Loading...
HomeMy WebLinkAbout2014-009 Issue and Sale of Limited Tax General Obligation Bonds CITY OF YAKIMA, WASHINGTON LIMITED TAX GENERAL OBLIGATION BONDS, 2014A AND LIMITED TAX GENERAL OBLIGATION REFUNDING BONDS, 2014B ORDINANCE NO. 2014 -009 AN ORDINANCE OF THE CITY OF YAKIMA, WASHINGTON, PROVIDING F®R THE ISSUANCE AND SALE OF LIMITED TAX GENERAL OBLIGATION BONDS IN THE AGGREGATE (PRINCIPAL AMOUNT OF NOT TO EXCEED $15,000,000 AND LIMITED TAX GENERAL OBLIGATION REFUNDING BONDS IN THE AGGREGATE PRINCIPAL AMOUNT OF NOT TO EXCEED $2,100,000 TO PROVIDE FUNDS TO FINANCE THE COSTS OF STREET, ROAD AND OTHER IMPROVEMENTS, TO REFUND CERTAIN OUTSTANDING LIMITED TAX GENERAL OBLIGATIONS OF THE CITY, AND TO FINANCE COSTS OF ISSUANCE OF EACH SERIES OF BONDS; PROVIDING FOR THE DISPOSITION j OF THE PROCEEDS OF SALE; AND DELEGATING AUTHORITY TO APPROVE THE FINAL TERMS OF THE BONDS. APPROVED ON MAY 6, 2014 PREPARED BY: PACIFICA LAW GROUP LLP Seattle, Washington CITY OF YAKIMA ORDINANCE NO. 2014 -009 TABLE OF CONTENTS* Page Section 1. Definitions and Interpretation of Terms 3 Section 2. Authorization of the New Money Project 8 Section 3. Authorization of Bonds and Bond Details 8 Section 4. Registration, Exchange and Payments 9 Section 5. Redemption Prior to Maturity and Purchase of Bonds 14 Section 6. Form of Bonds 18 Section 7. Execution of Bonds 21 Section 8. Application of Bond Proceeds; Plan of Refunding 21 Section 9. Tax Covenants 24 Section 10. Bond Funds and Provision for Tax Levy Payments 25 Section 11. Defeasance 27 Section 12. Sale of Bonds 28 Section 13. Preliminary and Final Official Statements 30 Section 14. Undertaking to Provide Ongoing Disclosure 31 Section 15. Lost, Stolen or Destroyed Bonds 35 Section 16. Severability; Ratification 35 Section 17. Effective Date 36 * This Table of Contents is provided for convenience only and is not a part of this ordinance. -1- 05/05/14 ORDINANCE NO. 2014 -009 AN ORDINANCE pF THE CITY OF YAKIMA, WASHINGTON, PROVIDING FOR THE ISSUANCE AND SALE OF LIMITED TAX GENERAL OBLIGATION BONDS IN THE AGGREGATE PRINCIPAL AMOUNT OF NOT TO EXCEED $15,000,000 AND LIMITED TAX GENERAL OBLIGATION REFUNDING BONDS IN THE AGGREGATE PRINCIPAL AMOUNT OF NOT TO EXCEED $2,100,000 TO PROVIDE FUNDS TO FINANCE THE COSTS OF STREET, ROAD AND OTHER IMPROVEMENTS, TO REFUND CERTAIN OUTSTANDING LIMITED TAX GENERAL OBLIGATIONS OF THE CITY, AND TO FINANCE COSTS OF ISSUANCE OF EACH SERIES OF BONDS; PROVIDING FOR THE DISPOSITION OF THE PROCEEDS OF SALE; AND DELEGATING AUTHORITY TO APPROVE THE FINAL TERMS OF THE BONDS. WHEREAS, the City Council (the "Council ") of the City of Yakima, Washington (the "City "), has deemed it in the best interest of the City and its citizens that the City make certain street, road and other capital improvements in the City (the "New Money Project "); and WHEREAS, the City is authorized by chapters 35.22, 39.36 and 39.46 RCW to issue limited tax general obligation bonds to pay costs of the New Money Project; and WHEREAS, the City has outstanding its Limited Tax General Obligation Refunding Bonds, 2004, issued on September 1, 2004 pursuant to Ordinance No. 2004 -43 passed by the Council on July 20, 2004 and Resolution No. R- 2004 -124 adopted by the Council on August 10, 2004 (together, the "2004 Bond Ordinance "), which remain outstanding as follows: Maturity Dates (November 1) Principal Amounts Interest Rates 2014 $ 340,000 3.75% 2015 355,000 3.80 2016 365,000 3.90 2017 380,000 4.00 Maturity Dates (November 1) Principal Amounts Interest Rates 2018 395,000 4.10 2019 335,000 4.20 (the "2004 Bonds "); and WHEREAS, the 2004 Bond Ordinance provides that the City may call the 2004 Bonds maturing on or after November 1, 2015 (the "2004 Refunding Candidates ") for redemption on or after November 1, 2014, in whole or in part on any date, at a price of par plus accrued interest, if any, to the date of redemption; and WHEREAS, after due consideration it appears to the Council that all or a portion of the 2004 Refunding Candidates (the "Refunded Bonds ") may be defeased and refunded by proceeds of limited tax general obligation bonds at a savings to the City and its taxpayers; and WHEREAS, the Council deems it in the best interest of the City to issue two series of limited tax general obligation bonds pursuant to the terms of this ordinance to provide financing for the New Money Project, to redeem and defease the Refunded Bonds, and to pay costs of issuing each series of bonds; and WHEREAS, the Council wishes to delegate authority to the Director of Finance and Budget (the "Designated Representative "), for a limited time, to approve the interest rates, maturity dates, redemption terms and principal maturities for each series of bonds within the parameters set by this ordinance; and WHEREAS, the City expects to receive a proposal from Piper Jaffray & Co. (the "Underwriter ") and now desires to issue and sell the bonds to the Underwriter as set forth herein; NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF YAKIMA, WASHINGTON, DOES ORDAIN AS FOLLOWS: -2- Section 1. Definitions and Interpretation of Terms. (a) Definitions. As used in this ordinance, the following words shall have the following meanings: Acquired Obligations means the Government Obligations acquired by the City under the terms of this ordinance and the Escrow Agreement to effect the defeasance and refunding of the Refunded Bonds. Beneficial Owner means any person that has or shares the power, directly or indirectly to make investment decisions concerning ownership of any Bonds (including persons holding Bonds through nominees, depositories or other intermediaries). Bond Purchase Contracts means the contracts for the purchase of the Bonds between the Underwriter and the City, each executed pursuant to Section 12 of this ordinance. Bond Register means the registration books showing the name, address and tax identification number of each Registered Owner of the Bonds, maintained pursuant to Section 149(a) of the Code. Bond Registrar means, initially, the fiscal agency of the State of Washington, for the purposes of registering and authenticating each series of Bonds, maintaining the Bond Register, effecting transfer of ownership of the Bonds and paying interest on and principal of the Bonds. Bond Year means each one -year period that ends on the date selected by the City. The first and last Bond Years may be short periods. If no day is selected by the City before the earlier of the final maturity date of a series of Bonds or the date that is five years after the date of issuance of a series of Bonds, Bond Years end on each anniversary of the date of issue and on the final maturity date of a series of Bonds. Bonds mean the 2014A Bonds and the 2014B Bonds. -3- Call Date means the date selected by the City and set forth in the Escrow Agreement for redemption of the Refunded Bonds which shall be on or after November 1, 2014. City means the City of Yakima, Washington, a municipal corporation duly organized and existing by virtue of the laws of the State of Washington. City Manager means the duly appointed City Manager of the City or the officer of the City authorized to succeed to the duties of such office. Code means the Internal Revenue Code of 1986, as amended, and shall include all applicable regulations and rulings relating thereto. Commission means the Securities and Exchange Commission. Council means the City; Council as the general legislative authority of the City, as the same shall be duly and regularly' constituted from time to time. Designated Representative means the Director of Finance and Budget of the City, or any successor to the functions of such office. Director of Finance and Budget means the duly appointed Director of Finance and Budget of the City or the officer' of the City authorized to succeed to the duties of such office. DTC means The Depository Trust Company, New York, New York, a limited purpose