Loading...
HomeMy WebLinkAbout1993-011 Home Preservation Project• ORDINANCE NO. 93-1. 1 AN ORDINANCE OF THE COUNCIL OF THE CITY OF YAKIMA, WASHINGTON, PROVIDING FOR THE ISSUANCE, SALE AND DELIVERY OF LIMITED TAX GENERAL OBLIGATION BONDS FOR THE PURPOSE OF FUNDING A PROGRAM FOR REHABILITATION OF SINGLE-FAMILY OWNER -OCCUPIED RESIDENCES; AUTHORIZING THE EXECUTION OF BONDS OF THE CITY IN THE PRINCIPAL AMOUNT OF NOT TO EXCEED $200,000; PROVIDING FOR THE DISPOSITION OF THE PROCEEDS OF SUCH BONDS; FIXING THE FORM, INTEREST RATE, TERMS, MATURITY AND COVENANTS OF SUCH BONDS; AND CREATING A FUND FROM WHICH THE PRINCIPAL OF AND INTEREST ON SUCH BONDS SHALL BE PAID. WHEREAS, the City of Yakima (the "City") is a city of the first class of the State of Washington; and WHEREAS, RCW 35.21.685 authorizes cities to assist in the development or preservation of publicly or privately owned housing for persons of low income by providing loans to the owners or developers of housing for such persons; and WHEREAS RCW 39.36.020(2) authorizes the City to borrow up to three-fourths of one percent of the value of the taxable property within the City without a vote of the people; and WHEREAS, in order to borrow money to fund a program of loans for the purposes authorized by RCW 35.21.685 at a favorable rate of interest, the City deems it advisable to issue its limited tax general obligation bonds in the principal amount of not to exceed $200,000; and WHEREAS, the City has received an offer to purchase its bonds from Pioneer National Bank which offer is acceptable to the City Council; NOW, THEREFORE, BE IT ORDAINED BY THE CITY OF YAKIMA, AS FOLLOWS: SECTION 1. Definitions. As used in this ordinance, the following words shall have the following meanings, unless a different meaning clearly appears from the context: (a) "Bonds" means the limited tax general obligation Bonds of the City in the aggregate principal amount of $200,000 to be issued pursuant to this ordinance. • (b) "Bond Fund" means the "City of Yakima Low Income Housing Bond Redemption Fund," created by Section 4 of this ordinance. (c) "Bond Year" means each one year period that ends at the close of business on March 31, 1993. (d) "City" means the City of Yakima, Washington, a municipal corporation duly organized and existing under and by virtue of the Constitution and laws of the State of Washington. (e) "Code" means the federal Internal Revenue Code of 1986, as amended. (f) "Council" means the Council of the City as the same shall be duly and regularly constituted from time to time. (g) "Final Computation Date" means the date that the last Bond is discharged. A Bond is discharged on the date that all amounts due under the terms of the Bond are actually and unconditionally due if cash is available at the place of payment and no interest accrues with respect to the Bond after such date. (h) "Finance Director" means the Director of Finance and Budget of the City, or any successor to the functions and duties of such Director of Finance and Budget. (i) "Installment Computation Date" means the last year of the fifth Bond Year and of each succeeding fifth Bond Year. (j) "Interest Rate" means the per annum rate of interest on the Bonds pursuant to Section 2 of this ordinance. (k) "Nonpurpose Payments" means, in general, any payment with respect to an investment allocated to the Bonds. The following types of payments are specifically included: (i) Direct Payments. The amount of gross proceeds of the Bond directly used to purchase the investment. Direct payments do not include brokerage commissions, administrative expenses or similar expenses. (ii) Constructive Payments. The fair market value (as of the date of allocation to the Bonds) of any investment that was not directly purchased with gross proceeds of the Bonds, but which is allocated to the Bonds. -2- LMC704 93/03/17 • • • • (iii) Payments of Rebatable Arbitrage. Any payment of Rebatable Arbitrage if such payment is made no later than the due date for such payment. (1) "Nonpurpose Receipts" means, in general, any receipt with respect to an investment allocated to the Bonds. The following types of receipts are specifically included: (i) Actual Receipts. constructively received with Actual receipts may not commissions, administrative expenses. Any amount actually or respect to an investment. be reduced by selling expenses or similar (ii) Disposition Receipts. An amount determined by treating an investment that ceases to be allocated to the Bonds (other than by reason of a sale or retirement) as if sold for fair market value on the date that the investmentceases to be allocated to the Bonds. (iii) Installment Date Receipts. The