HomeMy WebLinkAbout3377 Ordinance ORDINANCE NO. 3377
AN ORDINANCE OF THE CITY OF PASCO, WASHINGTON,
RELATING TO CONTRACTING INDEBTEDNESS; PROVIDING FOR
THE ISSUANCE, SPECIFYING THE MATURITIES, INTEREST RATES,
TERMS AND COVENANTS OF $1,700,000 PAR VALUE OF
UNLIMITED TAX GENERAL OBLIGATION BONDS, 1999,
AUTHORIZED BY THE QUALIFIED VOTERS OF THE CITY AT A
SPECIAL ELECTION HELD THEREIN PURSUANT TO ORDINANCE
NO. 3280; ESTABLISHING A BOND REDEMPTION FUND;
PROVIDING FOR BOND INSURANCE; AND APPROVING THE SALE
AND PROVIDING FOR THE DELIVERY OF THE BONDS TO BANC
OF AMERICA SECURITIES LLC OF SEATTLE, WASHINGTON.
THE CITY COUNCIL OF THE CITY OF PASCO, WASHINGTON, DO
ORDAIN AS FOLLOWS:
Section 1. Authorization of Bonds Pursuant to Election. The City of
Pasco, Washington (the "City"), shall issue and sell the total $1,700,000 par
value of negotiable general obligation bonds authorized by the qualified voters
of the City at a special election held on March 10, 1998, pursuant to Ordinance
No. 3280, passed and approved January 20, 1998, for the purpose of paying all
or a part of the cost of renovating the Pasco Library (the "Library Project") and
to relocate the Pasco City Fire Station No. 1, by acquiring, constructing and
equipping a new fire station (the "Fire Station Project") (collectively, the
"Project") and to pay the Project portion of the Limited Tax General Obligation
Bond Anticipation Notes, 1999, dated May 25, 1999 (the "Notes").
Section 2. Description of Bonds. The bonds shall be called Unlimited
Tax General Obligation Bonds, 1999, of the City (the "Bonds"); shall be in the
aggregate principal amount of $1,700,000; shall be dated October 1, 1999;
shall be in the denomination of$5,000 or any integral multiple thereof within a
single maturity; shall be numbered separately in the manner and with any
additional designation as the Bond Registrar (collectively, the fiscal agencies of
the State of Washington) deems necessary for purposes of identification; shall
bear interest (computed on the basis of a 360-day year of twelve 30-day
months) payable semiannually on each June 1 and December 1, commencing
June 1, 2000, to the maturity or earlier redemption of the Bonds; and shall
mature on December 1 in years and amounts and bear interest at the rates per
annum as follows:
Maturity Interest
Years Amounts Rates
2002 $35,000 5.250%
2003 65,000 5.150
2004 100,000 5.150
2005 100,000 5.150
2006 100,000 5.200
2007 100,000 5.250
2008 100,000 5.300
2009 100,000 5.400
2010 100,000 5.200
2011 100,000 5.250
2012 100,000 5.300
2013 100,000 5.350
2014 100,000 5.400
2015 100,000 5.450
2016 100,000 5.500
2019 300,000 5.500
The life of the Project to be acquired with the proceeds of the Bonds
exceeds the term of the Bonds.
Section 3. Registration and Transfer of Bonds. The Bonds shall be
issued only in registered form as to both principal and interest and shall be
recorded on books or records maintained by the Bond Registrar (the "Bond
Register"). The Bond Register shall contain the name and mailing address of
the owner of each Bond and the principal amount and number of each of the
Bonds held by each owner.
Bonds surrendered to the Bond Registrar may be exchanged for Bonds in
any authorized denomination of an equal aggregate principal amount and of
the same interest rate and maturity. Bonds may be transferred only if
endorsed in the manner provided thereon and surrendered to the Bond
Registrar. Any exchange or transfer shall be without cost to the owner or
transferee. The Bond Registrar shall not be obligated to exchange or transfer
any Bond during the 15 days preceding any principal payment or redemption
date.
