Ordinance 3862N ORDINANCE of the City of Edmonds, Washington,
relating to contracting indebtedness; providing for the issuance of
not to exceed $12,500,000 of the ity's limited, tax general'
obligation refunding bonds to carry out the refunding of certain
outstanding limited tax general obligation bonds of the City and''to
pay the administrative costs of such reftand n, s and the; costs of
issuance and sale of the bonds; firing or setting parameters with
respect to certain terns and covenants of the ponds appointing the
Finance Director as the City"s designated representative to approve
the final terms ofthe sale and issuance of the bonds, to appoint
refunding trustee and to tie certain other actions with respect to,
carrying out the refundings and the issuance of the bonds; and
repeating ordinance No. 3837 of the City.
Passed December ber , 2011?
This elocunie Ott prepared :
I I I I Third Avenue, write 3400
Seattle, Washington 98101
2 0 ' 7m ' ' `
MIVGWQi ' •�4�Iri
Section 1. Findings and .......... .......... ...... --.- .... -- ... ----I
Section 2. Definitions. ...... ...... --- ...... ... ---- ........ ----2
Section 3. Porpose and ALIthorization of the Bonds-- .... ...... — ... —6
Section 4. Description of the Bonds; Appollument of Designated Representative....,,. ......... .....6
Section 5. Bond Registrar; Registration and Transfer of Bon& ........ ........ ---- ...... ........ — 8
Section, Form and Execution of Bonds --'.'—.- ....... —.— ....... ...... ........
Section 7, payment of Bonds ...... ............ --10
Section 8, Redemption Provisions and Open Market Purchase of Bon ds........ - ...... . ......... 1
Section 9. Failure To Redeem Bonds .. ....... ......... ..... -- ..... -- ....... ....... ....... ... ----12
Section 10. Pledge offaxes..—........ ..... --- .... -- ...... ........ .......... ....... ...................
Section 11, Tax Matters. ---- ....... — ...... ...... -- ............
13
Section 12. Refunding or Defleasance of the Bonds--.—.---- ............... ....... --- ......
13
Section 13. Bond Fund; Deposit of Bond Proceeds. ...... — ................. .......... 14
Section 14, Refunding of the Refunded Bonds.... ................ ...... A4
Section 1.5. Sale of Bonds... .... ...... .......... ... 17
Section 16. Official Statement, ...... ............... ............... ....... 17
Section IT Undertaking to Provide Continuing 18
Section 18. Supplemental ------ ...... ...... IS
Section 19. General Autitorization, Delivery of Bonds........,.... .... ...........
Section 20. Severability ....... 1,8
Section 21, Prior Bond Authorization Repeated - ............... ............... ............ 19
Section 22. Effective Date of Ordinance ........... 19
5 110§850 ";
AN ORDINANCE of - City of • a •Washington,
relating to contracting indebtedness;providing f• . of
not to exceed $12,500,000 of the City's limited tax general
obligation r-' • bonds a carry out the refunding of certain• . i -f tax general obligation bonds of ♦ to
pay the administrative costs of such refund ngs and the costs 6
issuance and sale of the bonds; fixing or setting parameters with
respect to certain terms and covenants of the bonds; appointing the
Finance Director as the City's designated representative to approve
the final terms of - sale and issuance of - bonds,• appoint a
refunding trustee and to take certain other actions with respect to
carrying out the refundings and the issuance of the bonds; and
repealing ordinance • `s of
THE CITY COUNCIL OF THE CITY OF EDMONDS, WASHINGTON, DO ORDAIN
AS FOLLOWS:
Section• and Dctcrminatioouncilof of Edmonds,
meaningsWashington (the "City") makes the findings and determinations set forth below. Capitalized
terms have the given in Section
(a) The Refunding Candidatesi The City has previously issued the following limited
tax general obligation bonds (the "Refunding Candidates"):
(1) 1998 Bonds. The 1998 Bonds were issued in the original principal amount of
$4,480,000 for the purpose of refunding the City's then -outstanding Limited Tax
General Obligation Bonds, 1993 and Limited Tax General Obligation Bonds,
1995. The refinanced projects include a public works building; and the
acquisition and renovation of a building and adjacent -parking spaces to serve as
the new city hall. The outstanding 1998 Bonds - callable at any time at a price
of par plus accrued interest to the date fixed for redemption.
2001,4 Bonds. 1i Bonds ` - issued in the original principal amount of
$3,045,000 for the purpose of paying a portion of the costs of making
improvements to the Frances Anderson Recreational Center, replacing e
Edmonds lr ••f, funding a sewer rehabilitationprojectand street
improvements. The outstanding 2001A Bonds maturing on or after December 1,
2012 are callable at any time on or after December 1, 2011 at a price of par plus
accrued interest to the date fixed for redemption.