trust company organized under the laws of the State of New York, as depository for the Bonds pursuant to Section 4 of this ordinance. Escrow Agent means U.S. Bank National Association, Seattle, Washington. Escrow Agreement means the Escrow Deposit Agreement between the City and the Escrow Agent providing for the redemption and defeasance of the Refunded Bonds. Government Obligations mean those obligations now or hereafter defined as such in chapter 39.53 RCW. -4- Letter of Representations means the blanket issuer letter of representations from the City to DTC. MSRB means the Municipal Securities Rulemaking Board or any successors to its functions. Net Proceeds, when used with reference with the Bonds, mean the principal amount of a series of Bonds, plus accrued interest and original issue premium, if any, and less original issue discount, if any. New Money Project means the capital projects described in Section 2 of this ordinance. Private Person means any natural person engaged in a trade or business or any trust, estate, partnership, association, company or corporation. Private Person Use means the use of property in a trade or business by a Private Person if such use is other than as a member of the general public. Private Person Use includes ownership of the property by the Private Person as well as other arrangements that transfer to the Private Person the actual or beneficial use of the property (such as a lease, management or incentive payment contract or other special arrangement) in such a manner as to set the Private Person apart from the general public. Use of property as a member of the general public includes attendance by the Private Person at municipal meetings or business rental of property to the Private Person on a day -to -day basis if the rental paid by such Private Person is the same as the rental paid by any Private Person who desires to rent the property. Use of property by nonprofit community groups or community recreational groups is not treated as Private Person Use if such use is incidental to the governmental uses of property, the property is made available for such use by all such community groups on an equal basis and such community groups are charged only a de minimis fee to cover custodial expenses. -5- Project Fund means the "Project Fund" as described in Section 8 of this ordinance. Refunded Bonds mean all or a portion of the Refunding Candidates designated by the Designated Representative for refunding pursuant to this ordinance. Refunding Account means the account by that name established pursuant to Section 8 of this ordinance. Refunding Candidates mean the 2004 Bonds maturing on or after November 1, 2015. Registered Owner means the person named as the registered owner of a Bond in the Bond Register. For so long as the Bonds are held in book -entry only form, DTC shall be deemed to be the sole Registered Owner: Rule means the Commission's Rule 15c2 -12 under the Securities Exchange Act of 1934, as the same may be amended from time to time. 2004 Bond Ordinance means together, Ordinance No. 2004 -43 passed by the Council on July 20, 2004 and Resolution No. R- 2004 -124 adopted by the Council on August 10, 2004, authorizing the issuance of the 2'004 Bonds. 2004 Bonds mean the City of Yakima, Washington, Limited Tax General Obligation Refunding Bonds, 2004, with a dated date of September 1, 2004 pursuant to the 2004 Bond Ordinance as described in the recitals of this ordinance. 2014A Bond Fund means the "City of Yakima, Washington, General Obligation 2014A Bond Fund" and the accounts therein authorized to be created pursuant to Section 10 of this ordinance. 2014B Bond Fund means the "City of Yakima, Washington, General Obligation 2014B Bond Fund" and the accounts therein authorized to be created pursuant to Section 10 of this ordinance. -6- 2014A Bonds mean the City's Limited Tax General Obligation Bonds, 2014A authorized to be issued pursuant to this ordinance in the aggregate principal amount of not to exceed $15,000,000. 2014B Bonds mean the City's Limited Tax General Obligation Refunding Bonds, 2014B authorized to be issued pursuant to this ordinance in the aggregate principal amount of not to exceed $2,100,000. Underwriter means Piper Jaffray & Co., or its successors. (b) Interpretation. In this ordinance, unless the context otherwise requires: (1) The terms "hereby," "hereof," "hereto," "herein, "hereunder" and any similar terms, as used in this ordinance, refer to this ordinance as a whole and not to any particular article, section, subdivision or clause hereof, and the term "hereafter" shall mean after, and the term "heretofore" shall mean before, the date of this ordinance; (2) Words of the masculine gender shall mean and include correlative words of the feminine and neuter genders and words importing the singular number shall mean and include the plural number and vice versa; (3) Words importing persons shall include firms, associations, partnerships (including limited partnerships)', trusts, corporations and other legal entities, including public bodies, as well as natural persons; (4) Any headings preceding the text of the several articles and sections of this ordinance, and any table of contents or marginal notes appended to copies hereof, shall be solely for convenience of reference and shall not constitute a part of this ordinance, nor shall they affect its meaning, construction or effect; and -7- (5) All references herein to "articles," "sections" and other subdivisions or clauses are to the corresponding' articles, sections, subdivisions or clauses hereof. Section 2. Authorization of the New Money Project. The 2014A Bonds are being issued, in part, to finance the costs of certain street and road improvements in the City and other capital improvements approved by the Council (together, the "New Money Project "). Any remaining costs of the New Money Project shall be paid from other City funds legally available for such purposes. Section 3. Authorization of Bonds and Bond Details. (a) 2014A Bonds. For the purpose of paying the costs of the New Money Project and paying costs of issuance of the 2014A Bonds, the City shall issue and sell its limited tax general obligation bonds as set forth herein. The 2014A Bonds shall be general obligations of the City, shall be designated "City of Yakima, Washington, Limited Tax General Obligation Bonds, 2014A" with such designation as determined to be necessary by the Designated Representative; shall be issued in the aggregate principal amount of not to exceed $15,000,000; shall be dated as of their date of delivery; shall be fully registered as to both principal and interest; shall be in the denomination of $5,000 each, or any integral multiple thereof, provided that no 2014A Bond shall represent more than one maturity; shall be numbered separately in such manner and with any additional designation as the Bond Registrar deems necessary for purposes of identification; and shall bear interest from their date payable on the days and at the rates set forth in the applicable Bond Purchase Contract; and shall mature on the dates and in the principal amounts set forth in such Bond Purchase Contract and as approved by the Designated Representative pursuant to Section 12 of this ordinance. The -8- 2014A Bonds of any of the maturities may be combined and issued as term bonds, subject to mandatory redemption as provided in the applicable Bond Purchase Contract. (b) 2014B Bonds. For the purpose of refunding and defeasing the Refunded Bonds i and paying costs of issuance of the 2014B Bonds, the City shall issue and sell its limited tax general obligation bonds as set forth herein. The 2014B Bonds shall be general obligations of the City, shall be designated "City of Yakima, Washington, Limited Tax General Obligation Refunding Bonds, 2014B" with such designation as determined to be necessary by the Designated Representative; shall