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HomeMy WebLinkAbout1997-029 General Obligation bond o CITY OF YAKIM , WASHINGTON LLMITED TAX GENERAL OBLIGATION BOND, '1997 (KEYBANK LINE OF CREDIT) - $5,000,000 ORDINANCE NO 97-29_ AN ORDINANCE of the City of Yakima, Washington, providing for the issuance and sale of a limited tax general obligation bond . of the City in the aggregate principal amount of $5,000,000, for the purpose of establishing a line of credit to provide funds for various lawful City purposes and to pay the costs of date, form, and re issuance of said bond; providing the Pa yment terms of said bond and for the pledge of funds to pay the principal thereof and interest thereon; and approving the sale of such bond • • APPROVED ON MAY 6, 1997 PREPARED BY: PRESTON GATES & ELLIS LLP - 5000 Columbia Center • 701 Fifth Avenue Seattle, Washington 98104 -7078 • Table of Contents Page 4110 Section 1. Definitions 1 Section 2.. Authorization of Bond 2 Section 3. Registration and Payments 3 Section 4. Prepayment 3 Section 5. • Form of Bond 3 • Section 6. Execution of Bond 5 Section 7. Application of Bond Proceeds 6 Section 8 Pledge of Funds and Credit 6 Section 9. Tax Covenants and Designation 6 Section 10. Sale of the Bond 7 Section 11 Procedures for Draws on the Bond... 7 Section 12. Severability 7 Section 13 Effective Date 8 • • This table of contents is not a part of this resolution; it is included for convenience of the • reader only 111111 • • ORDINANCE NO. 97- 29 AN ORDINANCE of the City of Yakima, Washington, providing for the issuance and sale of a limited tax general obligation bond of the City in the aggregate principal amount of $5,000,000, for the purpose of establishing a line of credit to provide .funds for various lawful City purposes and to pay the costs of issuance of said bond, providing the date, form, and repayment terms of said bond and for the pledge of funds to pay the principal thereof and interest thereon; and approving the sale of such bond.. WHEREAS, the City Council (the "Council ") of City of Yakima, Washington (the "City "), has determined that it is in the best interest of the City to establish a line of credit to finance the costs of City projects pending the availability of permanent funding therefor, and WHEREAS, the City is authorized, pursuant to RCW 39.46.050, to establish a line of credit with a qualified public depositary to be drawn upon in exchange for a bond of the City, and • WHEREAS, the City has received the offer of KeyBank National Association, Seattle, Washington (the "Bank "), to establish a lint of credit in the principal amount of not to exceed $5,000,000 in exchange for a limited tax general obligation bond of the City in the principal amount of $5,000,000 (the "Bond "), and the Council wishes to accept such offer on the terms and conditions set forth herein and in the Bank's offer to purchase the Bond and establish the line of credit, NOW, THEREFORE, THE CITY OF YAKIMA, WASHINGTON, DO ORDAIN, as follows. - Section 1. Definitions As used in this ordinance, the following words shall have the following meanings. . "Authorized Officer" means the Director of Finance and Budget of the City, or his designee. "Bank" means KeyBank National Association, Seattle, Washington, and any business • successor thereto. • "City ouncil" means the duly constituted City Council as the general legislative authority of the City. II/ "Bond Registr " means the Treasurer, for the purposes of registering and authenticating the Bond, maintaining the Bond Register, and paying installments of principal and interest on the Bond. "Bond" means the City of Yakima, Washington, Limited Tax General Obligation Bond, 1997 ( KeyBank Line of Credit), in the principal amount of 85,000,000, issued pursuant to this ordinance "Code" means the federal Internal. Revenue Code of 1986, as amended from time to time, and the applicable regulations thereunder "City" means City of Yakima, Washington, a municipal corporation duly organized and existing under and by virtue of the laws of the State of Washi "LIBOR" means the one -year London Inter -Bank Offered Rate as set forth on the Bank's daily cost of funds rate sheet, as obtained from the Reuters Monitor Money Rates Service "[u tstandi a Principal Balance" of the Bond means on any particular day the aggregate of all funds that the City has drawn from the Bank under the Bond to that day, less the aggregate of all principal payments on the Bond made by the City on or before that day. "Treasurer" means the Director of Finance and Budget of the City, or any successor to the functions of such officer. Section 2. Authorization of Bond. The City shall now issue and sell to the Bank its limited tax general obligation bond in the principal amount of not to exceed $5,000,000 (the "Bond ") to establish a line of credit with the Bank for the purpose of providing funds to pay the costs of acquiring the Property and the