HomeMy WebLinkAbout3463 Ordinance ORDINANCE NO. 3463
AN ORDINANCE of the City of Pasco,Washington,relating
to contracting indebtedness; providing for the issuance of$6,900,000
par value of Limited Tax General Obligation and Refunding Bonds,
2001, of the City to (a) provide funds with which to pay and redeem
the City's outstanding Limited Tax General Obligation Bond
Anticipation Notes, 1999,(b)provide funds with which to pay the cost
of advance refunding a portion of the City's outstanding Limited Tax
General Obligation Bonds, 1994, Series B, and (c) pay the
administrative costs of such refunding and the costs of issuance and
sale of such bonds; fixing the date, form, maturities, interest rates,
terms and covenants of the bonds; providing for and authorizing the
purchase of certain obligations out of the proceeds of the sale of the
bonds herein authorized and for the use and application of the money
derived from those investments; authorizing the execution of an
agreement with Chase National Corporate Services, Inc. of Seattle,
Washington, as refunding trustee; providing for the call, payment and
redemption of the outstanding bonds to be refunded; providing for
bond insurance; establishing a bond redemption fund; and approving
the sale and providing for the delivery of the bonds to Banc of
America Securities LLC of Seattle, Washington.
WHEREAS, pursuant to Ordinance No. 3360, the City heretofore issued its $6,000,000
par value Limited Tax General Obligation Bond Anticipation Notes, 1999, (the "Notes'), for
general City purposes, including the acquisition and construction of the Softball Fields Project,
the Civic Center Project, the Library Project and the Fire Station Project, and by that ordinance
the City reserved the right to redeem the Notes prior to their stated maturity date in whole or in
part on any date by Iot on or after December 1, 1999, as par plus accrued interest; and .
WHEREAS,by Ordinance No. 3377, passed by the City Council on September 20, 1999,
the City issued its$1,700,000 par value Unlimited Tax General Obligation Bonds, 1999,to repay
the portion of the Notes that financed the Library Project and the Fire Station Project; and
WHEREAS, there is currently $4,300,000 of the Notes currently outstanding that
provided interim financing for the Softball Fields Project and the Civic Center Project; and
WHEREAS, pursuant to Ordinance No. 3042, the City heretofore issued its $4,505,000
par value Limited Tax General Obligation Bonds, 1994 (the "1994 Bonds"), for the purpose of
providing the funds to pay part of the cost of acquiring, constructing and equipping a new civic
center located at McLaughlin School, including City government offices and an activity center,
and to pay part of the cost of acquiring and constructing a new sports stadium; and
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WHEREAS, there are presently outstanding $2,685,000 par value of 1994 Bonds
maturing on December I of each of the years 2005 through 2010, inclusive, and in 2014, and
bearing various interest rates from 5.60%to 6.25%(the"Refunded Bonds"); and
WHEREAS, after due consideration, it appears to the City Council that the Refunded
Bonds may be refunded by the issuance and sale of the limited tax general obligation and
refunding bonds authorized herein (the "Bonds") so that a substantial savings will be effected by
the difference between the principal and interest cost over the life of the Bonds allocated to such
refunding and the principal and interest cost over the life of the Refunded Bonds but for such
refunding,which refunding will be effected by:
(a) The issuance of the Bonds and the payment of the administrative costs of the
refunding; and
(b) The payment of the interest on the Refunded Bonds when due up to and
including December 1, 2004, and the call, payment and redemption on
December 1, 2004, of all of the then-outstanding Refunded Bonds at a price
of par;
(the"Refunding Plan"); and
WHEREAS, to effect that refunding in the manner that will be most advantageous to the
City it is found necessary and advisable that certain Acquired Obligations (hereinafter defined)
bearing interest and maturing.at such time or times as necessary to accomplish the refunding as
aforesaid be purchased out of a portion of the proceeds of the Bonds; and
WHEREAS, the City Council deems it to be in the best interests of the City to issue and
sell the Bonds to pay costs of repaying and redeeming the outstanding Notes and advance
refunding the Refunded Bonds and to pay the administrative costs of such refunding and the
costs of issuance and sale of the Bonds; and
WHEREAS, Ambac Assurance Corporation, a Wisconsin-domiciled stock insurance
company ("Ambac Assurance" or the "Bond Insurer"), has made a commitment to issue an
insurance policy (the "Municipal Bond Insurance Policy") insuring the payment when due of the
principal of and interest on the herein-authorized bonds as provided therein, and the City Council
of the City deems that the purchase of the Municipal Bond Insurance Policy is in the best interest
of the City; and
WHEREAS, .Banc of America Securities LLC of Seattle, Washington, has offered to
purchase the bonds authorized herein under the terms and conditions hereinafter set forth in the
form of a bond purchase contract;NOW, THEREFORE,
THE CITY COUNCIL OF THE CITY OF PASCO, WASHINGTON, DO ORDAIN AS
FOLLOWS:
Section 1 Definitions. As used in this ordinance,the following words shall have the
following meanings:
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"Acquired Obligations" means those United States Treasury Certificates of Indebtedness
and/or Notes--State and Local Government Series and other direct, noncallable obligations of the
United States of America purchased to accomplish the Refunding Plan as authorized by this
ordinance.