(3) 2001B Bonds. The 2001B Bonds were issued in the original principal amount of
$2,260,000 for the purpose of purchasing certain property for park and other
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purposes. The outstanding 2001B Bonds maturing on or after December 1, 2012
are callable at any time on or after December 1, 2011 at a price of par plus
accrued interest to the date fixed for redemption. In addition to a pledge of taxes,
the City also pledged the proceeds of any grants received by the City for the
purchase of park and open space property to the payment of principal of and
interest on ii Bonds.
maturing�4) 2002 Bonds� The 2002 Bonds were issued in the original principal amount of
$7,015,000 for the purpose of paying a portion of the costs of acquiring and
renovating facilities for a performing arts theatre, creating on -site parking, and
constructing a meeting room for the theatre. The outstanding 2002 Bonds
on or _ December time on or
December i price of par plus accrued - _ to the date fixed for
redemption. In addition to a pledge of taxes, the City also pledged to the payment
of principal of and interest on the Bonds the proceeds of certain
intergovernmental payments -• i - • • • Public
• � from • •mish County Public Facilities District underCounty
Interlocal Agreement, and farther pledged the proceeds of certain Real Estate
Excise Taxes imposed by • RCW 82.41.010.
• Approval of Final Terms of Bonds. RCW 39A6040(2)provides that an
ordinance authorizing the issuance of bonds may authorize an officer of the City to serve as the
City's Designated Representative and to accept, on behalf of the City, an offer to purchase those
bonds so long as the acceptance of such offer is consistent with terms established by an
ordinance that establishes, or sets parameters with respect to, the following Final Terms: the
amount, date or dates, denominations, interest rate or rates (or mechanism for determining
interest rate or rates); payment dates, final maturity, redemption rights, price, nummum. savings
for refunding bonds (if the refunding bonds are issued for savings purposes), and any other terms
and conditions deemed appropriate by the City Council.
(c) Find • with Respect I Refunding. The City C• ••that,••
deterimination by the Designated Representative that such a refunding will result 'in a savings t
the City as further set forth in Section 14, the Refunding Candidates may be refunded by th
issuance of " Bonds.
Section 2. Definitions. As used in this ordinance, the following words shall have the
following meanings;
(a) "1998 Bonds" means the City's outstanding Limited Tax General Obligation
Refunding Bonds, 1998, authorized by Ordinance No. 3235, passed on December 15, 1998.
(b) "2001A Bonds" means the City's outstanding Limited Tax General Obligation
Bonds, 2001, authorized by Ordinance No. 3372, passed on August 21, 2001.
(c) "2001B Bonds" means the City's outstanding Limited Tax General Obligation
Bonds 2001 Series B, authorized by Ordinance No. 3388, passed on December'11, 2001.
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11«9507
(d) "2002 Bonds" means the City's outstanding Limited Tax General Obligation
Bonds, 2002, authorized by Ordinance No. 3425, passed on November 7, 2002.
(e) "Acquired Obligations" means those United States Treasury Certificates of
Indebtedness, Notes, and Bonds --State and Local Government Series and other Government
Obligations purchased to accomplish the refunding of the Refunded Bonds.
(f) "Authorized Denominations" means $5,000 or any integral multiple thereof
within a maturity.
(g) "Beneficial Owner" means the owner of any beneficial interests in the Bonds.
(h) "Bond Counsel" means Foster Pepper PLLC or any other nationally recognized
bond counsel firm then representing the City.
(i) "Bond Fund' means a special fund for the payment of the principal of and interest
on any Series of Bonds created or designated by the Finance Director pursuant to this ordinance.
0) "Bond Purchase Contract" means an offer to purchase the Bonds (or any Series
of Bonds) presented by an underwriter (or other purchaser) and accepted by the Designated
Representative, acting on behalf of the City, setting forth certain terms and conditions of the
issuance, sale and delivery of any Series of the Bonds. In the case of a competitive sale of
Bonds, the offer shall mean the submitted bid (which incorporates all of the terms and conditions
set forth in the Notice of Bond Sale), and the award by the Designated Representative to the
successful bidder shall constitute the acceptance of the Bond Purchase Contract.
(k) "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.
(1) "Bond Registrar" means the Fiscal Agent.
(m) "Bonds" means the limited tax general obligation refunding bonds issued pursuant
to this ordinance.
(n) "City" means the City of Edmonds, Washington.
(o) "Closing Date" means the date on which aeries of Bonds is delivered to the
initial purchaser or purchasers thereof upon payment in full therefor.
(p) "Code" means the United States Internal Revenue Code of 1986, as amended, and
applicable rules and regulations promulgated thereunder.
