HomeMy WebLinkAbout4018 Ordinance CITY OF PASCO, WASHINGTON
ORDINANCE NO. 4164
AN ORDINANCE of the City of Pasco, Washington, relating to
contracting indebtedness; providing for the issuance of$4,110,000 par value of
Limited Tax General Obligation Refunding Bonds, 2011, of the City to provide
part of the funds with which to pay the cost of refunding the City's outstanding
Limited Tax General Obligation and Refunding Bonds, 2001 and paying the
administrative costs of such refunding and the costs of issuance and sale of such
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 U.S. Bank National Association of Seattle, Washington, as
refunding trustee; providing for the call, payment and redemption of the
outstanding bonds to be refunded; fixing the terms and covenants of the bonds;
and providing for related matters.
Passed August 15,2011
This document prepared by:
Foster Pepper PLLC
1111 Third Avenue, Suite 3400
Seattle, Washington 98101
(206) 447-4400
51153266.4
TABLE OF CONTENTS
Page
Section1. Definitions................................................................................................................. 1
Section 2. Recitals and Findings................................................................................................ 3
Section3. Debt Capacity............................................................................................................ 4
Section 4. Authorization of Bonds............................................................................................. 5
Section 5. Description of Bonds ................................................................................................ 5
Section 6. Bond Registrar; Registration and Transfer of Bonds................................................ 5
Section 7. Form and Execution of Bonds .................................................................................. 6
Section 8. Payment of Bonds..................................................................................................... 7
Section 9. Redemption Provisions and Open Market Purchase of Bonds................................. 7
Section10. Pledge of Taxes......................................................................................................... 8
Section 11. Tax Covenants; Designation of Bonds as "Qualified Tax-Exempt Obligations....... 8
Section 12. Refunding or Defeasance of the Bonds .................................................................... 8
Section 13. Bond Fund and Deposit of Bond Proceeds............................................................... 9
Section 14. Refunding of the Refunded Bonds............................................................................ 9
Section 15. Call for Redemption of the Refunded Bonds.......................................................... 11
Section 16. City Findings with Respect to Refunding............................................................... 11
Section 17. Undertaking to Provide Continuing Disclosure...................................................... 11
Section 18. Approval of Bond Purchase Contract; Delivery of Bonds...................................... 14
Section 19. Official Statement................................................................................................... 14
Section 20. General Authorization and Ratification.................................................................. 14
Section21. Severability............................................................................................................. 15
Section 22. Effective Date of Ordinance................................................................................... 15
51153266.4
CITY OF PASCO, WASHINGTON
ORDINANCE NO.
AN ORDINANCE of the City of Pasco, Washington, relating to
contracting indebtedness; providing for the issuance of $4,110,000 par value of
Limited Tax General Obligation Refunding Bonds, 2011, of the City to provide
part of the funds with which to pay the cost of refunding the City's outstanding
Limited Tax General Obligation and Refunding Bonds, 2001 and paying the
administrative costs of such refunding and the costs of issuance and sale of such
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 U.S. Bank National Association of Seattle, Washington, as
refunding trustee; providing for the call, payment and redemption of the
outstanding bonds to be refunded; fixing the terms and covenants of the bonds;
and providing for related matters.
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:
(a) "Authorized Denomination"means $5,000 or any integral multiple thereof
within a maturity.
(b) "Acquired Obligations" means those United States Treasury Certificates
of Indebtedness, Notes, and Bonds--State and Local Government Series and other direct,
noncallable obligations of the United States of America purchased to accomplish the refunding
of the Refunded Bonds as authorized by this ordinance.
(c) `Beneficial Owner" means the owner of any beneficial interests in the
Bonds.
(d) "Bond Fund" means the Limited Tax General Obligation Refunding Bond
Fund, 2011, created by this ordinance for the payment of the Bonds.
(e) "Bond Register" means the books or records maintained by the Bond
Registrar.
