HomeMy WebLinkAbout2008-034 Limited Tax General Obligation Bonds to Fund Pedestrian Crossing, Street / Infrastructure Improvements, Fire TrORDINANCE NO 2008-34
AN ORDINANCE of the City of Yakima, Washington, providing for the
issuance of limited tax general obligation bonds of the City
in the principal sum of not to exceed $3,500,000 to finance
pedestrian crossing, street and other infrastructure
improvements and to acquire a fire truck; providing the
form and terms of the bonds; and delegating the authority
to approve the final terms of the bonds
WHEREAS, the City Council of the City of Yakima, Washington (the "City") has
determined that it is in the best interest of the City to complete pedestrian crossing, street and
other infrastructure improvements within the City and to acquire a fire ladder truck (the
"Projects"), and
WHEREAS, it appears to the City Council that it is in the best interest of the City that it
authorize the issuance of limited tax general obligation bonds to be sold in the aggregate
principal amount of not to exceed $3,500,000 to finance the Projects;
NOW, THEREFORE, BE IT ORDAINED BY the City of Yakima, Washington, 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:
"Bond Register" means the registration records for the Bonds maintained by the Bond
Registrar
"Bond Registrar" means the fiscal agency of the State of Washington, currently The
Bank of New York Mellon in New York, New York, for the purposes of registering and
authenticating the Bonds, maintaining the Bond Register, effecting transfer of ownership of the
Bonds and paying principal of and interest on the Bonds.
"Bonds" means the not to exceed $3,500,000 principal amount of the City of Yakima,
Washington, Limited Tax General Obligation Bonds, 2008, issued pursuant to this ordinance
"CEDE & Co " means the nominee of The Depository Trust Company
"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.
"City Council" means the legislative authority of the City as the same shall be duly and
regularly constituted from time to time
"Code» means the Internal Revenue Code of 1986, as amended, together with
corresponding and applicable final, temporary or proposed regulations and revenue rulings
issued or amended with respect thereto by the United States Treasury Department of the
Internal Revenue Service, to the extent applicable to the Bonds.
"Debt Service Fund" means the "LTGO Debt Service Fund, 2008" authorized to be
created by Section 6
"DTC" means The Depository Trust Company of New York, as depository for the Bonds,
or any successor or substitute depository for the Bonds.
"Federal Tax Certificate" means the certificate executed by the Director of Finance and
Budget or her designee setting forth the requirements of the Code for maintaining the
tax -exemption of interest on the Bonds.
"Letter of Representations" means the Blanket Letter of Representations from the City to
DTC
P 0978_NMM20978_38E
"MSRB" means the Municipal Securities Rulemaking Board or any successor to its
functions.
"NRMSIR" means a nationally -recognized municipal securities information repository
"Projects" mean pedestrian crossing, street and infrastructure improvements; the
acquisition of a fire ladder truck; and/or other capital projects as may be authorized by the City
Council.
"Registered Owner" means the person in whose name a Bond is registered on the Bond
Register For so long as the City utilizes the book -entry system for the Bonds, DTC shall be
deemed to be the Registered Owner
"Rule" means the Securities and Exchange Commission's Rule 15c2-12 under the
Securities Exchange Act of 1934
"SID" means a state information repository for the State of Washington (if one is
created)
"Underwriter" means Seattle -Northwest Securities Corporation, Seattle, Washington.
SECTION 2. Findings and Authorization of Projects. The City Council hereby finds that
it is in the public interest for the City to undertake the Projects. The cost of the Projects will be
financed in part from the proceeds of sale of the Bonds. If the City Council shall determine that
it has become impractical to acquire any portion of the Projects by reason of changed
conditions, the City shall not be required to acquire such portions of the Projects. If all of the
Projects have been acquired or constructed or duly provided for, or found to be impractical, the
City Council may apply the Bond proceeds or any portion thereof to the redemption of the
Bonds or to other capital purposes as the City Council, in its discretion, shall determine
SECTION 3. Authorization of Bonds. The City shall issue and sell the Bonds in the
aggregate principal amount of not to exceed $3,500,000 to provide money to finance the
Projects and to pay all costs incidental thereto and to the issuance of the Bonds. The Bonds
shall be general obligations of the City; shall be designated "City of Yakima, Washington,
Limited Tax General Obligation Bonds, 2008"; shall be dated their date of delivery; shall be
issued in fully registered form in the denomination of $5,000 or any integral multiple thereof,
provided that no Bond shall represent more than one maturity; shall be numbered separately
and in such manner and with any additional designation as the Bond Registrar deems
necessary for purposes of identification and control; and shall bear interest (calculated based on
a 360 -day year of 12 30 -day months) from their date, payable on December 1, 2008, and
semiannually thereafter on the first days of each June and December and shall mature on
December 1 in the years and principal amounts set forth and approved in the Bond Purchase
Contract executed by the City Manager or the Director of Finance and Budget pursuant to
Section 13 of this ordinance.
SECTION 4 Registration, Exchange and Payments.
(a) Registrar/Bond Register The City hereby adopts the system of
registration approved by the Washington State Finance Committee, which utilizes the fiscal
agency of the State of Washington in New York, New York, as registrar, authenticating agent,
paying agent and transfer agent (the "Bond Registrar") The Bond Registrar shall keep, or
cause to be kept, at its principal corporate trust office,. sufficient records for the registration and
transfer of the Bonds (the "Bond Register"), which shall be open to inspection by the City The
Bond Registrar is authorized, on behalf of the City, to authenticate and deliver Bonds
transferred or exchanged in accordance with the provisions of such Bonds and this ordinance
and to carry out all of the Bond Registrar's powers andduties under this ordinance. The Bond
Registrar shall be responsible for its representations contained in the Certificate of
Authentication on the Bonds.
(b) Registered Ownership The City and the Bond Registrar may deem and
treat the Registered Owner of each Bond as the absolute owner for all purposes, and neither
the City nor the Bond Registrar shall be affected by any notice to the contrary Payment of any
such Bond shall be made only as described in Section 4(h) hereof, but such registration may be
transferred as herein provided. All such payments made as described in Section 4(h) shall be
valid and shall satisfy the liability of the City upon such Bond to the extent of the amount or
amounts so paid.
(c) DTC Acceptance/Letter of Representations. The Bonds shall initially be
held in fully immobilized form by DTC acting as depository To induce DTC to accept the Bonds
as eligible for deposit at DTC, the City has heretofore executed and delivered to DTC a Blanket
Issuer Letter of Representations (the "Letter of Representations")
Neither the City nor the Bond Registrar will have any responsibility or obligation to DTC
participants or the persons for whom they act as nominees with respect to the Bonds for the
accuracy of any records maintained by DTC or any DTC participant, the payment by DTC or any
DTC participant of any amount in respect of the principal of or interest on Bonds, any notice that
is permitted or required to be given to Registered Owners under this ordinance (except such
notices as shall be required to be given by the City to the Bond Registrar or to DTC), the
selection by DTC or any DTC participant of any person to receive payment in the event of a
partial redemption of the Bonds, or any consent given or other action taken by DTC as the
Registered Owner For so long as any Bonds are held in fully immobilized form hereunder, DTC
or its successor depository shall be deemed to be the Registered Owner for all purposes, and
all references in this ordinance to the Registered Owners shall mean DTC or its nominee and
shall not mean the owners of any beneficial interest in any Bonds
(d) Use of Depository
(i) The Bonds shall be registered initially in the name of CEDE & Co.,
as nominee of DTC, with a single Bond for each maturity in a denomination equal to the total
principal amount of such maturity Registered ownership of such immobilized Bonds, or any
portions thereof, may not thereafter be transferred except (A) to any successor of DTC or its
nominee, provided that any such successor shall be qualified under any applicable laws to
provide the service proposed to be provided by it; (B) to any substitute depository appointed by
the City pursuant to subsection (ii) below or such substitute depository's successor; or (C) to
any person as provided in subsection (iv) below
(ii) Upon the resignation of DTC or its successor (or any substitute
depository or its successor) from its functions as depository or a determination by the City to
discontinue the system of book entry transfers through DTC or its successor (or any substitute
depository or its successor), the City may appoint a substitute depository Any such substitute
depository shall be qualified under any applicable laws to provide the services proposed to be
provided by it.
(iii) In the case of any transfer pursuant to clause (A) or (B) of
subsection (i) above, the Bond Registrar shall, upon receipt of all outstanding Bonds, together
with a written request on behalf of the City, issue a single new Bond for each maturity then
outstanding, registered in the name of such successor or substitute depository, or its nominee,
all as specified in such written request of the City
(iv) In the event that (A) DTC or its successor (or substitute depository
or its successor) resigns from its functions as depository, and no substitute depository can be
obtained, or (B) the City determines that it is in the best interest of the beneficial owners of the
Bonds that the Bonds be provided in certificated form, the ownership of such Bonds may then
be transferred to any person or entity as herein provided, and shall no longer be held in fully
immobilized form. The City shall deliver a written request to the Bond Registrar, together with a
supply of definitive Bonds in certificated form, to issue Bonds in any authorized denomination.
Upon receipt by the Bond Registrar of alt then outstanding Bonds, together with a written
request on behalf of the City to the Bond Registrar, new Bonds shall be issued in the
appropriate denominations and registered in the names of such persons as are provided in such
written request.
(e) Transfer or Exchange of Registered Ownership, Change in
Denominations. The registered ownership of any Bond may be transferred or exchanged, but
no transfer of any Bond shall be valid unless it is surrendered to the Bond Registrar with the
assignment form appearing on such Bond duly executed by the Registered Owner or such
Registered Owner's duly authorized agent in a manner satisfactory to the Bond Registrar Upon
such surrender, the Bond Registrar shall cancel the surrendered Bond and shall authenticate
and deliver, without charge to the Registered Owner or transferee, a new Bond (or Bonds at the
option of the new Registered Owner) of the same date, maturity and interest rate and for the
same aggregate principal amount in any authorized denomination, naming as Registered Owner
the person or persons listed as the assignee on the assignment form appearing on the
surrendered Bond, in exchange for such surrendered and canceled Bond. Any Bond may be
surrendered to the Bond Registrar and exchanged, without charge, for an equal aggregate
principal amount of Bonds of the same date, maturity and interest rate, in any authorized
denomination. The Bond Registrar shall not be obligated to transfer or exchange any Bond
during a period beginning at the opening of business on the 15th day of the month next
preceding any interest payment date and ending at the close of business on such interest
payment date, or, in the case of any proposed redemption of the Bonds, after the mailing of
notice of the call of such Bonds for redemption.
