HomeMy WebLinkAbout2007-009 Limited Tax General Obligation Bonds Issuance re: Yakima Downtown Futures Initiative Project Phase 2 ORDINANCE NO 09
AN ORDINANCE of the City of Yakima, Washington, providing for
the issuance of limited tax general obligation and refunding bonds
of the City in the principal sum of not to exceed $9,500,000 to
remodel a fire station, finance the downtown renovation project
and the River Road project and to refund certain outstanding bonds
of the City and providing the form and terms of the bonds
WHEREAS, the City of Yakima, Washington (the "City ") now has outstanding its
Limited Tax General Obligation Bonds, 2002, issued under date of June 1, 2002 (the "2002
Bonds "), of which $4,745,000 are callable for redemption in advance of their scheduled
maturities, and
WHEREAS, Ordinance No 2002 -22, passed on April 16, 2002, as amended by
Ordinance No 2002 -27, passed on May 7, 2002 and Resolution No R- 2002 -54 of the City
passed on May 7, 2002, which authorized the issuance and sale of the 2002 Bonds, provides that
the City may call such bonds for redemption on or after June 1, 2012, at a price of par plus
accrued interest to the date of redemption, and
WHEREAS, the City Council has determined that it is in the best interest of the City to
remodel a fire station, renovate downtown, including sidewalks, streetlamps, curbs, gutters and
other improvements, and widen River Road (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 and refunding bonds to be sold in the
aggregate principal amount of not to exceed $5,100,000 to effect such savings and in the
aggregate principal amount of not to exceed $4,400,000 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 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 $9,500,000 principal amount of the City of Yakima,
Washington, Limited Tax General Obligation and Refunding Bonds, 2007, 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, 2007" authorized to be
created by Section 6
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"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
"MSRB" means the Municipal Securities Rulemaking Board or any successor to its
functions
"NRMSIR" means a nationally- recognized municipal securities information repository
"Projects" mean the remodeling of Fire Station No 92, the downtown renovation project,
including sidewalks, streetlamps, curbs, gutters and other improvements, improving River Road,
or other capital projects as may be authorized by the Council
"Refunded Bonds" means all of the 2002 Bonds maturing on or after June 1, 2013
"Refunding Account" means the account by that name established pursuant to Section 12
"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
"Sale Resolution" means the resolution to be adopted by the City Council setting the final
terms of the Bonds.
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"SID" means a state information repository for the State of Washington (if one is
created)
"2002 Bonds" means the Limited Tax General Obligation Bonds, 2002 of the City, issued
under date of June 1, 2002 pursuant to Ordinance No 2002 -22, as amended by Ordinance
No 2002 -27 passed by the Council on April 16, 2002 and May 7, 2002, respectively, and
presently outstanding in the principal amount of $6,025,000
"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 refund the Refunded Bonds and thereby effect a savings
to the City and its taxpayers and to undertake the Projects. The cost of the Projects will be
financed 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 $9,500,000 to provide money to refund the
Refunded Bonds, to finance the Projects, including repaying a portion of a line of credit used to
finance such 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 and Refunding Bonds, 2007 ", shall be dated as
provided in the Sale Resolution, shall be issued in fully registered form in the denomination of
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$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, shall bear
interest (calculated based on a 360 -day year of 12 30 -day months) at the rates set forth in the
Sale Resolution from their date, until the Bonds have been paid or their payment duly provided
for, payable on the date set forth in the Sale Resolution, and semiannually thereafter on the first
day of each November and May and shall mature on May 1 of the years and in the amounts set
forth in the Sale Resolution.
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 and duties 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
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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
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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.
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Upon receipt by the Bond Registrar of all 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
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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) Redemption Prior to Maturity The Bonds may be subject to redemption
in advance of their schedule maturities as provided in the Sale Resolution to be adopted by the
Council.
(b) 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
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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 less 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
(c) 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
(d) 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
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order to maintain compliance with duly promulgated regulations and recommendations regarding
notices of redemption of municipal securities.
(e) 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, 2007" (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,
including sales and use tax levied pursuant to RCW 82 14.390 and hotel /motel taxes levied
pursuant to RCW 67.28 in the case of the portion used to refund the Refunded Bonds, real estate
excise taxes (REET) in the case of the portion of the Bonds used for the downtown renovation
Project and gas taxes in the case of the portion of the Bonds used for the River Road Project, 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
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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
SECTION 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
government obligations, as such obligations are now or hereafter defined in RCW 39 53, or any
combination of cash and /or noncallable government obligations, in amounts and maturities
which, together with the known earned 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 government 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; Special Designation. 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
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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 AND REFUNDING BOND, 2007
INTEREST RATE MATURITY DATE CUSIP NO
REGISTERED OWNER.
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 May 1, 2007, or the most recent date to which interest has been paid or duly
provided for, at the Interest Rate set forth above payable November 1, 2007, and semiannually
thereafter on each May 1 and November 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 DTC referred to in the Blanket Issuer Letter of Representations
from the City to The Depository Trust Company In the event that the bonds of this issue are no
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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 of the City, passed
, 2007 and Resolution No , adopted on , 2007 (together, the
"Bond Ordinance "), to refund certain outstanding general obligation bonds of the City and to
provide financing for the City's fire station remodel, downtown renovation and widening of
River Road.
The Bonds are subject to redemption prior to their stated maturities.
The City has designated the bonds of this issue as "qualified tax - exempt obligations" for
purchase by financial institutions.
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, including sales and use tax levied pursuant
to RCW 82 14.390 and hotel /motel taxes levied pursuant to RCW 67.28 in the case of the portion
used to refund the Refunded Bonds, real estate excise taxes (REET) in the case of the downtown
renovation Project and gas taxes in the case of the River Road Project, 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
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
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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
, 2007
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
and Refunding Bonds, 2007, dated , 2007
WASHINGTON STATE FISCAL
AGENCY, as Bond Registrar
By
Authorized Signer
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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
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SECTION 12 Refunding Plan and Procedures, Application of Proceeds. At the time of
delivery of the Bonds, the proceeds of the Bonds shall be deposited as follows
(a) The amount necessary to finance or reimburse the costs of the Projects,
pursuant to this ordinance and the Sale Resolution and Resolution No 2006 -123, shall be
deposited into the following accounts designated by the Director of Finance and Budget. the
portion of the proceeds of the Bonds used for the downtown renovation project shall be
deposited into the Central Business District Capital Fund (Fund 321), the portion of the proceeds
of the Bonds used for River Road improvements shall be deposited into the Arterial Street Fund
(Fund 142) and the portion of the proceeds of the Bonds used for fire station remodeling shall be
deposited into the Fire Capital Fund (Fund 332) (collectively, the "Capital Funds ")
(b) The balance of the proceeds of the Bonds shall be deposited in. the
Refunding Account (as hereinafter defined) and applied as set forth in this section.
There is hereby authorized and established a special account of the City to be maintained
with the Escrow Agent (as hereinafter defined) to be known as the "City of Yakima 2007
Limited Tax General Obligation Refunding Account" (the "Refunding Account ") The
Refunding Account shall be drawn upon for the sole purpose of paying the principal of and
interest on the Refunded Bonds and of paying costs related to issuance of the Bonds and
refunding the Refunded Bonds. The proceeds of the sale of the refunding portion of the Bonds
shall be deposited into the Refunding Account to provide for refunding the Refunded Bonds, as
authorized by Ordinance No 2002 -22, as amended by Ordinance No 2002 -27, and to pay the
costs of issuance of the Bonds.
The Director of Finance and Budget is authorized to determine, in consultation with the
City's financial advisor, which of the Refunded Bonds, if any, are to be refunded. The final plan
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of refunding and call for redemption of the Refunded Bonds shall be set forth in and approved by
the Sale Resolution. Money in the Refunding Account shall be used immediately upon receipt
thereof to defease the Refunded Bonds and discharge the other obligations of the City relating
thereto under Ordinance Nos. 2002 -22 and 2002 -27 by providing for the payment of the
principal of and interest on the Refunded Bonds as set forth in the Sale Resolution. The City
shall defease such bonds and discharge such obligations by the use of the money in the
Refunding Account to purchase certain "Government Obligations," as such obligations are
defined in Chapter 39 53 RCW as now or hereafter amended (which obligations so purchased are
herein called "Acquired Obligations "), bearing such interest and maturing as to principal and
interest in such amounts and at such times that, together with any necessary beginning cash
balance, will provide for the payment of the Refunded Bonds, as set forth in the Sale Resolution.
Such Acquired Obligations shall be purchased at a yield not greater than the yield permitted by
the Code and regulations relating to acquired obligations in connection with refunding bond
issues.
In connection with the issuance of the Bonds, to carry out the refunding and defeasance
of the Refunded Bonds, the Director of Finance is hereby authorized to appoint as escrow agent a
bank or trust company qualified by law to perform the duties described herein (the "Escrow
Agent ") Any beginning cash balance and the Acquired Obligations shall be irrevocably
deposited with the Escrow Agent in an amount sufficient to defease the Refunded Bonds in
accordance with this ordinance and the Sale Resolution.
The City will take such actions as are found necessary to see that all necessary and proper
fees, compensation and expenses of the Escrow Agent shall be paid when due The proper
officers and agents of the City are directed to obtain from the Escrow Agent an agreement setting
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forth the duties, obligations and responsibilities of the Escrow Agent in connection with the
redemption and retirement of the Refunded Bonds as provided herein and setting forth such
provisions for the payment of the fees, compensation and expenses of such Escrow Agent as are
satisfactory to it. To carry out the purposes of this section of this ordinance, the Director of
Finance and Budget is authorized and directed to execute and deliver to the Escrow Agent such
an escrow agreement.
SECTION 13 Sale of the Bonds. The Director of Finance and Budget is authorized to
negotiate a purchase contract (the "Purchase Contract ") with Seattle - Northwest Securities
Corporation, Seattle, Washington, to purchase such principal amount of the Bonds as the
Director of Finance and Budget shall determine at a price specified therein, plus accrued interest,
if any, and under the terms and conditions thereof as provided in such offer and in this ordinance
subject to the approval of the terms thereof by the Sale Resolution.
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 will, by subsequent resolution, deem the Preliminary Official
Statement as 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 Purchase Contract and in sufficient time to accompany any confirmation that
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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 2008 for the fiscal year ended December 31 .2007)
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
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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
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• Rating changes.
Solely for purposes of disclosure, and not intending to modify this undertaking, the City
advises that no debt service reserves, credit enhancement 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
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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
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PASSED by the City Council of the City of Yakima at a regular meeting thereof, held
th
this 20 day :of March , 2007
CITY OF YAKIMA, WASHINGTON
' David Elder, Mayor
ATTEST
Deborah Moore, City Clerk
APPROVED AS TO FORM
N/A
City Attorney
First Reading N/A
Publication Date 3 - 23 - 2007
Effective Date 4 -22 -2007
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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 .a 7 — aof
the City (the "Ordinance "), as finally passed at a regular meeting of the City Council held on
March20, , 2007, and duly recorded in my office.
2 i 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 th i 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 , 2007
City Clerk
P' \NMN \NMN2WF 03/15/07
PRELIMINARY OFFICIAL STATEMENT DATED , 2007
$9,100,000* DR
AFT
City of Yakima, Washington
Limited Tax General Obligation and Refunding Bonds, 2007
0
CU • DATED. Date of Delivery DUE: May 1, as shown below
E
o y STANDARD & POOR'S RATING — Applied for.
Nr
m c BANK QUALIFIED —The City has designated the Bonds as "qualified tax- exempt obligations" for purposes of section
E ms. 265(b)(3)(B) of the Code See "Tax Matters" herein for a discussion of this designation.
Z ,c BOOK - ENTRY ONLY — The Bonds will be issued as fully registered bonds in denominations of $5,000, or integral multiples
c N thereof, and will be registered in the name of Cede & Co., as bond owner and nominee for The Depository Trust
3 Company ( "DTC "). DTC will act as securities depository for the Bonds. Purchasers will not receive certificates
w representing their interest in the Bonds purchased.
• F
• E PRINCIPAL AND INTEREST PAYMENTS — Interest on the Bonds will be payable semiannually on each May 1 and
▪ �; November 1, commencing on November 1, 2007, to maturity or earlier redemption. Principal of and interest on the
ti 2 Bonds will be payable by the fiscal agency of the State of Washington in New York, New York, currently The Bank of
o R New York (the "Bond Registrar "), as further described herein. For so long as the Bonds remain in a "book -entry only"
3 transfer system, the fiscal agent will make such payments only to DTC, which in turn is obligated to remit such principal
ten_` p and interest to its Participants for subsequent disbursement to Beneficial Owners of the Bonds as further described
El , • herein in Appendix B — Book-Entry Transfer System.
.c > MATURITY SCHEDULE —
N v Due Interest Price or Due Interest Price or
'o c M ay 1 Amount* Rate Yield CUSIP May 1 Amount* Rate Yield CUSIP
✓ m 2008 $ 310,000 % 2018 $ 505,000 %
m m 2009 315,000 2019 530,000
t 2010 335,000 2020 545,000
u
o 2011 340,000 2021 570,000
m .3 2012 355,000 2022 585,000
F .Z" 2013 370,000 2023 405,000
v 2014 .620,000 2024 420,000
ai
rn d 2015 645,000 2025 430,000
cf,
co
u; 2016 670,000 2026 455,000
v c 2017 695,000
c m O PTIONAL REDEMPTION —The Bonds are subject to redemption prior to their stated maturities as further described herein.
w See "Description of the Bonds - Redemption Provisions."
ua
m SECURITY — The Bonds are limited tax general obligations of the City The City has irrevocably covenants and agrees for as
u H long as any of the Bonds are outstanding and unpaid that each year it will include in its budget and levy ad valorem taxes
o t upon all the property within the City subject to taxation in an amount that will be sufficient and all other revenues and
m c 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 full faith, credit and resources of the City have been pledged irrevocably for the annual levy and
u'r collection of such taxes and the prompt payment of such principal and interest. The Bonds do not constitute a debt or
C Ei indebtedness of the State of Washington or any political subdivision thereof other than the City (see "Security for the
N 0 Bonds" herein)
E
2
al .o TAX EXEMPTION —In the opinion of K &L Preston Gates Ellis LLP, Bond Counsel, assuming compliance with certain covenants of the
N m City, interest on the Bonds is excludable from gross income for federal income tax purposes under existing law Interest on the
a e Bonds is not an item of tax preference for purposes of either individual or corporate alternative minimum tax. Interest on the Bonds
E t may be indirectly subject to corporate alternative minimum tax and certain other taxes imposed on certain corporations. See "Tax
Matters" herein for a discussion of the opinion of Bond Counsel.
Z
CO 3 • a DELIVERY The Bonds are offered for sale to the original purchaser subject to the final approving legal opinion of K &L
. E > Preston Gates Ellis LLP, Seattle, Washington, Bond Counsel. It is expected that the Bonds will be available for delivery
e. u to the Bond Registrar on behalf of DTC by Fast Automated Securities Transfer, on or about May 1, 2007
m u,
N 2 * Preliminary subject to change.
.0 a
1E This cover page contains certain information for quick reference only. It is not a summary of the issue. Investors must read the entire Official Statement to
obtain information essential to the making of an informed investment decision.
III, SEATTLE - NORTHWEST
■EM SECURITIES CORPORATION
City of Yakima, Washington
129 North Second Street
Yakima, Washington 98901 DRAFT
Phone: (509) 575 -6000
Fax: (509) 576 -6614
www.ci.yakima.wa.us*
Mayor and City Council
David Edler Mayor
Neil McClure Assistant Mayor
Ron Bonlender Council Member
Micah Cawley Council Member
Norm Johnson Council Member
Bill Lover Council Member
Susan Whitman Council Member
Administrative Officials
Richard A. Zais, Jr City Manager
Dave Zabell Assistant City Manager
Rita M. DeBord, CPA Director of Finance & Budget
Ray Paolella City Attorney
Timothy Jensen Treasury Services Officer
Cindy Epperson Financial Services Manager
Bond Counsel
K &L Preston Gates Ellis LLP
Seattle, Washington
206 - 623 -7580
Bond Registrar
The Bank of New York
New York, New York
1- 800 - 438 -5473
* The City's website is not part of this Official Statement, and investors should not rely on information presented in
the City's website in determining whether to purchase the Bonds. This inactive textual reference to the City's
website is not a hyperlink and does not incorporate the City's website by reference.
This Official Statement does not constitute an offer to sell the Bonds in any jurisdiction in which or to a person to whom it is
unlawful to make such an offer No dealer, salesperson or other person has been authorized by the City or the Underwriter to
give any information or to make any representations, other than those contained herein, in connection with the offering of the
Bonds and, if given or made, such information or representations must not be relied upon. The information and expressions of
opinion herein are subject to change without notice, and neither the delivery of this Official Statement nor any sale made
hereunder will, under any circumstances, create an implication that there has been no change in the affairs of the City since the
date hereof
The Underwriter has provided the following sentence for inclusion in this Official Statement. The Underwriter has reviewed the
information in this Official Statement in accordance with, and as part of its responsibility to investors under the federal
securities laws as applied to the facts and circumstances of this transaction, but the Underwriter does not guarantee the accuracy
or completeness of such information.
This Preliminary Official Statement has been "deemed final" by the City, pursuant to Rule 15c2 -12 promulgated by the
Securities and Exchange Commission under the Securities Exchange Act of 1934, as amended, except for information which is
permitted to be excluded from this Preliminary Official Statement under said Rule 15c2 - 12.
In connection with this offering, the Underwriter may over -allot or effect transactions that stabilize or maintain the market price
of the Bonds at levels above those which might otherwise prevail in the open market. Such stabilizing, if commenced, may be
discontinued at any time.
ii
Table of Contents lie 61
T
Page
Description of the Bonds 1
Principal Amount, Date, Interest Rates and Maturities 1
Redemption Provisions 1
Purchase 1
Bond Registrar and Registration Features 2
Book -Entry Bonds 2
Authorization for Issuance. 2
Purpose and Use of Proceeds 2
Purpose 2
Plan of Refunding. 2
Refunding Procedure 3
Verification of Mathematical Calculations. 3
Sources and Uses of Funds. 4
Security for the Bonds. 4
General. 4
Additional Revenue 4
Bonded Indebtedness 5
Computation of Debt Capacity 5
Summary of Limited Tax General Obligation Bond Debt Service Requirements 7
Net Direct and Overlapping Debt 8
Debt Payment Record 8
Future Financings. 8
Taxing Authority 9
Authorized Property Tax Levies 9
The City's Property Tax Levies. 9
Overlapping Taxing Districts 10
General Property Taxes 10
Regular Property Tax Limitations 11
Assessed Value 12
Tax Collection Procedure 12
City of Yakima 13
Tax Collection Record 13
City of Yakima 13
Major Property Taxpayers. 13
Authorized Investments 14
Local Government Investment Pool 14
Authorized Investments for Bond Proceeds 14
City of Yakima Comparative General Fund Statement of Revenues,
Expenditures and Changes in Fund Balance 15
City of Yakima Comparative General Fund Balance Sheet 16
The City 17
Key Administrative Staff 17
Labor Relations 18
Pension System 18
Other Post Employment Benefits 20
Risk Management. 21
Accounting Policies 22
Budgetary Process 22
Cash and Investments. 23
Auditing of City Finances 23
Demographic Information 24
Initiative and Referendum 26
State Initiatives 26
Tax Matters 27
Qualified Tax - Exempt Obligations 28
Rating 28
Continuing Disclosure 28
Legal and Underwriting 29
Approval of Counsel. 29
Litigation 30
Official Statement 30
Underwriting 30
Concluding Statement 30
Opinion of Bond Counsel. Appendix A
Book -Entry Transfer System Appendix B
2005 Annual Financial Report .Appendix C
iii
OFFICIAL STATEMENT
$9,100,000* D RA F T
City of Yakima, Washington
Limited Tax General Obligation and Refunding Bonds, 2007
The City of Yakima, Washington (the "City "), a municipal corporation duly organized and existing under and
by virtue of the laws of the State of Washington (the "State "), furnishes this Official Statement in connection
with the offering of $9,100,000* aggregate principal amount of the above - referenced bonds (the "Bonds") This
Official Statement provides information concerning the City and the Bonds.
