Ordinance 3372CITY OF EDMONDS, WASHINGTON
ORDINANCE NO. 3372
AN ORDINANCE of the City of Edmonds, Washington, relating to
contracting indebtedness; providing for the issuance of $3,045,000 par value of
Limited Tax General Obligation Bonds, 2001, of the City for general City purposes
to provide funds with which to pay costs of making improvements to the Frances
Anderson Recreational Center, replacing the Edmonds library roof, funding a sewer
rehabilitation project and street improvements; fixing the date, form, maturities,
interest rates, terms and covenants of the bonds; establishing a bond redemption
fund and a construction fund; providing for bond insurance; and approving the sale
and providing for the delivery of the bonds to Seattle- Northwest Securities
Corporation of Seattle, Washington.
Prepared by:
FOSTER PEPPER & SHEFELMANPLLC
1111 Third Avenue, Suite 3400
Seattle, Washington 98101
(200) 447 -4400
50266580.04
TABLE OF CONTENTS
Section1.
Debt Capacity ................................................................................. ............................... 1
Section 2.
Authorization of Bonds .................................................................. ............................... 2
Section 3.
Description of Bonds ...................................................................... ............................... 2
Section 4.
Registration and Transfer of Bonds ............................................... ............................... 3
Section 5.
Payment of Bonds ...................................................................:...... ............................... 5
Section 6.
Redemption Provisions and Open Market Purchase of Bonds ....... ............................... 5
Section 7.
Notice of Redemption .................................................................... :.............................. 7
Section 8.
Failure To Redeem Bonds ............................................................. ............................... 8
Section9. Pledge of Taxes .............................................................................. ............................... 8
Section 10.
Form and Execution of Bonds ..................................................... ............................... 8
Section11.
Bond Registrar.. .......................................................................... ...............................
10
Section 12.
Preservation of Tax Exemption for Interest on Bonds ............... ...............................
10
Section 13.
Small Governmental Issuer Arbitrage Rebate Exception and Designation of
Bonds as "Qualified Tax- Exempt Obligations." ........................ .:.............................
10
Section 14.
Refunding or Defeasance of the Bonds ...................................... ...............................
11
Section 15.
Bond Fund and Deposit of Bond Proceeds ................................ ...............................
13
Section 16.
Approval of Bond Purchase Contract ........................................ ...............................
13
Section 17.
Preliminary Official Statement Deemed Final ........................... ...............................
14
Section 18.
Undertaking to Provide Continuing Disclosure ......................... ...............................
14
Section 19.
Bond Insurance .......................................................................... ...............................
17
Section 20.
Effective Date of Ordinance ...................................................... ...............................
17
50266580.04
CITY OF EDMONDS, WASHINGTON
ORDINANCE NO. 3372
AN ORDINANCE of the City of Edmonds, Washington, relating to
contracting indebtedness; providing for the issuance of $3,045,000 par value of
Limited Tax General Obligation Bonds, 2001, of the City for general City purposes
to provide funds with which to pay costs of making improvements to the Frances
Anderson Recreational Center, replacing the Edmonds library roof, funding a sewer
rehabilitation project and street improvements; fixing the date, form, maturities,
interest rates, terms and covenants of the bonds; establishing a bond redemption
fund and a construction fund; providing for bond insurance; and approving the sale
and providing for the delivery of the bonds to Seattle - Northwest Securities
Corporation of Seattle, Washington.
WHEREAS, the City of Edmonds, Washington (the "City"), is in need of making
improvements to the Frances Anderson Recreational Center, replacing the Edmonds library roof,
funding a sewer rehabilitation project and street improvements, the estimated cost of which is
$2,975,000, and the City does not have available sufficient funds to pay the cost; and
WHEREAS, Financial Security Assurance Inc. (the `Bond Insurer "), has made a
commitment to issue an insurance policy (the "Municipal Bond Insurance Policy ") insuring the
payment when due of the principal of and interest on the Bonds as provided therein, and the City
Council deems that the purchase of the Municipal Bond Insurance Policy is in the best interest of
the City; NOW THEREFORE,
THE CITY COUNCIL OF THE CITY OF EDMONDS, WASHINGTON, DO ORDAIN
AS FOLLOWS:
Section 1. Debt Capacity. The assessed valuation of the taxable property within the City
as ascertained by the last preceding assessment for City purposes for the calendar year 2001 is
$3,260,973,309, and the City has outstanding general indebtedness evidenced by limited tax
general obligation bonds and leases in the principal amount of $9,618,500 incurred within the
50266580.04
limit of up to 1 -1/2% of the value of the taxable property within the City permitted for general
municipal purposes without a vote of the qualified voters therein, unlimited tax general
obligation bonds in the principal amount of $8,850,000 incurred within the limit of up to 2 -1/2%
of the value of the taxable property within the City for capital purposes only, issued pursuant to a
vote of the qualified voters of the City, and the amount of indebtedness for which bonds are
authorized herein to be issued is $3,045,000.