(f) Bond Registrar's Ownership of Bonds. The Bond Registrar may become
the Registered Owner of any Bond with the same rights it would have if it were not the Bond
Registrar, and to the extent permitted by law, may act as depository for and permit any of its
officers or directors to act as member of, or in any other capacity with respect to, any committee
formed to protect the rights of the Registered Owners of the Bonds.
(g) Registration Covenant. The City covenants that, until all Bonds have
been surrendered and canceled, it will maintain a system for recording the ownership of each
Bond that complies with the provisions of Section 149 of the Code
(h) Place and Medium of Payment. Both principal of and interest on the
Bonds shall be payable in lawful money of the United States of America. For so long as all
Bonds are in fully immobilized form, payments of principal and interest shall be made as
provided in accordance with the operational arrangements of DTC referred to in the Letter of
Representations. In the event that the Bonds are no longer in fully immobilized form, interest on
the Bonds shall be paid by check or draft mailed to the Registered Owners at the addresses for
such Registered Owners appearing on the Bond Register on the 15th day of the month
preceding the interest payment date, and principal of the Bonds shall be payable upon
presentation and surrender of such Bonds by the Registered Owners at the principal office of
the Bond Registrar
SECTION 5. Redemption and Purchase.
(a) Optional Redemption. The City hereby reserves the right to redeem the
outstanding Bonds maturing on and after December 1, 2019, in whole or in part (maturities to be
selected by the City within a maturity in such manner as DTC or the Bond Registrar, as
appropriate, shall determine) on December 1, 2018, and on any date thereafter, at par, plus
accrued interest to the date of redemption.
(b) Mandatory Redemption of Term Bonds, if any The Bonds may be called
for mandatory redemption at any time prior to scheduled maturity under terms approved by the
City Manager or Director of Finance and Budget in the Bond Purchase Contract pursuant to
Section 13 of this ordinance.
(c) Partial Redemption If Tess than all of the principal amount of any Bond is
redeemed, upon surrender of such Bond at the principal office of the Bond Registrar, there shall
be issued to the Registered Owner, without charge, for the then unredeemed balance of the
principal amount, a new Bond or Bonds, at the option of the Registered Owner, of like series,
maturity and interest rate in any authorized denomination.
(d) Notice of Redemption Written notice of any redemption of Bonds shall
be given by the Bond Registrar on behalf of the City by first class mail, postage prepaid, not less
than 30 days nor more than 60 days before the redemption date to the Registered Owners of
Bonds that are to be redeemed at their last addresses shown on the Bond Register So long as
the Bonds are in book -entry form, notice of redemption shall be given as provided in the Letter
of Representations.
The requirements of this section shall be deemed complied with when notice is mailed,
whether or not it is actually received by the owner
Each notice of redemption shall contain the following information. (1) the redemption
date, (2) the redemption price, (3) if Tess than all outstanding Bonds are to be redeemed, the
identification (and, in the case of partial redemption, the principal amounts) of. the Bonds to be
redeemed, (4) that on the redemption date the redemption price will become due and payable
upon each Bond or portion called for redemption, and that interest shall cease to accrue from
the redemption date, (5) that the Bonds are to be surrendered for payment at the principal office
of the Bond Registrar, (6) the CUSIP numbers of all Bonds being redeemed, (7) the dated date
of the Bonds, (8) the rate of interest for each Bond being redeemed, (9) the date of the notice,
and (10) any other information needed to identify the Bonds being redeemed.
Upon the payment of the redemption price of Bonds being redeemed, each check or
other transfer of funds issued for such purpose shall bear the CUSIP number identifying, by
issue and maturity, the Bonds being redeemed with the proceeds of such check or other
transfer
(e) Effect of Redemption Unless the City has revoked a notice of
redemption, the City shall transfer to the Bond Registrar amounts that, in addition to other
money, if any, held by the Bond Registrar, will be sufficient to redeem, on the redemption date,
all the Bonds to be redeemed. From the redemption date interest on each Bond to be
redeemed shall cease to accrue.
(f) Amendment of Notice Provisions. The foregoing notice provisions of this
section, including but not limited to the information to be included in redemption notices and the
persons designated to receive notices, may be amended by additions, deletions and changes in
order to maintain compliance with duly promulgated regulations and recommendations
regarding notices of redemption of municipal securities
(g) Purchase on Open Market. The City reserves the right to purchase any
of the Bonds in the open market at any time and at any price
SECTION 6. Creation of Debt Service Fund and Provision for Tax Levy Payments. A
special fund of the City known as the "LTGO Debt Service Fund, 2008" (the "Debt Service
Fund"), is hereby authorized to be created. The Debt Service Fund shall be drawn upon for the
sole purpose of paying the principal of and interest on the Bonds.
The City hereby irrevocably covenants and agrees for as long as any of the Bonds are
outstanding and unpaid that each year it will include in its budget and levy ad valorem taxes
upon all the property within the City subject to taxation in an amount that will be sufficient,
together with all other revenues and money of the City legally available for such purposes, to
pay the principal of and interest on the Bonds as the same shall become due
The City hereby irrevocably pledges that the annual tax provided for herein to be levied
for the payment of such principal and interest shall be within and as a part of the tax levy
permitted to cities without a vote of the people, and that a sufficient portion of each annual levy
to be levied and collected by the City prior to the full payment of the principal of and interest on
the Bonds will be and is hereby irrevocably set aside, pledged and appropriated for the payment
of the principal of and interest on the Bonds to the extent that other legally available funds are
not deposited into the Debt Service Fund. The full faith, credit and resources of the City are
hereby irrevocably pledged for the annual levy and collection of the taxes and for the prompt
payment of the principal of and interest on the Bonds as the same shall become due
ECTION 7 Bonds Deemed To Be No Longer Outstanding. In the event that the City, in
order to effect the payment, retirement or redemption of any Bond, sets aside in the Debt
Service Fund or in another special account, held in trust by a trustee, cash or noncallable
govemment obligations, as such obligations are now or hereafter defined in chapter 39.53
RCW, or any combination of cash and/or noncallable govemment obligations, in amounts and
maturities which, together with the known eamed income therefrom, are sufficient to redeem or
pay and retire such Bond in accordance with its terms and to pay when due the interest and
redemption premium, if any, thereon, and such cash and/or noncallable govemment obligations
are irrevocably set aside and pledged for such purpose, then no further payments need be
made into the Debt Service Fund for the payment of the principal of and interest on such Bond.
The owner of a Bond so provided for shall cease to be entitled to any lien, benefit or security of
this ordinance except the right to receive payment of principal, premium, if any, and interest
from such special fund, and such Bond shall be deemed to be not outstanding under this
ordinance.
SECTION 8. Tax Covenant. The City covenants to undertake all actions required to
maintain the tax-exempt status of interest on the Bonds under Section 103 of the Code as set
forth in the Federal Tax Certificate that will be executed at the closing of the Bonds The City
hereby designates the Bonds as "qualified tax-exempt obligations" under Section 265(b)(3) of
the Code for banks, thrift institutions and other financial institutions.
SECTION 9. Lost or Destroyed Bonds. If any Bonds are lost, stolen or destroyed, the
Bond Registrar may authenticate and deliver a new Bond or Bonds of like amount, maturity and
tenor to the Registered Owner upon the owner paying the expenses and charges of the Bond
Registrar and the City in connection with preparation and authentication of the replacement
Bond or Bonds and upon his or her filing with the Bond Registrar and the City evidence.
satisfactory to both that such Bond or Bonds were actually lost, stolen or destroyed and of his or
her ownership, and upon furnishing the City and the Bond Registrar with indemnity satisfactory
to both.
SECTION 10 Form of the Bonds. The Bonds shall be in substantially the following
form:
[STATEMENT OF INSURANCE]
UNITED STATES OF AMERICA
NO $
STATE OF WASHINGTON
CITY OF YAKIMA
LIMITED TAX GENERAL OBLIGATION BOND, 2008
INTEREST RATE.
REGISTERED OWNER.
MATURITY DATE. CUSIP NO.
PRINCIPAL AMOUNT DOLLARS
The City of Yakima, Washington, a municipal corporation organized and existing under
the laws and Constitution of the State of Washington (the "City"), hereby acknowledges itself to
owe and for value received promises to pay to the Registered Owner identified above, or
registered assigns, on the Maturity Date identified above, the Principal Amount specified above,
unless redeemed prior thereto as provided herein, together with interest on such Principal
Amount from , 2008, or the most recent date to which interest has been paid or
duly provided for, at the Interest Rate set forth above payable December 1, 2008, and
semiannually thereafter on each June 1 and December 1 until payment of the principal sum has
been made or duly provided for Both principal of and interest on this bond are payable in lawful
money of the United States of America. For so long as the bonds of this issue are held in fully
immobilized form, payments of principal and interest thereon shall be made as provided in
accordance with the operational arrangements of The Depository Trust Company ("DTC")
referred to in the Blanket Issuer Letter of Representations from the City to DTC In the event
that the bonds of this issue are no longer held in fully immobilized form, interest on this bond
shall be paid by check or draft mailed to the Registered Owner at the address appearing on the
Bond Register on the 15th day of the month preceding the interest payment date, and principal
of this bond shall be payable upon presentation and surrender of this bond by the Registered
Owner at the principal office of the fiscal agency of the State of Washington in New York, New
York (the "Bond Registrar"), provided, however, that if so requested in writing by the Registered
Owner of at least $1,000,000 principal amount of Bonds, interest will be paid by wire transfer on
the date due to an account with a bank located within the United States.
This bond is one of an issue of limited tax general obligation bonds of the City of like
date and tenor, except as to number, interest rate and date of maturity, in the aggregate
principal amount of $ , issued pursuant to Ordinance No 2008-34 of the City,
passed July 15, 2008 (the "Bond Ordinance"), to complete pedestrian crossing, street and other
infrastructure improvements within the City, to acquire a fire ladder truck and to make other
capital improvements deemed necessary by the City Council.
The bonds of this issue are subject to redemption prior to their stated maturities as
provided in the Bond Ordinance.
The bonds of this issue have been designated by the City as "qualified tax-exempt
obligations" for investment by financial institutions under Section 265(b) of the Code.
The City has irrevocably covenanted with the owner of this bond that it will annually
include in its budget and levy taxes, within and as a part of the tax levy permitted to cities
without a vote of the electorate, upon all the property subject to taxation in amounts sufficient,
together with other money legally available therefor, to pay the principal of and interest on this
bond as the same shall become due. The full faith, credit and resources of the City are hereby
irrevocably pledged for the annual levy and collection of such taxes and the prompt payment of
such principal and interest.