fair market value (or, for fixed rate investments, present value) of all investments allocated to the Bonds at the close of business on any Computation Date. (iv) Imputed Receipts. Any receipts that are required to be imputed and taken into account pursuant to Section 1.148-5T of the Temporary Income Tax Regulations or any successor Temporary or Final Income Tax Regulations. (m) "Program" means the program established by the City to assist persons of low income in financing the rehabilitation and preservation of their owner occupied residences. (n) "Rebate Computation Certificate" means the certificate executed by the Finance Director setting forth the methodology for computation of Rebatable Arbitrage. SECTION 2. Issuance of Bonds. The City shall, for the purpose of funding the Program, issue its Bonds in the aggregate principal amount of $200,000. The Bonds shall be designated the "City of Yakima, Washington, Limited Tax General Obligation Bonds, 1993," shall be dated April 1, 1993, shall be in fully registered form, in denominations of $5,000 or any integral multiple thereof, shall mature on April 1, 2003, and shall bear interest payable semiannually on the first day of each Neve tbe-r/October and April commencing Nev'1, 1993, at a rate of 7.25% percent October / -3- LMC704 93/03/17 per annum calculated on a basis of 365/366 days as the case may be. The City hereby appoints the Finance Director as the Bond registrar. The City shall cause a Bond register to be maintained by the Bond registrar. So long as any Bonds remain outstanding, the Bond registrar shall make all necessary provisions to permit the exchange or registration or transfer of the Bonds at its office. The Bonds shall be transferable only upon the Bond register by the registered owner thereof in person or by his attorney duly authorized in writing, upon surrender thereof, together with a written instrument of transfer satisfactory to the Bond registrar duly executed by the registered owner or his duly authorized attorney. Upon the transfer of a Bond, the Bond registrar shall issue in the name of the transferee, a new Bond in the same denomination. Both principal of and interest on the Bonds shall be payable in lawful money of the United States of America. Interest on the Bonds shall be paid by check or draft mailed on the day interest is due to the registered owners or assigns at the address appearing on the Bond register on the 15th day of the month preceding the principal and interest payment date. The final payment of principal of and interest on the Bonds shall be payable upon presentation and surrender thereof by the registered owners at the office of the Finance Director. SECTION 3. Tax Covenants The City shall comply with the provisions of this section unless, in the written opinion of nationally -recognized bond counsel to the City, such compliance is not required in order to maintain the exemption of the interest on the Bonds from federal income taxation. The City covenants that it will not take or permit to be taken on its behalf any action which would adversely affect the exemption from federal income taxation of the interest or discount, if any, on the Bonds and will take or require to be taken such acts as may reasonably be within its ability and as may from time to time be required under applicable law to continue the exemption from federal income taxation of the interest and discount, if any, on the Bonds provided, however, that the City does not represent, warrant, covenant or agree that interest on the Bonds will not be taken into account for purposes of computing the corporate or individual alternative minimum tax under Section 55 of the Code, or for purposes of computing the environmental tax on corporations under Section 59A of the Code or under any other similar treatment of interest on the Bonds. Without limiting the generality of the foregoing, the City covenants that it will not take any action or fail to take any -4- LMC704 93/03/17 • • • action with respect to the investment of the proceeds of any line of credit secured by any Bond, or other funds, which would result in constituting a Bond to be an "arbitrage bond" within the meaning of such term as used in Sections 103 and 148 of the Code or which would violate Treasury Regulations under Sections 103, 143 and 148 of the Code applicable to the Bonds. The City will comply with the requirements of Sections 103, 143 and 148 of the Code (or any successor provision thereof applicable to the Bonds) and the applicable Regulations thereunder throughout the term of the Bonds. The Council hereby finds and declares, with respect to Section 148(f)(4)(C) of the Code, that