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HomeMy WebLinkAbout1986-2998 ISSUANCE OF GENERAL OBLIGATION BOND ORDINA* NO291) 8 AN ORDINANCE OF THE COUNCIL OF CITY OF YAKIMA WASHINGTON, PROVIDING FOR THE ISSUANCE AND SALE OF A GENERAL OBLIGATION BOND OF THE CITY 411 IN THE PRINCIPAL AMOUNT OF $750,000; PROVIDING FOR THE DISPOSITION OF THE PROCEEDS OF SALE OF SUCH BOND; FIXING THE DATE, FORM, MAXIMUM INTEREST RATE, TERMS, MATURITY AND COVENANTS OF SUCH BOND; CREATING A BOND FUND FROM WHICH THE PRINCIPAL OF AND INTEREST ON SUCH BOND SHALL BE PAID; AND CONFIRMING THE SALE OF SUCH BOND. WHEREAS, the City of Yakima (the "City") is a city of the first class of the State of Washington; and WHEREAS, RCW 35.22.280(4) authorizes first class cities to borrow money for corporate purposes on the credit of the corpora- tion and to issue negotiable bonds therefor; and WHEREAS, the acquisition of necessary City equipment is a • corporate purpose of the City; and WHEREAS, RCW 35.46.050 authorizes the City to establish lines of credit with any qualified public depository to be drawn upon in u: exchange for its bonds or other obligations, the interest rates on which may be a fixed rate or rates set periodically or a variable rate or rates determined by agreement of the parties; and WHEREAS, in order to borrow funds to make such anticipated expenditures for equipment acquisition at a favorable rate of interest, the City deems it advisable to establish a line of credit through the issuance of its limited tax general obligation bond in the principal amount of not to exceed $750,000, pursuant to RCW 35.46.050; and WHEREAS, the City has sought offers from various qualified public depositories for the establishment of a line of credit through the purchase of the City's limited tax general obligation bond in the principal amount of $750,000 (the "Bond"); and 2 ; Ai A WHEREAS, the COU'ridi "Council") has deter- mined that the offer of Rainier National Bank of Seattle, WashingtonaqualifietrAblic:.,depAsiy2:dateCNOVeffiber 1986 cti;t7 A v to purchaSeth0 to issue p.:7e and sell the'iBond'purSOarittt11 -;ed 7q4-5*I'V'T Vrz, NOW, THERFORE, BY THE YAKIMA, as follows: - • ' — an ;D7 amA Section 1. Definitions. As used in this reSOIution, the fallowing words. shall-have the following ,meanings,--unless a different meaning clearly appear,s fromthecontext:,, (a) "Bank" means Rainier,National,Bank.. (b) "Bo,nd", means the limited tax general obligation bond of the City in the'principal amountof ,$750,0,0 t9 e,issued pursuant f ' ;q ;' • to this ordinance__ (c) "Bond Fund" means the "City 9f Yakima Limited Tax General Obligation Bond Redemption Fund, 1987,"_;t,he special bond + ' redemption fund of the City authorized.to,becreated by Section 5 of this ordinance. • 9 t ; _•" : (d) "City" means the City ,of Yakima, Washington, a municipal corporation duly organized and existing under and by virtue of the Constitution and laws of the State of,Washington. • 4 1 (e) "Code" means the Internal Revenue Code of 1986, as amended. (f) "Council" means the Council of the City as the same shall be duly and regularly constituted from time to time, (g) "Director of Finance and Budget" means, tne_piTectox• of Finance and Budget of the City,or any,suppessor,,to the.,f.unctions and duties of such,Director of ..Finance and Budget , :',;• „(h) "Interest Rate,means.the.per,annum rat intere,st_on the Bond to bp: determined.by resolution of the Council pursuant to Section 2 of this ordinance. -2- JG306 86/12/04 (i) "Outstanding Principal Balance" means the aggregate of all funds that the City has drawn from the Bank pursuant to the Bond less the aggregate of all principal payments on the Bond made by the City. (j) "Preference Disallowance" means the percentage dis- allowance set forth in Section 291(a)(3) of the Code, of the deduction for that interest, described in Section 291(a)(1)(B) or the Code, on indebtedness incurred or continued to purchase or carry tax-exempt obligations or any disallowance of interest deductions described in Section 265 of the Code, by reason of receipt of tax exempt interest. (k) "Request for Draw" means an oral or written request by an authorized representative of the City for a draw from the line of credit authorized to be established by this ordinance. Section 2. Issuance of Bond. The City shall, for the purpose of funding acquisition of necessary City equipment, issue its Bond in the principal amount of $750,000. Said bond shall be designated the "City of