Ordinance 3536CITY OF EDMONDS, WASHINGTON
ORDINANCE NO. 3536
AN ORDINANCE of the City of Edmonds, Washington, relating to
contracting indebtedness; providing for the issuance of the $200,000 par value
Limited Tax General Obligation Bond, 2005, of the City for general City purposes to
provide the funds with which to pay costs of acquiring telecommunications
equipment and other City purposes, and paying the costs of issuance and sale of such
bond; fixing the date, forth, maturity, interest rate, terms and covenants of the bond;
designating an acquisition fund and establishing a bond fund; and approving the sale
and providing for the delivery of the bond to Bank of America, N.A., of Seattle,
Washington.
PASSED: FEBRUARY 15, 2005
This document prepared by:
Foster Pepper & Shefelman PLLC
1111 Third Avenue, Suite 3400
Seattle, WA 98101
(206) 447 -4400
CITY OF EDMONDS, WASHINGTON
ORDINANCE NO. 3536
AN ORDINANCE of the City of Edmonds; Washington, relating to
contracting indebtedness; providing for the issuance of the $200,000 par value
Limited Tax General Obligation Bond, 2005, of the City for general City purposes to
provide the funds with which to pay costs of acquiring telecommunications
equipment and other City purposes, and paying the costs of issuance and sale of such
bond; fixing the date, form, maturity, interest rate, terms and covenants of the bond;
designating an acquisition fund and establishing a bond fund; and approving the sale
and providing for the delivery of the bond to Bank of America, N.A., of Seattle,
Washington.
WHEREAS, the City of Edmonds, Washington (the "City'), is in need of acquiring new
telecommunications equipment, the estimated cost of which is $200,000, and the City does not have
available sufficient funds to pay the cost; NOW, THEREFORE,
BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF EDMONDS,
WASHINGTON, as follows:
Section 1. Definitions. As used in this ordinance, the following words have the
following meanings:
"Acquisition Fund" means the Telecommunication Acquisition Fund created and
established by this ordinance.
"Administrative Services Director" means the Administrative Services Director of the
City (or the successor officer to the Administrative Services Director).
"Bank" means Bank of America, N.A.
"Bond" means the Limited Tax General Obligation Bond, 2005, of the City issued
pursuant to and under the authority of and for the purposes provided in this ordinance.
"Bond Fund" means the Limited Tax General Obligation Bond Fund, 2005, created and
established by this ordinance.
TABLE OF CONTENTS
Section1. Definitions ....................................................................................... ..............................I
Section2.
Debt Capacity ................................................................................. ..............................2
Section 3.
Authorization of Bond .................................................................... ..............................2
Section 4.
Description of Bond ................ ............................... .................... ..............................3
Section 5.
Registration and Transfer of Bond; Bond Registrar ....................... ..............................3
Section6.
Payment of Bond ............................................................................ ..............................4
Section 7.
Optional Prepayment and Redemption of Bond ............................ ..............................4
Section 8.
Failure To Pay Installments ............................................................ ..............................5
Section 9.
Pledge of Taxes ............................................................................... ..............................5
Section10.
Covenants ........................................................................................ ..............................5
Section 11.
Form and Execution of Bond .......................................................... ..............................6
Section 12.
Preservation of Tax Exemption for Interest on Bond .....:.............. ..............................7
Section 13.
Small Governmental Issuer Arbitrage Rebate Exception and Designation of the
Bond as a "Qualified Tax- Exempt Obligation." ............................ ..............................7
Section 14.
Refunding or Defeasance of the Bond ............................................ ..............................8
Section 15.
Acquisition Fund and Deposit and Use of Bond Proceeds ............ ...:..........................8
Section 16.
Approval of Transaction ................................................................. ..............................9
Section 17.
Effective Date of Ordinance .......................................................... .............................10
"Bond Registrar" means the Administrative Services Director of the City.
"City" means the City of Edmonds, Washington.
"Code" means the Internal Revenue Code of 1986, as amended.
