of the Code (relating to the deduction by financial institutions of the interest
incurred to carry tax-exempt debt) and authorizes and directs the proper City officials to execute
and deliver all documents necessary to evidence such designation to any and all interested
parties. The City further covenants not to issue more than $10,000,000 of such "qualified tax-
exempt obligations" during 2005.
Section 15. Parity Provisions. The City further covenants with the owner of the Bond for
as long as any of the same is outstanding that it will not create any special account or fund or
accounts or funds for the payment of the principal of and interest on any other revenue
obligations which will have any priority over or which will rank on a parity with the payments
required by this ordinance to be made out of the Net Revenue of the System, nor will it issue
Future Parity Bonds, except that it reserves the right for
First, the purpose of acquiring, constructing and installing additions,
betterments and improvements to and extensions of, acquiring necessary
equipment for, or making necessary replacements of or repairs or capital
improvements to the System pursuant to a plan or plans of additions and
betterments thereto hereafter adopted, or
Second, the purpose of refunding by exchange or purchasing and retiring
or advance refunding by call and payment at or prior to their maturity any part or
all of the outstanding 1994 Bonds, the Bond or Future Parity Bonds, or
Third, other purposes then permitted by law, to issue additional and/or refunding revenue
bonds therefor, and to make payments into the Bond Fund from the Net Revenue ofthe System
sufficient to pay the principal of and interest on such Future Parity Bonds and to maintain a
reserve therefor as hereinafter required, which payments may rank equally with the payments out
of the Net Revenue of the System required to be made into the Bond Fund by this ordinance, if
the conditions and requirements set forth below are met and complied with at the time of the
issuance of such Future Parity Bonds and further that the Reserve Requirement for those Future
Parity Bonds is fully funded at the time of issuance ofthose Future Parity Bonds. Ifthe City is
in default on the payment of any amounts due under this ordinance, Ordinance No. 4451, and the
ordinances issuing any Future Parity Bonds then outstanding, no further Future Parity Bonds
may be issued so long as such default continues:
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a. At the time of issuance of such Future Parity Bonds, there shall
not be a deficiency in either the Principal and Interest Account or the Reserve
Account in the Bond Fund;
b. The ordinance authorizing the issuance of such Future Parity
Bonds shall provide for the creation of a sinking fund account in the Bond Fund
for any Term Bonds to be issued and for regular payments to be made into such
account for the payment ofthe principal of such Term Bonds on or before their
maturity, or, as an alternative, the mandatory redemption of such Term Bonds
prior to their maturity date from money in the Principal and Interest Account.
c. The ordinance authorizing any Future Parity Bonds shall provide
for the payment of the principal of and interest thereon out of the Bond Fund and
shall further provide for the payment from the Net Revenue ofthe System in
substantially equal monthly payments an amount which within a period of five
years from the date of issuance of such Future Parity Bonds will fund fully the
Reserve Requirement of such Future Parity Bonds subject to the City's right to
fund all or a portion of the Reserve Requirement with a Reserve Fund Instrument
or in whole or in part out of the proceeds of such Future Parity Bonds; except
that in the event such Future Parity Bonds are issued for the purpose of refunding
the Bond and/or Future Parity Bonds, the amount of such reserve allocated to
such bonds being so refunded shall be retained or used as a reserve for such
refunding Future Parity Bonds or used to retire the Bond or outstanding Future
Parity Bonds pursuant to the refunding plan, which reserve amount shall be
replaced in the same manner and within the same time as required for additional
Future Parity Bonds, or such reserve may remain in the Reserve Account to be
used as the reserve for remaining bonds payable from the Bond Fund; and
d. At the time of the issuance of such Future Parity Bonds, the City
shall have on file a certificate from an independent, licensed professional
engineer experienced in the design, construction and operation of municipal
utilities, or a certified public accountant, showing that in his or her professional
opinion the estimated Gross Revenue of the System in any future year, after
deducting Operating and Maintenance Expenses, will be equal to the Coverage
Requirement. However, if Future Parity Bonds proposed to be so issued are for
the sole purpose of refunding outstanding bonds payable from the Bond Fund,
such certification of coverage shall not be required if the Annual Debt Service in
each year for the refunding bonds is not increased over the amount required for
the bonds to be refunded thereby and the maturities of those refunding bonds are
not extended beyond the maturities of the bonds to be refunded thereby.
The engineer's certificate, in estimating the Gross Revenue of the System
available for debt service, shall use the historical Gross Revenue of the System
for any twelve consecutive months out of the twenty-four months immediately
preceding the month of delivery ofthe Future Parity Bonds. Such Gross
Revenue may be adjusted to reflect any changes in rates in effect and being
-15-
I .
charged or expressly committed by ordinance of the City Council to be made in
the future; may include income derived from customers of the System that have
become customers during the twelve consecutive month period or thereafter
adjusted to reflect one year's net revenue from such customers; may include
revenues from any customers to be connected to the System who have paid the
required connection charges; may include the revenue to be derived from any
person, firm, corporation or municipal corporation under any executed contract
for water and/or sewer service which revenue was not included in the historical
Gross Revenue of the System; and may include the engineer's estimate ofthe
Gross Revenue to be derived by the City from customers with improved property
available to connect to any additions to and improvements and extensions of the
System to be paid for out of the proceeds ofthe sale of the additional Future
Parity Bonds or other additions to and improvements and extensions of the
System then under construction and not fully connected to the facilities of the
System when such additions, improvements and extensions are completed.
Actual or reasonably anticipated changes in the Operating and
Maintenance Expenses subsequent to such twelve-month period shall be added
or deducted, as is applicable.
Nothing contained in the provisions for Future Parity Bonds shall prevent the City from
issuing revenue bonds having a subordinate lien on the Gross Revenue of the System.
Section 16. Flow of Funds. The Gross Revenue of the System, except for earnings on
investments in the Bond Fund or other bond redemption funds, refunded bonds, refunding
escrow account or other trust account, and earnings subject to arbitrage rebate (in order to
maintain the exemption of the interest on obligations of the System from federal income
taxation), shall be deposited as received in the Current Water Fund and shall be used, paid out
and distributed in the following order or priority:
a. To pay the Operating and Maintenance Expenses;
b. To make the required payments into the Principal and Interest
Account for all bonds payable out of the Bond Fund;
c. To make the required payments into the Reserve Account for all
bonds payable out of the Bond Fund and to make all payments required to be
made pursuant to a reimbursement agreement in connection with a Reserve
Account Instrument or for repayment of Reserve Instrument or Bond Policy
Costs, except that if there is not sufficient money to make all payments under
reimbursement agreements, the payments will be made on a pro rata basis;
d. To make all required payments into any revenue bond redemption
fund created to pay and secure the payment of the principal of and interest on any
revenue bonds or short-term obligations ofthe City having a lien and charge upon
the Gross Revenue of the System subordinate and inferior to the lien thereon for
-16-
the payment ofthe principal of and interest on the 1994 Bonds, the Bond, and
Future Parity Bonds; and
e. To redeem and retire any water and sewer revenue bonds of the
City then outstanding or to purchase any or all of those bonds in the open market
at a price not in excess of the price at which those bonds could be redeemed at the
next call date; to make necessary additions, betterments, repairs, extensions and
replacements of the System or other purposes proper to its maintenance and
operation, including the payment of any City-imposed utility taxes or payments in
lieu of taxes payable from Gross Revenue of the System, or for any other lawful
City purpose.
The City may transfer from any funds or accounts ofthe City legally available therefor,
except bond redemption funds, any money therein to meet the required payments to be made into
the Bond Fund.
Section 17. Defeasance. Ifmoney and/or "Government Obligations" (as such
obligations are defined in Chapter 39.53 RCW, as now in existence or hereafter amended)
maturing at such times(s) and bearing such interest to be earned thereon (without any
reinvestment thereof) as will provide a series of payments which shall be sufficient, together
with any money initially deposited, to provide for the payment of the principal of and interest on
all or a portion of the Bond, when due in accordance with its terms and in accordance with a
refunding plan adopted by the City, are set aside in a special fund (hereinafter called the "trust
account") to effect such payment and are pledged irrevocably for the purpose of effecting such
payment, then no further payments need be made into the Bond Fund for the payment of the
principal of and the interest on the Bond, the Owner thereof shall cease to be entitled to any lien,
benefit or security of this Ordinance and in the Gross Revenue of the System, funds and accounts
obligated to the payment of such defeased Bond except for the right to receive the money and the
principal and interest proceeds on the obligations set aside in the trust account, and the Bond
shall no longer be deemed to be outstanding hereunder.
Section 18. Sale of the Bond. The Purchaser has presented the Proposal to the City
pursuant to which the Purchaser has proposed to purchase the Bond, under the terms and
conditions provided in the Proposal, subject to credit approval, which has since been obtained,
which written Proposal is on file with the City Clerk and is incorporated herein by this reference.
The City Council finds that selling the Bond according to the terms of the Proposal is in the
City's best interest and therefore authorizes acceptance of an offer of the Purchaser to purchase
the Bond in accordance with the terms contained in the Proposal and authorizes the execution by
City officials of any written offer to purchase in accordance with the terms of the Proposal.
Upon purchase of the Bond, the City shall pay to the Purchaser an origination fee equal to
$1,500, and shall payor reimburse the Purchaser for the payment of its legal expenses with
respect to the purchase ofthe Bond, not to exceed $500.
The Bond will be printed or multicopied at City expense and will be delivered to the
Purchaser in accordance with the terms of the Proposal with the approving legal opinion of
Gottlieb, Fisher & Andrews, PLLC, bond counsel of Seattle, Washington, relative to the issuance
-17-
of the Bond, printed on or attached to the Bond. Bond counsel has not been engaged to
participate in the preparation or review of, or express any opinion concerning the completeness
or accuracy of any official statement or other disclosure documentation used in cOlmection with
the offer or sale of the Bond by any person, and bond counsel's opinion shall so state. Bond
counsel has not been retained to monitor, and shall not be responsible for monitoring, the City's
compliance with any federal law or regulations to maintain the tax -exempt status of the interest
on the Bond.
