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HomeMy WebLinkAbout2007-019 Limited Tax General Obligation Bond; Revolving Line of Credit; Amending Ordinance 97-29 I � ORDINANCE NO. 2007-19 AN ORDINANCE of the City of Yakima, Washington, amending Ordinance No 97 -29, as currently amended by Ordinance No 2002 -31, and the terms of the City's Limited Tax General Obligation Bond, 1997 WHEREAS, the City Council of the City of Yakima, Washington (the "City ") passed Ordinance No 97 -29 on May 6, 1997 establishing a line of credit in the aggregate principal amount of not to exceed $5,000,000 to provide funds for various City capital projects, and WHEREAS, the City issued its Limited Tax General Obligation Bond, 1997 (KeyBank Line of Credit), dated June 9, 1997 (the "Bond "), to KeyBank National Association (the "Bank ") to evidence the line of credit; and WHEREAS, Ordinance No 2002 -31 of the City, passed on May 21, 2002, amended certain terms of Ordinance No 97 -29, including extending the maturity date of the Bond until June 1, 2007, and WHEREAS, the City has received an offer from the Bank to amend the terms of the Bond, and WHEREAS, it is in the best interest of the City to amend the terms of the Bond and to extend the maturity of the Bond to June 1, 2012, NOW, THEREFORE, BE IT ORDAINED BY the City of Yakima, Washington, as follows Section 1 Section 2 of Ordinance No 97 -29 is hereby amended to read as follows (additions are double underlined and deletions are stricken) Section 2 Authorization of Bond. The City shall now issue and sell to the Bank its limited tax general obligation bond in the principal amount of not to exceed $5,000,000 (the "Bond ") to establish a line of credit with the Bank for the purpose of providing funds to pay the costs of acquiring and constructing various City capital projects ( "the Property ") and the costs of issuance of the Bond. The Bond shall be designated "City of Yakima, Washington, Limited Tax General Obligation Bond, 1997 (KeyBank Line of Credit)," shall be dated as of the date of its delivery to the Bank, shall be fully registered as to both principal and interest, shall be in the denomination of not to exceed $5,000,000, and shall be numbered in such manner and with any additional designation as the Bond Registrar deems necessary for purposes of identification. Draws on the line of credit established by the sale of the Bond to the Bank shall be made in accordance with the provisions of Section 11 [of Ordinance No 97 -29] hereof. The Outstanding Principal Balance shall bear interest initially at a per annum rate equal to seventy -nine and 12/100 percent (79 12 %) of the LIBOR rate until the date of delivery of a replacement Bond and, commencing on such date, the Bond shall bear interest at a rate equal to one hundred percent (100 %) of65% of the sum of the LIBOR rate plus 2.12% (the "Adjusted LIBOR Rate ")in effect on the day of closing and fiery of the replacement Bond. The City may choose to set the interest rate applicable to the Outstanding Principal Balance shall be reset at the time of each draw based on the one month, two month, three month or six month ach June 1 thereafter to a per annum rate equal to 100 %of the LIBOR rate in effect on such dateJune 1, and the Outstanding Principal May 31st. The interest rate applicable to particular principal amount drawn under the Bond shall be 100% of the Adjusted LIBOR Ratein cffcct determined from the date the Bank honors such draw until such rate is reset. Interest shall be calculated on the basis of a year of 360 days and actual days elapsed. Interest shall be payable annually on every June 1, commencing June 1, 2002 The Outstanding Principal Balance shall be due and payable at final maturity of the Bond on June 1, 2012June 1, 2007 Section 2 Section 4 of Ordinance No 97 -29 is hereby amended to read as follows (additions are double underlined and deletions are stricken) Section 4 Prepayment. The City may prepay all or a portion of the principal amount owing on the Bond on any LIBOR resetintcrest payment date — without penalty Repayment on any date other than a LIBOR reset date may be subject to a break funding prepayment charge. Section 3 The City shall issue a new Bond, dated the date of delivery to the Bank in exchange for the Bond dated May 31, 2002, reflecting the amended terms herein and subject to the terms of the Bank's commitment letter which is attached as Exhibit A and incorporated -2- P' \NMN \NMN2XU herein by this reference Upon delivery of the new Bond, the City shall pay to the Bank a fee of $5,000, plus legal expenses not to