Section 2. 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 $3,045,000 for general City purposes to provide the funds to pay costs of making
improvements to the Frances Anderson Recreational Center, replacing the Edmonds library roof,
funding a sewer rehabilitation project and street improvements (collectively, the "Improvements ")
and to pay the costs of issuance and sale of the bonds (the "costs of issuance "). The general
indebtedness to be incurred shall be within the limit of up to 1 -1/2% of the value of the taxable
property within the City permitted for general municipal purposes without a vote of the qualified
voters therein.
Section 3. Description of Bonds. The bonds shall be called Limited Tax General
Obligation Bonds, 2001, of the City (the "Bonds "); shall be in the aggregate principal amount of
$3,045,000; shall be dated September 1, 2001; shall be in the denomination of $5,000 or any
integral multiple thereof within a single maturity; shall be numbered separately in the manner
and with any additional designation as the Bond Registrar (collectively, the fiscal agent and co-
fiscal agent of the State of Washington) deems necessary for purposes of identification; shall
bear interest (computed on the basis of a 360 -day year of twelve 30 -day months) payable
semiannually on each June 1 and December 1, commencing December 1, 2001, to the maturity
50266580.04 -2-
or earlier redemption of the Bonds; and shall mature on December 1 in years and amounts and
bear interest at the rates per annum as follows:
Maturity
Interest
Years
Amounts
Rates
2002
$105,000
3.00%
2003
105,000
3.00
2004
110,000
3.50
2005
115,000
3.50
2006
120,000
3.50
2007
120,000
4.00
2008
125,000
4.00
2009
130,000
4.00
2010
135,000
4.15
2011
145,000
4.25
2012
150,000
4.35
2013
155,000
4.45
2016
505,000
4.65
2018
380,000
4.80
2021
645,000
4.90
The life of the capital facilities to be acquired or improved with the proceeds of the Bonds
exceeds the term of the Bonds.
Section 4. Registration and Transfer of Bonds. The Bonds shall be issued only in
registered form as to both principal and interest and shall be recorded on books or records
maintained by the Bond Registrar (the "Bond Register "). The Bond Register shall contain the
name and mailing address of the owner of each Bond and the principal amount and number of
each of the Bonds held by each owner.
Bonds surrendered to the Bond Registrar may be exchanged for Bonds in any authorized
denomination of an equal aggregate principal amount and of the same interest rate and maturity.
Bonds may be transferred only if endorsed in the manner provided thereon and surrendered to
the Bond Registrar. Any exchange or transfer shall be without cost to the owner or transferee.
50266580.04 -3-
The Bond Registrar shall not be obligated to exchange or transfer any Bond during the 15 days
preceding any principal payment or redemption date.
The Bonds initially shall be registered in the name of Cede & Co., as the nominee of The
Depository Trust Company, New York, New York ( "DTC "). The Bonds so registered shall be
held in fully immobilized form by DTC as depository in accordance with the provisions of a
Blanket Issuer Letter of Representations dated August 6, 1996, between the City and DTC (as it
may be amended from time to time, the "Letter of Representations "). Neither the City nor the
Bond Registrar shall have any responsibility or obligation to DTC participants or the persons for
whom they act as nominees with respect to the Bonds regarding accuracy of any records
maintained by DTC or DTC participants of any amount in respect of principal of or interest on
the Bonds, or any notice which is permitted or required to be given to registered owners
hereunder (except such notice as is required to be given by the Bond Registrar to DTC).