(q) "County" means Snohomish County.
(r) "County PFD" means the Snohomish County Public Facilities District.
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511689507
(s) "County PFD Interlocal Agreement or "County Interlocal Agreement" means
the Interlocal _Agreement for Development of the Edmonds Centre [sic] for the Arts, dated
November 4, 2002, by and among the City, the Edmonds PFD, the Snohomish County PFD and
the County, and recorded under County recording number 200211060003.
(t) "DTC' means The Depository Trust Company, New York, New York.
(u) "Designated Representative" means the Finance Director, appointed in Section 3
of this ordinance to serve as the City's- designated representative in accordance with RCW
39 46.040(2).
(v) "Edmonds PFD" means the Edmonds Public Facilities District.
O "Final Terms" means the terms and conditions for the sale of any Series of Bonds
including, but not limited to the amount, date or dates, denominations; interest rate or rates (or
mechanism for determining interest rate or rates), payment dates, final maturity,_ redemption
rights, price, and minimum savings for refunding bonds (if the refunding bonds are issued for
savings purposes).
(x) "Finance Director" means the Finance Director of the City or any other City
official who succeeds to the duties now delegated to that office, or the designee of such officer.
(y) "Financial Advisor" means A. Dashen and Associates of Bellevue, Washington,
or any other Financial Advisor then appointed and acting as financial advisor to the City.
(z) "Fiscal Agent" means the fiscal agent of the State, currently The Bank of New
York Mellon, as the same maybe designated y the State from time to time.
(aa) "Government Obligations" has the meaning given in chapter 39.53 RCW,- as it
now exists or may hereafter be amended.
(bb) "Intergovernmental Payments" means the amounts received by the City from the
Edmonds PFD and the County PFD under the County PFD Interlocal Agreement.
(cc) "Letter of Representations" means the Blanket Issuer Letter of Representations
dated August 6,_ 1996, between the City and DTC, as it may be amended from time tot' e.
(dd) "S " means the Municipal Securities Rulemaking Board.
(ee) "Owners" means, without distinction, the Registered Owner(s) and the Beneficial
Owner(s).
(ff) "Rating Agency " means a nationally recoize rating agency or agencies, if any,
providing a rating on the Bonds at the request of the City.
(g) "Real Estate Excise Taxes" means the proceeds of the real estate excise taxes
imposed by the City under RCW 82.41.010.
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( ) "Redemption Date" means the date or dates fixed for redemption of each series of
the Refunded os, respectively.
(ii) "Refunded Bonds" means all or a portion of the Refunding Candidates selected by
the Designated Representative to be refunded with the proceeds of the Bonds,
0j) "Refunded Bond Ordina ce(s)" means the ordinance authorizing a particular issue
of the Refunding Candidates, as applicable.
(kk) "Refunding Candidates" means the following currently outstanding bonds of the
Amount Currently
Interest
Final Maturity
Authorizing
Bond Issue
Outstanding
Rates
Date
Call Date
Ordinance No.
1998 Bonds
$1,305,000
4.30 — 4.40%
12/1/2014
12/1/2008
3235
2001A Bonds
1,835,000
4.35 - 4.90%
12/1/2021
12/1/2011
3372
2001B Bonds
1,390,000
4.90 — 5.45%
12/1/2021
12/1/2011
3388
2002 Bonds
5970,000
375- 4.90%®
12/1/2026
12/1/2012
3425
(11) "Refunding Plan" means (as further described in the applicable Refunding Trust
Agreement):
(1) the deposit with the Refunding Trustee of an amount of proceeds of a Series of
the Bonds sufficient (together with other_ money of the City, if necessary) to
acquire the Acquired Obligations to be held by the Refunding Trustee with cash,
if necessary;
(2) the application of the principal of and interest on the Acquired Obligations (an
any other cash balance) to the call, payment and redemption of the specifie
Refunded Bonds on the applicable Redemption Date(s) at a price of par plus an],
accrued interest; and
(3) the payment of costs of issuing the Series of Bonds and the costs of carrying out
the foregoing elements of the Refunding Plan.
(` ) "Refunding Trust Agreement" means a refunding trust or escrow agreement
between the Cityandthe Refunding Trustee, dated as of the Closing Date of each Series of
Bonds, providing for: the safekeeping of bond proceeds and the refunding certain Refunded
Bonds.
( ) "Refunding Trustee" means the trustee or escrow agent; or any successor trustee
or escrow agent,, designated by the DesignatedRepresentativeto serve as refunding trustee to
carry out the Refunding Plan.
(oo) "Registered Owner" means any person or entity who is the registered owner of
any Bond.