Section 19. Delivery of Bond; Temporary Bond. The proper City officials, including,
but not limited to, the Director of Financial Services, are authorized and directed to execute
and/or approve, as appropriate, all documents, and to do everything necessary for the preparation
and delivery of a transcript of proceedings pertaining to the Bond, and the printing, execution
and prompt delivery of the Bond to the Purchaser and for the proper application and use of the
proceeds of the sale thereof.
Ifthe definitive Bond is not ready for delivery by the date established for closing (the
"Closing"), the City Director of Financial Services, upon the approval of the Purchaser, may
cause to be issued and delivered to the Purchaser a temporary Bond with appropriate omissions,
changes and additions. Any temporary Bond shall be entitled and subject to the same benefits
and provisions of this ordinance with respect to the payment, security and obligation thereof as
the definitive Bond authorized hereby. Such temporary Bond shall be exchangeable without cost
to the Owner thereof for the definitive Bond when the latter is ready for delivery.
Section 20. Rights of 1994 Bond Insurer and Reserve Insurer. Ordinance No. 4451 of
the City granted certain rights to and made certain covenants with the 1994 Bond Insurer and the
Reserve Insurer in consideration for the issuance of the 1994 Bond Insurance Policy and the
Reserve Account Instrument. Many of these rights and covenants affect owners of any Future
Parity Bonds, issued after the 1994 Bonds, including the Bond, for as long as the 1994 Bonds are
outstanding and reference is hereby made to Ordinance No. 4451 for the full text ofthese rights
and covenants.
Section 21. Interest Rate on Installments and Delinquent Payments. The interest rate on
the installments and delinquent payments of special assessments in UUD No. 2002-01 is
established at the rate of 5.60% per annum, which rate does not exceed the net effective interest
on the Bond plus one-half of one percent.
Section 22. Financial Reports. The City agrees to provide the Owner (a) a copy ofthe
City's annual State Audit Report as soon as such report is available, together with unaudited
annual financial statements within 180 days of the completion of each fiscal year; and (b) a copy
of the City's annual budget within ninety days ofthe budget cycle.
Section 23. Contract~ Severability. The covenants contained in this Ordinance shall
constitute a contract between the City and the Owner of the Bond. The City unconditionally
covenants that it will keep and perform all of the covenants of the Bond and this Ordinance. If
anyone or more of the provisions of this Ordinance shall be declared unconstitutional or invalid
for any reason, such decision shall not affect the validity of the remaining provisions of this
-18-
Ordinance or the Bond, and this Ordinance and the Bond shall be construed and enforced as if
such unconstitutional or invalid provision had not been contained herein.
Section 24. Effective Date. This ordinance shall take effect and be in full force ten days
after passage and publication of an approved summary, consisting of the title.
APPROVED by the City Council of the City ofBrernerton, Washington, the _ day
of August, 2005.
PASSED by the City Council of the City ofBremerton, Washington, this _ day of
August, 2005.
Daren Nygren, Council President
APPROVED this _ day of August, 2005.
Cary Bozeman, Mayor
ATTEST:
Paula Johnston, City Clerk
APPROVED AS TO FORM:
By
Daniel S. Gottlieb, Bond Counsel
PUBLISHED:
EFFECTIVE DATE:
ORDINANCE NO.
-19-
Borrower: CIty of Bremerton
AMORTiZATION SCHEDULE
. Lender: Bank of America, N.A.
CCS-Commarcial Banking INon-REI
WA '-50'.13-30
800 Afth Avenue
Seattle, WA 98104-3122
Repayment Schedule: Principal + Interest
Calculation Method: 30/360 U.S. Rule
Payment Intareat Prlnclpel RemainIng
Amount Paid Paid Balanc.
20,793.54 20,793.54 0.00 406,587.00
40,658.70 0.00 40,658.70 385,928.30
61,462.24 20,793.54 40,658.70 ..
9,331.17 9,331.17 0.00 365,928.30
9,331.17 9,331.17 0.00 365,928.30
40,658.70 0.00 40,658.70 325,269.60
59.321.04 18.662.34 40,658.70
8,294.37 8,294.37 0.00 325,269.60
8,294.37 8,294.37 0.00 325,269.60
40.658.70 0.00 40,658.70 284,610.90
57,247.44 16,588.74 40,658.70
7,257.58 7,257.58 0.00 284,610.90
7,257.58 7,257.58 0.00 284,610.90
40,658.70 0.00 40,658.70 243,952.20
55,173.86 14,515.16 40,658.70
6,220.78 6,220.78 0.00 243,952.20
6,220.78 6,220.78 0.00 243,952.20
40,658.70 0.00 40,658.70 203,293.50
53,100.26 12,441.56 40,658.70
5,183.9B 5,183.9B 0,00 203,293.50
5,183.98 5,183.9B 0.00 203,293,50
40,658.70 0.00 40,658.70 162,634.80
51,026.66 10,367.96 40.658.70
4,147.19 4,147.19 0.00 162,634.80
4.147.19 4,147.19 0,00 162,634,80 .
40,658.70 0.00 40,658.70 121,976.10
48,953.08 8,294.38 40,658.70
3,110,39 3,110.39 0.00 121,976.10
3,110.39 3,1.10.39 0;00. 121,976.10
40,658.70 0.00 40,658.70 81,317.40
46,879.48' . 6,220.78 .40,658.70
2,073.59 2,073.59. 0,00 81,317.40
2,073.59 2,073.59 :' O.OQ. 81,317.40
40,658.70 0.00 40,658.70 40,658.70
44.805.88 4,147.18 40.658.70
1,036.80 1,036.80 0.00. 40,658,70
41,695.50 1,036.80 40,658.70 0.00
520,692.24 114,105.24 406,687.00
Dlabur,ement Oat.: August 31, 2005
Interest Rete: 5.100
Payment Payment
Number Date
1 09-01.2006
2 09-01-2006
2006 TOTALS:
3 03-01-2007
4 09-01.2007
5 09-01.2007
2007 TOTALS:
6 03-01-2008
7 09-01.2008
8 09-01.2008
2008 TOTALS:
9 03-01-2009
10 09.01-2009
11 09.01.2009
2009 TOTALS:
12. 03-01.2010
13 09-01-2010
14 09.01-2010
2010 TOTALS:
15 03-01-2011
16 09-01-2011
17 09-01-2011
2011 TOTALS:
18 . 03-01-2012
19 09-01-2012
20 09-01..2012
2012 TOTAl8:
21 03-01.2013 .
22 09-01-2013
23 09-01.2013
2013 TOTALS:
24 03.01-2014
25 09.01.2014
26 09-01.2014
. 2014 TOTALS:
27 03.01.2015
28 09-01-2015
TOTALS:
NOTICE: This is an estimated loan amortiz'atfon schedule. .Actual amoums may vary jf payments are made on different dates oi in different
amounts.
1..A6ER fl'\Q t.-Jdlllll, \,I... I.2f,.20 103 CIlPI.:J.1I11'IM><i to","".... .a"lulio.... ~Ilc. 11117.:@. All Ngl1b "-_v.d. . WJ.. Pfl.NWCL'COJ
Attachment A
Ordinance No. 4944
m..".'.'.YW'..'."
~c ~
. . .
. ~ .
f r
L~
Memorandum
To:
City Council
Mayor Cary Bozeman
From:
Laura Lyon, Director of Financial Services
Re:
2005 Water and Sewer Revenue Bond - ULlD 2002-01
Date:
August 17, 2005
The City established ULlD No. 2002-01 by Ordinance No. 4837 and further
provided for an interfund loan to cover the costs of the improvements until such
time as the assessment process was formally concluded and bonds could be
issued. The interfund loan has been extended until September 1,2005 by
previous council actions.
After notice and hearing (required by law), the City approved and confirmed the
final assessments and assessment roll of ULlD No. 2002-01 in the total amount
of $467,841.00 and subsequently received $61,254.17 during the 3D-day period
for making cash payments of assessments without penalty, interest or costs.
The remaining assessments of $406,487 are to be financed through the issuance
of a water and sewer revenue bond. The proceeds of the debt issuance in
combination with funds on hand from prepayments provides for the repayment of
the outstanding interfund loan (plus accrued interest thereon through 8/31/05),
plus reserve requirements and issuance costs. Bank of America, N.A. has
proposed to purchase these revenue bonds under terms and conditions set out in
their non-binding proposal letter.
Bond counsel (Judy Andrews and Dan Gottlieb of Gottlieb Fisher & Andrews)
have prepared the ordinance and will be providing necessary opinions and
support as we proceed to conclude the debt issuance and closing process.
Cc: Cathy Johnson
m
Memorandum
To:
City Council
Mayor Cary Bozeman
From:
Laura Lyon, Oirector of Financial Services
Re:
2005 Water and Sewer Revenue Bond - UUO 2002-01
Date:
August 03,2005
The City established UUO No. 2002-01 by Ordinance No. 4837 and further
provided for an interfund loan to cover the costs of the improvements until such
time as the assessment process was formally concluded and bonds cou'ld be
issued. The interfund loan has been extended until September 1, 2005 by
previous council actions.
After notice and hearing (required by law), the City approved and confirmed the
final assessments and assessment roll of UUO No. 2002-01 in the total amount
of $467,841.00 and subsequently received $61,254.17 during the 30-day period
for making cash payments of assessments without penalty, interest or costs.