Description of the Bonds
Principal Amount, Date, Interest Rates and Maturities
The Bonds will be issued in the aggregate principal amount of $9,100,000* and will be dated and bear interest
from the date of initial delivery to the Underwriter The Bonds will mature on the dates and in the principal
amounts and will bear interest (payable semiannually on each May 1 and November 1, commencing
November 1, 2007) until the maturity or earlier redemption of the Bonds at the rates set forth on the cover of
this Official Statement. Interest on the Bonds will be computed on the basis of a 360 -day year consisting of
twelve 30 -day months. Principal of and interest on the Bonds will be payable by the fiscal agency of the State
of Washington in New York, New York, currently The Bank of New York (the "Bond Registrar ")
Redemption Provisions
Optional Redemption. The Bonds maturing in years 2008 through 2016, inclusive, are not subject to optional
redemption prior to maturity The Bonds maturing on and after May 1, 2018 are subject to redemption at the
option of the City, in whole or in part (and if in part, with maturities to be selected by the City) on any date on
and after May 1, 2017 at the price of par, plus accrued interest, if any, to the date of redemption.
For as long as the Bonds are in book -entry only form, if fewer than all of the Bonds of a maturity are called for
redemption, the selection of Bonds within a maturity to be redeemed shall be made by The Depository Trust
Company, New York, New York ( "DTC"), in accordance with its operational procedures then in effect. See
Appendix B attached hereto If the Bonds are no longer held in book -entry only form, then the Bond Registrar
will select Bonds for redemption using a random selection method.
Notice of Redemption. For as long as the Bonds are held in book -entry only form, the Bond Registrar will
provide notice to DTC only, and it will be the responsibility of DTC to disseminate notices to DTC
participants. The City will not provide any notice of redemption to beneficial owners of Bonds. See "Book -
Entry Bonds."
If the Bonds are no longer kept in book -entry only form, notice of redemption will be given not fewer than 30
days nor more than 60 days prior to the redemption date by first -class mail, postage prepaid, to the registered
owner of any Bond to be redeemed at the address appearing on the bond registration books maintained by the
Bond Registrar Interest on the Bonds called for redemption shall cease to accrue on the date fixed for
redemption unless the Bond or Bonds called are not redeemed when presented pursuant to the call.
Purchase
The City reserves the right and option to purchase any or all of the Bonds offered to the City at any time at any
price. All Bonds so purchased shall be canceled.
* Preliminary, subject to change.
1
g
Bond Registrar and Registration Features D RAF ■
T
The Bonds will be issued as fully registered bonds and, when issued, will be registered in the name of Cede &
Co as Bond Owner and as nominee for DTC. DTC will act as securities depository for the Bonds. Individual
purchases and sales of the Bonds may be made in book -entry form only in minimum denominations of $5,000
within a single maturity and integral multiples thereof. Purchasers ( "Beneficial Owners ") will not receive
certificates representing their interest in the Bonds.
Principal of and interest on the Bonds will be payable by the Bond Registrar (or such other fiscal agency or
agencies as the State may from time to time designate) So long as Cede & Co is the registered owner of the
Bonds, principal of and interest on the Bonds are payable by wire transfer by the Bond Registrar to DTC,
which in turn is obligated to remit such principal and interest to its Participants for subsequent disbursement
to the Beneficial Owners of the Bonds, as further described herein in Appendix B
Book - Entry Bonds
DTC will act as securities depository for the Bonds. The ownership of one fully registered Bond for each
maturity of the Bonds, as set forth on the cover of this Official Statement, each in the aggregate principal
amount of such maturity, will be registered in the name of Cede & Co , as nominee for DTC. See Appendix B
attached hereto for additional information.
Procedure in the Event of Revisions of Book-Entry Transfer System. If DTC resigns as the securities depository and
the City is unable to retain a qualified successor to DTC, or the City has determined that it is in the best
interest of the City not to continue the book -entry system of transfer or that interests of the Beneficial Owners
of the Bonds might be affected adversely if the book -entry system of transfer is continued, the City will
execute, authenticate and deliver at no cost to the Beneficial Owners of the Bonds or their nominees Bonds in
fully registered form, in the denomination of $5,000 or any integral multiple thereof within a maturity In the
event the Bonds are transferred by the City to fully registered form, the Bonds may be payable by the Bond
Registrar or the State's co- fiscal agent, which is currently Wells Fargo Bank, National Association, in Seattle,
Washington. Thereafter, the principal of the Bonds will be payable upon due presentment and surrender
thereof at the principal office of the Bond Registrar; interest on the Bonds will be payable by check or draft
mailed on the interest payment date to the owners of the Bonds at the address appearing on the Bond Register
on the 15th day of the month next preceding the interest payment date, and the Bonds will be transferable as
provided in the Ordinance (defined below)
Authorization for Issuance
Under and in accordance with State laws, the Bonds are issued pursuant to Ordinance No passed by the
City Council (the "Council ") on , 2007 and Resolution No adopted by the Council on
2007 (collectively, the "Ordinance "), and the authority of RCW chapters 39.36, 39 46, 35.37 and
39.53
Purpose and Use of Proceeds
Purpose
The proceeds from the sale of the Bonds will be used to (i) remodel a fire station, (ii) renovate the downtown
area of the City, including sidewalks, streetlamps, curbs, gutters and other improvements, (iii) make
infrastructure improvements to River Road, (iv) refund a portion of the City's outstanding debt to obtain the
benefit of savings in annual and total debt service requirements, and (v) pay the costs of issuance of the Bonds.
Plan of Refunding
A portion of the proceeds of the Bonds will be used to provide funds to establish an irrevocable trust escrow to
refund a portion of the City's outstanding obligations. The candidates authorized to be refunded with the
proceeds of the Bonds are identified below Depending on market conditions on the pricing date and the
savings available to the City as a result of such refunding, the City may include none, all or a portion of
$4,745,000 of the City's callable Limited Tax General Obligation Bonds, 2002, dated June 1, 2002 (the "2002
2
DRAFT
Bonds "), maturing on June 1 in the years 2013, 2014, 2016, 2017 through 2022, inclusive, and 2026 (the
"Refunded Bonds ") Information on the Refunded Bonds is as follows.
Refunded Amount Redemption
Maturities* Refunded* Date Price
2013, 2014, 2016, 2017 -2022, 2026 $ 4,745,000 06/01/12 100%
* Preliminary, subject to change.
Refunded Bonds*
Maturity Years Principal Interest CUSIP
(June 1) Amounts Rates Numbers
2013 $ 245,000 4.35% 984521MP6
2014 255,000 4.50 984521MQ4
2016* 550,000 4.70 984521MS0
2017 295,000 4.75 984521MT8
2018 310,000 4.80 984521MU5
2019 325,000 4.95 984521MV3
2020 340,000 5 00 984521MW1
2021 355,000 5 00 984521MX9
2022 375,000 5.00 984521MY7
2026* 1,695,000 5 00 984521NC4
* Term Bond.
Refunding Procedure
If the City proceeds with the refunding, a portion of the proceeds of the Bonds would be used to acquire
certain direct non - callable United States government obligations (referred to herein as "Government
Obligations ") by U.S. Bank National Association ( "Escrow Agent ") The maturing principal of the
Government Obligations, interest earned thereon, and necessary cash balance, if any, will be used to provide
payment of the interest on the Refunded Bonds until June 1, 2012 and the redemption price (100 %) on June 1,
2012.
The Government Obligations, interest earned thereon, and necessary cash balance, if any, will irrevocably be
pledged to and held in trust for the benefit of the owners of the Refunded Bonds by the Escrow Agent,
pursuant to an escrow agreement to be executed by the City and the Escrow Agent.
Verification of Mathematical Calculations
Grant Thornton LLP, a firm of independent public accountants, will deliver on or before the delivery date of
the Bonds, its verification report indicating that it has verified, in accordance with attestation standards
established by the American Institute of Certified Public Accountants, the mathematical accuracy of (a) the
mathematical computations of the adequacy of the cash and the maturing principal of and interest on the
Government Obligations, to pay, when due, the interest on and redemption price of the Refunded Bonds and
(b) the mathematical computations of yield used by Bond Counsel to support its opinion that interest on the
Bonds will be excluded from gross income for federal income tax purposes.
The verification performed by Grant Thornton LLP will be solely based upon data, information and
documents provided to Grant Thornton LLP by the Underwriter and its representatives. Grant Thornton LLP
has restricted its procedures to recalculating the computations provided by the Underwriter and its
representatives and will not evaluate or examine the assumptions or information used in the computations.
3
'sr T
Sources and Uses of Funds
The proceeds of the Bonds are estimated to be applied as follows.
Sources of Funds
Par Amount of Bonds( $ 9,100,000
Net Premium/ (Discount)
Total Sources of Funds $
Use of Funds
Funds Available for Construction $
Escrow Requirements
Issuance Costs (
Total Use of Funds $
(1) Preliminary, subject to change.
(2) Includes Bond Counsel fees, rating fees, bond insurance premium, underwriter's discount, and other costs associated
with the issuance of the Bonds.
Security for the Bonds
General
The Bonds are limited tax general obligation bonds of the City The City, as authorized by law and an
ordinance of its Council duly and regularly passed, has irrevocably pledged that, unless the principal of and
interest on the Bonds are paid from other sources, it will make annual levies of taxes, within the constitutional
and statutory tax limitations provided by law without a vote of the electors of the City, upon all of the
property in the City subject to taxation in amounts sufficient to pay such principal and interest as the same
shall become due.
Subject to applicable laws, the City may apply other funds available to make payments with respect to the
Bonds and thereby reduce the amount of future tax levies for such purpose.
The Bonds do not constitute a debt or indebtedness of the State or any political subdivision thereof other than
the City
Additional Revenue
The City will also use revenues and money legally available to the City, including gas taxes in the case of the
portion of the Bonds used for the River Road project, and real estate excise taxes ( "REET ") in the case of the
portion of the Bonds used for the downtown renovation project, to pay the principal of and interest on the new
money portion of the Bonds. The following tables provide a representative history of the revenue from gas
taxes and REET for the City
City of Yakima
Historical Gas Tax and REET Revenue
Gas Taxes REET
2006 $ 1,299,298 $ 894,037
2005 1,164,787 878,934
2004 1,111,681 706,670
2003 1,125,915 640,373
2002 1,156,907 469,359
Source: City of Yakima
4
DRAFT
Bonded Indebtedness
As prescribed by State statutes, the unlimited tax general obligation indebtedness permitted for cities, subject to
a 60 percent majority vote of registered voters, is limited to 2.5 percent of assessed value for general purposes, 2.5
percent for utilities and 2.5 percent for open space /park facilities. Within the 2.5 percent of assessed value for
general purposes, the City may, without a vote of the electors, incur general obligation indebtedness in an
amount not to exceed 1.5 percent of assessed value. Additionally, within the 2.5 percent of assessed value for
general purposes, the City may, also without a vote of the electors, enter into leases if the total principal
component of the lease payments, together with the other nonvoted general obligation indebtedness of the
City, does not exceed 1.5 percent of assessed value. The combination of unlimited tax and limited tax general
obligation debt for general purposes, including leases, cannot exceed 2.5 percent of assessed value and for all
purposes cannot exceed 7.5 percent of assessed value.
The City may, without a vote of the electorate, issue debt as follows:
(1) Pursuant to an ordinance specifying the amount and object of the expenditure of the proceeds,
the City Council may borrow money for corporate purposes and issue bonds and notes within
the constitutional and statutory limitations on indebtedness.
(2) The City may execute conditional sales contracts for the purchase of real or personal property
(3) The City may execute leases with or without an option to purchase.
Computation of Debt Capacity
(As of May 1, 2007)
2007 Collection Year Assessed Value ( $ 4,586,923,853
Nonvoted Debt Capacity
1.5% of Assessed Value $ 68,803,858
Less: Outstanding Nonvoted Debt (2) 0
Less: The Bonds (3) (9,100,000)
Remaining Nonvoted Debt Capacity $
Voted and Nonvoted Debt Capacity
2.5% of Assessed Value $ 114,673,096
Less: Outstanding Nonvoted Debt (2) O
Less: The Bonds (3) (9,100,000)
Less: Outstanding Voted Debt (2,010,000)
Total Remaining Voted and Nonvoted Debt Capacity $
Voted Utility Debt Capacity
2.5% of Assessed Value $ 114,673,096
Less: Outstanding Utility Obligations 0
Total Remaining Utility Debt Capacity $ 114,673,096
Voted Open Space /Park Debt Capacity
2.5% of Assessed Value $ 114,673,096
Less: Outstanding Open Space /Park Obligations 0
Total Remaining Open Space /Park Debt Capacity $ 114,673,096
(1) Provided by the Yakima County Assessor
(2) Includes limited tax general obligation debt, lease purchase agreements, and special assessment notes and warrants;
excludes the Refunded Bonds.
(3) Preliminary, subject to change.
Source. Czty of Yakima.
5
D RAFT
Outstanding Debt
(As of May 1, 2007)
Long Term Borrowing
General Obligations: Non -voted (1)
Date of Date of Amount Amount
Limited Tax General Obligations Issue Maturity Issued Outstanding
LTGO 1996 01/01/96 11/01/07 $ 6,000,000 $ 235,000
LTGO 1998 04/01/98 06/01/08 1,430,000 340,000
LTGO 2002 05/01/02 06/01/12 ( 6,735,000 1,280,000
LTGO 2002 Line of Credit 06/01/02 06/01/07 5,000,000
LTGO 2003 Series A 06/01/03 12/01/23 1,430,528 1,430,528
LTGO 2003 Series B 06/01/03 12/01/13 4,155,000 3,225,000
LTGO Refunding 2004 09/01/04 11/01/19 4,175,000 4,035,000
LTGO 2005 12/01/05 12/01/15 775,000 695,000
The Bonds (this issue) 05/01/07 05/01/26 .9,100,000 (3) 9,100,000 (
LTGO Bond Total 33,775,528
Lease Purchase Agreements
Police Video 11/03/03 11/03/08 491,838 204,933
Printer/ copier 06/01/04 03/01/09 93,414 43,911
Mobile Wireless Data Network 07/09/04 04/09/09 325,000 168,951
Printer /copier 10/15/04 07/15/09 54,255 31,161
Purchase Contract Total 964,507 448,956
Total Non -voted General Obligations $ 30,664,507 $
General Obligations: Voter Approved
Unlimited Tax General Obligation Bonds
UTGO Refunding 2004 09/01/04 12/01/14 $ 2,300,000 $ 2,010,000
UTGO Bond Total $ 2,300,000 $ 2,010,000
(1) Does not include special assessment notes and warrants outstanding in the amount of $53,000 and $750,332,
respectively, as of March 1, 2007 Also does not include City's obligation pursuant to an interlocal agreement with
Yakima County to pay approximately $150,000 annually through 2008.
(2) The Date of Maturity reflects the redemption of the Refunded Bonds. The June 1, 2007 through 2012 principal
payments remain after this refunding.
(3) Preliminary, subject to change.
6
DRAFT
Summary of Limited Tax General Obligation Bond Debt Service Requirements
(As of May 1, 2007)
Calendar Outstanding LTGO Bonds (1) The Bonds (2) Total Debt
Years Principal Interest Principal Interest Service
2007 $ 1,187,615 $ 265,075 $ 0 $ 0 $ 1,452,690
2008 1,229,861 308,889 310,000 348,823 2,197,573
2009 1,154,241 292,130 315,000 337,353 2,098,723
2010 1,158,125 266,614 335,000 325,698 2,085,436
2011 1,187,419 236,395 340,000 313,470 2,077,284
2012 1,221,614 205,646 355,000 301,060 2,083,320
2013 1,013,534 175,123 370,000 288,103 1,846,760
2014 520,455 147,442 620,000 274,413 1,562,310
2015 537,376 134,864 645,000 251,473 1,568,713
2016 448,196 125,738 670,000 227,285 1,471,220
2017 458,302 113,852 695,000 201,825 1,468,980
2018 470,855 102,822 505,000 175,415 1,254,093
2019 408,409 90,662 530,000 155,973 1,185,043
2020 65,464 82,333 545,000 135,303 828,099
2021 61,613 84,133 570,000 114,048 829,793
2022 59,687 88,246 585,000 91,533 824,466
2023 57,762 92,238 405,000 68,425 623,425
2024 0 0 420,000 52,428 472,428
2025 0 0 430,000 35,628 465,628
2026 0 0 455,000 18,428 473,428
Total $ 11,240,528 $ 2,812,201 $ 9,100,000 $ 3,716,678 $ 26,869,406
(1) Does not include the 2002 LTGO Line of Credit (see "Bonded Indebtedness - Outstanding Debt" for details), excludes
the Refunded Bonds.
(2) Preliminary, subject to change.
7
Summary of Overlapping Debt
DRAFT
(As of February 1, 2007)
Estimated
2007 Assessed Percent Outstanding Overlapping
Overlapping Taxing District Value Overlap GO Debt Debt
Yakima School District No 7 $ 3,779,689,607 94.04% $ 29,675,000 $ 27,907,614
West Valley School District No 208 1,891,405,806 5140 58,610,000 30,124,537
Yakima County 12,599,607,728 35 99 41,565,000 14,961,146
Naches School District No 3 576,713,011 0.29 2,640,000 7,638
Total $ 73,000,935
Source. Yakima County Assessor and Treasurer and individual taxing districts.
Net Direct and Overlapping Debt
The following tables present information regarding the City's direct debt (including the Bonds) and the
estimated portion of the debt of overlapping taxing districts allocated to the City's residents.
Regular Assessed Value (2007 Collection Year) ( $ 4,586,923,853
Estimated 2006 Population (2) 81,710
Debt Information
Net Direct Debt (3) $
Estimated Net Overlapping Debt (as previously detailed herein) 73,000,935
Total Net Direct and Overlapping Debt $
(1) Provided by the Yakima County Assessor's Office.
(2) Estimate derived from the State of Washington, Office of Financial Management, Forecasting Division.
(3) Includes the Bonds plus limited and unlimited tax general obligation debt, lease purchase agreements, and special
assessment notes and warrants, excludes the Refunded Bonds.
Bonded Debt Ratios
Net Direct Debt to Assessed Value
Net Direct and Overlapping Debt
to Assessed Value
Per Capita Assessed Value $ 56,137
Per Capita Net Direct Debt $
Per Capita Total Net Direct and Net Overlapping Debt $
Debt Payment Record
The City has promptly met all debt service payments on outstanding obligations. No refunding bonds have
been issued to prevent an impending default.
Future Financings
Other than the Bonds, the City has no authorized but unissued general obligation bonds outstanding, nor does
it anticipate issuing additional long -term debt within the next 12 months.
8
• AFT
Taxing Authority
Authorized Property Tax Levies
The City is authorized to impose (1) a regular levy (up to $3 60/$1,000 of assessed value) and (2) excess levies
(unlimited as to rate or amount) The City's regular levy for the 2007 collection year is $3 1165/$1,000 The
regular levy is imposed without a vote of the people for general purposes, including payment of debt service
on the Bonds, and is subject to limitations (see "General Property Taxes — Regular Property Tax Limitations"
herein) Excess levies are imposed, upon voter approval, to pay debt service on unlimited tax general
obligation bonds. An excess levy also may be imposed without a vote to prevent the impairment of a contract
(RCW 84.52.052)
The City's Property Tax Levies
The following table shows the City's levy rates and dollar amounts levied since 2003
Ad Valorem Tax Levies
(Dollars per $1,000 of Assessed Value)
Collection Levy Rates Levy Amounts
Year General Bond* Total General Bond* Total
2007 $3 1165 $0.0649 $3 1814 $14,294,963 $ 294,000 $14,588,963
2006 3.3813 0 0729 3 4542 14,099,088 300,000 14,399,088
2005 3 4395 0 0763 3.5158 13,660,632 300,000 13,960,632
2004 3 4718 0 0841 3.5559 13,276,452 315,833 13,592,285
2003 3.5214 0 0957 3.6171 12,935,578 345,000 13,280,578
* For repayment of voted bonds; not subject to limitation on levy rates or levy amounts.