For as long as any Bonds are held in fully immobilized form, DTC, its nominee or its
successor depository shall be deemed to be the registered owner for all purposes hereunder and
all references to registered owners, bondowners, bondholders or the like shall mean DTC or its
nominee and shall not mean the owners of any beneficial interests in the Bonds. Registered
ownership of such Bonds, or any portions thereof, may not thereafter be transferred except: (i) to
any successor of DTC or its nominee, if that successor shall be qualified under any applicable
laws to provide the services proposed to be provided by it; (ii) to any substitute depository
appointed by the City or such substitute depository's successor; or (iii) to any person if the
Bonds are no longer held in immobilized form.
Upon the resignation of DTC or its successor (or any substitute depository or its
successor) from its functions as depository, or a determination by the City that it no longer
wishes to continue the system of book entry transfers through DTC or its successor (or any
50266580.04 -4-
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 5. Payment of Bonds. Both principal of and interest on the Bonds shall be
payable in lawful money of the United States of America. Interest on the Bonds shall be paid by
checks or drafts of the Bond Registrar mailed on the interest payment date to the registered
owners at the addresses appearing on the Bond Register on the 15th day of the month preceding
the interest payment date. Principal of the Bonds shall be payable upon presentation and
surrender of the Bonds by the registered owners at either of the principal offices of the Bond
Registrar at the option of the owners. Notwithstanding the foregoing, for as long as the Bonds
are registered in the name of DTC or its nominee, payment of principal of and interest on the
Bonds shall be made in the manner set forth in the Letter of Representations.
Section 6. Redemption Provisions and Open Market Purchase of Bonds. Bonds maturing
in the years 2002 through 2011, inclusive, shall be issued without the right or option of the City
to redeem those Bonds prior to their stated maturity dates. The City reserves the right and option
to redeem the Bonds maturing on or after December 1, 2012, prior to their stated maturity dates
at any time on or after December 1, 2011, as a whole or in part (within one or more maturities
selected by the City and randomly within a maturity in such manner as the Bond Registrar shall
determine), at par plus accrued interest to the date fixed for redemption.
50266580.04 -5-
Bonds maturing in 2016, 2018 and 2021 are Term Bonds and, if not redeemed under the
optional redemption provisions set forth above or purchased in the open market under the
provisions set forth below, shall be called for redemption randomly (in such manner as the Bond
Registrar shall determine) at par plus accrued interest on December 1 in years and amounts as
follows:
Mandatory Mandatory
Redemption Redemption
Years Amounts
2016 Term Bonds
2014 $160,000
2015 170,000
2016 (maturity) 175,000
2018 Term Bonds
2017 185,000
2018 (maturity) 195,000
2021 Term Bonds
2019 $205,000
2020 215,000
2021 (maturity) 225,000
If the City shall redeem Term Bonds under the optional redemption provisions set forth
above or purchase Term Bonds in the open market as set forth below, the par amount of the Term
Bonds so redeemed or purchased (irrespective of their actual redemption or purchase prices) shall
be credited against one or more scheduled mandatory redemption amounts for those Term Bonds
(as allocated by the City) beginning not earlier than 60 days after the date of the optional
redemption or purchase, and the City shall promptly notify the Bond Registrar in writing of the
manner in which the credit for the Term Bonds so redeemed or purchased has been allocated.
50266580.04 -6-
Portions of the principal amount of any Bond, in installments of $5,000 or any integral
multiple thereof, may be redeemed. If less than all of the principal amount of any Bond is
redeemed, upon surrender of that Bond at either of the principal offices of the Bond Registrar,
there shall be issued to the registered owner, without charge therefor, a new Bond (or Bonds, at
the option of the registered owner) of the same maturity and interest rate in any of the
denominations authorized by this ordinance in the aggregate principal amount remaining
unredeemed.
The City further reserves the right and option to purchase any or all of the Bonds in the
open market at any time at any price acceptable to the City plus accrued interest to the date of
purchase.
All Bonds purchased or redeemed under this section shall be canceled.
Notwithstanding the foregoing, for as long as the Bonds are registered in the name of
DTC or its nominee, selection of Bonds for redemption shall be in accordance with the Letter of
Representations.