costs of issuance of the Bond. The Bond shall be designated "City of Yakima, Washington, Limited Tax General Obligation Bond, 1997 (KeyBank Line of Credit)," shall be dated as of the date of its delivery to the Bank, shall be fully registered as to both principal and interest, shall be in the denomination of not to exceed $5,000,000, and shall be numbered in such manner and with any additional -2- rwon0.9000r00"n. don 410 1 III designation as the Bond Registrar deems necessary for purposes of identification. Draws on the line of credit established by the sale of the Bond to the Bank shall be made in accordance with the provisions of Section 11 hereof. The Outstanding Principal Balance shall bear interest_ initially at a per annum rate equal to seventy-nine and 12/100 percent (79.12 %) of the LIBOR rate in effect on the day of the initial draw on the line of credit established hereunder. The interest rate applicable to the Outstanding Principal Balance shall be reset each June 1 thereafter to a per annum rate equal to 79.12% of the LIBOR rate in effect on such June 1, and the Outstanding Principal Balance shall thereafter bear interest at such rate through the following May 30. Interest on a particular principal amount drawn under the Bond shall be determined from the date the Bank honors such draw. Interest shall be calculated on the basis of a year of 365 /366 days and actual days elapsed. Interest shall be payable every June 1 and December 1, commencing on December 1, 1997. The Outstanding Principal Balance shall be due and payable at final maturity of the Bond on June 1, 2002. Section 3. ttegtration and Payments. The Treasurer shall act as authenticating . 41 agent, paying agent and registrar for the Bond (collectively, the "Bond Registrar "). Both principal of and interest on the Bond shall be payable in lawful money of the United States of America. Payments of principal of and interest on the Bond shall be made by check or draft of the Bond Registrar mailed five calendar days prior to the date such interest is 'due or by electronic funds transfer made on the date such interest is due to the Bank at the address appearing on the Bond Register. Upon final payment of all principal and interest thereon, the Bond shall be submitted to the Bond Registrar for cancellation and surrender The Bond is not transferable. Section 4. Prepayment The City may prepay all or a portion of the principal amount owing on the Bond at any time without penalty. t Section 5. Form of Bond. The Bond shall be in substantially the following form: UNITED STATES OF AMERICA r . NO. , S5,000,000 O. S5,000,000 1111 . -3- J:1007NHDMEZrakNnsdoe • (Drawn as provided herein) STATE OF WASHINGTON CITY OF YAKIMA LIMJTED TAX GENERAL OBLIGATION BOND, 1997 INTEREST RATE: A per annum rate equal to seventy -nine and 12/100 percent (79.12 %) of LIBOR (as defined in the Bond Resolution) from time to time, as provided herein REGISTERED OWNER: KeyBank National Association PRINCIPAL AMOUNT: FIVE MILLION AND NO /100 DOLLARS (Drawn as provided herein) THE CITY OF YAKIMA, WASHINGTON (the "City "), hereby acknowledges itself to owe and for value received promises to • pay to the Registered Owner identified above, or registered assigns, the Outstanding Principal Balance (as defined below) of this bond, in an amount.not to exceed the Principal Amount specified above. The Outstanding Principal Balance on any particular day shall be the aggregate of all funds that the City has drawn from the date of this bond to that day less the aggregate of all principal payments made by the City on or before that day The Outstanding Principal Balance shall bear interest initially at a per annum rate equal to 79.12% of the Bank's. one -year LIBOR rate in effect on the day of the initial draw on the line of credit established hereunder. The interest rate applicable to the Outstanding Principal Balance shall be reset each June 1 thereafter at a per annum rate equal to 79.12% of the one -year LIBOR rate in effect on such June 1, and the Outstanding Principal Balance shall thereafter bear interest at such rate through the following May 30. Interest on a particular principal amount drawn under the Bond shall be determined from the date the Bank honors such draw. Interest shall be calculated on the basis of a year of 3651366 days and actual days elapsed. Interest shall be payable every June 1 and December 1, commencing on December 1, 1997. The Outstanding Principal Balance shall be due and payable at final maturity of the Bond on June 1, 2002 Both principal of and interest on this bond are payable in lawful money of the United States of America. Installments of the principal of and interest on the Bond shall be paid by check or draft of the Director of Finance and Budget .of the City (the "Bond Registrar") mailed five calendar days prior to the date such interest is due or by electronic funds transfer made on the date such interest is due to