(f) "Bond Registrar"means the Fiscal Agent.
(g) "Bonds" means the $4,110,000 par value Limited Tax General Obligation
Refunding Bonds, 2011, of the City issued pursuant to and for the purposes provided in this
ordinance.
5]]53 266.4
(h) "2001 Bonds" means the Limited Tax General Obligation and Refunding
Bonds, 2001, of the City issued pursuant to Ordinance No. 3463, for the purpose of(i) providing
funds with which to pay and redeem the City's outstanding Limited Tax General Obligation
Bond Anticipation Notes, 1999, which were issued 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 (ii) 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, which were issued for the purpose of providing the funds to pay part of the cost of
acquiring 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.
(i) "City"means the City of Pasco, Washington, a municipal corporation duly
organized and existing under the laws of the State.
0) "City Council" means the governing body of the City, acting in its
legislative capacity.
(k) "Code" means the United States Internal Revenue Code of 1986, as
amended, and applicable rules and regulations promulgated thereunder.
(1) "DTC"means The Depository Trust Company,New York,New York.
(m) "Finance Manager" means the Finance Manager of the City or the
successor officer.
(n) "Fiscal Agent" means the fiscal agent of the State, as the same may be
designated by the State from time to time.
(o) "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.
(p) "MSRB" means the Municipal Securities Rulemaking Board.
(q) "Owners" means, without distinction, the Registered Owner(s) and the
Beneficial Owner(s).
(r) "Refunded Bonds" means the Limited Tax General Obligation and
Refunding Bonds, 2001, of the City, maturing in the years 2012 through 2018, inclusive and
2020, issued pursuant to Ordinance No. 3463, the refunding of which has been provided for by
this ordinance.
(s) "Refunding Plan"means:
(i) the placement of sufficient proceeds of the Bonds which,
with other money of the City, if necessary, will acquire the Acquired
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Obligations to be deposited, with cash, if necessary, with the Refunding
Trustee;
(ii) the payment of the principal of and interest on the
Refunded Bonds when due up to and including December 1, 2011, and the
call, payment, and redemption on December 1, 2011, of all of the then-
outstanding Refunded Bonds at a price of par plus accrued interest to
December 1, 2011- and
(iii) the payment of the costs of issuing the Bonds and the costs
of carrying out the Refunding Plan.
(t) "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.
(u) "Refunding Trustee" means U.S. Bank National Association, Seattle,
Washington, serving as trustee or escrow agent or any successor trustee or escrow agent.
(v) "Registered Owner" means the person in whose name a Bond is registered
on the Bond Register. For so long as the City utilizes the book—entry system for the Bonds under
the Letter of Representations, Registered Owner shall mean DTC.
(w) "Registration Ordinance" means City Ordinance No. 2845 establishing a
system of registration for the City's bonds and other obligations.
(x) "Rule 15c2-12" means Rule 15c2-12 promulgated by the SEC under the
Securities Exchange Act of 1934, as amended.
(y) "SEC" means the United States Securities and Exchange Commission.
(z) "State"means the State of Washington.
(aa) "Undertaking' means the continuing disclosure agreement set forth in
Section 17 of this ordinance.
(bb) "Underwriter" means Piper Jaffray & Co. of Seattle, Washington.
Section 2. Recitals and Findin.9s.
(a) Outstanding Bonds. There are presently outstanding $4,280,000 par value
of 2001 Bonds maturing on December 1 of each of the years 2011 through 2018, inclusive, and
in year 2020 and bearing various interest rates from 4.25% to 5.05%.
(b) Findings Mth Respect to Refunding.
(i) Background. Pursuant to Ordinance No. 3463, the City
heretofore issued its $6,900,000 par value Limited Tax General Obligation and
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Refunding Bonds, 2001, for the purpose of (i) providing funds with which to pay
and redeem the City's outstanding Limited Tax General Obligation Bond
Anticipation Notes, 1999 and (ii) 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 by that ordinance reserved the right to
redeem the 2001 Bonds prior to their maturity on December 1, 2011, at a price of
par plus accrued interest to the date fixed for redemption.