(pp) "Registration Ordinance" means City Ordinance No. 2451 establishing a system
of registration for the City's bonds and other obligations.
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(qq) "Rule" means Rule l5c2-12 promulgated by the SEC under the Securities and
Exchange Act of 1934, as the same may be amended from time to time.
(rr) "SEC'means the United States Securities and Exchange Commission.
(ss) "Series of Bonds" or "Bonds of a Series" or "Series" means a series of Bonds
issued pursuant to this ordinance.
(tt) "State" means the State of Washington.
(uu) "Term Bond" means those Bonds that are designated as to bonds in the and
Purchase Contract.
(vv) "Undertaking" means a continuing disclosure agreement authorized to be
executed by the Designated Representative, pursuant to Section 18 of this ordinance.
(ww) "Underwriter" means the firm or firms selected by the Designated Representative
as the underwriter(s) for a negotiated sale or awarded as the successful bidder in a competitive
sale.
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51 1689507
(b) Date or Dates. Each Series of Bonds shall be dated as of its date of delivery to
the initial purchaser, which date may not belater than December-31, 2012.
(c) Denominations, Series Designation, etc. The Bonds must be issued in Authorized
Denominations, shall be numbered separately in the manner and shall bear any name and
additional designation as deemed necessary or appropriate by the Designated Representative.
(d) Interest ate(s). The Bonds shall bear interest at fixed rates per annum
(computed on the basis of a 360-day year of twelve 30-day months) from their date or from the
most recent interest paymentdatefor whichinteresthas been paid or duly provided for,
whichever is later. One or more rates of interest may be fixed for the Bonds, which rate or rates
must be in multiples of 1t8t" or 1/20`,' of 1%, or both. No more than one rate of interest maybe
fixed for any one maturity. No rate of interest for any maturity may exceed 5 50%, and the "all -
in" true interest cost to the City for any Series of Bonds may not exceed 5.00%.
(e) _ Payment Dates. Interest must be payable at fixed rates semiannually (oneach
June 1 and December 1, or such other semiannual dates as are selected by the Designated
Representative), commencing on the next such semiannual date following the issuance of the
Series of Bonds. Principal must be payable annually (on each December 1, or such other annual
date as is selected by Designated Representative) commencing no earlier than the next such
annualdate following the issuance of the Series of Bonds.
(f) Final Maturity. The Bonds allocated to carrying out a refunding to achieve a
savings shall not extend over a longer period of time than the RefundedBonds. Bonds allocated
to "carrying out a refunding to modify debt service requirements may mature no later than
December 1, 2031.
(g) Redemption Rights. The Bonds shall be issued subject to optional and mandatory
redemption provisions, including designation of Term Bonds, if any, set forth in Section 9.
(h) Price. The purchase price for any Series of Bonds may not be less than 95% or
more than 115% o of the par value of that Series.
(i) Minimum Savings for Refunding Bonds. The Bonds being refunded to achieve a
savings must achieve a positive net present value savings after paying all costs of issuance. The
Bonds allocated to the advance refunding of the 2002 Bonds must achieve a minimum of 3.00%
net present value savings over the scheduled principal and interest of the 2002 Bonds, giving
consideration to the fixed maturities of the corresponding Bonds and Refunded Bonds, the costs
of issuance of the Bonds, and the known earned income from the 'investment of the Bond
proceeds in the Acquired Obligations, pending redemption of the Refunded Bonds.
0) Other Terms and Conditions.
(1) The issuance of each Series of Bonds may not exceed the City's debt capacity at
the time of issuance.
(2) The Bonds may be sold by either negotiated sale or by competitive bid, in
accordancewith Section 15.
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(3) The Designated Representative, in consultation with the City's financial advisor,
may determine whether it is in the City's best interest to provide for bond
insurance or other credit enhancement. With respect to bond insurance or other
credit enhancement, the Designated Representative may accept, on behalf of the
City, such additional terms, conditions, and covenants as may be required by the
enhancement provider,• provisions of ii•
issuance(4) The Designated Representative is authorized to take such additional actions as
may be necessary or convenient for the refunding of the Reffinded Bonds an or
the of Bonds pursuant to the terms of ordinance,
forth• of • •
(a) Registration of Bonds. The Bonds shall be issued only in registered fo
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 kep
sufficient books for the registration and transfer of the Bonds, which shall be open to inspectio
by the City at all times. The Bond Register shall contain/ mailing address of
Registered Owner of each Bond and the principal amount and number of each of the Bon s e
by each Registered Owner. The Bond Registrar is authorized, on behalf of the City, t
authenticate and deliver Bonds transferred or exchanged in accordance with the provisions of th
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51 168950.7
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5 I 1 GR�,50.7
to sign bonds, although he or she did not hold the required office on the date of issuance of the
Bonds.