be issued in the aggregate principal amount of not to exceed $2,100,000; shall be dated as of their date of delivery; shall be fully registered as to both principal and interest; shall be in the denomination of $5,000 each, or any integral multiple thereof, provided that no 2014B Bond shall represent more than one maturity; shall be numbered separately in such manner and with any additional designation as the Bond Registrar deems necessary for purposes of identification; and shall bear interest from their date payable on the days and at the rates set forth in the applicable Bond Purchase Contract; and shall mature on the dates and in the principal amounts set forth in such Bond Purchase Contract and as approved by the Designated Representative pursuant to Section 12 of this ordinance. The 2014B Bonds of any of the maturities may be combined and issued as term bonds, subject to mandatory redemption as provided in the applicable Bond Purchase Contract. Section 4. Registration, Exchange and Payments. (a) Bond Registrar /Bond Register. The City hereby adopts the system of registration for the Bonds approved by the Washington State Finance Committee from time to time through the appointment of state fiscal agency or agencies pursuant to RCW 39.46.030 and chapter 43.80 -9- RCW. The state fiscal agency or agencies shall serve as Bond Registrar for the Bonds (except as otherwise provided herein) and shall maintain the Bond Register for the Bonds. So long as any Bonds remain outstanding, the Bond Registrar shall make all necessary provisions to permit the exchange or registration or transfer of Bonds at its principal corporate trust office. The Bond Registrar may be removed at any time at the option of the Director of Finance and Budget upon prior notice to the Bond Registrar and a successor Bond Registrar appointed by the Director of Finance and Budget. No resignation or removal of the Bond Registrar shall be effective until a successor shall have been appointed and until the successor Bond Registrar shall have accepted the duties of the Bond Registrar hereunder. 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 of the Bonds. (b) Registered Ownership. The City and the Bond Registrar, each in its discretion, may deem and treat the Registered Owner of each Bond of each series as the absolute owner thereof for all purposes (except as provided in Section 14 of this ordinance), 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 Bond may be transferred as herein provided. All such payments made as described in Section 4(h) hereof shall be valid and shall satisfy and discharge the liability of the City upon such Bond to the extent of the amount or amounts so paid. (c) DTC Acceptance/Letters of Representations. The Bonds initially shall be held in fully immobilized form by DTC acting as depository. To induce DTC to accept the Bonds as -10- eligible for deposit at DTC, the City has executed and delivered to DTC a Blanket Issuer 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 (or any successor depository) with respect to the 1 Bonds in respect of the accuracy of any records maintained by DTC (or any successor depository) or any DTC participant, the payment by DTC (or any successor depository) or any DTC participant of any amount in respect of the principal of or interest on Bonds, any notice Ihich 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 (or any successor depository)), or any consent given or other action taken by DTC (or any successor depository) 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 hereunder, and all references herein to the Registered Owners shall mean DTC (or any successor depository) or its nominee and shall not mean the owners of any beneficial interest in such Bonds. If any Bond shall be duly presented for payment and funds have not been duly provided by the City on such applicable ¶te, then interest shall continue to accrue thereafter on the unpaid principal thereof at the rate stated on such Bond until it is paid. (d) Use of Depository. (1) The Bonds shall be registered initially in the name of "Cede & Co. ", as nominee of DTC, with one Bond maturing on each of the maturity dates for the Bonds within a series in a denomination corresponding to the total principal therein designated to mature on such date. Registered ownership of such immobilized Bonds, or any portions thereof, may not thereafter be transferred except (A) to any successor of DTC or its nominee, provided that any -11- 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 Director of Finance and Budget pursuant to subsection (2) below or such substitute depository's successor; or (C) to any person as provided in subsection (4) below. (2) 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 Director of Finance and Budget to discontinue the system of book entry transfers through DTC or its successor (or any substitute depository or its successor), the Director of Finance and Budget may hereafter 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. (3) In the case of any transfer pursuant to clause (A) or (B) of subsection (1) above, the Bond Registrar shall, upon receipt of all outstanding Bonds of a series, together with a written request on behalf of the Director of Finance and Budget, issue a single new Bond for each maturity of a series then outstanding, registered in the name of such successor or such substitute depository, or their nominees, as the case may be, all as specified in such written request of the Director of Finance and Budget. (4) 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 Director of Finance and Budget determines that it is in the best interest of the beneficial owners of the Bonds that such owners be able to obtain such bonds in the form of Bond certificates, 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 Director of Finance and Budget shall deliver a written request to the Bond Registrar, together with a supply of -12- definitive Bonds, to issue Bonds as herein provided in any authorized denomination. Upon receipt by the Bond Registrar of all then outstanding Bonds of a series together with a written request on behalf of the Director of Finance and Budget to the Bond Registrar, new Bonds of such series shall be issued in the appropriate denominations and registered in the names of such persons as are requested in such written request. (e) Registration of Transfer of Ownership or Exchange; Change in Denominations. The transfer of any Bond may be registered and Bonds may be exchanged, but no transfer of any such 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 man er 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 therefor, a new Bond (or Bonds at the option of the new Registered Owner) of the same date, maturity, series, 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 cancelled Bond. Any Bond may be surrendered to the Bond Registrar and exchanged, without charge, an equal aggregate rinci al amount of g g� e S� q principal Bonds of the same date, maturity, series, and interest rate, in any authorized denomination. The Bond Registrar shall not be obligated to register the transfer or to exchange any Bond during the 15 days preceding any interest] payment or principal payment date any such Bond is to be redeemed. (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 -13- 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 right of the Registered Owners of 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. Interest on the Bonds shall be calculated on the basis of a year of 360 days and twelve 30 -day months. For so long as all Bonds are 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 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 appealing on the Bond Register on the fifteenth day of the month preceding the interest payment date, or upon the written request of a Registered Owner of more than $1,000,000 of Bonds (receiv by the Bond Registrar at least 15 days prior to the applicable payment date), such payment shall be made by the Bond Registrar by wire transfer to the account within the continental United States designated by the Registered Owner. 