Sources. Yakima County Assessor's and Treasurer's Office.
9
$' FT
Overlapping Taxing Districts
The overlapping taxing districts within the City have the statutory power to levy regular property taxes at the
following rates, subject to the limitations provided by chapter 84.55 RCW, and levy excess voter approved
property taxes. For purposes of demonstration, representative levy rates for "levy code 333" of Yakima
County (the "County "), as well as the statutory levy authority of each type of potential overlapping district,
are listed below
Total Representative Total Statutory
Levy Rates Levy Authority
Per $1,000 of Per $1,000 of
Assessed Value Assessed Value
Yakima County $ 1 7383 $1.80 (2)
County (Road Levy) n/ a (1) 2.25
Library District n/ a ( 0.50
Fire Protection District n/a (1) 1.50
Port District n/a (1 ) 0 45
The City 31814 3 60 (3 )
Hospital District n/a (1) 0 75
State Schools 2.2536 3.60 (4)
Yakima - School District No 7 4.7269
County Emergency Services 0.2303
Total rate for Yakima County levy code 333 $ 12.1305
(1) Yakima County levy code 333 is included within the incorporated portion of Yakima County and therefore does not
have a road levy Likewise, it does not contain either a fire district, library district, port district or a hospital district.
(2) Pursuant to RCW 84.52.043(1), a county may increase its levy from $1.80 per $1,000 to a rate not to exceed $2.475 per
$1,000 for general county purposes if (i) the total levies for both the county and any road district within the county do
not exceed $4.05 per $1,000 and (ii) no other taxing district has its levy reduced as a result of the increased county levy
Of Yakima County's total levy rate of $1.7383, the nonvoted levy rate is $1.6697 and $0.0686 is the voted portion.
(3) RCW 41 16.060. $0.225 of the total $3.60 can be used for pension funding purposes, if required, otherwise this tax may
be levied and used for any other municipal purpose. The total levy includes a regular levy of $3.1165 and a voted
bond levy of $0.0649
(4) RCW 84.52.043(1). The levy by the State shall not exceed $3.60 per $1,000 assessed value adjusted to the State
equalized value in accordance with the indicated ratio fixed by the State Department of Revenue to be used
exclusively for the support of the common schools.
Source. Yaktnta County Assessor for Levy Code 333
General Property Taxes
The following provides a general description of the City's taxing authority and limitations thereon, the method
of determining the assessed value of real and personal property, tax collection procedures, and tax collection
information.
Authorized Property Taxes. The City is authorized to levy both "regular" property taxes and "excess" property
taxes.
(1) Regular Property Taxes. Regular property taxes are subject to constitutional and statutory limitations
as to rates and amounts and commonly are imposed by taxing districts for general municipal
purposes, including the payment of debt service on limited tax general obligation indebtedness, such
as the Bonds. Regular property taxes do not require voter approval except as described below
(2) Excess Property Taxes. Excess property taxes are not subject to limitation as to rates or amounts but
must be authorized by a 60 percent approving popular vote, as provided in Article VII, Section 2, of
the State Constitution and RCW 84.52.052. To be valid, such popular vote must have a minimum
voter turnout of 40 percent of the number who voted at the last City general election, except that one-
year excess tax levies also are valid if the turnout is less than 40 percent and the measure receives a
number of affirmative votes equal to or greater than 24 percent of the number who voted at the last
City general election. Excess levies may be imposed without a popular vote when necessary to
prevent impairment of the obligations of contracts.
10
DRAFT
Regular Property Tax Limitations
The authority of a City to levy taxes without a vote of the people for general City purposes, including the
payment of debt service on limited tax general obligation indebtedness, is subject to the limitations described
below Information relating to regular property tax limitations is based on existing statutes and constitutional
provisions. Changes in such laws could alter the impact of other interrelated tax limitations on the City
Regular property tax levies are subject to rate limitations and amount limitations, as described below, and to
the uniformity requirement of Article VII, Section 1 of the State Constitution, which specifies that a taxing
district must levy the same rate on similarly classified property throughout the district. Aggregate property
taxes vary within the county because of its different overlapping taxing districts. In the event that the
maximum permissible levy varies within the City, the lowest permissible rate for any part of the City would be
applied to the entire City
Maxintum Rate Limitation. Title 84 RCW authorizes the imposition of regular tax levies to various statutory
maximums (see "Overlapping Taxing Districts" herein)
The One Percent Aggregate Regular Levy Limitation. Article VII, Section 2 of the Washington Constitution, as
amended in 1973, limits aggregate regular property tax levies by the State and all taxing districts, except port
districts and public utility districts, to one percent of the true and fair value of property RCW 84.52.050
provides the same limitation by statute.
$5.90/$1,000 Aggregate Regular Levy Limitation. Within the one percent limitation described above,
RCW 84.52.043(2) imposes an aggregate limitation on regular tax levies by all taxing districts, other than the
State, of $5 90/$1,000 of assessed value, except levies for any port or public utility district; excess levies
authorized in Article VII, Section 2 of the State Constitution, and certain levies for acquiring conservation
futures, for emergency medical services or care, and to finance affordable housing.
Uniformity Requirement. Article VII, Section 1 of the Washington Constitution requires that property taxes be
levied at a uniform rate upon the same class of property within the territorial limits of a taxing district levying
such taxes. It is possible because of different overlapping taxing districts in different areas of the City that the
maximum permissible levy might vary within the City In that event, to comply with the constitutional
requirement for uniformity of taxation, the lowest permissible rate for any part of the City would be applied to
the entire City
Prioritization of Levies RCW 84.52.010 provides that if aggregate levies certified by all taxing districts exceed
the aggregate levy limitations described above, levies certified by junior taxing districts are reduced or
eliminated in order to bring the aggregate levy into compliance with the statutory maximum prescribed by
RCW 04.52.050 and 84.52.043 RCW 84.52.043 defines "junior taxing districts" as all taxing districts other than
the state, counties, road districts, cities, towns, port districts, and public utility districts.
The tax levy for unlimited tax general obligation bonds is a special excess levy approved by the voters, and as
such, is not subject to the limitations on regular levies described above.
Levy Amount Limitation ( "Levy Lid ") The regular property tax increase limitation (chapter 84.55 RCW) limits
the total dollar amount of regular property taxes levied by an individual local taxing district such as the City
to the amount of such taxes levied in the highest of the three most recent years multiplied by a limit factor,
plus an adjustment at the previous year's levy rate to account for taxes on new construction, annexations,
improvements, State - assessed property and wind -power turbines assessed as real property
Under Initiative 747 ( "I- 747 ") passed by the voters in 2001, the limit factor is the lesser of 101 percent of the
highest levy in the three previous years or 100 percent plus inflation, unless a greater amount is approved by
a simple majority of the voters. On June 13, 2006, a King County Superior Court ruled Washington State
Initiative 747 unconstitutional. Initiative 747 limits annual increases in the amount of regular property taxes
levied by the City Since Initiative 747, the City has generally been subject to a one percent limit on annual
increases (except for, among other things, increases resulting from new construction) The recent King County
Superior Court order voided the Initiative and enjoined the State of Washington from enforcing the Initiative.
11
DRAFT
The State Attorney General filed an appeal to the State Supreme Court and has been granted a stay of the
lower court's decision pending the State Supreme Court's final decision. The State Supreme Court is expected
to hear the case in 2007 The City cannot predict whether the Superior Court decision invalidating the
Initiative will be upheld or, if upheld, whether the Legislature would re -enact the one percent limit rather than
permitting a return to the higher limits in effect prior to Initiative 747 (generally permitting annual increases
equal to the lesser of inflation or six percent)
RCW 84.55.092 allows the property tax levy to be set at the amount that would be allowed if the tax levy for
taxes due in each year since 1986 had been set at the full amount allowed under Chapter 84.55 RCW This is
sometimes referred to as "banked" levy capacity
With a majority vote of its electors, a taxing district may levy, within the rate limitations described above,
more than what otherwise would be allowed by the tax increase limitation indefinitely or for a limited period
or to satisfy a limited purpose, as allowed by RCW 84.55 050 This is known as a "levy lid lift." A newly
created taxing district can initiate its levy at the maximum permitted statutory levy rate, unless that rate would
exceed any of the limitations described above.
Since the regular property tax increase limitation applies to the total dollar amount levied rather than to levy
rates, increases in the assessed value of all property in the taxing district (excluding new construction,
improvements and State - assessed property) which exceed the rate of growth in taxes allowed by the limit
factor result in decreased regular tax levy rates, unless voters authorize a higher levy or the taxing district uses
banked levy capacity Decreases in the assessed value of all property in the taxing district (including new
construction, improvements and State - assessed property) or increases in such assessed value that are less than
the rate of growth in taxes imposed, among other events, may result in increased regular tax levy rates.
Special excess levies approved by a 60 percent majority of the voters and meeting minimum voter turnout
requirements are not subject to the rate or amount limitations on regular levies described above.
Assessed Value
The County Assessor, or equivalent thereof ( "Assessor "), determines the value of all real and personal
property throughout the County that is subject to ad valorem taxation, except certain utility properties which
are valued by the State Department of Revenue. The Assessor is an elected official whose duties and methods
of determining value are prescribed and controlled by statute and by detailed regulations promulgated by the
State Department of Revenue.
For tax purposes, the assessed value of property is 100 percent of its market value. Three approaches may be
used to determine real property value: market data, replacement cost and income generating capacity In the
County, all property is- subject to an annual property valuation and an on -site revaluation every six years. The
property is listed by the Assessor on a roll at its current assessed value and the roll is filed in the Assessor's
office. The Assessor's determinations are subject to revisions by the County Board of Equalization and, for
certain property, subject to further revisions by the State Board of Tax Appeals.
Tax Collection Procedure
Property taxes are levied in specific amounts and the rate for all taxes levied for all taxing districts in the
County is determined, calculated and fixed by the Assessor based upon the assessed value of the property
within the various taxing districts. The Assessor extends the taxes to be levied within each taxing district on a
tax roll that contains the total amount of taxes to be so levied and collected. By January 15 of each year, the tax
roll is delivered to the County Treasurer, or equivalent thereof, who creates a tax account for each taxpayer
and is responsible for the collection of taxes due to each account. All such taxes are due and payable on April
30 of each year, but if the amount due from a taxpayer exceeds $50, one -half may be paid then and the balance
no later than October 31 of that year Delinquent taxes are subject to interest at the rate of 12 percent per year
computed on a monthly basis from the date of delinquency until paid. In addition, a penalty of three percent
is assessed on June 1st of the year in which the tax was due and eight percent on December 1st of the year due.
All collections of interest on delinquent taxes are credited to the County's current expense fund. The method
of giving notice of payment of taxes due, the accounting for the money collected, the division of the taxes
among the various taxing districts, notices of delinquency, and collection procedures are covered by detailed
statutes. The lien on property taxes is prior to all other liens or encumbrances of any kind on real or personal
12
AFT
property subject to taxation. By law the County Treasurer may not commence foreclosure of a tax lien on real
property until three years have passed since the. first delinquency The State's courts have not decided
whether the Homestead Law (chapter 6 13 RCW) may give the occupying homeowner a right to retain the first
$40,000 of proceeds of the forced sale of the family residence or other "homestead" property for delinquent
general property taxes. (See Algona v Sharp, 30 Wn. App 837, 638 P.2d 627 (1982), holding the homestead
right superior to the improvement district assessments.) The United States Bankruptcy Court for the Western
District of Washington has held that the Homestead Exemption applies to the lien for property taxes, while the
State Attorney General has taken the position that it does not.
City of Yakima
Tax Collection Record
Tax Collection
Collection Regular Ad Valorem Year As of
Year Assessed Value (1) Tax Levy of Levy 02/01/07
2007 $ 4,586,923,853 $14,588,963 (2) (2)
2006 4,169,739,611 14,399,088 97 6% 97 6%
2005 3,971,667,847 13,960,632 96.1 99 0
2004 3,824,096,823 13,592,285 96.8 99.5
2003 3,673,433,781 13,280,578 96 7 99 9
2002 3,268,615,861 12,390,073 95 4 99 9
(1) Assessed valuation is based upon 100 percent of actual valuation.
(2) In process of collection.
NOTE. Taxes are due and payable on April 30 of each year of the levy The entire tax or first half must be paid on or
before April 30, otherwise the total amount becomes delinquent on May 1. The second half of the tax is payable
on or before October 31, becoming delinquent November 1
Source: City of Yakima and Yakima County Assessor's Office.
City of Yakima
Major Property Taxpayers
Percent of
2007 Collection Year City's
Taxpayer Type of Business Assessed Valuation Total A.V.
Yakima HMA Inc. ( Hospital $ 53,515,199 1 17%
Shields Bag & Printing Co Manufacturing 34,815,751 0 76
Longview Fibre Co Manufacturing 24,007,854 0.53
Qwest Corporation Telecommunications 21,543,014 0 47
Safeway Stores Inc. Food and beverage 20,102,613 0 44
Jeld -Wen Windows & Doors Wood products 17,430,035 0.38
Hansen Fruit Company LP Fruit processing 16,791,638 0.37
Washington Fruit & Produce Fruit processing 16,293,819 0.35
Yakima Valley Subsidiary N/A 14,847,150 0.32
Cascade Natural Gas Corporation Utilities 14,439,196 0.31
Subtotal - Ten of the City's Largest Taxpayers 233,786,269 510
All Other City Taxpayers 4,353,137,584 94.90
Total City Taxpayers $ 4,586,923,853 100.00%
(1) Formerly Providence Health Systems, a non - profit medical facility Yakima HMA Inc. is doing business as Yakima
Regional Medical and Cardiac Center
Source. Yakima County Treasurer's Office.
13
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�.3 T
Authorized Investments
Chapter 35.39 RCW limits the investment by cities and towns of its inactive funds or other funds in excess of
current needs to the following authorized investments: United States bonds, United States certificates of
indebtedness, bonds or warrants of the State and any local government in the State; its own bonds or warrants
of a local improvement district which are within the protection of the local improvement guaranty fund law;
and any other investment authorized by law for any other taxing district or the State Treasurer Under chapter
43.84 RCW, the State Treasurer may invest in non - negotiable certificates of deposit in designated qualified
public depositories, in obligations of the US government, its agencies and wholly owned corporations, in
bankers' acceptances, in commercial paper, in the obligations of the federal home loan bank, federal national
mortgage association and other government corporations subject to statutory provisions and may enter into
repurchase agreements. Utility revenue bonds and warrants of any city and bonds or warrants of a local
improvement district are also eligible investments (RCW 35.39.030)
Money available for investment may be invested on an individual fund basis or may, unless otherwise
restricted by law, be commingled within one common investment portfolio All income derived from such
investment may be either apportioned to and used by the various participating funds or for the benefit of the
general government in accordance with city ordinances or resolutions. Funds derived from the sale of bonds
or other instruments of indebtedness will be invested or used in such manner as the authorizing ordinances,
resolutions or bond covenants may lawfully prescribe.
Local Government Investment Pool
The State Treasurer's Office administers the Washington State Local Government Investment Pool (the
"LGIP "), a $5 1 billion dollar fund that invests money on behalf of more than 350 cities, counties and special
taxing districts. In its management of LGIP, the State Treasurer is required to adhere, at all times, to the
principles appropriate for the prudent investment of public finds. These are, in priority order, (i) the safety of
principal, (ii) the assurance of sufficient liquidity to meet cash flow demands, and (iii) to attain the highest
possible yield within the constraints of the first two goals. Historically, the LGIP has had sufficient liquidity to
meet all cash flow demands.
The LGIP, authorized by chapter 43.250 RCW, is a voluntary pool which provides its participants the
opportunity to benefit from the economies of scale inherent in pooling It is also intended to offer participants
increased safety of principal and the ability to achieve a higher investment yield than would otherwise be
available to them. The pool is restricted to investments with maturities of one year or less, and the average life
typically is less than 90 days. Investments permitted under the pool's guidelines include U.S. government and
agency securities, bankers' acceptances, high quality commercial paper, repurchase and reverse repurchase
agreements, motor vehicle fund warrants, and certificates of deposit issued by qualified Washington State
depositories.
Authorized Investments for Bond Proceeds
In addition to the eligible investments discussed above, bond proceeds may also be invested in mutual funds
with portfolios consisting of U.S government and guaranteed agency securities with average maturities of less
than four years, municipal securities rated in one of the four highest categories, and money market funds
consisting of the same, so long as municipal securities held in the fund(s) are in one of the two highest rating
categories of a nationally recognized rating agency Bond proceeds may also be invested in shares of money
market funds with portfolios of securities otherwise authorized by law for investment by local governments
(RCW 39.59 030) See "The City - Cash and Investments" for more information regarding the City's
investment practices
14
DRAFT
City of Yakima
Comparative General Fund Statement
of Revenues, Expenditures and Changes in Fund Balance
(Fiscal Years Ended December 31)
Audited
2005 2004 2003 2002 2001
Revenues
Taxes and Special Assessments $ 32,066,945 $ 30,119,323 $ 28,294,713 $ 26,565,287 $ 25,438,932
Licenses and Permits 690,783 529,767 469,716 405,856 408,688
Intergovernmental 1,763,988 1,605,395 1,739,409 1,749,790 1,829,708
Charges for Services 4,290,541 4,201,981 3;861,959 3,723,724 3,466,615
Fines and Forfeitures 1,190,300 1,363,565 1,396,796 1,631,877 1,553,036
Interest 735,857 414,847 425,786 558,359 893,688
Other 57,001 40,518 (259,859) (1) 56,453 51,885
Total Revenues $ 40,795,415 $ 38,275,396 $ 35,928,520 $ 34,691,346 $ 33,642,552
Expenditures
General Government 9,852,233 9,783,461 8,963,242 8,662,004 8,053,234
Security of Persons and Property 25,098,721 23,297,962 22,262,081 20,794,442 19,490,986
Physical Environment 1,328,608 1,326,367 1,230,396 1,242,009 1,086,178
Economic Environment 607,358 582,593 503,422 419,434 372,629
Mental and Physical Health 18,255 16,952 15,327 23,219 22,608
Culture and Recreation 1,419,440 1,421,107 1,405,448 1,251,178 1,214,139
Capital Outlay 64,800 200,122 56,641 93,030 89,068
Debt Service 393,142 357,374 211,843 212,403 212,754
Total Expenditures 38,782,557 36,985,938 34,648,400 32,697,719 30,541,596
Excess of Revenues
Over (Under) Expenditures 2,012,858 1,289,458 1,280,120 1,993,627 3,100,956
Other Financing Sources (Uses)
Proceeds from Capital Lease Financing 0 147,669 0 0 0
Operating Transfers In 90,000 145,000 110,000 110,000 110,000
Operating Transfers (Out) (2) (1,994,240) (2,005,430) (1,845,427) (1,919,371) (1,910,660)
Comp For Loss of Gen. Fixed Assets 322 779 1,143 2,774 989
Total Other Financing Sources (Uses) (1,903,918) (1,711,982) (1,734,284) (1,806,597) (1,799,671)
Excess of Revenues and Other Sources
Over (Under) Expenditures/Other Uses 108,940 (422,524) (454,164) 187,030 1,301,285
Fund Balance, January 1 8,850,534 9,256,841 9,709,874 (3) 6,191,466 4,903,996
Change in Reserve for Inventory 4,521 16,217 1,131 (3,280) (13,815)
Ending Fund Balance $ 8,963,995 $ 8,850,534 $ 9,256,841 $ 6,375,216 $ 6,191,466
(1) Prior period adjustment.