Section 7. Notice of Redemption. The City shall cause notice of any intended
redemption of Bonds to be given not less than 30 nor more than 60 days prior to the date fixed
for redemption by first -class mail, postage prepaid, to the registered owner of any Bond to be
redeemed at the address appearing on the Bond Register at the time the Bond Registrar prepares
the notice, and the requirements of this sentence shall be deemed to have been fulfilled when
notice has been mailed as so provided, whether or not it is actually received. by the owner of any
Bond. Interest on Bonds called for redemption shall cease to accrue on the date fixed for
redemption unless the Bond or Bonds called are not redeemed when presented pursuant to the
call. In addition, the redemption notice shall be mailed within the same period, postage prepaid,
to Moody's Investors Service, Inc., and Standard & Poor's at their offices in New York,
50266580.04 -7-
New York, or their successors, to Seattle - Northwest Securities Corporation, at its principal office
in Seattle, Washington, or its successor, to the Bond Insurer at its principal office in New York,
New York, or its successor, to each NRMSIR or the MSRB and to such other persons and with
such additional information as the City Administrative Services Director shall determine, but
these additional mailings shall not be a condition precedent to the redemption of Bonds.
Notwithstanding the foregoing, for as long as the Bonds are registered in the name of DTC or its
nominee, notice of redemption shall be given in accordance with the Letter of Representations.
Section 8. Failure To Redeem Bonds. If any Bond is not redeemed when properly
presented at its maturity or call date, the City shall be obligated to pay interest on that Bond at
the same rate provided in the Bond from and after its maturity or call date until that Bond, both
principal and interest, is paid in full or until sufficient money for its payment in full is on deposit
in the bond redemption fund hereinafter created and the Bond has been called for payment by
giving notice of that call to the registered owner of each of those unpaid Bonds.
Section 9. Pledge of Taxes. For as long as any of the Bonds are outstanding, the City
irrevocably pledges to include in its budget and levy taxes annually within the constitutional and
statutory tax limitations provided by law without a vote of the electors of the City on all of the
taxable property within the City in an amount sufficient, together with other money legally
available and to be used therefor, to pay when due the principal of and interest on the Bonds, and
the full faith, credit and resources of the City are pledged irrevocably for the annual levy and
collection of those taxes and the prompt payment of that principal and interest.
Section 10. Form and Execution of Bonds. The Bonds shall be printed or lithographed
on good bond paper in a form consistent with the provisions of this ordinance and state law and
shall be signed by the Mayor and City Clerk, either or both of whose signatures may be manual
50266580.04 -8-
or in facsimile, and the seal of the City or a facsimile reproduction thereof shall be impressed or
printed thereon.
Only Bonds bearing a Certificate of Authentication in the following form, manually
signed by the Bond Registrar, shall be valid or obligatory for any purpose or entitled to the
benefits of this ordinance:
CERTIFICATE OF AUTHENTICATION
This Bond is one of the fully registered City of Edmonds, Washington,
Limited Tax General Obligation Bonds, 2001, described in the Bond Ordinance.
WASHINGTON STATE FISCAL AGENT
Bond Registrar
Authorized Signer
The authorized signing of a Certificate of Authentication shall be conclusive evidence that the
Bonds so authenticated have been duly executed, authenticated and delivered and are entitled to the
benefits of this ordinance.
If any officer whose facsimile signature appears on the Bonds ceases to be an officer of
the City authorized to sign bonds before the Bonds bearing his or her facsimile signature are
authenticated or delivered by the Bond Registrar or issued by the City, those Bonds nevertheless
may be authenticated, issued and delivered and, when authenticated, issued and delivered, shall
be as binding on the City as though that person had continued to be an officer of the City
authorized to sign bonds. Any Bond also may be signed on behalf of the City by any person
who, on the actual date of signing of the Bond, is an officer of the City authorized to sign bonds,
although he or she did not hold the required office on the date of issuance of the Bonds.
Section 11. Bond Registrar. The Bond Registrar shall keep, or cause to be kept, at its
principal corporate trust office, sufficient books for the registration and transfer of the Bonds,
50266580.04 -9-
which shall be open to inspection by the City at all times. The Bond Registrar is authorized, on
behalf of the City, to authenticate and deliver Bonds transferred or exchanged in accordance with
the provisions of the Bonds and this ordinance, to serve as the City's paying agent for the Bonds
and to carry out all of the Bond Registrar's powers and duties under this ordinance and City
Ordinance No. 2451 establishing a system of registration for the City's bonds and obligations.
