HomeMy WebLinkAbout2844 Issuance and Sale of Limited Tax General Obligation Bonds ORDINANCE NO. 2844
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 $2,390,000 to finance a
swimming pool, fire station, wave viewing gallery, skate park, the
Pink House lease settlement and a portion of the city hall
improvements and providing the form and terms of the 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 improve the swimming pool and wave
viewing gallery, finance the Pink House lease settlement, construct Skate Park, construct a fire
station and pay a portion of the city hall improvements; and
WHEREAS, in order to provide the funds required for such purposes 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 $2,390,000 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, 2003" authorized to be created within the City's Debt Service 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 t~onds as provided
therein.
"E~ond Register" means the registration records for the Bonds maintained by the Bond
Registrar.
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"Bond Registrar" means the fiscal agency of the State of Washington, in New York, New
York, for 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 $2,390,000 principal amount of the City of Port Townsend,
Washington, Limited Tax General Obligation Bonds, 2003, 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 Intemal
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 MBIA Insurance Corporation.
"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.
"NRMSIR" means a nationally recognized municipal securities information repository.
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"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. Findings and Authorization of Improvements. The City Council hereby
finds that it is in the public interest for the City to improve the swimming pool and wave viewing
gallery, finance the Pink House lease settlement, construct Skate Park, construct a fire station
and pay a portion of the city hall improvements. The estimated cost of these projects and all
costs incidental thereto and the issuance of the Bonds is $2,390,000, which 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 $2,390,000 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, 2003"; shall be dated December 30, 2003; 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
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 June 1, 2004, and semiannually thereafter on
December 1 and June 1, and shall mature on December 1 of each year as follows:
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Maturity Year
(December 1)
Principal Amount
Interest Rates
2006 $ 90,000 1.85 %
2007 105,000 2.20
2008 105,000 2.55
2009 110,000 2.85
2010 115,000 3.10
2011 115,000 3.35
2012 120,000 3.60
2013 125,000 3.70
2014 130,000 3.80
2015 125,000 3.90
2016 130,000 4.05
2017 140,000 4.15
2018 140,000 4.25
2023 840,000 4.60
SECTION 4. Registration, Exchange and Payments.
(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 City, 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.
valid and shall satisfy the liability of the City upon such Bond to the extent of the amount or
amounts so paid.
(c) DTC Acceptance/Letter 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
All such payments made as described in Section 4(h) shall be ;:
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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 appointed 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 Registrar 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 payment 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 Registrar'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 are 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 Registrar;
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, 2014 in whole or in part (maturities to be
selected by the City and redeeming within a maturity in such manner as DTC or the Bond
Registrar, as appropriate, shall determine) on December 1, 2013, and on any date thereafter, at
par, plus accrued interest to the date of redemption.
(b) Mandatory Redemption. The Bonds maturing on December 1, 2023 shall
be redeemed prior to maturity by lot (or paid at maturity), not later than December 1 in the years
2019 through 2023 (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 for redemption.
Year Amount
2019 $ 150,000
2020 155,000
2021 160,000
2022 170,000
2023* 205,000
* Final Maturity
(c) Partial Redemption.
If 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 owner, 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
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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.
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 for payment at the principal office of
the Bond Registrar, (6) 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
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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.
SECTION 6. Creation of Bond Account and Provision for Tax Lev¥~Pawnents. A
special account of the City known as the "City of Port Townsend Limited Tax General
Obligation Bond Redemption Account, 2003" (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 Debt
Service 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 levy 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.
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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.
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 RCW 39.53, 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.
SECTION 8. Tax Covenant; Special Designation. The City covenants to undertake all
actions required to maintain the tax-exempt status of interest on the Bonds under Section 103 of
the Code. 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
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City does not expect to issue more than $10,000,000 in qualified tax-exempt obligations during
calendar year 2003.
SECTION 9. Lost or Destroyed 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 ftmfishing the City and the Bond Registrar with indemnity satisfactory
to both.
SECTION 10. Form of the Bonds. The Bonds shall be in substantially the following
STATEMENT OF INSURANCE
MBIA Insurance Corporation (the "Insurer") has issued a policy containing the following
provisions, such policy being on file at the principal office of the Fiscal Agency of the State of
Washington in New York, New York.