"Bond Fund"means the Limited Tax General Obligation and Refunding Bond Fund, 2001,
created by this ordinance for the payment of the Bonds.
"Bond Insurer" or "Ambac Assurance" means Ambac Assurance Corporation, a
Wisconsin-domiciled stock insurance company.
"Bond Register" means the books or records maintained by the Bond Registrar containing
the name and mailing address of the owner of each Bond and the principal amount and number of
Bonds held by each owner.
"Bond Registrar" means collectively, the fiscal agent and co-fiscal agent of the State of
Washington, as the same may be designated from time to time.
"Bonds" means the $6,900,000 par value Limited Tax General Obligation and Refunding
Bonds, 2001, of the City issued pursuant to and for the purposes provided in this ordinance.
"1994 Bonds" means the outstanding Limited Tax General Obligation Bonds, 1994,
Series B of the City issued pursuant to Ordinance No. 3042, the refunding of a portion of which has
been provided for by this ordinance.
"City" means the City of Pasco, Washington, a municipal corporation duly organized and
existing under and by virtue of the laws of the State of Washington.
"Code" means the United States Internal Revenue Code of 1986, as amended, and
applicable rules and regulations promulgated thereunder.
"DTC"means The Depository Trust Company,New York,New York.
"Finance Director"means the Finance Director of the City.
"Government Obligations" means direct, noncallable obligations of the United States of
America.
"Letter of Representations" means the Blanket Issuer Letter of Representations dated
August 31, 1998,between the City and DTC, as it may be amended from time to time.
"Municipal Bond Insurance Policy" means the financial guaranty municipal bond
insurance policy issued by the Bond Insurer insuring the payment when due of the principal of
and interest on the Bonds as provided therein.
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"Notes" means the outstanding Limited Tax General Obligation Bond Anticipation Notes,
1999, dated May 25, 1999, authorized and issued pursuant to Ordinance No. 3360 of the City.
"Refunded Bonds" means the presently outstanding $2,685,000 par value of 1994 Bonds
maturing on December 1 in the years 2005 through 2010, inclusive, and in 2014, and bearing
interest at the rates of 5.60%through 6.25%.
"Refunding Plan"means:
(a) the placement of sufficient proceeds of the Bonds which, with other
money of the City, if necessary, will acquire the Acquired Obligations to be
deposited, with cash, if necessary, with the Refunding Trustee;
(b) the payment of the interest on the Refunded Bonds when due up to
and including December 1, 2004, and the call, payment and redemption on
December 1, 2004, of all of the then-outstanding Refunded Bonds at a price of par;
(c) the costs of payment of the administrative costs of the Refunding
Plan.
"Refunding Trust Agreement"means a Refunding Trust Agreement between the City and
the Refunding Trustee substantially in the form of that which is on file with the City Clerk and by
this reference incorporated herein.
"Refunding Trustee"means Chase National Corporate Services, Inc., Seattle,
Washington, serving as trustee or escrow agent or any successor trustee or escrow agent.