Yakima, Washington, Limited Tax General Obligation Bond, 1987," shall be dated the date of its delivery to the Bank, shall be issued in 1987 in fully registered form, and shall mature on February 1, 1993, with final payment of principal of and interest on the Bond due, February 1, 1993. The City hereby appoints the Director of Finance and Budget as the Bond registrar. The City shall cause a bond register to be maintained by the Bond registrar. So long as the Bond remains outstanding, the Bond registrar shall make all necessary provi- sions to permit the exchange or registration or transfer of the Bond at its office. The Bond shall be transferable only upon the Bond register by the registered owner thereof in person or by his attorney duly authorized in writing, upon surrender thereof, together with a written instrument of transfer satisfactory to the Bond registrar duly executed by the registered owner or his duly -3- JG306 86/12/04 authorized attorney. Upon, the transfer of the Bond, the Bond registrar shall issue in the name of the transferee, a new Bond in denomination equal to $750,000. The Bond shall bear interest on the Outstanding Principal Balance at a rate not to exceed 110% of the prime rate of the Bank, 41' and shall be hereafter fixed by resolution of the City Council (the "Interest Rate"), except as expressly provided in Section 3 of this Ordinance. The principal of and interest on the Bond shall be payable as follows: Upon each Request for Draw, a portion of the Outstanding Principal Balance equal to such Request for Draw, and the interest thereon, shall be payable in level payments of principal and interest sufficient to amortize such . draw at the Interest Rate over 'a period of 60 months. This 60 month period shall be determined from the date of the advance of Bond proceeds to the City pursuant to the Request for Draw by which the City drew that principal amount from the Bank. Such level payments of principal of and interest on the Bond with respect to such Request for Draw shall be payable on the first day of each month beginning with the first day of the month'immedi- , ately following the month in which the City makes such Request for Draw. Final payment of the principal of and interest on the Bond shall nonetheless be due on February 1, .1993. Payments of the principal of and interest on the Bond corresponding to each and every Request for Draw shall be aggregated into a single monthly payment. Both principal of and interest on the Bond shall be payable in lawful money of the United States of America. Principal of and interest on the Bond shall be paid by check or draft mailed to the registered owner or assign at the address appearing on the Bond register on the 15th day of the month preceding the principal and 3 interest payment date. The final payment of principal of and interest on the Bond shall be payable upon presentation and -4- JG306 86/12/04 • surrender thereof by the registered owner at the office of the Director of Finance and Budget. • Section 3. Tax Covenants. 411 A. In the event that the interest on the Bond is subject to federal income taxation when held by the registered owner (other than with respect to the corporate or individual alternative minimum tax under Section 55 of the Code or with respect to the environmental tax on corporations under Section 59A of the Code or with respect to other similar exceptional treatment of the inter- est on the Bonds under the Code) then (i) the interest rate payable on the Bond shall be increased, from and after the effec- tive date that the interest on the Bond becomes subject to federal income taxation, to 110% of the 'announced prime rate of Rainier National Bank, and (ii) the City shall pay to the registered owner, on demand (1) the difference between the interest paid at the tax-exempt rate and the interest rate which would be payable at the taxable rate as provided in (i) hereof, but which has not been so paid, and (2) any interest, penalties or other charges, if any, incurred'by the registered owner as a result of the interest payable on the Bond being so subject to federal income taxation. B. In the event of any increase or decrease in the Pref- erence Disallowance which would be applicable to the Bond, the interest rate on the Bond in effect shall be increased (in the 'event of any increase in such Preference Disallowance) or de- . creased (in the event of any decrease in such Preference Dis- allowance) by 0.3 percent of the prime rate of Rainier