HomeMy WebLinkAbout2978 Issuance and Sale of Limited Tax General Obligation Bonds to Finance Improvements to Roads and Sidewalks, Tourism and Infrastructure and waterfront accessORDINANCE N0.2978
An ordinance of the City of Port Townsend, Washington, providing
for the issuance and sale of limited tax general obligation bonds of
the City in the aggregate principal amount of $7,500,000 to finance
road and sidewalk improvements, tourism and infrastructure
improvements, and waterfront access improvements; and providing
the form and terms of such bonds.
WHEREAS, the City Council of the City of Port Townsend, Washington (the "City") has
determined that it is in the best interest of the City to construct road and sidewalk improvements,
tourism and infrastructure improvements, and waterfront access improvements (the "Projects");
and
WHEREAS, in order to provide the funds required for the Projects and to pay the costs of
issuing the bonds, the City now desires to authorize the issuance of limited tax levy general
obligation bonds in the principal amount of $7,500,000 and to authorize the sale of such bonds;
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF PORT TOWNSEND,
WASHINGTON, DO ORDAIN AS FOLLOWS:
SECTION 1. Definitions. As used in this ordinance, the following words shall have the
following meanings, unless a different meaning clearly appears from the context:
Bond Account means the "City of Port Townsend Limited Tax General Obligation Bond
Redemption Account, 2008" authorized to be created within the City's Bond Fund by Section 6
of this ordinance.
Bond Insurance Policy means the municipal bond insurance policy issued by the Insurer
insuring the payment when due of the principal of and interest on the Bonds as provided therein.
Band Register means the registration records for the Bonds maintained by the Bond
Registrar.
Bond Registrar means the fiscal agency of the State of Washington, in New York, New
York, fox the purposes of registering and authenticating the Bonds, maintaining the Bond
Register, effecting transfer of ownership of the Bonds and paying principal of and interest on the
Bonds.
Bonds means the $7,500,000 principal amount of the City of Port Townsend,
Washington, Limited Tax General Obligation Bonds, 2008, issued pursuant to this ordinance.
City means the City of Port Townsend, Washington, a municipal corporation duly
organized and existing under and by virtue of the Constitution and laws of the State of
Washington.
Code means the Internal Revenue Code of 1986, as amended, together with
corresponding and applicable final, temporary or proposed regulations and revenue rulings
issued or amended with respect thereto by the United States Treasury Department of the Internal
Revenue Service, to the extent applicable to the Bonds.
Council means the legislative authority of The City as the same shall be duly and
regularly constituted from time to time.
DTC means The Depository Trust Company of New York, as depository for the Bonds,
or any successor or substitute depository for the Bonds.
Insurer means Financial Security Assurance Inc., New York, New York, or any
successor thereto or assignee thereof, as issuer of a Bond Insurance Policy for the Bonds.
Letter of Representations means the Blanket Letter of Representations from the City to
DTC.
MSRB means the Municipal Securities Rulemaking Board or any successor to its
functions.
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NRMSIR means a nationally recognized municipal securities information repository.
Projects means the projects authorized by Section 2 of this ordinance.
Registered Owner means the person in whose name a Bond is registered on the Bond
Register. For so long as the City utilizes the book-entry system for the Bonds, DTC shall be
deemed to be the Registered Owner.
Rule means the SEC's Rule 15c2-12 under the Securities Exchange Act of 1934.
SEC means the U.S. Securities and Exchange Commission.
SECTION 2. Findin¢s and Authorization of Improvements. The City Council hereby
finds that it is in the public interest for the City to (a) construct road and sidewalk improvements,
including to San Juan and 49`x', Discovery Road, Water Street, Madison Street and Upper Sims,
(b) construct tourism and infrastructure improvements and waterfront access improvements
including to the Pope Marine Park and Building, Waterfront Esplanade, Wave Gallery relocation
and Visitor Plaza, (c) relocate and fit the Police Station and Visitor Center, and (d) construct.
various other capital improvements to City facilities (together, the "Projects"). The estimated
cost of the Projects is $18,980,000, of which approximately $7,500,000 shall be provided from
the proceeds of sale of the Bonds.
SECTION 3. Authorization of Bonds. The City shall issue and sell the Bonds in the
aggregate principal amount of $7,500,000 to provide money to finance the Projects described in
Section 2, and all costs incidental thereto and to the issuance of the Bonds. The Bonds shall be
general obligations of the City; shall be designated "City of Port Townsend, Washington,
Limited Tax General Obligation Bonds, 2008"; shall be dated the date of their delivery; shall be
issued in fully registered form in the denomination of $5,000 or any integral multiple thereof,
provided that no Bond shall represent more than one maturity; shall be numbered separately and
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in such manner and with any additional designation as the Bond Registrar deems necessary for
purposes of identification and control; shall bear interest (calculated based on a 360-day year of
12 30-day months) at the rates set forth below from their date, until the Bonds have been paid or
their payment duly provided for, payable on December 1, 2008, and semiannually thereafter on
each December 1 and June 1, and shall mature on December 1 of each year as follows:
Maturity Year
(December 1)
2026
2030
2034
2038
Principal
Amount Interest Rates
$1,430,000
1,680,000
2,000,000
2,390,000
SECTION 4. Reeistration, Exchan¢e and Pa'rl~.