The pledge of tax levies for payment of principal of and interest on the bonds may be
discharged prior to maturity of the bonds by making provision for the payment thereof on the
terms and conditions set forth in the Bond Ordinance.
The bonds of this issue are issued in fully registered form in the denomination of $5,000
each or any integral multiple thereof, provided that no bond shall represent more than one
7
maturity Upon surrender to the Bond Registrar, bonds are interchangeable for bonds in any
authorized denomination of an equal aggregate principal amount and of the same interest rate
and maturity This bond is transferable only on the records maintained by the Bond Registrar
for that purpose upon the surrender of this bond by the Registered Owner hereof or his/her duly
authorized agent and only if endorsed in the manner provided hereon, and thereupon a new
fully registered bond of like principal amount, maturity and interest rate shall be issued to the
transferee in exchange therefor Such exchange or transfer shall be without cost to the
Registered Owner or transferee The City may deem the person in whose name this bond is
registered to be the absolute owner hereof for the purpose of receiving payment of the principal
of and interest on this bond and for any and all other purposes whatsoever
Reference is made to the Bond Ordinance as more fully describing the covenants with
and the rights of Registered Owners of the bonds or registered assigns and the meanings of
capitalized terms appearing on this bond which are defined in such ordinance
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 hereon 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 and ordinances of the
City, that all acts, conditions and things required to be done precedent to and in the issuance of
this bond and the bonds of this issue have happened, been done and performed, and that this
bond and the bonds of this issue do not exceed any constitutional or statutory limitations.
IN WITNESS WHEREOF, the City of Yakima, Washington, has caused this bond to be
signed on behalf of the City with the manual or facsimile signature of the Mayor and to be
attested by the manual or facsimile signature of the Clerk of the City, as of this day of
, 2008.
CITY OF YAKIMA, WASHINGTON
By /s/ manual or facsimile
David Edler, Mayor
ATTEST
/s/ manual or facsimile
Deborah J Moore, Clerk of the City
The Certificate of Authentication for the Bonds shall be in substantially the following form
and shall appear on each Bond.
CERTIFICATE OF AUTHENTICATION
Date of Authentication.
This bond is one of the City of Yakima, Washington, Limited Tax General Obligation
Bonds, 2008, dated , 2008
WASHINGTON STATE FISCAL AGENCY,
as Bond Registrar
By
Authorized Signer
SECTION 11 Execution of the Bonds. The Bonds shall be executed on behalf of the
City with the manual or facsimile signature of the Mayor and attested by the manual or facsimile
signature of the City Clerk. In case either or both of the officers who have signed or attested
any of the Bonds cease to be such officer before such Bonds have been actually issued and
delivered, such Bonds shall be valid nevertheless and may be issued by the City with the same
effect as though the persons who had signed or attested such Bonds had not ceased to be such
officers, and any Bond may be signed or attested on behalf of the City by officers who at the
date of actual execution of such Bond are the proper officers, although at the nominal date of
execution of such Bond such officer was not an officer of the City
Only Bonds that bear a Certificate of Authentication in the form set forth in Section 10,
manually executed by the Bond Registrar, shall be valid or obligatory for any purpose or entitled
to the benefits of this ordinance Such Certificate of Authentication shall be conclusive evidence
that the Bonds so authenticated have been duly executed, authenticated and delivered and are
entitled to the benefits of this ordinance
In case either of the officers of the City who shall have executed the Bonds shall cease
to be such officer or officers of the City before the Bonds so signed shall have been
authenticated or delivered by the Bond Registrar, or issued by the City, such Bonds may
nevertheless 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 Any Bond may also be signed and attested on behalf
of the City by such persons as at the actual date of execution of such Bond shall be the proper
officers of the City although at the original date of such Bond any such person shall not have
been such officer
SECTION 12. Application of Proceeds. The City shall utilize funds designated the Fire
Capital Fund #332 and The Arterial Street Fund #142 (the "Project Funds") into which the
proceeds of the Bonds shall be deposited. Money on hand in the Project Funds shall be used to
pay the costs of or reimbursement for the costs of the Projects and costs of issuance of the
Bonds. The Director of Finance and Budget or her designee may invest money in the Project
Fund in legal investments for City funds. Earnings on such investments shall accrue to the
benefit of the fund earning such interest. Any part of the proceeds of the Bonds remaining in
the Project Fund after all costs of the Projects have been paid (including costs of issuance) may
be used for any capital purpose of the City or may be transferred to the Debt Service Fund.
SECTION 13. Sale of the Bonds: Bond Insurance. The Bonds shall be sold at
negotiated sale to the Underwriter pursuant to the terms of the Bond Purchase Contract. The
City Manager and the Director of Finance and Budget are hereby authorized to negotiate terms
for the purchase of the Bonds and execute the Bond Purchase Contract, with such terms as are
approved by him or her pursuant to this section and consistent with this ordinance. The
Underwriter is advising the Council that market conditions are fluctuating and, as a result, the
most favorable market conditions may occur on a day other than a regular meeting date of the
City Council. The City Council has determined that it would be in the best interest of the City to
delegate to the City Manager and the Director of Finance and Budget for a limited time the
authority to approve the final interest rates, aggregate principal amount, and principal amounts
of each maturity of the Bonds. The City Manager and the Director of Finance and Budget are
hereby authorized to approve the final interest rates, aggregate principal amount, and principal
maturities for the Bonds in the manner provided hereafter so long as (a) the aggregate principal
amount of the Bonds does not exceed $3,500,000; and (b) the true interest cost for the Bonds
(in the aggregate) does not exceed 5 00%
In determining whether or not to proceed with bond insurance and determining the final
interest rates, aggregate principal amounts, and principal maturities, the City Manager and the
Director of Finance and Budget, in consultation with City staff, shall take into account those
factors that, in his and her judgment, will result in the lowest true interest cost on the Bonds to
their maturity, including, but not limited to current financial market conditions and current interest
rates for obligations comparable in tenor and quality to the Bonds Subject to the terms and
conditions set forth in this Section 13, the City Manager and the Director of Finance and Budget
are hereby authorized to execute the final form of the Bond Purchase Contract, upon the City
Manager and the Director of Finance and Budget's approval of the final interest rates, aggregate
principal amount, and principal maturities set forth therein. Following the execution of the Bond
Purchase Contract, the Director of Finance and Budget shall provide a report to the City
Council, at the next regular meeting of the City Council after sale of the Bonds, describing the
final terms of the Bonds approved pursuant to the authority delegated in this section. The
authority granted to the City Manager and the Director of Finance and Budget by this Section 13
shall expire 60 days after the date of approval of this ordinance. If a Bond Purchase Contract
for the Bonds has not been executed within 60 days after the date of final approval of this
ordinance, the authorization for the issuance of the Bonds shall be rescinded, and the Bonds
shall not be issued nor their sale approved unless such Bonds shall have been re -authorized by
ordinance of the City Council. The ordinance re -authorizing the issuance and sale of such
Bonds may be in the form of a new ordinance repealing this ordinance in whole or in part or may
be in the form of an amendatory ordinance approving a bond purchase contract or establishing
terms and conditions for the authority delegated under this Section 13
Upon the passage and approval of this ordinance, the proper officials of the City,
including the City Manager and the Director of Finance and Budget, are authorized and directed
to undertake all action necessary for the prompt execution and delivery of the Bonds to the
Underwriter thereof and further to execute all closing certificates and documents required to
effect the closing and delivery of the Bonds in accordance with the terms of the Bond Purchase
Contract.
The Director of Finance and Budget is hereby further authorized and directed to solicit
proposals from municipal bond insurance companies for the issuance of a bond insurance
policy In the event that the Director of Finance and Budget receives multiple proposals, the
Director of Finance and Budget may select the proposal having the lowest cost and resulting in
an overall lower interest cost with respect to the Bonds. The Director of Finance and Budget
may execute a commitment received from the insurer selected by the Director of Finance and
Budget. The City Council further authorizes and directs all proper officers, agents, attorneys
and employees of the City to cooperate with the insurer in preparing such additional
agreements, certificates, and other documentation on behalf of the City as shall be necessary or
advisable in providing for the bond insurance policy
SECTION 14. Approval of Preliminary Official Statement. The City hereby authorizes
the preparation of a Preliminary Official Statement and authorizes the distribution of such
Preliminary Official Statement by the Underwriter in connection with the offering of the Bonds.
Pursuant to the Rule, the City hereby authorizes the City Manager or the Director of Finance
and Budget to deem the Preliminary Official Statement final as of its date except for the
omission of information dependent upon the pricing of the issue and the completion of the
underwriting agreement, such as offering prices, interest rates, selling compensation, aggregate
principal amount, principal amount per maturity, delivery dates and other terms of the Bonds
dependent on the foregoing matters. The City agrees to cooperate with the Underwriter to
deliver or cause to be delivered, within seven business days from the date of the Bond
Purchase Contract and in sufficient time to accompany any confirmation that requests payment
from any customer of the Underwriter, copies of a final official statement in sufficient quantity to
comply with paragraph (b)(4) of the Rule and the rules of the MSRB
SECTION 15 Ongoing Disclosure
(a) Contract/Undertaking This section constitutes the City's written
undertaking for the benefit of the owners of the Bonds as required by Section (b)(5) of the Rule
(b) Financial Statements/Operating Data The City agrees to provide or
cause to be provided to each NRMSIR and to the SID, if any, in each case as designated by the
SEC in accordance with the Rule, the following annual financial information and operating data
for the prior fiscal year (commencing in 2009 for the fiscal year ended December 31, 2008)
1 Annual financial statements, which statements may or may not be
audited, showing ending fund balances for the City's general fund prepared in accordance with
the Budgeting Accounting and Reporting System prescribed by the Washington State Auditor
pursuant to RCW 43 09.200 (or any successor statute),
2 The assessed valuation of taxable property in the City;
3 Ad valorem taxes due and percentage of taxes collected;
4 Property tax levy rate per $1,000 of assessed valuation, and
5 Outstanding general obligation debt of the City
Items 2-5 shall be required only to the extent that such information is not included in the annual
financial statements.
The information and data described above shall be provided on or before nine months
after the end of the City's fiscal year The City's current fiscal year ends December 31 The
City may adjust such fiscal year by providing written notice of the change of fiscal year to each
then existing NRMSIR and the SID, if any In lieu of providing such annual financial information
and operating data, the City may cross-reference to other documents provided to the NRMSIR,
the SID or to the SEC and, if such document is a final official statement within the meaning of
the Rule, available from the MSRB.