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 Prior to Maturity and Purchase of Bonds. (a) Mandatory Redemption of Term Bonds and Optional Redemption, if any. Each series of Bonds shall be subject Ito optional redemption on the dates, at the prices and under the -14- terms set forth in applicable Bond Purchase Contract approved by the Designated Representative pursuant to Section 12 of this ordinance. Each series of Bonds shall be subject to mandatory redemption to the extent, if any, set forth in the applicable Bond Purchase Contract and as approved by the Designated Representative pursuant to Section 12 of this ordinance. (b) Purchase of Bonds. The City reserves the right to purchase any of the Bonds offered to it at any time at a price deemed reasonable by the Director of Finance and Budget. (c) Selection of Bonds for Redemption. For as long as the Bonds are held in book -entry only form, the selection of particular Bonds within a series and maturity to be redeemed shall be made in accordance with the operational arrangements then in effect at DTC. If the Bonds are no longer held in uncertificated form, the selection of such Bonds to be redeemed and the surrender and reissuance thereof, as applicable, shall be made as provided in the following provisions of this subsection (c). If the City redeems at any one time fewer than all of the Bonds having the same maturity date within a series, the particular Bonds or portions of Bonds of such series and maturity to be redeemed shall be selected by lot (or in such manner determined by the Bond Registrar) in increments of $5,000. In the case of a Bond of a denomination greater than $5,000, the City and the Bond Registrar shall treat each Bond of such series and maturity as representing such number of separate Bonds each of the denomination of $5,000 as is obtained by dividing the actual principal amount of such Bond of such series and maturity by $5,000. In the event that only a portion of the principal sum of a Bond is redeemed, upon surrender of such Bond at the principal office of the Bond Registrar there shall be issued to the Registered Owner, without charge therefor, for the then unredeemed balance of the principal sum thereof, at the option of the Registered Owner, a Bond or Bonds of like maturity, series, and interest rate in any of the denominations herein authorized. -15- (d) Notice of Redemption. (1) Official Notice. For so long as the Bonds are held in uncertificated form, notice of redemption (which notice may be conditional on the receipt of sufficient funds for redemption or otherwise) shall be given in accordance with the operational arrangements of DTC as then in effect, and neither the City nor the Bond Registrar will provide any notice of redemption to any Beneficial Owners. Thereafter (if the Bonds are no longer held in uncertificated form), notice of redemption shall be given in the manner hereinafter provided. Unless waived by any owner of Bonds to be redeemed, official notice of any such redemption (which redemption may be conditioned by the Bond Registrar on the receipt of sufficient funds for redemption or otherwise) shall be given by the Bond Registrar on behalf of the City by mailing a copy of an official redemption notice by first class mail at least 20 days and not more than 60 days prior to the date fixed for redemption to the Registered Owner of the Bond or Bonds to be redeemed at the address shown on the Register or at such other address as is furnished in writing by such Registered Owner to the Bond Registrar. All official notices of redemption shall be dated and shall state: (A) thl redemption date, (B) the redemption price, (C) if ' fewer than all outstanding Bonds are to be redeemed, the identification by series and maturity (and, in the case of partial redemption, the respective principal amounts) of the Bonds to be redeemed, (D) that on the redemption date the redemption price will become due and payable upon each such Bond or portion thereof called for redemption, and that interest thereon shall cease to accrue from and after said date, -16- 1 i (E) any conditions to redemption, and (F) the place where such Bonds are to be surrendered for payment of the redemption price, which place of payment shall be the principal office of the Bond Registrar. On or prior to any redemption date, unless such redemption has been rescinded or revoked, the City shall deposit with the Bond Registrar an amount of money sufficient to pay the redemption price of all the Bonds or portions of Bonds which are to be redeemed on that date. The City retains the right to rescind any redemption notice and the related optional redemption of 1 Bonds by giving notice of resci ision to the affected registered owners at any time on or prior to the scheduled redemption date. Any notice of optional redemption that is so rescinded shall be of no effect, and the Bonds for which the notice of optional redemption has been rescinded shall remain outstanding. (2) Effect of Notice; Bonds Due. If an unconditional notice of redemption has been given as aforesaid, or if the conditions to redemption have been satisfied or waived, the Bonds or portions of Bonds so i to be redeemed shall, on the redemption date, become due and payable at the redemption pric i therein specified, and from and after such date such Bonds or portions of Bonds shall cease to bear interest. Upon surrender of such Bonds for redemption in accordance with said notice, such Bonds shall be paid by the Bond Registrar at the redemption price. Installments of interest due on or prior to the redemption date shall be payable as herein provided for payment of interest. All Bonds which have been redeemed shall be canceled and destroyed by the Bond Registrar' and shall not be reissued. (3) Additional Notice. In addition to the foregoing notice, further notice shall 1 be given by the City as set out below, but no defect in said further notice nor any failure to give all or any portion of such further notice shall in any manner defeat the effectiveness of a call for -17- i redemption if notice thereof is given as above prescribed. Each further notice of redemption given hereunder shall contain the information required above for an official notice of redemption plus (A) the CUSIP numbers of all Bonds being redeemed; (B) the date of issue of the Bonds as originally issued; (C) the rate of interest borne by each Bond being redeemed; (D) the series and maturity date of each Bond being redeemed; and (E) any other descriptive information needed to identify accurately the Bonds being redeemed. Each further notice of redemption may be sent at least 20 days before the redemption date to each party entitled to receive notice pursuant to Section 14 of this ordinance and to the Underwriter and with such additional information as the City shall deem appropriate, but such mailings shall not be a condition precedent to the redemption of such Bonds. (4) Amendment of Notice Provisions. The foregoing notice provisions of this Section 5 of this ordinance, including but not limited to the information to be included in redemption notices and the persons designated to receive notices, may be amended by additions, deletions and changes in order to maintain compliance with duly promulgated regulations and recommendations regarding notices of redemption of municipal securities. Section 6. Form of Bonds. The Bonds shall be in substantially the following form: UNITED STATES OF AMERICA NO. $ STATE OF WASHINGTON CITY OF YAKIMA LIMITED TAX GENERAL OBLIGATION [REFUNDING] BOND, 2014[A/B] INTEREST RATE: % MATURITY DATE: CUSIP NO.: REGISTERED OWNER: CEDE & CO. PRINCIPAL AMOUNT: -18- The City of Yakima, Washington (the "City "), hereby acknowledges itself to owe and for value received promises to pay ito the Registered Owner identified above, or registered assigns, on the Maturity Date identified above, the Principal Amount indicated above and to pay interest thereon from , 20 , or the most recent date to which interest has been paid or duly provided for until payment of this bond at the Interest Rate set forth above, payable on , and semiannually thereafter on the first days of each succeeding and . Both principal of and interest on this bond are payable in lawful money of the United States of America. The lfiscal agency of the State of Washington has been appointed by the City as the authenticating agent, paying agent and registrar for the bonds of this issue (the "Bond Registrar "). For so long as the bonds of this issue are held in fully immobilized form, payments of principal and interest thereon shall be made as provided in accordance with the operational arrangements of The Depository Trust Company ( "DTC ") referred to in the Blanket Issuer Letter of Representations i (the "Letter of Representations ") from the City to DTC. The bonds of this issue are issued under and in accordance with the provisions of the Constitution and applicable statutes of the State of Washington and Ordinance No. 2014 -009 duly passed by the City Council on May 6, 2014 (the "Bond Ordinance "). Capitalized terms used in this bond have the meanings given such terms in the Bond 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 or on behalf of the Bond Registrar or its duly designated agent. This bond is one of an authorized issue of bonds of like date, tenor, rate of interest and date of maturity, except as to number and amount in the aggregate principal amount of $ and is issued pursuant to the Bond Ordinance to provide funds to pay the cost of [certain street, road and other improvements in the City] [defeasing and refunding certain limited tax general obligation bonds of the City] and paying costs of issuance for the Bonds. The bonds of this issue are [not] subject to redemption prior to their stated dates of maturity. The City hereby irrevocably covenants and agrees with the owner of this bond that it will include in its annual budget and levy taxes annually, within and as a part of the tax levy permitted to the City without a vote of the electorate, upon all the property subject to taxation in amounts sufficient, together with other money legally available therefor, to pay the principal of and interest on this bond as the same shall become due. The full faith, credit and resources of the City are hereby irrevocably pledged for the annual levy and collection of such taxes and the prompt payment of such principal and interest. The bonds of this issue have not been designated by the City as "qualified tax - exempt obligations" for investment by financial institutions under Section 265(b) of the Code. 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 iii the Bond Ordinance. • -19- It is hereby certified that all acts, conditions and things required by the Constitution and statutes of the State of Washi�ngton 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 and the bonds of this issue 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 and the seal of the City imprinted, impressed or otherwise reproduced hereon as of this day of , 20 . CITY OF YAKIMA, WASHINGTON By /s/ manual or facsimile Mayor ATTEST: /s/ manual or facsimile City Clerk [SEAL] The Bond Registrar's Certificate of Authentication on the Bonds shall be in substantially the following form: CERTIFICATE OF AUTHENTICATION Date of Authentication: , 2014 This is one of the Limited Tax General Obligation [Refunding] Bonds, 20_ of the City of Yakima, Washington, dated , 20_. WASHINGTON STATE FISCAL AGENT, as Registrar By THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., as subcontractor to The Bank of New York Mellon, fiscal agent for the State of Washington By -20- Authorized Signer Section 7. Execution of Bonds. The Bonds of each series shall be executed on behalf of the City with the manual or facsimile signatures of the Mayor and City Clerk of the City and the seal of the City shall be impressed, imprinted or otherwise reproduced thereon. Only such Bonds as shall bear thereon a Certificate of Authentication in the form hereinbefore recited, 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 hereunder and are entitled to the benefits of this ordinance. In case either of the officers who shall have executed the Bonds shall cease to be an 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 be signed and attested on behalf of the City by such persons who at the date of the actual execution 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 8. Application of Bond Proceeds; Plan of Refunding. (a) 2014A Bonds. The City shall establish a fund designated the "Project Fund" into which the proceeds of the 2014A Bonds (other than accrued interest, if any) allocable to the New Money Project shall be deposited. Money on hand in the Project Fund shall be used to pay the costs of the New Money Project. The Director of Finance and Budget may invest money in the Project Fund in legal investments for City funds. Earnings on such investments shall accrue to -21- the benefit of the fund earning such interest. Any part of the proceeds of the 2014A Bonds remaining in the Project Fund after all costs of the New Money Project have been paid (including costs of issuance) may be used to finance other capital projects of the City approved by the Council or transferred to the 2014A Bond Fund to pay principal on the 2014A Bonds. (b) 2014B Bonds. For the purpose of realizing a debt service savings, the City proposes to apply a portion of the proceeds of the 2014B Bonds to defease and refund the Refunded Bonds as set forth herein. The Refunded Bonds shall include all or a portion of the Refunding Candidates as designated by the Designated Representative and set forth in the applicable Bond Purchase Contract. A portion of the proceeds of the 2014B Bonds shall be deposited with the Escrow Agent pursuant to the Escrow Agreement to be used immediately upon receipt thereof to defease the Refunded Bonds as authorized by the 2004 Bond Ordinance, as applicable, and to pay costs of issuance of the 2014B Bonds. The net proceeds deposited with the Escrow Agent shall be used to defease the Refunded Bonds and discharge the obligations thereon by maintaining the net proceeds in cash or by the purchase of certain Government Obligations (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 which, together with any necessary beginning cash balance, will provide for the payment of: (1) interest on the Refunded Bonds as such becomes due on and prior to the Call Date; (2) the redemption price (100% of the principal amount) of the Refunded Bonds on the Call Date. -22- 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. (c) Escrow Agent /Escrow Agreement. The City hereby appoints U.S. Bank National Association, Seattle Washington, as the Escrow Agent for the Refunded Bonds (the "Escrow Agent "). A beginning cash balance, if any, and the Acquired Obligations shall be deposited irrevocably with the Escrow Agent in an amount sufficient to defease the Refunded Bonds. The proceeds of the 2014B Bonds remaining after acquisition of the Acquired Obligations and provision for the necessary beginning cash balance shall be utilized to pay expenses of the acquisition and safekeeping of the Acquired Obligations and costs of issuance of the 2014B Bonds. In order to carry out the purposes of this section, the Director of Finance and Budget is authorized and directed to execute and deliver to the Escrow Agent, the Escrow Agreement. (d) Call for Redemption of Refunded Bonds. The City hereby irrevocably sets aside sufficient funds out of the purchase of Acquired Obligations from proceeds of the 2014B