4.15%
4.35
4.45
5.00
(a) Registrar/Bond Register. The City hereby adopts the system of
registration approved by the Washington State Finance Committee, which utilizes the fiscal
agencies of the State of Washington in New York, New York, as registrar, authenticating agent,
paying agent and transfer agent (the "Bond Registrar"). The Bond Registrar shall keep, or cause
to be kept, at its principal corporate trust office, sufficient records for the registration and transfer
of the Bonds (the "Bond Register"), which shall be open to inspection by the City. The Bond
Registrar is authorized, on behalf of the Ciry, to authenticate and deliver Bonds transferred or
exchanged in accordance with the provisions of such Bonds and this ordinance 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 Certificate of Authentication on the Bonds.
(b) Registered Ownership. The City and the Bond Registrar may deem and
treat the Registered Owner of each Bond as the absolute owner for all purposes, and neither the
City nor the Bond Registrar shall be affected by any notice to the contrary. Payment of any such
Bond shall be made only as described in Section 4(h) hereof, but such registration may be
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transferred as herein provided. All such payments made as described in Section 4(h) shall be
valid and shall satisfy the liability of the City upon such Bond to the extent of the amount or
amounts so paid.
(c) DTC AcceptancelLetter of Representations. The Bonds shall initially be
held in fully immobilized form by DTC acting as depository. To induce DTC to accept the
Bonds as eligible for deposit at DTC, the City has executed and delivered to DTC a Blanket
Issuer Letter of Representations (the "Letter of Representations").
Neither the City nor the Bond Registrar will have any responsibility or obligation to DTC
participants or the persons for whom they act as nominees with respect to the Bonds for the
accuracy of any records maintained by DTC or any DTC participant, the payment by DTC or any
DTC participant of any amount in respect of the principal of or interest on Bonds, any notice that
is permitted or required to be given to Registered Owners under this ordinance (except such
notices as shall be required to be given by the City to the Bond Registrar or to DTC), the
selection by DTC or any DTC participant of any person to receive payment in the event of a
partial redemption of the Bonds, or any consent given or other action taken by DTC as the
Registered Owner. For so long as any Bonds are held in fully immobilized form hereunder, DTC
or its successor depository shall be deemed to be the Registered Owner for all purposes, and all
references in this. ordinance to the Registered Owners shall mean DTC or its nominee and shall
not mean the owners of any beneficial interest in any Bonds.
(d) Use of Depository.
(i) The Bonds shall be registered initially in the name of CEDE &
Co., as nominee of DTC, with a single Bond for each maturity in a denomination equal. to the
total principal amount of such maturity. Registered ownership of such immobilized Bonds, or
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any portions thereof, may not thereafter be transferred except (A) to any successor of DTC or its
nominee, provided that any such successor shall be qualified under any applicable laws to
provide the service proposed to be provided by it; (B} to any substitute depository appainted by
the City pursuant to subsection (ii) below or such substitute depository's successor; or (C) to any
person as provided in subsection (iv) below.
(ii) 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 to
discontinue the system of book entry transfers through DTC or its successor (or any substitute
depository or its successor), the City may appoint a substitute depository. Any such substitute
depository shall be qualified under any applicable laws to provide the services proposed to be
provided by it.
(iii) In the case of any transfer pursuant to clause (A) or (B) of
subsection (i) above, the Bond Registraz shall, upon receipt of all outstanding Bonds, together
with a written request on behalf of the City, issue a single new Bond for each maturity then
outstanding, registered in the name of such successor or substitute depository, or its nominee, all
as specified in such written request of the City.
(iv) In the event that (A) DTC or its successor (or substitute depository
or its successor) resigns from its functions as depository, and no substitute depository can be
obtained, or (B) the City determines that it is in the best interest of the beneficial owners of the
Bonds that the Bonds be provided in certificated form, the ownership of such Bonds may then be
transferred to any person or entity as herein provided, and shall no longer be held in fully
immobilized form. The City shall deliver a written request to the Bond Registrar, together with a
supply of definitive Bonds in certificated form, to issue Bonds in any authorized denomination.
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Upon receipt by the Bond Registrar of all then outstanding Bonds, together with a written request
on behalf of the City to the Bond Registrar, new Bonds shall be issued in the appropriate
denominations and registered in the names of such persons as are provided in such written
request.