If not provided as part of the annual financial information discussed above, the City shall
provide the City's audited annual financial statement prepared in accordance with the Budgeting
Accounting and Reporting System prescribed by the Washington State Auditor pursuant to
RCW 43 09.200 (or any successor statute) when and if available to each then existing NRMSIR
and the SID, if any
(c) Material Events. The City agrees to provide or cause to be provided, in a
timely manner, to the SID, if any, and to each NRMSIR or to the MSRB notice of the occurrence
of any of the following events with respect to the Bonds, if material:
• Principal and interest payment delinquencies,
• Non-payment related defaults;
• Unscheduled draws on debt service reserves reflecting financial difficulties;
• Unscheduled draws on credit enhancements reflecting financial difficulties;
• Substitution of credit or liquidity providers, or their failure to perform;
• Adverse tax opinions or events affecting the tax-exempt status of the Bonds,
• Modifications to the rights of Bond owners,
• Bond calls (optional, contingent or unscheduled Bond calls other than scheduled
sinking fund redemptions for which notice is given pursuant to Exchange Act
Release 34-23856),
• Defeasances,
• Release, substitution or sale of property securing repayment of the Bonds; and
• Rating changes
Solely for purposes of disclosure, and not intending to modify this undertaking, the City
advises that no debt service reserves or property secures payment of the Bonds
(d) Notification Upon Failure to Provide Financial Data The City agrees to
provide or cause to be provided, in a timely manner, to each NRMSIR or to the MSRB and to
the SID, if any, notice of its failure to provide the annual financial information described in
Subsection (b) above on or prior to the date set forth in Subsection (b) above.
(e) Termination/Modification The City's obligations to provide annual
financial information and notices of material events shall terminate upon the legal defeasance,
prior redemption or payment in full of all of the Bonds. Any provision of this section shall be null
and void if the City (1) obtains an opinion of nationally recognized bond counsel to the effect
that the portion of the Rule that requires that provision is invalid, has been repealed retroactively
or otherwise does not apply to the Bonds and (2) notifies each NRMSIR and the SID, if any, of
such opinion and the cancellation of this section.
The City may amend this section with an opinion of nationally recognized bond counsel
in accordance with the Rule In the event of any amendment of this section, the City shall
describe such amendment in the next annual report, and shall include a narrative explanation of
the reason for the amendment and its impact on the type (or in the case of a change of
accounting principles, on the presentation) of financial information or operating data being
presented by the City In addition, if the amendment relates to the accounting principles to be
followed in preparing financial statements, (i) notice of such change shall be given in the same
manner as for a material event under Subsection (c) and (ii) the annual report for the year in
which the change is made shall present a comparison (in narrative form and also, if feasible, in
quantitative form) between the financial statements as prepared on the basis of the new
accounting principles and those prepared on the basis of the former accounting principles.
(f) Bond Owner's Remedies Under This Section The right of any
bondowner or beneficial owner of Bonds to enforce the provisions of this section shall be limited
to a right to obtain specific enforcement of the City's obligations under this section, and any
failure by the City to comply with the provisions of this undertaking shall not be an event of
default with respect to the Bonds. For purposes of this section, "beneficial owner" means any
person who has the power, directly or indirectly, to vote or consent with respect to, or to dispose
of ownership of, any Bonds, including persons holding Bonds through nominees or depositories
SECTION 16 General Authorization; Ratification of Prior Acts. The Director of Finance
and Budget and City Manager and other appropriate officers of the City are authorized to take
any actions and to execute documents as in their judgment may be necessary or desirable in
order to carry out the terms of, and complete the transactions contemplated by, this ordinance
All acts taken pursuant to the authority of this ordinance but prior to its effective date are hereby
ratified.
SECTION 17 Severability If any provision in this ordinance is declared by any court of
competent jurisdiction to be contrary to law, then such provision shall be null and void and shall
be deemed separable from the remaining provisions of this ordinance and shall in no way affect
the validity of the other provisions of this ordinance or of the Bonds
SECTION 18. Effective Date. This ordinance shall be effective 30 days after its
passage, approval and publication as provided by law
PASSED by the City Council of the City of Yakima at a regular meeting thereof, held this
15th day of July, 2008
ATTEST
City Clerk
APPROVED AS TO FORM
N/A
City Attorney
Publication Date: 7/18/08
Effective Date: 8/17/08
13
CITY OF YAKIMA, WASHINGTON
David Ed er, Mayor
CERTIFICATE
I, the undersigned, Clerk of the City of Yakima, Washington (herein called the "City") and
keeper of the records of the City Council of the City (the "City Council"), DO HEREBY CERTIFY
1 That the attached ordinance is a true and correct copy of Ordinance No 2008-34
of the City (the "Ordinance"), as finally passed at a regular meeting of the City Council held on
July 15, 2008, and duly recorded in my office ,
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 of the City Council was present throughout the meeting and a legally sufficient number
of members of the City Council voted in the proper manner for the passage of said Ordinance,
that all other requirements and proceedings incident to the proper adoption or passage of said
Ordinance have been duly fulfilled, carried out and otherwise observed, and that I am
authorized to execute this certificate
DATED this 15th day of July, 2008
14
City Clerk
•
BOND DEBT SERVICE
City of Yakima, Washington
Proposed LTGO Bonds, 2008
Current insured BQ interest rates
Fire Ladder Truck Project
Dated Date 09/04/2008
Delivery Date 09/04/2008
Period Annual
Ending Principal Coupon Interest Debt Service Debt Service
12/01/2008 10,000 4 000% 7,443.33 17,443.33 17,443.33
06/01/2009 15,200 00 15,200 00
12/01/2009 45,000 4 000% 15,200.00 60,200 00 75,400 00
06/01/2010 14,300 00 14,300 00
12/01/2010 45,000 4 000% 14,300.00 59,300.00 73,600 00
06/01/2011 13,400 00 13,400.00
12/01/2011 50,000 4 000% 13,400.00 63,400 00 76,800 00
06/01/2012 12,400 00 12,400 00
12/01/2012 50,000 4 000% 12,400 00 62,400 00 74,800 00
06/01/2013 11,400 00 11,400 00
12/01/2013 55,000 4 000% 11,400.00 66,400.00 77,800 00
06/01/2014 10,300.00 10,300 00
12/01/2014 55,000 4 000% 10,300 00 65,300 00 75,600.00
06/01/2015 9,200.00 9,200.00
12/01/2015 60,000 4 000% 9,200.00 69,200.00 78,400 00
06/01/2016 8,000.00 8,000 00
12/01/2016 60,000 4 000% 8,000.00 68,000 00 76,000 00
06/01/2017 6,800.00 6,800 00
12/01/2017 60,000 4 000% 6,800 00 66,800.00 73,600.00
06/01/2018 5,600.00 5,600.00
12/01/2018 65,000 4 000% 5,600.00 70,600 00 76,200 00
06/01/2019 4,300.00 4,300 00
12/01/2019 70,000 4 000% 4,300.00 74,300.00 78,600 00
06/01/2020 2,900 00 2,900 00
12/01/2020 70,000 4 000% 2,900.00 72,900 00 75,800 00
06/01/2021 1,500.00 1,500 00
12/01/2021 75,000 4 000% 1,500.00 76,500 00 78,000 00
770,000 238,043.33 1,008,043.33 1,008,043.33
Jun 27, 2008 9:54 am Prepared by Seattle -Northwest Securities Corp - JMW (k:\analysis\dbc\city\Yakima.2008LTGO) Page 5
BOND DEBT SERVICE
City of Yakima, Washington
Proposed LTGO Bonds, 2008
Current insured BQ interest rates
Miscellaneous Projects
Dated Date 09/04/2008
Delivery Date 09/04/2008
Period Annual
Ending Principal Coupon Interest Debt Service Debt Service
12/01/2008 40,000 4 000% 21,411 67 61,411 67 61,411.67
06/01/2009 43,500.00 43,500 00
12/01/2009 160,000 4 000% 43,500.00 203,500 00 247,000 00
06/01/2010 40,300.00 40,300 00
12/01/2010 170,000 4 000% 40,300.00 210,300 00 250,600 00
06/01/2011 36,900 00 36,900 00
12/01/2011 175,000 4 000% 36,900.00 211,900.00 248,800 00
06/01/2012 33,400 00 33,400.00
12/01/2012 180,000 4 000% 33,400.00 213,400.00 246,800 00
06/01/2013 29,800.00 29,800 00
12/01/2013 190,000 4 000% 29,800 00 219,800.00 249,600 00
06/01/2014 26,000.00 26,000 00
12/01/2014 195,000 4 000% 26,000 00 221,000 00 247,000 00
06/01/2015 22,100 00 22,100 00
12/01/2015 205,000 4 000% 22,100.00 227,100.00 249,200 00
06/01/2016 18,000.00 18,000 00
12/01/2016 210,000 4 000% 18,000 00 228,000.00 246,000 00
06/01/2017 13,800 00 13,800 00
12/01/2017 220,000 4 000% 13,800.00 233,800 00 247,600 00
06/01/2018 9,400.00 9,400.00
12/01/2018 230,000 4 000% 9,400 00 239,400.00 248,800.00
06/01/2019 4,800 00 4,800 00
12/01/2019 240,000 4 000% 4,800 00 244,800.00 249,600 00
2,215,000 577,411.67 2,792,411 67 2,792,41167
•
•
Jun 27, 2008 9:54 am Prepared by Seattle -Northwest Securities Corp - JMW (k:\analysis\dbc\city\Yakima:2008LTGO) Page 4
•
Period
Ending
BOND DEBT SERVICE
City of Yakima, Washington L
Proposed LTGO Bonds, 2008 - CC)/7113 n tek
Dated Date 09/04/2008
Delivery Date 09/04/2008
Principal
Annual
Debt Debt
Coupon Interest Service Service
12/01/2008 50,000 4 000% 28,855 78,855 78,855
06/01/2009 58,700 58,700
12/01/2009 205,000 4 000% 58,700 263,700 322,400
06/01/2010 54,600 54,600
12/01/2010 215,000 4 000% 54,600 269,600 324,200
06/01/2011 50,300 50,300
12/01/2011 225,000 4 000% 50,300 275,300 325,600
06/01/2012 45,800 45,800
12/01/2012 230,000 4 000% 45,800 275,800 321,600
06/01/2013 41,200 41,200
12/01/2013 245,000 4 000% 41,200 286,200 327,400
06/01/2014 36,300 36,300
12/01/2014 250,000 4 000% 36,300 286,300 322,600
06/01/2015 31,300 31,300
12/01/2015 265,000 4 000% 31,300 296,300 327,600
06/01/2016 26,000 26,000
12/01/2016 270,000 4 000% 26,000 296,000 322,000
06/01/2017 20,600 20,600
12/01/2017 280,000 4 000% 20,600 300,600 321,200
06/01/2018 15,000 15,000
12/01/2018 295,000 4 000% 15,000 310,000 325,000
06/01/2019 9,100 9,100
12/01/2019 310,000 4 000% 9,100 319,100 328,200
06/01/2020 2,900 2,900
12/01/2020 70,000 4 000% 2,900 72,900 75,800
06/01/2021 1,500 1,500
12/01/2021 75,000 4 000% 1,500 76,500 78,000
2,985,000 815,455 3,800,455 3,800,455
Jun 27, 2008 9:54 am Prepared by Seattle -Northwest Securities Corp - JMW (k:\analysis\dbc\city\Yakima.2008LTGO) Page 3
2.SNW
August 20, 2008
Rita M. DeBord
Director of Finance and Budget
City of Yakima
129 North Second Street
Yakima, Washington 98901
Re: City of Yakima, Washington
$2,950,000 Limited Tax General Obligation Bonds, 2008
Dear Ms. DeBord
Seattle -Northwest Securities Corporation (the "Underwriter") offers to enter into this purchase agreement
(the "Purchase Agreement") with the City of Yakima, Washington (the "Issuer") Each of the
Underwriter and the Issuer may be referred to herein as a "Party" or collectively as the "Parties."