Each Bond issued to refund the 2002 Bonds shall include on such Bond and in any
disclosure document for the sale of any such Bond, substantially the following statement,
-• by Sectionof i PFD Thterlocal Agreementt
The :• • • • to the refundingof the 2002Bonds (the "PFD
Allocation Bonds") are obligations of the City, payable from project payments
transferred to the City by the Edmonds PFD, from certain real estate excise tax
receipts and from other money of the City legally available therefor. The PFD
Allocation Bonds are n# obligations of the Edmondsthe County Or the
County PFD.
incurredThe Edmonds PFD, the County and the County PFD are politic
subdivisions of the state of Washington separate from the City. All liabiliti
by -• in connectionEdmonds PFD shallsatisfied exclusively from the assets, credit, and property of the City and
creditor or other person shall have any right of action against or recourse to t
Edmonds PFD (except to the extent of required payments under the County P
Enterlocal Agreement), the County PFD, the County, or any of their respectil
assets, credit or services on account of any debts, obligations, liabilities
omissions of the City.
[CountyThe County PFD is a municipal corporation organized under RCW
36.100.010 and Amended Ordinance No. 01-041 of Snohomish County�
Amended Ordinance No. 01-041 expressly provides "All liabilities incurred by
the be satisfied exclusively • the assets,-• r
property of the [County PFD] and no creditor or other person shall have any night
of action against or recourse to the County, its assets, credit or services on account
of any debts, obligations, liabilities or omissions of the [County PFD]."
Section 7. PaMent 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 nomince, 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 paid by checks or drafts of • •'
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) received 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.
10
51 169950,, 7...
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In the case •, an optional re•' • •notice may state that the City retains the rig t
to rescind the redemption notice and the related optional redemption of Bonds by giving a notice
of rescission to the affected Registered Owners at any time prior to the scheduled optional
redemption date� Any notice of optional redemption that is so rescinded shall be of no effect,
. • the Bonds• • of optional-i- • M been rescinded shall remain
outstanding.
In addition, the redemption notice shall be mailed or sent electronically within the same
period to the MSRB consistent with the Undertaking, to any nationally recognized rating agency
which at the time maintains a rating on the Bonds at the request of the City, and to such other
persons and with such additional inf• i as - Finance Director shalldetermine, but these
additional mailings shall not be a condition precedent to the redemption of Bonds.
(f) Effect of Redeinption. Interest on Bonds called for redemption shall cease
to accrue on the date fixed for redemption, unlessthe: notice of redemption is rescinded as set
forth above.
Open Market Purchase. The City further- - _ _ right and option to
purchase any or all of the Bonds open market at any time at any price acceptable• the
City plus accrued interest to the date of purchase.
O Cancellation of Bonds. All Bonds purchased or redeemed_ under this
section shall be canceled.
Section 9, Failure To Redeem Bonds, If any Bond is not redeemed when properl
presented at its maturity or on the date set for redemption, if applicable, the City shall b
obligated to pay interest on that Bond at the same rate provided in the Bond from and after it
maturity or date set for redemption until that Bond, both principal and interest, is paid in full ol
until sufficient money forpayment in full is on deposit i• • Fund and the Bond ha
been called for payment by giving notice of that call to the Registered Owner.
• ITM 1TWINTITO
Pledge / Taxes. Foras long as any of the Bonds are outstanding,ti
irrevocably pledges to include in its budget and levy taxes annually within the constitutional an
statutory tax limitations provided by law without a vote of the electors of the City on all of th
taxable property within the City in an amount sufficient, together with other money legall.
available and to be used therefor, to pay when due the principal of and interest on those genert
obligation Bonds, and the full faith, credit and resources of the City are pledged irrevocably fol
the annual levy and collection of those taxes and the prompt payment of that principal an
(b) Additional Pledge with respect to 2002 Refunding Allocation. In addition, as
required by the County Interl6cal Agreement, the City expressly pledges to the payment of the
principal of and interest on that portion of the Bonds allocated to the refunding of the 2002
Bonds, the following resources, in the following order: (i) proceeds of the Intergovernmental
Payments received •` the City under• • Agreement received •
y the City as a
result of .les tax collected by the Edmondsr proceeds of the Real Estate Excise
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Taxes imposed by the City under RCW 82.41�0M, and (iii) proceeds of the Intergovernmental
Payments received by the City under the County Interlocal Agreement received by the City as a
result of the sales tax collected by the County PFD.
Section I L Tax Matters.