The remaining assessments of $406,487 are to be financed through the issuance
of a water and sewer revenue bond. The proceeds of the debt issuance in
combination with funds on hand from prepayments provides for the repayment of
the outstanding interfund loan (plus accrued interest thereon through 8/31/05),
plus reserve requirements and issuance costs. Bank of America, N.A. has
proposed to purchase these revenue bonds under terms and conditions set out in
their non-binding proposal letter (which is enclosed). The par amount of the
borrowing will be finalized prior to council action on August 17th. Pending is a
determination of whether the current reserve insurance policy for water and
sewer revenue bonds can be amended to include this parity revenue bond
reserve requirements. If not, additional proceeds will be required to fund the
specified reserve level for this debt.
Bond counsel (Judy Andrews of Gottlieb Fisher & Andrews) has prepared the ordinance
and will be providing necessary opinions and support as we proceed to conclude the
debt issuance and closing process.
Cc: Cathy Johnson
City of Bremerton
August 3, 2005
Page 2 of 4
BORROWER:
LENDER:
CREDIT FACILITY:
PURPOSE:
MATURITY DATE:
CLOSING DATE:
SECURITY:
INTEREST RATE:
REPAYMENT:
ORIGINATION FEE:
EXPENSES:
Bank of America ~
...
Exhibit A
Summary of Terms and Conditions
(For Discussion Purposes Only)
City of Bremerton, Washington (the "Borrower")
Bank of America N.A. ("Bank of America ")
$406,587 (est.) Water and Sewer Revenue Bond, 2005. Tax-
Exempt Bank Qualified (the "Credit Facility").
Proceeds of the Bond will be used to provide financing for the
West 650 Zone water main improvement project completed
within Utility Local Improvement District 2002-01 and to pay
costs associated with issuing the Bond.
Ten years from closing.
Estimated to close on August 31, 2005.
Borrower to pledge the following security for repayment of all
outstanding principal, interest and fees due on the Credit
Facility:
. Pledge of the gross revenues of the combined waterworks
and sewerage system of the City of Bremerton (the
"System"). Gross Revenue shall mean the Revenue of the
System as defined per Borrower's Ordinance # 4451
adopted May 16, 1994. This pledge shall constitute a lien
and charge upon such Gross Revenue of the System prior
and superior to any other liens and charges whatsoever,
subject only to Operating and Maintenance Expenses.
Indicative Fixed Rate of 5.10% as of August 3, 2005, calculated
on a 30/360-day basis. Final pricing to be set upon approval of
the Bond Ordinance by Borrower, as mutually agreed by
Borrower and Bank of America.
Interest on the Credit Facility shall be repaid semi-annually each
March 1 and September 1, beginning September 1, 2006.
Principal on the Credit Facility shall be repaid in equal annual
installments on September 1 each year, beginning
September 1, 2006.
Borrower agrees to pay Bank an origination fee of $1,500. This
fee shall be deemed fully earned and payable upon closing.
Borrower will pay all reasonable costs and expenses associated
with the preparation and review of all documentation executed in
connection with the Credit FaCility, including Bank of America's
attorneys' fees, whether or not the Credit Facility is closed;
Borrower's outside legal counsel fees; and any other costs
associated with documenting and closing the Credit Facility.
City of Bremerton
August 3, 2005
Page 3 of 4
Bank of America ~
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PREPAYMENT FEES:
Any prepayment of this Credit Facility prior to its scheduled
maturity may result in the imposition of a prepayment fee. The
prepayment fee shall be in an amount sufficient to compensate
the Bank for any loss incurred by it as a result of the
prepayment, as documented by the Bank, including any loss
arising from the liquidation or reemployment of funds obtained
by it to maintain the funds used to purchase the Bond or from
fees payable to terminate the deposits from which such funds
were obtained. For purposes of this paragraph, the Bank shall
be deemed to have funded the purchase of the Bond by a
matching deposit or other borrowing in the applicable interbank
market, whether or not the Bond was in fact so funded. In no
case shall a prepayment fee apply if the Bank's internally
derived cost of funds is higher on the date of prepayment than it
was on the date the fixed rate of the Bond was set
Borrower agrees to comply with all covenants outlined in Section
15 of Borrower's Ordinance # 4451 which includes, but is not
limited to, the following:
Borrower will establish, maintain, revise as
necessary and collect such rates and charges for
water and sewer service furnished which will
produce Net Revenue of the System available for
debt service each calendar year at least equal to
the Coverage Requirement. The Coverage
Requirement is a debt service coverage
requirement of 1.30x on all parity bonds and future
parity bonds as defined in Ordinance # 4451.
Borrower will at all times maintain and keep the
System in good repair, working order and condition,
and also will at all times operate such utility and the
business in connection therewith in an efficient
manner and at a reasonable cost.
Borrower will pay all Operating and Maintenance
Expenses and otherwise meet the obligations of
the City of Bremerton as set forth in Ordinance
# 4451.
As long as any Bonds are outstanding, Borrower
covenants that it will not create any special account
or fund or accounts or funds for the payment of the
principal of and interest on any other revenue
obligations which will have any priority over or
which will rank on a parity with the payments
required by the existing parity bonds, the Credit
Facility, or future parity bonds, to be made out of
the Net Revenue of the System, nor will it issue
Future Parity Bonds, except as permitted in
Ordinance # 4451.
EVENTS OF DEFAULT:
Usual and customary in transactions of this type, to include
without limitation: (i) nonpayment of principal, interest, fees or
other amounts; (ii) violation of covenants; (iii) inaccuracy of
representations and warranties; (iv) bankruptcy and other
insolvency events; (v) creditor or forfeiture proceedings; and (vi)
City of Bremerton
August 3, 2005
Page 4 of 4
BankofAmerica ~
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actual or asserted invalidity of any loan documentation or
security interests.
If an event of default occurs due to (i) 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 two
percentage points.
FINANCIAL REPORTING
REQUIREMENTS:
Annual State Audit Report of the Borrower within 10 days of
receipt from State Auditor.
Borrower's internally prepared unaudited annual financial
statement within180 days of its fiscal year end.
Within 90 days of commencement of the new budget cycle,
a copy of Borrower's budget for the new period.
DOCUMENTATION:
All documentation, including the form of legal opinion to be
issued by Borrower's legal counsel, is subject to review and
approval by Bank of America's legal counsel.
Documentation to include:
A legal opinion of nationally recognized bond counsel,
in form and substance acceptable to Bank and its legal
counsel, that (i) the Ordinance and all documents
related to the Credit Facility have been properly
adopted, authorized and executed; and (ii) the
Ordinance and all documents related to the Credit
Facility constitute a legally binding obligation of the
Borrower, enforceable according to their terms (subject
to standard exceptions); (iii) interest payable on the
Credit Facility is excludable from net income for
purposes of federal income taxes; and (iv) Borrower
has designated the Credit Facility as a "qualified tax-
exempt obligation".
A copy of the Ordinance passed by the City Council
authorizing the issuance of the Credit Facility;
Receipt of the original signed Bond at closing.
This Summary of Terms and Conditions does not constitute a commitment to lend by Bank of
America or any of its affiliates and is presented for discussion purposes only. The actual terms and
conditions upon which Bank of America may extend credit to Borrower is subject to satisfactory
completion of due diligence, necessary credit approval and such other terms and conditions as
determined by Bank of America, in its sole discretion.
ORAL AGREEMENTS OR ORAL COMMITMENTS TO LOAN MONEY, EXTEND CREDIT, OR TO
FORBEAR FROM ENFORCING REPAYMENT OF A DEBT ARE NOT ENFORCEABLE UNDER
WASHINGTON LAW.
CrTY OF BREMERTO~, 'WASHINGTO.!\'
CONSOLIDATED LOCAL IMPROVEME1\TT DISTI'JCT NO. 2002-01
CERTIFICATE REGARDING PREP A Y1\1EI\T OF ASSESSI\1:E!\TS
I, Catherine A Johnson, Finance Officer for the City of Bremerioll, V/ ashington, certify
that the amount of assessments collected by the Treasurers office of the City fI011'l tl1e
following Jocal improvement district are as follows.
'. LID Original .. Amount .P<iid Unpaid Assessments II
Number' Assessment .. Without Interest . .
. in District.
2002-01 $467,840.59 $61,254,17 $406,586.42
TOT"A.L $467,840.59 $61.254.17 5:406.586.42
DATED this 21st day of June, 2005
CITY OF BREMERTON, WASHINGTON
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HEARING FOR APPROVAL AND CONFIRMATlOl\' ULID ASSESS]\1ENT
ROLLS UTILITY LOCAL IMPROVEMENT DISTRleT 2002-1
COUNCIL SUI\1MARY
The purpose ofthis hearing is for approval and confirmation ofthe assessments and
assessment rolls for Utility Local Improvement District (ULID) 2002-1. This ULID is a
portion of a large project known as the W-650 Pressure Zone Improvements. This project
is in the vicinity of the west end of We mer Road (see attached map). The total project
consisted of a large water reservoir, a water pump station and approximately 15,000 feet
of water pipe. The total cost for all these improvements was $3.1 million. The City
received EDA grants for approximately $570,000. City staff is continuing to pursue
reimbursement from the State Military Department for $400,000. The ULID portion of
this project is approximately 5,300 feet of 12-inch water distribution pipe. The estimated
assessment cost prior to bid was $928,000 or $104 per front foot. At the close of
construction the assessment cost is $467,840.59 or $52.71 per front foot. These costs
include construction, engineering, interim financing and bond sale costs. The final costs
are substantially less than originally estimated because of a good bid and considerably
less rock and blasting than anticipated. The propel1y owners ""ill have an opp0l1unity to
present obj ection to the assessments of the ULID at the hearing. Prior to the healing each
property owner was mailed a letter announcing this hearing and stating the cost of the
assessment. Upon City Council approval and confim1ation of the assessment rolls, City
staff will proceed with the bond sale.
ab, Ag::nda Bills 2005, {JLID 2002 _Assessment Roll, Hearing
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AMENDED
DATE SUBMITTED: 8-3-05
AGENDA BILL
CITY OF BREMERTON
CITY COUNCIL
BILL #
05-1'80
713
........................................................................................