ninety-five percent or more of the net proceeds of the Bonds will be used for local governmental activities of the City. SECTION 4. Bond Redemption Fund. A special fund of the City known as the "City of Yakima Low Income Housing Bond Redemption Fund," (the "Bond Fund") has heretofore been authorized and has been created by the Finance Director. The Bond Fund shall be drawn upon for the sole purpose of paying the principal of and interest on the Bonds. Moneys on deposit in the Bond Fund not immediately needed to pay such interest or principal may temporarily be deposited in such institutions or invested in such obligations as are legal investments for City funds. Any interest or profit from the investment of such moneys shall be deposited in the Bond Fund. Any moneys remaining in the Bond Fund after payment in full of the principal of and interest on the Bonds shall be transferred to the Community Development Block Grant Fund of the City, and the Bond Fund shall be closed. The City covenants and agrees that for as long as the Bonds are outstanding and unpaid it will include in its budget and make annual levies of ad valorem taxes, within and as a part of the tax levy permitted to cities without a vote of the people, upon all taxable property within the City subject to taxation in amounts that, with other monies legally available therefor, will be sufficient to pay the principal of and interest on the Bond as the same shall become due and payable. Such taxes and other monies so pledged shall be paid directly into the Bond Fund in amounts sufficient to pay the principal of and interest on the Bonds, and none of the money in such Fund shall be used for any other purpose than the payment of the principal of and interest on the Bonds. The full faith, credit and resources of the City are hereby pledged for the prompt payment of the principal of and interest on the Bonds as the same shall become due. SECTION 5. Payment Prior to Maturity. The Bonds may not be redeemed in whole or in part in advance of their scheduled maturity date. -5- LMC704 93/03/17 SECTION 6. Application of the Proceeds of Sale of the Bonds. Proceeds of the Bonds shall be deposited in the City of Yakima Community Development Block Grant Fund held by the Finance Director and used by the City to pay the cost and expenses of the Program and costs incidental to the issuance of the Bonds. SECTION 7. Repayment of Loans. Proceeds received from the repayment of loans made to carry out the Program shall be deposited in the Community Development Block Grant Fund of the City and used for any lawful purposes of the City, including the payment of principal and interest on the Bonds. SECTION 8. Form of the Bonds. The Bonds shall be in substantially the following form: UNITED STATES OF AMERICA NO. $ STATE OF WASHINGTON YAKIMA COUNTY CITY OF YAKIMA LIMITED TAX GENERAL OBLIGATION BOND Principal Interest Maturity Date: CUSIP No.: Amount: Rate: Registered Owner: City of Yakima, Washington (the "City"), a municipal corporation organized and existing under and by virtue of the laws and Constitution of the State of Washington, hereby acknowledges itself to owe and for value received promises to pay to the Registered Owner identified above or registered assigns on 1, 2003, solely from the sources hereinafter mentioned, the Principal Amount identified above with interest thereon until such principal sum is paid. This Bond bears interest at the Interest Rate identified above on the Principal Amount identified above payable semi- annually commencing on the first day of 1993 and on the first day of each and thereafter until the Bonds are paid. This Bond is issued pursuant to duly adopted ordinances and resolutions of the City, including Ordinance No. adopted on (the "Bond Ordinance"), for the purpose of -6- LMC704 93/03/17 • • • financing a City of Yakima home preservation program, all in conformity with the Constitution and laws of the State of Washington and the ordinances of the City. The City hereby covenants and agrees with the registered owner of this Bond that it will keep and perform all of the covenants of this Bond and the Bond Ordinance. Interest on this Bond is payable in lawful money of the United States of America by check or draft mailed on the day Interest is due to the registered owner or assigns at the address appearing on the Bond register on the 15th day of the month preceding the interest payment date. The final payment of principal of and interest on the Bond shall be payable upon presentation and surrender hereof by the registered owner at the office of the Director of Finance and Budget. The City has reserved the right to redeem the Bonds of this