Section 2. Debt Capacity. The assessed valuation of the taxable property within the City
as ascertained by the last preceding assessment for City purposes for the calendar year 2001 is
$1,031,900,004, and the City has outstanding general indebtedness evidenced by limited tax
general obligation bonds in the principal amount of$2,226,707 incurred within the limit of up to
1-1/2% of the value of the taxable property within the City permitted for general municipal
purposes without a vote of the qualified voters therein, unlimited tax general obligation bonds in
the principal amount of$3,605,000 incurred within the limit of up to 2-1/2% of the value of the
taxable property within the City for capital purposes only, issued pursuant to a vote of the
qualified voters of the City, and the amount of indebtedness for which bonds are authorized
herein to be issued is $6,900,000.
Section 3. Authorization of Bonds. The City shall borrow money on the credit of the
City and issue negotiable limited tax general obligation and refunding bonds evidencing that
indebtedness in the amount of$6,900,000 to accomplish the Refunding Plan, repay and redeem
the outstanding Notes and pay the costs of issuance and sale of the bonds (the "costs of
issuance"). The general indebtedness to be incurred shall be within the limit of up to 1-1/2% of
the value of the taxable property within the City permitted for general municipal purposes
without a vote of the qualified voters therein.
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Section 4. Description of Bonds. The bonds shall be called Limited Tax General
Obligation and Refunding Bonds, 2001, of the City (the "Bonds"); shall be in the aggregate
principal amount of$6,900,000; shall be dated March 1, 2001; 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
agent and co-fiscal agent 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, 2001, 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
2001 $ 55,000 4.25%
2002 75,000 4.25
2003 80,000 4.25
2004 85,000 4.25
2005 290,000 4.25
2006 305,000 4.25
2007 320,000 4.30
2008 330,000 4.30
2009 345,000 4.30
2010 360,000 4.35
2011 375,000 4.40
2012 390,000 4.55
2013 410,000 4.65
2014 430,000 4.75
2015 450,000 4.80
2016 470,000 4.90
2017 495,000 4.95
2018 520,000 5.00
2020 1,115,000 5.05
Portions of the above maturity amounts are allocated to paying the respective costs of
carrying out the Refunding Plan and providing long-term financing for the Softball Fields Project
and the Civic Center Project by currently refunding the outstanding Notes,including a ratable share
of proceeds used to pay the costs of issuance of the Bonds, in accordance with the following
schedule:
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Advance Current
Maturity Refunding Refunding
Years Allocation Allocation Total
2001 $ 55,000 $ $ 55,000
2002 20,000 55,000 75,000
2003 20,000 60,000 80,000
2004 20,000 65,000 85,000
2005 230,000 60,000 290,000
2006 235,000 70,000 305,000
2007 250,000 70,000 320,000
2008 260,000 70,000 330,000
2009 265,000 80,000 345,000
2010 275,000 85,000 360,000
2011 295,000 80,000 375,000
2012 310,000 80,000 390,000
2013 315,000 95,000 410,000
2014 330,000 100,000 430,000
2015 450,000 450,000
2016 470,000 470,000
2017 495,000 495,000
2018 520,000 520,000
2020 1,115,000 1,115,000
Section 5. 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 & 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 (as it
may be amended from time to time, the "Letter of Representations"). Neither the City nor the
Bond Registrar shall have any responsibility or obligation to DTC participants or the persons for
whom they 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
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the Bonds, or any notice which 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 as long as any Bonds are held in fully immobilized form, DTC, its nominee 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
nominee 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 certificated 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 6. 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 15' day of the month preceding
the interest payment date or, if requested in writing by a registered owner of$1,000,000 or more
in principal amount of Bonds prior to the applicable record date, by wire transfer on 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, for 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.
Section 7. Redemption Provisions and Open Market Purchase of Bonds. Bonds
maturing in the years 2001 through 2011, 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, 2012, prior to their stated
maturity dates at any time on or after December 1, 2011, 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 2020 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
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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
2019 $545,000
2020(twurity) 570,000
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.
All Bonds purchased or redeemed under this section shall be canceled.
Notwithstanding the foregoing, for as long as the Bonds are registered in the name of
DTC or its nominee, selection of Bonds for redemption shall be in accordance with the Letter of
Representations.