NOI4-Q45
SUBJECT: Ordinance authorizing the sale Committee Meeting Date: 8-10-05
and issuance of a 2005 limited tax general COUNCIL MEETING Date: 8-17-05
obligation refunding bond for the purpose of Department: Financial Services
refinancing a portion of the outstanding 1993 Presenter: Laura Lyon
limited tax general obligation bonds. Phone: 473-5722
SUMMARY: The 1993 limited tax general obligation bond issue provides the option to call (at par)
bonds with a maturity date on or after December 1, 2006. The option to exercise this call becomes
effective on December 1, 2005. This ordinance provides for the issuance of a limited tax general
obligation refunding bond - the proceeds of which will be used to refund, on a current basis, and
defease the 1993 Bonds maturing on or after December 1, 2006 and to pay costs related to the sale
and issuance of the refunding bond. This refunding will provide a debt service savings to tpp City.
Bank of America, N.A. has proposed, by way ofthe non-binding proposal letter (b"- ] -,rr '~ --1, :08'"5 to
purchase such limited tax general obligation bond upon the terms and conditions set forth in the
authorizing ordinance. .
ATTACHMENTS: Ordinance, Discussion Memo, and Proposoo Term Sheet from Bank of America
FISCAL IMP ACTS (Include Budgeted Amount): The bonds to be refinanced have a par amount of
$\)b~,~have maturities fro, ~j01l06 through 12/01112. The average coupon rate of these bonds
is 5.53% and the average life is : years. The refunding bonds have the same maturity dates with an
anticipated true interest cost of~~ and average life of :t:tyears. Net present value of debt service
savings is expected in the amou~i'of $096,1 H which repreS1"iifs a savings of ~% of the refunded
bonds. <19\06<0 ~. \ \
APPROVALS:
DEP ARTMENT DIRECTOR:
CITY ATTORNEY:
FINANCE DIRECTOR:
- MAYOR:
.I "'c .
FISCAL/BUDGET.' /-/,:( )- ~>?"l.;;"J /2""'" . ,--, ·
. ,- ..".--_4... /> _t! - ~"'
OPERATIONS: "~ i~
COUNCIL PRESIDENT: yc::{./\.---IlA. '~ ____
RECOMMENDED MOTION: D
//
./'
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CONSENT AGENDA ~
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Move to approve Ordinance No. ..fQ4::; authorizing the sale and issuance of a 2005 limited tax
general obligation refunding bond with a par amount of $\'i~ll\a::ofor the purpose of refina..'1cing a
portion of the outstanding 1993 limited tax general obligation bonds.
COIJNCIL ACTION: 0 Approve 0 Deny 0 Table
o ContinueD No Action
m
Memorandum
To:
From:
City Council
Mayor Cary Bozeman /
Laura Lyon, Director of Financial Service~
Refunding Outstanding 1993 L TGO Bonds With Maturities 12/1/06
through 12/01/12
Re:
Date:
August 03, 2005
Previously, I had reported to the Fiscal & Budget Committee and the full City Council,
that we have an opportunity to refund the outstanding 1993 L TGO Bonds with maturity
dates of 12/01/06 and beyond. Attached is the draft ordinance authorizing the sale and
issuance of a 2005 limited tax obligation bond for the purposes of refunding a portion of
the outstanding 1993 limited tax general obligation bonds.
The candidate bonds for refinancing have a par amount of $1,685,000 and have
maturities from 12/01/06 through 12/01/12. The average coupon rate of these bonds is
5.53% and the average life is 4.6 years. Because of the relative small size of the
remaining issue, Bank of America has presented an offer to refund the bonds with a
fixed rate bank loan (as opposed to marketing a refunding bond issue) with a current
indicative rate of 3.47%. This provides a net present value debt service savings of
$96,113.03 which represents a 5.89% savings rate on the refunded bonds.
The benefit of doing this refunding as a bank loan is that it lowers the costs of issuance
(no public offering disclosure statements), and it provides rapid turn around - both of
which are very important for a refunding opportunity that is this small. The potential for
interest rates to move negatively and reduce or eliminate the savings is quite possible
and in fact our expected savings has already slightly eroded from the initial estimates.
Being able to move quickly to lock in the rate and savings is an important feature.
Bond counsel (Judy Andrews of Gottlieb Fisher & Andrews) has prepared the ordinance
and will be providing necessary opinions and support as we proceed to conclude the
debt issuance and closing process.
We will finalize the ordinance with the final terms prior to action on August 1 ih.
Cc: Cathy Johnson
CITY OF BREMERTON, WASHINGTON
ORDINANCE NO. l.\~ '-\ ~
AN ORDINANCE RELATING TO THE INCURRENCE OF
INDEBTEDNESS; PROVIDING FOR THE SALE AND
ISSUANCE OF A LIMITED TAX GENERAL OBLIGATION
REFUNDING BOND, 2005 IN THE PRINCIPAL AMOUNT
OF $1,671,000 TO REFUND, ON A CURRENT BASIS, A
PORTION OF THE CITY'S OUTSTANDING LIMITED
TAX GENERAL OBLIGATION BONDS, 1993;
PROVIDING FOR THE DATE, DENOMINATION, FORM,
TERMS, REGISTRATION PRIVILEGES, MATURITY,
INTEREST RATE AND COVENANTS OF THE BOND;
PROVIDING FOR THE ANNUAL LEVY OF TAXES TO
PAY THE PRINCIPAL THEREOF AND THE INTEREST
THEREON; ESTABLISHING A DEBT SERVICE
ACCOUNT FOR THE BOND; AND PROVIDING FOR THE
SALE AND DELIVERY OF SUCH BOND TO BANK OF
AMERICA, N.A.
WHEREAS, pursuant to Ordinance No. 4429, the City of Bremerton (the "City") has
heretofore issued and sold its Limited Tax General Obligation Bonds, 1993 (the "1993 Bonds"),
of which $1,815,000 in aggreg~te principal amount are currently outstanding; and
WHEREAS, the City reserved the right to refund and defease all or a portion of the 1993
Bonds pursuant to a refunding or defeasance plan; and
WHEREAS, pursuant to chapter 39.53 RCW, the City is authorized to sell and issue,
without an election, limited tax general obligation refunding bonds ofthe City to refund the 1993
Bonds; and
WHEREAS, the refunding, on a current basis, and defeasance of a portion of the 1993
Bonds in accordance with the Refunding Plan (hereinafter defined) will provide a debt service
savings to the City; and
WHEREAS, the City deems it necessary and advisable that a limited tax general
obligation bond in the principal amount of$1,671,000 now be issued and sold to provide funds
for the Refunding Plan; and
WHEREAS, the incurrence of indebtedness by the City will not cause the total
indebtedness of the City to be incurred without the assent of the voters of the City to exceed the
limitations set forth in Chapter 39.36 RCW; and .
f: \bremerton \ltgorefD 5
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WHEREAS, Bank of America, N.A. (the "Purchaser") has proposed, by way ofthe non-
binding proposal letter dated July 8, 2005 (the "Proposal"), to purchase such bond upon the
terms and conditions hereinafter set forth; and
WHEREAS, the City Council deems it in the best interests of the City to accept an offer
by the Purchaser to purchase such bond on the same terms and conditions as the Proposal, and to
deliver such bond to the Purchaser; NOW, THEREFORE,
THE CITY OF BREMERTON DOES ORDAIN AS FOLLOWS:
Section 1. Finding, Purpose and Description of Bond. The City authorizes the sale and
issuance of its "Limited Tax General Obligation Refunding Bond, 2005" (the "Bond") for the
purpose of providing part of the funds necessary to refund, on a current basis, and defease the
1993 Bonds maturing on or after December 1,2006 (the "Refunded 1993 Bonds"), and to pay
certain "incidental costs and costs related to the sale and issuance" (as defined in RCW
39.46.070) ofthe Bond (the "Refunding Plan").
The Bond shall be issued as a single Bond in the principal amount of$1,671,000; shall be
dated its date of issue; shall mature on December 1, 2012; and shall bear interest (computed on
the basis of a 30/360-day year) at the rate of 3.690% per annum; provided, that from and after the
date of (a) any failure by the City to pay any principal of or interest on the Bond or any fees or
other amounts due to the Purchaser hereunder, when due, or (b) receipt by the Owner of written
notice of any final determination, decision or decree, all applicable appeals periods with respect
to which shall have expired, made by the commissioner or any district director of the Internal
Revenue'Service or by any court of competent jurisdiction to the effect that interest on the Bond
is includable in gross income of the Owner for federal income tax purposes, the Bond shall bear
interest at the rate of 5.690% per annum. Interest on the Bond shall be payable semi-annually on
each June 1 and December 1 to the maturity or earlier prepayment of the Bond, beginning on
December 1,2005. Principal ofthe Bond shall be payable in annual installments on each
December 1, commencing on December 1,2005, to the maturity or earlier prepayment of the
Bond, in accordance with the amortization schedule attached hereto as Exhibit A and
incorporated herein by this reference. The Bond shall be issued in fully registered form as to
both principal and interest; shall be numbered in such manner and with any additional
designation as the City, in its capacity as registrar and paying agent for the Bond (the
"Registrar"), deems necessary for purposes of identification.