Bonds to make the payments described above. The City hereby irrevocably calls the Refunded Bonds for redemption on the Call Date in accordance with the provisions of the 2004 Bond Ordinance authorizing the redemption and retirement of the 2004 Bonds prior to their fixed maturities. Said defeasance and call for redemption of the Refunded Bonds shall be irrevocable after the issuance of the 2014B Bonds and delivery of the Acquired Obligations to the Escrow Agent. -23- I I The Escrow Agent is hereby authorized and directed to provide for the giving of notices 1 of the redemption of the Refunded Bonds in accordance with the applicable provisions of the 2004 Bond Ordinance. The costs of publication of such notices shall be an expense of the City. 1 The Escrow Agent is hereby authorized and directed to pay to the Director of Finance and Budget, or, at the direction of the Director of Finance and Budget, to the paying agent for the Refunded Bonds, sums sufficient to pay, when due, the payments specified in this section. All such sums shall be paid from the moneys and Acquired Obligations deposited with the Escrow Agent, and the income therefror and proceeds thereof. All such sums so paid to the Director of Finance and Budget shall be credited to the Refunding Account, which is hereby authorized to be created (the "Refunding Account "). All moneys and Acquired Obligations deposited with the Escrow Agent and any income therefrom shall be held, invested (but only at the direction of the Director of Finance and Budget) and applied in accordance with the provisions of this ordinance 1 and with the laws of the State of Washington for the benefit of the City and owners of the Refunded Bonds. 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 for the Refunded Bonds shall be paid when due. 1 Section 9. Tax Covenants. The City shall comply with the provisions of this section unless, in the written opinion of Bond Counsel to the City, such compliance is not required to maintain the exemption of the interest on each series of Bonds from federal income taxation. The City hereby covenants that it will not make any use of the proceeds of sale of the Bonds or any other funds of the City which may be deemed to be proceeds of such Bonds I pursuant to Section 148 of the Code and the applicable regulations thereunder that will cause the 1 1 -24- 1 Bonds to be "arbitrage bonds" within the meaning of such Section and regulations. The City will comply with the requirements cif Section 148 of the Code (or any successor provision thereof applicable to the Bonds) and the applicable regulations thereunder throughout the respective terms of the Bonds. The City further covenants that it will not take any action or permit any action to be taken that would cause the Bonds to constitute "private activity bonds" under Section 141 of the Code. Section 10. Bond Funds and Provision for Tax Levy Payments. (a) 2014A Bond Fund. The City hereby authorizes the creation of a fund to be used for the payment of debt service on the 2014A Bonds, designated as the "City of Yakima, Washington, General Obligation 2014A Bond Fund" (the "2014A Bond Fund "), and within such fund separate accounts as deter fined to be necessary by the Director of Finance and Budget, for the purpose of paying debt service on the 2014A Bonds. No later than the date each payment of principal of and/or interest on the 2014A Bonds matures or becomes due and payable, the City shall transmit sufficient funds, from the 2014A Bond Fund or from other legally available sources to the Bond Registrar for the payment of such principal and/or interest. Money in the 2014A Bond Fund not needed to pay the interest or principal next coming due may temporarily be deposited in legal investmentls for City funds. The City hereby irrevocably covenants and agrees for as long as any of the 2014A Bonds are outstanding and unpaid that each year it will include in its budget and levy an ad valorem tax upon all the property within the City subject to taxation in an amount that will be sufficient, together with all other revenues and money of the City legally available for such purposes, to pay the principal of and interest on the 2014A Bonds as the same shall become due. -25- 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 regular property tax levy permitted to cities, 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 2014A Bonds will be and is hereby irrevocably set aside, pledged and appropriated for the payment of the principal of and interest on the 2014A Bonds. The full faith, credit and resources of the City are hereby irrevocably pledged for the annual levy and collection of said taxes and for the prompt payment of the principal of and interest on the 2014A Bonds as the same shall become due. (b) 2014B Bond Fund. The City hereby authorizes the creation of a fund to be used for the payment of debt service on the 2014B Bonds, designated as the "City of Yakima, Washington, General Obligation 2014B Bond Fund" (the "2014B Bond Fund "), and within such fund separate accounts as determined to be necessary by the Director of Finance and Budget, for the purpose of paying debt service on the 2014B Bonds. No later than the date each payment of principal of and /or interest on the 2014B Bonds matures or becomes due and payable, the City shall transmit sufficient funds, from the 2014B Bond Fund or from other legally available sources to the Bond Registrar for the payment of such principal and /or interest. Money in the 2014B Bond Fund not needed to pay the interest or principal next coming due may temporarily be deposited in legal investment's for City funds. The City hereby irrevocably covenants and agrees for as long as any of the 2014B Bonds are outstanding and unpaid that each year it will include in its budget and levy an ad valorem tax upon all the property within the City subject to taxation in an amount that will be sufficient, -26- together with all other revenues and money of the City legally available for such purposes, to pay the principal of and interest on the 2014B 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 regular property tax levy permitted to cities, 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 2014B Bonds will be and is hereby irrevocably set aside, pledged and appropriated for the payment of the principal of and interest on the 2014B Bonds. The full faith, credit and resources of the City are hereby irrevocably pledged for the annual levy and collection of said taxes and for the prompt payment of the principal of and interest on the 2014B Bonds as the same shall become due. Section 11. Defeasance. In the event that the City, in order to effect the payment, retirement or redemption of any pond, sets aside in the 2014A Bond Fund or 2014B Bond Fund, as applicable, or in another special account, cash or noncallable Government Obligations, 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 2014A Bond Fund or 2014B Bond Fund, as applicable, 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, -27- premium, if any, and interest from the 2014A Bond Fund or 2014B Bond Fund, as applicable, or such special account, and such Bond shall be deemed to be not outstanding under this ordinance. The City shall give or cause to be given written notice of defeasance to the owners of all Bonds so provided for within 20 days of the defeasance and to each party entitled to receive notice in accordance with Section 14 of this ordinance. Section 12. Sale of Bonds. (a) Bond Sale. The Bonds of each series shall be sold at negotiated sale to the Underwriter pursuant to the terms of the Bond Purchase Contract executed in connection with the issuance of such series of Bonds. The Underwriter has advised the Council that market conditions are fluctuating and, as a result, the most favorable market conditions may occur on a day other than a regular meeting date of the Council. The Council