Section 8. 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 Banc of America Securities LLC, at its principal office in
Seattle, Washington, or its successor, to the Bond Insurer, or its successor, to each NRMSIR or
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the MSRB and to such other persons and with such additional information as the City Finance
Director shall determine, but these additional mailings shall not be a condition precedent to the
redemption of Bonds. Notwithstanding the foregoing, for as long as the Bonds are registered in
the name of DTC or its nominee, notice of redemption shall be given in accordance with the
Letter of Representations.
Section 9. 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 of each of those unpaid Bonds.
Section 10. Pledge of Taxes. For as long as any of the Bonds are outstanding, the City
irrevocably pledges to include in its budget and levy taxes annually within the constitutional and
statutory tax limitations provided by law without a vote of the electors of the City 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.
Section 11. Refunding of the Refunded Bonds.
(a) A Mointment of Refunding Trustee. Chase National Corporate Services, Inc. of
Seattle,Washington, is appointed Refunding Trustee.
(b) Use of Bond Proceeds, Acquisition of Acquired Obligations. A sufficient.amount
of the proceeds of the sale of the Bonds shall be deposited immediately upon the receipt thereof
with the Refunding Trustee and used to discharge the obligations of the City relating to the
Refunded Bonds under Ordinance No. 3042 by providing for the payment of the amounts
required to be paid by the Refunding Plan. To the extent practicable, such obligations shall be
discharged fully by the Refunding Trustee's simultaneous purchase of the Acquired Obligations,
bearing such interest and maturing as to principal and interest in such amounts and at such times
so as to provide, together with a beginning cash balance, if necessary, for the payment of the
amount required to be paid by the Refunding Plan. The Acquired Obligations are listed and
more particularly described in Schedule A attached to the Refunding Trust Agreement between
the City and the Refunding Trustee,but are subject to substitution as set forth below. Any Bond
proceeds or other money deposited with the Refunding Trustee not needed to purchase the
Acquired Obligations and provide a beginning cash balance, if any, and, if applicable, pay the
costs of issuance of the Bonds shall be returned to the City at the time of delivery of the Bonds to
the initial purchaser thereof and deposited in the Bond Fund to pay interest on the Bonds on the
first interest payment date.
(c) Substitution of Acquired Obligations. Prior to the purchase of any Acquired
Obligations by the Refunding Trustee, the City reserves the right to substitute other Government
Obligations for any of the Acquired Obligations and to use any savings created thereby for any
lawful City purpose if, (a)in the opinion of Foster Pepper& Shefelman PLLC, the City's bond
counsel, the interest on the Bonds and the Refunded Bonds will remain excluded from gross
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income for federal income tax purposes under Sections 103, 148, and 149(d) of the Code, and
(b) such substitution shall not impair the timely payment of the amounts required to be paid by
the Refunding Plan, as verified by a nationally recognized independent certified public
accounting firm.
After the purchase of the Acquired Obligations by the Refunding Trustee, the City
reserves the right to substitute therefor cash or Government Obligations subject to the conditions
that such money or securities held by the Refunding Trustee shall be sufficient to carry out the
Refunding Plan, that such substitution will not cause the Bonds and the Refunded Bonds to be
arbitrage bonds within the meaning of Section 148 of the Code and regulations thereunder in
effect on the date of such substitution and applicable to obligations issued on the issue date of the
Bonds, and that the City obtain, at its expense: (1) a verification by a nationally recognized
independent certified public accounting firm acceptable to the Refunding Trustee confirming that
the payments of principal of and interest on the substitute securities, if paid when due, and any
other money held by the Refunding Trustee will be sufficient to carry out the Refunding Plan;
and (2) an opinion from Foster Pepper & Shefelman PLLC, bond counsel to the City, its
successor, or other nationally recognized bond counsel to the City, to the effect that the
disposition and substitution or purchase of such securities, under the statutes, rules, and
regulations then in force and applicable to the Bonds, will not cause the interest on the Bonds or
the Refunded Bonds to be included in gross income for federal income tax purposes and that
such disposition and substitution or purchase is in compliance with the statutes and regulations
applicable to the Bonds. Any surplus money resulting from the sale, transfer, other disposition,
or redemption of the Acquired Obligations and the substitutions therefor shall be released from
the trust estate and transferred to the City to be used for any lawful City purpose.