exceed $2,000 All other provisions of Ordinance Nos. 97 -29 and 2002 -31 shall remain unchanged. Section 4 For as long as the Bond is outstanding, the City shall provide the Bank with copies of the City's annual audited financial statements within 10 days of receipt from the State Auditor Upon request, the City will also provide the Bank with their annual budget within 30 days of adoption. Section 5 The Director of Finance and Budget is authorized to take any action necessary to implement this ordinance. Section 6 This ordinance shall be effective thirty days after its publication as provided by law PASSED by the City Council of the City of Yakima at a regular meeting thereof, held this 17th day of April, 2007 CITY OF YAKIMA, WASHINGTON � %�r _ / David Elder, Mayor ATTEST Deborah J Mo , City Clerk APPROVED AS TO FORM N/A City Attorney First Reading N/A Publication Date 4 - 20 - 2007 Effective Date 5 - 20 - :007 -3- P INMNINMN2X U EXHIBIT A KEYBANK PROPOSAL Key Bank O KeyB April 5, 2007 WA -31 -18 -0548 601-108 Avenue NE P 0 Box 90027 Tim Jensen Bellevue, WA 98009 City of Yakima 129 North Second Street Phone: 425-709-4541 Yakima, Washington 98901 Fax: 425-709-4547 Via Email tjensen @ci yakima.wa.us Re Limited Tax General Obligation Bond (Line of Credit) Dear Tim KeyBank National Association (the "Bank ") is pleased to provide this proposal to extend the City of Yakima's $5,000,000 LTGO line of credit that expires on June 1, 2007 Although we believe the indicative terms and conditions listed below are responsive, we welcome your input as to any aspects that may not suit your needs We are prepared to make ourselves available to discuss alternative structures and /or credit terms We want to ultimately deliver a financing that will be most aggressive and will win your business Borrower City of Yakima (the "City ") Facility $5,000,000 Limited Tax General Obligation Line of Credit Security Pledge of general revenue of the City Tax Status Bank Qualified, Tax Exempt Interest Rate Interest will be calculated based on LIBOR. The interest will be determined by the formula noted below (LIBOR plus 2.12 %) times 65 At the time of each draw the City would chose to set the rate based on the one month, two month, three month or six month LIBOR. Maturity Five (5) years from the date of closing Repayment: Interest due annually, Principal due at maturity Origination Fee $5,000 Prepayment: Principal payments may be made on any LIBOR reset date without penalty Repayment on any date other than LIBOR reset date may be subject to a break funding prepayment charge Page 1 of 2 Financial Data Required The Bank will be provided, for the life of the Facility, annual audited financial statements within 10 days of receipt from the State Auditor And upon request of the Bank, the City will provide annual budgets within 30 days of adoption Additional Terms and Conditions All required documentation for the Facility including the borrowing ordinance and the enforceability, tax and validity opinion, will be prepared by bond counsel acceptable to the Bank and Bank counsel and delivered prior to or at closing All legal fees for this documentation will be assessed to the account of the Borrower Bank legal fees to be paid by Borrower Legal fees not to exceed $2,000 All interest calculations will be based on actual / 360 day basis The Bank's obligation under this proposal shall be subject to satisfaction of all of the conditions contained herein and all documentation that is customarily undertaken in a loan transaction and is subject to the final credit approval of the Bank. The issuance of this proposal shall not prejudice the Bank's rights of review and approval, including without limitation, of all documents and materials heretofore delivered to the Bank by or on behalf of the City This letter is solely for your benefit and is not to be relied upon, or shared, with any third parties This proposal will expire on June 10, 2007 unless extended by our mutual agreement. Please call me at 425 - 709 -4541 or Carolyn Nelson at 425- 709 -4540 with any questions Sincerely, Kim Monson Senior Vice President Page 2 of 2 CITY OF YAKIMA, WASHINGTON LIMITED TAX GENERAL OBLIGATION BOND, 1997 (KEYBANK LINE OF CREDIT) - SS,000,000 ORDINANCE NO 97- 2 9 AN ORDINANCE of the City of Yakima, Washington, providing for the issuance and sale of a limited tax general obligation bond of the City in the aggregate pnncipal amount of $5,000,000, for the purpose of establishing a t of credit to provide funds for various lawful City purposes and to pay n issuance of said bond, providing the date, form, and