(a) Preservation of r • or Bonds.•
that it will take all actions reasonably necessary and within its control to prevent interest on the
Bonds from being includable 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
Code is applicable to the Bonds, take all actions necessary to comply (or to be treated as having
complied) .t requirement in connection with the Bonds, d • the calculationis
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.
r Designation of .r "Qualifiedr Obligations.The Bonds
are designated as "qualified tax-exempt obligations" for the purposes of Section 265(b)(3) of the
Code, if (a) the Finance Director is able to determine an ce i t at t e on s are not p vate
activity bonds" within the meaning of Section 141 of the Code; (2) the reasonably anticipated
amount of tax-exempt obligations (other than private activity bonds and other obligations n•
required to be included *in such calculation) which the City and any entity subordinate to the City
(including any entity that the City controls,derives its authorityto 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 (b) the
amount of tax-exempt obligations, including the Bonds, so 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 notexceed 1 i1i lit.
Section 12, Refunding or Defeasance of the Bonds. The City may issue refundin
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
the refunding or defeasance. If money and/or Government Obligations maturing at a time or
times and bearing interest in amounts (together with money, if necessary) sufficient to redeem
and retire, refund or •- `. _ the defeased Bonds accordance _ir terms are set aside in s
special trust fund •, escrow account•'.• • edge•; to that redemption,•,
dcfeasance 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 { the payment of the • ` `. `• Bonds sh, cease and become void.The
Owners of defcased 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
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51108850:7
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 detennine, 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 mone i
y 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,
(a) Bond Fund. The Bond Fund is created for the purpose of paying principal of an
interest on the Bonds. The Finance Director may create such accounts within the Bond Fund a -
he or she may deem necessary or convenient for the tracking of each Series of Bonds. All taxe
collected for and other amounts allocated to the payment of the principal of and interest on th 11
Bonds shall be deposited in the Bond Fund. M
(b) Deposit ofBond Proceeds� The principal -proceeds and premium, if any, received
from the sale and delivery of the Bonds shall be used to pay the costs of issuance of the Bonds
and deposited, invested and used in accordance with the applicable Refunding Plan and
Section 15 of this ordinance.
Section 14. Refftimding of the Refunded Bonds.
the terms and conditions set forth by this ordinance, the Designated Representative is authorized
to select applicable Refunding Candidates to be refunded by each Series of Bonds, to designate
the applicable Redemption Date and to appoint the Refunding Trustee for each Series of Bonds.
The Designated Representative may choose to refund less than all of the Refunding Candidates
and may serve as, or appoint separately, the Refunding Trustee for any Series of Bonds.
(b) Findings and Determinations With Respect to the Refundings. Prior to approving
the sale of a Series of Bonds, the Designated Representative shall identify the Refunded Bonds to
be refunded by the sale of such Series, and shall make the following determinations in writing:
kl) The Redemption Date is the earliest practical date or dates on which the Refunded
Bonds may be called for redemption;
(2) The savings that will be effected (as measured by the difference between the
principal and interest cost over the life of Bonds and the principal and interest cost
over the life of the Refunded Bonds but for such refunding) exceeds the minimum
savings required by Section 4 of this ordinance, In determining such savings, the
Designated Representative has given due 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
payment and redemption of the Refunded Bonds authorized by this ordinance
and
(3) The Refunding Plan will be effected by the issuance and sale of the Bonds sale of the Bonds and other money of the City used in the Refunding Plan pendin
applicationof " proceeds of such Bonds (togetherother moneyof
if necessary) to carrying out the Refunding Plan and that the money to b
deposited with the Refunding Trustee for the Refunded Bonds in accordance wit
the Refunding Plan will be sufficient (together with interest earned on th
Acquired Obligations) to discharge and satisfy the obligations of the City unde
Refunded Bond Ordinances.
The City Council finds that, based on the foregoing determinations, the pledges, charges, trusts,
covenants, and agreements of the City made or provided for in the applicable Refunded Bond
Ordinances, immediately upon the deposit of sufficient proceeds of the Bonds with the
Refunding Trustee, the Refunded Bonds shall no longer be deemed to be outstanding under the
applicable Refunded Bond Ordinances.