(ii) Substantial Savings. 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 Refunding Bonds, 2011 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 and
the principal and interest cost over the life of the Refunded Bonds but for such
refunding, which refunding will be effected by carrying out the Refunding Plan.
(iii) Effect of Refunding Plan. 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 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.
(c) Purchase Offer. The Underwriter has offered to purchase the Bonds under
the terms and conditions set forth in this ordinance and in the Purchase Contract (hereinafter
defined).
(d) Issuance of the Bonds. Based on the foregoing, the City Council deems it
to be in the best interests of the City to issue and sell the Bonds to pay the cost of carrying out
the Refunding Plan.
Section 3. 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 2011
is $3,100,250,228.
(a) The City has outstanding general indebtedness as follows:
(i) Limited tax general obligation bonds and loans outstanding
in the principal amount of$7,434,033, which is incurred within the limit of up to
11/2% of the value of the taxable property within the City permitted for general
municipal purposes.
(ii) Unlimited tax general obligation bonds for capital purposes
only outstanding in the principal amount of $1,950,000 for general municipal
purposes; $0 for City-owned water, artificial light, and sewers; and $0 for
acquiring or developing open space, park facilities, and capital facilities
associated with economic development. The debt described in this paragraph is
unlimited tax general obligation debt and incurred with the approval of the
requisite number of the City's qualified voters, within the limit of up to 2%2% of
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the value of the taxable property within the City for general municipal purposes
(when combined with the outstanding limited tax general obligation
indebtedness), 2%2% for utility purposes and 2%2% for open space and economic
development purposes.
(b) The amount of indebtedness authorized by this ordinance is $4,110,000
and is issued within the limitation pennitted for general municipal purposes without a vote.
Section 4. Purpose and Authorization of Bonds. The City shall borrow money on the
credit of the City and issue negotiable limited tax general obligation bonds evidencing that
indebtedness in the amount of$4,110,000 to accomplish the Refunding Plan, and pay the costs of
issuance and sale of the Bonds.
Section 5. Description of Bonds. The Bonds shall be called City of Pasco,
Washington, Limited Tax General Obligation Refunding Bonds, 2011. The Bonds shall be
issued in the aggregate principal amount of $4,110,000; shall be dated their date of initial
delivery to the Underwriter; shall be in Authorized Denominations; and shall be numbered
separately in the manner and with any additional designation as the Bond Registrar deems
necessary for purposes of identification.
The Bonds shall bear interest at the rates per annum (computed on the basis of a 360-day
year of twelve 30-day months) payable semiannually on each June 1 and December 1,
commencing December 1, 2011, to the maturity of the Bonds; and shall mature on December 1
in years and amounts and bear interest at the rates per annum as set forth in Exhibit A, which is
attached to this ordinance and incorporated by this reference.
Section 6. Bond Registrar, Registration and Transfer of Bonds.
(a) Registration of Bonds. The Bonds shall be issued only in registered form
as to both principal and interest and shall be recorded on the Bond Register.
(b) Bond Registrar. 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 Register shall contain the name and mailing address of the
Registered Owner of each Bond and the principal amount and number of each of the Bonds held
by each Registered Owner.
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's Registration Ordinance.
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 either a
Registered or Beneficial 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 Beneficial Owners.
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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.