repayment terms of said bond and for the pledge of funds to pay the pnncipal thereof and interest thereon, and approving the sale of such bond APPROVED ON MAY 6, 1997 PREPARED BY PRESTON GATES & ELLIS LLP 5000 Columbia Center - 701 Fifth Avenue Seattle, Washington 98104 -7078 Table of Contents Page 1 Section 1 Definitions 1 .2 Section 2 Authonzauon of Bond 3 Section 3 Registration and Payments 3 Section 4 Prepayment 3 Section 5 Form of Bond S Section 6 Execution of Bond 6 Section 7 Application of Bond Proceeds 6 Section 8 Pledge of Funds and Credit 6 Section 9 Tax Covenants and Designation 7 Section 10 Sale of the Bond 7 Section 11 Procedures for Draws on the Bond Section 12 Severability 7 7 Section 13 Effective Date This table of contents is not a part of this resolution, it is included for convenience of the reader only -1- ORDINANCE NO 97- 2 9 AN ORDINANCE of the City of Yakima, Washington, providing for the issuance and sale of a limited tax general obligation bond of the City in the aggregate principal amount of S5,000,000, for the purpose of establishing a line of credit to provide funds for vanous lawful City purposes and to pay the costs of and repayment terms of said the date, form, issuance of said bond, providing bond and for the pledge of funds to pay the principal thereof and interest thereon, and approving the salt of such bond. WHEREAS, the City Council (the "Council ") of City of Yakima, Washington (the "City "), has determined that it is in the best interest of the City to establish a line of credit to finance the costs of City projects pending the availability of permanent funding therefor, and WHEREAS, the City is authorized, pursuant to RCW 39 46 050, to establish a line of credit with a qualified public depositary to be drawn upon in exchange for a bond of the City, and WHEREAS, the City has received the offer of KeyBank National Association, Seattle, Washington (the "Bank "), to establish a line of credit in the pnncipal amount of not to exceed 55,000,000 in exchange for a limited tax general obligation bond of the City in the principal amount of 55,000,000 (the "Bond "), and the Council wishes to accept such offer on the terms and conditions set forth herein and in the Bank's offer to purchase the Bond and estabhsh the lint of credit, NOW, THEREFORE, THE CITY OF YAKIMA, WASHINGTON, DO ORDAIN, as follows ion 1 Definitions As used in this ordinance, the following words shall have the following meanings "Authorized Officer" means the Duector of Finance and Budget of the City, or his designee "Bank" means KeyBank National Association, Seattle, Washington, and any business successor thereto "City oun ce" means the duly constituted City Council as the general legislative authority of the City " and R str " means the Treasurer, for the purposes of registenag and authenticating the Bond, maintauung the Bond Register, and paying installments of principal and interest on the Bond "Bond" means the City of Yalama, Washington, Lunrted Tax General Obligation Bond, 1997 (Key Bank Line of Credit), in the principal amount of 55,000,000, issued pursuant to this ordinance "Code: means the federal Internal Revenue Code of 1956, as amended from time to tune, and the applicable regulations thereunder „ means City of Yakima, Washington, a murucipal corporation duly organized and existing under and by virtue of the laws of the State of Washington. "LIBOR" means the one -year London Inter -Bank Offered Rate as set forth on the Bank's daily cost of funds rate sheet, as obtained from the Reuters Monitor Money Rates Service. W(lutstanding Principal Balance" of the Bond means on any particular day the aggregate of all funds that the City has drawn from the Bank under the Bond to that day, less the aggregate of all pnncipal payments on the Bond made by the City on or before that day "Treasurer" means the Director of Finance and Budget of the City, or any successor to the functions of such officer Section 2 thonzat of Bon The City shall now issue and sell to the Bank its limited tax general obligation bond in the pnncipal amount of not to exceed 55,000,000 (the "Bond ") to establish a line of credit with the Bank for the purpose of providing funds to pay the costs of acquiring the Property and the costs of issuance of the Bond. The Bond shall be designated "City of Yakima, Washington, Limited Tax General Obligation Bond, 1997 (KeyBank Line of Credit)," shalt be dated as of the date of its delivery to the Bank, shall be fully registered as to both pnncipal and interest, shall be in the denomination of not to exceed $5,000,000, and shall be numbered