This offer is contingent upon acceptance by the Issuer by execution and delivery of this Purchase
Agreement to the Underwriter at or prior to 11:59 p.m. Pacific Time on the date hereof, by means of hand
delivery, facsimile or other secure electronic transmission, such as a PDF file. Upon execution of this
Purchase Agreement by the Parties, this Purchase Agreement will constitute a binding agreement
between the Issuer and the Underwriter
Capitalized terms in this Purchase Agreement that are not otherwise defined herein shall have the
meanings given to such terms in the Ordinance as defined below
1 Authorization and Documents
The issuance, sale and delivery of the Bonds (as defined below) is authorized by Ordinance No
2008-34 passed by the Mayor and City Council of the Issuer on July 15, 2008 (the "Ordinance")
The transaction at which the Bonds are delivered by the Issuer to the Underwriter and paid for by
the Underwriter is referred to herein as the "Closing" and the date of such transaction, the
"Closing Date."
The Ordinance includes an undertaking to provide certain information to DisclosureUSA (so long
as such method of disclosure continues to be approved by the Securities and Exchange
Commission for such purposes) or to nationally recognized municipal securities intormation
repositories and regulatory bodies or their designees. The Ordinance and this Purchase
Agreement are collectively referred to herein as the "Documents."
City of Yakima, Washington
August 20, 2008
Page 2
2. Purchase and Sale
Subject to the terms and conditions of this Purchase Agreement, the Underwriter hereby agrees
to purchase from the Issuer for offering to the public and the Issuer hereby agrees to sell to the
Underwriter all, but not less than all of the $2,950,000 aggregate principal amount of Limited Tax
General Obligation Bonds, 2008 (the "Bonds") The Bonds shall be dated, shall mature, shall bear
interest, shall be payable, and shall have redemption provisions, all as set forth in Exhibit C
attached hereto The Underwriter's purchase price for the Bonds also is set forth in Exhibit C.
3 Fiscal Agent; Enhancement; Insurance
a) The fiscal agent of the State of Washington shall be the fiscal agent for the Bonds, serving
as registrar, authenticating agent and paying agent (the "Bond Registrar"). The Bonds
shall be payable and shall be secured as provided in the Ordinance and as described in
the document entitled Preliminary Official Statement, which is dated August 13, 2008
and which describes the Issuer and the Bonds (the "POS")
b) Payment when due of the regularly scheduled principal of and interest on the Bonds
shall be insured by a municipal bond insurance policy (the "Policy") issued by Financial
Security Assurance Inc. (the "Insurer")
4. Of tering
The Underwriter agrees to make a bona fide public offering of all the Bonds, at prices not in excess
of the initial public offering prices or at yields not lower than the initial yields as set forth in
Exhibit C attached hereto.
5 Official Statement
a) The Issuer hereby "deems final" the POS for purposes of Rule 15c2-12 of the Securities
Exchange Act of 1934, as amended (the "Rule") The Issuer approves and ratifies the use
and distribution by the Underwriter of the POS in connection with the public offering for
sale of the Bonds by the Underwriter
b) The final official statement shall be substantially in the form of the POS with only such
changes permitted by the Rule as shall have been reviewed by the Underwriter (such
tinal official statement, incorporating such changes, if any, shall be referred to herein as
the "Final Official Statement") The Issuer shall cooperate with the Underwriter in the
preparation of the Final Official Statement for delivery within seven (7) business days
after the date hereof and, in any event, for delivery in sufficient time to accompany any
order confirmation from the Underwriter to its customer, and in sufficient time to permit
the Underwriter to comply with the provisions ot the Rule and with all applicable rules
ot the Municipal Securities Rulemaking Board.
c) The Issuer will not amend or supplement the Final Otficial Statement without the consent
of the Underwriter The Issuer agrees to notify the Underwriter promptly if, on or prior
to the 25th day after the End of the Underwriting Period (as defined below), any event
-2-
City of Yakima, Washington
August 20, 2008
Page 3
shall occur, or information come to the attention of the Issuer, that would cause the Final
Official Statement (whether or not previously supplemented or amended), as of its date,
to contain any untrue statement of a material fact or to omit to state a material fact
necessary to make the statements therein, in light of the circumstances under which they
were made, not misleading. If, in the opinion of the Issuer, such event requiies the
preparation and distribution of a supplement or amendment to the Final Official
Statement, the Issuer at its expense and with Underwriter's assistance, shall amend or
supplement the Final Official Statement in a form and manner approved by the
Underwriter and will provide such number of copies of the supplement or amendment to
the Final Official Statement, as the Underwriter may reasonably request. For purposes of
this Purchase Agreement, the "End of the Underwriting Period" shall occur on the
Closing Date.
6 Representations, Warranties and Covenants
The Issuer represents, warrants and covenants to the Underwriter that as of the date hereof and
as ot the Closing Date:
a) The Issuer is a municipal corporation duly organized and validly existing under the laws
and Constitution of the State of Washington,
b) The Issuer has duly adopted the Ordinance and it is a valid, legal and binding ordinance
of the Issuer;
c) The Issuer is duly authorized and has tull legal right, power, and authority to issue, sell
and deliver the Bonds and perform its obligations under the Documents,
d) The Ordinance is in full force and eftect and has not been superseded, rescinded or
amended,
e) The Issuer has full legal right, power and authority to and will apply or cause to be
applied the proceeds of the Bonds as described in the Ordinance;
f)
g)
The execution of and performance by the Issuer ot its obligations under the Documents
will not cause the Issuer to be (i) in violation of any constitutional provision, law, court
decree, administrative regulation or judgment or (ii) in material detault under any loan
agreement, indenture, bond, note, resolution or other material agreement or instrument
to which the Issuer is a party or to which the Issuer or any ot its properties or assets is
otherwise subject;
All governmental approvals or authorizations required to be obtained by the Issuer prior
to the Closing in connection with the issuance and delivery of the Bonds or the
performance by the Issuer ot its obligations under the Documents have been or will be
obtained prior to Closing;
-3-
City of Yakima, Washington
August 20, 2008
Page 4
h) No filing or registration of the Ordinance or other instrument or financing statement is
required to be made to create, protect or preserve the pledge of taxing power under the
Ordinance or is required for the validity and enforceability of the Ordinance;
j)
As of the Closing, the Bonds will be legal, valid and binding obligations of the Issuer,
and, subject only to the laws of bankruptcy and insolvency, will be enforceable in
accordance with their terms and will be in full force and effect,
Except as described in the Final Official Statement there is no action, suit, proceeding,
inquiry or investigation before or by any court, governmental agency, public board or
body pending or, to the knowledge of the Issuer, threatened against the Issuer, (i) in any
way questioning the legal existence of the Issuer or the titles of the officers of the Issuer
to their respective offices, (ii) in any way aftecting or contesting or seeking to prohibit,
restrain or enjoin the issuance or delivery ot the Bonds, (iii) wherein an unfavorable
decision, ruling, or finding would have a material adverse effect on the collection and
application of taxes that may be levied for the benefit of the Issuer for the payment of the
Bonds, the financial condition of the Issuer, or would have an adverse effect on the
validity or enforceability of the Bonds or the Ordinance, or which would in any way
adversely affect the exclusion of interest on the Bonds from gross income for federal
income tax purposes, (iv) contesting the completeness or accuracy of the POS or the Final
Official Statement; or (v) to the actual knowledge of the Issuer, there is no reasonable
basis for any action, proceeding, inquiry or investigation of the nature described in the
foregoing clauses (i) through (iv),
k) The issuer believes that the unaudited 2007 financial statements contained in the Final
Official Statement fairly present the financial position of the Issuer as of the dates and for
the periods therein set forth in accordance with the accounting standards applicable to
the Issuer, and since the date thereof, there has been no material adverse change in the
financial position of the Issuer; further, the City believes that, while unaudited, the 2007
figures contained in the Final Official Statement fairly reflect the financial condition of
the City as of its date,
I) In connection with the financing process, the Underwriter provided the format tor and
certain of the content tor inclusion in the POS, assumed principal drafting responsibility
tor the preparation of the POS and coordinated the preparation and dissemination ot the
Final Official Statement. The Issuer understands and acknowledges, however, that the
ultimate responsibility for the POS and the Final Official Statement with respect to
content, accuracy and completeness is the responsibility of the Issuer as an issuer of
municipal securities. The Issuer hereby represents and warrants to the Underwriter that
the POS did not, as of its date, and the Final Official Statement will not, as of its date and
at the Closing Date, contain any untrue statement of material tact nor omit any statement
or information which is necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading; provided, however, that no
representation or warranty is made with respect to information within the POS or the
Final Official Statement relating to DTC, the book entry system, the Insurer or the
Underwriter; and
-4-
City of Yakima, Washington
August 20, 2008
Page 5
m) The Issuer has not failed to comply with any prior undertaking under the Rule in the past
five years.