The Insurer, in consideration of the payment of the premium and subject to the terms of
the policy, hereby unconditionally and irrevocably guarantees to any owner, as hereinafter
defined, of the following described obligations, the full and complete payment required to be
made by or on behalf of the City of Port Townsend, Washington (the "Issuer") to the Fiscal
Agency of the State of Washington, or its successor (the "Paying Agent"), of an amount equal to
(i) the principal of (either at the stated maturity or by any advancement of maturity pursuant to a
mandatory sinking fund payment) and interest on, the Obligations (as that term is defined below)
as such payments shall become due but shall not be so paid (except that in the event of any
acceleration of the due date of such principal by reason of mandatory or optional redemption or
acceleration resulting from default or otherwise, other than any advancement of maturity
pursuant to a mandatory sinking fund payment, the payments guaranteed hereby shall be made in
such amounts and at such times as such payments of principal would have been due had there not
been any such acceleration); and (ii)the reimbursement of any such payment which is
subsequently recovered from any owner pursuant to a final judgment by a court of competent
jurisdiction that such payment constitutes an avoidable preference to such owner within the
meaning of any applicable bankruptcy law. The amounts referred to in clauses (i) and (ii) of the
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preceding sentence shall be referred to herein collectively as the "Insured Amounts."
"Obligations" shall mean:
$2,390,000
CITY OF PORT TOWNSEND, WASHINGTON
LIMITED TAX GENERAL OBLIGATION BOND, 2003
Upon receipt of telephonic or telegraphic notice, such notice subsequently confirmed in
writing by registered or certified mail, or upon receipt of written notice by registered or certified
mall, by the Insurer from the Paying Agent or any owner of an Obligation the payment of an
Insured Amount for which is then due, that such required payment has not been made, the
Insurer on the due date of such payment or within one business day after receipt of notice of such
nonpayment, whichever is later, will make a deposit of funds, in an account with U.S. Bank
Trust National Association, in New York, New York, or its successor, sufficient for the payment
of any such Insured Amounts which are then due. Upon presentment and surrender of such
Obligations or presentment of such other proof of ownership of the Obligations, together with
any appropriate instruments of assignment to evidence the assignment of the Insured Amounts
due on the Obligations as are paid by the Insurer, and appropriate instruments to effect the
appointment of the Insurer as agent for such owners of the Obligations in any legal proceeding
related to payment of Insured Amounts on the Obligations, such instruments being in a form
satisfactory to U.S. Bank Trust National Association, U.S. Bank Trust National Association shall
disburse to such owners or the Paying Agent payment of the Insured Amounts due on such
Obligations, less any amount held by the Paying Agent for the payment of such Insured Amounts
and legally available therefor. This policy does not insure against loss of any prepayment
premium which may at any time be payable with respect to any Obligation.
As used herein, the term "owner" shall mean the registered owner of any Obligation as
indicated in the books maintained by the Paying Agent, the Issuer, or any designee of the Issuer
for such purpose. The term owner shall not include the Issuer or any party whose agreement
with the Issuer constitutes the underlying security for the Obligations.
Any service of process on the Insurer may be made to the Insurer at its offices located at
113 King Street, Armonk, New York 10504 and such service of process shall be valid and
binding.
This policy is non-cancelable for any reason. The premium on this policy is not
refundable for any reason including the payment prior to maturity of the Obligations.
MBIA Insurance Corporation
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UNITED STATES OF AMERICA
NO.
STATE OF WASHINGTON
CITY OF PORT TOWNSEND
LIMITED TAX GENERAL OBLIGATION BOND, 2003
INTEREST RATE:
MATURITY DATE:
CUSIP NO:
REGISTERED OWNER: CEDE & CO.
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 June 1, 2004, 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
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 $2,390,000, issued pursuant to Ordinance No. 2844 of the City, passed on
December 15, 2003 (the "Bond Ordinance"), to provide financing for various capital purposes.
The bonds are subject to optional and mandatory redemption as provided in the Bond
Ordinance.
The City has designated the bonds of this issue as "qualified tax-exempt obligations" for
purchase by financial institutions.
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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.
