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HomeMy WebLinkAbout3974 Ordinance CITY OF PASCO, WASHINGTON ORDINANCE NO. 3974 AN ORDINANCE relating to Local Improvement District No. 145; fixing the amount, form, date, interest rates, maturity and denominations of the Local Improvement District No. 145 Bonds; providing for the sale and delivery thereof to Piper Jaffray& Co. in Seattle, Washington; and fixing the interest rate on Local Improvement District No. 145 assessment installments. Passed November 1, 2010 This document prepared by: Foster Pepper PLLC 1111 Third Avenue, Suite 3400 Seattle, Washington 98101 (206) 447-4400 51091031.5 TABLE OF CONTENTS Page Section 1. Recitals; LID Formation and Purpose........................................................................... 1 Section 2. Authorization and Description of Bonds ...................................................................... 2 Section 3. Registration and Transfer of Bonds.............................................................................. 3 Section4. Payment of Bonds......................................................................................................... 5 Section 5. Guaranty Fund. ........................................................... .............. 5 .................................... Section 6. Bond Redemption Fund................................................................................................ 5 Section 7. Redemption Provisions................................................................................................. 6 Section 8. Notice of Redemption................................................................................................... 7 Section 9. Failure to Redeem Bonds.............................................................................................. 7 Section 10. Pledge of Assessment Payments................................................................................. 8 Section 11. Form and Execution of Bonds.................................................................................... 8 Section12. Bond Registrar............................................................................................................ 9 Section 13. Preservation of Tax Exemption for Interest on Bonds................................................ 9 Section 14. Designation of Bonds as "Qualified Tax Exempt Obligations................................. 10 Section 15. Use of Bond Proceeds............................................................................................... 10 Section 16. Approval of Bond Purchase Contract............................ ... 10 ........................................ Section 17. Preliminary Official Statement Deemed Final.......................................................... 11 Section 18. Fixing Interest Rate on Assessments........................................................................ 11 Section 19. Effective Date of Ordinance..................................................................................... 12 -1- 51091031.5 CITY OF PASCO, WASHINGTON ORDINANCE NO. 3974 AN ORDINANCE relating to Local Improvement District No. 145; fixing the amount, form, date, interest rates, maturity and denominations of the Local Improvement District No. 145 Bonds; providing for the sale and delivery thereof to Piper Jaffray& Co. in Seattle,Washington; and fixing the interest rate on Local Improvement District No. 145 assessment installments. THE CITY COUNCIL OF THE CITY OF PASCO, WASHINGTON, DO ORDAIN as follows: Section 1. Recitals: LID Formation and PyMose. (a) Pursuant to Ordinance 3872, passed August 4, 2008, the City of Pasco, Washington (the "City"), created Local Improvement District No. 145 (the "District") to finance the costs of certain street and sidewalk improvements to "A" Street between Elm Avenue and East Road 40 within the City(the "Project"). (b) It appears to the City Council of the City that it is in the best interest of the City to issue, sell and deliver the local improvement district bonds authorized and described in this ordinance (the"Bonds") for the purpose of providing long-term financing for the Project. (c) Piper Jaffray & Co., 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. (d) The total amount of the assessment roll in the LID was $1,460,522.76. The 30-day period for making cash payments of assessments without interest to the District expired on October 19, 2010, and $675,393.51 of assessments were paid during this period. The balance of assessments unpaid on the assessment roll is therefore $785,129.25. Local Improvement District No. 145 Bonds (the "Bonds") shall, therefore, be issued in the total principal sum of $785,129.00, rounded to the nearest dollar amount. 51091031.5 Section 2. Authorization and Description of Bonds. The City shall issue "City of Pasco, Washington, Local Improvement District No. 145 Bonds, 2010" (the "Bonds") to (i) pay the costs of the Project, (ii) reimburse or repay funds obtained from interfund loans, interest-bearing warrants, installment notes, or other short-term obligations issued to pay costs of the Project, and (iii) to pay the costs of issuance of the Bonds. The Bonds shall be issued in the total principal sum of $785,129.00, being the total amount on the assessment roll of the LID subject to assessment and remaining uncollected after the expiration of the 30-day interest-free prepayment period for assessments on the assessment roll for that LID. The Bonds shall be dated the date of the initial delivery, shall mature on November 15, 2022, and shall be numbered in such manner and with any additional designation (including CUSIP numbers) as the fiscal agent of the State of Washington (as the same may be designated by the State of Washington from time to time) (the "Bond Registrar") deems necessary for the purpose of identification. The Bonds shall mature on