(c) DTC and the Book Entry System. The Bonds initially shall be registered
in the name of Cede & Co., as the nominee of DTC. The Bonds so registered shall be held in
fully immobilized form by DTC as depository in accordance with the provisions of 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 Beneficial Owners. 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 7. Form and Execution of Bonds. The Bonds shall be prepared 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
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benefits of this ordinance: "Certificate Of Authentication. This Bond is one of the fully
registered City of Pasco, Washington, Limited Tax General Obligation Refunding Bonds, 2011,
described in the Bond Ordinance." 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 manual or 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 manual or
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 8. Payment of Bonds. Both principal of and interest on the Bonds shall be
payable in lawful money of the United States of America. 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. If the Bonds cease to be
in book-entry-only form, 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
or by electronic transfer on the interest payment date. The City shall not be required to make
electronic transfers except to a Registered Owner of Bonds pursuant to a request in writing and at
the sole expense of that Registered Owner at least 10 days before an interest payment date.
Principal of the Bonds shall be payable upon presentation and surrender of the Bonds by the
Registered Owners to the Bond Registrar.
Section 9. Redemption Provisions and Open Market Purchase of Bonds.
(a) Optional Redemption. The Bonds shall be issued without the right or
option of the City to redeem the Bonds prior to their stated maturity.
(b) Open Market Purchase. The City 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.
(c) Cancellation of Bonds. All Bonds purchased under this section shall be
canceled.
(d) Failure To Redeem Bonds. If any Bond is not redeemed when properly
presented at its maturity, the City shall be obligated to pay interest on that Bond at the same rate
provided in the Bond from and after its maturity 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 to the Registered Owner.
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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.
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. Tax Covenants; Designation of Bonds as "Qualified Tax-Exempt
Obli atg ions.
(a) 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 requirements of Section 148 of the Code are applicable to the
Bonds, take all actions necessary to comply (or to be treated as having complied) with those
requirements 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.
(b) Small Governmental Issuer Arbitrage Rebate Exception and Designation
of Bonds as "Qualified Tax-Exempt Obligations." The City finds and declares that (a) it is a
duly organized and existing governmental unit of the State and has general taxing power; (b) no
Bond which is part of this issue of Bonds is a "private activity bond" within the meaning of
Section 141 of the Code; (c) at least 95% of the net proceeds of the Bonds will be used for local
governmental activities of the City(or of a governmental unit the jurisdiction of which is entirely
within the jurisdiction of the City); (d) the aggregate face amount of all tax-exempt obligations
(other than private activity bonds and other obligations not required to be included in such
calculation) issued by the City and all entities 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) during the calendar year in which the Bonds
are issued is not reasonably expected to exceed $5,000,000; and (e) 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 therefore certifies that the Bonds are eligible
for the arbitrage rebate exception under Section 148(f)(4)(D) of the Code and designates the
Bonds as"qualified tax-exempt obligations" for the purposes of Section 265(b)(3) of the Code.
Section 12. Refunding or Defeasance of the Bonds. The City may issue refunding
bonds pursuant to the laws of the State 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
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the refunding or defeasance. If money and/or "government obligations" (as defined in chapter
39.53 RCW, as now or hereafter amended) 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
detennine.
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.
Section 13. Bond Fund and Deposit of Bond Proceeds. The Bond Fund is hereby
created and established in the office of the Finance Manager as a special fund designated the
Limited Tax General Obligation Bond Fund, 2011, for the purpose of paying principal of and
interest on the Bonds. All taxes and other amounts allocated to the payment of the principal of
and interest on the Bonds shall be deposited in the Bond Fund.
Section 14. Refunding of the Refunded Bonds.
(a) Appointment of Refunding Trustee. U.S. Bank National Association 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. 3463 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 Exhibit 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 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
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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 direct,
noncallable obligations of the United States of America ("Substitute 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 PLLC, the City's bond counsel, the interest on the Bonds and the
Refunded Bonds will remain excluded from gross 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 Substitute 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 or 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 dates of
the Bonds and the Refunded Bonds, as applicable, 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 (ii) an opinion from Foster Pepper 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. The Refunding Trustee is authorized and
directed to purchase the Acquired Obligations (or Substitute Obligations) and to make the
payments required to be made by the Refunding Plan from the Acquired Obligations (or
Substitute Obligations) and money deposited with the Refunding Trustee pursuant to this
ordinance. All Acquired Obligations (or Substitute 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. 3463, 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 counsel's fees,and other related expenses, shall be paid out
of the proceeds of the Bonds.