issue in whole or in part at any time on or after April 1, 1994 without premium or penalty on thirty days' written notice to the registered owner hereof at par plus accrued interest to the date of redemption. The City hereby irrevocably covenants that it will include in its budget and levy ad valorem taxes within and as a part of the tax levy permitted to cities without a vote of the people, upon all the taxable property with the City subject to taxation, in amounts sufficient, with other monies legally available therefor, to pay the principal of and interest due on this Bond as the same shall become due and shall deposit such funds into the City of Yakima Low Income Housing Bond Redemption Fund authorized to be maintained by the Bond Ordinance. The full faith, credit and resources of the City are hereby irrevocably pledged for the prompt payment of such principal and interest. This Bond shall not be valid or become obligatory for any purpose or be entitled to any security or benefit under the Bond Ordinance until the Certificate of Authentication thereon shall have been manually signed by the Bond Registrar. It is hereby certified and declared that this Bond is issued pursuant to and in strict compliance with the constitution and laws of the State of Washington, the charter of the City, and duly adopted ordinances of the City, and that all acts, conditions and things required to have happened, been done and performed precedent to and in the issuance hereof have happened, been done, and performed. -7- LMC704 93/03/17 IN WITNESS WHEREOF, the City of Yakima, Washington, has caused this Bond to be signed with the manual or facsimile signature of the Mayor, to be attested by the manual or facsimile signature of the City Clerk, and the seal of the City to be impressed or imprinted hereon, all as of this day of , 1993. CITY OF YAKIMA, YAKIMA COUNTY By /s/ manual or facsimile signature Mayor ATTEST - /s/ manual or facsimile signature City Clerk CERTIFICATE OF AUTHENTICATION This Bond is one of the Bonds described in the within - mentioned Bond Ordinance of the City of Yakima, Washington and is dated , 1993. DIRECTOR OF FINANCE AND BUDGET, CITY OF YAKIMA Bond Registrar By Authorized Officer ASSIGNMENT FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto (name and address of assignee) the within Bond and does irrevocably constitute and appoint the Bond registrar to transfer said Bond on the books kept for -8- LMC704 93/03/17 • • • • registration thereof with full power of substitution in the premises. Date: NOTE: The signature of this Assignment must correspond with the name of the registered owner as it appears upon the face of the within bond in every particular, without alteration or enlargement or any change whatever. SECTION 8. Execution of the Bonds. The Bonds shall be executed on behalf of the City by the manual or facsimile signature of the Mayor, shall be attested by the manual or facsimile signature of the Clerk of the Council and shall have the corporate seal of the City impressed or imprinted thereon. SECTION 9. Delivery of the Bonds. The delivery of the Bonds to the Purchaser pursuant to the proposal (a copy of which is attached hereto) is hereby approved and confirmed. Such proposal is hereby accepted on the terms and conditions set forth therein and herein. SECTION 10. Authorization to Officials and Agents; Ratification of Prior Actions. The appropriate City officials, agents and representatives are hereby authorized and directed to do everything necessary including holding the public hearing required by Section 147 of the Code prior to issuance of the Bonds for the prompt issuance, execution and delivery of the Bonds, and for the proper use and application of the proceeds of the Bonds as provided in this ordinance. All actions heretofore taken by the City's officials, agents and representatives in connection with the issuance of the Bonds and in connection with the City's request for proposals to extend the lines of credit provided for herein are hereby ratified, approved and confirmed. SECTION 11. Bonds Not Designated "Oualified Tax -Exempt Obligations." The Bonds are not designated as "qualified tax- exempt obligations" as defined in Section 265(b) of the Code because they are qualified mortgage bonds which do not qualify under § 265(b) of the Code. -9- LMC704 93/03/17 SECTION 12. Lost or Destroyed Bonds. In case a Bond shall be lost, stolen or destroyed, the Bond registrar may execute and deliver a new Bond of like amount, date, and tenor to the registered owner thereof upon the owner's paying the expenses and charges of the City an the Bond registrar in connection therewith and upon his