The Bond Registrar shall be responsible for its representations contained in the Bond
Registrar's Certificate of Authentication on the Bonds. The Bond Registrar may become the
owner of Bonds with the same rights it would have if it were not the Bond Registrar and, to the
extent permitted by law, may act as depository for and permit any of its officers or directors to
act as members of, or in any other capacity with respect to, any committee formed to protect the
rights of Bond owners.
Section 12. Preservation of Tax Exemption for Interest on Bonds. The City covenants
that it will take all actions necessary to prevent interest on the Bonds from being included in
gross income for federal income tax purposes, and it will neither take any action nor make or
permit any use of proceeds of the Bonds or other funds of the City treated as proceeds of the
Bonds at any time during the term of the Bonds which will cause interest on the Bonds to be
included in gross income for federal income tax purposes. The City certifies that it has not been
notified of any listing or proposed listing by the Internal Revenue Service to the effect that it is a
bond issuer whose arbitrage certifications may not be relied upon.
Section 13. 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 of Washington 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 United States Internal Revenue Code of 1986, as amended (the
50266580.04 -10-
"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 14. Refunding or Defeasance of the Bonds. The City may issue refunding bonds
pursuant to the laws of the State of Washington or use money available from any other lawful
source to pay when due the principal of and interest on the Bonds, or any portion thereof
included in a refunding or defeasance plan, and to redeem and retire, refund or defease all such
then - outstanding Bonds (hereinafter collectively called the "defeased Bonds ") and to pay the
costs of the refunding or defeasance. If money and/or "government obligations" (as defined in
chapter 39.53 RCW, as now or hereafter amended) 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
50266580.04 -11 -
defeased Bonds in the covenants of this ordinance and in the funds and accounts obligated to the
payment of the defeased Bonds shall cease and become void. The owners of defeased Bonds
shall have the right to receive payment of the principal of and interest on the defeased Bonds
from the trust account. The City shall include in the refunding or defeasance plan such
provisions as the City deems necessary for the random selection of any defeased Bonds that
constitute less than all of a particular maturity of the Bonds, for notice of the defeasance to be
given to the owners of the defeased Bonds and to such other persons as the City shall determine,
and for any required replacement of Bond certificates for defeased Bonds. The defeased Bonds
shall be deemed no longer outstanding, and the City may apply any money in any other fund or
account established for the payment or redemption of the defeased Bonds to any lawful purposes
as it shall determine.
If the Bonds are registered in the name of DTC or its nominee, notice of any defeasance
of Bonds shall be given to DTC in the manner prescribed in the Letter of Representations for
notices of redemption of Bonds.
Notwithstanding anything in this section to the contrary, if the principal of and/or interest
due on the Bonds is paid by the Bond Insurer pursuant to the Municipal Bond Insurance Policy,
the Bonds shall be treated as remaining outstanding for all purposes, not defeased or otherwise
satisfied and shall not be considered paid by the City, and the covenants, agreements and other
obligations of the City to the registered owners of the Bonds shall continue to exist and shall run
to the benefit of the Bond Insurer, and the Bond Insurer shall be subrogated to the rights of those
registered owners.
Section 15. Bond Fund and Deposit of Bond Proceeds. There is created and established
in the office of the Administrative Services Director of the City a special fund designated as the
Limited Tax General Obligation Bond Fund, 2001 (the "Bond Fund "), for the purpose of paying
50266580.04 - -12-
principal of and interest on the Bonds. Accrued interest on the Bonds, if any, received from the
sale and delivery of the Bonds shall be paid into the Bond Fund. All taxes collected for and
allocated to the payment of the principal of and interest on the Bonds shall be deposited in the
Bond Fund.
There also shall be created and established in the office of the Administrative Services
Director a special fund designated as the Capital Improvements Fund, 2001 (the "Construction
Fund "). The principal proceeds received from the sale and delivery of the Bonds shall be paid
into the Construction Fund and used for the purposes specified in Section 2 of this ordinance.
Until needed to pay the costs of the Improvements and costs of issuance of the Bonds, the City
may invest principal proceeds temporarily in any legal investment, and the investment earnings
may be retained in the Construction Fund and be spent for the purposes of that fund.