(2) The majority of operating funds transferred out of the general fund are used to fund parks programs, bonded debt
service, contingency funds and the City's public safety communications network.
(3) In conjunction with GASB 34, the City also implemented GASB 33, which defines revenue recognition for "no
exchange" (i.e. tax) transactions. As a result of the implementation of GASB 33, a change in accounting principle was
determined to have occurred. This change caused a restatement of $3,334,658 in the General Fund beginning fund
balance to comply with the pronouncement.
Note: The estimated ending General Fund balance for December 31, 2006 is $
Source. City of Yakima.
15
D R
Fr
City of Yakima
Comparative General Fund Balance Sheet
(Fiscal Years Ended December 31)
Audited
2005 2004 2003 2002 2001
Assets and Other Debits
Cash & Equity in Pooled Investments $ 2,880,717 $ 2,351,707 $ 1,050,215 $ 7,704,560 $ 8,890,037
Receivables:
Taxes 4,201,726 3,684,741 3,363,202 862,274 727,573
Accounts 113,498 153,443 174,206 174,086 166,865
Interest /Penalties 131,653 70,611 89,499 287,596 287,633
Other 0 6,397 0 0 0
Due from Other Funds 511,606 242,101 584 ;875 1,066,233 153,003
Due from Other Gov't Units 38,210 28,880 73,368 26,964 26,964
Inventories 48,671 44,150 27,933 26,802 30,082
Investments, at amortized cost 4,616,693 5,670,001 7,500,000 0 0
Total Assets 12,542,774 12,252,031 12,863,298 10,148,515 10,282,157
Liabilities
Warrants /Accounts Payable 448,896 503,264 606,871 389,798 642,513
Wages /Benefits Payable \ 2,918,085 2,655,805 2,551,753 2,246,608 2,054,005
Due to Governments 46,513 37,258 22,399 24,585 25,083
Deposits Payable 58,511 68,183 271,744 214,524 10,963
Deferred Revenues 106,774 136,987 153,690 897,784 1,358,127
Total Liabilities 3,578,779 3,401,497 3,606,457 3,773,299 4,090,691
Fund Equity and Other Credits
Fund Balance:
Reserved 277,565 383,582 781,001 788,694 771,777
Unreserved 8,686,430 8,466,952 8,475,840 5,586,522 5,419,689
Total Fund Equity and Other Credits 8,963,995 8,850,534 9,256,841 6,375,216 6,191,466
Total Liabilities, Equity and Other Credits $ 12,542,774 $ 12,252,031 $ 12,863,298 $ 10,148,515 $ 10,282,157
Source: City of Yakima.
16
DRAFT
The City
The City of Yakima was incorporated in 1886 It is the tenth largest city in the State of Washington (the
"State "), and encompasses approximately 23 square miles. The City provides the full range of municipal
services including public safety (police, fire, building), public improvements (streets, traffic signals, storm
sewer, irrigation utility), sanitation (solid waste disposal, wastewater utility), water utility, irrigation utility,
community development, parks and recreation, and general administrative services.
The City operates under a council /manager form of government with a full -time city manager The City
Council (the "Council ") consists of seven council members. Four members are elected from individual
districts and three are elected at large. The mayor is chosen by the Council from within its own membership
every two years.
Elected Officials
City Council Term Expires
Dave Elder, Mayor December 31, 2007
Neil McClure, Asst. Mayor December 31, 2007
Ronald J Bonlender December 31, 2007
Micah Cawley December 31, 2009
Norm Johnson December 31, 2009
Bill Lover December 31, 2009
Susan J Whitman December 31, 2007
Key Administrative Staff
Richard A. Zais, Jr., City Manager Mr Zais joined the City in 1973 as the Administrative Assistant to the City
Manager and was appointed to the position of City Manager in 1979 Mr Zais is responsible for the
supervision and direction of a full- service city with seven operating departments. Mr Zais prepares and
administers the $164 million annual City budget with a $55 million annual payroll for over 600 full -time
employees. Mr Zais serves as the Council's chief advisor, appoints all administrative officers and employees
and executes Council policy and programs. Mr Zais' educational background is in public administration with
a B.A. and M.P.A. from the University of Washington.
Rita M. DeBord, Director of Finance & Budget. Ms. DeBord joined the City in 1999 as the Finance Director,
coming from Puget Sound Energy Corporation. Ms. DeBord is responsible for all financial and treasury
services, budgeting and accounting, utility customer services and information systems for the City During
her 21 years with Puget Sound Energy, Ms. DeBord served in many capacities including the following key
management positions. Manager of District Operations, Manager of Corporate Budgets, and Manager of
Information Systems Project. Ms. DeBord has a degree in Accounting from Central Washington University, is
a CPA and is a member of the American Institute of Certified Accountantsand Washington Society of CPAs.
Timothy M. Jensen, Treasury Services Officer Mr Jensen joined the City in 1990 as an accountant, coming from a
national public accounting firm where his primary duties were as a senior auditor Mr Jensen was appointed
the City's Treasury Services Officer in 2001 where he oversees the security of the City's investments, cash
management, and debt administration and performs high -level financial analysis. Mr Jensen obtained a B.S.
in Accounting from Central Washington University in 1986, and studied Economics at the University of
California, Berkeley and the University of Nevada, Reno from 1974 through 1977 Mr Jensen is an executive
officer of the Washington Finance Officers Association "WFOA" and will be President of that organization in
2008 He has served on the Board of Directors of WFOA since 1998 Mr Jensen is a past member of the
Washington State Local Government Investment Pool Advisory Committee. He is also currently serving on
the Washington State Auditor's Local Government Advisory Committee and has served two different State
Treasurers on select issue committees.
Cindy J Epperson, Financial Services Manager Ms. Epperson joined the City in 1990 as an accountant and was
promoted to Financial Services Manager in 1998, where she has the responsibility for the City's accounting
systems and processes and financial statement preparation. Ms. Epperson works closely with the City
17
Manager and Finance Director to prepare the City's budget. Prior to joining the i , " - t . q, : s
Accounting Manager for two local agricultural businesses. Prior to her experience ink,. ..' 414. I d try,
Ms. Epperson was Senior Auditor for an international accounting firm. She obtained a B. . : egr in
Accounting from the University of Arkansas in Little Rock.
Labor Relations
The City currently employs approximately 652 full -time and 18 part -time and temporary employees. A
majority of the City's employees are represented by bargaining units as follows.
Number
Bargaining Unit of Employees Contract Expiration Date
AFSCME Municipal 282 December 31, 2007 (
YPPA 114 December 31, 2005 (2)
Fire Suppression 81 December 31, 2006 (2)
AFSCME Transit 47 December 31, 2006 (2)
Fire Communications 11 December 31, 2006 (
Fire PERS 14 December 31, 2006 (2)
(1) Benefit terms and adjustments are still under negotiation.
(2) Currently under negotiation, City management has proposed a wage freeze for 2007
The City considers its relationships with its employee groups and bargaining units to be satisfactory
Pension System
Public Employees' Retirement System ( "PERS ") Substantially all of the City's full -time and qualifying part -time
employees, other than those covered under union plans, participate in PERS. This is a statewide local
government retirement system administered by the Washington State Department of Retirement Systems,
under cost - sharing, multiple- employer defined benefit public employee retirement plans. The PERS system
includes three plans.
Participants who joined the system by September 30, 1977, are PERS Plan I members. Those joining thereafter
are enrolled in PERS Plan II. A third plan, entitled PERS Plan III, provides members with a defined benefit
plan similar to PERS Plan II and the opportunity to invest their retirement contributions in a defined
contribution plan.
PERS Plan I members are eligible for retirement at any age after 30 years of service, at age 60 with five years of
service, or at age 55 with 25 years of service. The annual pension is two percent of the average final
compensation per year of service, capped at 60 percent. The average final compensation is based on the
greatest compensation earned during any 24 eligible consecutive compensation months.
PERS Plan II members may retire at age 65 with five years of service or at 55 with 20 years of service. The
annual pension is two percent of the average final compensation per year of service. PERS Plan II retirements
prior to 65 are actuarially reduced. On July 1 of each year following the first full year of retirement service, the
benefit will be adjusted by the percentage change in the Consumer Price Index ( "CPI ") of Seattle, capped at
three percent annually
PERS Plan III is structured as a dual benefit program that will provide members with the following benefits.
• A defined benefit allowance similar to PERS Plan II calculated as one percent of the average final
compensation per year of service (versus a two percent formula) and funded entirely by employer
contributions.
• A defined contribution account consisting of member contributions plus the full investment return
on those contributions.
Each biennium, the State Pension Funding Council adopts PERS Plan I employer contribution rates and PERS
Plan II employer and employee contribution rates. Employee contribution rates for PERS Plan I are
18
U
established by statute at six percent and do not vary from year to year The employer and employee
contribution rates for PERS Plan II are set by the director of the Department of Retirement Systems, based on
recommendations by the Office of the State Actuary, to continue to fully fund PERS Plan II. Unlike PERS
Plan II, which has a single contribution rate (which is currently 2.25 percent), with PERS Plan III, the employee
chooses how much to contribute from one to six contribution rate options. Once an option has been selected,
the contribution rate choice is irrevocable unless the employee changes employers.
All employers are required to contribute at the level established by State law The methods used to determine
the contribution requirements are established under State statute in accordance with Chapters 41 40 and 41.26
RCW
For the year ending December 31, 2006, the City's contribution of $ , or percent of covered
payrolls, represents its full liability under the system, except that future rates may be adjusted to meet the
system needs.
According to information provided by the Office of the State Actuary, based upon revised demographic and
economic assumptions, the total unfunded actuarial accrued liability of Plan I of the PERS System currently is
$3 671 million, of which the State share is $1 485 million and the local government share is $2.276 million. In
2005 and 2006, the State Legislature enacted and authorized the State Pension Funding Council to adopt
changes in contribution rates to PERS intended to amortize the PERS I unfunded actuarial liability by 2004.
According to information provided by the Office of the State Actuary, Plan II and III of PERS currently have no
unfunded actuarial accrued liability Shown below are the current and projected employer contribution rates
for Plan I, II and III of PERS, including its component rates. These rates are subject to change by future
legislation enacted by the State Legislature to address future changes in actuarial and economic assumptions.
PERS Employer Contribution Rates
Effective Effective Effective Effective
7/1/06 1/1/07 7/1/07 7/1/08
Normal Rate 3.50% 3.50% 4.15% 4.83%
PERS I Unfunded Liability 0 01 1 78 1.69 2.57
Gain Sharing 0 00 0 00 0.62 0 62
DRS Admin. Expense Rate 0.18 0.18 0.18 0.18
Total PERS Employer Rate 3.69% 5.46% 6.64% 8.20%
Law Enforcement Officers' and Fire Fighters' Retirement System ( "LEOFF ") LEOFF is a cost - sharing multiple -
employer defined benefit pension plan. Membership in the plan includes all full -time, fully compensated local
law enforcement officers, and fire fighters. The LEOFF system includes two plans
Participants who joined the system by September 30, 1977, are LEOFF Plan I members. Those joining
thereafter are enrolled in LEOFF Plan II. Retirement benefits are financed from employee and employer
contributions, investment earnings, and State contributions. Retirement benefits in both LEOFF Plan I and
LEOFF Plan II are vested after completion of five years of eligible service.
LEOFF Plan I members are eligible to retire with five years of service at age 50 The service retirement benefit
is dependent upon the final average salary and service credit years at retirement. On April 1 of each year
following the first full year of retirement service, the benefit will be adjusted by the percentage change in the
CPI of Seattle.
Percent of
Term of Service Final Average
5 -9 Years 1.0%
10 -19 Years 1.5
20 or more years 2.0
LEOFF Plan II members are eligible to retire at the age of 50 with 20 years of service or at 53 with five years of
service. Retirement benefits prior to age 53 are actuarially reduced at a rate of three percent per year The
19
DRAFT
benefit is two percent of the final average salary per year of service. The final average salary is determined as
the 60 highest paid consecutive service months There is no limit on the number of service credit years, which
may be included in the benefit calculation. On July 1 of each year following the first full year of retirement
service, the benefit will be adjusted by the percentage change in the CPI of Seattle, capped at three percent
annually
LEOFF Plan I employer and employee contribution rates are established by statute, and the State is responsible
for the balance of the funding at rates set by the Pension Funding Council to fully amortize the total costs of
the plan. Employer and employee rates for LEOFF Plan II are set by the director of the Department of
Retirement Systems, based on recommendations by the Office of the State Actuary, to continue to fully fund
the plan. LEOFF Plan II employers and employees are required to contribute at the level required by State
law The methods used to determine the contribution rates are established under State statute in accordance
with Chapters 41.26 and 4145 RCW
For the year ending December 31, 2006, the City's contribution to LEOFF I (for participants who joined the
system by September 30, 1977) of percent and to LEOFF II (participants who joined after September 30,
1977) of percent of covered payroll totaled $ , representing its full liability under the system,
except that future rates may be adjusted to meet the system needs
Historical trend information regarding all of these plans is presented in Washington State's Department of
Retirement Systems' annual financial report. A copy of this report may be obtained at:
Department of Retirement Systems
Point Plaza West
1025 East Union Street
P O Box 48380
Olympia, WA 98504 -8380
Internet Address: www drs wa.gov
According to information provided by the Office of State Actuary, the LEOFF System currently has no
unfunded actuarial accrued liability
Unficnded Pension Liabilities The City maintains two single employer defined benefit pension plans, Firemen's
Pension and Police Pension, which are closed systems covering Firemen and Police Officers hired prior to
March 1, 1970 Both plans had their first annual actuarial valuation as of March 31, 1989, and the required
contributions identified in that valuation have been the basis for recording the unfunded pension liability
since 1989
The Police Pension is a department in the General Fund, and is operating on a pay -as- you -go basis The
unfunded pension liability will be adjusted annually by comparing actual expenditures for pension benefits to
the actuarially determined contribution. The City intends to maintain this plan on a pay -as- you -go basis. This
fund had an unfunded pension liability of $ at December 31, 2006
The Firemen's Relief and Pension Fund is a trust fund, and has as its funding sources a portion of local
property taxes, a state tax on fire insurance premiums and interest income. This fund had an unfunded
pension liability of $ _ at December 31, 2006 An actuarial study was completed January 1, 2003
Actuarial studies are performed every five years.
Other Post Employment Benefits
The Government Accounting Standards Board ( "GASB ") has issued a new standard concerning Accounting
and Financial Reporting by Employers for Post Employment Benefits Other than Pensions ( "GASB 45 ") In
addition to pensions, many state and local governmental employers provide other post employment benefits
( "OPEB ") as a part of total compensation to attract and retain the services of qualified employees. OPEB
includes post employment healthcare, as well as other forms of post employment benefits when provided
separately from a pension plan. The new standard provides for the measurement, recognition and display of
OPEB expenses /expenditures, related liabilities (assets), note disclosures, and if applicable, required
20
DRAF supplementary information in the financial reports. This pronouncement is effective for t ty foe fiscal
year ending on December 31, [2007 or 2008 ?]
To date, the City has not had an actuarial study performed to comply with GASB 45 The City plans to have
an actuarial study performed by [date ?] for the fiscal year ending December 31, _
Risk Management
The City maintains reserve funds to provide for self - insurance coverage in the areas of Unemployment
Compensation, Medical /Dental coverage, and Workers' Compensation. In addition, the City maintains a Risk
Management Fund to provide for property, liability, and other coverages.
Unemployment Compensation. In 1978, the City established an Unemployment Compensation Reserve Fund to
provide unemployment compensation coverage for its employees, and thereby elected to participate with the
State in a cost - reimbursement instead of monthly premium program. In doing so, the City retained its right to
appeal awards and determinations made by the State Department of Employment Security
Self - insured Medical/Dental Program The City, in 1979, self - insured its medical and dental programs for all
employees other than temporary employees and employees hired to work less than half -time. The City's
Human Resources Office administers the self - insured program and claims payment services are provided by
Health Care Management Administration, Inc.
Each operating fund is charged an amount per covered employee which would otherwise have been paid to
an insurance carrier Interfund premiums to the Employee Health Benefit Reserve Fund for 2006 were
$ Incurred but not reported claims of $ were accrued as a liability
[PLEASE UPDATE AS NECESSARY]
In order to avoid catastrophic losses, the City "reinsures" the program by purchasing insurance known as
"stop -loss insurance." Two types of "stop- loss" insurance are purchased. (i) individual stop -loss, and
(ii) aggregate stop -loss, with both provided through Safeco Insurance Company Under the individual stop -
loss insurance, the City pays the first $150,000 of claims for an individual employee or dependent. Any
charges accrued by an individual in excess of $150,000 in a calendar year are thereafter reimbursed by Safeco
The aggregate stop -loss is designed to protect the City from multiple large claims which may not reach the
individual stop -loss attachment point of $150,000 The aggregate stop -loss attachment point is calculated by
determining the projected amount of claims for the year and adding an additional 25 percent of that amount
(125 percent of projected claims)
Workers' Compensation Program. The City self - insured its workers' compensation program for all employees
except those covered by the LEOFF I Retirement System in 1984. This workers' compensation program
provides coverage identical to the State - administered workers' compensation program, however, the City pays
only the direct injury- related costs and certain administrative fees. The program is administered by the City's
Personnel Office with claims administration and safety services provided by Ward North America (formerly
Scott Wetzel Services, Inc.)
Each operating fund is charged an appropriate accrual amount, per employee, based on rate requirements
prescribed by the State. Each year the reserve fund is reviewed to determine a contribution rate which
provides for an appropriate reserve. Interfund premiums to the Workers' Compensation Fund for 2006 were
$ Based on the claim manager's estimate, the City has accrued incurred but not reported claims of
$ at December 31, 2006
In order to avoid catastrophic losses, the City "reinsures" the program by purchasing insurance known as
"stop -loss insurance." This insurance is provided through Marsh Advantage America under a policy
purchased from Employers Reinsurance. Under the individual stop -loss portion of the insurance, the City is
liable for the first $500,000 of claims resulting from a specific accident. Charges beyond that $500,000 are
covered by stop -loss insurance up to $25 million.
Risk Management Program. The Risk Management Reserve Fund was established in 1986 when the City
elected to self - insure the liability exposure portion of its insurance program. Resources accrue to the fund
21
DA F T
through interfund premiums to Operating Funds for appropriate insurance coverage and the replenishment
and building of reserves for potential liability claims City contributions to the Risk Management Reserve
Fund for 2006 were $ _ The Fund provides for administration, legal services, claims adjustment, and
for the purchase of property, excess liability and other insurance coverage.
Liabilities of the fund are reported when it is probable that a loss has occurred and the amount of the loss can
be reasonably estimated. Liabilities include an amount for claims that have been incurred but not reported.
The result of the process to estimate the claims liability is not an exact amount as it depends on many complex
factors, such as inflation, changes in legal doctrines and damage awards. Accordingly, claims are reevaluated
periodically to consider recent claim settlement trends, inflation and other economic and social factors. The
estimate of the claims liability also includes amounts for incremental claims adjustment expenses related to
specific claims. Based on these factors, the claims manager's estimate of claims liability was $ as of
December 31, 2006. Excess liability coverage is provided from Genesis Underwriters Management Company
in an amount of $ , with a $ retention.