has determined that it would be in the best interest of the City to delegate to the Designated Representative for a limited time the authority to approve the final interest rates, aggregate principal amount, and principal amounts of each maturity of each series of Bonds, and redemption rights for each series of Bonds. The Designated Representative is hereby authorized to approve the final interest rates, aggregate principal amount, principal maturities, and redemption rights for each series of Bonds in the manner provided hereafter so long as: (1) 2014A Bonds: (i) the aggregate principal amount of the 2014A Bonds does not exceed $15,000,000; (ii) the final maturity date for the 2014A Bonds is no later than June 1, 2025; -28- (iii) the aggregate purchase price for the 2014A Bonds shall not be less than 95% of the aggregate stated principal amount of the 2014A Bonds, excluding any original issue discount; (iv) the true interest cost for the 2014A Bonds (in the aggregate) does not exceed 4.00 %; and (v) the Bond Purchase Contract executed in connection with the 2014A Bonds is executed no later than December 31, 2014. (2) 2014B Bonds: (i) the aggregate principal amount of the 2014B Bonds does not exceed $2,100,000; (ii) the final maturity date for the 2014B Bonds is no later than November 1, 2020; (iii) the aggregate purchase price for the 2014B Bonds shall not be less than 95% of the aggregate stated principal amount of the 2014B Bonds, excluding any original issue discount; , (iv) the true interest cost for the 2014B Bonds (in the aggregate) does not exceed 2.75 %; (v) the 2014B Bonds are sold for a price that results in a minimum net present value debt service savings over the Refunded Bonds of 2.00 %; and (vi) the Bond Purchase Contract executed in connection with the 2014B Bonds is executed no later than December 31, 2014. Subject to the terms and conditions set forth in this section, the Designated Representative is hereby authorized to execute the :Bond Purchase Contracts. -29- Following the execution of each Bond Purchase Contract, the Designated Representative shall provide a report to the Council describing the final terms of the applicable series of Bonds approved pursuant to the authority delegated in this section. If a Bond Purchase Contract for a series of Bonds has not been executed within the time frame set forth above, the authorization for the issuance of such series of Bonds shall be rescinded, and such series of Bonds shall not be issued nor their sale approved unless such series of Bonds shall have been re- authorized by ordinance of the Council. The ordinance re- authorizing the issuance and sale of such Bonds may be in the form of a new ordinance repealing this ordinance in whole or in part or may be in the form of an amendatory ordinance approving a bond purchase contract or establishing terms and conditions for the authority delegated under this section. (b) Delivery of Bonds; Documentation. Upon the passage and approval of this ordinance, the proper officials, the City, including but not limited to the Designated Representative and the City Manager, are authorized and directed to undertake all action necessary for the prompt execution and delivery of each series of Bonds to the Underwriter and further to execute all closing certificates and documents required to effect the closing and delivery of each series of Bonds in accordance with the terms of the applicable Bond Purchase Contract. Section 13. Preliminary and Final Official Statements. The Designated Representative is hereby authorized to deem final the preliminary Official Statements relating to each series of Bonds for the purposes of the Rule. The Designated Representative is further authorized to approve for purposes of the Rule, on behalf of the City, the Official Statement relating to the issuance and sale of a series of Bonds and the distribution of such Official Statement pursuant thereto with such changes, if any, as may be deemed by her to be appropriate. -30- i Section 14. Undertaking to Provide Ongoing Disclosure. (a) Contract /Undertaking. This section constitutes the City's written undertaking for the benefit of the owners, including Beneficial Owners, of the Bonds as required by Section (b)(5) of the Rule. (b) Financial Statements /Operating Data. With respect to each series of Bonds, the City agrees to provide or cause to be provided to the MSRB, the following annual financial information and operating data for the prior fiscal year (commencing in 2014 for the fiscal year ended December 31, 2013): i 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 successor statute) and generally of the type included in the official statement for the Bonds under the heading (or similar heading) "General Fund Comparative Statement of Revenues, Expenditures and Changes in Fund Balance "; 2. The assess ed 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 the -31- MSRB. In lieu of providing such annual financial information and operating data, the City may cross - reference to other documents available to the public on the MSRB's interne website or filed with the Commission. 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 the MSRB. (c) Listed Events. The City agrees to provide or cause to be provided to the MSRB, in a timely manner not in excess of ten business days after the occurrence of the event, notice of the occurrence of any of the following events with respect to the Bonds: 1. Principal and interest payment delinquencies; 2. Non - payment related defaults, if material; 3. Unscheduled draws on debt service reserves reflecting financial difficultie 1; 4. Unscheduled draws on credit enhancements reflecting financial difficultie ; 5. Substitution of credit or liquidity providers, or their failure to perform; 6. Adverse tax opinions, the issuance by the Internal Revenue Service of proposed or final determinations of taxability, Notices of Proposed Issue (IRS Form 5701 -TEB) or other material notices or determinations with respect to the tax status of the Bonds, or other material events affecting the tax status of the Bonds; 7. Modifications to the rights of Bondholders, if material; -32- 1 8. Optional, j contingent or unscheduled Bond calls other than scheduled 1 sinking fund redemptions for which notice is given pursuant to Exchange Act Release 34- 23856, if material, and tender offers; 9. Defeasandes; 10. Release, substitution, or sale of property securing repayment of the Bonds, if material; 11. Rating changes; 1 12. Bankruptcy, insolvency, receivership or similar event of the City; 13. The consummation of a merger, consolidation, or acquisition involving the City or the sale of all or substantially all of the assets of the City, other than in the ordinary course of business, the entry into a definitive agreement to undertake such an action or the termination of a definitive agreement relating to any such actions, other than pursuant to its terms, if material; and 14. Appointment of a successor or additional trustee or the change of name of a trustee, if material. 