the registered owner or nominee at the, address appearing on the Bond d Register. Upon final payment of all installments of principal and interest thereon, this note shall be submitted to the Bond Registrar for cancellation and surrender. THIS BOND IS NOT TRANSFERABLE. -4- J ! oT1/MOMEWelorna doe 410 Both principal of and interest on this bond are payable out of annual levies. of ad valorem taxes to be made upon all of the taxable property within the City permitted to be levied without a vote of the electorate in amounts which, together with other available funds, will be sufficient to pay such principal and interest as the same shall become due. The full faith, credit and resources of the City are hereby irrevocably pledged for the prompt payment of such principal and interest.. It is hereby certified that all acts, conditions and things required by the Constitution and statutes of the State of Washington to exist, to have happened, been done and performed precedent to and in the issuance of this bond have happened, been done and performed and that the issuance of this bond does not violate any constitutional, statutory or other limitation upon the amount of bonded indebtedness that the City may incur. IN WITNESS WHEREOF, the City of Yakima, Washington, has caused this bond to be executed by the manual or facsimile signatures of the Mayor and City Clerk as of this 6th da of May , 1997 • CITY OF YAKIMA, WASHINGTON B /s/r ynn Buchanan Mayor ATTEST: • /s/ Karen S. Roberts • City Clerk REGISTRATION CERTIFICATE • This bond is registered in the name of the Registered Owner on the books of the City, in the office of the Director of Finance and Budget (the "Bond Registrar"), as to both principal and interest, as noted in the registration blank below. All payments of principal of and interest on this bond shall be made by the City with full acquittance by the Bond Registrar's check or warrant, made payable to the Registered Owner as shown hereon and on the registration books of the Bond Registrar and delivered to such owner or mailed to him at his/her address noted hereon and on the registration books of the Bond Registrar. Date of Name and Address of Signature of Registration Registered Owner Registrar • Section 6. Execution of Bond. The Bond shall be executed on behalf of the City with the manual or facsimile signatures of the Mayor and City Clerk. Only such Bond as shall bear -5- J.roonvHOME+rd. ox thereon a Registration Certificate in the form hereinbefore recited, manually executed by or on behalf of the Bond Registrar or its duly designated agent, shall be valid or obligatory for any purpose or entitled to the benefits of this ordinance. In case either of the officers who shall have executed the Bond shall cease to be an officer or officers of the City before the Bond so signed shall have been authenticated or delivered by the Bond Registrar, or issued by the City, such Bond may nevertheless be authenticated, delivered and issued and upon such 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 who are at the actual date of delivery of such Bond are the proper officers of the City although at the original date of such Bond any such person shall not have been such officer of the City. Section 7 Application of Bond Proceeds The money derived from draws on the line of credit established by the sale of the Bond shall be deposited in the appropriate fund of the City and shall be expended for lawful City purposes and the costs of issuing and selling the Bond, as authorized herein Section 8 Pledge of Funds and redit. Both principal of and interest on the Bond are payable out of annual levies of ad valorem taxes to be made upon all of the taxable property within the City permitted to be levied without a vote of the electorate in amounts that, together with other available funds, will be sufficient to pay such principal and interest as the same shall become due. The full faith, credit and resources of the City.are hereby irrevocably pledged for the prompt payment of such principal and interest. Section 9. Tax covenants and Designation (a) Covenants Regarding Arbitrage and Private Activity. The City hereby covenants that it will not make any use of the proceeds of sale of the Bond or any other funds of the City that may be deemed to be proceeds of such Bond pursuant to Section 148 of the Code that will cause the Bond to be an "arbitrage bond" within the meaning of said section and said regulations. The City will comply with the requirements of Section 148 of the Code (or any successor -6- J 1ppTV/1gME1YNama tlet 110 provision thereof applicable to the Bond) and the applicable Regulations thereunder throughout • the term of the Bond. . The City father covenants that it will not take any action or permit any action to be taken that would cause the Bond to constitute a "private activity bond" under Section 141 of the Code. (b) Bond Designated "Qualified Tax -Exem t Obli tins." ' The City hereby • . designates the Bond as a: qualified tax - exempt obligation for purchase by financial institutions • pursuant to Section 265(b) of the Code. The City does not anticipate that it will issue more than . 