(d) Administration of Refunding Plan. The Refunding Trustee is authorized and
directed to purchase the .Acquired Obligations (or Government Obligations) and to make the
payments required to be made by the Refunding Plan from the Acquired Obligations (or
Government Obligations) and money deposited with the Refunding Trustee pursuant to this
ordinance. All Acquired Obligations (or Government Obligations) and the money deposited
with the Refunding Trustee and any income therefrom shall be held irrevocably, invested and
applied.in accordance with the provisions of Ordinance No. 3042, this ordinance, chapter 39.53
RCW and other applicable statutes of the State of Washington and the Refunding Trust
Agreement. All necessary and proper fees, compensation, and expenses of the Refunding
Trustee for the Bonds and all other costs incidental to the setting up of the escrow to accomplish
the refunding of the Refunded Bonds and costs related to the issuance and delivery of the Bonds,
including bond printing, verification fees, bond insurance premium, bond counsel's fees, and
other related expenses, shall be paid out of the proceeds of the Bonds.
(e) Authorization for Refunding Trust Agreement. To carry out the Refunding Plan
provided for by this ordinance, the Mayor or Finance Director of the City is authorized and
directed to execute and deliver to the Refunding Trustee a Refunding Trust Agreement
substantially in the form on file with the City Clerk and by this reference made a part hereof
setting forth the duties, obligations and responsibilities of the Refunding Trustee in connection
with the payment, redemption, and retirement of the Refunded Bonds as provided herein and
stating that the provisions for payment of the fees, compensation, and expenses of such
Refunding Trustee set forth therein are satisfactory to it. Prior to executing the Refunding Trust
Agreement, the Mayor or Finance Director of the City is authorized to make such changes
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therein that do not change the substance and purpose thereof or that assure that the escrow
provided therein and the Bonds are in compliance with the requirements of federal law governing
the exclusion of interest on the Bonds from gross income for federal income tax purposes.
Section 12. Call for Redemption of the Refunded Bonds_. The City calls for redemption
on December 1, 2004, all of the Refunded Bonds 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 Bonds are herein called for redemption is the first date on
which those bonds 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. 3042 in
order to effect the redemption prior to their maturity of the Refunded Bonds.
Section 13. City Findings with Respect to Refunding. The City Council of the City finds
and determines that the issuance and sale of the Bonds at this time will effect a savings to the
City and is in the best interest of the City and its taxpayers and in the public interest. In making
such finding and determination, the City Council has given consideration to the fixed maturities
of the Bonds and the Refunded Bonds, the costs of issuance of the Bonds allocable to the
refunding and the known earned income from the investment of the proceeds of the issuance and
sale of the Bonds used in the Refunding Plan pending payment and redemption of the Refunded
Bonds.
The City Council further finds and determines that the money to be deposited with the
Refunding Trustee for the Refunded Bonds in accordance with Section 11 of this ordinance will
discharge and satisfy the obligations of the City under Ordinance No. 3042 with respect to the
Refunded Bonds, and the pledges, charges, trusts, covenants, and agreements of the City therein
made or provided for as to the Refunded Bonds, and that the Refunded Bonds shall no longer be
deemed to be outstanding under such ordinances immediately upon the deposit of such money
with the Refunding Trustee.
Section 14. Bond Fund and Deposit of Bond Proceeds. The Bond Fund is created and
established in the office of the Finance Director a special fund designated as the Limited Tax
General Obligation and Refunding Bond Fund, 2000, for the purpose of paying principal of and
interest on the Bonds. 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.
There has been previously created and established in the office of the Finance Director a
note redemption fund designated as the Limited Tax General Obligation Note Fund, 1999 (the
"Note Fund"). After depositing with the Refunding Trustee a sufficient amount of proceeds of
the Bonds to carry out the Refunding Plan as described in Section 11 herein, an additional
amount of proceeds of the Bonds sufficient to pay and redeem the outstanding Notes shall be
paid into the Note Fund and used for that purpose. Any proceeds remaining after accomplishing
the Refunding Plan and paying and redeeming the outstanding Notes shall be deposited into the
City's General Fund and used to pay costs of issuance of the Bonds. Until needed to pay those
costs, the City may invest those principal proceeds temporarily in any legal investment, and the
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investment earnings may be retained in the Note Fund or General Fund and be spent for the
purposes of that fund.