Section 16. Approval of Bond Purchase Contract. Seattle - Northwest Securities
Corporation of Seattle, Washington, has presented a purchase contract (the "Bond Purchase
Contract ") to the City offering to purchase the Bonds under the terms and conditions provided in
the Bond Purchase Contract, which written Bond Purchase Contract is on file with the City and is
incorporated herein by this reference. The City Council finds that entering into the Bond
Purchase Contract is in the City's best interest and therefore accepts the offer contained therein
and authorizes its execution by City officials.
The Bonds will be printed at City expense and will be delivered to the purchaser in
accordance with the .Bond Purchase Contract, with the approving legal opinion of Foster
Pepper & Shefelman PLLC, municipal bond counsel of Seattle, Washington, regarding the
Bonds.
50266580.04 -13-
The proper City officials are authorized and directed to do everything necessary for the
prompt delivery of the Bonds to the purchaser and for the proper application and use of the
proceeds of the sale thereof.
Section 17. Preliminary Official Statement Deemed Final. The City Council has been
provided with copies of a preliminary official - statement dated August 2, 2001 (the "Preliminary
Official Statement "), prepared in connection with the sale of the Bonds. For the sole purpose of
the Bond purchaser's compliance with Securities and Exchange Commission Rule 15c2-
12(b)(1), the City "deems final" that Preliminary Official Statement as of its date, except for the
omission of information as to offering prices, interest rates, selling compensation, aggregate
principal amount, principal amount per maturity, maturity dates, options of redemption, delivery
dates, ratings and other terms of the Bonds dependent on such matters.
Section 18. Undertaking to Provide Continuing Disclosure. To meet the requirements of
United States Securities and Exchange Commission ( "SEC ") Rule 15c2- 12(b)(5) (the "Rule "), as
applicable to a participating underwriter for the Bonds, the City makes the following written
undertaking (the "Undertaking ") for the benefit of holders of the Bonds:
(a) Undertaking to Provide Annual Financial Information and Notice of
Material Events. The City undertakes to provide or cause to be provided, either
directly or through a designated agent:
(i) To each nationally recognized municipal securities
information repository designated by the SEC in accordance with the Rule
( "NRMSIR ") and to a state information depository, if any, established in the
State of Washington (the "SID") annual financial information and operating
data of the type included in the final official statement for the Bonds and
described in subsection (b) of this section ( "annual financial information ");
(ii) To each NRMSIR or the Municipal Securities Rulemaking
Board ( "MSRB "), and to the SID, timely notice of the occurrence of any of
the following events with respect to the Bonds, if material: (1) principal and
interest payment delinquencies; (2) non - payment related defaults; (3)
unscheduled draws on debt service reserves reflecting financial difficulties;
(4) unscheduled draws on credit enhancements reflecting financial
difficulties; (5) substitution of.credit or liquidity providers, or their failure to
50266580.04 -14-
perform; (6) adverse tax opinions or events affecting the tax- exempt status of
the Bonds; (7) modifications to rights of holders of the Bonds; (8) Bond calls
(other than scheduled mandatory redemptions of Tenn Bonds); (9)
defeasances; (10) release, substitution, or sale of property securing
repayment of the Bonds; and (11) rating changes; and
(iii) To each NRMSIR or to the MSRB, and to the SID, timely
notice of a failure by the City to provide required annual financial
information on or before the date specified in subsection (b) of this section.
(b) Type of Annual Financial Information Undertaken to be Provided.
The annual financial information that the City undertakes to provide in subsection
(a) of this section:
(i) Shall consist of (1) annual financial statements prepared
(except as noted in the financial statements) in accordance with applicable
generally accepted accounting principles promulgated by the Government
Accounting Standards Board ( "GASB "), as such principles may be changed
from time to time, which statements shall not be audited, except, however,
that if and when audited financial statements are otherwise prepared and
available to the City they will be provided; (2) a statement of authorized,
issued and outstanding general obligation debt of the City; (3) the assessed
value of the property within the City subject to ad valorem taxation; and
(4) ad valorem tax levy rates and amounts and percentage of taxes
collected;
(ii) Shall be provided to each NRMSIR and the SID, not later
than the last day of the ninth month after the end of each fiscal year of the
City (currently, a fiscal year ending December 31), as such fiscal year may
be changed as required or permitted by State law, commencing with the
City's fiscal year ending December 31, 2001; and
(iii) May be provided in a single or multiple documents, and may
be incorporated by reference to other documents that have been filed with
each NRMSIR and the SID, or, if the document incorporated by reference is
a "final official statement" with respect to other obligations of the City, that
has been filed with the MSRB.