November 15, 2022, shall be in the denomination of $5,000.00 each or any integral multiple thereof, except for one Bond within the first annual group on the Estimated Redemption Schedule assigned CUSIP Number 702562AB5 shall be in the principal amount of $5,129.00, and shall bear interest from their date to the maturity or earlier redemption of the Bonds, payable annually on November 15 of each year beginning November 15, 2011, at the rates per annum shown on the following Estimated Redemption Schedule: -2- 51091031.5 ESTIMATED REDEMPTION SCHEDULE Estimated Redemption Dates CUSIP Estimated Interest (November 15) Numbers Amounts Rates 2011 702562AB5 $65,129.00 2.25% 2012 702562AC3 80,000.00 2.50 2013 702562AD1 80,000.00 3.00 2014 702562AE9 80,000.00 3.50 2015 702562AF6 80,000.00 3.75 2016 702562AG4 80,000.00 4.00 2017 702562AH2 80,000.00 4.25 2018 702562AJ8 80,000.00 4.50 2019 702562AK5 80,000.00 4.75 2020 702562AL3 80,000.00 5.00 Interest on the Bonds shall be calculated on the basis of a 360-day year with 30-day months. As used in this ordinance, "CUSIP Numbers" shall mean the identification numbers (or replacement identification numbers) assigned by the CUSIP Service Bureau or its successor to any 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"). Such 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 may be transferred only if endorsed in the manner provided thereon and surrendered to the Bond Registrar. The transfer of a Bond shall be by the Bond Registrar's receiving the Bond to be transferred, canceling it and issuing a new certificate in the form of the Bonds to the transferee after registering the name and address of the transferee on the Bond Register. The new certificate shall bear the same CUSIP number as the transferred Bond but may have a different inventory reference number or control number. 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. -3- 51091031.5 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 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, except for the purpose of the City's undertaking herein to provide continuing disclosure, 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. -4- 51091031.5 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 4. Payment of Bonds. Both principal of and interest on the Bonds shall be payable solely out of the Local Improvement Fund, District No. 145 (the "Bond Fund"), created pursuant to Section 5 of Ordinance No. 3872, and the Local Improvement Guaranty Fund of the City (the "Guaranty Fund"), created pursuant to 3.08.010 of the Pasco Municipal Code. 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 mailed on the interest payment date, or if requested in writing prior to the Record Date by a Registered Owner of Bonds, by electronic transfer on the interest payment date to Registered Owners of the Bonds as those Registered Owners and their addresses and accounts appear on the Bond Register on the Record Date(or other record date established in the Bond Resolution), but only if the requesting Registered Owner pays the costs of such electronic transfer. Principal of and premium, if any, on the Bonds shall be payable at maturity or on such date as may be specified for prior redemption upon presentation and surrender of the Bonds by the Registered Owners to the Bond Register. 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 5. Guaranty Fund. The Guaranty Fund was established for the purposes of guaranteeing, to the extent amounts are available, the payment of the City's current and future local improvement bonds, including the Bonds. The City shall maintain an amount in the Guaranty Fund equal to the greater of 10 percent of the principal amount of all outstanding local improvement district bonds or the aggregate debt service due in the next calendar year based on the Estimated Redemption Schedule shown in Section 2. Section 6. Bond Redemption Fund. Prior to the issuance of the Bonds, any money on hand representing collections pertaining to prepayments or installments of assessments, and -5- 51091031.5 interest thereon, shall be transferred to and deposited in the Bond Fund; that money may be used for costs of the Project or for the redemption of Bonds, as determined by the City Financial Services Manager. All collections pertaining to assessments on the assessment roll of Local Improvement District No. 145 that are collected after the issuance of the Bonds shall, when received, be deposited in the Bond Fund, and until the Bonds are redeemed or otherwise provided for, those collections shall be used to redeem Bonds or to pay for costs of collecting delinquent assessments. Accrued interest on the Bonds received from the sale and delivery of the Bonds, if any, together with any net premium received from the sale and delivery of the Bonds that is not necessary to pay the costs of issuance and sale of the Bonds, shall be paid or allocated into the Bond Fund prior to the first debt service payment date with respect to those Bonds. Until needed to pay the costs described herein, the City may invest principal proceeds of the Bonds temporarily in any legal investment, and the investment earnings shall be deposited in the Bond Fund. Earnings subject to a federal tax or rebate requirement may be withdrawn from any such fund or account and used for those tax or rebate purposes. Section 7. Redemption Provisions. The City reserves the right to redeem the Bonds prior to their stated maturity on any interest payment date, in chronological order, beginning with the lowest CUSIP number as described on the Estimated Redemption Schedule shown in Section 2, as indicated by the respective CUSIP Numbers assigned to each annual group and shall call Bonds for redemption in order of the Estimated Redemption Schedule whenever there shall be sufficient money in the Bond Fund to pay the Bonds so called over and above the amount required for the payment of