"Proposal Letter" means the letter of the Bank dated January 14, 2005, describing certain
conditions under which the Bank proposes to purchase the Bond.
"Project" means the acquisition of telecommunication equipment and other City purposes
approved by ordinance.
"Registered Owner" means the Bank, as registered owner of the Bond, or any subsequent
owner of the Bond.
Section 2. Debt Capacity. The assessed valuation of the taxable property within the City
as ascertained by the last preceding assessment for City purposes for the calendar year 2004 is
$4,465,519,067, and the City has outstanding general indebtedness evidenced by limited tax
general obligation bonds and other obligations in the principal amount of $25,215,473 incurred
within the limit of up to 1 -1/2% of the value of the taxable property within the City permitted for
general municipal purposes without a vote of the qualified voters therein, unlimited tax general
obligation bonds in the principal amount of $1,555,000 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 $200,000.
Section 3. Authorization of Bond. The City shall borrow money on the credit of the City
and issue its limited tax general obligation bond evidencing that indebtedness in the amount of
$200,000 for general City purposes to provide the funds to pay costs of carrying out the Project
and to pay the costs of issuance and sale of the Bond (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
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property within the City permitted for general municipal purposes without a vote of the qualified
voters therein.
Section 4. Description of Bond. The Bond shall be called the Limited Tax General
Obligation Bond, 2005, of the City; shall be in the aggregate principal amount of $200,000; shall
be dated its date of delivery; shall mature on March 1, 2010; shall be numbered R -1; shall be in
fully registered form; and shall bear interest at the rate of 3.53% per annum (computed on the
basis of a 360 -day year of twelve 30 -day months). The Bond shall be payable in ten installments
in an amount necessary to amortize the principal of and interest on the Bond over a five -year
period, payable on each June 1 and December 1, commencing June 1, 2005, and at maturity, in
installment payment amounts as set forth in Exhibit A attached hereto and by reference
incorporated herein. At maturity, any remaining outstanding principal balance and accrued
interest on the Bond shall be due and payable in full.
The City Council finds that fixing the above interest rate is in the best interest of the City.
The life of the capital facilities to be financed with the proceeds of the Bond exceeds the term of
the Bond.
Section 5. Registration and Transfer of Bond, Bond Re isg tray. The Bond 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 Administrative Services Director
of the City shall serve as Bond Registrar for the Bond. The Bond Register shall contain the
name and mailing address of the Registered Owner of the Bond.
The Bond may not be assigned or transferred by the, Bank without the prior written
consent of the City, except that the Bank may assign or transfer the Bond to any successor to the
business and assets of the Bank.
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The Bond Registrar shall keep, or cause to be kept, at its office in Edmonds, Washington,
sufficient books for the registration and transfer of the Bond. The Bond Registrar is authorized,
on behalf of the City, to authenticate and deliver the, Bond in accordance with the provisions of
the Bond and this ordinance, to serve as the City's paying agent for the Bond and to carry out all
of the Bond Registrar's powers and duties under this ordinance. The Bond Registrar shall be
responsible for its representations contained in the Bond Registrar's Certificate of Authentication
on the Bond.
Section 6. Payment of Bond. Installments of principal of and interest on the Bond shall
be payable in lawful money of the United States of America and shall be paid by check, draft or
warrant of the Bond Registrar mailed five days prior to the installment payment date to the
Registered Owner at the address appearing on the Bond Register on the 15th day of the month
preceding the installment payment date or by wire transfer or electronic debit to the Registered
Owner on the installment payment date. The Registered Owner shall present and surrender the
Bond at the office of the Bond Registrar in Edmonds, Washington, for cancellation promptly
after the final installment of principal and interest on the Bond, whether at maturity or upon
earlier prepayment and redemption, paid by the City. The Bond presented and surrendered under
this section shall be destroyed or cancelled in accordance with law.
The City and the Bond Registrar may deem and treat the Registered Owner as the
absolute owner of the Bond for the purpose of receiving payment of principal and interest and for
all other purposes, and neither the City nor the Bond Registrar shall be affected by any notice to
the contrary other than proper notice of assignment or transfer.