Accounting Policies
Accounting records for the City are maintained in accordance with methods prescribed by the State Auditor
under the authority of Washington State law The City financially reports on the calendar year basis and
employs a double -entry modified accrual system for all fund categories with the exception of proprietary,
nonexpendable and pension trust funds which require full accrual reporting. The modified accrual basis
differs from the accrual basis in the following ways. (i) purchases of capital assets are considered
expenditures, (ii) redemption of long -term debt is considered an expenditure when due; (iii) revenues are
recognized only when they become both measurable and available to finance expenditures of the current
period, revenues that are measurable but not available are recorded as receivable and offset by deferred
revenues, (iv) inventories and prepaid items are reported as expenditures when purchased, (v) interest on
long -term debt is not accrued but is recorded as an expenditure when due, and (vi) accumulated unpaid
vacation and sick pay are considered expenditures when paid. In accordance with GASB 34, the City has
implemented this accounting standard in its December 31, 2005 financial statement.
Fund Accountmg The accounts of the City are organized on the basis of funds each of which is considered a
separate accounting entity The City uses governmental, proprietary and fiduciary funds. Each governmental
fund and expendable trust or agency fund is accounted for with a separate set of self - balancing accounts that
comprise its assets, liabilities, fund balances, revenues and expenditures. Proprietary and similar trust funds
use the revenue, expense and equity accounts of similar businesses in the private sector The City's resources
are allocated to and accounted for in individual funds depending on what they are to be spent for and how
they are controlled.
Governmental Funds All governmental funds are accounted for on a spending or "financial flow"
measurement focus. This means that only current assets and current liabilities are generally included on their
balance sheets. Their reported fund balance (net current assets) is considered a measure of "available
expendable resources." Governmental fund operating statements focus on measuring changes in financial
position, rather than net income; they present increases (revenues and other financing sources) and decreases
(expenditures and other financing uses) in net current assets.
Budgetary Process
The City Council annually approves the City's operating budget. The operating budget is designed to allocate
available resources among the City's services and programs and to provide for associated financing decisions.
Annual appropriated budgets are adopted on the modified accrual basis of accounting. For governmental
funds, there are no differences between budgetary basis and generally accepted accounting principles.
Budgetary accounts are integrated in fund ledgers for all budgeted funds, but the financial statements include
budgetary comparisons for the General Fund and Special Revenue Funds only Budgets for debt service and
capital projects are adopted at the level of the individual debt issue or project and for fiscal periods that
correspond to the lines of debt issues or projects. Annual appropriated budgets are adopted at the fund level.
Subsidiary revenue and expenditure ledgers are used to compare the budgeted amounts with actual revenues
and expenditures. As a management control device, the subsidiary ledgers monitor expenditures for
22
D . . FT
individual functions and activities by object class. Appropriations for general and special revenue funds lapse
at year -end.
The City Manager is authorized to transfer budgeted appropriations between departments within any fund,
however, any revisions that alter the total expenditures of a fund, or that affect the number of permanently
authorized employee positions, salary ranges, or other conditions of employment must be approved by
the Council.
Cash and Investments
Cash and investments are managed under the guidance of the City's Investment Policy adopted by a
resolution of the Council. The policy was based on the Model Investment Policy prepared by the Municipal
Treasurers' Association of the United States and Canada and applies to all financial assets of the City
Investments are made using the "prudent person" standard with primary objectives being safety of principal,
liquidity enabling the City to meet all operating requirements and a return on investment objective of attaining
a market rate of return through budgetary and economic cycles. City policies require the City to minimize
counterparty risks by safekeeping all purchased securities and conducting all trades on a delivery versus
payment basis. A report on the performance of the Treasury Division is prepared quarterly for review by the
Council and City Manager
Investments of City funds except those of the Firemen's Relief and Pension Fund are limited to (i) investment
deposits, including certificates of deposit with qualified public depositories as defined in chapter 39 59 RCW,
(ii) certificates, notes or bonds of the United States, or other obligations of the United States, or its agencies, or
of any corporation wholly owned by the government of the United States, (iii) obligations of government -
sponsored corporations which are eligible as collateral for advances to member banks as determined by the
Board of Governors of the Federal Reserve System, (iv) banker's acceptances sold on the secondary market;
and (v) the LGIP
The market value of investments held in the combined portfolios under the control of the Department of
Finance and Budget as of December 31, 2006 was $ million. Of that amount, percent was in agency
securities, percent was in the LGIP, percent was invested in U.S Treasuries, and percent was
invested in municipal securities. See "Appendix C - 2005 Annual Financial Report" for a breakdown of
investments.
Auditing of City Finances
Accounting systems and budgetary controls are prescribed by the Office of the State Auditor in accordance
with RCW 43 09.200 and RCW 43 09.230 The City complies with the systems and controls prescribed by the
Office of the State Auditor and establishes procedures and records which reasonably assure safeguarding of
assets and the reliability of financial reporting (see "Authorized Investments" herein)
The State Auditor is required to examine the affairs of cities at least once every two years. The City is audited
annually The examination must include, among other things, the financial condition and resources of the
City, whether the laws and constitution of the State are being complied with, and the methods and accuracy of
the accounts and reports of the City Reports of the auditor's examinations are required to be filed in the office
of the State Auditor and in the finance department of the City
The audited financial statements of the City for the year ended December 31, 2005, attached as Appendix C,
are incorporated by reference to this Official Statement and have been filed with the current nationally
recognized municipal securities information repositories ( "NRMSIR ").
23
d
t? A
Demographic Information
The City lies in central Washington State in the County about 142 miles
southeast of Seattle and 188 miles northeast of Portland, Oregon. The County - =WM
ranks second in the State in terms of square miles and seventh in terms of W
population. The City is the County seat and the largest incorporated 1.
AA community in the County encompassing 23 square miles. Population history j1
for both the City and County in recent years is shown in the following table: m.
Yakima Counhj
Population Washington
Yakima County and the City of Yakima
Yakima City of
April 1 County 'Yakima
2006 231,800 81,710
2005 229,300 79,480*
2004 227,500 79,480
2003 226,000 79,220
2002 225,000 79,120
* The City completed an annexation of 1,990 citizens in June 2005.
Source. Washington State Office of Financial Management, June 2006
Economic Indicators
Major Employers The economy of the City is based on government - related jobs and agriculture that produces
and processes tree fruits, hops, mint, vegetables, livestock, dairy and grapes for wine. The City is the center of
the County's economic activity
City of Yakima
Major Employers
Number of
Employer Type of Business Employees
Yakima Valley Memorial Hospital Healthcare 1,500
Yakima School District No 7 Education 1,453
Yakima County Government 1,200
Tree Top Inc. Fruit Company 1,150
Yakima Regional Medical Healthcare 841
City of Yakima Government 670
Washington Beef, LLC Beef Processing 620
Yakima Legends Casino Entertainment 619
Shields Bag & Printing Company Printing 575
Wal -Mart Retail 545
Borton & Sons Fruit & Cold Storage Fruit & Cold Storage 524
Snokist Growers Fruit Orchard 521
Yakima Training Center Military 512
Enterprise for Progress Community Service 500
Department of Transportation Government 500
Zirkle Fruit Company Fruit Company 480
Western Recreational Vehicles Vehicle Distribution 430
West Valley School District No 208 Education 427
Yakima Valley Community College Education 415
Haney Truck Line Trucking Company 410
Source. Greater Yakima Chamber of Commerce, March 2006.
24
.11 RAFT
Income. Historic personal income and per capita income levels for the County and the State are shown below.
Yakima County and State of Washington
Total Personal and Per Capita Income
Yakima County State of Washington
Total Personal Per Capita Total Personal Per Capita
Year Income (in millions) Income Income (in millions) Income
2005* N/A N/A $222,642,504 $35,409
2004 $5,766,499 $25,125 217,503,197 35,041
2003 5,457,597 24,057 201,606,772 32,882
2002 5,179,243 23,071 197,451,578 32,549
2001 5,151,726 23,067 193,498,304 32,291
2000 4,916,123 22,070 187,853,404 31,779
Source. U.5 Department of Commerce, Bureau of Economic Analysis, February 2007
Taxable Retail Sales. Taxable retail sales reflect only those sales subject to retail sales tax. Historic taxable retail
sales for the City and the County are shown below -
City of Yakima and Yakima County
Taxable Retail Sales
City of Yakima
Year Yakima County
2006* $ 1,056,146,195 $ 1,961,429,106
2005 1,350,618,320 2,503,736,875
2004 1,307,845,725 2,411,522,348
2003 1,246,026,347 2,294,202,221
2002 1,205,189,471 2,178,920,758
2001 1,176,022,552 2,122,049,462
*Data through third quarter only
Source: Washington State Department of Revenue, February 2007
Building Permits. Residential building permits are an indicator of growth within a region. The number and
valuation of new single- family and multi - family residential building permits in the County are listed below
Yakima County
Residential Building Permits
New Single Family Units New Multi Family Units Total
Year Number Valuation Number Valuation Valuation
2006 310 $ 68,284,422 N/A $ N/A $ 68,284,422
2005 414 85,356,908 N/A N/A 85,828,413
2004 393 79,122,131 4 200,672 79,322,803
2003 325 53,948,476 33 2,468,9680 56,417,444
2002 279 41,477,251 80 5,655,912 47,133,163
2001 221 28,283,731 51 4,400,963 32,684,694
Source: Greater Yakima Valley Chamber of Commerce.
25
DRA FT
Employment. Employment within the County is described in the following tables. Civilian Labor Force data
is based on household surveys of residents. NAICS data are estimates based on surveys of employers and
benchmarked based on covered employment as reported by all employers.
Yakima MSA
Nonagricultural Wage & Salary Workers
and Labor Force and Employment Data
Annual Average
2006 2005 2004 2003 2002
Civilian Labor Force 118,800 119,200 117,300 114,700 112,700
Total Employment 110,300 110,200 107,100 103,500 101,700
Total Unemployment 8,500 9,000 10,200 11,200 11,000
Percent of Labor Force 7.2 7 6 8.7 9.8 9.8
NAICS INDUSTRY 2006 2005 2004 2003 2002
TOTAL NONFARM 78,700 75,900 75,100 74,900 74,000
TOTAL PRIVATE 61,400 59,000 58,400 58,300 57,800
GOODS PRODUCING 13,300 12,700 12,700 12,900 13,300
NAT RESOURCES, MINING, and CONSTR. 4,000 3,600 3,400 3,200 3,100
MANUFACTURING 9,200 9,100 9,300 9,800 10,100
Non - Durable Goods 5,300 5,000 5,000 5,500 5,800
SERVICES PROVIDING 65,400 63,200 62,300 62,000 60,800
PRIVATE SERVICES PROVIDING 48,200 46,300 45,600 45,400 44,600
TRADE, TRANSPORTATION, & WAREHSG 17,300 16,300 16,300 15,700 15,800
Wholesale Trade 4,600 4,200 4,000 3,800 3,900
Retail Trade 9,700 9,500 9,400 9,500 9,200
Transportation, Warehousing, and Utilities 3,100 2,700 2,900 2,400 2,700
PROFESSIONAL and BUSINESS SERVICES 4,300 4,200 4,200 4,500 4,500
EDUCATIONAL and HEALTH SERVICES 13,000 12,600 12,200 11,800 11,600
Health Services 11,900 11,500 11,100 10,800 10,700
LEISURE and HOSPITALITY 6,700 6,700 6,400 6,400 6,300
Food Services 4,800 4,800 4,600 4,600 4,500
GOVERNMENT 17,200 17,000 16,700 16,600 16,200
Federal Government 1,300 1,300 1,300 1,400 1,400
State Government 3,000 3,000 3,000 2,900 2,900
Local Government 12,900 12,700 12,400 12,300 11,900
Workers in Labor /Management Disputes 0 0 0
Source: Washington State Employment Security Department, February 2007
Initiative and Referendum
State Initiatives
Under the State Constitution, the voters of the State have the ability to initiate legislation and require the
Legislature to refer legislation to the voters through the powers of initiative and referendum, respectively The
initiative power in Washington may not be used to amend the State Constitution. Initiatives and referenda are
submitted to the voters upon receipt of a petition signed by at least eight percent (initiative) and four percent
(referenda) of the number of voters registered and voting for the office of Governor at the preceding regular
gubernatorial election. Any law approved in this manner by a majority of the voters may not be amended or
repealed by the Legislature within a period of two years following enactment, except by a vote of two- thirds of
all the members elected to each house of the Legislature. After two years, the law is subject to amendment or
repeal by the Legislature in the same manner as other laws.
26
1'IH r3.
Future Initiative Legislation. Other tax and fee initiative measures have been and may be filed, but it cannot be
predicted whether any such initiatives might gain sufficient signatures to qualify for submission to the
Legislature and/ or the voters or, if submitted, whether they ultimately would be approved.
Tax Matters
In the opinion of Bond Counsel, interest on the Bonds is excludable from gross income for federal income tax
purposes and is not an item of tax preference for purposes of the federal alternative minimum tax imposed on
individuals and corporations, however, interest on the Bonds is taken into account in determining adjusted
current earnings for the purpose of computing the alternative minimum tax imposed on certain corporations.
Federal income tax law contains a number of requirements that apply to the Bonds, including investment
restrictions, periodic payments of arbitrage profits to the United States, requirements regarding the use of
proceeds of the Bonds and the facilities financed or refinanced with proceeds of the Bonds and certain other
matters. The City has covenanted to comply with all applicable requirements.
Bond Counsel's opinion is subject to the condition that the City comply with the above - referenced covenants
and, in addition, will rely on representations by the City and its advisors with respect to matters solely within
the knowledge of the City and its advisors, respectively, which Bond Counsel has not independently verified.
If the City fails to comply with such covenants or if the foregoing representations are determined to be
inaccurate or incomplete, interest on the Bonds could be included in gross income for federal income tax
purposes retroactively to the date of issuance of the Bonds, regardless of the date on which the event causing
taxability occurs. In rendering its opinion, Bond Counsel has relied on the report of Grant Thornton LLP with
respect to the accuracy of certain mathematical calculations.
Except as expressly stated above, Bond Counsel expresses no opinion regarding any other federal or state
income tax consequences of acquiring, carrying, owning or disposing of the Bonds. Owners of the Bonds
should consult their tax advisors regarding the applicability of any collateral tax consequences of owning the
Bonds, which may include original issue discount, original issue premium, purchase at a market discount or at
a premium, taxation upon sale, redemption or other disposition, and various withholding requirements.
Prospective purchasers of the Bonds should be aware that ownership of the Bonds may result in collateral
federal income tax consequences to certain taxpayers, including, without limitation, financial institutions,
property and casualty insurance companies, individual recipients of Social Security or Railroad Retirement
benefits, certain S corporations with "excess net passive income," foreign corporations subject to the branch
profits tax, life insurance companies and taxpayers who may be deemed to have incurred or continued
indebtedness to purchase or carry or have paid or incurred certain expenses allocable to the Bonds. Bond
Counsel expresses no opinion regarding any collateral tax consequences. Prospective purchasers of the Bonds
should consult their tax advisors regarding collateral federal income tax consequences.
Payments of interest on tax - exempt obligations such as the Bonds, are in many cases required to be reported to
the Internal Revenue Service (the "IRS "). Additionally, backup withholding may apply to any such payments
made after March 31, 2007 to any owner who is not an "exempt recipient" and who fails to provide certain
identifying information. Individuals generally are not exempt recipients, whereas corporations and certain
other entities generally are exempt recipients.
Bond Counsel's opinion is not a guarantee of result and is not binding on the IRS, rather, the opinion
represents Bond Counsel's legal judgment based on its review of existing law and in reliance on the
representations made to Bond Counsel and the City's compliance with its covenants. The IRS has established
an ongoing program to audit tax - exempt obligations to determine whether interest on such obligations is
includable in gross income for federal income tax purposes. Bond Counsel cannot predict whether the IRS will
commence an audit of the Bonds. Owners of the Bonds are advised that, if the IRS does audit the Bonds,
under current IRS procedures, at least during the early stages of an audit, the IRS will treat the City as the
taxpayer, and the owners of the Bonds may have limited rights to participate in the audit. The commencement
of an audit could adversely affect the market value and liquidity of the Bonds until the audit is concluded,
regardless of the ultimate outcome.
27
4 i A' FT
Qualified Tax - Exempt Obligations
The City has designated the Bonds as "qualified tax - exempt obligations" within the meaning of Section
265(b)(3)(B) of the Code.
Rating
As noted on the cover page of this Official Statement, the City will apply for ratings for the Bonds from
Standard & Poor's Ratings Services. When and if obtained, the rating will reflect only the views of the rating
agency and an explanation of the significance of the rating may be obtained from the rating agency There is
no assurance that the rating, once obtained, will be retained for any given period of time or that the rating will
not be revised downward or withdrawn entirely by the rating agency if, in its judgment, circumstances so
warrant. Any such downward revision or withdrawal of the rating will be likely to have an adverse effect on
the market price of the Bonds.
Continuing Disclosure
In accordance with Section (b)(5) of Securities and Exchange Commission Rule 15c2 -12 under the Securities
Exchange Act of 1934, as the same may be amended from time to time (the "Rule "), the City has agreed in the
Ordinance for the benefit of the Bond Owners or Beneficial Owners of the Bonds to provide or cause to be
provided to each NRMSIR and to the state information depository for the State of Washington (if one is
created) ( "SID "), in each case as designated by the Securities and Exchange Commission (the "Commission ")
in accordance with the Rule, the following annual financial information and operating data for the prior fiscal
year (commencing in 2008 for the fiscal year ended December 31, 2007)• (i) annual financial statements, which
statements may or may not be audited showing ending fund balances, prepared in accordance with
regulations prescribed by the State Auditor pursuant to RCW 43 09.200 (or any successor statutes) and
generally of the type included in this Official Statement for the Bonds under the heading "Comparative
General Fund Statement of Revenues, Expenditures and Changes in Fund Balance," (ii) the assessed valuation
of taxable property in the City; (iii) property taxes due and percentage of taxes collected, (iv) property tax levy
rate per $1,000 of assessed valuation, and (v) outstanding general obligation debt of the City
Such annual information and operating data described above will be so provided on or before the end of nine
months after the end of the City's fiscal year The City may adjust such date if the City changes its fiscal year
by providing written notice of the change of fiscal year to each then existing NRMSIR and the SID The City's
current fiscal year ends on December 31 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 Commission,
and, if such document is a final official statement within the meaning of the Rule, such document will be
available from the Municipal Securities Rulemaking Board ( "MSRB ")
If not provided as part of the annual financial information discussed above, the City will provide its audited
annual financial statement prepared in accordance with regulations prescribed by the State Auditor pursuant
to the statutes cited above (or any successor statutes) when and if available to each then existing NRMSIR and
the SID, if any
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 notice of the occurrence of any of the following events with respect to the Bonds, if material.
(1) Principal and interest payment delinquencies,
(2) Non - payment related defaults,
(3) Unscheduled draws on debt service reserves reflecting financial difficulties,
(4) Unscheduled draws on credit enhancements reflecting financial difficulties,
(5) Substitution of credit or liquidity providers, or their failure to perform,
(6) Adverse tax opinions or events affecting the tax - exempt status of the Bonds,
(7) Modifications to the rights of Bond owners,
28
(8) 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- 238560),
(9) Defeasances,
(10) Release, substitution or sale of property, securing repayment of the Bonds, and
(11) Rating changes.
Solely for purposes of disclosure, and not intending to modify this undertaking, the City advises that no credit
enhancements, debt service reserves or property secure payment of the Bonds.
Notification Upon Failure to Provide Financial Data. The City has agreed in the Ordinance to provide or cause to
be provided, in a timely manner, to each NRMSIR and to the SID, if any, notice of its failure to provide the
annual financial information described above in this section under the subheading "General" on or prior to the
date set forth above in such subsection.
Ternnnatzon/Modification. The City's obligations to provide 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 approving opinion of nationally recognized bond
counsel in accordance with the Rule.
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.
Bondowner's Remedies Related to Contznuzng Disclosure Undertaking A Bondowner's or a Beneficial Owner's
right to enforce the provisions related to continuing disclosure undertaking shall be limited to a right to obtain
specific enforcement of the City's obligations related thereto, 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 under the Ordinance.