The Bonds initially shall be registered in the name of Cede 8a Co., as the
nominee of The Depository Trust Company, New York, New York ("DTC"). The
Bonds so registered shall be held in fully immobilized form by DTC as
depository in accordance with the provisions of a Blanket Issuer Letter of
Representations dated August 31, 1998, between the City and DTC (the "Letter
of Representations. Neither the City nor the Bond Registrar shall have any
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responsibility or obligation to DTC participants or the persons for y
act as nominees with respect to the Bonds regarding accuracy of any records
maintained by DTC or DTC participants of any amount in respect of principal
of or interest on the Bonds, or any notice that is permitted or required to be
given to registered owners hereunder (except such notice as is required to be
given by the Bond Registrar to DTC).
For so long as any Bonds are held in fully immobilized form, DTC or its
successor depository shall be deemed to be the registered owner for all
purposes hereunder and all references to registered owners, bondowners,
bondholders or the like shall mean DTC or its nominees and shall not mean
the owners of any beneficial interests in the Bonds. Registered ownership of
such Bonds, or any portions thereof, may not thereafter be transferred except:
(i) to any successor of DTC or its nominee, if that successor shall be qualified
under any applicable laws to provide the services proposed to be provided by it;
(ii) to any substitute depository appointed by the City or such substitute
depository's successor; or (iii) to any person if the Bonds are no longer held in
immobilized form.
Upon the resignation of DTC or its successor (or any substitute
depository or its successor) from its functions as depository, or a determination
by the City that it no longer wishes to continue the system of book entry
transfers through DTC or its successor (or any substitute depository or its
successor), the City may appoint a substitute depository. Any such substitute
depository shall be qualified under any applicable laws to provide the services
proposed to be provided by it.
If (i) DTC or its successor (or substitute depository or its successor)
resigns from its functions as depository, and no substitute depository can be
obtained, or (ii) the City determines that the Bonds are to be in certificited
form, the ownership of Bonds may be transferred to any person as provided
herein and the Bonds no longer shall be held in fully immobilized form.
Section 4. Payment of Bonds. 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 paid by checks or drafts of the Bond Registrar
mailed on the interest payment date to the registered owners at the addresses
appearing on the Bond Register on the 15th day of the month preceding the
interest payment date. Principal of the Bonds shall be payable upon
presentation and surrender of the Bonds by the registered owners at either of
the principal offices of the Bond Registrar at the option of the owners.
Notwithstanding the foregoing, as long as the Bonds are registered in the name
of DTC or its nominee, payment of principal of and interest on the Bonds shall
be made in the manner set forth in the Letter of Representations (as it may be
changed).
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Section 5. Redemption Provisions and Open Market Purchase of Bonds.
Bonds maturing in the years 2000 through 2009, inclusive, shall be issued
without the right or option of the City to redeem those Bonds prior to their
stated maturity dates. The City reserves the right and option to redeem the
Bonds maturing on or after December 1, 2010, prior to their stated maturity
dates at any time on or after December 1, 2009, as a whole or in part (within
one or more maturities selected by the City and randomly within a maturity in
such manner as the Bond Registrar shall determine), at par plus accrued
interest to the date fixed for redemption.
Bonds maturing in 2019 are Term Bonds and, if not redeemed under the
optional redemption provisions set forth above or purchased in the open
market under the provisions set forth below, shall be called for redemption by
lot (in such manner as the Bond Registrar shall determine) at par plus accrued
interest on December 1 in years and amounts as follows:
Mandatory Mandatory
Redemption Redemption
Years Amounts
2017 $100,000
2018 100,000
2019 100,000
If the City shall redeem Term Bonds under the optional redemption
provisions set forth above or purchase Term Bonds in the open market as set
forth below, the par amount of the Term Bonds so redeemed or purchased
(irrespective of their actual redemption or purchase prices) shall be credited
against one or more scheduled mandatory redemption amounts for those Term
Bonds (as allocated by the City) beginning not earlier than 60 days after the date
of the optional redemption or purchase, and the City shall promptly notify the
Bond Registrar in writing of the manner in which the credit for the Term Bonds
so redeemed or purchased has been allocated.
Portions of the principal amount of any Bond, in installments of $5,000
or any integral multiple thereof, may be redeemed. If less than all of the
principal amount of any Bond is redeemed, upon surrender of that Bond at
either of the principal offices of the Bond Registrar, there shall be issued to the
registered owner, without charge therefor, a new Bond (or Bonds, at the option
of the registered owner) of the same maturity and interest rate in any of the
denominations authorized by this ordinance in the aggregate principal amount
remaining unredeemed.