Section 2. Place, Manner and Medium of Payment. Both principal of and interest on the
Bond shall be payable in lawful money of the United States of America. Interest on the Bond
and annual principal installments and any prepaid principal thereof shall be paid by check or
draft mailed on or before the applicable payment date to the person who is named as the
registered owner thereof (the "Owner") on the registration books for the Bond maintained by the
Registrar (the "Bond Register") on the day such payment is made. Upon request ofthe City
following receipt of the final principal payment, the Owner shall surrender the Bond at the office
of the Registrar.
f:\bremelion \ltgorefD 5
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Section 3. Prepayment. The Bond shall be subject to optional prepayment prior to
maturity, in whole or in part on any date, together with a prepayment fee, plus accrued interest to
the date fixed for prepayment, upon three days notice to the Owner. The prepayment fee shall be
in an amount sufficient to compensate the Owner for any loss, cost or expense incurred by it as a
result of the prepayment, including any loss of anticipated profits and any loss or expense arising
from the liquidation or reemployment of funds obtained by it to maintain the funding of the Bond
or from fees payable to terminate the deposits from which such funds were obtained. The City
shall also pay any customary administrative fees charged by the Owner in connection with the
foregoing. For purposes of calculating the prepayment fee, the Owner shall be deemed to have
funded the Bond by a matching deposit or other borrowing in the applicable interbank market,
whether or not the Bond was in fact so funded.
Section 4. Debt Limit Not Exceeded. The City finds and covenants that the Bond is
issued within all constitutional and statutory debt limitations presently applicable to the City.
Section 5. Pledge of Full Faith, Credit and Resources. The Bond is a limited tax general
obligation of the City. Unless the principal of and interest on the Bond are paid from other
sources, so long as the Bond is outstanding, the City hereby irrevocably covenants to make
annual levies oftaxes upon all property within the City subject to taxation without a vote in
amounts sufficient, together with any other money legally available therefor, to pay such
principal and interest as the same shall become due. The City hereby irrevocably pledges its full
faith, credit and resources to the annual levy and collection of such taxes and for the prompt
payment of such principal and interest.
The City hereby irrevocably covenants that the annual tax provided for herein to be
levied for the payment of the principal of and interest on the Bond shall be within and as a part of
the tax levy permitted the City without a vote and that a sufficient portion of each such annual
tax levy to be made so long as the Bond is outstanding, together with any other money legally
available therefor, will be and is hereby set aside, pledged and appropriated for the payment of
the principal of and interest on the Bond as the same shall become due.
Section 6. Form of Bond. The Bond shall be typewritten, printed, lithographed or
multicopied on good bond paper in a form consistent with !=his Ordinance and Washington law.
Section 7. Execution of Bond. The Bond shall be signed on behalf ofthe City with the
facsimile or manual signatures of the Mayor and the City Clerk, and shall have the seal of the
City impressed or a facsimile thereof imprinted thereon. '
In case either or both of the officers who shall have executed the Bond shall cease to be
such officer or officers of the City before the Bond shall have been authenticated or delivered by
the Registrar or issued by the City, the Bond nevertheless may be authenticated, delivered and
issued and upon such authentication, delivery and issuance, shall be as binding upon the City as
though those who signed the same had continued to be such officers of the City. The Bond also
may be signed and attested on behalf of the City by such persons as at the actual date of
execution of the Bond shall be the proper officers of the City although at the original date of the
Bond such persons were not such officers ofthe City.
f: \bremerton \ltgorefO 5
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Section 8. Registration. The Registrar shall keep, or cause to be kept, the Bond Register
at the office ofthe Registrar.
The City may deem and treat the Owner of the Bond as the absolute owner thereof for all
purposes, and the City shall not be affected by any notice to the contrary. Payment ofthe Bond
shall be made only as described in Section 2 hereof. All such payments made as provided in
Section 2 hereof shall be valid and shall satisfy and discharge the liability of the City upon the
Bond to the extent of the amount or amounts so paid.
The registered ownership of the Bond shall not be transferable, except for transfer to a
successor in interest to the Owner as a result of a merger or consolidation or sale of substantially
all assets of the Owner.
The City covenants that, until the Bond shall have been surrendered and cancelled, it will
maintain a system of recording the ownership of the Bond that complies with the provisions of
the Internal Revenue Code of 1986, as amended (the "Code").
Section 9. Mutilated, Lost, Stolen or Destroyed Bond. If the Bond becomes mutilated;
lost, stolen or destroyed, the City may issue and deliver a new Bond of the same number and
interest rate, for the same principal amount, and of like tenor and effect in substitution therefor,
all in accordance with law. If such mutilated, lost, stolen or destroyed Bond has matured, the
City, at its option, may pay the same without the surrender thereof. However, no such
substitution or payment shall be made unless and until the applicant shall furnish (a) evidence
satisfactory to the City of the destruction or loss of the original Bond and of the ownership
thereof, and (b) such additional security, indemnity or evidence as may be required by or on
behalf of the City. No substitute Bond shall be furnished unless the applicant shall reimburse the
City for its expenses in the furnishing thereof.
Section 10. Defeasance. Ifmoney and/or "Government Obligations" (as such
obligations are defined in Chapter 39.53 RCW, as now in existence or hereafter amended)
maturing at such times(s) and bearing such interest to be earned thereon (without any
reinvestment thereof) as will provide a series of payments which shall be sufficient, together
with any money initially deposited, to provide for the payment of the principal of and interest on
all or a portion of the Bond, when due in accordance with its terms and in accordance with a
refunding plan adopted by the City, are set aside in a special fund (hereinafter called the "trust
account") to effect such payment and are pledged irrevocably for the purpose of effecting such
payment, then no further payments need be made into the Bond Fund for the payment of the
principal of and the interest on the Bond, the Owner thereof shall cease to be entitled to any lien,
benefit or security of this Ordinance except for the right to receive the money and the principal
and interest proceeds on the obligations set aside in the trust account, and the Bond shall no
longer be deemed to be outstanding hereunder.
Section 11. Sale of the Bond. The Purchaser has presented the Proposal to the City
pursuant to which the Purchaser has proposed to purchase the Bond, under the terms and
conditions provided in the Proposal, subject to credit approval, which has since been obtained,
f:\bremerton \ItgorefO 5
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which written Proposal is on file with the City Clerk and is incorporated herein by this reference.
The City Council finds that selling the Bond according to the terms of the Proposal is in the
City's best interest and therefore authorizes the acceptance of an offer of the Purchaser to
purchase the Bond in accordance with the terms contained in the Proposal and authorizes the
execution by City officials of any written offer to purchase in accordance with the terms of the
Proposal. Upon purchase of the Bond, the City shall pay to the Purchaser an origination fee
equal to 0.10% of the original principal amount of the Bond, and shall payor reimburse the
Purchaser for the payment of its legal expenses with respect to the purchase of the Bond, not to
exceed $500.
The Bond will be printed or multi copied at City expense and will be delivered to the
Purchaser in accordance with the tenns of the Proposal with the approving legal opinion of
Gottlieb, Fisher & Andrews, PLLC, bond counsel of Seattle, Washington, relative to the issuance
of the Bond, printed on or attached to the Bond. Bond counsel has not been engaged to
participate in the preparation or review of, or express any opinion concerning the completeness
or accuracy of any official statement or other disclosure documentation used in connection with
the offer or sale of the Bond by any person, and bond counsel's opinion shall so state. Bond
counsel has not been retained to monitor, and shall not be responsible for monitoring, the City's
compliance with any federal law or regulations to maintain the tax -exempt status of the interest
on the Bond.
Section 12. Delivery of Bond; Temporary Bond. The proper City officials, including,
but not limited to, the Director of Financial Services, are authorized and directed to execute
and/or approve, as appropriate, all documents, and to do everything necessary for the preparation
and delivery of a transcript of proceedings pertaining to the Bond, and the printing, execution
and prompt delivery of the Bond to the Purchaser and for the proper application and use of the
proceeds of the sale thereof.
lfthe definitive Bond is not ready for delivery by the date established for closing (the
"Closing"), the City Director of Financial Services, upon the approval ofthe Purchaser, may
cause to be issued and delivered to the Purchaser a temporary Bond with appropriate omissions,
changes and additions. Any temporary Bond shall be entitled and subject to the same benefits
and provisions of this ordinance with respect to the payment, security and obligation thereof as
the definitive Bond authorized hereby. Such temporary Bond shall be exchangeable without cost
to the Owner thereof for the definitive Bond when the latter is ready for delivery.
Section 13. Call of Refunded 1999 Bonds for Redemption. The City hereby calls the
1993 Bonds maturing on or after-December 1,2006 for redemption on December 1,2005, at a
redemption price of par plus accrued interest. Such call for redemption shall become irrevocable
upon delivery of the Bond at Closing.
Section 14. Acquisition of Escrow Obligations. The proper City officials, including, but
not limited to, the Director of Financial Services, shall, at or prior to closing, make appropriate
arrangements for the payment for and delivery of any Escrow Obligations (defined in the Escrow
Agreement hereinafter defined) which are to be purchased in the open market pursuant to the
Refunding Plan; and shall, prior to closing, deliver or cause to be delivered to the Federal
f: \bremelton Iltgoref05
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Reserve Bank in Seattle, Washington, subscriptions for any Escrow Obligations which are to be
acquired from the United States Bureau of Public Debt pursuant to the Refunding Plan described
in the Escrow Agreement (the "Escrow Agreement"), dated as of the date of Closing, between
the City and The Bank of New York, as escrow trustee (the "Escrow Trustee"). The maturing
principal of and the interest on such Escrow Obligations, together with the Initial Cash to be
provided to the Escrow Trustee pursuant to the Refunding Plan, shall be sufficient to pay all of
the interest to become due on the Refunded 1993 Bonds from Closing to and including
December 1, 2005, when due, and to redeem on said date, all ofthe outstanding Refunded 1993
Bonds at a redemption price of par and interest accrued thereon to the date of redemption.
The Escrow Trustee shall designate in any such subscriptions that all the principal of and
interest on the Escrow Obligations subscribed for with the United States Bureau of Public Debt
shall be payable to the Escrow Trustee. Such subscription may be amended as permitted by
federal law .