in such manner and with any additional -2- ru+Frsa ma doc designation as the Bond Registrar deems necessary for purposes of identification. Draws on the line of credit established by the sale of the Bond to the Bank shall be made in accordance with the provisions of Section 11 hereof The Outstanding Pnncipal Balance shall bear interest initially at a per annum rate equal to seventy -nine and 12/100 percent (79 12 %) of the LIBOR rate m effect on the day of the urinal draw on the line of credit established hereunder The Interest rate applicable to the Outstanding Pnncipal Balance shall be reset each June 1 thereafter to a per annum rate equal to 79 12% of the LIBOR rate in effect on such June 1, and the Outstanding Principal Balance shall thereafter bear Interest at such rate through the following May 30 Interest on a particular principal amount drawn under the Bond shall be determined from the date the Bank honors such draw Interest shall be calculated on the basis of a year of 365/366 days and actual days elapsed. Interest shall be payable every June 1 and December 1, commencing on December 1, 1997 The Outstanding Pnncipal Balance shall be due and payable at final matunty of the Bond on June 1, 2002 Section 3 R on at d Pavmea The Treasurer shall act as authenticating agent, paying agent and registrar for the Bond (collectively, the "Bond Registrar ") Both pnncipal of and interest on the Bond shall be payable in lawful money of the United States of America Payments of pnncipal of and interest on the Bond shall be made by check or drag of the Bond Registrar mailed five calendar days prior to the date such interest is due or by electroruc funds transfer made on the date such interest is due to the Bank at the address appearing on the Bond Register Upon final payment of all principal and interest thereon, the Bond shall be submitted to the Bond Registrar for cancellation and surrender The Bond is not transferable Section 4 Prepayment The City may prepay all or a portion of the principal amount owing on the Bond at any time without penalty Sectton 5 Form of Bond. The Bond shall be in substantially the following form UNITED STATES OF AMERICA NO S5,000,000 -3- J CCITwOUE,.ak» ex (Drawn as provided herein) STATE OF WASHINGTON CITY OF YAKIMA LIMITED TAX GENERAL OBLIGATION BOND, 1997 INTEREST RATE A per annum rate equal to seventy -rune and 12/100 percent (79 12 %) of LIBOR (as defined in the Bond Resolution) from tune to time, as provided herein REGISTERED OWNER KeyBank National Association PRINCIPAL AMOUNT FIVE MILLION AND NO /100 DOLLARS (Drawn as provided herein) THE CITY OF YAKIMA, WASHINGTON (the "City "), hereby acknowledges itself to owe and for value received promises to pay to the Registered Owner identified above, or registered assigns, the Outstanding Pnncipal Balance (as defined below) of this bond, in an amount not to exceed the Principal Amount specified above. The Outstanding Principal Balance on any particular day shall be the aggregate of all funds that the City has drawn from the date of this bond to that day less the aggregate of all principal payments made by the City on or before that day The Outstanding Principal Balance shall bear interest initially at a per annum rate equal to 79 12% of the Bank's one -year LIBOR rate in effect on the day of the initial draw on the line of credit established hereunder The interest rate applicable to the Outstanding Pnncipal Balance shall be reset each June 1 thereafter at a per rate cipal Balance 12% hall one-year interest rate in effect on such June 1, and the Outstanding at such rate through the following May 30 Interest on a particular pnncipal amount drawn under the Bond shall be determined from the date the Bank honors such draw Interest shall be calculated on the basis of a year of 365/366 days and actual days elapsed. Interest shall be payable every June 1 and December l both e e the on June 1, Outstanding Pnncipal Balance shall be due and payable at final maturity of De Both principal of and interest on this bond are payable in lawful money of the United States of Amenca Installments of the principal of and interest on the Bond shall be paid by check or draft of the Director of Finance and Budget ue of City (the "ond funds R transfer medal on the calendar days pnor to the date such date such interest is due to the registered owner or nominee at the address appearing on the Bond Register Upon final payment of all installments of principal and interest thereon, this note shall be submitted to the Bond Registrar for cancellation and surrender THIS BOND IS NOT TRANSFERABLE -4- J 