(c) Amendment of Undertaking. The Undertaking is subject to
amendment after the primary offering of the Bonds without the consent of any
holder of any Bond, or of any broker, dealer, municipal securities dealer,
participating underwriter, rating agency, NRMSIR, the SID or the MSRB, under the
circumstances and in the manner permitted by the Rule.
The City will give notice to each NRMSIR or the MSRB, and the SID, of the
substance (or provide a copy) of any amendment to the Undertaking and a brief
statement of the reasons for the amendment. If the amendment changes the type of
annual financial information to be provided, the annual financial information
50266580.04 -15-
containing the amended financial information will include a narrative explanation of
the effect of that change on the type of information to be provided.
(d) Beneficiaries. The Undertaking evidenced by this section shall inure
to the benefit of the City and any holder of Bonds, and shall not inure to the benefit
of or create any rights in any other person.
(e) Termination of Undertaking. The City's obligations under this
Undertaking shall terminate upon the legal defeasance of all of the Bonds. In
addition, the City's obligations under this Undertaking shall terminate if those
provisions of the Rule which require the City to comply with this Undertaking
become legally inapplicable in respect of the Bonds for any reason, as confirmed by
an opinion of nationally recognized bond counsel or other counsel familiar with
federal securities laws delivered to the City, and the City provides timely notice of
such termination to each NRMSIR or the MSRB and the SID.
(f) Remedy for Failure to Comply with Undertaking. As soon as
practicable after the City learns of any failure to comply with the Undertaking, the
City will proceed with due diligence to cause such noncompliance to be corrected.
No failure by the City or other obligated person to comply with the Undertaking
shall constitute a default in respect of the Bonds. The sole remedy of any holder of a
Bond shall be to take such actions as that holder deems necessary, including seeking
an order of specific performance from an appropriate court, to compel the City or
other obligated person to comply with the Undertaking.
(g) Designation of Official Responsible to Administer Undertaking. The
Administrative Services Director of the City (or such other officer of the City who
may in the future perform the duties of that office) or his or her designee is
authorized and directed in his or her discretion to take such further actions as may be
necessary, appropriate or convenient to carry out the Undertaking of the City in
respect of the Bonds set forth in this section and in accordance with the Rule,
including, without limitation, the following actions:
(i) Preparing and filing the annual financial information
undertaken to be provided;
(ii) Determining whether any event specified in subsection (a)
has occurred, assessing its materiality with respect to the Bonds, and, if
material, preparing and disseminating notice of its occurrence;
(iii) Determining whether any person other than the City is an
"obligated person" within the meaning of the Rule with respect to the Bonds,
and obtaining from such person an undertaking to provide any annual
financial information and notice of material events for that person in
accordance with the Rule;
50266580.04 -16-
(iv) Selecting, engaging and compensating designated agents and
consultants, including but not limited to financial advisors and legal counsel,
to assist and advise the City in carrying out the Undertaking; and
(v) Effecting any necessary amendment of the Undertaking.
Section 19. Bond Insurance. The City Council finds that it is in the City's best interest to
purchase, and that a savings will result from purchasing, the Municipal Bond Insurance Policy
for the Bonds. The Mayor is hereby authorized to execute the Bond Insurer's Municipal Bond
Insurance Commitment. The City shall purchase from the Bond Insurer the Municipal Bond
Insurance Policy insuring the prompt payment of the principal of and interest on the Bonds and
agrees to the conditions for obtaining that policy, including the payment of the premium therefor.
Section 20. 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 Edmonds,
Washington, at a regular open public meeting thereof, this 21St day of August, 2001.