the interest payable on that interest payment date on all unpaid Bonds. All Bonds redeemed under this section shall be cancelled. Portions of the principal amount of any Bond, in integral amounts of$5,000 (or $5,000 plus such other denomination within the first estimated redemption group assigned by CUSIP number) may be redeemed, unless otherwise provided in the Bond Resolution. If fewer than all of the outstanding Bonds of an annual group from the Estimated Redemption Schedule are to be -6- 51091031.5 called for redemption, the selection of specific Bonds for redemption within that annual group shall be at random, and for as long as the Bonds are registered in the name of DTC or its nominee, the selection shall be in accordance with the operational arrangements of DTC, then in effect, as referenced in 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 15 nor more than 30 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 registered 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 to any rating agency then maintaining a rating on the bonds at the request of the City, and to such other persons and with such additional information as the Financial Services Manager shall determine, or as specified in the Bond Resolution, but none of these additional mailings shall 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 Fund and the Bond has been called for payment by giving notice of that call, postage prepaid, to the registered owner of each of those unpaid Bonds. -7- 51091031.5 Section 10. Pledge of Assessment Payments. Assessments collected in the District, together with interest and penalties, if any, are pledged to the payment of the Bonds which are payable solely out of the Bond Fund and the Local Improvement Guaranty Fund of the City in the manner provided by law. The Bonds are not general obligations of the City. Section 11. Form and Execution of Bonds. The Bonds shall be prepared in a form consistent with the provisions of this ordinance and state law, shall be signed by the Mayor and the 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, Local Improvement District No. 145 Bonds, 2010 described in the Bond Ordinance. WASHINGTON STATE FISCAL AGENT Bond Registrar By [Specimenl 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 -8- 51041031.5 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 Bond. Section 12. Bond Registrar. The fiscal agent of the State of Washington (as the same may be designated by the State of Washington from time to time) is appointed as the Bond Registrar for the Bonds. The Bond Registrar shall keep, or cause to be kept, 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. 2845 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 13. 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 -9- 51091031.5 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. Section 14. 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 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 $30,000,000; 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 $30,000,000. The City designates the Bonds as "qualified tax exempt obligations" for the purposes of Section 265(b)(3) of the Code. Section 15. Use of Bond Proceeds. The principal proceeds of the Bonds shall be used to finance the costs of carrying out improvements in the District and repaying interim financing for District improvements and to pay the costs of issuance of the Bonds. Until needed to pay those costs, the City may invest principal proceeds temporarily in any legal investment, and the investment earnings may be retained in the Bond Fund and be spent for the purposes of that fund, and earnings subject to a federal tax or rebate requirement may be used for those tax or rebate purposes. Section 16. Approval of Bond Purchase Contract. Piper Jaffray & Co., 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 -10- 51091031.5 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, together with the approving legal opinion of Foster Pepper PLLC,municipal bond counsel, 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, including without limitation the execution of the Official Statement on behalf of the City, 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 October 21, 2010 (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. Section 18. Fixing; Interest Rate on Assessments. The interest rate on installment payments of special assessments is revised and fixed at the rate of 4.72%. Each delinquent installment is subject, at the time of delinquency, to a charge of 5% penalty levied on both principal and interest due upon that installment, and all delinquent installments also will be charged interest at the rate of 8%per annum as set forth in Pasco Municipal Code 14.04.050. -11- 51091031.5 Section 19. 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 by the Mayor of the City of Pasco, Washington, at a regular open public meeting thereof this 1St day of November, 2010. Mayor ATTEST: Debra L. Clark, City Clerk APPROVED AS TO FORM: Leland B. Kerr, City Attorney PUBLISHED: -12- 51091031.5 CERTIFICATION I, the undersigned, City Clerk of the City of Pasco, Washington (the "City"), hereby certify as follows: 1. The attached copy of Ordinance No. 3974 (the "Ordinance") is a full, true and correct copy of an ordinance duly passed at a regular meeting of the City Council of the City held at the regular meeting place thereof on November 1, 2010, as that ordinance appears on the minute book of the City; and the Ordinance will be in full force and effect five days after publication in the City's official newspaper; and 2. A quorum of the members of the City Council was present throughout the meeting and a majority of those members present voted in the proper manner for the passage of the Ordinance. IN WITNESS WHEREOF, I have hereunto set my hand this I"day of November, 2010. CITY OF PASCO, WASHINGTON Debra L. Clark ity Clerk ' 51091031.5