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.
DzsclosureUSA. The City may elect to submit the information required to be filed with the NRMSIRs and the
SID, if any, directly to DisclosureUSA.org unless or until the Commission withdraws its approval of this
submission process.
Prior Compliance with Continuing Disclosure Undertakings The City has entered into undertakings with respect
to its obligations issued after July 3, 1995 subject thereto and is in compliance with its obligations thereunder
Legal and Underwriting
Approval of Counsel
Legal matters incident to the authorization, issuance and sale of Bonds by the City are subject to the approving
legal opinion of K &L Preston Gates Ellis LLP, Bond Counsel. A form of the opinion of Bond Counsel is
attached hereto Bond Counsel will be compensated only upon the issuance and sale of the Bonds. Bond
Counsel has not been retained to review and has not reviewed this Official Statement for completeness or
accuracy and will not offer an opinion concerning this Official Statement. All or a portion of the fees of Bond
Counsel are contingent upon the issuance and sale of the Bonds.
29
DRAFT
Litigation
On February 15, 2005, Congdon Orchards, Inc. and CongdonDevelopment Company, LLC (Congdon) filed a
damage claim with the City alleging Congdon has been wrongfully damaged by Yakima's breach of contract,
tottious conduct, negligence, breaches of duties, errors and omissions and other wrongful conduct. Congdon
alleged its damages exceed $21 million and continue. The City's legal staff believes the chances of recovery are
low based on recent court rulings.
There is no litigation pending or threatened questioning the validity of the Bonds nor the power and authority
of the City to issue the Bonds. There is no litigation pending or threatened which would materially affect the
City's ability to meet debt service requirements on the Bonds.
Because of the nature of its activities, the City is subject to certain pending legal actions which arise in the
ordinary course of business. The City believes, based on the information presently known, that the ultimate
liability for any of such legal actions will not be material to the financial position of the City
Official Statement
In the Ordinance the City will deem final this Preliminary Official Statement as of its date for the purpose of
Securities and Exchange Commission Rule 15c2 -12.
Underwriting
The Bonds are being purchased by Seattle- Northwest Securities Corporation, the Underwriter The purchase
contract provides that the Underwriter will purchase all of the Bonds, if any are purchased, at a price of
percent of the par value of the Bonds,. The Bonds will be reoffered at an average price of percent of the
par value of the Bonds. After the initial public offering, the public offering prices may be varied from time to
time.
Concluding Statement
So far as any statement herein includes matters of opinion, or estimates of future expenses and income,
whether or not expressly so stated, they are intended merely as such and not as representations of fact.
The information contained herein should not be construed as representing all conditions affecting the City or
the Bonds. Additional information may be obtained from the City The statements relating to the Ordinance
are in summarized form, and in all respects are subject to and qualified in their entirety by express reference to
the provisions of such document in its complete form.
The agreements of the City are set forth in such documents, and the information assembled herein is not to be
construed as a contract with the Owners of the Bonds.
30
Appendix A
Form of Opinion of Bond Counsel
fA\ 7T
Appendix B
Book-Entry Transfer System
DRAFT
THE DEPOSITORY TRUST COMPANY
SAMPLE OFFERING DOCUMENT LANGUAGE DESCRIBING
BOOK - ENTRY -ONLY ISSUANCE
(Prepared by DTC— bracketed material may be applicable only to certain issues)
1. The Depository Trust Company ( "DTC "), New York, NY, will act as securities depository for the
securities (the "Securities "). The Securities will be issued as fully - registered securities registered in the
name of Cede & Co (DTC's partnership nominee) or such other name as may be requested by an
authorized representative of DTC. One fully- registered Security certificate will be issued for [each issue
of] the Securities, [each] in the aggregate principal amount of such issue, and will be deposited with DTC.
[If, however, the aggregate principal amount of [any] issue exceeds $500 million, one certificate will be
issued with respect to each $500 million of principal amount, and an additional certificate will be issued
with respect to any remaining principal amount of such issue.]
2. DTC, the world's largest securities depository, is a limited - purpose trust company organized under the
New York Banking Law, a "banking organization" within the meaning of the New York Banking Law, a
member of the Federal Reserve System, a "clearing corporation" within the meaning of the New York
Uniform Commercial Code, and a "clearing agency" registered pursuant to the provisions of Section 17A
of the Securities Exchange Act of 1934. DTC holds and provides asset servicing for over 2.2 million issues
of U.S. and non -U.S. equity issues, corporate and municipal debt issues, and money market instruments
from over 100 countries that DTC's participants ( "Direct Participants ") deposit with DTC. DTC also facil-
itates the post -trade settlement among Direct Participants of sales and other securities transactions in
deposited securities, through electronic computerized book -entry transfers and pledges between Direct
Participants' accounts. This eliminates the need for physical movement of securities certificates. Direct
Participants include both U.S and non -U.S. securities brokers and dealers, banks, trust companies, clear-
ing corporations, and certain other organizations. DTC is a wholly -owned subsidiary of The Depository
Trust & Clearing Corporation ( "DTCC ") DTCC, in turn, is owned by a number of Direct Participants of
DTC and Members of the National Securities Clearing Corporation, Fixed Income Clearing Corporation
and Emerging Markets Clearing Corporation (NSCC, FICC, and EMCC, also subsidiaries of DTCC), as
well as by the New York Stock Exchange, Inc., the American Stock Exchange LLC, and the National
Association of Securities Dealers, Inc. Access to the DTC system is also available to others such as both
U.S and non -U.S. securities brokers and dealers, banks, trust companies, and clearing corporations that
clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly
( "Indirect Participants ") DTC has Standard & Poor's highest rating: AAA. The DTC Rules applicable to
its Participants are on file with the Securities and Exchange Commission. More information about DTC
can be found at www dtcc.com and www dtc.org.
3. Purchases of Securities under the DTC system must be made by or through Direct Participants,
which will receive a credit for the Securities on DTC's records. The ownership interest of each actual
purchaser of each Security ( "Beneficial Owner ") is in turn to be recorded on the Direct and Indirect
Participants' records. Beneficial Owners will not receive written confirmation from DTC of their
purchase. Beneficial Owners are, however, expected to receive written confirmations providing details of
the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant
through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the
Securities are to be accomplished by entries made on the books of Direct and Indirect Participants acting
on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their
ownership interests in Securities, except in the event that use of the book -entry system for the Securities is
discontinued.
4. To facilitate subsequent transfers, all Securities deposited by Direct Participants with DTC are
registered in the name of DTC's partnership nominee, Cede & Co , or such other name as may be
requested by an authorized representative of DTC. The deposit of Securities with DTC and their
registration in the name of Cede & Co or such other DTC nominee do not effect any change in beneficial
ownership DTC has no knowledge of the actual Beneficial Owners of the Securities, DTC's records reflect
DRAFT
only the identity of the Direct Participants to whose accounts such Securities are credited, which may or
may not be the Beneficial Owners. The Direct and Indirect Participants will remain responsible for
keeping account of their holdings on behalf of their customers.
5. Conveyance of notices and other communications by DTC to Direct Participants, by Direct
Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial
Owners will be governed by arrangements among them, subject to any statutory or regulatory
requirements as may be in effect from time to time. [Beneficial Owners of Securities may wish to take
certain steps to augment the transmission to them of notices of significant events with respect to the
Securities, such as redemptions, tenders, defaults, and proposed amendments to the Security documents.
For example, Beneficial Owners of Securities may wish to ascertain that the nominee holding the
Securities for their benefit has agreed to obtain and transmit notices to Beneficial Owners. In the
alternative, Beneficial Owners may wish to provide their names and addresses to the registrar and
request that copies of notices be provided directly to them.]
[6. Redemption notices shall be sent to DTC. If less than all of the Securities within an issue are being
redeemed, DTC's practice is to determine by lot the amount of the interest of each Direct Participant in
such issue to be redeemed.]
7 Neither DTC nor Cede & Co (nor any other DTC nominee) will consent or vote with respect to
Securities unless authorized by a Direct Participant in accordance with DTC's Procedures. Under its usual
procedures, DTC mails an Omnibus Proxy to Issuer as soon as possible after the record date. The
Omnibus Proxy assigns Cede & Co 's consenting or voting rights to those Direct Participants to whose
accounts Securities are credited on the record date (identified in a listing attached to the Omnibus Proxy)
S. Redemption proceeds, distributions, and dividend payments on the Securities will be made to
Cede & Co , or such other nominee as may be requested by an authorized representative of DTC. DTC's
practice is to credit Direct Participants' accounts upon DTC's receipt of funds and corresponding detail
information from Issuer or Agent, on payable date in accordance with their respective holdings shown on
DTC's records. Payments by Participants to Beneficial Owners will be governed by standing instructions
and customary practices, as is the case with securities held for the accounts of customers in bearer form or
registered in "street name," and will be the responsibility of such Participant and not of DTC, Agent, or
Issuer, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment
of redemption proceeds, distributions, and dividend payments to Cede & Co (or such other nominee as
may be requested by an authorized representative of DTC) is the responsibility of Issuer or Agent, dis-
bursement of such payments to Direct Participants will be the responsibility of DTC, and disbursement of
such payments to the Beneficial Owners will be the responsibility of Direct and Indirect Participants.
[9 A Beneficial Owner shall give notice to elect to have its Securities purchased or tendered, through
its Participant, to [Tender /Remarketing] Agent, and shall effect delivery of such Securities by causing the
Direct Participant to transfer the Participant's interest in the Securities, on DTC's records, to
[Tender /Remarketing] Agent. The requirement for physical delivery of Securities in connection with an
optional tender or a mandatory purchase will be deemed satisfied when the ownership rights in the
Securities are transferred by Direct Participants on DTC's records and followed by a book -entry credit of
tendered Securities to [Tender /Remarketing] Agent's DTC account.]
10. DTC may discontinue providing its services as depository with respect to the Securities at any
time by giving reasonable notice to Issuer or Agent. Under such circumstances, in the event that a
successor depository is not obtained, Security certificates are required to be printed and delivered
11. Issuer may decide to discontinue use of the system of book - entry -only transfers through DTC (or
a successor securities depository) In that event, Security certificates will be printed and delivered to DTC.
12. The information in this section concerning DTC and DTC's book -entry system has been obtained
from sources that Issuer believes to be reliable, but Issuer takes no responsibility for the accuracy thereof.
[3/04]
D'' FT
Appendix C
2005 Annual Financial Report
BOND DEBT SERVICE
City of Yakima, Washington DRAFT
Proposed 2007 LTGO Bonds
Downtown Futures Project
PRELIMINARY NUMBERS
Dated Date 05/01/2007
Delivery Date 05/01/2007
Period Annual
Ending Principal Coupon Interest Debt Service Debt Service
05/01 /2007
11/01/2007 29,101.25 29 101.25
05/01 /2008 80,000 3 700% 29 101.25 109 101.25 138,202.50
11/01/2008 27,621.25 27 621.25
05/01/2009 80,000 3 700% 27,621.25 107 621.25 135,242.50
11/01/2009 26,141.25 26.141.25
05/01/2010 85 000 3 700% 26,141.25 111 141.25 137,282.50
11/01/2010 24,568 75 24,568.75
05/01/2011 85 000 3 650% 24,568.75 109,568.75 134,137.50
11/01/2011 23,017.50 23,017.50
05/01/2012 90,000 3 700% 23,017 50 113,017.50 136,035 00
11/01/2012 21,352.50 21,352.50
05/01/2013 95 000 3 700% 21,352.50 116,352.50 137,705 00
11/01/2013 19,595 00 19,595 00
05/01/2014 95 000 3 750% 19,595 00 114,595 00 134,190 00
11/01/2014 17,813 75 17,813 75
05/01/2015 100,000 3 750% 17,813 75 117,813 75 135,627.50
11/01/2015 15,938 75 15,938.75
05/01/2016 105,000 3 800% 15,938 75 120,938.75 136,877.50
11/01/2016 13,943 75 13,943 75
05/01/2017 110,000 3 850% 13,943 75 123,943 75 137,887.50
11/01/2017 11,826.25 11,826.25
05/01/2018 110,000 3 900% 11,826.25 121,826.25 133,652.50
11/01/2018 9,681.25 9,681.25
05/01/2019 115,000 3.900% 9 681.25 124,681.25 134,362.50
11/01/2019 7,438.75 7 438.75
05/01/2020 120,000 3.950% 7,438 75 127 438.75 134,877.50
11/01/2020 5,068.75 5,068.75
05/01/2021 125 000 3 950% 5,068.75 130,068.75 135 137.50
11/01/2021 2,600 00 2,600 00
05/01/2022 130,000 4 000% 2,600 00 132,600 00 135,200 00
1,525 000 511,417.50 2,036,417.50 2,036,417.50
Mar 14, 2007 1.54 pm Prepared by Seattle - Northwest Securities Corp - JMW (k. \analysis \dbc \city \Yakima.2007) Page 13
DRA.FT
BOND SUMMARY STATISTICS
City of Yakima, Washington
Proposed 2007 LTGO Bonds
Downtown Futures Project
PRELIMINARY NUMBERS
Dated Date 05/01/2007
Delivery Date 05/01/2007
Last Maturity 05/01/2022
Arbitrage Yield 3.967719%
True Interest Cost (TIC) 4 030208%
Net Interest Cost (NIC) 3.950757%
All -In TIC 4 066276%
Average Coupon 3.869977%
Average Life (years) 8.666
Duration of Issue (years) 7 134
Par Amount 1,525 000 00
Bond Proceeds 1,525,000 00
Total Interest 511 417.50
Net Interest 522,092.50
Total Debt Service 2,036,417.50
Maximum Annual Debt Service 138,202.50
Average Annual Debt Service 135 761 17
Underwriter's Fees (per $1000)
Average Takedown
Other Fee 7 000000
Total Underwriter's Discount 7 000000
Bid Price 99.300000
Par Average Average
Bond Component Value Price Coupon Life
Serial Bonds 1,525 000 00 100.000 3 870% 8 666
1,525 000 00 8.666
All -In Arbitrage
TIC TIC Yield
Par Value 1,525,000 00 1,525 000 00 1.525 000 00
+ Accrued Interest
+ Premium (Discount)
- Underwriter's Discount - 10,675 00 - 10,675 00
- Cost of Issuance Expense - 3,812.50
- Other Amounts -7 127 46 -7,127 46 -7 127 46
Target Value 1.507 197.54 1,503,385 04 1,517,872.54
Target Date 05/01/2007 05/01/2007 05/01/2007
Yield 4 030208% 4 066276% 3.967719%
Mar 14 2007 1.54 pm Prepared by Seattle - Northwest Securities Corp - JMW (k: \analysis \dbc \city\Yakima:2007) Page 17
BOND DEBT SERVICE
City of Yakima, Washington
Proposed 2007 LTGO Bonds DRAFT
Fire Station Project
PRELIMINARY NUMBERS
Dated Date 05/01/2007
Delivery Date 05/01/2007
Period Annual
Ending Principal Coupon Interest Debt Service Debt Service
05/01/2007
11/01/2007 15 935 00 15,935 00
05/01/2008 45 000 3 700% 15,935 00 60,935 00 76,870 00
11/01/2008 15,102.50 15 102.50
05/01/2009 45,000 3 700% 15,102.50 60,102.50 75,205 00
11/01/2009 14,270 00 14,270 00
05/01/2010 45,000 3 700% 14.270 00 59,270 00 73,540 00
11/01/2010 13,437.50 13,437.50
05/01/2011 45 000 3 650% 13,437.50 58,437.50 71,875 00
11/01/2011 12,616.25 12,616.25
05/01/2012 50,000 3 700% 12,616.25 62,616.25 75,232.50
11/01/2012 11,691.25 1 1 691.25
05/01/2013 50.000 3 700% 11,691.25 61,691.25 73,382.50
11/01/2013 10,766.25 10 766.25
05/01/2014 55 000 3 750% 10,766.25 65 766.25 76,532.50
11/01/2014 9,735 00 9,735 00
05/01/2015 55,000 3 750% 9 735 00 64,735 00 74,470 00
11/01/2015 8,703 75 8,703 75
05/01/2016 55,000 3.800% 8,703 75 63,703 75 72,407 50
11/01/2016 7,658.75 7,658.75
05/01/2017 60,000 3 850% 7,658.75 67,658.75 75,317.50
11/01/2017 6,503 75 6,503 75
05/01/2018 60,000 3.900% 6,503 75 66,503 75 73 007.50
11/01/2018 5,333 75 5,333 75
05/01/2019 65 000 3.900% 5,333 75 70,333 75 75 667.50
11/01/2019 4,066.25 4,066.25
05/01/2020 65 000 3.950% 4,066.25 69,066.25 73 132.50
11/01/2020 2,782.50 2,782.50
05/01/2021 70.000 3.950% 2,782.50 72,782.50 75,565 00
11/01/2021 1,400 00 1 400 00
05/01/2022 70,000 4 000% 1,400 00 71,400 00 72,800 00
835 000 280,005 00 1 115,005 00 1 115 005 00
Mar 14, 2007 1 54 pm Prepared by Seattle - Northwest Securities Corp - JMW (k.\ analysis \dbc \city\Yakima.2007) Page 14
DRAFT
BOND SUMMARY STATISTICS
City of Yakima, Washington
Proposed 2007 LTGO Bonds
Fire Station Project
PRELIMINARY NUMBERS
Dated Date 05/01/2007
Delivery Date 05/01/2007
Last Maturity 05/01/2022
Arbitrage Yield 3 967719%
True Interest Cost (TIC) 4 030447%
Net Interest Cost (NIC) 3.950933%
All -1n TIC 4 066525%
Average Coupon 3.870145%
Average Life (years) 8.665
Duration of Issue (years) 7 132
Par Amount 835,000 00
Bond Proceeds 835,000 00
Total Interest 280,005 00
Net Interest 285,850 00
Total Debt Service 1 115,005 00
Maximum Annual Debt Service 76,870 00
Average Annual Debt Service 74,333 67
Underwriter's Fees (per $1000)
Average Takedown
Other Fee 7 000000
Total Underwriter's Discount 7 000000
Bid Price 99.300000
Par Average Average
Bond Component Value Price Coupon Life
Serial Bonds 835 000 00 100 000 3.870% 8.665
835 000 00 8.665
All -In Arbitrage
TIC TIC Yield
Par Value 835,000 00 835,000 00 835 000 00
+ Accrued Interest
+ Premium (Discount)
- Underwriter's Discount -5,845 00 -5,845 00