The City further reserves the right and option to purchase any or all of
the Bonds in the open market at any time at any price acceptable to the City
plus accrued interest to the date of purchase.
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All Bonds purchased or redeemed under this section shall be cancelled.
Notwithstanding the foregoing, for so long as the Bonds are registered in
the name of Cede & Co., as nominee of DTC, selection of Bonds within a
maturity for redemption shall be in accordance with the Letter of
Representations (as it may be changed).
Section 6. Notice of Redemption. The City shall cause notice of any
intended redemption of Bonds to be given not less than 30 nor more than
60 days prior to the date fixed for redemption by first-class mail, postage
prepaid, to the registered owner of any Bond to be redeemed at the address
appearing on the Bond Register at the time the Bond Registrar prepares the
notice, and the requirements of this sentence shall be deemed to have been
fulfilled when notice has been mailed as so provided, whether or not it is
actually received by the owner of any Bond. Interest on Bonds called for
redemption shall cease to accrue on the date fixed for redemption unless the
Bond or Bonds called are not redeemed when presented pursuant to the call.
In addition, the redemption notice shall be mailed within the same period,
postage prepaid, to Moody's Investors Service, Inc., and Standard & Poor's at
their offices in New York, New York, or their successors, to the Bond Insurer at
its principal office in Armonk, New York, to Banc of America Securities LLC, at
its principal office in Seattle, Washington, or its successor, or its successor,
and to such other persons and with such additional information as the City
Clerk shall determine, but these additional mailings shall not be a condition
precedent to the redemption of Bonds. Notwithstanding the foregoing, for so
long as the Bonds are registered in the name of Cede 8s Co., as nominee of
DTC, notice of redemption shall be given in accordance with the Letter of
Representations (as it may be changed).
Section 7. Failure to Redeem Bonds. If any Bond is not redeemed when
properly presented at its maturity or call date, the City shall be obligated to pay
interest on that Bond at the same rate provided in the Bond from and after its
maturity or call date until that Bond, both principal and interest, is paid in full
or until sufficient money for its payment in full is on deposit in the bond
redemption fund hereinafter created and the Bond has been called for payment
by giving notice of that call to the registered owner thereof.
Section 8. Pledge of Taxes. For as long as any of the Bonds are
outstanding, the City irrevocably pledges to levy taxes annually without
limitation as to rate or amount on all of the taxable property within the City in
an amount sufficient, together with other money legally available and to be
used therefor, to pay when due the principal of and interest on the Bonds, and
the full faith, credit and resources of the City are pledged irrevocably for the
annual levy and collection of those taxes and the prompt payment of that
principal and interest.
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Section 9. Form and Execution of Bonds. The Bonds shall be printed,
lithographed or typed on good bond paper in a form consistent with the
provisions of this ordinance and state law, shall be signed by the Mayor and
City Clerk, either or both of whose signatures may be manual or in facsimile,
and the seal of the City or a facsimile reproduction thereof shall be impressed
or printed thereon.
Only Bonds bearing a Certificate of Authentication in the following form,
manually signed by the Bond Registrar, shall be valid or obligatory for any
purpose or entitled to the benefits of this ordinance:
CERTIFICATE OF AUTHENTICATION
This Bond is one of the fully registered City of Pasco,
Washington, Unlimited Tax General Obligation Bonds, 1999,
described in the Bond Ordinance.
WASHINGTON STATE FISCAL AGENCY
Bond Registrar
By
Authorized Signer
The authorized signing of a Certificate of Authentication shall be conclusive
evidence that the Bond so authenticated has been duly executed, authenticated
and delivered and is entitled to the benefits of this ordinance.
If any officer whose facsimile signature appears on the Bonds ceases to
be an officer of the City authorized to sign bonds before the Bonds bearing his
or her facsimile signature are authenticated or delivered by the Bond Registrar
or issued by the City, those Bonds nevertheless may be authenticated, issued
and delivered and, when authenticated, issued and delivered, shall be as
binding on the City as though that person had continued to be an officer of the
City authorized to sign bonds. Any Bond also may be signed on behalf of the
City by any person who, on the actual date of signing of the Bond, is an officer
of the City authorized to sign bonds, although he or she did not hold the
required office on the date of issuance of the Bonds.