Section 15. Form and Execution of Bonds. The Bonds shall be printed or lithographed
on good bond paper in a form consistent with the provisions of this ordinance and state law and
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, Limited
Tax General Obligation and Refunding Bonds, 2001, described in the Bond
Ordinance.
WASHINGTON STATE FISCAL AGENT
Bond Registrar
By
Authorized Signer
The authorized signing of a Certificate of Authentication shall be conclusive evidence that the
Bonds so authenticated have been duly executed, authenticated and delivered and are entitled to the
benefits of this ordinance.
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 16. Bond Registrar. 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 duties under this ordinance and City
Ordinance No. 2838 establishing a system of registration for the City's bonds and obligations.
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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 17. 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 also covenants that it will,to
the extent the arbitrage rebate requirement of Section 148 of the Internal Revenue Code of 1986,
as amended (the "Code"), is applicable to the Bonds, take all actions necessary to comply(or to
be treated as having complied)with that requirement in connection with the Bonds, including the
calculation and payment of any penalties that the City has elected to pay as an alternative to
calculating rebatable arbitrage, and the payment of any other penalties if required under Section
148 of the Code to prevent interest on the Bonds from being 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
certifications may not be relied upon.
Section 18. Designation 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 that the City controls,
that derives its authority to issue tax-exempt obligations from the City, or that 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 19. 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 direct obligations of the United States of
America maturing at a time or times and bearing interest in amounts (together with money, if
necessary) sufficient to redeem and retire, refund or defense 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
50230182.02 -13-
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, not defeased or otherwise
satisfied 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 shall run
to the benefit of the Bond Insurer, and the Bond Insurer shall be subrogated to the rights of those
registered owners.
Section 20. 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 Finance Director
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.
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 21. Preliminary Official Statement Deemed Final. The City Council has been
provided with copies of a preliminary official statement dated February 6, 2001 (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, 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.
50:3018202 -14-
4 .
Section 22. Undertaking to Provide Continuing 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.
(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 promulgated by the Government
Accounting Standards Board ("GASB"), as such principles may be changed
from time to time, 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) authorized, issued and
outstanding balance of general obligation bonds; (3) assessed valuation for
the fiscal year; and (4) regular property tax levy rate and regular property
tax levy rate limit for the fiscal year and amounts and percentage of taxes
collected;
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(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, [2001]; 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 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 Undertaking. 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.
50M192.02 -16-
(g) Designation of Official Responsible to Administer Undertaking. The
Finance Director 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;
(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 23. Bond Insurance. The City is authorized to 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. Any notice required to be given to the Bond Insurer shall be
sent by certified or registered mail to Ambac Assurance Corporation, One State Street Plaza,
New York, New York 10004.
While the Municipal Bond Insurance Policy is in effect, the City or the Bond Registrar
shall furnish to the Bond Insurer (to the attention of the Surveillance Department, unless
otherwise indicated):
(a) As soon as practicable after the filing thereof, copies of any financial
statements, audits and annual reports of the City;
(b) copies of any notices given to the registered owners of the Bonds,
including, without limitation, notices of any redemption of or defeasance of Bonds, and
any certificate rendered pursuant to this ordinance relating to the security for the Bonds;
(c) to the extent that the City has entered into a continuing disclosure
agreement with respect to the Bonds, the Bond Insurer shall be included as a party to be
notified; and
50230182.02 -17--
(d) such additional information the Bond Insurer may reasonably request.
The Bond Registrar shall notify the Bond Insurer(to the attention of the General Counsel
Office)of any failure of the City to provide relevant notices and certificates.
The City will permit the Bond Insurer to discuss the affairs, finances and accounts of the
City or any information the Bond Insurer may reasonably request regarding the security for the
Bonds with appropriate officers of the City. The Bond Registrar and the City will permit the
Bond Insurer to have access to and make copies of all books and records relating to the Bonds at
any reasonable time.