- Cost of Issuance Expense - 2.087.50
- Other Amounts - 3,902.52 - 3,902.52 - 3.902.52
Target Value 825,252.48 823 164.98 831,097 48
Target Date 05/01/2007 05/01/2007 05/01/2007
Yield 4 030447% 4 066525% 3.967719%
Mar 14 2007 1.54 pm Prepared by Seattle - Northwest Securities Corp - JMW (k. \analysis \dbc \city\Yakima.2007) Page 18
BOND DEBT SERVICE
City of Yakima, Washington D il F
Proposed 2007 LTGO Bonds
River Road Project
PRELIMINARY NUMBERS
Dated Date 05/01/2007
Delivery Date 05/01/2007
Period Annual
Ending Principal Coupon interest Debt Service Debt Service
05/01/2007
11/01/2007 34,266.25 34,266.25
05/01/2008 155 000 3 700% 34,266.25 189,266.25 223,532 50
11/01/2008 31,398 75 31,398.75
05/01/2009 160 000 3 700% 31,398 75 191,398.75 222,797.50
11/01/2009 28,438 75 28,438 75
05/01/2010 165 000 3 700% 28,438 75 193 438 75 221,877.50
11/01/2010 25,386.25 25,386.25
05/01/2011 175,000 3 650% 25,386.25 200,386.25 225,772.50
11/01/2011 22,192.50 22,192.50
05/01/2012 180,000 3 700% 22,192.50 202,192.50 224,385 00
11/01/2012 18,862.50 18,862.50
05/01/2013 185 000 3 700% 18,862.50 203,862.50 222,725 00
11/01/2013 15,440 00 15 440 00
05/01/2014 195,000 3 750% 15,440 00 210 440 00 225 880 00
11/01/2014 11,783 75 11 783 75
05/01/2015 200,000 3 750% 11,783 75 211,783 75 223,567.50
11/01/2015 8,033 75 8,033 75
05/01/2016 205,Q00 3.800% 8,033 75 213 033 75 221,067.50
11/01/2016 4,138.75 4,138.75
05/01/2017 215,000 3.850% 4,138.75 219,138.75 223,277.50
1,835 000 399,882.50 2,234,882.50 2,234,882.50
Mar 14, 2007 1.54 pm Prepared by Seattle - Northwest Securities Corp JMW (1: \analysis \dbc \city \Yakima.2007) Page 12
DRAFT
BOND SUMMARY STATISTICS
City of Yakima, Washington
Proposed 2007 LTGO Bonds
River Road Project
PRELIMINARY NUMBERS
Dated Date 05/01/2007
Delivery Date 05/01/2007
Last Maturity 05/01/2017
Arbitrage Yield 3.967719%
True Interest Cost (TIC) 3.980863%
Net Interest Cost (NIC) 3 879018%
All -In TIC 4 031278%
Average Coupon 3 758294%
Average Life (years) 5 798
Duration of Issue (years) 5 102
Par Amount 1,835,000 00
Bond Proceeds 1,835,000 00
Total Interest 399,882.50
Net Interest 412,727.50
Total Debt Service 2,234,882.50
Maximum Annual Debt Service 225,880 00
Average Annual Debt Service 223,488.25
Underwriter's Fees (per $1000)
Average Takedown
Other Fee 7 000000
Total Underwriter's Discount 7 000000
Bid Price 99.300000
Par Average Average
Bond Component Value Price Coupon Life
Serial Bonds 1,835 000 00 100 000 3 758% 5 798
1,835 000 00 5 798
All -In Arbitrage
TIC TIC Yield
Par Value 1,835 000 00 1,835 000 00 1,835 000 00
+ Accrued Interest
+ Premium (Discount)
- Underwriter's Discount - 12,845 00 - 12,845 00
- Cost of Issuance Expense - 4,587.50
- Other Amounts - 7,822.09 - 7,822.09 - 7,822.09
Target Value 1,814,332.91 1,809,745 41 1,827,177.91
Target Date 05/01/2007 05/01/2007 05/01/2007
Yield 3.980863% 4 031278% 3.967719%
Mar 14, 2007 1.54 pm Prepared by Seattle- Northwest Securities Corp - JMW (k. \analysis \dbc \city\Yakrma.2007) Page 16
SAVINGS
City of Yakima, Washington !i r;
Proposed Refunding of 2002 LTGO Bonds -
PRELIMINARY NIJMBERS
Pi esent Value
Prior Prim Prim Refunding Annual to 05/01/2007
Date Debt Service Receipts Net Cash Flow Debt Service Savings Savings a 3 9677187%
P
05/01/2007 1 '115,606.25 115,606 25 115,606.25 -115,606 25
06/01 /2007 1 15,606 25 115,606.25 115,606 25 115,228 37
11/01/2007 98,087 50 - 98,087 50 96,179 44
12/01/2007 115,606.25 115,606 25 115,606.25 1 12 986 87
05/01/2008 118,087 50 118,087 50 - 113,537 95
06/01/2000 115,606 25 115,666 25 115,606 25 15,037 50 110,788.97
11/01/2008 97717.50 97 717 50 - 92,12511
12/01/2008 115,606 25 115,606 25 115,606.25 108,633.83
05/01 /2009 1 1 7 717.50 1 17 717 50 108,821 64
06/01/2009 115,606 25 115,606 25 115,606 25 15,777.50 106,520 61
11/01/2009 97,347 50 - 97,347 50 -88,240 42
12/01/2009 115,606.25 115,606.25 1 15,606.25 104,448.50
05/01/2010 117,347 50 117,347 50 - 104,300,21
06/01/2010 115,606 25 115,606 25 115,606 25 16,517 50 102,416 69
11/01/2010 96,977 50 - 96,977 50 - 84,518 33
12/01/2010 115,606 25 115,606,25 1 15,606 25 100,424.41
05/01/2011 116,977 50 116,977 50 99,965 65
06/01/2011 115,606 25 115,606 25 115,606 25 17,257 50 98,470.89
11/81/2011 96,612.50 - 96,61250 - 80,95624
12/01/2011 115,60625 115,606.25 115,60625 96,55537
05/01/2012 121,61250 - 121,612.90 - 99,92261
06/01/2012 115,60625 115,606 25 119,60615 12,987 50 94,677 11
11/01/2012 96,15000 - 96,150.00 77 464 62
12/01/2012 115,60625 115,60625 115,60625 92,83938
05/01/2013 366,150.00 366,15000 289,255.57
06/01/2013 360,606 25 360,606 25 360,606 25 13,912 50 283,944.87
11/01/2013 91 155 00 91,15900 70,610.90
12/01/2013 110,277 50 110,277 50 110,277 50 85 144.43
05/01/2014 371,155.00 371,155 00 281,913,01
06/01/2014 365,27750 365,27750 365,277.50 13,245.00 276,541 82
11/01/2014 85,905 00 -85 905.00 - 63,980 38
12/01/2014 104,540.00 104,540.00 104,540.00 77,604 86
05/01/2015 380,905.00 380,90500 - 278,17211
06/01/201 374,54000 374,54000 374,540.00 12,27000 272,62973
11/01/2015 80,373.75 - 80,373 75 57 554.56
12/01/2015 98,19500 98,19500 98,195.00 70,08627
05/01/2016 380,373.75 380,373 75 267,081.97
06/01/2016 378,195.00 378,195,00 378,195.00 15,642 50 264,684 13
11/01/2016 74,673.75 74,673 7S 51 412 72
12/01/2016 91,615 00 91,615 00 91,615 00 62,870.55
05/01/2017 389,673.75 389,673.75 - 263,070.59
06/01/2017 386,615 00 386,615 00 386,615.00 13,882.50- 260,152.46
11/01/2017 68610 -00 - 68,610.00 - 45,41791
12/01/2017 84,608 75 84,608 75 84,608.75 55,825 56
05/01/2018 393,610.00 393,610 00 - 255,490 28
06/01/2018 394,608 75 394,608 75 394,608.75 16,997.50 255,301.32
11/01/2018 62,27250 - 62,272.50 39,634.48
12/01/2018 77,16875 77,16875 77,16875 48,954.92
05/01/2019 402,272.50 - 402,272 50 251,053 18
06/01/2019 402,168 75 402,168 75 402,168 75 14,792.50 250,168 02
11/01/2019 55,642 50 55,642 50 34,050 27
12/01/2019 69,12500 69,12500 69,125.00 42,16258
05/01/2020 405,642 50 -405,642 50 243,403.01
06/01/2020 409,125.00 409 125.00 409,12500 16965.00 244,69021
11 /01 /2020 48,73000 - 48,73000 28,671 30
12/01/2020 60,625.00 60,625.00 60,625 00 35,553 38
09/01/2021 413 730 00 - 413 730 00 238,691 31
06/01/2021 415,625.00 415,625.00 415,625 00 13,790 00 239,000.80
11/01/2021 41,52125 -41 521.25 23,48868
12/01/2021 51,7 51 750,00 51 750 00 29 179 42
05/01/2022 421,521.25 -421,521 25 233,817.06
06/01/2022 426,750 00 426,750 00 426,750.00 15,457.50 235,943.68
11/01/2022 33,921.25 33,921.25 18,45003
12/01/2022 42,375 00 42,375 00 42,375 00 22,972.75
05/01/2023 428 921.25 - 428,921.25 228,755 42
06/01/2023 437,375 00 437,375 00 437,375.00 16,907.50 232,501.56
11/01/2023 26,021.25 26,021.25 13,60788
12/01/2023 32,50000 32,50000 32500.00 16,940.41
05/01/2024 436,021.25 - 436,021.25 223,582 91
06/01/2024 442,500.00 442,50000 442,500.00 1295750 226,163.39
11/01/2024 17 718.75 17 718 75 - 8,909 07
12/01/2024 22,250 00 22,250 00 22,250.00 11,150 84
05/01/2025 447 718 75 - 447 718.75 220,736 09
06/01/2025 457,250.00 457,250 00 457,250.00 14,062 50 224,698 34
11/01/2025 9,011.25 - 9,01125 -4,356 34
12/01/2025 11,375.00 11,375.00 11,37 5 481 08
05/01/2026 454,011 25 - 454,011 25 215,214 63
06/01/2026 466,375,00 466,375.00 466,375 00 14,727.50 220,352 78
7,960,691,25 115,606.25 7,845,085.00 7,561,897 50 283 187 50 283,187 50 182,667 06
Mar 14, 2007 1,54 pm Prepared by Seattle - Northwest Securities Corp JMW (k.\ analysis \dbc \city\Yakima.2007) Page 4
DRAFT
BOND SUMMARY STATISTICS
City of Yakima, Washington
Proposed Refunding of 2002 LTGO Bonds
PRELIMINARY NUMBERS
Dated Date 05/01/2007
Delivery Date 05/01/2007
Last Maturity 05/01/2026
Arbitrage Yield 3 9677I9%
True Interest Cost (TIC) 4 076158%
Net Interest Cost (NIC) 4 011'348%
All -In TIC 4 113627%
Average Coupon 3.957127%
Average Life (years) 12.910
Duration of Issue (years) 9 949
Par Amount 5,005 000 00
Bond Proceeds 5 005 000 00
Total Interest 2,556,897.50
Net Interest 2,591,932.50
Total Debt Service 7,561,897.50
Maximum Annual Debt Service 466,810 00
Average Annual Debt Service 397,994 61
Underwriter's Fees (per $1000)
Average Takedown
Other Fee 7 000000
Total Underwriter's Discount 7 000000
Bid Price 99.300000
Par Average Average
Bond Component Value Price Coupon Life
Serial Bonds 5 005 000 00 100 000 3 957% 12.910
5,005 000 00 12.910
All -In Arbitrage
TIC TIC Yield
Par Value 5,005,000 00 5,005,000 00 5 005,000 00
+ Accrued Interest
+ Premium (Discount)
- Underwriter's Discount - 35,035 00 -35 035 00
- Cost of Issuance Expense -18,112.50
- Other Amounts 26,466 64 - 26,466 64 - 26,466 64
Target Value 4.943,498.36 4,925.385 86 4,978,533.36
Target Date 05/01/2007 05/01/2007 05/01/2007
Yield 4 076158% 4 113627% 3.967719%
Mar 14, 2007 1.54 pm Prepared by Seattle - Northwest Securities Corp - JMW (k. \analysis \dbc \city \Yakima.2007) Page 19
BUSINESS OF THE CITY COUNCIL
YAKIMA, WASHINGTON
AGENDA STATEMENT
—_ Item No ?�- (�
For Meeting of April 2006
ITEM TITLE Consideration of Report Regarding a Downtown Yakima Futures
Initiatives (DYFI) Financing Plan to Accomplish the Full Length of the
Project on Yakima Avenue from 9th Street to 7th Avenue including the
North Front Street Historic District:
A. A Motion to Amend the Financing Plan, and,
B An Ordinance Amending the 2006 Budget
SUBMITTED BY Dick Zais, City Manager
CONTACT PERSON/TELEPHONE Dick Zais, City Manager 575 -6040
Chris Waarvick, Director of Public Works 576 -6411
Michael Morales, Asst. CED Director 575 -3533
Cindy Epperson, Financial Services Mgr 575 -6070
SUMMARY EXPLANATION
Background.
The 2006 adopted budget anticipated pedestrian way safety and lighting improvements on
Yakima Avenue from 9th Street to Front Street and the North Front Street Historic District.
Design work had begun back in 2005 following the successful effort to secure state Capital
Budget ($4 million) and Transportation ($870,000) grant funding by our Legislative delegation
and City Council
In the ensuing time, two issues have arisen causing needed changes to be considered in the
project financing plan. 1 ) The West Yakima Avenue phase (Front Street to 7th Avenue) of the
DYFI was awarded $2 5 million in state Transportation funding, and 2.) The bid on the first
Yakima Avenue phase (9` St. to 1 St.) came in above available grant resources.
(Continued )
Resolution Ordinance X Other (Specify) Amended Financing Plan
Contracts to (name and address)
Funding Source: Project Budgeted in 321 C : D Ca • ital Fund
APPROVED FOR SUBMITTAL. n - City Manager
STAFF RECOMMENDATION: Staff respectfully recommends the following actions.
A. A Motion to approve the amended financing plan regarding the construction of the
Downtown Futures Initiative project for Phase I (including N Front St.), and Phase II
B Read the Appropriation Ordinance by title only at the April 4, 2006 meeting Pass
Ordinance after second reading at the April 18, 2006 meeting
BOARD /COMMISSION RECOMMENDATION: The Downtown Futures Oversight
Committee was briefed on 3/23/06, and recommended bringing this issue forward for full
Council action Senator Alex Deccio also supports this plan, as it completes this Downtown
project as originally presented to the legislature The leadership of the West Side Merchant's
Association has also been briefed and appreciates the proposal to complete Phase II to 7
Avenue, as originally envisioned
COUNCIL ACTION
Action Ordinance passed ORDINANCE NO 2006 -17
Downtown Yakima Futures Initiatives
April 4, 2006
Page 2 of 3
In using the "real bid unit pricing" approach to project costs, and in analyzing our financing
needs for the North Front Street and West Yakima Avenue phases, staff and consultants have
determined that the second phase of the project would also likely cost in excess of available
grant resources. As a result, the City Council directed staff to present a project financial
analysis and funding solution to this overall project. A number of options were examined and
reviewed with the Economic Development Committee, and are hereto attached
Recognizing Council's vision to consider Yakima Avenue (9' Street to 7th Avenue) and the
North Front Street Historic District as one, unified Downtown redevelopment project, it was
recommended that leaving pieces incomplete or deferring to a future date would not .serve the
project's basic intent: a significant, current investment into the .public infrastructure contributing
to the renaissance of the downtown
As proposed, the financing plan offered herein for Council consideration accomplishes the
Yakima Avenue (9th Street to 7th Avenue) and the North Front Street Historic District project
elements ($9 4 million current estimate) of the larger DYFI plan with a local match to state and
federal grants of only 22% ($2.06 million) Our legislative delegation has indicated that this
action, if approved by City Council, would make funding possibilities for the remaining .DYFI
plan elements much more achievable in future legislative sessions.
Alternative Financing Plan.
Because of recent escalation in construction /material costs and strong competition from other
projects statewide among a limited pool of qualified contractors, real project costs exceeded
available grant revenues. As a result, it was necessary to identify other revenue sources.
Several other local and Federal revenue sources are presented for Council consideration.
The attached spreadsheet summarizes the amended financing plan by listing the estimated
project costs and the proposed revenue sources. Following this spreadsheet is the engineers
project summary, which identifies the original plan (currently in the 2005/2006 budget), the
deficiency based on actual bid pricing for Phase I, and a summary of Phase II estimated costs
and resources.
To arrive at the local share recommendation, there were several components of the project
that could qualify for funding from other City operations. In addition to these operational
commitments, growth in the 2nd %% Real Estate Excise Tax (REET 2) is recommended to
assist the project in two ways — 1) The 2005 growth of this tax more than the year -end
estimate is being proposed for current Phase I project support; and 2) Future growth above
currently identified REET 2 funded programs could be used to support a proposed 15 -year
Councilmanic General Obligation Bond, beginning in 2007 (Debt service on a $1 5 million
bond is estimated to be about $150,000 annually) Staff believes that REET 2 will remain
adequate to support both current obligations of the fund and the proposed bond issue. In the
unlikely event that REET 2 is not sufficient to make future debt service payments, it would be
proposed that REET I be used as a supplemental revenue source, so that general tax
resources would not be tapped REET 1 and REET 2 dollars are intended for capital
improvement projects, and cannot be used for operations and maintenance
The timing of when the bond would be issued is still in discussion. It could be as soon as this
fall, as this would likely result in lower interest rates and would provide cash flow for the
project. However, it may also be advantageous to defer the bond issue until early next year,
after bid prices for Phase II are known
Downtown Yakima Futures Initiatives
April 4, 2006
Page 3 of 3
The attached appropriation would amend the CBD capital budget for the additional costs
needed for Phase I and the entire estimate for Phase II It also adds the new revenue sources
to the capital budget, and authorizes the transfers that are not related to savings /redirection of
budget in the other City funds (i e REET 2 and Transit contributions are from revenue gains
in the 2005 budget, and are therefore included in the appropriation ordinance) Other fund
contributions will be re- allocated from their existing 2006 budgets for project elements, which
qualify for consideration from those operating divisions
Summary and Recommendation.
Given Council's commitment to invest in infrastructure to support the revitalization of
Downtown and the positive effects this project would have on the City's economy and image,
staff is recommending this amended financing plan. Senator Alex Deccio is strongly
recommending that the project scope remain as originally presented, so that the City's
commitment to the project is demonstrated to the legislature The leadership of the Westside
Merchant group has been apprised and were pleased to be informed of the plan Upon
Council approval of this amended financing plan, the City Manager would then proceed with
the awarding of bids for Phase I (including N Front Street), and would set a date for the
official ground breaking ceremony
City of Yakima
Amended Financing. Plan
Downtown Yakima Futures Initiative, Phases I and II
Yakima Ave Yakima Ave
Phase 1 N Front St Phase II Total
Estimated Cost
Professional Services $ 776,535 $ 493,927 $ 800,000 $ 2,070,462
Construction Costs 2,793,944 1,728,858 2,815,000 7,337,802
Total Project Costs 3,570,479 2,222,785 3,615,000 9,408,264
Estimated Revenue
State & Federal Grants
2005 CTED 2,138,000 1,862,000 4,000,000
2005 WSDOT 870,000 870,000
2006 State 225,000 2,275,000 2,500,000
Federal EDI 196,000 196,000
Total Grants 3,233,000 2,058,000 2,275,000 7,566,000
Local Share
CBD Capital 75,000 75,000
Wastewater 20,000 165,000 185,000
Water 35,000 35,000
Telecommunications 40,000 40,000
REET 2 - Streets 130,000 130,000
Transit 30,000 30,000
Streets 60,000 80,000
Councilmanic Bond 1,500,000 1,500,000
Total Local Share 390,000 165,000 1,500,000 2,055,000
Total Revenue $ 3,623,000 $ 2,223,000 $ 3,775,000 $ 9,621,000
Additional Contingency Balance $ 52,521 $ 215 $ 160,000 $ 212,736
Prepared by C Epperson 4/1/2006
ORDINANCE NO 2006 - 11
AN ORDINANCE amending the 2006 budget for the City of Yakima, and
making an appropriation within the 321 - Central Business
District (CBD) Capital Fund and other various funds for
expenditure during 2006 to provide for construction of
Downtown Futures Initiative projects
WHEREAS, the 321 - Central Business District (CBD) Capital Fund and other
various funds contain Unappropriated Fund Balances available for appropriation and
expenditures during 2006 in various amounts as detailed in the attached Schedule I to
provide for construction of Downtown Futures Initiative projects, and
WHEREAS, at the time of the adoption of the 2006 budget it could not
reasonably have been foreseen that the appropriation provided for by this ordinance
would be required, and the City Council declares that an emergency exists of the type
contemplated by RCW 35 33 091 and that it is in the best interests of the City to make
the appropriation herein provided, now, therefore,
BE IT ORDAINED BY THE CITY OF YAKIMA.