Section 10. Bond Re ism. The Bond Registrar shall keep, or cause to
be kept, at its principal corporate trust office, sufficient books for the
registration and transfer of the Bonds, which shall be open to inspection by the
City at all times. The Bond Registrar is authorized, on behalf of the City, to
authenticate and deliver Bonds transferred or exchanged in accordance with
the provisions of the Bonds and this ordinance, to serve as the City's paying
agent for the Bonds and to carry out all of the Bond Registrar's powers and
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duties under this ordinance and City Ordinance No. 2838 establishing a
system of registration for the City's bonds and obligations.
The Bond Registrar shall be responsible for its representations contained
in the Bond Registrar's Certificate of Authentication on the Bonds. The Bond
Registrar may become the owner of Bonds with the same rights it would have if
it were not the Bond Registrar and, to the extent permitted by law, may act as
depository for and permit any of its officers or directors to act as members of,
or in any other capacity with respect to, any committee formed to protect the
rights of Bond owners.
Section 11. Preservation of Tax Exemption for Interest on Bonds. The
City covenants that it will take all actions necessary to prevent interest on the
Bonds from being included in gross income for federal income tax purposes,
and it will neither take any action nor make or permit any use of proceeds of
the Bonds or other funds of the City treated as proceeds of the Bonds at any
time during the term of the Bonds, which will cause interest on the Bonds to be
included in gross income for federal income tax purposes. [The City certifies
that it has not been notified of any listing or proposed listing by the Internal
Revenue Service to the effect that it is a bond issuer whose arbitrage
certification may not be relied upon.]
Section 12. Desi nation of Bonds as "Qualified Tax-Exempt Obligations."
The City has determined and certifies that (a) the Bonds are not "private
activity bonds" within the meaning of Section 141 of the Code; (b) the
reasonably anticipated amount of tax-exempt obligations (other than private
activity bonds and other obligations not required to be included in such
calculation) which the City and any entity subordinate to the City (including
any entity which the City controls, which derives its authority to issue
tax-exempt obligations from the City or which issues tax-exempt obligations on
behalf of the City) will issue during the calendar year in which the Bonds are
issued will not exceed $10,000,000; and (c) the amount of tax-exempt
obligations, including the Bonds, designated by the City as "qualified
tax-exempt obligations" for the purposes of Section 265(b)(3) of the Code during
the calendar year in which the Bonds are issued does not exceed $10,000,000.
The City designates the Bonds as "qualified tax-exempt obligations" for the
purposes of Section 265(b)(3) of the Code.
Section 13. Refunding or Defeasance of the Bonds. The City may issue
refunding bonds pursuant to the laws of the State of Washington or use money
available from any other lawful source to pay when due the principal of and
interest on the Bonds, or any portion thereof included in a refunding or
defeasance plan, and to redeem and retire, refund or defease all such then-
outstanding Bonds (hereinafter collectively called the "defeased Bonds") and to
pay the costs of the refunding or defeasance. If money and/or "government
obligations" (as defined in chapter 39.53 RCW, as now or hereafter amended)
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maturing at a time or times and bearing interest in amounts (together with
money, if necessary) sufficient to redeem and retire, refund or defease the
defeased Bonds in accordance with their terms are set aside in a special trust
fund or escrow account irrevocably pledged to that redemption, retirement or
defeasance of defeased Bonds (hereinafter called the "trust account"), then all
right and interest of the owners of the defeased Bonds in the covenants of this
ordinance and in the funds and accounts obligated to the payment of the
defeased Bonds shall cease and become void. The owners of defeased Bonds
shall have the right to receive payment of the principal of and interest on the
defeased Bonds from the trust account. The City shall include in the refunding
or defeasance plan such provisions as the City deems necessary for the random
selection of any defeased Bonds that constitute less than all of a particular
maturity of the Bonds, for notice of the defeasance to be given to the owners of
the defeased Bonds and to such other persons as the City shall determine, and
for any required replacement of Bond certificates for defeased Bonds. The
defeased Bonds shall be deemed no longer outstanding, and the City may apply
any money in any other fund or account established for the payment or
redemption of the defeased Bonds to any lawful purposes as it shall determine.