(e) Transfer or Exchange of Registered Ownership; Change in
Denominations. The registered ownership of any Bond may be transferred or exchanged, but no
transfer of any Bond shall be valid unless it is surrendered to the Bond Registrar with the
assignment form appearing on such Bond duly executed by the Registered Owner or such
Registered Owner's duly authorized agent in a manner satisfactory to the Bond Registrar. Upon
such surrender, the Bond Registrar shall cancel the surrendered Bond and shall authenticate and
deliver, without charge to the Registered Owner or transferee, a new Bond (or Bonds at the
option of the new Registered Owner) of the same date, maturity and interest rate and for the
same aggregate principal amount in any authorized denomination, naming as Registered Owner
the person or persons listed as the assignee on the assignment form appearing on the surrendered
Bond, in exchange for such surrendered and canceled Bond. Any Bond may be surrendered to
the Bond Registrar and exchanged, without charge, for an equal aggregate principal amount of
Bonds of the same date, maturity and interest rate, in any authorized denomination. The Bond
Registrar shall not be obligated to transfer or exchange any Bond during a period beginning at
the opening of business on the 15th day of the month next preceding any interest payrnent date
and ending at the close of business on such interest payment date, or, in the case of any proposed
redemption of the Bonds, after the mailing of notice of the call of such Bonds for redemption.
(f) Bond RegismaY's Ownership of Bonds. The Bond Registrar may become
the Registered Owner of any Bond with the same rights it would have if it were not the Bond
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Registrar, and to the extent permitted by law, may act as depository for and permit any of its
officers or directors to act as member of, or in any other capacity with respect to, any committee
formed to protect the rights of the Registered Owners of the Bonds.
(g) Registration Covenant. The City covenants that, until all Bonds have been
surrendered and canceled, it will maintain, or cause to be maintained, a system for recording the
ownership of each Bond that complies with the provisions of Section 149 of the Code.
(h) Place and Medium of Payment. Both principal of and interest on the
Bonds shall be payable in lawful money of the United States of America. For so long as all
Bonds are in fully immobilized form, payments of principal and interest shall be made as
provided in accordance with the operational arrangements of DTC referred to in the Letter of
Representations. In the event that the Bonds aze no longer in fully immobilized form, interest on
the Bonds shall be paid by check or draft mailed to the Registered Owners at the addresses for
such Registered Owners appearing on the Bond Register on the 15th day of the month preceding
the interest payment date, and principal of the Bonds shall be payable upon presentation and
surrender of such Bonds by the Registered Owners at the principal office of the Bond Registraz;
provided, however, that if so requested in writing by the Registered Owner of at least $1,000,000
principal amount of Bonds, interest will be paid by wire transfer on the date due to an account
with a bank located within the United States.
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SECTION 5. Redemption and Purchases.
(a) Optional Redemption. The City hereby reserves the right to redeem the
outstanding Bonds maturing on and after December 1, 2026 in whole or in part (maturities to be
selected by the City and randomly within a maturity in such mamrer as DTC or the Bond
Registrar, as appropriate, shall determine) on December 1, 2017, and on any date thereafter, at
par, plus accrued interest to the date of redemption.
(b) Mandatory Redemption. The Bonds maturing on December 1, 2026,
December 1, 2030, December 1, 2034, and December 1, 2038 (which shall be deemed to be
Term Bonds), shall be redeemed prior to maturity randomly (or paid at maturity), not later than
December 1 in the following years (to the extent such Bonds have not been previously redeemed
or purchased) and in the principal amounts set forth below, without premium, together with the
interest accrued to the date fixed fox redemption.
2026 Term Bond
Yeaz Amount
2023 $ 335,000
2024 350,000
2025 365,000
2026 380,000
2030 Term Bond
Year Amount
2027 $395,000
2028 410,000
2029 430,000
2030 445,000
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2034 Term Bond
Year Amount
2031 $465,000
2032 490,000
2033 510,000
2034 535,000
2038 Term Bond
Year Amount
2035 $555,000
2036 585,000
2037 610,000
2038 640,000
* Final Maturity
(c) Partial Redemption. 1f less than all of the principal amount of any Bond is
redeemed, upon surrender of such Bond at the principal office of the Bond Registrar, there shall
be issued to the Registered Owner, without charge, for the then unredeemed balance of the
principal amount, a new Bond or Bonds, at the option of the Registered Ovmer, of like maturity
and interest rate in any authorized denomination.
(d) Notice of Redemption. Written notice of any redemption of Bonds shall be
given by the Bond Registrar on behalf of the City by first class mail, postage prepaid, not less
than 30 days nor more than 60 days before the redemption date to the Registered Owners of
Bonds that are to be redeemed at their last addresses shown on the Bond Register. So long as the
Bonds are in book-entry form, notice of redemption shall be given as provided in the Letter of
Representations.
The requirements of this section shall be deemed complied with when notice is mailed,
whether or not it is actually received by the owner.