Section 7. Optional Prepayment and Redemption of Bond. The City reserves the right
and option to prepay and redeem at any time prior to its stated maturity date any or all of the
principal amount of the Bond outstanding at par plus accrued interest to the date of prepayment
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and redemption, subject to the payment of a potential prepayment fee as set forth in Exhibit B
attached hereto and by this reference incorporated herein. Written notice to the Bank of any
prepayment or redemption of the Bond shall not be required. Interest on the principal amount of
the Bond called for prepayment shall cease to accrue on the dated fixed for prepayment unless
the principal amount called for prepayment is not paid on the prepayment date. The amounts of
the semiannual payments on the Bond shall not be adjusted to reflect reamortization upon any
such prepayment.
Section 8. Failure To Pay Installments. If any installment of principal of and interest on
the Bond is not paid when due, or the City shall fail. to comply with any other covenant of this
ordinance, the interest rate on the Bond shall, at the option of the Bank, be increased by two (2)
percentage points, until such default has been cured or until all principal and accrued interest of
the Bond have been repaid in full.
Section 9. Pledge of Taxes. For as long as the Bond is 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 Bond, 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. Covenants. The City covenants with the Bank for as long as the Bond
remains outstanding that it will provide to the Bank the following:
(a) its annual state audit report within 10 days of its receipt from the
State auditor.
(b) its internally prepared unaudited financial statement within seven
months of its fiscal year end.
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(c) within 90 days of commencement of the new budget cycle, a copy
of its budget for the new period.
Section 11. Form and Execution of Bond. The Bond shall be typewritten 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.
To be valid or obligatory for any purpose or entitled to the benefits of this ordinance, the
Bond shall bear a Certificate of Authentication in the following form, manually signed by the
Bond Registrar:
CERTIFICATE OF AUTHENTICATION
This Bond is the fully registered City of Edmonds, Washington, Limited Tax
General Obligation Bond, 2005, described in the Bond Ordinance.
By
Bond Registrar
The authorized signing of a Certificate of Authentication shall be conclusive evidence that the Bond
so authenticated have been duly executed, authenticated and delivered and is entitled to the benefits
of this ordinance.
If any officer whose signature appears on the Bond ceases to be an officer of the City
authorized to sign bonds before the Bond bearing his or her signature is authenticated or
delivered by the Bond Registrar or issued by the City, the Bond 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. The Bond also may be signed on behalf of the City by any person who, on the actual
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date of signing of the Bond, is an officer of the City authorized to sign bonds, although he or she
did not hold the required office on the date of issuance of the Bond.
Section 12. Preservation of Tax Exemption for Interest on Bond. The City covenants
that it will take all actions necessary to prevent interest on the Bond 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 Bond or other funds of the City treated as proceeds of the Bond at any
time during the term of the Bond which will cause interest on the Bond 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 Arbitraize Rebate Exception and Designation of
the Bond as a "Qualified Tax - Exempt Obligation." 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) the Bond is not a "private activity bond" within the meaning of Section 141 of the
United States Internal Revenue Code of 1986, as amended (the "Code "); (c) at least 95% of the
net proceeds of the Bond 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 Bond is issued is not reasonably expected to exceed
$5,000,000; and (e) the amount of tax - exempt obligations, including the Bond, designated by the
City as "qualified tax - exempt obligations" for the purposes of Section 265(b)(3) of the Code
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during the calendar year in which the Bond is issued does not exceed $10,000,000. The City
therefore certifies that the Bond is eligible for the arbitrage rebate exception under
Section 148(f)(4)(D) of the Code and designates the Bond as a "qualified tax- exempt obligation"
for the purposes of Section 265(b)(3) of the Code.