510,000,000 in qualified tax - exempt obligations during the year 1997. Section 10. Sa o f the Bond. The offer of the Bank dated May 2, 1997, to purchase the Bond on the terms specified therein and in this ordinance is hereby in all •respects accepted and approved . The proper City officials are hereby authorized and directed to do everything necessary for • . the prompt execution and delivery of the Bond to the Bank and for the proper application and use . • of the proceeds of sale thereof. Section 11. Procedures for Draws on the Bond. A request for draw pursuant to the Bond may be made in writing by an Authorized Officer in any manner approved by the Bank and the Authorized Officer; provided, however, that each draw shall be in a minimum amount of 510,000 (unless it is the final draw or this requirement is otherwise waived by the Bank) and shall . be subject to the written approval of Preston Gates & Ellis LLP or any other nationally recognized bond counsel firm satisfactory to the City and acceptable to the. Bank. Section 12. Severability. If any one or more of the covenants or agreements provided in this ordinance to be performed on the part of the City shall be declared by any court of competent jurisdiction to be contrary to law, then such covenant or covenants, agreement or agreements, shall be null and void and shall be 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 Bond. • . -7- .i.voonw+o Yar,MS.doc :Section 13. Effective Date. This ordinance shall become effective from and after its passage and publication in accordance with law. PASSED by the City Council of the City of Yakima, Washington, at a regular meeting thereof held this 6th day of May, 1997. Lynn Buchanan, Mayor ATTEST. )';e€ ;.!c C ity Clerk Publication Date: 5 -9 -97 Effective Date: 6 -8 -97 • .8. J CpTVHpMEWaMrne 00C CITY CLERK'S CERTIFICATE I, the undersigned, City Clerk of the City of Yakima, Washington (the "City") and keeper of the records of the City Council (the "Council "), DO HEREBY CERTIFY: 1 That the attached Ordinance is a true and correct copy of Ordinance No. 97- 29 of the City (the "Ordinance "), duly passed at a regular meeting of the Council held on the 6th day of May, 1997. 2. That said meeting was duly convened and held in all respects in accordance with law, and to the extent required by law, due and proper notice of such meeting was given; that a legal quorum was present throughout the meeting and a legally sufficient number of members of the Council voted in the proper manner for the passage of the Ordinance; that all other requirements and proceedings incident to the proper passage of the Ordinance have been duly fulfilled, carried out and otherwise observed, and that I am authorized to execute this certificate. IN WITNESS WHEREOF, I have hereunto set my hand this , "k7 ,day of May, 1997 City Clerk, City of Yakima r BUSINESS OF THE CITY COUNCIL YAKIMA, WASHINGTON AGENDA STATEMENT Item No. / - 47) For Meeting Of 5/6/97 ITEM TITLE: Report on Municipal Court Status and Legislative Action for Probation Services Center Construction SUBMITTED BY: Department of Finance & Budget Municipal Court Police Department CONTACT PERSON/TELEPHONE: John Hanson, 5 75- 70 Judge Martin, 5- 20 Chief Blesio, 575 -6200 SUMMARY EXPLANATION: Background As of January 1, 1997, the City Municipal Court and Probation Services Office began operation. The purpose of this report is to update the status of the Court and Probation Services Operation; provide the City Council with options and financing the recommendation to provide for an interim facility to house the City's Day Detention Program and Probation Offices. . • Budget Status The Municipal Court /Probation Services Budget for 1997 was authorized at $669,098. Because of some minor budget adjustments attributable to Health Benefit expenditures approved recently, the current amended budget is $671,031 for the Court and Probation activities. Through nearly the first third of this year (4/30/97), actual expenditures are $126,635 or 18.9% of the budget. The primary budget savings is in salaries and benefits, and expenses related to providing for jury trials. Since the Court began its operation without a pending trial and hearing caseload, the first jury trials scheduled were for the middle of March. The budget anticipated one jury trial per week or between 50 and 60 a year. CONTINUED • Resolution X Ordinance X Contract X Other (Specify Exhibits I -VII) Funding Source APPROVED FOR SUBMITTAL: City Manager F RECOMMENDATION: Approve the report and adopt Legislation. pp islation. P P g Municipal Court Status Report BOARD /COMMISSION RECOMMENDATION: COUNCIL ACTION: At this time, the only expenditure items that likely will exceed the budget