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Each notice of redemption shall contain the following information: (1) the redemption
date, (2) the redemption price, (3) if less than all outstanding Bonds are to be redeemed, the
identification (and, in the case of partial redemption, the principal amounts) of the Bonds to be
redeemed, (4) that on the redemption date the redemption price will become due and payable
upon each Bond or portion called for redemption, and that interest shall cease to accrue from the
redemption date, (5) that the Bonds are to be surrendered fox payment at the principal office of
the Bond Registrar, (~ the CUSIP numbers of all Bonds being redeemed, (7) the dated date of
the Bonds, (8) the rate of interest for each Bond being redeemed, (9) the date of the notice, and
(10) any other information needed to identify the Bonds being redeemed.
Upon the payment of the redemption price of Bonds being redeemed, each check or other
transfer of funds issued for such purpose shall bear the CUSIP number identifying, by issue and
maturity, the Bonds being redeemed with the proceeds of such check or other transfer.
(e) Effect of Redemption. Unless the City has revoked a notice of redemption,
the City shall transfer to the Bond Registrar amounts that, in addition to other money, if any, held
by the Bond Registrar, will be sufficient to redeem, on the redemption date, all the Bonds to be
redeemed. From the redemption date interest on each Bond to be redeemed shall cease to accrue.
(f) Amendment of Notice Provisions. The foregoing notice provisions of this
section, including but not limited to the information to be included in redemption notices and the
persons designated to receive notices, may be amended by additions, deletions and changes in
order to maintain compliance with duly promulgated regulations and recommendations regarding
notices of redemption of municipal securities.
(g) Purchase on Open Market. The City reserves the right to purchase any of
the Bonds in the open market at any time and at any price.
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SECTION 6. Creation of Bond Account and Provision for Tax Levy Payments: A
special fund of the City known as the "City of Port Townsend Limited Tax General Obligation
Bond Redemption Account, 2008" (the "Bond Account"), is hereby authorized and directed to be
created in the office of the Finance Director of the City within the City's Bond Fund. The Bond
Account shall be drawn upon for the sole purpose of paying the principal of and interest on the
Bonds.
The City hereby irrevocably covenants for as long as any of the Bonds are outstanding
and unpaid that each year it will include in its budget and -evy an ad valorem tax, within and as a
part of the tax millage levy permitted to cities without a vote of the people, upon all the property
within the City subject to taxation in an amount which will be sufficient to pay the principal of
and interest on the Bonds as the same shall become due. All of such taxes and any of such other
money so collected shall be paid into the Bond Account. None of the money in the Bond
Account shall be used for any other purpose than the payment of the principal of and interest on
the Bonds. Money in the Bond Account not needed to pay the interest or principal next coming
due may temporarily be deposited in such institutions or invested in such obligations as may be
lawful for the investment of City money. Any interest or profit from the investment of such
money shall be deposited in the Bond Account.
The City hereby irrevocably pledges that a sufficient portion of each annual levy to be
levied and collected by the City prior to the full payment of the principal of and interest on the
Bonds will be and is hereby irrevocably set aside, pledged and appropriated for the payment of
the principal of and interest on the Bonds. The full faith, credit and resources of the City are
hereby irrevocably pledged for the annual levy and collection of such taxes and for the prompt
payment of the principal of and interest on the Bonds as the same shall become due.
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SECTION 7. Bonds Deemed To Be No Longer Outstanding. In the event that the City,
in order to effect the payment, retirement or redemption of any Bond, sets aside in the Bond
Account or in another special account, held in trust by a trustee, cash or noncallable government
obligations, as such obligations are now or hereafter defined in chapter 39.53 RCW, or any
combination of cash and/or noncallable government obligations, in amounts and maturities
which, together with the known earned income therefrom, are sufficient to redeem or pay and
retire such Bond in accordance with its terms and to pay when due the interest and redemption
premium, if any, thereon, and such cash and/or noncallable government obligations are
irrevocably set aside and pledged for such purpose, then no further payments need be made into
the Bond Account for the payment of the principal of and interest on such Bond. The owner of a
Bond so provided for shall cease to be entitled to any lien, benefit or security of this ordinance
except the right to receive payment of principal, premium, if any, and interest from such special
account, and such Bond shall be deemed to be not outstanding under this ordinance.
SBCTION 8. Tax Covenant; Special Designation. The City shall comply with
the provisions of this section unless, in the written opinion of Bond Counsel to the City, such
compliance is not required in order to maintain the exemption of the interest on the Bonds from
federal income taxation.
The City hereby covenants that it will not make any use of the proceeds of sale of the
Bonds or any other funds of the City which may be deemed to be proceeds of such Bonds
pursuant to Section 148 of the Code and the applicable regulations thereunder that will cause the
Bonds tci be "arbitrage bonds" within the meaning of said section and said regulations. The City
will comply with the requirements of Section 148 of the Code (or any successor provision
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thereof applicable to the Bonds) and the applicable regulations thereunder throughout the term of
the Bonds.