If the Bonds are registered in the name of DTC or its nominee, notice of
any defeasance of Bonds shall be given to DTC in the manner prescribed in the
Letter of Representations for notices of redemption of Bonds.
Notwithstanding anything in this section to the contrary, if the principal of
and/or interest due on the Bonds is paid by the Bond Insurer pursuant to the
Municipal Bond Insurance Policy, the Bonds shall be treated as remaining
outstanding for all purposes and shall not be considered paid by the City, and
the covenants, agreements and other obligations of the City to the registered
owners of the Bonds shall continue to exist and run to the benefit of the Bond
Insurer, and the Bond Insurer shall be subrogated to the rights of the registered
owners.
Section 14. Bond Fund and De osit of Bond Proceeds. There is created
and established in the office of the Finance Director a special fund designated
as the Unlimited Tax General Obligation Bond Fund, 1999 (the "Bond Fund").
Accrued interest on the Bonds, if any, received from the sale and delivery of the
Bonds shall be paid into the Bond Fund. All taxes collected for and allocated
to the payment of the principal of and interest on the Bonds shall be deposited
in the Bond Fund.
After payment of the cost of issuance of the Bonds, the remaining
principal proceeds received from the sale and delivery of the Bonds shall be
paid into the Limited Tax General Obligation Note Fund, 1999, (the "Note
Fund") and used for the purposes specified in Section 1 of this ordinance.
Until needed to repay the Project portion of the Notes and costs of issuance of
the Bonds, the City may invest principal proceeds temporarily in any legal
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investment, and the investment earnings may be retained in the Note Fund and
be spent for the purposes of that fund except that earnings subject to a federal
tax or rebate requirement may be withdrawn from the Note Fund and used for
those tax or rebate purposes.
Section 15. Call for Redemption of the Proiect Portion of the Notes (the
"Refunded Notes"). The City calls for redemption on December 1, 1999, the
Project portion of the Refunded Notes at par plus accrued interest. Such call
for redemption shall be irrevocable after the delivery of the Bonds to the initial
purchaser thereof. The date on which the Refunded Notes are herein called for
redemption is the first date on which those notes may be called.
The proper City officials are authorized and directed to give or cause to
be given such notices as required, at the times and in the manner required,
pursuant to Ordinance No. 3360 in order to effect the redemption prior to their
maturity of the Refunded Notes.
Section 16. Approval of Bond Purchase Contract. Banc of America
Securities LLC of Seattle, Washington, has presented a purchase contract (the
"Bond Purchase Contract") to the City offering to purchase the Bonds under
the terms and conditions provided in the Bond Purchase Contract, which
written Bond Purchase Contract is on file with the City Clerk and is
incorporated herein by this reference. The City Council finds that entering into
the Bond Purchase Contract is in the City's best interest and therefore accepts
the offer contained therein and authorizes its execution by City officials.
The Bonds will be printed at City expense and will be delivered to the
purchaser in accordance with the Bond Purchase Contract, with the approving
legal opinion of Foster Pepper & Shefelman PLLC, municipal bond counsel of
Seattle, Washington, regarding the Bonds. Bond counsel shall not be required
to review and shall express no opinion concerning the completeness or
accuracy of any official statement, offering circular or other sales or disclosure
material issued or used in connection with the Bonds, and bond counsel's
opinion shall so state.
The proper City officials are authorized and directed to do everything
necessary for the prompt delivery of the Bonds to the purchaser and for the
proper application and use of the proceeds of the sale thereof.
Section 17. Preliminary Official Statement Deemed Final. The City
Council has been provided with copies of a preliminary official statement dated
September 9, 1999 (the "Preliminary Official Statement"), prepared in
connection with the sale of the Bonds. For the sole purpose of the Bond
purchaser's compliance with Securities and Exchange Commission Rule 15c2-
12(b)(1), the City "deems final" that Preliminary Official Statement as of its
date, except for the omission of information as to offering prices, interest rates,
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f.
selling compensation, aggregate principal amount, principal amount per
maturity, maturity dates, options of redemption, delivery dates, ratings and
other terms of the Bonds dependent on such matters.