0:77,20140fillElYslatrna doe Both pruicipal of and interest on this bond are payable out of annual levies of ad valorem taxes to be made upon all of the taxable property within the City permitted to be levied without a vote of the electorate in amounts which, together with other available funds, will be sufficient to pay such pnncipal and interest as the same shall become due The full faith, credit and resources of the City are hereby irrevocably pledged for the prompt payment of such pnncipal and interest. It is hereby certified that all acts, conditions and things required by the Constitution and statutes of the State of Washington to exist, to have happened, been done and performed precedent to and in the issuance of this bond have happened, been done and performed and that the issuance of this bond does not violate any constitutional, statutory or other limitation upon the amount of bonded mdcbtedness that the City may incur IN WITNESS WHEREOF, the City of Yakima, Washington, has caused this bond to be executed by the manual or facsimile signatures of the Mayor and City Clerk as of this day of , 1997 CITY OF YAKIMA, WASHINGTON By /s/ Mayor ATTEST /s/ City Clerk REGISTRATION CERTIFICATE This bond is registered m the name of the Registered Owner on the books of the City, in the office of the Director of Finance and Budget (the "Bond Registrar "), as to both pnncipal and interest, as noted in the registration blank below All payments of pnncipal of and interest on this bond shall be made by the City with full acquittance by the Bond Registrar's check or warrant, made payable to the Registered Owner as shown hereon and on the registration books of the Bond Registrar and delivered to such owner or mailed to him at his/her address noted hereon and on the registration books of the Bond Registrar Date of Name and Address of Signature of Registration Registered Over Registrar Section 6 Execution of Bond The Bond shall be executed on behalf of the City with the manual or facsimile signatures of the Mayor and City Clerk Only such Bond as shall bear -5- J,oa,,, 4ZetfE r.k.m.. c thereon a Registration Certificate in the form herembefore recited, manually executed by or on behalf of the Bond Registrar or its duly designated agent, shall be valid or obligatory for any purpose or entitled to the benefits of this ordinance In case either of the officers who shall have executed the Bond shall cease to be an officer or officers of the City before the Bond so signed shall have been authenticated or delivered by the Bond Registrar, or issued by the City, such Bond may nevertheless be authenticated, delivered and issued and upon such authermcation, delivery and issuance, shad 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 who are at the actual date of delivery of such Bond are the proper officers of the City although at the original date of such Bond any such person shall not have been such officer of the City Section 7 A lica n of Bond Proceeds The money derived from draws on the line of credit established by the sale of the Bond shall be deposited in the appropnate fund of the City and shall be expended for lawful City purposes and the costs of issuing and selling the Bond, as authorized herein Section 8 Pledge of Funds and Qredit. Both principal of and interest on the Bond are payable out of annual levies of ad valorem taxes to be made upon all of the taxable property within the City permitted to be levied without a vote of the electorate in amounts that, together with other available funds, will be sufficient to pay such principal and interest as the same shall become due. The full faith, credit and resources of the City are hereby irrevocably pledged for the prompt payment of such pnncnpal and interest. Seon 9 Tax and Designation (a) Covenants Regarding Arbitracte and Pnvate Activity The City hereby covenants that it will not make any use of the proceeds of sale of the Bond or any other funds of the City that may be deemed to be proceeds of such Bond pursuant to Section 148 of the Code that will cause the Bond to be an "arbitrage bond" within the meaning of said section and said regulations. The City will comply with the requirements of Section 148 of the Code (or any successor -6- r ■ZOTO040dieTf OloPod a« provision thereof applicable to the Bond) and the applicable Regulations thereunder throughout the term of the Bond The City further covenants that it will not take any action or permit any action to be taken that would cause the Bond to constitute a "private activity bond" under Section 141 of the Code (b) Bond D i ated ed Tax -Exem t