(c) Authorization for Refunding Trust Agreeinent. The Designated Representative
and the Mayor are each independently authorized to execute and deliver to the Refunding
Trustee a Refunding Agreement, which sets forththe duties, obligations and
responsibilities of the Refunding Trustee in connection with the Refunding Plan, provisions for
payment of the fees, compensation•' expenses of such Refunding i' such other
federalprovisions as may be necessary so that the Bonds are in compliance with the requirements of
governing the exclusionof intereston the Bonds fromgross income•federal
incomepurposes.
initial(d) Call for Redeniption of Refunded BondsThe Designated Representative is
authorized to call- on behalf of the JktiA,, the Refunded Bxmri&�* I
Redemption Date(s) in accordance with this ordinance. In addition to such other information as
may be necessary or convenient, the call for redemption shall specify the name of the Refunded
Bonds being called, their maturity dates, their Redemption Date(s) and redemption prices
(expressed as a percentage of par, plus accrued interest), and shall be irrevocable after the Bonds
are delivered to the purchaser thereof.• -r Representative, the Mayor
other proper City officials are authorized and directed to give or cause to be given such notices
as required, at the times and in the maimer required pursuant to the Refunded Bond Ordinances,
in order to effect the defeasance and redemption prior to maturity of the Refunded Bonds�
(e) Use ofBond Proceeds. The proceeds of each Series of Bonds (together with other
moneyof the City, if necessary)• •, carry out the Refunding Plan shall,
immediately upon receipt, be deposited with the Refunding Trustee as set forth in the Refunding
Trust Agreement. The Refunding Trustee shall use the money so deposited to discharge the
obligations of the City relating to the Refunded Bonds under the Refunded Bond Ordinances by
providing for the payment of the amounts required to be paid by the Refunding Plan. The
Refunding Plan shall be carried but, and proceeds of the Bonds shall be applied, in accordance
with this ordinance and the laws of the State.
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5116885Q.7
Section 16. Official Statqmenj
(a) Preliminary Official Statement Under the Rule� The Designated Representative
and Mayor are each independently authorized to review and approve the information about the
City contained in any preliminary official statement"Preliminary
r _ Official Statement")
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51969950:.7
Section 19� General Authorization,� Deliygjy of Bonds The Designated
Representative, the Mayor and • appropriate officers e ly
everything as in their judgment may be necessary, appropriate or desirable in order to carry out
the terms and provisions of, and complete the transactions contemplated in connection with, this
ordinance. The Bonds are to be printed at City expense and are to be delivered to the purchaser
in accordance with the Bond Purchase Contract, with the approving "•. opinion • Bond
Counsel regarding the Bonds,
Section 20, Severabilit- . The provisions of this ordinance are declared to be separate
and severable. If a court of competent jurisdiction, all appeals having been exhausted or a
appeal periods having ran, finds any provision of this ordinance to be invalid or unenforceable as
to any • • 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 v6id with respect to the particular person or
circumstance, and all • provisions of this ordinance in all • respects, and the offending
provision with respect to all other persons and all other circumstances, shall remain valid and
enforceable
51169850,7
ecti6n 2 1. Prior Bond i . • Repealed. Ordinance Ni. 3837 of . City
authorizing the salei issuance of . obligation bonds bonds i purpose
of refunding certain indebtedness of the City is hereby by repealed and is of no effect
whatsoever.
Section 22. Effective Date of Ordinance. This ordinance shall take effect and be in
i rom and after its passage and five days following its publication as required by law.
PASSED by • . • APPROVED by i of - City of i • i
Washington,open public • thereof,i December, 1
City Clerk
FOSTERPEPPER'r
i r l iCou-isel
Filed with the City Clerk: 12-02-2011
Passed by the City Council: 12-06-2011
Published: 12-11-2011
Effective Date: 12-16-2011
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511688507
EXHIBIT A
Form of
COV
To meet the requirements of paragraph(b)(5) of Rule l5c2-12, as applicable to a
participating underwriter for the Limited Tax General Obligation Refunding Bonds, 20-- (the
"Bonds") issued as of the date hereof by the City of Edmonds, Washington (the "City"), the City
makes the written Undertaking set forth below, for the benefit of holders of the Bonds.
Capitalized terms not defined herein have the meanings set forth in Ordinance Noi♦ of the
City.
(a) jjh�iiig to Pro AumW Financial Information and Notice of LisibA
Events. The City undertakes to provide or cause, to be provided, either directly or throng a
designated agent, to the Municipal Securities Rulemaking Board (the "MSRB"), in an electronic
format as prescribed by the MSRB, accompanied by identifying information as prescribed by the
MSRB:
(1) 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 inforrnation");
(2) Timely notice (not in excess of 10 business days after the
occurrence of the event) • the ♦ of any of the followinv events witt
respect to the Bonds: (1) principal and interest payment delinquencies; (2) non.