National Bank for each percentage point increase or decrease, as appro- priate, in the Preference Disallowance. In no event, however, shall the applicable rate exceed 110% of the prime rate of Rainier 11 National Bank. C. In the event there is change in the maximum corporate • tax rate under the Code, the interest rate on the Bond shall be -5- JG306 86/12/04 increased (or decreased) by one percent of the prime rate of Rainier National Bank at such time as each one percent decrease (or increase) in the highest marginal statutory rate of federal income tax applicable to corporations becomes effective with respect to Rainier National Bank. However, in no event shall the applicable rate exceed 110% of the prime rate of Rainier National Bank. Section 4. Request for Draw. A Request for Draw pursuant to the Bond may be made by the City either orally or in writing at any time on or before December 31, 1987. Oral Requests for Draw may include requests by telephone, telegraph, telex or any other means of communication by an authorized representative of the City. The Director of Finance and Budget is hereby authorized to determine the amount of credit to be extended and to make written or oral Requests for Draw pursuant to this Ordinance. Promptly following each Request for Draw the Director of Finance and Budget shall send by registered or certified mail, a confirmation of the Request for Draw, substantially in the form of Exhibit A to this Ordinance. The Bank shall incur no liability to the City or to any other person in acting upon any oral or written notice or other communication which the Bank believes in good faith to have been given by an official or other person authorized to borrow on behalf of the City, or in otherwise acting in good faith in making advances pursuant to this Ordinance. The Bank may, in the event of a material adverse change in the financial condition of the City, determine not to advance additional draws pursuant to the Bond provided, however, that the Bank shall not make such deter- mination unreasonably. Section 5. Bond Redemption Fund. A special fund of the City to be known as the "City of Yakima Limited Tax General Obligation 41 Bond Redemption Fund, 1987" (the "Bond Fund") is hereby authorized to be created by the Director of Finance and Budget. The Bond -6- JG306 86/12/04 Fund shall be drawn upon for the sole purpose of paying the principal of and interest on the Bond. Moneys on deposit in the Bond Fund not immediately needed to pay such interest or principal • may temporarily be deposited in such institutions or invested in such obligations which are legal investments for City funds. Any interest or profit from the investment of such moneys shall be deposited in the Bond Fund. •Any moneys remaining in the Bond Fund after payment in full of the principal of and interest on the Bond may be transferred to the General Fund of the City, and the Bond Fund shall be closed. The City covenants and agrees that for as long as the Bond is outstanding and unpaid it will include in its budget and make annual levies of ad valorem taxes, within and as a part of the tax levy permitted to cities without a vote of the people, upon all taxable property within the City subject to taxation in amounts that, with other monies legally available therefor, will be sufficient to pay the principal of and interest on the Bond as the same shall become due and payable. Such taxes and other monies so pledged shall be paid directly into the Bond Fund in amounts sufficient to pay the principal of and interest on the Bond, and none of the money in such Fund shall be used for any other purpose than the payment of the principal of and interest on the Bond. The full faith, credit and resources of the City are hereby pledged for the prompt payment of the principal of and interest on the Bond as the same shall become due. Section 6. Payment Prior to Maturity. The Bond may be redeemed in advance of its scheduled maturity at any time without premium or penalty upon thirty days' written notice to the re- quested owner at par plus accrued interest to the date of lk redemption. Section 7. Application of the Proceeds of Sale of the Bond. Immediately upon receipt of a Request for Draw, the amount -7- JG306 86/12/04 requested shall be deposited by the Bank in the City of Yakima General Fund held by the Director of Finance and Budget and may be used by the City to pay the cost and expenses of acquiring neces- sary City equipment as authorized by the applicable