Ob ations." The City hereby designates the Bond as a qualified ax-exe npt obligation for purchase by financial institutions pursuant to Section 265(b) of the Code. The City does not anticipate that it will issue more than 510,000,000 in qualified tax - exempt obligations during the year 1997 Section 10 Sale of the Bond. The offer of the Bank dated May 2, 1997, to purchase the Bond on the terms specified therein and m this ordinance is hereby in all respects accepted and approved The proper City officials are hereby authorized and directed to do everything necessary for the prompt execution and delivery of the Bond to the Bank and for the proper application and use of the proceeds of sale thereof Section 11 Procedures for Draws on the Bond. A request for draw pursuant to the Bond may be made in writing by an Authorized Officer in any manner approved by the Bank and the Authonzed Officer; provided, however, that each draw shall be in a minimum amount of 510,000 (unless it is the final draw or this requirement is otherwise waived by the Bank) and shall be subject to the wntten approval of Preston Gates & Ellis LLP or any other nationally recognized bond counsel firm satisfactory to the City and acceptable to the Bank Section 12 Severability If any one or more of the covenants or agreements provided in this ordinance to be performed on the part of the City shall be declared by any court of competent jurisdiction to be contrary to law, then such covenant or covenants, agreement or agreements, shall be null and void and shall be deerned separable from the remaining covenants and agreements of this ordinance and shall m no way affect the validity of the other provisions of this ordinance or of the Bond -7- J.0or Mont ea Section 13 Effective Date. This ordinance shall become effective from and after its passage and publication in accordance with law PASSED by the City Council of the City of Yakima, Washington, at a regular meeting thereof held this 6th day of May, 1997 eavtm K xe_14/1 Lynn Buchanan, Mayor ATTEST ADEN S. RO NTS, CMC City Clerk -8- J 1001 aoe CITY CLERKS CERTIFICATE 1, the undersigned, City Clerk of the City of Yalama, Washington (the "City") and keeper of the records of the City Council (the "Council "), DO HEREBY CERTIFY 1 That the attached Ordinance is a true and correct copy of Ordinance No 97- 2 9 of the City (the "Ordinance "), duly passed at a regular meeting of the Council held on the 6th day of May, 1997 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 legal quorum was present throughout the meeting and a legally sufficient number of members of the Council voted in the proper manner for the passage of the Ordinance; that all other requirements and proceedings incident to the proper passage of the Ordinance have been duly fulfilled, carved out and otherwise observed, and that I am authonzed to execute this certificate IN WITNESS WHEREOF, I have hereunto set my hand this day of May, 1997 Is/ KAREN S. ROBERTS, CMC City Clerk, City of Yakima ORDINANCE NO 2002 -31 AN ORDINANCE of the City of Yakima, Washington, amending Ordmance No 97 -29 and the terms of the City's Limited Tax General Obhgation Bond, 1997 WHEREAS, the City Council of the City of Yakima, Washington (the "City ") passed Ordmance No 97 -29 on May 6, 1997 estabhshmg a hne of credit m the aggregate principal amount of not to exceed $5,000,000 to provide funds for various City capital projects, and WHEREAS, the City issued its Limited Tax General Obligation Bond, 1997 (KeyBank Lme of Credit), dated June 9, 1997 (the "Bond "), to KeyBank National Association (the "Bank ") to evidence the line of credit; and WHEREAS, the City has received an offer from the Bank to amend the terms of the Bond, and WHEREAS, it is m the best interest of the City to amend the terms of the Bond and to extend the maturity of the Bond to June 1, 2007, NOW, THEREFORE, BE IT ORDAINED BY the City of Yakima, Washington, as follows. Section 1 Section 2 of Ordmance No 97 -29 is hereby amended to read as follows (additions are double underhned and deletions are stricken) Section 2 Authorization of Bond. The City shall now issue and sell to the Bank its limited tax general obligation bond in the principal amount of not to exceed $5,000,000 (the "Bond ") to establish a line of credit with the Bank for the purpose of providmg funds to pay the costs of acquiring and constructing various City capital projects ( "the Property and the costs of issuance of the Bond. The Bond shall be designated "City of Yakima, Washington, Limited Tax General Obligation Bond, 1997 (KeyBar} prie of Credit)," shall