The City further covenants that it will not take any action or permit any action to be taken
that would cause the Bonds to constitute "private activity bonds" under Section 141 of the Code.
The City will pay any rebate amount to the United States of America at the times and in
the amounts necessary to meet the requirements of the Code to maintain the federal income tax
exemption of the interest payments on the Bonds, in accordance with the Federal Tax Certificate.
The City hereby designates the Bonds as "qualified tax-exempt obligations" under
Section 265(b)(3) of the Code for banks, thrift institutions and other financial institutions. The
City does not anticipate that it will issue more than $10,000,000 of qualified tax-exempt
obligations during 2008.
SECTION 9. Lost or Destroved Bonds. If any Bonds are lost, stolen or destroyed, the
Bond Registrar may authenticate and deliver a new Bond or Bonds of like amount, maturity and
tenor to the Registered Owner upon the owner paying the expenses and charges of the Bond
Registrar and the City in connection with preparation and authentication of the replacement
Bond or Bonds and upon his or her filing with the Bond Registrar and the City evidence
satisfactory to both that such Bond or Bonds were actually lost, stolen or destroyed and of his or
her ownership, and upon furnishing the City and the Bond Registrar with indemnity satisfactory
to both.
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SECTION 10. Form of the Bonds. The Bonds shall be in substantially the following
form:
STATEMENT OF INSURANCE
Financial Security Assurance lnc. ("Financial Security"), New York,
New York, has delivered its municipal bond insurance policy with respect to
the scheduled payments due of principal of and interest on this Bond to The
Bank of New York, New York, New York, or its successor, as paying agent
for the Bonds (the "Paying Agent"). Said Policy is on file and available for
inspection at the principal office of the Paying Agent and a copy thereof may
be obtained from Financial Security or the Paying Agent.
UNITED STATES OF AMERICA
NO. $
STATE OF WASHINGTON
CITY OF PORT TOWNSEND
LIMITED TAX GENERAL OBLIGATION BOND, 2008
INTEREST RATE: MATURITY DATE: CUSIP NO:
REGISTERED OWNER:
PRINCIPAL AMOUNT:
DOLLARS
The City of Port Townsend, Washington, a municipal corporation organized and existing
under and by virtue of the laws and Constitution of the State of Washington (the "City"), hereby
acknowledges itself to owe and for value received promises to pay to the Registered Owner
identified above, or registered assigns, on the Maturity Date identified above, the Principal
Amount specified above, unless redeemed prior thereto as provided herein, together with interest
on such Principal Amount from the date hereof or the most recent date to which interest has been
paid or duly provided for at the Interest Rate set forth above payable December 1, 2008, and
semiannually thereafter on each December 1 and June 1 until payment of the principal sum has
been made or duly provided for. Both principal of and interest on this bond are payable in lawful.
money of the United States of America. For so long as the bonds of this issue are held in fully
immobilized form, payments of principal and interest thereon shall be made as provided in
accordance with the operational arrangements of DTC referred to in the Blanket Issuer Letter of
Representations from the City to The Depository Trust Company. In the event that the bonds of
this issue are no longer held in fully immobilized form, interest on this bond shall be paid by
check or draft mailed to the Registered Owner at the address appearing on the Bond Register on
the 15th day of the month preceding the interest payment date, and principal of this bond shall be
payable upon presentation and surrender of this bond by the Registered Owner at the principal
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office of the fiscal agency of the State of Washington in New York, New York (the "Bond
Registrar").
This bond is one of an issue of limited tax general obligation bonds of the City of like
date and tenor, except as to number, interest rate and date of maturity. in the aggregate principal
amount of $7,500,000, issued pursuant to Ordinance No. 2978 of the City, passed on Jwie 16,
2008 (the "Bond Ordinance"), to fmance road and sidewalk improvements, tourism and
infrastructure improvements, and waterfront access improvements.
The Bonds are subject to optional and mandatory redemption prior to maturity as stated
in the Bond Ordinance.
The City has designated the bonds of this issue as "qualified tax-exempt obligations' for
purchase by financial institutions.
The City has irrevocably covenanted with the owner of this bond that it will annually
include in its budget and levy taxes, within and as a part of the tax levy permitted to cities
without a vote of the electorate, upon all the property subject to taxation in amounts sufficient,
together with other money legally available therefor, to pay the principal of and interest on this
bond as the same shall become due. The full faith, credit and resources of the City are hereby
irrevocably pledged for the annual levy and collection of such taxes and the prompt payment of
such principal and interest.
The pledge of tax levies for payment of principal of and interest on the bonds may be
discharged prior to maturity of the bonds by making provision for the payment thereof on the
terms and conditions set forth in the Bond Ordinance.