City budget. Section 8. Form of the Bond. The Bond shall be in substan- tially the following form: UNITED STATES OF AMERICA R-1 $750,000 STATE OF WASHINGTON YAKIMA COUNTY CITY OF YAKIMA LIMITED TAX GENERAL OBLIGATION BOND, 1987 Registered Owner: City of Yakima, Washington (the "City"), a municipal corpora- tion organized and existing under and by virtue of the Constitu- tion and laws of the State of Washington, hereby acknowledges itself to owe and for value received promises to pay to the registered owner specified above no later than February 1, 1993, solely from the sources hereinafter mentioned, the Outstanding Principal Balance (as defined below) of this bond at the times hereinafter specified, with interest thereon provided until such principal sum is paid. This bond is issued pursuant to duly adopted ordinances and resolutions of the City, including Ordinance No. adopted on December , 1986 (the "Bond Ordinance"), for the purpose of financing acquisition of city equipment, all in conformity with the Constitution and laws of the State of Washington and the ordinances of the City. This bond bears interest at the rate of % (the "Interest Rate") on the Outstanding Principal Balance of this bond (as defined in the Bond Ordinance), except as expressly provided in the Bond Ordinance. The principal of and interest on the Bond shall be payable as follows: Upon each Request for Draw, a portion of the Outstanding Principal Balance equal to such Request for Draw, and the interest thereon, shall be payable in level monthly payments of principal and interest sufficient to amortize such draw at the Interest Rate over a period of 60 months. This 60 month period shall be determined from the date of the advance of Bond proceeds pursuant to the Request for Draw by which the City drew that principal amount from the Bank. Such level pay- ments of principal and interest on the Bond with respect to such Request for Draw shall be payable on the first day of each month beginning with the first day of the month immediately following the month in which the City makes such Request for Draw. Final payment of the principal of and interest on the Bond shall none- theless be due on February 1, 1993. Payments of the principal of and interest on the Bond corresponding to each and every Request for Draw shall be aggregated into a single monthly payment. -8- JG306 86/12/04 The City hereby covenants and agrees with the registered owner of this bond that it will keep and perform all of the covenants of this bond of the Bond Ordinance. Both the principal of and interest on this note are payable in lawful money of the United States of America by check or draft mailed to the registered owner or assign at the address appearing All on the Bond register on, the 15th day of the month preceding the interest payment date. The final payment of principal of and interest on the Bond shall be payable upon presentation and surrender hereof by the registered owner at the office of the. Director of Finance and Budget. The City has reserved the right to redeem this bond at any time without premium or penalty on thirty days' written notice to the registered owner hereof at par plus accrued interest to the date of redemption. The City hereby irrevocably covenants that it will include in its budget and levy ad valorem taxes within and as a part of the tax levy permitted to cities without a vote of the people, upon all the taxable property within the City subject to taxation, in amounts sufficient, with other monies legally available therefor, to pay the principal of and interest due on this Bond as the same will become due and shall deposit such funds into the City of Yakima Limited Tax General Obligation Bond Redemption Fund, 1987 of the City authorized to be maintained by the Ordinance. The full faith, credit and resources of the City are hereby irrevocably pledged for the prompt payment of such principal and interest. This bond shall not be valid or become obligatory for any purpose or be entitled to any security or benefit under the Bond Ordinance until the Certificate of Authentication thereon shall have been manually signed by the Bond registrar. It is hereby certified and declared that this bond is issued pursuant to and in strict compliance with the Constitution and laws of the State of Washington, the Charter of the City, and duly adopted ordinances of the City, and that all acts, conditions and things required to have happened, been done and performed prece- dent to and