This bond shall not be valid or become obligatory for any purpose or be entitled to any
security or benefit under the Bond Ordinance (as hereinafter defined) 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.
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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 or the City
Manager, to be attested by the manual or facsimile signature of the Clerk of the City, and the seal
of the City to be reproduced or impressed hereon, as of this December 30, 2003.
(SEAL)
CITY OF PORT TOWNSEND,
WASHINGTON
ATTEST:
By
/s/manual or facsimile
Mayor/City Manager
/s/manual or facsimile
Clerk of the City
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, 2003, dated December 30, 2003.
WASHINGTON STATE FISCAL
AGENCY, as Bond Registrar
By
Authorized Signer
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto ~
PLEASE INSERT SOCIAL SECURITY OR TAXPAYER
IDENTIFICATION NUMBER OF TRANSFEREE
I
(Please print or typewrite name and address, including zip code of Transferee)
17 Ordinance 2844
the within bond and all rights thereunder and does hereby irrevocably constitute and appoint
of ., or its successor,
as Agent to transfer said bond on the books kept by the Bond Register for registration thereof,
with full power of substitution in the premises.
DATED:
SIGNATURE GUARANTEED:
NOTICE: Signature(s) must be
guaranteed pursuant to law.
NOTE: The signature on this Assignment
must correspond with the name of the
Registered Owner as it appears upon the
face of the within bond in every particular,
without alteration or enlargement or any
change whatever.
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 signature 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 are 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
18 Ordinance 2844
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.
SECTION 12. Project Fund; Application of Proceeds of Bonds. A special account is
hereby created in the 2003 Capital Project Fund to be known as the "2003 Bond Proceeds
Account" (the "Project Fund"). The Project Fund shall be used to pay the costs of the capital
improvements described in Section 2.
At the time of delivery of the Bonds, the proceeds of the Bonds shall be deposited as
follows:
(a) The accrued interest, if any, to the date of delivery shall be deposited to
the Bond Account and used to pay a portion of the interest on the Bonds on December 1, 2003.
(b) The remaining proceeds shall be deposited into the Project Fund and used
to pay the costs of the acquisitions described in Section 2 hereof and all costs incidental thereto
and to the issuance of the Bonds.
Money remaining in the Project Fund after all of such costs have been paid or
reimbursed, or the Council determines not to undertake any project, may be used to pay costs of
19 Ordinance 2844
other legally authorized capital expenditures of the City or shall be deposited in the Bond
Account. Money in the Project Fund 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 Project
Fund 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
purchase contract and deliver it to Martin Nelson & Company, Inc. (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 Underwfiter'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
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
20 Ordinance 2844
other legally authorized capital expenditures of the City or shall be deposited in the Bc
Account. Money in the Project Fund 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 Project
Fund 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
purchase contract and deliver it to Martin Nelson & Company, Inc. (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
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
20 Ordinance2844
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 Ongoing 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.
The City is an obligated person with respect to less than $10,000,000 of municipal securities,
including the Bonds.
(b) Financial Statements/Operating Data. The City agrees to provide or
cause to be provided to each person upon request or to the SID, if any, a copy of its latest
publicly available annual financial statements 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). Such annual statements shall be available upon
request to the office of the City Finance Director.
(c) Material Events. The City agrees to provide or cause to be provided, in a
timely manner, to the SID, if any, to the Insurer, 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;
· Unscheduled draws on debt service reserves reflecting financial difficulties;
· Unscheduled draws on credit enhancements reflecting financial difficulties;
· 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;
21 Ordinance 2844
· 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 debt service reserves or property secure payment of the Bonds.
(d) Termination/Modification. The City's obligations to provide notices of
material events shall terminate upon the legal defeasance, prior redemption or payment in full of
all of the Bonds. Any provision of this 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, the Insurer, 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 accordance with the Rule.
(e) 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
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.
22 Ordinance 2844
SECTION 16. Bond Insurance.