Section 14. Refunding or Defeasance of the Bond. 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 Bond, or any portion thereof included
in a refunding or defeasance plan, and to redeem and retire, refund or defease such then-
outstanding Bond (hereinafter collectively called the "defeased Bond ") and to pay the costs of
the refunding or defeasance. If money and/or direct obligations of the United States of America
maturing at a time or times and bearing interest in amounts (together with money, if necessary)
sufficient to redeem and retire, refund or defease the defeased Bond in accordance with its terms
are set aside in a special trust fund or escrow account irrevocably pledged to that redemption,
retirement or defeasance of the defeased Bond (hereinafter called the "trust account "), then all
right and interest of the owner of the defeased Bond in the covenants of this ordinance and in the
funds and accounts obligated to the payment of the defeased Bond shall cease and become void.
The owner of defeased Bond shall have the right to receive payment of the principal of and
interest on the defeased Bond from the trust account. The defeased Bond 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 Bond to any lawful purposes as it shall determine.
Section 15. Acquisition Fund and Deposit and Use of Bond Proceeds. There shall be
created and established in the office of the Administrative Services Director a special fund
designated as the Telecommunication Acquisition Fund (the "Acquisition Fund "), and the
Administrative Services Director is authorized and directed to create and establish such fund.
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191
For purposes of paying principal of and interest and any prepayment fee on the Bond, there shall
also be created and established a special fund designated as the Limited Tax General Obligation
Bond Fund, 2005, of the City, and the Administrative Services Director is authorized and
directed to create and establish such fund. All taxes collected for and allocated to the payment of
the principal of and interest on the. Bond shall be deposited in the Bond Fund.
The principal proceeds received from the sale and delivery of the Bond shall be paid into
the Acquisition Fund and used for the purposes of the Project specified in Section 2 of this
ordinance. Until needed to pay the costs of the Project 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 Acquisition Fund and be spent for the purposes of that fund.
The cost of all necessary consulting services, inspection and testing, administrative
expenses and other costs incurred in connection with the making of the improvements
constituting the Project shall be deemed a part of the costs of such improvements.
Section 16. Approval of Transaction. It is anticipated that the Bank will offer to
purchase the Bond at a price of par under the terms and conditions contained in the Proposal
Letter and this ordinance. The City Council finds that such offer is in the best interest of the City
and authorizes the Administrative Services Director to accept such offer on behalf of the City.
The City shall pay to the Bank the origination fee of $1,500.00 upon delivery of the Bond. A
Bank counsel review fee of $500.00 shall be paid to the Bank at closing. The origination fee and
Bank counsel review fee may be deducted from bond proceeds or may be paid from other money
of the City.
The Bond will be prepared at the City's expense and will be delivered to the Bank,
together with the approving legal opinion of Foster Pepper & Shefelman PLLC, municipal bond
counsel of Seattle, Washington, regarding the Bond.
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The proper City officials are authorized and directed to do everything necessary for the
prompt delivery of the Bond to the Bank and for the proper application and use of the proceeds
of the sale thereof.
Section 17. 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 15th day of February, 2005.
ATTEST:
rty Clerk
APPROVED AS TO FORM:
FOSTER P PPER & SHEFEL LLC
Bond Couhsel
Filed with the City Clerk:
02/11/2005
Passed by the City Council:
02/15/2005
Published:
02/17/2005
Effective Date:
02/22/2005
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May
0-
EXHIBIT A
Installment Payment Schedule
BOND DEBT SERVICE
CITY OF EDMONDS, WA (G.O.)
Loan
Period Annual .
Ending Principal Coupon Interest Debt Service Debt Service
02/23/2005
06/01/2005
12,237.37
3.530%
1,921.89
14,159.26
12/01/2005
12,237.36
3.530% .
3,314.01
15,551.37.