Section 18. Undertaking to Provide Con_tinuina Disclosure. To meet the
requirements of United States Securities and Exchange Commission ("SEC")
Rule 15c2-12(b)(5) (the "Rule"), as applicable to a participating underwriter for
the Bonds, the City makes the following written undertaking (the
"Undertaking") for the benefit of holders of the Bonds:
(a) Undertaking to Provide Annual Financial Information
and Notice of Material Events. The City undertakes to provide or
cause to be provided, either directly or through a designated agent:
(i) To each nationally recognized municipal
securities information repository designated by the SEC in
accordance with the Rule ("NRMSIR") and to a state
information depository, if any, established in the State of
Washington (the "SID") annual financial information and
operating data of the type included in the final official
statement for the Bonds and described in subsection (b) of
this section ("annual financial information");
(ii) To each NRMSIR or the Municipal Securities
Rulemaking Board ("MSRB"), and to the SID, timely notice of
the occurrence of any of the following events with respect to
the Bonds, if material: (1) principal and interest payment
delinquencies; (2) non-payment related defaults; (3)
unscheduled draws on debt service reserves reflecting
financial difficulties; (4) unscheduled draws on credit
enhancements reflecting financial difficulties; (5) substitution
of credit or liquidity providers, or their failure to perform; (6)
adverse tax opinions or events affecting the tax-exempt status
of the Bonds; (7) modifications to rights of holders of the
Bonds; (8) Bond calls (other than scheduled mandatory
redemptions of Term Bonds); (9) defeasances; (10) release,
substitution, or sale of property securing repayment of the
Bonds; and (11) rating changes; and
(iii) To each NRMSIR or to the MSRB, and to the SID,
timely notice of a failure by the City to provide required annual
financial information on or before the date specified in
subsection (b) of this section.
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(b) Type of Annual Financial Information Undertaken to be
Provided. The annual financial information that the City undertakes
to provide in subsection (a) of this section:
(i) Shall consist of (1) annual financial statements
prepared (except as noted in the financial statements) in
accordance with applicable generally accepted accounting
principles applied to governmental units, as such principles
may be changed from time to time, and in conformity with
state law and regulations pertaining to cities, which
statements shall not be audited, except, however, that if and
when audited financial statements are otherwise prepared and
available to the City they will be provided; (2)a statement of
authorized, issued and outstanding general obligation debt of
the City; (3) the assessed value of property within the City
subject to ad valorem taxation; and (4) ad valorem tax levy
rates and amounts, and amounts collected;
(ii) Shall be provided to each NRMSIR and the SID,
not later than the last day of the ninth month after the end of
each fiscal year of the City (currently, a fiscal year ending
December 31), as such fiscal year may be changed as required
or permitted by State law, commencing with the City's fiscal
year ending December 31, 1999; and
(iii) May be provided in a single or multiple
documents, and may be incorporated by reference to other
documents that have been filed with each NRMSIR and the
SID, or, if the document incorporated by reference is a "final
official statement" with respect to other obligations of the City,
that has been filed with the MSRB.
(c) Amendment of Undertaking. The Undertaking is
subject to amendment after the primary offering of the Bonds
without the consent of any holder of any Bond, or of any broker,
dealer, municipal securities dealer, participating underwriter, rating
agency, NRMSIR, the SID or the MSRB, under the circumstances
and in the manner permitted by the Rule.
The City will give notice to each NRMSIR or the MSRB, and the
SID, of the substance (or provide a copy) of any amendment to the
Undertaking and a brief statement of the reasons for the
amendment. If the amendment changes the type of annual financial
information to be provided, the annual financial information
containing the amended financial information will include a
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narrative explanation of the effect of that change on the type of
information to be provided.
(d) Beneficiaries. The Undertaking evidenced by this
section shall inure to the benefit of the City and any holder of Bonds,
and shall not inure to the benefit of or create any rights in any other
person.