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(e) Authorization for Refunding Trust Agreement. To carry out the Refunding Plan
provided for by this ordinance, the City Manager is authorized and directed to execute and
deliver to the Refunding Trustee a Refunding Trust Agreement substantially in the fonn 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 City Manager is
authorized to make such changes 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 15. Call for Redemption of the Refunded Bonds. The City calls for
redemption on December 1, 2011, all of the Refunded Bonds at a price of 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. 3463 in
order to effect the redemption prior to their maturity of the Refunded Bonds.
Section 16. 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 and the
known earned income from the investment of the proceeds of the issuance and sale of the Bonds
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 14 of this ordinance will
discharge and satisfy the obligations of the City under Ordinance No. 3463 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 ordinance immediately upon the deposit of such money
with the Refunding Trustee.
Section 17. Undertaking to Provide Continuing Disclosure. To meet the requirements
of paragraph (b)(5) of Rule 15c2-12, as applicable to a participating underwriter for the Bonds,
the City makes the following written Undertaking for the benefit of holders of the Bonds:
(a) Undertaking to Provide Annual Financial Information and Notice of
Listed Events. The City undertakes to provide or cause to be provided, either directly or through
a designated agent, to the MSRB, in an electronic format as prescribed by the MSRB,
accompanied by identifying information as prescribed by the MSRB:
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(i) 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) Timely notice (not in excess of 10 business days after the
occurrence of the event) of the occurrence of any of the following events with
respect to the Bonds: (1) principal and interest payment delinquencies; (2) non-
payment related defaults, if material; (3) unscheduled draws on debt service
reserves reflecting financial 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, the
issuance by the Internal Revenue Service of proposed or final determinations of
taxability, Notice of Proposed Issue (IRS Form 5701 — TEB) or other material
notices or determinations with respect to the tax status of the Bonds; (7)
modifications to rights of holders of the Bonds, if material; (8) bond calls (other
than scheduled mandatory redemptions of Term Bonds), if material, and tender
offers; (9) defeasances; (10) release, substitution, or sale of property securing
repayment of the Bonds, if material; (11) rating changes; (12) bankruptcy,
insolvency, receivership or similar event of the City, as such"Bankruptcy Events"
are defined in Rule 15c2-12; (13) the consummation of a merger, consolidation,
or acquisition involving the City or the sale of all or substantially all of the assets
of the City other than in the ordinary course of business,the entry into a definitive
agreement to undertake such an action or the termination of a definitive
agreement relating to any such actions, other than pursuant to its terms, if
material; and (14) appointment of a successor or additional trustee or the change
of name of a trustee, if material.
(iii) 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 applicable to State local governmental
units such as the City, 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) outstanding general obligation bonds; (3) assessed valuation for the
fiscal year; (4) regular property tax levy rate and regular property tax levy rate
limit for the fiscal year; and (5) general fund revenues from other major tax
sources;
(ii) Shall be provided 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
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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, 2010; and
(iii) May be provided in a single or multiple documents, and
may be incorporated by specific reference to documents available to the public on
the Internet website of the MSRB or filed with the SEC.
(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 or the MSRB,
under the circumstances and in the manner permitted by Rule 15c2-12. The City will give notice
to the MSRB 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 Beneficial Owner 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 Rule 15c2-12 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 the MSRB.