line item for t o year are the overtime and operating supply costs related to court start -up. Rather ti hiring a separate bailiff /court security for out -of- custody arraignments and trials, t Court is paying off -duty City Police Support Officers (Jail security) overtime. This line • item will be monitored closely. At some point, the Court may find it less expensive to contract with retired Police Officers or a Security firm for Court security duties. For now, the Court /Probation Services Operating Budget appears to be in sound shape for the remainder of 1997. (See Exhibit I). Staffing/Operating Impacts Initial Court staffing included the Judge, a part -time Court Commissioner, Court Services Manager, three Court Clerks, and a Court Certified Interpreter Clerk, Probation Manager and Probation Clerk: In addition to this level of staffing, a full -time Court Clerk position authorized for 1997 was held vacant. The plan is to fill this position at mid -year. This provides the Court a budget cushion for Court start -up costs. Additionally, staffing in the Probation Services Office contemplated the hiring of an additional Probation Officer for four months in 1997, and an additional clerical position in late Fall. This staffing level was predicated on a probation caseload of approximately 400 probationers per Probation Officer, assuming the Probation Officer would be responsible for daily monitoring of the Day and Home Detention programs. As of April 30, 1997, the Probation caseload stands at 7 probationers with a caseload expected to exceed 1,000 to 1,200 by December, 1997. For this reason, it is necessary to recommend to City Council that staff move forward on hiring additional Probation Office help in the near future. Rather than fill the position with a Probation Officer as identified on the report earlier, we now believe that the addition of a "Case Specialist" position, a new position would better assist the Probation Office. This position would be at a lesser pay rate than the proposed Probation Officer position. The Probation Officer proposed for hire later this year would be held over until 1998. The Probation Clerk position slated for late Fall would likely hired on schedule or possibly earlier. The attached job description (Exhibit II) and pay range is . contemplated for the Case Specialist position. An amendment to the City's pay and compensation ordinance will be forthcoming to create the final salary range for the position. Funding for the Case Specialist position would come from existing budgetary authority for the unfilled Probation Officer position, and may require a budget appropriation later in 1997, depending on the remainder of Court and Probation expenditures for the year. Because the Probation caseload has grown much more quickly than the conservative budget estimate, increases in this revenue source can be used to offset an appropriation, if required, for the Case Specialist position. (See Exhibit III re: Probation, Day and Home Detention Revenues). s Municipal Court Status Report 2 • Indirect Operating Impacts The operation of the Court has severely increased the amount of mail incoming and outgoing from the Police Station. Historically, the Police Department has assigned Department staff to address incoming and outgoing mail, however, with the impact of the Court, temporary employees will likely be required to address these duties. A permanent solution will be recommended as part of the 1998 Budget. Similarly, because of Police, Legal and Court mail volumes, a postage machine may need to be located at the Police Station. Facility Needs The Probation Office currently is housed immediately across the hall from the Municipal Court. The office area is very limited, and there is currently no location to house the City's • Day Detention Program. The Day Detention Program, operated as a "condition of probation" had, as of the end of April, 992 cumulative day stay representing 199 individuals or an average of approximately 12 individuals daily. (See Probation Services Revenue Analysis, Exhibit III, 240 averaged stay days assigned per month _ 20 averaged days available = 12 per day) With the need for a facility to house the City's Day Detention Program; to provide for needed office space, and additional space for future Probation expansion; to provide adequate office space for the Court Commissioner adjacent to the Court facilities, City Finance, Municipal Court and Police Department staff have reviewed a number of options to address the needs. (See Exhibit IV for options.) • Proposal • As an the interim solution to provide for immediate needs, staff recommends that the City -owned lot at 3rd and Spruce Streets be improved and a commercial modular structure be placed on the property to house the City's Probation operations. (See Exhibit • V- Facility Layout/ Recommended Option.) The structure would !house the City's Probation Office and Day Detention