Section 15. Escrow Agreement. The Escrow Agreement, in substantially the same form
as the draft dated August 17,2005, on file with the City Clerk, is hereby approved in order to
accomplish the defeasance of the Refunded 1993 Bonds. The Director of Financial Services is
authorized and directed to (a) execute and to deliver said Escrow Agreement, on behalf ofthe
City, to the Escrow Trustee on or before Closing, with such changes as the Director of Financial
Services deems to be in the best interests of the City; and such execution and delivery of the
Escrow Agreement shall evidence irrevocably the approval of the executed Escrow Agreement
by the City; and (b) cause the Escrow Trustee to deliver notices of defeasance and redemption of
the Refunded 1993 Bonds in accordance with the Escrow Agreement.
Section 16. Establishment of Bond Fund; Application of Bond Proceeds. There is
hereby created and established in the office ofthe Director of Financial Services a special
account to be designated as the "Limited Tax General Obligation Refunding Bond Account,
2005" (the "Bond Account") in the Bond Fund.
The money and investments in the Bond Account shall be used by the City, together with
any other money legally available and designated therefor, to pay the principal of and interest on
the Bond, when due.
Any rounding amount received by the City upon the sale of the Bond shall be deposited
into the Bond Fund and shall be applied to the payment of interest coming due on the Bond.
All ofthe net proceeds of the Bond (net ofthe origination fee to be retained by the
Purchaser and any rounding amount) shall be paid by the City to the Escrow Trustee at Closing
to be applied as set forth in the Escrow Agreement.
Section 17. Tax-Exemption Covenants. The City covenants that it will not take or
permit to be taken on its behalf any action that would adversely affect the exclusion of the
interest on the Bond from gross income for purposes of federal income taxation, and will take or
require to be taken such acts as may be permitted by Washington law and as may from time to
time be required under applicable law to continue the exclusion of the interest on the Bond from
f:\bremerton \ltgorefO 5
6
I -
gross income for purposes of federal income taxation. Without limiting the generality of the
foregoing, the City will not invest or make or permit any use of the proceeds of the Bond or of its
other money at any time during the term of the Bond which would cause the Bond to be an
"arbitrage bond" within the meaning of Section 148 of the Code.
The City covenants that, ifthe City issues more than $5,000,000 in tax-exempt bonds in
the calendar year 2005 and all the proceeds of the Bond have not been spent within six months
from the date of issuance of the Bond, it will calculate or cause to be calculated, and shall rebate
to the United States, all earnings from the investment of Bond proceeds that are in excess ofthe
amount that would have been earned had the yield on such investments been equal to the yield
on the Bond, plus income derived from such excess earnings, to the extent and in the manner
required by Section 148 of the Code.
The City has not been notified of any listing or proposed listing by the Internal Revenue
Service to the effect that the City is a bond issuer the arbitrage certifications of which may not be
relied upon.
The City will take no actions and will make no use of the proceeds of the Bond or any
other funds held under this Ordinance which would cause the Bond to be treated as a "private
activity bond" (as defined in Section 141 (b) of the Code) subject to treatment under said
Section 141(b) as an obligation not described in Section 103(a) ofthe Code, unless the tax
exemption thereof is not affected.
The City hereby designates the Bond as a "qualified tax-exempt obligation" for purposes
of Section 265 of the Code (relating to the deduction by financial institutions of the interest
incurred to carry tax-exempt debt) and authorizes and directs the proper City officials to execute
and deliver all documents necessary to evidence such designation to any and all interested
parties. The City further covenants not to issue more than $10,000,000 of such "qualified tax-
exempt obligations" during 2005.
Section 18. Financial Reports. The City agrees to provide the Owner (a) a copy ofthe
City's annual State Audit Report as soon as such report is available, together with unaudited
annual financial statements within 180 days of the completion of each fiscal year; and (b) a copy
of the City's annual budget within ninety days of the budget cycle.
Section 19. Contract; Severability. The covenants contained in this Ordinance shall
constitute a contract between the City and the Owner of the Bond. The City unconditionally
covenants that it will keep and perform all of the covenants of the Bond and this Ordinance. If
anyone or more of the provisions of this Ordinance shall be declared unconstitutional orinvalid
for any reason, such decision shall not affect the validity of the remaining provisions of this
Ordinance or the Bond, and this Ordinance and the Bond shall be construed and enforced as if
such unconstitutional or invalid provision had not been contained herein.
Section 20. Effective Date. This ordinance shall take effect and be in full force ten days
after passage and publication of an approved summary, consisting of the title.
f: \bremerton \ltgorefO 5
7
APPROVED by the City Council of the City of Bremerton, Washington, the _ day
of August, 2005.
PASSED by the City Council of the City of Bremerton, Washington, this _ day of
August, 2005.
Daren Nygren, Council President
APPROVED this _ day of August, 2005.
Cary Bozeman, Mayor
ATTEST:
Paula Johnston, City Clerk
APPROVED AS TO FORM:
By
Daniel S. Gottlieb, Bond Counsel
PUBLISHED:
EFFECTNE DATE:
ORDINANCE NO.
f\bremerton \ltgoreiV5
8
BOND DEBT SERVICE
CITY OF BREMERTON
LTGO Refunding Bond, 2005 (ref93LT)
Period Annual
Ending Principal Coupon Interest Debt Service Debt Service
09/06/2005
12/01/2005 26,000 3.690% 14,729.87 40,729.87 40,729.87
06/01/2006 30,687.48 30,687.48
12/01/2006 207,000 3.690% 30,856.09 237,856.09 268,543.57
06/01/2007 26,825.89 26,825.89
12/01/2007 215,000 3.690% 26,973.29 241,973.29 268,799.18
06/01/2008 22,940.42 22,940.42
12/01/2008 226,000 3.690% 22,940.42 248,940.42 271,880.84
06/01/2009 18,599.04 18,599.04
12/01/2009 233,000 3.690% 18,701.23 251,701.23 270,300.27
06/01/2010 14,252.42 14,252.42
12/01/2010 244,000 3.690% 14,330.73 258,330.73 272,583.15
06/01/2011 9,700.60 9,700.60
12/01/2011 255,000 3.690% 9,753.90 264,753.90 274,454.50
06/01/2012 4,970.74 4,970.74
12/01/2012 265.000 3.690% 4,970.74 269,970.74 274,941.48
1,671,000 271,232.86 1,942,232.86 1,942,232.86
Attachment A
Ordinance No. 4945
Aug 17, 2005 9:54 am Prepared by Banc of America Securities LLC
(Finance 5.015 BREMRTON:BREM-05REFL,05REFL) Page 6
I "
I
',"",>' ,", ',,^"',
m
~: ~1~r~'~"v~, c~;
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Memorandum
To:
From:
City Council
Mayor Cary Bozeman I /
Laura Lyon, Director of Financial service';
Re:
Refunding Outstanding 1993 L TGO Bonds With Maturities 12/1/06
through 12/01/12
Date:
August 17, 2005
Previously, I had reported to the Fiscal & Budget Committee and the full City Council,
that we have an opportunity to refund the outstanding 1993 L TGO Bonds with maturity
dates of 12/01/06 and beyond. Attached is an ordinance authorizing the sale and
issuance of a 2005 limited tax obligation bond for the purposes of refunding a portion of
the outstanding 1993 limited tax general obligation bonds.
The candidate bonds for refinancing have a par amount of $1 ,630,000 and have
maturities from 12/01/06 through 12/01/12. The average coupon rate ofthese bonds is
5.53% and the average life is 4.5 years. Because of the relative small size of the
remaining issue, Bank of America has presented an offer to refund the bonds with a
fixed rate bank loan (as opposed to marketing a refunding bond issue) with a coupon
rate of 3.69%. This provides a net present value debt service savings of $99,635.96
which represents a 6.11 % savings rate on the refunded bonds.
The benefit of doing this refunding as a bank Joan is that it lowers the costs of issuance
(no public offering disclosure statements), and it provides rapid turn around - both of
which are very important for a refunding opportunity that is this small. The potential for
interest rates to move negatively and reduce or eliminate the savings is quite possible
and in fact our expected savings has already slightly eroded from the initial estimates.
Being able to move quickly to lock in the rate and savings is an important feature.
Bond counsel (Judy Andrews and Dan Gottlieb of Gottlieb Fisher & Andrews) have
prepared the ordinance and will be providing necessary opinions and support as we
proceed to conclude the debt issuance and closing process.