be dated as of the date of its delivery to the pank, shall be fully registered as to both principal and mterest, shall be m the denomination of not to exceed $5,000,000, and shall be numbered in such manner and with any additional designation as the Bond Registrar deems necessary for purposes of identification. Draws on the line of credit established by the sale of the Bond to the Bank shall be made in accordance with the provisions of Section 11 hereof The Outstanding Principal Balance shall bear interest nutially at a per annum rate equal to seventy -nine and 12/100 percent (79 12 %) of the LIBOR rate until the date of delivery of a replacement Bond and, commencmg on such date, the Bond shall bear mterest at a rate equal to one hundred percent (100 %) of the LIBOR rate m effect on the day of closing and delivery of the replacement Bond. • . of credit established hereunder The mterest rate applicable to the Outstandmg Principal Balance shall be reset each June 1 thereafter to a per annum rate equal to 100% 79.12%-of the LIBOR rate m effect on such June 1, and the Outstanding Principal Balance shall thereafter bear mterest at such rate through the following May 31' 30 The Interest rate applicable to en-a particular prmcipal amount drawn under the Bond shall be 100% of the LIBOR rate m effect determined from the date the Bank honors such draw until such rate is reset. Interest shall be calculated on the basis of a year of 360 36 days and actual days elapsed. Interest shall be payable annually on every June 1 December 1, commencmg ern June 1, 2002 December-11-997 The Outstanding Prmcipal Balance shall be due and payable at final maturity of the Bond on June 1, 2007 200-2. Section 2. Section 4 of Ordinance No 97 -29 is hereby amended to read as follows (additions are double underlined and deletions are stricken) Section 4 Prepayment. The City may prepay all or a portion of the principal amount owing on the Bond on any mterest payment date at any time-without penalty Section 3 The City shall issue a new Bond, dated the date of delivery to the Bank m exchange for the Bond dated June 9, 1997, reflectmg the amended terms herein and subject to the terms of the Bank s commitment letter which is attached as Exhibit A and incorporated herein by this reference All other provisions of Ordmance No 97 -29 shall remam unchanged. Section 4 The Director of Finance and tudget is authorized to take any action necessary to implement this ordinance -2- K:\25739 \000311ZCF\ZCF N21E6 Section 5 This ordinance shall be effective thirty days after its publication as provided by law PASSED by the City Council of the City of Yakima at a regular meetmg thereof, held this 21 day of May, 2002. CITY OF YAKIMA, WASHINGTON 411 Mayor ATTEST City Clerk APPROVED AS TO FORM. �. "a-ef)e ity Attorney First Reading N/A Publication Date 5 - 24 - 2002 Effective Date 6 - 23 - 2002 -3- K:1257391000312CF\ZCF N21E6 Commitment Letter [ k z. i6 Key; k WA -31 -18 -0548 601 -108 Avenue NE P 0 Box 90027 Bellevue, WA 98009 May 16, 2002 Phone: 425-709-4541 Fax: 425- 709 -4547 Tim Jensen City of Yakima 129 North Second Street Yakima, Washington 98901 Re: City of Yakima Credit Request Dear Tim. Thank you for the opportunity to respond to your request for the current financing needs of the City of Yakima (the "City "). This letter provides the terms of the credit commitment of the Bank to extend the City's current line of credit that expires on June 1, 2002. This commitment will expire on June 10, 2002. Borrower° City of Yakima (the "City ") Facility' $5,000,000 Limited Tax General Obligation Line of Credit Security Pledge of general revenue of the City Interest Rate Bank Qualified Tax Exempt: 100% of one year LIBOR, set on the date of closing, reset annually thereafter ' aturity° Five (5) years from the date of closing Repayment: Interest due annually, Principal due at maturity Origination Fee° $5,000 Prepayment: LIBOR Option. Prepayment only on annual reset date. Financial Data Required The Bank will be provided, for the life of the Facility, annual unaudited financial statements by May 31 after each fiscal year end and audited financial statements within 10 days of the receipt of the Audited Financial Statements. And upon request, the City will provide annual budgets within 30 days of adoption and quarterly financials reports within 45 days of each quarter end. is Commitment Letter is for use by addressee only and is not to be relied upon by third parties Commitment Letter Additional Terms and Conditions All required documentation for the Facility or Facilities including the borrowing