The Bond Insurer shall have the right to direct an accounting at the City's expense, and
the City's failure to comply with such direction within 30 days after receipt of written notice of
the direction from the Bond Insurer shall be deemed a default hereunder unless compliance
cannot occur within such period. In that event and only if an extension would not materially
adversely affect the interest of any registered owner of the Bonds, that 30-day period will be
extended so long as compliance is begun within that period and diligently pursued.
Section 24. Payment Procedures Under Bond Insurance. The Bond Insurer requires that
the following sections be included in this ordinance:
"As long as the bond insurance shall be in full force and effect, the Issuer, the
Trustee and any Paying Agent agree to comply with the following provisions"
"(a) At least one (1) day prior to all Interest Payment Dates the Trustee or
Paying Agent [the Bond Registrar], if any, will determine whether there will be sufficient
funds in the Funds and Accounts to pay the principal of or interest on the Bonds on such
Interest Payment Date. If the Trustee or Paying Agent, if any, determines that there will
be insufficient funds in such Funds or Accounts, the Trustee or Paying Agent, if any,
shall so notify Ambac Assurance. Such notice shall specify the amount of the anticipated
deficiency, the Bonds to which such deficiency is applicable and whether such Bonds
will be deficient as to principal or interest, or both. If the Trustee or Paying Agent, if any,
has not so notified Ambac Assurance at least one (1) day prior to an Interest Payment
Date, Ambac Assurance will make payments of principal or interest due on the Bonds on
or before the first (1st) day next following the date on which Ambac Assurance shall
have received notice of nonpayment from the Trustee or Paying Agent,if any.
"(b) the Trustee or Paying Agent, if any, shall, after giving notice to Ambac
Assurance as provided in (a) above, make available to Ambac Assurance and, at Ambac
Assurance's direction, to The Bank of New York, as insurance trustee for Ambac
Assurance or any successor insurance trustee (the "Insurance Trustee'), the registration
books of the Issuer maintained by the Trustee or Paying Agent, if any, and all records
relating to the Funds and Accounts maintained under this ordinance.
"(c) the Trustee or Paying Agent, if any, shall provide Ambac Assurance and
the Insurance Trustee with a list of registered owners of Bonds entitled to receive
principal or interest payments from Ambac Assurance under the terms of the Municipal
50230182.02 -18-
Y
Bond Insurance Policy, and shall make arrangements with the Insurance Trustee (i) to
mail checks or drafts to the registered owners of Bonds entitled to receive full or partial
interest payments from Ambac Assurance and (ii) to pay principal upon Bonds
surrendered to the Insurance Trustee by the registered owners of Bonds entitled to receive
full or partial principal payments from Ambac Assurance.
"(d) the Trustee or Paying Agent, if any, shall, at the time it provides notice to
Ambac Assurance pursuant to (a) above, notify registered owners of Bonds entitled to
receive the payment of principal or interest thereon from Ambac Assurance (i) as to the
fact of such entitlement, (ii) that Ambac Assurance will remit to them all or a part of the
interest payments next coming due upon proof of Bondholder entitlement to interest
payments and delivery to the Insurance Trustee, in form satisfactory to the Insurance
Trustee, of an appropriate assignment of the registered owner's right to payment,(iii)that
should they be entitled to receive full payment of principal from Ambac Assurance, they
must surrender their Bonds (along with an appropriate instrument of assignment in form
satisfactory to the Insurance Trustee to permit ownership of such Bonds to be registered
in the name of Ambac Assurance) for payment to the Insurance Trustee, and not the
Trustee or Paying Agent, if any, and (iv) that should they be entitled to receive partial
payment of principal from Ambac Assurance, they must first surrender their Bonds for
payment thereon first to the Trustee or Paying Agent, if any, who shall note on such
Bonds the portion of the principal paid by the Trustee or Paying Agent, if any, and then,
along with an appropriate instrument of assignment in form satisfactory to the Insurance
Trustee, to the Insurance Trustee,which will then pay the unpaid portion of principal.