29,710.63
06/01/2006
16;282.77
3.530%
3,098.02
19,380.79
12/01/2606
16,282.77
3.5300/a
2,810.63
19,093.40
38,474.19
06/01/2007
16,862.67
3.530%
2,523.24
19,385:91
12/0112007
16,862.67
3.5300/a
2,225.61
19,088.28
38,474.19
06/01/2008
17,463.22
3.530%
1,927.99
.19,391.21
12/01/2008
17,463.22
3.5306/o
1,619.76
19,082.98
38,474.19
06/01/2009
18,085.16
3.530%
1,311.54
19,396.70
12/01/2009
18,085.16
3.530%
992.33
19,077.49
38,474.19
03/01/2010
38,137.63
3.530%
336.56
38,474.19 _
12/01/2010
38,474.19
200,000.00 22,081.58 222,081.58 222,081.58
EXHIBIT B
Prepayment Provisions
Under the Fixed Rate Option, if principal amounts are prepaid, whether by voluntary
prepayment or otherwise, the prepayment shall be accompanied by a prepayment fee. The
prepayment fee shall be in an amount sufficient to compensate Bank for any loss, cost or expense
incurred by it as a result of the prepayment, including any loss of anticipated profits and any loss
or expense arising from the liquidation or reemployment of funds obtained by it to maintain the
credit facility or from fees payable to terminate the deposits from which such funds were
obtained. The Borrower shall also pay any customary administrative fees charged by Bank in
connection with the foregoing. For purposes of calculating the prepayment fee, Bank shall be
deemed to have funded the advance by a matching deposit or other borrowing in the applicable
interbank market, whether or not the advance was in fact so funded.
SUMMARY OF ORDINANCE NO. 3536
of the City of Edmonds, Washington
On the 15th day of February, 2005, the City Council of the City of Edmonds
passed Ordinance No. 3536. 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 the $200,000 par
value Limited Tax General Obligation Bond, 2005, of the City for general
City purposes to provide the funds with which to pay costs of acquiring
telecommunications equipment and other City purposes, and paying the
costs of issuance and sale of such bond; fixing the date, form maturity,
interest rate, terms and covenants of the bond; designating an acquisition
fund and establishing a bond fund, and approving the sale and providing
for the delivery of the bond to Bank of America, N.A, of Seattle,
Washington.
The full text of this Ordinance will be mailed upon request.
DATED this 16th day of February, 2005.
`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. 3536 (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 February 15, 2005, 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 February, 2005.
CITY OF EDMONDS, WASHINGTON
SANDRA S. CHASE, City Clerk
STATE OF WASHINGTON,
COUNTY OF SNOHOMISH
SUMMARY OF ORDINANCE NO. 3536
o t e riy o mon s, as inyton
On-the 15th day of February, 2005, the City Council of the
City of Edmonds, passed Ordinance No. 3538 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 is-
suance of the $200,000 par value Limited Tax General
Obligation Bond, 2005; of the City for general City pur-
poses to provide the funds with which to pay costs of ac-
quiring telecommunications equipment and other City
purposes; and paying the costs of issuance and sale of
such bond; fixing the date, form maturity, interest rate, {
terms and covenants of the bond; designating an acquisi-
tion fund and establishing a bond fund, and approving
the sale and providing for the delivery of the bond to
Bank of America, N.A. of Seattle, Washington.
The full text of this Ordinance will be mailed upon request.
DATED this 16th day of February, 2005.
t CITY CLERK, SANDRA S. C SE.
Published: February 17, 2005. __ _ _
Affidavit of Publication
S.S.
The undersigned, being first duly sworn on oath deposes and says that she is Principal Clerk
of THE HERALD, a daily newspaper printed and published in the City of Everett, County of
Snohomish, and State of Washington; that said newspaper is a newspaper of general
circulation in said County and 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 No. 3536
City of Edmonds
a printed copy of which is hereunto attached, was published in said newspaper proper and not
in supplement form, in the regular and entire edition of said paper on the following days and
times, namely:
February 17, 2005
and that said newspaper was reg/ulaarrly distributed to its subscribers during all of said period.
W.s-�X13"r1n -l'
Principal Clerk
Subscribed and sworn to before me this 17th
RECEIVED day of February, 2005
FEB 2 2 2005 P 0401 Sln �'�y.
A,
Notary Publ nand r the State of Washington, residing at Everett Sno mish GrA
EDMONDS CITY CLERK County. P(/Q RY
CP s. C
v,A � 2008
Account Name: City of Edmonds Account Number. 101416 Order Number. 00012$9648