The bonds of this issue are issued in fully registered form in the denomination of $5,000
each or any integral multiple thereof, provided that no bond shall represent more than one
maturity. Upon surrender to the Bond Registrar, bonds are interchangeable for bonds in any
authorized denomination of an equal aggregate principal amount and of the same interest rate
and maturity. This bond is transferable only on the records maintained by the Bond Registrar for
that purpose upon the surrender of this bond by the Registered Owner hereof or his/her duly
authorized agent and only if endorsed in the manner provided hereon, and thereupon a new fully
registered bond of like principal amount, maturity and interest rate shall be issued to the
transferee in exchange therefor. Such exchange or transfer shall be without cost to the
Registered Owner or transferee. The City may deem the person in whose name this bond is
registered to be the absolute owner hereof for the purpose of receiving payment of the principal
of and interest on this bond and for any and all other purposes whatsoever.
Reference also is made to the Bond Ordinance as more fully describing the covenants
with and the rights of Registered Owners of the bonds or registered assigns and the meanings of
capitalized terms appearing on this bond which are defined in such ordinance.
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This bond shall not be valid or become obligatory for any purpose or be entitled to any
security or benefit under the Bond Ordinance until the Certificate of Authentication hereon shall
have been manually signed by the Bond Registrar.
It is hereby certified and declared that this bond is issued pursuant to and in strict
compliance with the Constitution and laws of the State of Washington and ordinances of the
City, that all acts, conditions and things required to be done precedent to and in the issuance of
this bond and the bonds of this issue have happened, been done and performed, and that this
bond and the bonds of this issue do not exceed any constitutional or statutory limitations.
IN WITNESS WHEREOF, the City of Port Townsend, Washington, has caused this bond
to be signed on behalf of the City with the manual or facsimile signature of the [Mayor/City
Manager], to be attested by the manual or facsimile signature of the City Clerk, and the seal of
the City to be reproduced or impressed hereon, as of this 1st day of July, 2008.
(SEAL)
CITY OF PORT TOWNSEND,
WASHINGTON
By /s/ manual or facsimile
[Mayor/City Manager]
ATTEST:
/s/ manual or facsimile
City Clerk
The Certificate of Authentication for the Bonds shall be in substantially the following
form and shall appear on each Bond:
CERTIFICATE OF AUTHENTICATION
Date of Authentication:
This bond is one of the City of Port Townsend, Washington, Limited Tax General
Obligation Bonds, 2008, dated July 1, 2008.
WASHINGTON STATE FISCAL
AGENCY, as Bond Registrar
By
Authorized Signer
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SECTION 11. Execution of the Bonds. The Bonds shall be executed on behalf of the
City with the manual or facsimile signature of the Mayor or the City Manager, attested by the
manual or facsimile signatare of the City Clerk, and shall have the seal of the City impressed or
imprinted thereon. In case either or both of the officers who have signed or attested any of the
Bonds cease to be such officer before such Bonds have been actually issued and delivered, such
Bonds shall be valid nevertheless and may be issued by the City with the same effect as though
the persons who had signed or attested such Bonds had not ceased to be such officers, and. any
Bond may be signed or attested on behalf of the City by officers who at the date of actual
execution of such Bond aze the proper officers, although at the nominal date of execution of such
Bond such officer was not an officer of the City.
Only Bonds that bear a Certificate of Authentication in the form set forth in Section 10,
manually executed by the Bond Registrar, shall be valid or obligatory for any purpose or entitled
to the benefits of this ordinance. Such 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.
In case either of the officers of the City who shall have executed the Bonds shall cease to
be such officer or officers of the City before the Bonds so signed shall have been authenticated
or delivered by the Bond Registrar, or issued by the City, such Bonds may nevertheless be
authenticated, delivered and issued and upon such authentication, delivery and issuance, shall be
as binding upon the City as though those who signed the same had continued to be such officers
of the City. Any Bond may also be signed and attested on behalf of the City by such persons as
at the actual date of execution of such Bond shall be the proper officers of the City although at
the original date of such Bond any such person shall not have been such officer.
'10' P'.1208]6120978 36J 0611 ]l66
SECTION 12. Proceeds Account: Application of Proceeds of Bonds. At the time of
delivery of the Bonds, the proceeds of the Bonds shall be deposited into the 2008 Bond Proceeds
Account ("Proceeds Account"), which is hereby authorized to be created, and used to pay or
reimburse the costs of the Project described in Section 2 and all costs incidental thereto and to
the issuance of the Bonds.