(e) Termination of Undertaking. The City's obligations
under this Undertaking shall terminate upon the legal defeasance of
all of the Bonds. In addition, the City's obligations under this
Undertaking shall terminate if those provisions of the Rule which
require the City to comply with this Undertaking become legally
inapplicable in respect of the Bonds for any reason, as confirmed by
an opinion of nationally recognized bond counsel or other counsel
familiar with federal securities laws delivered to the City, and the
City provides timely notice of such termination to each NRMSIR or
the MSRB and the SID.
{f)
Remedy for Failure to Comply with Undertakin . As
soon as practicable after the City learns of any failure to comply with
the Undertaking, the City will proceed with due diligence to cause
such noncompliance to be corrected. No failure by the City or other
obligated person to comply with the Undertaking shall constitute a
default in respect of the Bonds. The sole remedy of any holder of a
Bond shall be to take such actions as that holder deems necessary,
including seeking an order of specific performance from an
appropriate court, to compel the City or other obligated person to
comply with the Undertaking.
(g) Designation of Official Responsible_ to Administer
Undertaking. The Finance Services Manager of the City (or such
other officer of the City who may in the future perform the duties of
that office) or his or her designee is authorized and directed in his or
her discretion to take such further actions as may be necessary,
appropriate or convenient to carry out the Undertaking of the City in
respect of the Bonds set forth in this section and in accordance with
the Rule, including, without limitation, the following actions:
(i) Preparing and filing the annual financial
information undertaken to be provided;
(ii) Determining whether any event specified in
subsection (a) has occurred, assessing its materiality with
respect to the Bonds, and, if material, preparing and
disseminating notice of its occurrence;
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(iii) Determining whether any person other than the
City is an "obligated person" within the meaning of the Rule
with respect to the Bonds, and obtaining from such person an
undertaking to provide any annual financial information and
notice of material events for that person in accordance with
the Rule;
(iv) Selecting, engaging and compensating designated
agents and consultants, including but not limited to financial
advisors and legal counsel, to assist and advise the City in
carrying out the Undertaking; and
(v) Effecting any necessary amendment of the
Undertaking.
Section 19. Bond Insurance. The City Council finds that it is in the
City's best interest to purchase, and that a savings will result from purchasing,
the Municipal Bond Insurance Policy for the Bonds. The City shall purchase
from the Bond Insurer the Municipal Bond Insurance Policy insuring the
prompt payment of the principal of and interest on the Bonds and agrees to the
conditions for obtaining that policy, including the payment of the premium
therefor and the following provisions entitled "Payments under the Policy"
required by the Bond Insurer to be included in this ordinance:
"A. In the event that, on the second Business Day, and
again on the Business Day, prior to the payment date on the
Obligations, the Paying Agent [the Bond Registrar] has not received
sufficient moneys to pay all principal of and interest on the
Obligations due on the second following or following, as the case
may be, Business Day, the Paying Agent shall immediately notify the
Insurer or its designee on the same Business Day by telephone or
telegraph, confirmed in writing by registered or certified mail, of the
amount of the deficiency.
"B. If the deficiency is made up in whole or in part prior to
or on the payment date, the Paying Agent shall so notify the Insurer
or its designee.
"C. In addition, if the Paying Agent has notice that any
Bondholder has been required to disgorge payments of principal or
interest on the Obligation to a trustee in Bankruptcy or creditors or
others pursuant to a final judgment by a court of competent
jurisdiction that such payment constitutes a voidable preference to
such Bondholder within the meaning of any applicable bankruptcy
laws, then the Paying Agent shall notify the Insurer or its designee of
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such fact by telephone or telegraphic notice, confirmed in writing by
registered or certified mail.