(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 Beneficial Owner of a Bond shall be to take such actions as that
Beneficial Owner 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 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
Rule 15c2-12, including,without limitation, the following actions:
(i) Preparing and filing the annual financial infornation
undertaken to be provided;
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(ii) Determining whether any event specified in subsection (a)
has occurred, assessing its materiality, where necessary, with respect to the
Bonds, and preparing and disseminating any required notice of its occurrence;
(iii) Determining whether any person other than the City is an
"obligated person"within the meaning of Rule 15c2-12 with respect to the Bonds,
and obtaining from such person an undertaking to provide any annual financial
information and notice of listed events for that person in accordance with
Rule 15c2-12;
(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 18. Approval of Bond Purchase Contract; Delivery of Bonds. The
Underwriter has presented a purchase contract (the "Purchase Contract") to the City offering to
purchase the Bonds under the terms and conditions provided in the Purchase Contract, which
written Purchase Contract is on file with the City Clerk. The City Council finds that entering
into the Bond Purchase Contract is in the City's best interest and accepts the offer contained
therein and authorizes its execution by the City Manager.
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
PLLC,municipal bond counsel of Seattle,Washington, regarding the Bonds.
Section 19. Official Statement. The City has been provided with copies of a
preliminary official statement dated August 5, 2011, prepared in connection with the sale of the
Bonds. For the sole purpose of the Underwriter's compliance with paragraph (b)(1) of Rule
15c2-12, the City "deems final" that Preliminary Official Statement as of its date, except for the
omission of information permitted to be omitted by Rule 15c2-12 and ratifies the distribution by
the Underwriter of that preliminary official statement to potential purchasers of the Bonds.
The City authorizes and approves the preparation, execution by the City Manager and
delivery to the Underwriter of a final official statement for the Bonds, in the form of the
preliminary official statement, with such modifications and amendments thereto as shall be
deemed necessary or desirable by the City. The City authorizes and approves the distribution by
the Underwriter of that final official statement to potential purchasers and purchasers of the
Bonds.
Section 20. General Authorization and Ratification. The City Manager, the Finance
Manager, and other appropriate officers of the City are severally authorized and directed to take
any actions and to execute documents as in their judgment may be necessary or desirable to carry
out the terms of, and complete the transactions contemplated by, this ordinance and the Purchase
Contract (including everything necessary for the prompt delivery of the Bonds to the
Underwriter and for the proper application, use and investment of the proceeds of the sale
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thereof), and all actions heretofore taken in furtherance thereof and not inconsistent with the
terms of this ordinance are ratified and confirmed in all respects.
Section 21. Severability. The provisions of this ordinance are declared to be separate
and severable. If a court of competent jurisdiction, all appeals having been exhausted or all
appeal periods having run, finds any provision of this ordinance to be invalid or unenforceable as
to any person or circumstance, such offending provision shall, if feasible, be deemed to be
modified to be within the limits of enforceability or validity. However, if the offending
provision cannot be so modified, it shall be null and void with respect to the particular person or
circumstance, and all other provisions of this ordinance in all other respects, and the offending
provision with respect to all other persons and all other circumstances, shall remain valid and
enforceable.
Section 22. 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 an open public meeting thereof,this 15"' day of August, 2011.
Mayor
ATTEST:
City Clerk
APPROVED AS TO FORM:
Foster Pepper PLLC,Bond Counsel
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EXHIBIT A
Bond Maturity Schedule:
Maturity Years Amounts Interest Rates
2011 $ 65,000 2.00%
2012 400,000 2.00
2013 410,000 2.00
2014 420,000 3.00
2015 430,000 3.00
2016 445,000 3.00
2017 460,000 4.00
2018 475,000 4.00
2019 495,000 4.00
2020 510,000 4.00
The Bonds shall be issued without the right or option of the City to redeem the Bonds
prior to their stated maturity.
SIIS??uGA
CERTIFICATION
I, the undersigned, City Clerk of the City of City, Washington (the "City'), hereby certify
as follows:
1. The attached copy of Ordinance No.L161�(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 August 15, 2011, 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 the members voted in the proper manner for the passage of the
Ordinance.
IN WITNESS WHEREOF, I have hereunto set my hand this 15`x' day of August, 2011.
CITY OF PASCO, WAS - GTON
A0�4 1 Debra L. Clark, bVy Clerk
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