operation. The building would also include conference room space available for Probation and other municipal purposes on an available basis. Additionally, minor modifications will be made to the current jury room to provide the Court Commissioner office space. Extended jury deliberation would be held in existing Police Station /Legal Center conference rooms or a conference room in the new Probation Services Center. • ' Financing Cost of improvements are projected to be $340,000 to $375,000. - Funding would be provided as follows: 1. The Law & Justice Capital Fund includes a $90,000 appropriation for the development of P arking facilities already planned for the 3rd Street and Spruce Street lot. Municipal Court Status Report 3 2. The issue of a General Obligation Line of Credit for the remainder of the project, $250,000- $300,000 supported by currently unbudgeted Probation, Home and Day Detention revenues. Having the credit line availa provides financial options to the City currently not in place to add quickly and in a less costly way any number of financial needs. The 1 budget anticipated $150,000 from Probation, Day and Home Detention sources. The current revised projected revenue: Probation Services- $257,000; Day Detention -$ 55,000; Home Detention - $93,000 or a total of $400,000 In other words, the revenue is projected at $250,000 greater than currently budgeted. The annual debt service payment on the line of credit would be approximately $60,000- $70,000 depending on final terms of the credit line. (See Exhibit VI - General Obligation Line of Credit Commitment Letter -5 -Year Amortization Schedule for $300,000 G.O. Line of Credit.) As mentioned earlier, an additional amount of Probation fees may be required in a budget appropriation to offset hiring a Case Specialist. At the most, this would add $10,000 to the existing operation budget. This would leave ($400,000 less $160,000) almost $240,000 in revenues beyond current budgeted levels to provide an ongoing revenue source for • financing a facility. This revenue source is also projected to grow in 1998 and beyond as the Probation, Home and Day Detention Programs continue to expand. The additional staffing and operating expenditure needs however will not consume the resources being generated from these programs. Project Time Line /Contract Requirements . While this alternative may not be the best long term solution to facility needs for the Ci and Probation operation, it is clear that a financially acceptable and timely int€ solution is necessary to carryout Court requirements. It is anticipated that construction of the modular units will take 6 -8 weeks. Site plans and specifications will take three to four weeks, the. bidding, process approximately three to four weeks and facility placement, landscaping and construction of site improvements four to six weeks. It is expected the Probation Services Center will be operational by August 1997. Modular Units: The facility (modular units) are planned to be purchased though an intergovernmental purchasing agreement with the King County Directors Association (KCDA). The City already has an agreement in place, so no formal Council action will be required. Upon Report approval, staff • will initiate the purchase and final configuration of the modular units. Engineering /Site Plans and Bid Documents: To meet proper code requirements, provide a site plan for building location, parking lot layout, sidewalks, utility service locations, lighting layout, grading and drainage plan and landscaping areas, and to specifications for bidding parking and other site improvements, staff proposes the City contract with NEI (Nobel Engineering, Inc.) to provide these services at a cost of $3,900. (See Exhibit VII - Engineering Services Proposal and Proposed Contract.) (1) The actual line of credit authorized would be up to $5,000,000. For any future activity or draw above the initial $300,000 the Council would be notified. 411 Municipal Court Status Repon 4 Impacts Caused by Locating the Facility at the 3rd and Spruce Streets Location • The discussion to determine the "best" location for the Probation facility included a review of the initial planned use of the Spruce and 3rd Street property. The Police Department had intended for at least a portion of the property to house a secure car impound facility and fenced yard. The Police "Annex" on 2nd Street is currently being viewed as a possible solution. Some additional expense for housing impounded vehicles for evidentiary purposes will be necessary in the future. Conclusion/Recommendations While it would be desirable to recommend a long -term solution to the City Court /Probation space needs, clearly the need for a time sensitive solution at a reasonable cost is the highest priority. Staff recommends Council accept this report and adopt the legislation to allow the Probation Facility project be initiated. • .! Munmpal Court Status Report - 5