7 Termination
The Underwriter may terminate its obligation under this Purchase Agreement, without liability
therefor, by notifying the Issuer of its election to do so in writing it, after the execution of this
Purchase Agreement and prior to the Closing, any one or more of the following events shall have
occurred and such event, in the reasonable opinion of the Underwriter (i) would materially and
adversely affect the marketability of the Bonds or the prices or yields of the Bonds as set forth in
Exhibit C, or (ii) would materially and adversely affect the Underwriter's ability to enforce
contracts for the sale of the Bonds:
a) A material disruption in commercial banking or securities settlement or clearance
services, or
b) The United States shall have become engaged in hostilities or existing hostilities shall
have escalated or a national emergency or other national or international calamity,
including but not limited to terrorist attack(s) or other event; or
c) A general suspension of trading or other material restrictions not in force as of the date of
this Purchase Agreement on the New York Stock Exchange or other national securities
exchange; or
d) Declaration of a general banking moratorium by the United States, New York State or
Washington State authorities, or
e) Legislation with respect to eliminating or reducing the exemption from federal or state
taxation for interest income received on obligations of the general character of the Bonds
shall be introduced or enacted by the legislature of the State of Washington or by
Congress of the United States or adopted by either the United States House of
Representatives or the United States Senate or shall have been recommended to the
Congress or otherwise endorsed for passage by the Treasury Department of the United
States, the Internal Revenue Service or by the chairman of the Senate Finance Committee
or a decision or an order or ruling with respect to eliminating or reducing such
exemption, shall have been issued by a court of the United States, including the United
States Tax Court, or by or on behalf of the Treasury Department ot the United States or
the Internal Revenue Service, or
f) Legislation shall hereatter be enacted, or actively considered for enactment, or a decision
by a court ot the United States shall hereafter be rendered, or a ruling, stop order or
regulation by the Securities and Exchange Commission or other governmental agency
having jurisdiction ot the subject matter shall hereafter be made, the effect of which is or
would be that the offering and sale of the Bonds would be illegal or that:
i) The Bonds are not exempt from the registration, qualification or similar
requirements of the Securities Act of 1933, as amended and as then in effect (the
-5-
City of Yakima, Washington
August 20, 2008
Page 6
g)
"33 Act") or distribution of the Bonds, as contemplated herein or in the Final
Official Statement, is in violation ot or not exempt from the registration,
qualification or other requirements of the 33 Act, as amended and as then in
effect, or the Securities Exchange Act of 1934, as amended and then in effect or
the Investment Company Act of 1940, as amended and then in effect (the
"Investment Company Act") or, in each case, the rules or regulations
promulgated thereunder as then in effect; or
ii) The Ordinance is not exempt from the registration, qualification or other
requirements of the Trust Indenture Act of 1939, as amended and as then in
effect; or
iii) This Purchase Agreement is subject to the Investment Company Act or requires
any registration under the Investment Company Act; or
Any litigation, except as described in the Final Official Statement, shall be instituted or
pending at Closing to restrain or enjoin the authorization, issuance, execution, sale or
delivery of the Bonds or the execution and delivery of any of the Documents, or in any
way contesting or affecting any authority for or the validity or enforceability of the
Bonds, the Ordinance or any of the other Documents, any moneys or securities provided
for the payment of the Bonds or the existence or powers of the Issuer; or
h) Any legislation, ordinance, rule or regulation shall be introduced in or enacted by any
governmental body, board, department or agency of Washington State or of the United
States, or a decision by any court of competent jurisdiction within Washington State or
any court of the United States shall be rendered materially affecting the Issuer or the
Bonds, or
i) There shall have been established any new restrictions on transactions in securities
materially affecting the free market for securities or the extension of credit by, or the
charge to the net capital requirements of the Underwriter, including without limitation,
the fixing of minimum or maximum prices tor trading or maximum ranges of prices, by
any exchange, the Securities and Exchange Commission, any other federal or state
agency or the Congress of the United States, or by Executive Order; or
j)
Except for such changes to the Final Official Statement as provided in Section 5(c) of this
Purchase Agreement, there shall have been a material adverse change in the aftairs of the
Issuer or there shall exist any event or fact or set of facts that either (a) makes untrue or
incorrect in any material respect any statement or intormahon contained in the Final
Official Statement or (b) is not reflected in the Final Otficial Statement but should be
reflected therein to make the statements and information contained therein under the
circumstances in which made not misleading in any material respect; or
k) The withdrawal or downgrading ot any rating ot the Bonds by a national rating agency
from those shown in (c)(i) of Exhibit B
-6-
City of Yakima, Washington
August 20, 2008
Page 7
8 Closing; Conditions of Closing
The Closing shall occur on such date and at such time and place as is set forth in Exhibit C or
otherwise agreed between the Issuer and the Underwriter, and subject to the satisfaction of the
terms and conditions ot this Purchase Agreement. At Closing, the following shall occur• the
Issuer will deliver the duly executed Bonds or cause to be delivered to the fiscal agent tor re-
delivery through Fast Automated Transfer System to DTC and will deliver or cause to be
delivered to the Underwriter the Ordinance, the Underwriter will accept such delivery and pay
the purchase price of the Bonds as set forth in Exhibit C hereof in same day funds. The Issuer
shall cause the applicable CUSIP identification numbers to be printed on the Bonds of each
maturity, but neither the tailure to print such number on any such Bond nor any error with
respect thereto shall constitute cause for a failure or refusal by the Underwriter to accept delivery
of and to pay tor the Bonds. The Bonds shall be prepared and delivered to the Bond Registrar at
or prior to the Closing Date.
In addition to the other requirements of this Purchase Agreement, Underwriter's obligations
hereunder are subject to and conditioned upon Issuer, at or prior to the Closing Date, delivering
or making available to Underwriter copies of the Documents and such items as are listed in
Exhibit B attached hereto and incorporated herein.
9 Fees and Expenses
The Issuer will pay the cost of preparing, printing and executing the Bonds, the fees and
disbursements of Bond Counsel, bond registration and rating fees and expenses, the bond
insurance premium, the cost of printing and distributing the POS and Final Official Statement;
travel and lodging expenses of the Issuer's employees and representatives, and other expenses of
the Issuer
The Underwriter will pay fees and disbursements of its counsel, it any, the cost of preparation
and tiling ot blue sky and legal investment surveys where necessary, the Underwriter's travel
expenses, and other expenses of the Underwriter As a convenience to the Issuer, the
Underwriter may from time to time, but only upon the prior written direction from the Issuer,
make arrangements for certain items for which Issuer is responsible hereunder, such as printing
of the POS and the Final Official Statement and travel or lodging arrangements for the Issuer's
representatives.
The Underwriter also may advance for the Issuer's account when appropriate and when directed
in advance in writing by the Issuer, the cost of the items for which the Issuer is responsible by
making payments to third -party vendors. In such cases, the Issuer shall pay such costs or
expenses directly, upon submission of appropriate invoices by the Underwriter, or promptly
reimburse the Underwriter in the event the Underwriter has advanced such costs or expenses for
the Issuer's account. It is understood that the Issuer shall be primarily responsible tor payment of
all such items and that the Underwriter may agree to advance the cost ot such items from time to
time solely as an accommodation to the Issuer and on the condition that it shall be reimbursed in
tull by the Issuer
-7-
City of Yakima, Washington
August 20, 2008
Page 8
10 Miscellaneous
a) All matters relating to the Purchase Agreement shall be governed by the laws of the state
of Washington.
b) This Purchase Agreement is intended to benefit only the parties hereto Unless it can be
shown that the untruth of any representation or warranty of the Issuer or the violation of
any agreement of the Issuer hereunder actually was or should have been discovered by
the Underwriter through its review of the information in the Final Ofticial Statement in
accordance with and as a part of its responsibilities under federal securities laws as
applied to the facts and circumstances of this transaction, all representations and
warranties and agreements of the Issuer in this Purchase Agreement shall remain
operative and in full force and effect, regardless ot (i) any investigation made by or on
behalf ot the Underwriter, (ii) delivery of and payment tor the Bonds hereunder, or (iii)
any termination of this Purchase Agreement. If the Issuer tails to satisfy any of the
foregoing conditions or covenants, or if the Underwriter's obligations are terminated for
any reason permitted under this Purchase Agreement, then neither the Underwriter nor
the Issuer shall have any further obligations under this Purchase Agreement, except that
any expenses incurred shall be borne in accordance with the Fees and Expenses Section
hereof.
c) Any notice or other communication to be given to the Issuer by the Underwriter under
this Purchase Agreement may be given by delivering the same in writing to the Director
of Finance and Budget or other authorized official of the Issuer at 129 North Second
Street, Yakima, Washington 98901, and any notice or other communication to be given to
the Underwriter by the Issuer under this Purchase Agreement may be given by
delivering the same in writing to the attention of the officer of the Underwriter executing
this Purchase Agreement at Seattle -Northwest Securities Corporation, 1420 Fifth Avenue,
Suite 4300, Seattle, Washington, 98101 Written communications may be delivered by
electronic means
d) This Purchase Agreement may be executed in any number of counterparts, all of which
shall be one and the same instrument, and either Party hereto may execute this Purchase
Agreement by signing any such counterpart.