Money remaining in the Proceeds Account after all of such costs have been paid or
reimbursed, or the Council determines not to construct portions of such projects, may be used to
pay costs of other legally authorized capital expenditures of the City or shall be deposited in the
Bond Account. Money in the Proceeds Account may be invested as permitted by law. All
interest earned and profits derived from such investments shall be retained in and become a part
of the Proceeds Account or deposited into the Bond Account:
SECTION 13. Sale of the Bonds. The Council finds that the purchase contract that has
been distributed to the Council is reasonable and that it is in the best interest of the City that the
Bonds shall be sold upon the conditions set forth in the purchase contract. The City accepts the
purchase contract and authorizes the Finance Director, Mayor or City Manager to execute the
pwchase contract and deliver it to Martin Nelson & Company, Ina (the "Underwriter"). The
Bonds shall be issued and delivered to the Underwriter upon payment of the purchase price
specified in the purchase contract.
SECTION 14. Official Statement. The City approves the preliminary official statement
presented to the Council and ratifies the Underwriter s distribution of the preliminary official
statement in connection with the offering of the Bonds. Pursuant to the Rule, the City deems the
preliminary official statement final as of its date except for the omission of information
dependent upon the pricing of the Bonds and the completion of the bond purchase contract. The
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City agrees to cooperate with the Underwriter to deliver or cause to be delivered, within seven
business days from the date of the sale of the Bonds and in sufficient time to accompany any
confirmation that requests payment from any customer of the Underwriter, copies of a final
official statement in sufficient quantity to comply with paragraph (b)(4) of the Rule and the rules
of the MSRB. The City authorizes the Underwriter to use the official statement, substantially in
the form of the preliminary official statement, in connection with the sale of the Bonds. The
Finance Director, Mayor and City Manager are hereby authorized to review and approve on
behalf of the City the final official statement relative to the Bonds with such additions and
changes as may be deemed necessary or advisable to them.
SECTION 15. Undertaking to Provide Oneoine Disclosure.
(a) Contract/Undertaking. This section constitutes the City's
written undertaking for the benefit of the owners of the Bonds as required by Section (b)(5) of
the Rule.
(b) Financial Statements/Operating Data. The City agrees to provide or
cause to be provided to each NRMSIR and to the SID. if any, in each case as designated by the
Commission in accordance with the Rule, the following annual financial information and
operating data for the prior fiscal year (commencing in 2009 for the fiscal year ended
December 31, 2008):
Annual financial statements, which statements may or may not be
audited, showing ending fund balances for the City's general fund prepared in accordance with
the Budget Accounting and Reporting System prescribed by the Washington State Auditor
pursuant to RCW 43.09.200 (or any successor statute);
2. The assessed valuation of taxable property in the City;
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3. Property taxes due, property taxes collected and property taxes
delinquent;
4. Property tax levy rates per $1,000 of assessed valuation; and
5. Outstanding general obligation debt of the City.
Items 2-5 shall be required only to the extent that such information is not included in the
annual financial statements.
The information and data described above shall be provided on or before nine months
after the end of the City's fiscal year. The City's current fiscal year ends December 31. The
City may adjust such fiscal year by providing written notice of the change of fiscal year to each
then existing NRMSIR and the SID, if any. In lieu of providing such annual financial
information and operating data, the City may cross-reference to other documents provided to the
NRMSIR's, the SID or to the Commission and, if such document is a final official statement
within the meaning of the Rule, available from the MSRB.
If not provided as part of the annual financial information discussed above, the City shall
provide the City's audited annual financial statement prepared in accordance with the Budget
Accounting and Reporting System prescribed by the Washington State Auditor pursuant to
RCW 43.09.200 (or any successor statutes), when and if available, to each then existing
NRMSIR and the SID, if any.
(c) Mate~•ial Events. The City agrees to provide or cause to be provided, in a
timely manner, to the SID, if any, and to each NRMSIR or to the MSRB notice of the occurrence
of any of the following events with respect to the Bonds, if material:
• Principal and interest payment delinquencies;
• Non-payment related defaults;
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• Unscheduled draws on debt service reserves reflecting financial
difficulties;
• Unscheduled draws on credit enhancements reflecting financial
difficulfies;
• Substitution of credit or liquidity providers, or their failure to
perform;
• Adverse tax opinions or events affecting the tax-exempt status of
the Bonds;
• Modifications to the rights of Bond owners;
• Bond calls (optional, contingent or unscheduled Bond calls other
than scheduled sinking fund redemptions for which notice is given
pursuant to Exchange Act Release 34-238560);
• Defeasances;
• Release, substitution or sale of property, securing repayment of the
Bonds; and
• Rating changes.
Solely for purposes of disclosure, and not intending to modify this undertaking. the City
advises that no property or debt service reserves secure payment of the Bonds.
(d) Not j~cation Upon Failure to Provide Financial Data. The City agrees to
provide or cause to be provided, in a timely manner, to each NRMSIR or to the MSRB and to the
SID, if any, notice of its failure to provide the annual financial information described in
subsection (b) above on or prior to the date set forth in subsection (b) above.