Section 1. Appropriations are hereby made, for expenditure during 2006, from
Unappropriated Fund Balances in the 321 - Central Business District (CBD) Capital Fund
and other various funds to the various accounts and in the various amounts, to provide
for construction of Downtown Futures Initiative projects, all as specified in the Schedule
attached hereto and incorporated herein
Section 2. This ordinance is one making an appropriation and shall take effect
immediately upon its passage, approval and publication as provided by law and by the
City Charter
PASSED BY THE CITY COUNCIL, signed and approved this 18th
day of April , 2006
DAVID EDLER, MAYOR
ATTEST
CITY CLERK
First Reading 4 - - 2006
Publication Date
Effective Date
Cepperson 3/31/2006
SCHEDULE 1
Appropriations
Fund 321 - Central Business District (CBD) Capital Fund Resources Appropriations
Expenditures
Phase I - Yakima Avenue 321 - 321 - 321 - 2116 - 59570 -650 $585,000
N Front Street Improvements 321 - 321 - 321 - 2103 - 59570 -650 $211,000
Phase 2 - Yakima Avenue 321 - 321 - 321 -2165- 59570 -650 $3,615,000
Revenues
2006 WSDOT Grant -Phase I 321 - 321 - 699 -2116- 33403 -6DT $225,000
2006 WSDOT Grant -Phase 2 321 - 321 -699- 2165- 33403 -6DT $2,275,000
2005 CTED Grant -Phase 1 321 - 321 -699- 2116 - 33404 -2DC $80,000
Federal EDA Grant -N Front St 321 - 321 - 699 -2103- 33114 -2ED $196,000
Bond Proceeds 321- 321 -699- 0000 - 39110 -BND $1,500,000
Transfer from REET 2 Fund 321 - 321 -699- 2116- 39700 -OPT $130,000
Transfer from Transit Capital 321 - 321 -699 - 2116 - 39700 -OPT $30,000
Total CBD Capital Fund $4,436,000 $4,411,000
Fund 343 - REET 2 Capital Fund
Transfer to CBD Capital Fund 343 - 343 -348- 2116 - 59700 -550 $130,000
Fund 364 - Transit Capital Fund
Transfer to CBD Capital Fund 364 - 364- 518 - 2116 - 59700 -550 $30,000
Page 1 cje 3/31/2006
BUSINESS OF THE CITY COUNCIL
YAKIMA, WASHINGTON
AGENDA STATEMENT
Item No JL
For Meeting of August 15, 2006
ITEM TITLE Consideration of Report from Fire and Finance regarding the Updated
Financing Plan for the Addition and Alteration of Fire Station #92
A. A Motion to Approve an Altemative Financing Plan
B A Resolution authorizing the draw on the Line of Credit
C An Ordinance Amending the 2006 Budget and Creating an
Appropriation in the 332 – Fire Capital Fund
SUBMITTED BY Dick Zais, City Manager
Dennis Mayo, Fire Chief
CONTACT PERSON/TELEPHONE Steve Scott, Deputy Fire Chief, 575 -6060
Cindy Epperson, Financial Services Manager, 575 -6070
SUMMARY EXPLANATION
Background.
Upon annexation of the 72" Ave /Congdon areas in 2002, the City of Yakima entered into
negotiations with the West Valley Fire District # 12 (the District) for the 'transfer of assets" and for
a method that would be the most cost effective way to extend full -time fire service into these
areas
Continued
Resolution X Ordinance X Other (Specify) Report Contract _ Mail to (name
and address)
Funding Source Fund Fir- • . al Budget —Fund 332
APPROVED FOR SUBMITTAL. � - V City Manager
STAFF RECOMMENDATION Staff respectfully recommends the following actions by the
Council
A. Approve a Motion to accept the altemative financing plan regarding the addition
and alteration of Fire Station #92, and,
B Approve the Resolution authorizing the draw on the Line of Credit, and,
C Read the Appropriation Ordinance by title only at the August 15, 2006 meeting
Pass the Ordinance after the second reading at the September 5, 2006 meeting
BOARD /COMMISSION RECOMMENDATION The Public Safety Committee was briefed on
August 1, 2006, and unanimously supports the altemative financing plan Two members
supported accepting the low bid and moving forward with the Station 92 Addition Project utilizing
the financing plan Councilman Bonlender recommended rejecting the bids and advocated
rebidding later in a more attractive bid environment.
COUNCIL ACTION
Fire Station #92 Agenda Statement
Page 3
Updated Financing Plan.
The 2005/2006 Fire Capital Budget included a budget of $610,000 for the Station alteration
project, and $90,000 for debt service on a line of credit. Revenues related to this project include a
Tine -of- credit drawdown of $610,000, and a capital contribution of $120,000 from the District
(Note This contribution was originally planned to be used to pay debt service) The City has
recently seen an escalation in commodity /material prices in construction bids, and this project
followed that trend —the recommended bid package cost about $976,361, which is approximately
$216,000 more than the May 2, 2006 estimate
The Public Safety Committee has unanimously advocated to fully fund this project by restructuring
the current $610,000 bond and increasing it to a $820,000 bond and Staff is recommending that
the financing plan be revised as follows
• Increase the $610,000 Councilmanic bonds to $820,000 and
issue in conjunction with the Downtown Yakima Futures Initiative
bond issue, utilizing the line -of- credit for interim financing, $820,000
• Use $120,000 that will be received from Yakima County Fire
Protection District #12, West Valley as a contribution to be
applied towards the Addition Project; $120,000
• Contribution from the Law and Justice Capital Fund will pay for
Bid Altemate 5, a communications tower foundation to cost $7,700
$7,700, and
• Contribution from Fire Capital Reserves that are made available
by the contribution of $80,000 from the Yakima County Fire
Protection District #10, Fruitvale for reimbursement that will be
applied toward the purchase of a brush firefighting vehicle $28,300
Total Project Resources $976,000
Borrowing was onginally determined to be more cost effective by drawing down the line -of- credit,
since the break -even point for a bond issue is about $750,000 because of the fixed costs
associated with issuing bonds (such as legal fees for the bond ordinance, underwriting fees, etc )
With Council's recent decision to issue a Councilmanic bond to complete the Downtown Yakima
Futures Initiative Phase 2, this amount could be added to that bond issue and these fixed costs
could be spread over both projects, thus making it cost effective to issue bonds for the fire station
project. Because the timing of the bond issue is uncertain (it may be as late as the spring of
2007), the proposal is to use the line of credit as bridge financing /cash flow as needed, to be
repaid June 2007 when bond proceeds are available
Debt service is estimated to be $78,000 for a 15 -year term, using current anticipated rates
Future debt service is proposed to be funded by future annexation related property tax allocation
and other general fund revenues
Fire Sta. #92 Facility Addition July _ 2006 .
Yakima Fire Department Prior to 2:0000 PM
Yakima Washington City of Yakima
Project 0419 Yakima Washington
Estimate Concord GH Moen Glacier Mountain States
Construction Construction Construction Construction
Base Bid Amount, excluding wsst $475,000 00 $663,300 00 $849,000 00 $676,300 00 _ $751,000 00
Alternate No. 1 - Concrete Slab in Lieu of Lawn $10,600 00 $3,800 00 $2,400 00 $4,830 00 $1,407 00
Alternate No. 2 - Add Back -up Generator $15,500 00 $21,900 00 $25 100 00 $22 450 00 $22,427 00
Alternate No. 3 - Add Replacement of Existing Furnaces $19,700 00 $12,200 00 $14,500 00 $25,600 00 $22,617 00
Alternate No. 4 - Add Turn -Out Room and Library $43,700 00 $46,700 00 $55,000 00 $40,720 00 $56,588 00
Alternate No. 5 - Add Antenna Footing — — $8,200 00 $7,700 00 $7 500 00 --- $6,180 00 — - _- $6 00
Total $572,700 00 $755,600 00 $953,500 00 $776 080 00 $860 533 00
Sta 92 Addition Pg 5
RESOLUTION NO. R-2006- 123
A RESOLUTION of the City Council of the City of Yakima,
Washington, authorizing draws under its Limited Tax
General Obligation Bond, 1997 (KeyBank Line of Credit)
for fire station capital improvements
WHEREAS, the City of Yakima, Washington (the "City "), passed Ordinance No 97 -29,
as amended by Ordinance No 2002 -31 (together, the "Ordinance "), authorizing its issuance of a
Limited Tax General Obligation Bond, 1997 (KeyBank Line of Credit), dated June 9, 1997 and
reissued on May 31, 2002 (the "Bond "), to KeyBank National Association (the "Bank ") in order to
provide funds for various City capital projects, and
WHEREAS, the Ordinance authorizes the City to draw on the Bond upon receipt of
written approval from Preston Gates & EIIis LLP or any other nationally recognized bond
counsel firm, and
WHEREAS, the City now desires to draw on the Bond to renovate Fire Station No 92
(the "Project "),
NOW, THEREFORE, the City of Yakima does resolve
Section 1 Authorization of Project; Draws on the Bond The City Council hereby
finds that it is in the public interest for the City to undertake the Project. For the purpose of
paying the costs of the Project, the City Council hereby authorizes the City's Director of Finance
and Budget to make requests for draws to the Bank pursuant to the Ordinance in the amount
not to exceed $820,000 Pursuant to Section 11 of Ordinance No 97 -29, the City shall first
obtain written approval of Preston Gates & EIIis LLP with respect to such request for draw
Section 2. The City reasonably expects to reimburse the following expenditures with
the proceeds of limited tax general obligation bonds or other tax - exempt obligations to be issued
by the City* capital improvements and renovation of Fire Station No 92. The City expects to
issue approximately $820,000 principal amount of limited tax general obligation bonds for the
ORDINANCE NO 2006 -
AN ORDINANCE amending the 2006 budget for the City of Yakima, and
making appropnations of $276,000 within the 332 – Fire
Capital Fund for expenditure during 2006 for a construction
project at Fire Station #92
WHEREAS, the amount of $276,000 must be appropriated within the 332 – Fire
Capital Fund for expenditure during 2006 for a construction project at Fire Station #92,
and
WHEREAS, at the time of the adoption of the 2006 budget it could not
reasonably have been foreseen that the appropriation provided for by this ordinance
would be required, and the City Council declares that an emergency exists of the type
contemplated by RCW 35 33 091 and that it is in the best interests of the City to make
the appropriation herein provided, now, therefore,
BE IT ORDAINED BY THE CITY OF YAKIMA.
Section 1. The amount of $276,000 is hereby appropriated from the
Unappropriated Fund Balance in the 332 – Fire Capital Fund to the following accounts
Resources
Bond Proceeds ------------- - - - - -- 332 - 332 -699- 0000 - 39110 - BND —$210 000
Expenditures
Fire Station #92 Const. Project 332 - 332 -122- 2105 - 59422 -650 -- $276,000
Section 2. This ordinance is one making an appropriation and shall take effect
immediately upon its passage, approval and publication as provided by law and by the
City Charter
PASSED BY THE CITY COUNCIL, signed and approved this day of
2006
DAVID EDLER, MAYOR
ATTEST
CITY CLERK
First Reading
Publication Date
Effective Date
ss 8/10/2006
BUSINESS OF THE CITY COUNCIL
YAKIMA, WASHINGTON
AGENDA STATEMENT
Item No /9 A
For Meeting Of. June 6, 2006
ITEM TITLE River Road Improvement Project Status Report on Project
Elements, Financing Plan and Construction Timetable
SUBMITTED BY Richard A. Zais, Jr , City Manager
Dave Zabell, Assistant City Manager
Michael Morales, Deputy Director CED
Cindy Epperson, Financial Services Manager
CONTACT Michael Morales, 575 -3533
Cindy Epperson, 576 -6644
SUMMARY EXPLANATION
The River Road Improvement Project is a comprehensive overhaul of public
infrastructure that serves an important corridor between North 16 Avenue and Fruitvale
Boulevard The project began as a traffic signal and intersection improvement for North
16 Avenue and River Road, funded with federal direct allocation funds It has since
expanded to include widening of the roadway from 16 to Fruitvale to three lanes with
curb, gutter, sidewalk and bike lane, 8,300 linear feet of 27" sewer main to serve future
growth to the west, and updates and /or relocation of water and irrigation utilities
- - The project's financing- package -has also expanded to include funds from the state
Transportation Improvement Board, Public Works Trust Fund, and local gas tax funds,
with minimal private sector participation This heavy reliance on public sector financing
is at the heart of many of the project's delays due to, among other reasons, increases to
the project scope, budget reductions, and the city's efforts to secure additional
grants /loans through other funding cycles that take up to 2 fiscal years to complete
Continued on next page
Resolution Ordinance Contract _ Other Approve Course of Action
Funding Source
Approval for Submittal. `
City . nager
STAFF RECOMMENDATION Accept recommendations presented in report.
BOARD RECOMMENDATION
COUNCIL ACTION
1
BUDGET UPDATE
Expenses
Activity Amount
Roadway Widening, including Right -of -Way acquisition $2,750,000
27" Sewer Main Installation $2,970,000
Intersection Improvements $ 550,000
Water Utility Relocation /Upgrades $ 223,300
*TOTAL ESTIMATED PROJECT COST $6,493,300
*Cost estimates include engineering /design /inspection Also a 15% contingency, or $975,000, is included
in the estimates to protect against future cost increases due to construction /materials inflation, which has
been occurring in recent months
FINANCIAL RESOURCES
Source Amount
Transportation Improvement Board Grant $1,568,000
Public Works Trust Fund Loan & Wastewater Capital Fund 476 $2,970,000
Domestic Water Division Capital Fund $ 223,300
Developer Contributions for signal improvements $ 25,000
* Arterial Street Fund /Street Fund Bond Proceeds $1,707,700
(Repaid by gas tax)
TOTAL RESOURCES $6,493,300
* Gas tax funds are intended for transportation improvements and road maintenance,
and currently two - thirds of our gas tax revenue goes into maintenance activity, with one -
third reserved for capital projects Beginning in 2007, the city would allocate $225,000
per year of its unobligated direct gas tax allocation to this project Those funds would
pay for debt service, that will be part of the Councilmanic LTGO Bond that the city will
issue in Spring 2007 for capital projects, including the Downtown Futures Initiative
Phase 2, and Fire Station #92 The River component will be financed on a 10-
year term Interim cash flow needs for the project may be financed by accessing the
city's existing line of credit and repaid from bond proceeds
The total Capital Bond for 2007 would now include $1 "5 million for the Downtown
Futures Initiative, $610,000 for the West Valley Fire Station, and $1 7 million for the
River Road project, for a total LTGO of $3 8 million
Gas tax funds will be available for debt service on the River Road project because
several street improvement debts will be retired over the next five years Additionally, in
2005 the state legislature authorized an increase to the local share of the tax to be
phased in over a 3 -year period The increased allocation for capital projects is
estimated to generate an additional $80,000 annually by 2008
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RIVER ROAD - OVERALL
NOT TO SCALE
NEW 27' SEWER. FRUITVALE TO 6TH AVENUE
NEW ROADWAY LIMITS 16TH TO FRUITVALE
16TH & RIVER, SIGNALIZED IN 2006
BUSINESS OF THE CITY COUNCIL
YAKIMA, WASHINGTON
AGENDA STATEMENT
Item No i (o
For Meeting Of 3/20/2007
ITEM TITLE An Ordinance providing for the issuance of limited tax general obligation bonds of
the City in the principal sum not to exceed $9 5 million for the purposes of providing funds for
certain new capital projects and advance refunding certain outstanding bonds and providing the
form and term of the bonds
SUBMITTED BY Finance Department
CONTACT PERSON/TELEPHONE Tim Jensen, Treasury Services Oft-6070
Rita DeBord, Finance Director 575- 60Z0.
SUMMARY EXPLANATION
Overview:
Prior to issuing bonded debt on the City's behalf it is necessary, per section 12 of the City
Charter, that the Council approve, by Ordinance, the bonds terms and form The attached
Ordinance and draft Preliminary Official Statement reflects Council's direction to staff to issue
LTGO bonds to provide financing for the following
1 Yakima Downtown Futures Initiative project – Phase II
Provide $1,500,000 in proceeds as part of the comprehensive financing package to fund Phase
II of the Yakima Downtown Futures Initiative Project, as contained in a staff report to Council
dated April 18, 2006 Debt service is estimated to be $135,000 annually for fifteen years and
will be paid from Real Estate Excise Tax 2 (REET 2)
Continued on next page
Resolution — Ordinance X Other (Specify) Draft Preliminary Official Statement and
preliminary debt service schedules
Contract Mail to (name and address)
Phone
Funding Source
APPROVED FOR SUBMITTAL c2._
City Manager
Y 9
STAFF RECOMMENDATION Pass Ordinance and approve draft form of Preliminary Official Statement
BOARD /COMMISSION RECOMMENDATION
COUNCIL ACTION Ordinance passed. ORDINANCE NO. 2007-09
2 Remodel of Fire Station #92 (West Valley)
Provide $820,000 in proceeds to finance the remodeling of Fire Station #92, currently underway,
as outlined in a staff report to Council dated August 15, 2006 Annual debt service is estimated to
be $73,000 annually for fifteen years and will be paid from the City's annual Property Tax Levies
3 River Road Improvement Project:
Provide $1,807,000 in proceeds to fund improvements to River Road from Fruitvale Blvd tol6
Avenue Debt service is estimated to be $225,000 annually for ten years, and will be paid from
Gas Tax revenues made available from the retirement of a Public Works Trust Fund loan in June,
2008 and the retirement of LTGO bonds in April, 2008
4 Take advantage of refunding opportunity on outstanding bonds
Provide funds to advance refund, (i e refinance at lower interest rates), $4,745,000 LTGO's
issued in 2002 to finance phase III of the Convention Center expansion It is estimated that
approximately $5 million in new money will be required to accomplish this advance refunding In
this transaction, the existing, or refunded bonds, maturing in 2013 (the first call date on the
bonds) and after will be defeased by an escrow that will be purchased with the proceeds of the
refunding, or new bonds Even though the City will be issuing bonds with a principal amount
larger than that being refunded, total debt service will be approximately $283,000 less over the
remaining life of the refunded bonds due to the lower interest rates on the new bonds The
present value of this savings is estimated to be $182,000, or 4% of the refunded bonds Annual
debt service costs after the refunding is expected to be approximately $450,000, or an average
annual savings of about $15,000, paid from PFD Sales Tax Credit dollars The new bonds (or
refunding bonds) will have the same final maturity of 2026 as the 2002 bonds being refunded
Should market conditions change in such a way that the refunding does not result in substantial
savings as noted above the refunding bonds do not have to be issued
Draft Preliminary Official Statement (POS)
When publicly traded securities are offered for sale, SEC regulations require details of the City
finances and security for bond payments be issued to potential investors Finance Staff are
currently in the process of completing this document in conjunction with the City's Bond Counsel,
KL Preston Gates, and our underwriters, Seattle Northwest Securities Certain year -end
adjustments pertaining to the information contained therein still need to be made to complete the
document. We anticipate completion of the draft POS by the end of March for distribution to
potential investors at that time Once the bond pricing and sale are concluded the Final Official
Statement will be completed and submitted to Council as part of the final bond sale approval
packet, currently scheduled for April 17
Summary
Favorable bond market conditions at this time suggest the timing of this issue is advantageous to
the City to proceed with this transaction Currently, the Interest cost on this issue is estimated to
be around 4% on the new money portion and 4 11% on the refunding bonds, including legal and
underwriting costs At this time, Finance Staff proposes that we price and sell the bonds on April
16 and return to Council with a Sale Resolution for adoption at the April 17 regular Council
meeting We will be monitoring conditions in the bond market daily Should conditions change we
will make appropriate adjustments in the bond terms, conditions and /or date of sale Conditions
in the stock market are very volatile right now and this affects interest rates All of the numbers
related to this transaction are dynamic and subject to change