ordinance and the enforceability, tax and validity opinion, will be prepared by bond counsel acceptable to the Bank and Bank counsel and delivered prior to or at closing. All legal fees for this documentation will be assessed to the account of the Borrower Bank legal fees to be paid by Borrower Legal fees not to exceed $1,500 All interest calculations will be based on actual / 360 day basis. This letter is solely for your benefit and is not to be relied upon, or shared, with any third parties. I look forward to continuing to work with you, the City, and bond counsel on this project. Please call me at 425 - 709 -4541 or Carolyn Nelson at 425- 709 -4540 with any questions. Sincerely, Kim Monson Vice President This Commitment Letter is for use by addressee only and is not to be relied upon by third parties BUSINESS OF THE CITY COUNCIL YAKIMA, WASHINGTON , AGENDA STATEMENT Item No I. ZS For Meeting Of 4/17/2007 ITEM TITLE An Ordinance of the City of Yakima, Washington amending Ordinance No 97- 29, as currently amended by Ordinance 2002 -31, and the terms of the City's Limited Tax General Obligation Bond - Line of Credit, 1997 SUBMITTED BY Rita DeBord, Finance Direct I CONTACT PERSON /TELEPHONE Tim Jensen, Tre. , services Officer 575 -6070 SUMMARY EXPLANATION Council's passage of this Ordinance will extend the City's existing $5,000,000 Limited Tax General Obligation Revolving line of credit from it's maturity date of June 1St 2007 to June 1St, 2012. The Line of Credit is used to make relatively small borrowings when traditional bond financing is not cost effective The proceeds are drawn down as needed, rather than in a lump sum as in traditional bonding. For instance it has been used in the past to finance the construction of the Probation Center and various Irrigation Division capital improvements. Additionally it is available for short -term "bridge financing" to begin larger projects prior to traditional bonding, as was the case with the remodel of the West Valley Fire Station. The current outstanding balance of the credit line is $544,569, $500,000 of which will be repaid from the LTGO bonds currently being issued. The remaining$44,569 owed by the Parks Division for the paving of the parking lot at Chesterly Park - a $20,000 payment on the Parks (Continued) Resolution _Ordinance X Contract Other (Specify) Bank Commitment Letter, Ordinance 97 -29 & 2002 -31 Funding Source N/ A APPROVED FOR SUBMITTAL. -;. v City Manager STAFF RECOMMENDATION Pass Ordinance BOARD /COMMISSION RECOMMENDATION N/ A COUNCIL ACTION Ordinance passed. ORDINANCE NO. 2007-19 Line of Credit Agenda Statement (Cont.) project is planned for June 1, 2007 If Council approves this ordinance, the $24,569 balance will roll over to the extended line of credit. During the 5 years that the City has maintained the current line of credit, the total outstanding balance has never been greater than the current amount. Procedure: The procedure required to accomplish this bond issue and line of credit is very simple compared to traditional bond financing, because this bond is being sold to only one sophisticated investor and the Securities and Exchange Act of 1934 does not apply This bond is not transferable Approval of the new Bond Ordinance, amending the original Ordinance No 97 -29 (attached) will give the Finance Director authority to enter into this agreement. Highlights of borrowing: • Authority to extend the current five million dollar line of credit with Key Bank out to June 1, 2012 • Interest rate at the time of each draw would be one - month, two - month, three -month or six - month LIBOR plus 2.12 %, times 65 at the City's discretion (i.e six -month London Inter Bank Offer Rate, currently 5.36% plus 2.12 %times 65, for a net of 4.87 %), rate resets at the term option chosen at the time of the draw • Interest due annually on June 1st, any outstanding principal balance due June 1St, 2012 • Full Faith and Credit of the City of Yakima is pledged • Prepayment of any outstanding principal balance is allowed on any reset date without penalty • Only outstanding amounts effect the City's debt capacity • The City will pay the Bank a $5,000 initiation fee plus up to $2,000 in bank legal fees upon closing Documents enclosed. • Amending Ordinance (blackhned for ease of comparison) • Bank Commitment Letter (Attachment A to the Ordinance) • 1997 Ordinance 97 -29 (for reference only) • 2002 Ordinance 2002 -31 (for reference only) Conclusion. Staff believes this transaction is in the best interest of the City of Yakima and recommends passage of this Ordinance extending the Line of Credit Bond.