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) Format for Filings with the MSRB. All notices, financial information and operating data required by this undertaking to be provided to the MSRB must be in an electronic format as prescribed by the MSRB. All documents provided to the MSRB pursuant to this undertaking must be accompanied by identifying information as prescribed by the MSRB. -33- (e) Notification Upon Failure to Provide Financial Data. The City agrees to provide or cause to be provided, in a timely manner, to the MSRB 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. (f) Termination/Modification. The City's obligations to provide annual financial information and notices of listed 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 the MSRB 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 on the presentation) of financial information or operating data being presented b principles, p ); p g gp by the City. In addition, if the amendment relates to the accounting principles to be followed in preparing financial statements, (A) notice of such change shall be given in the same manner as for a listed event under subsection (c), and (B) the annual report for the year in which the change I 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. -34- i (g) 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. (h) No Default. Except as otherwise disclosed in the City's official statement relating to the Bonds, the City is not and has not been in default in the performance of its obligations of any prior undertaking for ongoing disclosure with respect to its obligations. Section 15. Lost, Stolen or Destroyed Bonds. In case any Bond or Bonds shall be lost, stolen or destroyed, the Bond Registrar may execute and deliver a new Bond or Bonds of like date, series, number and tenor to the Registered Owner thereof upon the Registered Owner's paying the expenses and charges of the City and the Bond Registrar in connection therewith and upon his/her filing with the City evidence satisfactory to the City that such Bond was actually lost, stolen or destroyed and of his/her ownership thereof, and upon furnishing the City and/or the Bond Registrar with indemnity satisfactory to the City and the Bond Registrar. Section 16. Severability; Ratification. 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 Bonds. All acts taken pursuant to the authority granted in this ordinance but prior to its effective date are hereby ratified and confirmed. -35- I j Section 17. Effective Date. As provided in Article VI, Section 2 of the Yakima City Charter, this ordinance shall become effective 30 days after the date of its passage and publication. i ADOPTED by the City Council of the City of Yakima, Washington, at a regular meeting thereof held this 6th day of May, 2014. CITY OF YAKIMA, WASHINGTON Micah Cawl , May/r ATTEST /AUTHENTICATED:'' ='%' ,+ . mil � � `'e Sonya Cl . 1 Tee, City Clerk .4 ,.„ *= I a " Approved as to form: Pacifica Law Group LLP Filed by the City Clerk: May 6, 2014 Passed by the City Council: May; 6, 2014 Ordinance No. 2014 -009 Date of Publication: May 9, 2014 Effective Date: June 8, 2014 -36- CERTIFICATE I, the undersigned, City Clerk of the City of Yakima, Washington (the "City ") and keeper of the records of the City Council (the "City Council "), DO HEREBY CERTIFY: 1. That the attached Ordinance is a true and correct copy of Ordinance No. 2014 -009 of the City Council (the "Ordinance "), duly passed at a regular meeting thereof held on the 6th day of May, 2014. 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 City 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. N WITNESS WHEREOF, I have hereunto set my hand this 6th day of May, 2014. City Clerk BUSINESS OF THE CITY COUNCIL YAKIMA, WASHINGTON AGENDA STATEMENT �� Item No. For Meeting of: 5/6/2014 ITEM TITLE: Ordinance of the City of Yakima, Washington providing for the issuance and sale of Limited Tax General Obligation Bonds in the aggregate principal amount of not to exceed $15,000,000 and Limited Tax General Obligation refunding bonds in the aggregate principal amount of not to exceed $2,100,000 to provide funds to finance the costs of street, road and other improvements, to refund certain outstanding Limited Tax General Obligations of the City, and to finance costs of issuance of each series of bonds; providing for the disposition of the proceeds of sale; and delegating authority to approve the final terms of the bonds. (Second Reading) SUBMITTED BY: Cindy Epperson, Director of Finance & Budget Tara Lewis, Financial Services Manager SUMMARY EXPLANATION: Historically, the City has deferred many capital upgrades, including street improvements. In response to the poor average Paving Condition Index (PCI) score of 54 on a 100 point scale for the City's 802 lane miles of roads, Council placed a City Charter Amendment on the August, 2013 ballot which would require the City to invest at least $2 million annually on the restoration or reconstruction of Yakima streets. This measure passed with 72% of voters support. During budget preparation last fall, Council approved a strategic initiative to take advantage of excellent road rehabilitation pricing with an aggressive 2014 road rehabilitation plan to grind and overlay 92 lane miles of arterial streets and residential streets with an estimated cost of $16 million by issuing a 10 -year term bond. This plan will prevent having to reconstruct these critical streets at a much higher cost and will extend their useful life by 10 to 15 years. At the time, it was estimated that annual debt service on the $16 million would be about $2 million, which is included for debt service in the 2014 budget. In reviewing the timing of the bond issuance we recognized that we could accomplish the $16 million project by bonding to net only $14 million, and using the $2 million allocated for street improvement debt service in 2014 directly on the capital project, and begin bond repayment in 2015. The attached bond ordinance was prepared by our Bond Counsel, Pacifica Law Group and sets the parameters for the sale. It is customary to round up for the "not to exceed" amount of bonds, to provide a cushion for market conditions on the date of the sale. In our current circumstance the bond ordinance has $15 million as the maximum bonds that can be issued. The second piece of this ordinance is a unique chance to refund bonds issued in 2004 related to the Convention Center expansion. This bond issue has a "call" provision on or after November 1, 2014. Since we are wrapping this refund into a "new money" bond ordinance, the issuance costs are greatly reduced, which increases the estimated savings related to doing the refunding. The amount of bonds to be refunded is only $1.8 million, but we anticipate annual savings of as much as $20,000 for the 5 remaining years. The form and covenants of the proposed bonds are described in the bond ordinance for Council review and consideration. Other specific details - such as the actual interest rates, the final structure of the bonds, etc. will not be known until the bonds are placed in the market. Council's approval of this bond ordinance authorizes staff to set the terms and conditions of the bond sale, within the parameters set in the ordinance, as we continue through the bond issuing process. Because the underwriters (Piper Jaffray) require that Council accept or reject their purchase offer within 24 hours of when the offer is made, the bond ordinance includes a provision that Council delegates the approval of the purchase offer to the Director of Finance and Budget, as long as the terms are within the parameters set forth in the ordinance. Updated for the May 6 meeting: Next steps for the bond issue included preparation of the Preliminary Official Statement (attached) and an interview with Standard and Poors to update the City's credit rating, which is scheduled for the afternoon of May 1. The low bid was within budget at $16 million, so the bond issue as proposed should cover the project. The bond ordinance requires a second reading, which is on this May 6 agenda, and pricing is tentatively set for Monday, May 19. We can update Council on the results of the sale at the May 20 meeting. Resolution: Ordinance: X Other (Specify): Contract: Contract Term: Start Date: End Date: Item Budgeted: NA Amount: Funding Source /Fiscal Impact: Strategic Priority: Improve the Built Environment Insurance Required? No Mail to: Phone: APPROVED FOR SUBMITTAL: � <• _,.. -. - City Manager RECOMMENDATION: Staff respectfully requests Council pass the ordinance upon its second reading on May 6. ATTACHMENTS: Description Upload Date Type ❑ 2014 Street Bond Ordinance 4/7/2014 Ordinance ❑ Preliminary Official Statement 4/30/2014 Exhibit