payment related defaults, if material; (3) unscheduled draws on debt servic'
reserves reflecting financial difficulties; (4) unscheduled draws on credi-
enhancements reflecting financial difficulties; (5) substitution of credit ol
liquidity providers, or their failure to perform; (6) adverse tax opinions, th(
issuance by the Internal Revenue Service of proposed or final determinations o-
taxability, Notice of Proposed lssue (IRS Fon-n 5701 — TEB) or other materia
notices • determinations with respect to the tax status • the Bonds; (7'
modifications to rights • holders • the Bonds, if material,� (8) bond calls (othe-,
-1 Pn
than scheduled mandatory redemptions of Term Bonds), if material, and tendel
offers; (9) defeasances; (10) release, substitution, • sale • property securini
repayment of the Bonds, if materiali (11) rating changes-, (12) bankruptcy
insolvency, receivership or similar event of the City, as such "Bankruptcy Events'
are defined in Rule l5c2-12; (13) the consummation • a merger, consolidation
or acquisition involving the City or the sale of all or substantially all of the asset!
of the City other than in the ordinary course of business, the entry into a definitiv(
agreement to undertake such an action or the termination of a definitiv(
agreement relating to any such actions, • than pursuant to its terms, i
material; and (14) appointment of a successor or additional trustee or the chang(
• name of a trustee, if mateni al.
4-
-511689507
(3) 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:
(1) Shall consist • prepared (except
noted in the financial statements) in accordance with generally accepted
accounting prmciples applicable • State local governmental units such as the
City, as such principles maybe changed from time to time, which statements
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) general
obligation debt that has been authorized and the amount outstanding; (3) assessed
valuation for the fiscal year; (4) regular ad valorem property tax levy rate,
amount, rate limitation and percentage of tax collected during the fiscal year,and
(5) amount of general fund revenues from other major tax sources
(2) 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
December 31), as such fiscal year may be changed as required or permitted by
State law, • year i Decemberi / •
be provided •` or r` documents, i may be
incorporated by specific reference to documents available to the public on the
Internet website of the MSR.B or filed with the Securities and Exchange
Commission.
Amendment of Undertakin• The Undertaking is subject• amendment
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, und
the circumstances and in the manner permitted by Rule l5c2-12. The City will give notice to th
r i of the substance(or provide a copy)of any amendment• the Undertaking and a brie
statement of the reasons for the amendment. If the amendment changes the type of annua
financial information to be provided, the annual financial information containing the amende
financial information will include a narrative explanation of the effect of that change on the typ
of informationto be provided.
create(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
any rightsother person.
(e) Termination of Undertakin . 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 . - . ` if thoseprovisions of Rule 15c2-12 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
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5a 168850:7
familiar with federal securities laws delivered to the City, and the City provides timely notice •
such termination to the MSRB.
(f) Remedy for Failure to Comply with Undertakin As soon as practicab e a er t e
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 Wre V.) 9 H 1 144 to
(9) Digiofi of 0m6a R&sbonsible to Administer Uhkifi The Financ,
Officer • the City • such other • • the City who may in the future perform the • • I I
that office) or his or her designee is authorized and directed in his • her discretion to take sue
further actions as may be necessary, appropriate or convenient to carry out the Undertaking o-
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:
(1) Preparing and filing the annual financial information undertaken to
be provided;
(2) 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;
(3) 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;
(4) 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
(5) • any necessary amendment of the Undertaking.
Dated
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511698507
3 14019AVI
1, the undersigned, City Clerk of the City of Edmonds, Washington (the "City"), hereby
certify as follows:
1, , The attached copy of Ordinance No. 3862 (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 December 6, 2011, as that ordinance appears on the
minute book of the City; and the Ordinance will be in ffill force and effect five days after
publication in the City's official newspaper; and
2. A quormn of the members of the City Council wits present throughout the
meeting mid as majority of its me berg voted in the proper manner for the passage of the
Ordinance.
,IN WITNESS WHEREOF, I have hereunto set my hand this 6'h day of December, 2011.
zd�--
lul WC-Nak -- -
Publication
Affidavit of
STATE OF WASHINGTON,
COUNTY SNOHOMISH S.S.
The undersigned, being first duly sworn on oath deposes and says that she is Principal Clerk o.
Snohonrish, and State of Washington; that said newspaper is a newspaper of general
circulation in said County THE HERALD, a daily newspaper printed and published in the City of Everett, County of State; that said newspaper has been approved as a legal
newspaper by order of the Superior Court of Snohomish County and that the notice
Summary of Ordinance N0, 3862
a printed copy of which is hereunto attached, was published unsaid newspaper proper and not
in supplement form; in the regular and entire edition of said paper on the following days and
times, namely:
December 11, 2011
and that said newspaper was regularly distributed to ia$ subscribers during all of said period.
� vrr
s m
Subscribed and swam to before me this 1'thr "
day of 1 "ci l r£ 2011
s
Notar# nd for c Siatc ofLi? psi ira 6clas tesi lssl at l rst ret A ralaotltish
County.
Account Name: City of Edmonds Account Number. 101416 Order Number. 0001760610