e) This Purchase Agreement, including all documents incorporated herein by reterence,
constitutes the entire agreement between and among the Parties, supersedes any other
representations, understandings or communications between the Parties or their
representatives, and may be amended only in a writing signed by both Parties. This
Purchase Agreement is intended solely for the benefit ot the Parties (including any
successors and assigns thereof but not any holder of any Bonds) No other person shall
acquire or have any rights hereunder or by virtue hereof
-8-
City of Yakima, Washington
August 20, 2008
Page 9
Respectfully submitted,
SEATTLE -NORTHWEST SECURITIES CORPORATION
By
Title• Senior Vice Presi ent
Accepted August 20, 2008
rryvvoL
CITY OF YAKIMA, WASHINGTON
By -
Rita M. DeBord, Director of Finance and Budget Time Signed
EXHIBIT A
FINAL PRICING NUMBERS
BOND DEBT SERVICE
City of Yakima, Washington
Limited Tax General Obligation Bonds, 2008
FINAL NUMBERS
Dated Date
Delivery Date
08/28/2008
08/28/2008
Penod Annual
Ending Principal Coupon Interest Debt Service Debt Service
12/01/2008 55,000 3 250% 27 196 04 82,196 04 82.196 04
06/01/2009 51,743 75 51,743 75
12/01/2009 210 000 3 250% 51 743 75 261,743 75 313 487.50
06/01/2010 48,331.25 48,331.25
12/01/2010 220,000 3 250% 48,331 25 268,331 25 316.662 50
06/01/2011 44,756 25 44,756 25
12/01/2011 225,000 3 250% 44,756.25 269 756 25 314,512 50
06/01/2012 41 100 00 41,100 00
12/01/2012 230,000 3 250% 41 100 00 271 100 00 312,200 00
06/01/2013 37,362.50 37,362.50
12/01/2013 240,000 3.250% 37,362.50 277,362 50 314 725 00
06/01/2014 33,462 50 33,462.50
12/01/2014 250 000 3 500% 33,462.50 283 462 50 316,925 00
06/01/2015 29087.50 29,08750
12/01/2015 255 000 3 500 % 29,087 50 284,087.50 313 175 00
06/01/2016 24,625 00 24,625 00
12/01/2016 265 000 3 750% 24,625 00 289,625.00 314.250 00
06/01/2017 19 656 25 19,656.25
12/01/2017 275 000 3 750% 19 656 25 294.656 25 314,312.50
06/01/2018 14,500 00 14,500 00
12/01/2018 290,000 4 000% 14,500.00 304,500 00 319 000 00
06/01/2019 8,700.00 8,700 00
12/01/2019 295 000 4.000% 8.700 00 303 700 00 312.400 00
06/01/2020 2,800 00 2,800 00
12/01/2020 70 000 4 000% 2.800 00 72,800 00 75,600 00
06/01/2021 1 400 00 1,400.00
12/01/2021 70 000 4 000% 1,400 00 71 400 00 72.800.00
2,950 000 742,246 04 3 692.246 04 3,692.246 04
Aug 20, 2008 11 02 am Prepared by Seattle -Northwest Securities Corp JSMW (k \analysis\dbcicity\ti akima.2008LTGO1 Page 3
Bond Component
BOND PRICING
City of Yakima, Washington
Limited Tax General Obligation Bonds, 2008
FINAL NUMBERS
Maturity Premium
Date Amount Rate \ field Price (-Discount)
Serial Bonds.
12/01/2008 55.000 1250% 1 900% 100.343 18865
12/01/2009 210,000 3.250% 2 000% 101.543 3,240.30
12/01/2010 220,000 3.250% 2.290% 102.098 4,615.60
12/01/2011 225,000 3.250% 2.620% 101 952 4.392.00
12/01/2012 230,000 3.250% 2.840% 101 630 3,749 00
12/01/2013 240.000 3.250% 3 060% 100.913 2,191.20
12/01/2014 250,000 3.500% 3.270% 101.288 3,220.00
12/01/2016 255,000 3.500% 3 420% 100 506 1,290.30
12/01/2016 265,000 3 750% 3.570% 101 273 3 373 45
12/01/2017 275,000 3.750% 3 710% 100.306 841 50
12/01/2018 290 000 4.000% 3.850% 101.256 3 642.40
12/01/2019 295,000 4.000% 4.000% 100 000
12/01/2020 70,000 4 000% 4 190% 98 187 1,269 10
12/01/2021 70,000 4,000% 4 290% 97 085 2,040.50
2,950,000 27 434.80
Dated Date 08/28/2008
Delivery Date 08/28/2008
First Coupon 12/01/2008
Par Amount
Premium
Production
Underwriter's Discount
Purchase Price
Accrued Interest
2,950,000.00
27 434,80
2,977 434 80 100.929993%
21 151.50 -0 717000%
2,956,283.30 100.212993%
Net Proceeds 2.956.283.30
Aug 20 2008 11.02 am Prepared b} Seattle Northwest Secunties Corp J\IW (k:\analysis \dbc\city \\ akima:2008LTGO) Page 2
SOURCES AND USES OF FUNDS
City of Yakima, Washington
Limited Tax General Obligation Bonds 2008
FINAL NUMBERS
Dated Date
Delrvery Date
Sources.
08/28/2008
08/28/2008
08LTGO1 08LTGO2 Total
Bond Proceeds:
Par Amount
Premium
Original Issue Discount
2.190,000.00
23 923 10
760,000 00
6,821.30
3,309 60
2,950,000 00
30 744 40
3,309 60
2,213,923 10
763,511 70 2,977 434 80
Uses:
08LTGOI 08LTGO2 Total
Project Fund Deposits.
Project Fund (Misc. Projects) 2.180.000 00 2,180,000 00
Project Fund (Fire Ladder Truck Project) 750.000 00 750.000 00
Delivery Date Expenses:
Cost of Issuance
Underwriter s Discount
Bond Insurance (FSA @ 25 bps)
2,180,000 00
9,836.44
15 702.30
6,852.56
750,000.00 2,9+0,000 00
3 413.56
5 449.20
2,378.06
I +,250.00
21 151 50
9,230 62
12,391.30
Other Uses of Funds.
Additional Proceeds 1 531.80
11,240.82 43,632 12
2.270.88 1,802.68
2,213 923 10
763,511 70 2,977 434 80
Aug 20, 2008 11 02 am Prepared by Seattle -Northwest Securities Corp JMW (lc \analysis\dbc\city\\ akima2008LTGO) Page I
EXHIBIT B
CLOSING DOCUMENTS
Issuer's Closing Documents
At Closing, Issuer shall provide the following•
a) Copies of the Ordinance and the Blanket Issuer Letter of Representation,
b) The approving opinion of Bond Counsel dated as of the Closing Date and addressed to the
Issuer, substantially in the form set forth in Appendix B to the Final Official Statement and a
letter addressed to the Insurer and the Underwriter to the effect that the Insurer and the
Underwriter may rely upon such opinion as if it were addressed to the Insurer and the
Underwriter;
c) Evidence of each of the following:
i) That Standard & Poor's ("S&P") has assigned its (a) underlying rating of "A+" to the
Bonds and that such rating is in full force and effect on and as of the date of Closing and
(b) insured rating ot "AAA" based upon the Issuer's purchase of the Policy issued by the
Insurer;
ii) Issuer's purchase of the Policy, including a copy of the Policy and an opinion of counsel
to the Insurer in form and substance satisfactory to the Underwriter; and
iii) designation of the Bonds as "qualified tax-exempt obligations" for banks, thrift
institutions and other tinancial institutions, as defined in Section 265(b)(3) of the Internal
Revenue Code of 1986, as amended.
d) A copy of completed Form 8038-G,
e) The following certitications, which may be combined, executed by an authorized officer of the
Issuer and dated as of the Closing Date, to the effect that:
i) The representations, warranties and covenants of the Issuer contained herein and in the
Ordinance are true and correct in all material respects on and as of the Closing Date with
the same effect as if made on the Closing Date,
No litigation or other proceedings are pending or, to the knowledge of the Issuer,
threatened in any court in any way (a) affecting the position or title of the authorized
officers of the Issuer, or (b) seeking to restrain or to enjoin the authorization, issuance,
sale or delivery of, or security for, any of the Bonds, or (c) contesting or aftecting the
validity or enforceability of the Bonds, the Ordinance, this Purchase Agreement, or
(d) contesting the completeness or accuracy ot the POS or the Final Official Statement, or
(e) contesting the powers of the Issuer or its authority with respect to the Bonds, the
Ordinance or this Purchase Agreement, or (f) materially affecting the finances ot the
Issuer For the purpose of this subparagraph, the Issuer may rely upon a certificate of the
Issuer's legal counsel with respect to the legal matters set torth therein,
iii) No event affecting the Issuer has occurred since the date of the Final Official Statement
which should be disclosed in the Final Official Statement tor the purpose tor which it is
to be used or which is necessary to disclose therein in order to make the statements
therein not misleading, and the Final Otficial Statement does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make the
statements therein, in light of the circumstances under which they were made, not
misleading; provided, however, that no representation or warranty is made with respect
to information within the Final Official Statement relating to DTC, the book entry system,
the Insurer or the Underwriter; and
f) Such additional certificates, instruments or opinions or other evidence as the Underwriter or
Bond Counsel may deem reasonably necessary or desirable to evidence the due authorization,
issuance, execution, authentication and delivery of the Bonds, the truth and accuracy as of the
time of the Closing of the representations and warranties contained in this Purchase Agreement,
and the conformity of the Bonds and Ordinance with the terms thereot as summarized in the POS
and the Final Official Statement, and to cover such other matters as the Underwriter or Bond
Counsel reasonably requests.
Underwriter's Closing Documents
At Closing, Underwriter shall deliver or cause to be delivered to the Issuer or Bond Counsel a receipt for
the Bonds including therein a representation that all closing conditions set forth in this Purchase
Agreement have been provided to the satistaction of the Underwriter or waived by it.
EXHIBIT C
DESCRIPTION OF THE BONDS
(a) Principal Amount: $2,950,000
(b) Purchase Price:
(c) Denominations:
(d) Form.
(e) Interest Payment Dates:
(f) Maturity and Interest Rates:
$2,956,283.30 ($100.212993 per $100), representing a net
original issue premium of $27,434.80 and an
underwriter's discount of $21,151.50
$5,000, or integral multiples thereof
Registered, Book -entry only
June 1 and December 1, commencing December 1, 2008
The Bonds shall mature on December 1 of each year and
bear interest as follows:
"" P CUSIP,
rit'erest �qa �.,
alesS X984521"
3Yields ��;_
..air:^pr.atrFs:°'S..:suWA
3.25% 1 90% RH9
3.25 2.00 RJ5
3.25 2.29 RK2
3.25 2.62 RLO
3.25 2.84 RM8
3.25 3.06 RN6
3.50 3.27 RP1
2008
2009
2010
2011
2012
2013
2014
$ 55,000
210,000
220,000
225,000
230,000
240,000
250,000
2015
2016
2017
2018
2019
2020
2021
$ 255,000
265,000
275,000
290,000
295,000
70,000
70,000
CUSIP
ate's, Yielid0984521-
ates�4i,'
3.50% 3 42% RQ9
3 75 3.57 RR7
3.75 3 71 RS5
4.00 3.85 RT3
4.00 4.00 RUO
4.00 4.19 RV8
4.00 4.29 RW6
(g) Optional Redemption.
(h) Dated Date:
(i) Offer Expires:
(j) Bond Counsel
The Bonds maturing on December 1 in years 2008
through 2018, inclusive, are not subject to redemption
prior to maturity The Bonds maturing on or after
December 1, 2019 are subject to redemption at the option
of the Issuer, in whole or in part on any date on or after
December 1, 2018 at a price of par plus accrued interest,
it any, to the date of redemption.