'22- P]209~81208]8 ?6J O6/1 ]!08
(e) TerminationlModification. The City's obligations to provide annual
financial information and notices of material events shall terminate upon the defeasance, prior
redemption or payment in full of all of the Bonds. Any provision of that section shall be null and
void if the City (1) obtains an opinion of nationally recognized bond counsel to the effect that the
portion of the Rule that requires that provision is invalid, has been repealed retroactively or
otherwise does not apply to the Bonds; and (2) notifies each NRMSIR and the SID, if any, of
such opinion and the cancellation of this section. The City may amend this section with an
approving opinion of nationally recognized bond counsel.
In the event of any amendment of this section, the City shall describe such amendment in
the next annual report, and shall include a narrative explanation of the reason for the amendment
and its impact on the type (or in the case of a change of accounting principles, on the
presentation) of financial information or operating data being presented by the City. In addition,
if the amendment relates to the accounting principles to be followed in preparing financial
statements, (I) notice of such change shall be given in the same manner as for a material event
under subsection (c), and (II) the annual report for the year in which the change is made shall
present a comparison (in narrative form and also, if practical, in quantitative form) between the
financial statements as prepared on the basis of the new accounting principles and those prepared
on the basis of the former accounting principles.
(f) Bond Owner's Remedies Under This Section. The right of any bondowner
or beneficial owner of Bonds to enforce the provisions of this section shall be limited to a right to
obtain specific enforcement of the City's obligations under this section, and any failure by the
City to comply with the provisions of this undertaking shall not be an event of default with
respect to the Bonds. For purposes of this section, "beneficial owner" means any person who has
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the power, directly or indirectly, to vote or consent with respect to, or to dispose of ownership of,
any Bonds, including persons holding Bonds through nominees or depositories.
(h) No Default. The City is not and has not been in default in the performance
of its obligations of any prior undertaking for ongoing disclosure with respect to its bond
obligations.
(i) Disclosure USA. The City may elect to submit the information required by
this Section 15 to be filed with the NRMSIRs and the SID, if any, directly to DisclosureUSA.org
unless or until the SEC withdraws its approval of this submission process.
SECTION 16. Bond Insurance. In accordance with the offer of the Underwriter to
purchase the Bonds, the City Council hereby approves the commitment of the Insurer to provide
a bond insurance policy guaranteeing the payment when due of principal of and interest on the
Bonds (the `'Bond Insurance Policy"). The City Council further authorizes and directs all proper
officers, agents, attorneys and employees of the City to execute a commitment letter with the
Insurer and to cooperate with the Insurer in preparing such additional agreements, certificates,
and other documentation on behalf of the City Council as shall be necessary or advisable in
providing for the Bond Insurance Policy.
SECTION 17. General Authorization; Ratification of Prior Acts. The Finance Director,
Mayor and City Manager and other appropriate officers of the City aze authorized to take any
actions and to execute documents as in their judgment may be necessary or desirable in order to
carry out the terms of, and complete the transactions contemplated by, this ordinance. All acts
taken pursuant to the authority of this ordinance but prior to its effective date are hereby ratified.
SECTION 18. Severability. If any provision in this ordinance is declared by any court of
competent.jurisdiction to be contrary to law, then such provision shall be null and void and shall
-ZY- Pi289]8p09]B 36J 0611 ]l08
be deemed separable from the remaining provisions of this ordinance and shall in no way affect
the validity of the other provisions of this ordinance or of the Bonds.
SECTION 19. Effective Date. This ordinance shall be effective five days after its
publication as provided by law.
ADOPTED by the City Council of the City of Port Townsend, Washington, this 16th day
of June, 2008.
CITY OF PORT TOWNSEND,
WASHINGTON
Mayor
ATTEST:
City Clerk ~~
APPROVED AS TO FORM:
J --
-2J- P.@0978{20978 36J 06(1JlOB
CERTIFICATE
I, the undersigned, City Clerk of the City of Port Townsend, Washington (herein called
the "City") and keeper of the records of the City Council of the City (herein called the
"Council"), DO HEREBY CERTIFY:
1. That the attached ordinance is a true and correct copy of Ordinance No. 2978 of
the City (herein called the "Ordinance"), as finally passed at a regular meeting of the City
Council of the City held on June 16, 2008 and duly recorded in my office.
2. That said meeting was duly convened and held in all respects in accordance with
law, and to the extent required by law, due and proper notice of such meeting was given; that a
quorum of the Council was present throughout the meeting and a legally sufficient number of
members of the City Council voted in the proper manner for the passage of said Ordinance; that
all other requirements and proceedings incident to the proper adoption or passage of said
Ordinance have been duly fulfilled, carried out and otherwise observed, and that I am authorized
to execute this certificate.
DATED this 16`" day of June, 2008.
City Clerk
P.120978_NMN1208]8_36J 05117!08