"D. The Paying Agent is hereby irrevocably designated,
appointed, directed and authorized to act as attorney-in-fact for
Holders of the Obligations as follows:
"1. If and to the extent there is a deficiency in
amounts required to pay interest on the Obligations, the
Paying Agent shall (a) execute and deliver to State Street Bank
and Trust Company, N.A., or its successors under the Policy
(the "Insurance Paying Agent"), in form satisfactory to the
Insurance Paying Agent, an instrument appointing the Insurer
as agent for such Holders in any legal proceeding related to
the payment of such interest and an assignment to the
Insurer of the claims for interest to which such deficiency
relates and which are paid by the Insurer, (b) receive as
designee of the respective Holders (and not as Paying Agent) in
accordance with the tenor of the Policy payment from the
Insurance Paying Agent with respect to the claims for interest
so assigned, and (c) disburse the same to such respective
Holders; and
"2. If and to the extent of a deficiency in amounts
required to pay principal of the Obligations, the Paying Agent
shall (a) execute and deliver to the Insurance Paying Agent in
form satisfactory to the Insurance Paying Agent an instrument
appointing the Insurer as agent for such Holder in any legal
proceeding relating to the payment of such principal and an
assignment to the Insurer of any of the Obligation surrendered
to the Insurance Paying agent of so much of the principal
amount thereof as has not previously been paid or for which
moneys are not held by the Paying Agent and available for
such payment (but such assignment shall be delivered only if
payment from the Insurance Paying Agent is received), (b)
receive as designee of the respective Holders (and not as
Paying Agent) in accordance with the tenor of the Policy
payment therefor from the Insurance Paying Agent, and (c)
disburse the same to such Holders.
"E. Payments with respect to claims for interest on and
principal of Obligations disbursed by the Paying Agent from proceeds
of the Policy shall not be considered to discharge the obligation of
the Issuer with respect to such Obligations, and the Insurer shall
become the owner of such unpaid Obligations and claims for the
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interest in accordance with the tenor of the assignment made to it
under the provisions of this subsection or otherwise.
"F. Irrespective of whether any such assignment is executed
and delivered, the Issuer and the Paying Agent hereby agree for the
benefit of the Insurer that:
"I. They recognize that to the extent the Insurer
makes payments, directly or indirectly (as by paying through
the Paying Agent), on account of principal of or interest on the
Obligations, the Insurer will be subrogated to the rights of
such Holders to receive the amount of such principal and
interest from the Issuer, with interest thereon as provided and
solely from the sources stated in this Indenture and the
Obligations; and
"2. They will accordingly pay to the Insurer the
amount of such principal and interest (including principal and
interest recovered under subparagraph (ii) of the first
paragraph of the Policy, which principal and interest shall be
deemed past due and not to have been paid), with interest
thereon as provided in this Indenture and the Obligations, but
only from the sources and in the manner provided herein for
the payment of principal of and interest on the Obligations to
Holders, and will otherwise treat the Insurer as the owner of
such rights to the amount of such principal and interest.
"G. In connection with the issuance of additional
Obligations, the Issuer shall deliver to the Insurer a copy of the
disclosure document, if any, circulated with respect to such
additional Obligations.
"H. Copies of any amendments made to the documents
executed in connection with the issuance of the Obligations which
are consented to by the Insurer shall be sent to Standard &' Poor's
Corporation.
"I. The Insurer shall receive notice of the resignation or
removal of the Paying Agent and the appointment of a successor
thereto.
"J. The Insurer shall receive copies of all notices required to
be delivered to Bondholders and, on an annual basis, copies of the
Issuer's audited financial statements and Annual Budget.
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"Notices: Any notice that is required to be given to a holder of
the Obligation or to the Paying Agent pursuant to the Indenture
shall also be provided to the Insurer. All notices required to be given
to the Insurer under the Indenture shall be in writing and shall be
sent by registered or certified mail addressed to MBIA Insurance
Corporation, 113 King Street, Armonk, New York 10504 Attention:
Surveillance."
Section 20. Effective Date of Ordinance. This ordinance shall take effect
and be in force from and after its passage and five (5) days following its
publication as required by law.
PASSED by the City Council and APPROVED by the Mayor of the City of
Pasco, Washington, at a regular open public meeting thereof, this 20th day of
September, 1999.
Charles D. Kilbury, ayor
ATTEST:
r
Catherine D. Seaman,
Deputy City Clerk
APPROVED AS TO FORM:
Leland B. r-r, City Atto 176y
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a, f
I, CATHERINE D. SEAMAN, Deputy City Clerk of the City of Pasco, Washington,
certify that the attached copy of Ordinance No. 3377 is a true and correct copy of
the original ordinance passed on the 20th day of September, 1999, as such
ordinance appears on the Minute Book of the City.
DATED this 21 st day of September, 1999.
Catherine D. Seaman,
Deputy City Clerk