Cc: Cathy Johnson
SOURCES AND USES OF FUNDS
CITY OF BREMERTON
L TOO Refunding Bond, 2005 (ref 93L T)
Dated Date
Delivery Date
09/06/2005
09/06/2005
Sources:
Bond Proceeds:
Par Amount
1,671,000.00
1,671,000.00
Uses:
Refunding Escrow Deposits:
Cash Deposit
SLG Purchases
0.29
1,661,309.00
1,661,309.29
Delivery Date Expenses:
Bond Counsel
Origination Fee
Escrow Agent
Bank Counsel
6,919.38
1,671.00
300.00
500.00
9,390.38
Other Uses of Funds:
Additional Proceeds
300.33
1,671,000.00
Aug 17,2005 9:54 am Prepared by Bane of America Securities LLC
(Finance 5.015 BREMRTON:BREM-05REFL,05REFL) Page 1
SUMMARY OF REFUNDING RESULTS
CITY OF BREMERTON
LTGO Refunding Bond, 2005 (ref93LT)
Dated Date
Delivery Date
Arbitrage yield
Escrow yield
09/06/2005
09/06/2005
3.769496%
3.428207%
Bond Par Amount
True Interest Cost
Net Interest Cost
Average Coupon
Average Life
1,671,000.00
3.743850%
3.742928%
3.742928%
4.337
Par amount of refunded bonds
Average coupon of refunded bonds
Average life of refunded bonds
1,630,000.00
5.533300%
4.466
PV of prior debt to 09/06/2005 @ 3.769496%
Net PV Savings
Percentage savings of refunded bonds
Percentage savings of refunding bonds
Percentage savings of refunding proceeds
1,768,664.63
99,635.96
6.112636%
5.962655%
5.962655%
Aug 17, 2005 9:54 am Prepared by Bane of America Securities LLC
(Finance 5.015 BREMRTON:BREM-05REFL,05REFL) Page 2
SAVINGS
CITY OF BREMERTON
L TGO Refunding Bond, 2005 (ref 93L T)
Present Value
Prior Refunding Annual to 09/06/2005
Date Debt Service Debt Service Savings Savings @ 3.7694958%
12/01/2005 44,696.25 40,729.87 3,966.38 3,966.38 3,931.56
06/01/2006 44,696.25 30,687.48 14,008.77 13,628.92
12/01/2006 239,696.25 237,856.09 1,840.16 15,848.93 1,757.15
06/01/2007 39,528.75 26,825.89 12,702.86 11,905.42
12/01/2007 244,528.75 241,973.29 2,555.46 15,258.32 2,350.73
06/01/2008 34,045.00 22,940.42 11,104.58 10,025.98
12/0112008 254,045.00 248,940.42 5.104.58 16,209.16 4,523.51
06/01/2009 28,050.00 18,599.04 9,450.96 8,220.20
12/01/2009 258,050.00 251,701.23 6,348.77 15,799.73 5,419.84
06/01/20 I 0 21,782.50 14,252.42 7,530.08 6,309.39
12/0112010 266,782.50 258,330.73 8,451.77 15,981.85 6,950.67
06/01/2011 14,983.75 9,700.60 5,283.15 4,264.45
12/01/2011 274,983.75 264,753.90 10,229.85 15,513.00 8,104.57
06/01/2012 7,768.75 4,970.74 2,798.01 2,175.71
12/0112012 282,768.75 269,970.74 12,798.01 15,596.02 9,767.53
2,056,406.25 1,942,232.86 114,173.39 114,173.39 99,335.63
Savings Summary
PV of savings from cash flow 99,335.63
Plus: Refunding funds on hand 300.33
Net PV Savings 99,635.96
i
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,I
Aug 17, 2005 9:54 am Prepared by Banc of America Securities LLC
(Finance 5.015 BREMRTON:BREM-05REFL,05REFL) Page 3
BOND SUMMARY STATISTICS
CITY OF BREMERTON
LTGO Refunding Bond, 2005 (ref93LT)
Dated Date
Delivery Date
Last Maturity
09/06/2005
09/06/2005
12/01/2012
Arbitrage Yield
True Interest Cost (TIC)
Net Interest Cost (NIC)
All-In TIC
Average Coupon
3.769496%
3.743850%
3.742928%
3.888439%
3.742928%
Average Life (years)
Duration ofIssue (years)
4.337
3.975
Par Amount
Bond Proceeds
Total Interest
Net Interest
Total Debt Service
Maximum Annual Debt Service
Average Annual Debt Service
1,671,000.00
1,671,000.00
271,232.86
271,232.86
1,942,232.86
274,941.48
268,408.38
Underwriter's Fees (per $1000)
Average Takedown
Other Fee
Total Underwriter's Discount
Bid Price
100.000000
Serial Bond
Par Average Average
Value Price Coupon Life
1,671,000.00 100.000 3.743% 4.337
1,671,000.00 4.337
All-In Arbitrage
TIC TIC Yield
1,671,000.00 1,671,000.00 1,671,000.00
Bond Component
Par Value
+ Accrued Interest
+ Premium (Discount)
- Underwriter's Discount
- Cost ofIssuance Expense
- Other Amounts
-9,390.38
-1,671.00
Target Value
1,671,000.00
09/06/2005
3.743850%
1,661,609.62
1,669,329.00
Target Date
Yield
09/06/2005
3.888439%
09/06/2005
3.769496%
Aug 17, 2005 9:54 am Prepared by Bane of America Securities LLC
(Finance 5.015 BREMRTON:BREM-05REFL,05REFL) Page 4
BOND PRICING
CITY OF BREMERTON
LTGO Refunding Bond, 2005 (ref93LT)
Bond Component
Maturity
Date
Serial Bond:
12/01/2005
12/01/2006
12/01/2007
12/01/2008
12/01/2009
12/01/2010
12/01/2011
12/01/2012
Dated Date
Delivery Date
First Coupon
Par Amount
Original Issue Discount
Production
Underwriter's Discount
Purchase Price
Accrued Interest
Net Proceeds
Amount Rate Yield Price
26,000 3.690% 3.690% 100.000
207,000 3.690% 3.690% 100.000
215,000 3.690% 3.690% 100.000
226,000 3.690% 3.690% 100.000
233,000 3.690% 3.690% 100.000
244,000 3.690% 3.690% 100.000
255,000 3.690% 3.690% 100.000
265,000 3.690% 3.690% 100.000
1,671,000
09/06/2005
09/06/2005
12/01/2005
1,671,000.00
1,671,000.00 100.000000%
1,671,000.00 100.000000%
1,671,000.00
Aug 17,2005 9:54 am Prepared by Bane of America Securities LLC
(Finance 5.015 BREMRTON:BREM-05REFL,05REFL) Page 5
BOND DEBT SERVICE
CITY OF BREMERTON
LTGO Refunding Bond, 2005 (ref 93LT)
Period Annual
Ending Principal Coupon Interest Debt Service Debt Service
09/06/2005
12/0112005 26,000 3.690% 14,729.87 40,729.87 40,729.87
06/01/2006 30.687.48 30,687.48
12/01/2006 207,000 3.690% 30,856.09 237,856.09 268,543.57
06/01/2007 26,825.89 26,825.89
12/01/2007 215,000 3.690% 26,973.29 241,973.29 268,799.18
06/0112008 22,940.42 22,940.42
12/01/2008 226,000 3.690% 22,940.42 248,940.42 271,880.84
06/01/2009 18,599.04 18,599.04
12/01/2009 233,000 3.690% 18,701.23 251,701.23 270,300.27
06/01/2010 14,252.42 14,252.42
12/01/2010 244,000 3.690% 14,330.73 258,330.73 272,583.15
06/01/2011 9,700.60 9,700.60
12/01/2011 255,000 3.690% 9,753.90 264,753.90 274,454.50
06/01/2012 4,970.74 4,970.74
12/01/2012 265.000 3.690% 4,970.74 269,970.74 274,941.48
1,671,000 271,232.86 1,942,232.86 1,942,232.86
Aug 17, 2005 9:54 am Prepared by Banc of America Securities LLC
(Finance 5.015 BREMRTON:BREM-05REFL,05REFL) Page 6
BOND DEBT SERVICE
CITY OF BREMERTON
LTGO Refunding Bond, 2005 (ref93LT)
Period
Ending Principal Coupon Interest Debt Service
12/0112005 26,000 3.690% 14,729.87 40,729.87
12/0112006 207,000 3.690% 61,543.57 268,543.57
12/0112007 215,000 3.690% 53,799.18 268,799.18
12/0112008 226,000 3.690% 45,880.84 271,880.84
12/0112009 233,000 3.690% 37,300.27 270,300.27
12/0112010 244,000 3.690% 28,583.15 272,583.15
12/01/201 I 255,000 3.690% 19,454.50 274,454.50
12/0112012 265,000 3.690% 9,941.48 274,941.48
1,671,000 271,232.86 1,942,232.86
Aug 17,2005 9:54 am Prepared by Banc of America Securities LLC
(Finance 5.015 BREMRTON:BREM-OSREFL,05REFL) Page 7
SUMMARY OF BONDS REFUNDED
CITY OF BREMERTON
LTGO Refunding Bond, 2005 (ref 93LT)
Maturity Interest Par Call Call
Bond Date Rate Amount Date Price
LTGO BONDS, 1993, 93LT:
SERIAL 12/01/2006 5.300% 195.000.00 12/01/2005 100.000
12/01/2007 5.350% 205.000.00 12/01/2005 100.000
12/01/2008 5.450% 220,000.00 12/01/2005 100.000
12/01/2009 5.450% 230,000.00 12/01/2005 100.000
12/01/2010 5.550% 245,000.00 12/01/2005 100.000
12/01/2011 5.550% 260,000.00 12/01/2005 100.000
12/01/2012 5.650% 275,000.00 12/01/2005 100.000
1,630,000.00
Aug 17,2005 9:54 am Prepared by Bane of America Securities LLC
(Finance 5.015 BREMRTON:BREM-05REFL,05REFL) Page 8
PRIOR BOND DEBT SERVICE
CITY OF BREMERTON
LTGO Refunding Bond, 2005 (ref 93LT)
LTGO BONDS, 1993 (93LT)
Period Annual
Ending Principal Coupon Interest Debt Service Debt Service
09/06/2005
12/01/2005 44,696.25 44,696.25 44,696.25
06/01/2006 44,696.25 44,696.25
12/01/2006 195,000 5.300% 44,696.25 239,696.25 284,392.50
06/01/2007 39,528.75 39,528.75
12/01/2007 205,000 5.350% 39,528.75 244,528.75 284,057.50
06/01/2008 34,045.00 34,045.00
12/01/2008 220,000 5.450% 34,045.00 254,045.00 288,090.00
06/01/2009 28,050.00 28,050.00
12/01/2009 230,000 5.450% 28,050.00 258,050.00 286,1 00.00
06/01/2010 21,782.50 21,782.50
12/01/2010 245.000 5.550% 21,782.50 266,782.50 288,565.00
06/01/20 II 14,983.75 14,983.75
12/01/2011 260.000 5.550% 14,983.75 274,983.75 289,967.50
06/01/2012 7,768.75 7,768.75
12/01/2012 275,000 5.650% 7,768.75 282,768.75 290,537.50
1,630,000 426,406.25 2,056,406.25 2,056,406.25
Aug 17,2005 9;54 am Prepared by Banc of America Securities LLC
(Finance 5.015 BREMRTON;BREM-05REFL,05REFL) Page 9
UNREFUNDED BOND DEBT SERVICE
CITY OF BREMERTON
LTGO Refunding Bond, 2005 (ref 93LT)
Period
Ending
Annual
Principal Coupon Interest Debt Service Debt Service
185,000 5.150% 4,763.75 189,763.75 189,763.75
185,000 4,763.75 189,763.75 189,763.75
09/06/2005
12/01/2005
Aug 17,2005 9:54 am Prepared by Bane of America Securities LLC
(Finance 5.015 BREMRTON:BREM-05REFL,05REFL) Page 10
PROOF OF ARBITRAGE YIELD
CITY OF BREMERTON
L TGO Refunding Bond, 2005 (ref 93L T)
Date
Debt Service
12/01/2005
06/01/2006
12/01/2006
06/01/2007
12/01/2007
06/01/2008
12/01/2008
06/01/2009
12/0112009
06/01/2010
12/01/2010
06/01/2011
12/01/2011
06/01/2012
12/01/2012
40,729.87
30,687.48
237,856.09
26,825.89
241,973.29
22,940.42
248,940.42
18,599.04
251,701.23
14,252.42
258,330.73
9,700.60
264,753.90
4,970.74
269,970.74
Present Value
to 09/06/2005
@ 3.7694958%
40,372.32
29,855.39
227,125.86
25,141.85
222,587.82
20,712.20
220,602.81
16,176.96
214,873.37
11,941.99
212,449.14
7,830.12
209,750.46
3,865.20
206,043.50
1,942,232.86
1,669,329.00
Proceeds Summarv
Delivery date
Par Value
Arbitrage expenses
Target for yield calculation
09/06/2005
1,671,000.00
-1,671.00
1,669,329.00
Aug 17, 2005 9:54 am Prepared by Banc of America Securities LLC
(Finance 5.015 BREMRTON:BREM-05REFL,05REFL) Page 11
ESCROW REQUIREMENTS
CITY OF BREMERTON
LTGO Refunding Bond, 2005 (ref 93LT)
Period
Ending
Interest
Principal
Redeemed
Total
12/01/2005
44,696.25
1,630,000.00
1,674,696.25
44,696.25
1,630,000.00
1,674,696.25
Aug 17,2005 9:54 am Prepared by Bane of America Securities LLC
(Finance 5.015 BREMRTON:BREM-05REFL,05REFL) Page 12
ESCROW DESCRIPTIONS
CITY OF BREMERTON
L TGO Refunding Bond, 2005 (ref 93L T)
Type of
Security
Type of
SLGS
Maturity
Date
First Int
Pmt Date
Par
Amount
Rate
Max
Rate
Sep 6,2005:
SLG
Certificate
12/01/2005 12/01/2005
1,661,309 3.420% 3.420%
1,661,309
SLGS Summary
SLGS Rates File
Total Certificates of Indebtedness
17 AUG05
1,661,309.00
Aug 17, 2005 9:54 am Prepared by Bane of America Securities LLC
(Finance 5.015 BREMRTON:BREM-05REFL,05REFL) Page 13
I .