(a) Acceptance of Insurance. The Council hereby approves the commitment of
MBIA Insurance Corporation (the "Insurer") to provide a policy of municipal bond insurance
guaranteeing the payment when due of principal of and interest on the Bonds (the "Bond
Insurance Policy"). The Finance Director is hereby authorized to execute such commitment on
behalf of the City. The Council further authorizes and directs all proper officers, agents,
attorneys and employees of the City to cooperate with the Insurer in preparing such additional
agreements, certificates, and other documentation on behalf of the City, consistent with this
resolution, as shall be required by such commitment or as shall be necessary or advisable in
providing for the Bond Insurance Policy.
(b) Payments Under the Bond Insurance Policy. In the event that, on the payment
date of the Bonds, the City or the Bond Registrar determines that there will not be sufficient
money available in the Bond Account to pay all principal of and interest on the Bonds due on
such payment date, the City or the Bond Registrar shall immediately notify the Insurer or its
designee on the same day by telephone or telegraph, confirmed in writing by registered or
certified mail, of the amount of the deficiency. If the deficiency is made up in whole or in part,
the Bond Registrar shall so notify the Insurer or its designee.
In addition, if the Bond Registrar has notice that any Bondholder has been required to
disgorge payments of principal or interest on the Bonds to a trustee in bankruptcy or creditors or
others pursuant to a final judgment by a court of competent jurisdiction that such payment
constitutes an avoidable preference to such Bondholder within the meaning of any applicable
bankruptcy laws, then the Bond Registrar shall notify the Insurer or its designee of such fact by
telephone or telegraphic notice, confirmed in writing by registered or certified mail.
23 Ordinance 2844
The Bond Registrar is hereby irrevocably designated, appointed, directed and authorized
to act as attorney-in-fact for Bondholders as follows:
(1) If and to the extent there is a deficiency in amounts required to pay interest
on the Bonds, the Bond Registrar shall (a)execute and deliver to U.S. Bank Trust National
Association, or its successors under the Bond Insurance Policy (the "Insurance Paying Agent"),
in form satisfactory to the Insurance Paying Agent, an instrument appointing the Insurer as agent
for such Bondholders in any legal proceeding related to the payment of such interest and an
assignment to the Insurer of the claims for interest to which such deficiency relates and which
are paid by the Insurer, (b) receive as designee of the respective Bondholders (and not as Bond
Registrar) in accordance with the tenor of the Bond Insurance Policy payment from the Insurance
Paying Agent with respect to the claims for interest so assigned, and (c) disburse the same to
such respective Bondholders; and
(2) If and to the extent of a deficiency in amounts required to pay principal of
any Bonds, the Bond Registrar shall (a)execute and deliver to the Insurance Paying Agent in
form satisfactory to the Insurance Paying Agent an instrument appointing the Insurer as agent for
such Bondholder in any legal proceeding relating to the payment of such principal and an
assignment to the Insurer of any of the Bonds surrendered to the Insurance Paying Agent of so
much of the principal amount thereof as has not previously been paid or for which moneys are
not held by the Bond Registrar and available for such payment (but such assignment shall be
delivered only if payment from the Insurance Paying Agent is received), (b) receive as designee
of the respective Bondholders (and not as Bond Registrar) in accordance with the tenor of the
Bond Insurance Policy payment therefor from the Insurance Paying Agent, and (c) disburse the
same to such Bondholders.
24 Ordinance 2844
Payments with respect to claims for interest on and principal of Bonds disbursed by the
Bond Registrar from proceeds of the Bond Insurance Policy shall not be considered to discharge
the obligation of the City with respect to such Bonds, and the Insurer shall become the owner of
such unpaid interest and claims for the interest in accordance with the tenor of the assignment
made to it under the provisions of this subsection or otherwise.
Irrespective of whether any such assignment is executed and delivered, the City and the
Bond Registrar hereby agree for the benefit of the Insurer that:
(1) They recognize that to the extent the Insurer makes payments directly or
indirectly (as by paying through the Bond Registrar), on account of principal of or interest on the
Bonds, the Insurer will be subrogated to the rights of such Bondholders to receive the amount of
such principal and interest for the City, with interest thereon as provided and solely from the
sources stated in this Ordinance and the Bonds; and
(2) They will accordingly pay to the Insurer the amount of such principal and
interest (including principal and interest recovered under subparagraph (ii) of the first paragraph
of the Bond Insurance Policy, which principal and interest shall be deemed past due and not to
have been paid), with interest thereon as provided in this Ordinance and the Bonds, but only
from the sources and in the manner provided herein for the payment of principal of and interest
on the Bond to Bondholders, and will otherwise treat the Insurer as the owner of such rights to
the amount of such principal and interest.