"(e) in the event that the Trustee or Paying Agent, if any, has notice that any
payment of principal of or interest on a Bond which has become Due for Payment and
which is made to a Bondholder by or on behalf of the Issuer has been deemed a
preferential transfer and theretofore recovered from its registered owner pursuant to the
United States Bankruptcy Code by a trustee in bankruptcy in accordance with the final,
nonappealable order of a court having competent jurisdiction, the Trustee or Paying
Agent, if any, shall, at the time Ambac Assurance is notified pursuant to (a) above,notify
all registered owners that in the event that any registered owner's payment is so
recovered, such registered owner will be entitled to payment from Ambac Assurance to
the extent of such recovery if sufficient funds are not otherwise available, and the Trustee
or Paying .Agent, if any, shall furnish to Ambac Assurance its records evidencing the
payments of principal of and interest on the Bonds which have been made by the Trustee
or Paying Agent, if any, and subsequently recovered from registered owners and the dates
on which such payments were made.
"(f) in addition to those rights granted Ambac Assurance under this ordinance,
Ambac Assurance shall, to the extent it makes payment of principal of or interest on
Bonds, become subrogated to the rights of the recipients of such payments in accordance
with the terms of the Municipal Bond Insurance Policy, and to evidence such subrogation
(i) in the case of subrogation as to claims for past due interest, the Trustee or Paying
Agent, if any, shall note Ambac Assurance's rights as subrogee on the registration books
of the Issuer maintained by the Trustee or Paying Agent, if any, upon receipt from
Ambac Assurance of proof of the payment of interest thereon to the registered owners of
the Bonds, and (ii) in the case of subrogation as to claims for past due principal, the
502301$2.02 -19-
Trustee or Paying Agent, if any, shall note Ambac Assurance's rights as subrogee on the
registration books of the Issuer maintained by the Trustee or Paying Agent, if any, upon
surrender of the Bonds by the registered owners thereof together with the proof of the
payment of principal thereof.."
Section 25. Parties Interested Herein. To the extent that this ordinance confers upon or
gives or grants to the Bond Insurer any right, remedy or claim under or by reason of this
ordinance, the Bond Insurer is explicitly recognized as being a third-party beneficiary hereunder
and may enforce any such right, remedy or claim conferred, given or granted hereunder. Nothing
expressed or implied in this ordinance is intended or shall be construed to confer upon, or to give
or grant to, any person or entity, other than the City, the Bond Insurer and the registered owners
of the Bonds, any right, remedy or claim under or by reason of this ordinance or any covenant,
condition or stipulation hereof, and all covenants, stipulations, promises and agreements in this
ordinance contained by and on behalf of the City shall be for the sole and exclusive benefit of the
City,the Bond Insurer and the registered owners of the Bonds.
Notwithstanding any other provision of this ordinance, the City shall notify the Bond
Insurer immediately if at any time there are insufficient funds to make any payments of principal
and/or interest as required and immediately upon the occurrence of any event of default
hereunder. Anything in this ordinance to the contrary notwithstanding, upon the occurrence and
continuance of an event of default, the Bond Insurer shall be entitled to control and direct the
enforcement of all rights and remedies granted to the Bond owners for the benefit of the Bond
owners pursuant to state law.
Any provision of this ordinance expressly recognizing or granting rights in or to the Bond
Insurer may not be amended in any manner which affects the rights of the Bond Insurer
hereunder without the prior written consent of the Bond Insurer. Unless otherwise provided in
this section, the Bond Insurer's consent shall be required, in addition to Bond owner consent,
when required, for the following purposes: (i) execution and delivery of any supplemental
ordinance, and(ii)initiation or approval of any other action which requires Bond owner consent.
Any reorganization or liquidation plan with respect to the City must be acceptable to the
Bond Insurer. In the event of any reorganization or liquidation, the Bond Insurer shall have the
right to vote on behalf of all Bond owners who hold Ambac Assurance-insured bonds absent a
default by the Bond Insurer under the applicable Municipal Bond Insurance Policy insuring such
bonds.
50230582.02 -20-
Section 26. Effective Date of Ordinance. This ordinance shall take effect and be in force
from and after its passage and five days following its publication as required by law.
PASSED by the City Council and APPROVED b� the Mayor of the City of Pasco,
Washington, at a regular open public meeting thereof this 20` day of February, 2001.
Mayor
ATTEST:
r
City Clerk
APPROVED AS TO FORM:
Foster Pepper& Shefelman PLLC
Special Counsel and Bond Counsel
5023018202 -21-