M or
ATTEST:
City Clerk
APPROVED AS
FOSTER &PPER k SHEFELMAN PLLC
Bond Counsel
50266580.04 -17- -
Filed with the City Clerk: 08/21/2001
Passed by the City Council: 08/21/2001
Published: 08/26/2001
Effective Date: 08/31/2001
50266580.04 -1 p-
SUMMARY OF ORDINANCE NO. 3372
of the City of Edmonds, Washington
On the 21st day of August, 2001, the City Council of the City of Edmonds,
passed Ordinance No. 3372. A summary of the content of said ordinance, consisting of
the title, provides as follows:
AN ORDINANCE of the City of Edmonds, Washington, relating to contracting
indebtedness; providing for the issuance of $3,045,000 par value of Limited Tax General
Obligation Bonds, 2001, of the City for general City purposes to provide funds with which
to pay costs of making improvements to the Frances Anderson Recreational Center,
replacing the Edmonds library roof, funding a sewer rehabilitation project and street
improvements; fixing the date, form, maturities, interest rates, terms and covenants of the
bonds; establishing a bond redemption fund and a construction fund; providing for bond
insurance; and approving the sale and providing for the delivery of the bonds to Seattle -
Northwest Securities Corporation of Seattle, Washington.
The full text of this Ordinance will be mailed upon request.
DATED this 22nd day of August, 2001.
CITY CLERK, SANDRA S. CHASE
CERTIFICATION
I, the undersigned, City Clerk of the City of Edmonds, Washington (the "City "), hereby
certify as follows:
1. The attached copy of Ordinance No. 3372 (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 21, 2001, as that ordinance appears on the minute book
of the City; and the Ordinance will be in full force and effect five days after the publication of its
summary in the City's official newspaper.
2. A quorum of the members of the City Council was present throughout the meeting
and a majority of those members present voted in the proper manner for the passage of the
Ordinance.
IN WITNESS WHEREOF, I have hereunto set my hand this day of August, 2001.
CITY OF EDMONDS, WASHINGTON
SANDRA S. CHASE, City Clerk
50266580.04
Affidavit of Publication
STATE OF WASHINGTON, cs
COUNTY OF SNOHOMISH.
ORDINANCE NO. 72
o the tyo moods, T
The undersigned, being first duly sworn on oath deposes and says
Washington
On the 21st day of August,,, t
that she is Principal Clerk of THE HERALD, a daily newspaper
2001, the City Council of the City
of Edmonds, passed Ordinance p
printed and published in the City f Everett, County of Snohomish,
No. 3372. A summary of the con- p
tent of said ordinance, consisting
of theti0e, rovidesasfollows: 1 a
and State of Washington; that said newspaper is a newspaper of
Edmonds, Washington, relating g
general circulation in said County and State; that said newspaper
to contracting indebtedness; Pro-
vid,V for the issuance of h
has been approved as a legal newspaper by order of the Superior
$3,045,000 par value of L
Court of Snohomish County and that the notice ......... ...............................
purposes to provide funds wit
which to pay costs of making
improvements to the Frances] S
Summary Of Ordinance NO. 3372
AndersonRecreational Center. .
.............................................................................................. ...............................
roof, funding a sewer rehabili-
tation project and street improve- , C
City o f Edmonds m
maturities, interest rates, terms I
and covenants of the bonds;
establishing a bond redemption
fund and a construction fund;
a� an, for gbond he male ands
rov'ding for the delivery of the] a
a printed copy of which is hereunto attached, was published in said
nds to Seattle-No rthwesF
Securities Corporation of Seatt le„ n
newspaper proper and not in supplement form, in the regular and
Washington.
The ran text of this ordinance;' e
entire edition of said paper on the following days and times, namely:
will be mailed upon request.
DATED this 22nd day of
August, 2001.
CITY SANDRA S. CHASE A
August 26, 2001
Published: August 26, 2001. .
.................................................... .
................... ................................................................................... ...............................
and that said newspaper was regularly distributed to its subscribers
during 11 of said period.
G
................................... ....i..........................
Principal Clerk
Subscribed and sworn to before me this .......27th
of.... A. g.... t ................ ............................... 2001...
.. ..... .... ..... ....... ...............................
Notary Public In and for the tate of Washington,
residing at Everett, &A P County.
��SSIOIV��,�
eat .o•,
� NOTARY 9m : •
SO PUBLIC <
%
WASY\C%"0
�ED�tVED
AUG 2 8 2001
B-2-1 EDMONDS CITY CLERK