ESCROW COST
CITY OF BREMERTON
L TGO Refunding Bond, 2005 (ref 93L T)
Type of Maturity Par Total
Security Date Amount Rate Cost
SLG 12/01/2005 1,661,309 3.420% 1,661,309.00
1,661,309 1,661,309.00
Purchase Cost of Cash Total
Date Securities Deposit Escrow Cost Yield
09/06/2005 1,661,309 0.29 1,661,309.29 3.428207%
1,661,309 0.29 1,661,309.29
Aug 17, 2005 9:54 am Prepared by Banc of America Securities LLC
(Finance 5.015 BREMRTON:BREM-05REFL,05REFL) Page 14
ESCROW CASH FLOW
CITY OF BREMERTON
LTGO Refunding Bond, 2005 (ref 93LT)
Present Value
Net Escrow to 09/06/2005
Date Principal Interest Receipts @ 3.4282067%
12/01/2005 1,661,309.00 13.386.96 1,674,695.96 1,661,309.00
1,661,309.00 13,386.96 1,674,695.96 1,661,309.00
Escrow Cost Summary
Purchase date
Purchase cost of securities
09/06/2005
1,661,309.00
Target for yield calculation
1,661,309.00
Aug 17, 2005 9:54 am Prepared by Banc of America Securities LLC
(Finance 5.015 BREMRTON:BREM-05REFL,05REFL) Page 15
I .
ESCROW SUFFICIENCY
CITY OF BREMERTON
LTGO Refunding Bond, 2005 (ref 93LT)
Date
Escrow
Requirement
Net Escrow
Receipts
Excess
Receipts
Excess
Balance
09/06/2005
12/0112005
1,674,696.25
0.29
1,674,695.96
0.29
-0.29
0.29
1,674,696.25
1,674,696.25
0.00
Aug 17,2005 9:54 am Prepared by Banc of America Securities LLC
(Finance 5.015 BREMRTON:BREM-05REFL,05REFL) Page 16
ESCROW STATISTICS
CITY OF BREMERTON
L TGO Refunding Bond, 2005 (ref 93L T)
Total
Escrow Cost
Modified
Duration
(years)
Yield to
Receipt
Date
Yield to
Disbursement
Date
Perfect
Escrow
Cost
Value of
Negative
Arbitrage
Cost of
Dead Time
Global Proceeds Escrow:
1,661,309.29
0.232
3.428207%
3.428207%
1,659,994.75
1.314.54
1,661,309.29
1,659,994.75
1,314.54
0.00
Delivery date
Arbitrage yield
09/06/2005
3.769496%
Aug 17,2005 9:54 am Prepared by Banc of America Securities LLC
(Finance 5.015 BREMRTON:BREM-05REFL,05REFL) Page 17
PROOF OF COMPOSITE ESCROW YIELD
CITY OF BREMERTON
L TGO Refunding Bond, 2005 (ref 93L T)
All restricted escrows funded bv bond proceeds
Date
Security
Receipts
Present Value
to 09/06/2005
@ 3.4282067%
12/0112005
1,674,695.96
1,661,309.00
1,674,695.96
1,661,309.00
Escrow Cost Summary
Purchase date
Purchase cost of securities
09/06/2005
1,661,309.00
Target for yield calculation
1,661,309.00
Aug 17, 2005 9:54 am Prepared by Bane of America Securities LLC
(Finance 5.015 BREMRTON:BREM-05REFL,05REFL) Page 18
I .
FORM 8038 STATISTICS
CITY OF BREMERTON
LTGO Refunding Bond, 2005 (ref 93LT)
Dated Date
Delivery Date
09/06/2005
09/06/2005
Bond Component Date Principal Coupon Price
Serial Bond:
12/01/2005 26,000.00 3.690% 100.000
12/01/2006 207,000.00 3.690% 100.000
12/01/2007 215,000.00 3.690% 100.000
12/01/2008 226,000.00 3.690% 100.000
12/01/2009 233,000.00 3.690% 100.000
12/01/2010 244,000.00 3.690% 100.000
12/01/2011 255,000.00 3.690% 100.000
12/01/2012 265,000.00 3.690% 100.000
1,671,000.00
Stated
Maturity Interest Issue Redemption
Date Rate Price at Maturity
Final Maturity 12/01/2012 3.690% 265,000.00 265,000.00
Entire Issue 1,671,000.00 1,671,000.00
Issue Price
Redemption
at Maturity
26,000.00
207,000.00
215,000.00
226,000.00
233,000.00
244,000.00
255,000.00
265,000.00
26,000.00
207,000.00
215,000.00
226,000.00
233,000.00
244,000.00
255,000.00
265,000.00
1,671,000.00
1,671,000.00
Weighted
Average
Maturity
Yield
Net
Interest
Cost
4.3366
3.7695%
3.7429%
Proceeds used for accrued interest
Proceeds used for bond issuance costs (including underwriters' discount)
Proceeds used for credit enhancement
Proceeds allocated to reasonably required reserve or replacement fund
Proceeds used to currently refund prior issues
Proceeds used to advance refund prior issues
Remaining weighted average maturity of the bonds to be currently refunded
Remaining weighted average maturity of the bonds to be advance refunded
0.00
0.00
1,671.00
0.00
1,661,309.29
0.00
4.4662
0.0000
Aug 17, 2005 9:54 am Prepared by Bane of America Securities LLC
(Finance 5.015 BREMRTON:BREM-05REFL,05REFL) Page 19
I t
FORM 8038 STATISTICS
CITY OF BREMERTON
L TGO Refunding Bond, 2005 (ref 93L T)
Refunded Bonds
Bond
Component Date Principal Coupon Price
LTGO BONDS, 1993:
SERIAL 12/01/2006 195,000.00 5.3 00% 100.000
SERIAL 12/01/2007 205,000.00 5.350% 100.000
SERIAL 12/01/2008 220,000.00 5.450% 100.000
SERIAL 12/01/2009 230,000.00 5.450% 100.000
SERIAL 12/01/2010 245.000.00 5.550% 100.000
SERIAL 12/01/20 II 260,000.00 5.550% 100.000
SERlAL 12/01/2012 275,000.00 5.650% 100.000
1,630,000.00
Issue Price
195,000.00
205,000.00
220,000.00
230,000.00
245,000.00
260,000.00
275,000.00
1,630,000.00
Last
Call
Date
Issue
Date
Remaining
Weighted
Average
Maturity
LTGO BONDS, 1993
All Refunded Issues
12/01/2005
12/01/2005
12/01/2000
4.4662
4.4662
I' t~
Aug 17, 2005 9:54 am Prepared by Bane of America Securities LLC
(Finance 5.015 BREMRTON:BREM-05REFL,05REFL) Page 20
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;f05 - jgg
~
8A
Move to approve the settlement proposal in Lassiter v. Bremerton,
U.S. District Court, Western District of Washington Cause No. 03-
5166RJB in the amount of$130,000 and authorize the City
Attorney to finalize the settlement.
R:\LEGAL\Files\Current Active Files\Lassiter\Misc\2005.08.l7 Motion re settlement.doc