in the issuance hereof have happened, been done, and performed. IN WITNESS WHEREOF, City of Yakima, Washington, has caused this bond to be signed with the manual or facsimile signature of the Chairman of its Board of Directors, to be attested by the manual or facsimile signature of the Secretary of the Board as of this day of , 1987. CITY OF YAKIMA, YAKIMA COUNTY By ,/s/ manual or facsimile signature Mayor 1 0 ATTEST: /s/ manual or facsimile signature City Clerk -9- JG306 86/12/04 CERTIFICATE OF AUTHENTICATION Date of Authentication: This bond is the bond described in the within mentioned Bond Ordinance and the Limited Tax General Obligation Bond, 1987 of the City of Yakima, Washington, dated , 1987. 4IF DIRECTOR OF FINANCE AND BUDGET, CITY OF YAKIMA Bond Registrar By Authorized Officer ASSIGNMENT FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto (name and address of assignee) the within bond and does hereby irrevocably constitute and appoint Bond Registrar to transfer said bond on the books kept for regis- tration thereof with full power of substitution in the premises. Date: NOTE: The signature of the Assignor must correspond with the name of the registered owner as it appears on the face of the within bond in every particular, without alteration or enlargement or any change whatever. * * * * * Promptly following each Request for Draw, the Bond shall have endorsed thereon by the registered owner the following certifi- cates which certificates shall appear on the bond in the following form: 41 -10- JG306 86/12/04 PRINCIPAL AND INTEREST PAYMENTS UPON DRAW • • Monthly : First : Last : Signature : . . Date : Amount : Principal and :Month of Month of : of Regis- : of Draw of Draw Interest Payment : Payment : Payment :tered Owner • -411 • • • • . • • • • • • • . . • • • • • • • • • : . : • • . . Section 9. Execution of the Bond. The Bond shall be exe- cuted on behalf of the City by the manual or facsimile signature of the Mayor, shall be attested by the manual or facsimile signa- 1 ture of the Clerk of the Council and shall have the corporate seal 1 of the City impressed or imprinted thereon. • Section 10. Sale of the Bond. The sale of the Bond to Rainier National Bank, Seattle, Washington pursuant to its written proposal dated November 25, 1986, and pursuant to this resolution, • is hereby approved and confirmed. Such proposal is hereby accep- ted on the terms and conditions set forth therein and herein. Section 11. Authorization to Officials and Agents; Ratifica- tion of Prior Actions. The appropriate City officials, agents and representatives are hereby authorized and directed to do every- thing necessary for the prompt issuance, execution and delivery of the Bond, and for the proper use and application of the proceeds of the sale thereof as provided in this ordinance. All actions heretofore taken by the City's officials, agents and representatives in connection with the issuance and sale of the Bond and in connection with the City's request for proposals to purchase the Bond are hereby ratified, approved and confirmed. • Section 12. Bond to Remain Tax Exempt; Nonarbitrage. The City covenants that it wdll not take or permit to be taken on its behalf any action which would adversely affect the exemption from -11- JG306 86/12/04 - • • federal income taxation of the interest or discount, if any, on the Bond and will take or require to be taken such acts as may reasonably be within its ability and as may from time to time be required under applicable law to continue the exemption from 41, federal income taxation of the interest and discount, if. any, on the Bond provided, however, that the City does not represent, warrant, covenant or agree that interest on the Bonds will not be taken into account for purposes of computing the corporate or individual alternative minimum tax under Section 55 of the Code, or for purposes of computing the environmental tax on corporations under Section 59A of the Code or under any other similar treatment of interest on the Bonds. Without limiting the generality of the 1 foregoing, the City covenants that it will not take any action or fail to take any action with respect to the investment of the proceeds of any Bond or other funds which would result in consti- tuting the Bond to be an "arbitrage bond" within the meaning of such term as used in Sections 103 and 148 of the Code or which would violate Treasury Regulations under Sections 103 and 148 of the Code applicable to the Bond. The Council hereby