filing with the Bond registrar evidence satisfactory to said Bond registrar that such Bond was actually lost, stolen or destroyed and of his/her ownership thereof, and upon furnishing the City with indemnity satisfactory to the Bond registrar. SECTION 13. The Program. In order to conserve the supply of decent, safe and sanitary housing within the City, the city hereby establishes the Program to provide below-market rate financing for the preservation of single family residential property by persons or families of low-income. The proceeds of the Bonds shall be utilized to make loans to homeowners within the City who qualify as persons of low income. Such loans will be made pursuant to the Program. The Program shall, in all respects, comply with the provisions of Section 143 (k) (4) or (5) (as the case may be) of the Code. Eligibility guidelines for the Loan - In order to be eligible for funding under the Program, each loan must meet the requirements of Section 143 particularly including Section 143(k)(4) or (5) of the Code for maintaining the tax- exempt status of the Bonds. Each loan must meet other standards to be established by the City with respect to the eligibility of the property to be acquired, the borrower, the deed of trust or mortgage, and the terms and conditions of the deed of trust or mortgage securing the loan by the City to the borrower. Properties. Each property to be acquired must be located within the City, be a permanent structure used primarily for year-round residential use or the principal residence of the borrower, and contain no more than four dwelling units. Borrowers. Each borrower must meet eligibility requirements established or to be established by the City including having an annual income below eighty percent (801) of median income, for the standard metropolitan statistical area in which the City is located, adjusted for family size in accordance with standards to be established by the City. These income limits may hereafter be changed by the City, subject to compliance with Section 143 of the Code and state law. -10- LMC704 93/03/17 • • • • Loan Terms and Conditions. The maximum amount of a loan will be in accordance with Section 143(k) (4) or (5) of the Code, as the case may be. All loans, regardless of amount, must be secured by a recorded security instrument, which may be a junior lien upon the property. Loan Origination and Approval. The City of Yakima, Office of Housing and Neighborhood Conservation is hereby delegated the authority to establish and publish a Program Handbook containing eligibility guidelines consistent with the provisions of this Ordinance, shall be responsible for receiving applications for the loans, reviewing the applications for loans for completeness and compliance with program eligibility requirements, making credit determinations, approving the loans, closing the loans and disbursing loan proceeds. Independent escrow companies may be used for loan closing. Such office will not charge the borrowers for application fees or costs of originating, processing and closing the Loans, but will charge for actual recording fees and title insurance charges incorporated in the closing costs. SECTION 14. Arbitrage Rebate. (a) General Rule. The City will pay to the United States of America in accordance with the provisions of this section (i) at least 90 percent of the Rebatable Arbitrage with respect to the Bonds as of each Installment Computation Date, (ii) 100 percent of the Rebatable Arbitrage with respect to the Bonds as of the Final Computation Date and (iii) any income attributable to such Rebatable Arbitrage. (b) Computation of Rebatable Arbitrage. The Rebatable Arbitrage with respect to the Bonds computed in accordance with the Rebate Computation Certificate and, as of each Computation Date, will be the excess of: The Receipts Payments (i) The future value of all with respect to the Bonds; over (ii) The future value of all with respect to the Bonds. Nonpurpose Nonpurpose future value will be computed as of each Computation Date. (c) Payment Procedure. (i) The payment of Rebatable Arbitrage due as of each Installment Computation Date will be paid no -11- LMC704 93/03/17 later than the date that is 60 days after the Installment Computation Date. (ii) The payment of Rebatable Arbitrage due as of the Final Computation Date will be paid no later than the latest of (a) the date that is 60 days after the Final Computation Date, (b) the date that is 8 months after the date of issuance of the Bonds, or (c) the date 60 days after the earlier of the date that the City no longer expects to spend gross proceeds of the Bonds within 6 months of the date of issuance