(c) Rights of Insurer.
(1) In connection with the issuance of additional general obligation bonds, the
City shall deliver to the Insurer a copy of the disclosure document, if any, circulated with respect
to such additional bonds.
25 Ordinance 2844
(2) Copies of any amendments made to the documents executed in connection
with the issuance of the Bonds which are consented to by the Insurer shall be sent to Standard &
Poor's Ratings Services, a Division of The McGraw-Hill Companies, Inc.
(3) The Insurer shall receive notice of the resignation or renewal of the Bond
Registrar and the appointment of a successor, other than the designated state fiscal agent.
(4) The Insurer shall receive copies of all notices required to be delivered to
Bondholders and, on an annual basis (or as soon as available from the office of the State Auditor)
copies of the City's audited financial statements, and annual budget.
(5) Any notice that is required to be given to a holder of Bonds or to the Bond
Registrar pursuant to this Ordinance shall also be provided to the Insurer. All notices required to
be given to the Insurer under this Ordinance shall be in writing and shall be sent by registered or
certified mail addressed to MBIA Insurance Corporation, 113 King Street, Armonk, New York
10504 Attention: Surveillance.
(6) The City agrees to reimburse the Insurer immediately and unconditionally
upon demand, to the extent permitted by law, for all reasonable expenses, including reasonable
attorneys' fees and expenses, incurred by the Insurer in connection with (i) enforcement by the
Insurer of the City's obligations, or the preservation or defense of any rights of the Insurer, under
this Ordinance and any other document executed in connection with the issuance of the Bonds,
and (ii) any consent, amendment, waiver or other action with respect to this Ordinance or any
related document, whether or not granted or approved, together with interest on all such expenses
from and including the date incurred to the date of payment at Citibank's Prime Rate plus 3% or
the maximum interest rate permitted by law, whichever is less. In addition, the Insurer reserves
26 Ordinance 2844
the right to charge a reasonable fee in connection with its review of any such consent,
amendment or waiver, whether or not granted or approved.
(7) The City agrees not to use the Insurer's name in any published document
including, without limitation, a press release or presentation, announcement or forum without the
Insurer's prior consent; provided that the City may use the Insurer's name in any general or
particular factual statement to the effect that the Insurer insures certain outstanding City bonds.
In the event that the City is advised by counsel that it has a legal obligation to disclose the
Insurer's name in any press release, public announcement or other published document, the City
shall provide the Insurer with at least three (3) business days' prior written notice of its intent to
use the Insurer's name together with a copy of the proposed use of the Insurer's name and of any
description of a transaction with the Insurer and shall obtain the Insurer's prior consent as to the
form and substance of the proposed use of the Insurer's name and any such description. The
foregoing shall not apply to any request for public records duly received by the City pursuant to
RCW Ch. 42.17, and the City shall not be obligated to notify the Insurer of its intent to comply
with any public disclosure request.
(8) The City shall not enter into any agreement nor shall it consent to or
participate in any arrangement pursuant to which Bonds are tendered or purchased for any
purpose other than the redemption and cancellation or legal defeasance of such Bonds without
the prior consent of the Insurer.
The provisions of this section shall be in effect only so long as the Bond Insurance Policy
is in full force and effect.
SECTION 17. General Authorization; Ratification of Prior Acts. The Finance Director,
Mayor and City Manager and other appropriate officers of the City are authorized to take any
27 Ordinance 2844
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
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 15th day
of December, 2003.
ATTEST:
City'Clerk 0
CITY OF PORT TOWNSEND,
WAS~.~GTO/~
APPROVED AS TO FORM:
28 Ordinance 2844
CERTIFICATE
I, the undersigned, 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. 2844 of
the City (herein called the "Ordinance"), as finally passed at a regular meeting of the City
Council of the City held on December 15, 2003 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 15th day of December, 2003.
Pamela Kolacy, cMc, C~i~ lerk
1 Ordinance 2844