Date of Delivery, expected to be August 28, 2008
11.59 p.m. Pacific Time, August 20, 2008.
K&L Preston Gates Ellis LLP
(k) Closing -
(I) Delivery -
(m) Bond Insurance
(n) Ratings.
Via conference call initiated by Bond Counsel on August
28, 2008, at 9:00 a.m.
To the Bond Registrar on behalf of DTC by Fast
Automated Securities Transfer
Payment of the principal of and interest on the Bonds,
when due, will be insured by the Policy to be issued by
the Insurer (Financial Security Assurance Inc.)
simultaneously with the delivery of the Bonds.
S&P will assign its rating of "AAA" to the Bonds based
on the Issuer's purchase of the Policy described above.
Furthermore, S&P has assigned its underlying rating of
"A+" to the Bonds.
•
•
BUSINESS OF THE CITY COUNCIL
YAKIMA, WASHINGTON
AGENDA STATEMENT
Item No • / 7
For Meeting of July 15,2008
ITEM TITLE An Ordinance of the City of Yakima providing for the issuance of a principal sum
not to exceed $3 5 million of Limited Tax General Obligation Bonds to finance street and traffic
infrastructure improvements and to acquire a fire truck, providing the form and terms of the
bonds, and authorizing the City Manager and the Director of Finance and Budget to approve
the final terms and execute documents necessary to complete the sale of the bonds
SUBMITTED BY Finance Department
CONTACT PERSON/TELEPHONE Rita DeBord, Finance Direct
Tim Jensen, Treasury Services Offif
SUMMARY EXPLANATION On June 10, 2008, the Council approved a Staff report authorizing
0 certain pedestrian crossings, street and other infrastructure projects, the purchase of a new
ladder fire truck, and the financing thereof The infrastructure projects and the fire truck will be
financed by a combination of available cash reserves, an outside agency contribution and
proceeds from the issuance of these Limited Tax General Obligation (LTGO) Bonds
Continued
Resolution _ Ordinance X Other (Specify) Preliminary Amortization Schedules
Contract Mail to (name and address):
Funding Source
APPROVED FOR SUBMITTAL
ity Manager
er
STAFF RECOMMENDATION Pass Ordinance
BOARD/COMMISSION RECOMMENDATION Fire Truck purchase was approved by the Public Safety
Committee and the Downtown Futures Initiative Oversight Committee approved the infrastructure projects to be
forwarded to the full Council
COUNCIL ACTION
\\Apollo\Users\ranson\COUNCIL\Council Agenda Items\2008\07-15-08 Revised A.Stmt. - LTGO Bond Ordinance.doc
Council Agenda Statement — 2008 LTGO Bonds, cont.
To quickly recap, the following infrastructure projects, fire apparatus and financing plan
previously authorized by Council is as follows
Project
• Grind and overlay (3`d Ave , Mead to Chestnut)
• Signal at N 66th Ave and Summitview
• Pedestrian Crossing 4th St. & MLK Jr Blvd
• Pedestrian Crossing 16th Ave and Bonnie Doone
Sub -total (LTGO Bonds as approved in 2008 Adopted Budget)
Financed Cost
$ 1,400,000
350,000
150,000
150,000
$ 2,050,000
• Pedestrian Crossing 16th Ave & Hathaway $130,000
(Note $120,000 additional funding will be provided by DSHS)
• Fire Ladder Truck (Total cost is $1 million) 750,000
($150,000 - General Fund reserves and $100,000 - Fire Cap reserves)
Total for 2008 LTGO Bond Issue (estimated)
$2.930.000 *
* Note to allow for changes in estimates and market conditions, the authorized maximum
amount for the bonds is set at $3 5 Million
•
Infrastructure Projects Debt service on the above infrastructure projects will be provided by
50% REET 1 and 50% REET 2 revenues and is estimated to be very close to the $250,000
annual estimate projected in the 2008 Budget Policy Issue However, the policy issue stated
that the term of the bonds would be ten years, the bond term has been increased to 11 years in
order to accommodate market conditions and the additional $130,000 financing for the 16th and
Hathaway Pedestrian crossing and still maintain the $250,000 annual debt service estimate
Staff is also proposing a small December 2008 principal payment of approximately $61,500
($30,750 from each REET fund) be made on this bond issue in order to minimize total interest
costs and to achieve the shortest bond term and budgeted debt service levels Although each
REET Fund has $25,000 budgeted in 2008 for debt service (for a total of $50,000), the
additional payment required in each fund ($5,750) will not require a budget appropriation, as
both funds have contingency budgets available
The Fire Ladder Truck. Total purchase cost is approximately $1 million, of that amount,
$150,000 will be provided from General Fund Reserves, and $100,000 will be provided from
Fire Capital Fund Reserves (Note the budget appropriation, for the transfer of General Fund
Reserves to Fire Capital was submitted to Council on July 1st and is scheduled for a second
reading and Council approval at the July 15th Council meeting) The $1 million total cost of the
truck itself was Appropriated in the Fire Capital Fund, and included in the 2008 Adopted
Budget. The remaining $750,000 purchase price of the truck, after reserve contributions -
$250,000 - will be provided from these LTGO Bond proceeds
Page 2 of 4
•
•
•
Council Agenda Statement — 2008 LTGO Bonds, cont.
Note Debt service on the fire truck was budgeted to be paid from REET 1 Resources After
further research, it was determined that REET1 Resources were not eligible for the purchase of
Fire apparatus, therefore, staff proposed, and Council previously authorized
1) Property tax revenues budgeted to pay debt service on the 2007 bonds issued to expand
the W V Fire Station to be used for debt service on these 2008 bonds, and
(2) The REET 1 funds will be used to pay the debt service on the 2007 Fire Station bonds
Debt service on both the 2007 and the 2008 bonds is estimated to be very similar,
approximately $75,000 annually The 2007 LTGO Bonds will retire in May 2022 and the 2008
Bonds, which have a 13 -year maturity, will retire in December 2021
A December 2008 principal payment of approximately $18,000 will be required to meet the
desired bond terms and debt service limitations This will not require a budget appropriation,
as the Property Tax allocation was included in the 2008 adopted Budget, but originally
designated for repayment of the 2007 W V Fire Station Bonds (see discussion above)
Terms, Form and Covenants of Bonds.
The form and covenants of the proposed bonds are described in the bond ordinance, for
Council review and consideration Other specific details — such as the actual interest rates, the
final structure of the bonds, insurance costs, etc. will not be known until the bonds are placed in
the market. Council's approval of this bond ordinance authorizes staff to set the terms and
conditions of the bond sale, within the parameters set in the ordinance, as we continue through
the bond issuance process Once the bond pricing is concluded and a purchase offer is made,
specific terms and conditions will be known Normally, at this point, staff prepares all of this
information in the form of the bond purchase / sale resolution and submits this to Council for
final approval However, due to circumstances outside of staffs control (as outlined below), we
are not able to proceed in the normal manner with this bond issue and staff is proposing a
different process
Note: The underwriters require that Council accept or reject their purchase offer within
24 hours of when the offer is made, this means that Council must meet and formally
accept the purchase offer within this 24 hour timeframe or the offer automatically
expires This is standard procedure, as the underwriters cannot legally conclude the
sale until Council authorizes the purchase agreement and since the bond market can
change quickly, the underwriters minimize their exposure by limiting their offer to a 24-
hour time period
Normally, this is not an issue as staff schedules the bond pricing (purchase offer) date on a
Council business meeting date However, due to scheduling conflicts between Council's
regular business meetings and available and attractive dates to enter the market (for example
holidays, the underwriters availability and the cash flow needs of the various projects) an
acceptable bond pricing date that coincides with a Council business meeting date is not
available Therefore, staff is proposing that Council set the general parameters under which
the bonds may be issued and delegate authority for the specific terms and conditions and for
the final documents to complete the bond sale to the City Manager and the Director of Finance
and Budget. The attached Ordinance includes language to accomplish this delegation
Page 3 of 4
Council Agenda Statement — 2008 LTGO Bonds, cont.
The attached Ordinance was prepared by the City Bond Counsel, KL Preston, Gates, if
approved by Council, this Ordinance would set the general parameters for the bond issue
(examples, the maximum principal amount that may be borrowed, the maximum interest rates,
the purpose and use of the bond proceeds, bond denominations, the bond underwriters, dates
of interest / principal payments, pledging the full faith and credit of the City, etc ) and would also
authorize the delegation of authority to finalize the specific terms and conditions of the bond
sale to the City Manager and the Finance Director The authority to set the specific terms and
conditions of the bond sale — within the parameters authorized by Council in the ordinance —
includes authority to finalize the Preliminary Official Statement (POS), the Official Statement
and any/all other legal documents necessary or desirable to execute the bond sale — including
the authority to execute a purchase / sale agreement - without obtaining further Council
authorizations
Staff will, of course, provide a complete report to Council of the final terms and conditions, the
POS, and the purchase / sale agreement at the next regularly scheduled Council business
meeting after the sale date for the bonds
The attached Ordinance, if approved by Council, would among other things, authorize the
following
❖ $3 5 million — maximum principal amount of bond issue
❖ 5 0 % - maximum Total Interest Costs, includes insurance, legal and underwriting costs,
on the total bond issue,
o 4 31 % - staffs estimated Total Interest Costs, based on current market
conditions
•
Staff Recommendation. s
Staff respectfully requests Council pass this Ordinance authorizing the issuance of the 2008
LTGO Bonds and the delegation of authority
Enclosed, please find
1 Bond Ordinance, and
2 Preliminary Amortization (debt service),Schedules for
a The Fire Ladder Truck,
b Miscellaneous Infrastructure projects
c Combined — fire truck and infrastructure projects
Page 4 of 4
978
CONTRACTS
Contract Title
Purchase Agreement
Contracting Party
Seattle Northwest Securities Corporation
Purpose
Issuance and sale of Limited tax general obligation bonds - $2,950,000
Originating Division
Finance
Staff Liaison
Rita DeBord
Amendments
Effective Date
08/20/2008
Eff. Date Explanation
Expiration Date
Exp. Date Explanation
Dollar Amount
Dollar Amt Explanation
Bond sale $2,950,000
Contract ID
2008-103
Resolution ID
Insurance (yes/no)
Insurance Expires
Insurance Name
File Location No.
C 08 101
Archive Info
Comments
Approved by Ordinance 2008-34