of the Bonds or 12 months after the date of issuance of the Bonds. (iii) Each payment of Rebatable Arbitrage will be made to the Internal Revenue Service Center, Philadelphia, Pennsylvania 19255 and will be accompanied by IRS Form 8038-T. (d) Other Methodology. Notwithstanding this Section 14, payments of Rebatable Arbitrage will be made in accordance with instructions provided by Preston Thorgrimson Shidler Gates & Ellis if necessary to maintain the Federal income tax exemption for interest payments made on the Bonds. SECTION 15. Severability. If any one or more of the covenants or agreements provided in this ordinance to be performed on the part of the City shall be declared by any court of competent jurisdiction to be contrary to law, then such covenant or covenants, agreement or agreements, shall be null and void and shall be deemed separable from the remaining covenants and agreements of this ordinance and shall in no way affect the validity of the other provisions of this ordinance or of the Bonds. SECTION 16. Effective Date. This ordinance shall be in full force and effect from and after thirty (30) days after the date of its publication, adoption and approval as required by law. ADOPTED by the City Council of City of Yakima, Washington, at a regular meeting thereof held this 23rd day of March, 1993. CITY OF YAKIMA, YAKIMA COUNTY, WASHINGTON Mayor -12- LMC704 93/03/17 • • • 1 ATTEST: City Clerk -13- LMC704 93/03/17 CLERK'S CERTIFICATE I, the undersigned, the duly chosen., qualified- and acting City Clerk of the City of Yakima, Washington (the "City"), and keeper of the tecords of the City Council (herein called the "Council"), DO HEREBY CERTIFY: 1. That the attached ordinance (herein called the "Ordinance") is a true and correct copy of Ordinance No. 93-_ of the City, as finally adopted at a regular meeting of the Council held on the day of March, 1993, and duly recorded in the offices of the City. 2. That said meeting was duly convened and held in all respects in accordance with law, and, to the extent required by law, due and proper notice of such meeting was given; that a quorum was present throughout the meeting and a legally sufficient number of the members of the City voted in the proper manner for the adoption of the Ordinance; that all other requirements and proceedings incident to the proper adoption of the Ordinance have been duly fulfilled, carried out and otherwise observed; and that I am authorized to execute this certificate. IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of the City this day of , 1993. City Clerk [S E A L] RESOLUTION NO. R-93-3 A RESOLUTION of the Council of the City of Yakima, Washington authorizing the Clerk of the City to correct a clerical mistake occurring on page 3, in Section 2 of Ordinance No. 93-11 of the City. WHEREAS, by Ordinance No. 93-11 of the City of Yakima, Washington, (the "City") adopted on March 23, 1993, the City authorized the issuance and sale of its Limited Tax General Obligation Bond, 1993, (the "Bond") in the aggregate principal amount of $200,000 for the purpose of financing the City's Home Preservation Program; and WHEREAS, by Ordinance No. 93-11, the City accepted the offer of Pioneer National Bank to purchase the Bond; and WHEREAS, the City specified that the date of the Bond be April 1, 1993 and that interest on the Bond be payable semiannually each year until the principal of the Bond was paid and that the Bond mature on April 1, 2003; and WHEREAS, in the preparation of Ordinance 93-11 a typographical error occured on page 3, in Section 2, which provided that one of the interest payment dates on the Bond would be November 1 rather than October 1; and WHEREAS, Ordinance 93-11 should t.v.-c corrected nun,- pro dine to reflect the City's intent to pay semi-annual interest on the Bond on October 1 and April 1 of each year until maturity; and WHEREAS, the error which was made was a clerical mistake and can be corrected as set forth herein; NOW, THEREFORE, BE IT RESOLVED by the City of Yakima, Washington as follows: Section 1. The Clerk of the City is hereby authorized to correct Ordinance No. 93-11 of the City nunc pro tunc either by interlineation in the existing Ordinance, or by the substitution of a corrected page containing the following correction only, in the following particulars: On page 3, in the first paragraph of Section 2, Subs L1 LutE the word "October" for the word "Nov,- }'er" where it now appears. ADOPTED by the Council of the City of Yakima, Washington, at a regular meeting thereof, this Ij day of April, 1993. CITY OF YAKIMA, WASHINGTON Mayor ATTEST: By % '1�- C y►-► c_ City Clerk J \LMC\25739-00.004\04R14K.DOC