finds and decla with respect to Section 148(f)(4)(C) of the Code, that (i) ninety-five percent or more of the net proceeds of this Bond will be used for local governmental activities of the City and (ii) the aggregate face amount of all tax-exempt bonds (other then private activity bonds) issued by the City (and, all subordinate entities thereof) during the calendar year of 1987 is not reason- ably expected to exceed $5,000,000. Section 13. Bonds Designated "Qualified Tax-Exempt Obliga- tions." The Bonds are hereby designated as "qualified tax-exempt obligations" as defined in Section 265(b) of the Code. The City finds: I and declares that it does not reasonably anticipate that it will issue tax exempt obligations (other than private activity • -12- JG306 86/12/04 1 • • , • bonds) in the calendar year of 1987 in an aggregate principal amount exceeding $10,000,000. Section 14. Lost or Destroyed Bonds. In case the Bond shall • be lost, stolen or destroyed, the Bond registrar may execute and deliver a new Bond of like amount, date, and tenor to the regis- tered owner thereof upon the owner's paying the expenses and charges of the City and the Bond registrar in connection therewith and upon his filing with the Bond registrar evidence satisfactory to said Bond registrar that such Bond was actually lost, stolen or destroyed and of his/her ownership thereof, and upon furnishing the City with indemnity satisfactory to the Bond registrar. Section 15. Severability. If any one or more of the cove- nants or agreements provided in this ordinance to be performed on the part of the City shall be declared by any court of competent jurisdiction to be contrary to law, then such covenant or cove- nants, agreement or agreements, shall be null and void and shall be deemed separable from the remaining covenants and agreements of this ordinance and shall in no way affect the validity of the other provisions of this ordinance or of the Bonds. Section 16. Effective Date. This ordinance shall be in full force and effect from and after thirty (30) days after the date of its publication, adoption and approval as required by law. ADOPTED by the City Council of City of Yakima, Washington, at a regular meeting'thereof held this 1 day of December, 1986. CITY OF YAKIuA, YAKIMA COUN/Y, WASHINGTON 111'P t AAI Alk A. , . • ‘. -yor 4411 ATTEST: 10 - ea 4 City Clerk -13- JG306 86/12/04 EXHIBIT A CONFIRMATION OF REOUEST FOR DRAW Rainier National Bank 411, 1301' Fifth Avenue • P.0. Box 3966 • Seattle, Washington 98101 • Gentlemen: As the authorized representative of the City of Yakima, I hereby confirm the City's Request for Draw made on [insert date of request] in the amount of [insert amount of request] with respect to its Limited Tax General Obligation Bond, 1987 issued pursuant to Ordinance No. of the City. The City understands that with respect to this Draw, and all previous Draws, the City will, on the first day of each month, make the following level payments of principal and interest: • • : Monthly : First : Last Date : Amount : Principal and :Month of : Month of of Draw : of Draw : Interest Payment : Payment : Payment • • : • • • • • • • • • • • • • 'Very truly yours, THE CITY OF YAKIMA, WASHINGTON • By Director of Finance and Budget • 41 • -1- JG306, 86/12/04 • • CLERK'S CERTIFICATE I, the undersigned, the duly chosen, qualified and acting Clerk of the City Council of City of Yakima, Washington (the "City "), and keeper of the records of the City . Council (herein called the "Council "), DO HEREBY CERTIFY: 1. That the attached Ordinance No. 2998 (herein called the "Ordinance ") is a true and correct copy of a ordinance of the City, as finally adopted at a meeting of the'Council held on the '9th day of December, 1986, and duly recorded in the offices of the City. 2. That said meeting was a regular meeting duly convened • and held in all respects in accordance with law, and, to the extent required by law, due and proper notice of such meeting was • given; that a quorum was present throughout the meeting and a legally sufficient number of the members of the City voted in the proper manner for the adoption of the Ordinance; that all other requirements and proceedings incident to the proper adoption of the Ordinance have been duly fulfilled, carried out and otherwise observed; and that I am authorized to execute this certificate. IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of the City this 12th day of December , 1986 . a tF x,� . • City Clerk [S E A L] • •