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HomeMy WebLinkAbout3253 Providing for the Issuance of a Limited Tax General Obligation and Refunding Bond Ordinance 3253 Page I of'8 ORDINANCE NO. 3253 AN ORDINANCE OF THE CITY OF PORT TOWNSEND, WASHINGTON, PROVIDING FOR THE ISSUANCE OF A LIMITED TAX GENERAL OBLIGATION AND REFUNDING BOND IN THE PRINCIPAL AMOUNT OF $3,658,350 TO PROVIDE FUNDS TO REFUND THE CITY'S OUTSTANDING LIMITED TAX GENERAL OBLIGATION BONDS, 20109 TO REPAY THE CITY'S LIMITED TAX GENERAL OBLIGATION BOND ANTICIPATION NOTE, 2019, TO FINANCE CAPITAL IMPROVEMENTS AND TO PAY COSTS OF ISSUING THE BOND; AUTHORIZING THE SALE OF THE BOND TO KITSAP BANK; AND FIXING THE TERMS AND COVENANTS OF THE BOND NOW THEREFORE,the City Council of the City of Port Townsend do ordain as follows: Sectiola 1. l� elinitjon�. As used in this ordinance, the following capitalized terms shall have the following meanings: (a) "2010 Bonds" means the City's Limited Tax General Obligation Bonds, 2010, issued pursuant to Ordinance No. 3050. (b) "Bond" means the "City of Port Townsend, Washington Limited Tax General Obligation and Refunding Bond, 2020" authorized by this ordinance. (c) "Bond Fund" means the debt service fund of the City created for the payment of the principal of and interest on the Bond. (d) "Bond Register" means the registration records for each Bond maintained by the Bond Registrar. (e) "Bond Registrar" means the City Finance Director, whose duties include registering and atidicnticating the Bond, maintaining the Bond Register, transferring ownership of the bond, and paying the principal of and interest on the Bond. (f) "City" means the City of Port Townsend, Washington, a municipal corporation duly organized and existing under the laws of the State of Washington. (g) "City Council" means the legislative authority of the City, as duly and regularly constituted from time to time. (h) "Code" means the United States Internal Revenue Code of 1986, as amended, and applicable rules and regulations promulgated thereunder. (i) "Fiscal Agent" means the fiscal agent of the State of Washington, as the same may be designated by the State from time to time. 0) "Issue Date" means the date of the delivery of the Bond to the Purchaser. Ordinance 3253 Page 2 of'$ (k) "Note" means the City's Limited Tax General Obligation Bond Anticipation Note, 2019, issued pursuant to Ordinance No. 3227. (1) "Purchaser" means Kitsap Bank, or its successors or assigns. (m) "Redemption Date"means December 1, 2020. (n) "Refunded Bonds" means the outstanding 2010 Bonds maturing in the years 2025 and 2030, the refunding of which has been provided for by this ordinance. Section 2. findin Ys and Determinations. The City takes note of the following facts and makes the following findings and determinations: (a) Refunding of the Refunded Bonds. (1) Pursuant to Ordinance No. 3050, the City heretofore issued its $3,740,000 par value Limited Tax General Obligation Bonds, 2010 (the "2010 Bonds"), for the purpose of providing the t`tinds necessary to pay the costs of improvements to sidewalks and utilities, the library expansion, Way Finding Project, broadband and wireless improvements, r t'urbishing the Fort Worden Building 202, improvements to Howard Street and other capital improvements, and by that ordinance reserved the right to redeem the 2010 Bonds maturing on and after December 1, 2025, prior to their maturity on or after December 1, 2020, at a price of par plus accrued interest to the date fixed for redemption(the "Refunded Bonds"). (2) There are presently $2,740,000 par value of 2010 Bonds outstanding to be refunded. (3) After due consideration, it appears to the City Council that all of the Refunded Bonds be refunded by a portion of the issuance and sale of the limited tax general obligation and refunding bond authorized herein so that a savings will be effected by the difference between the principal and interest cost over the life of the portion of the Bond used for the refunding of the Refunded Bonds and the principal and interest cost over the life of the Refunded Bonds but for such refunding, which refunding will be effected by carrying out the refunding of the Refunded Bonds. (b) Repayment of Existing Line of Credit. The City currently has outstanding its Limited Tax General Obligation Bond Anticipation Note, 2019, in the principal amount of not to exceed $1,500,000, which matures on June 1, 2021 (the "Note") issued for the purpose of repaying the City's Limited Tax General Obligation Bond Anticipation Note, 2014 and to finance capital improvements. The City Council therefore finds that it is in the best interests of the City to repay the Note prior to its maturity date. (c) Authority and Description of the Proiect. The City is in need of t"deeding for its capital program (the "Projects"). The City Council therefore brads that it is in the best interests of the City to carry out the Projects. Ordinance 3253 Page 3 of 8 (d) Debt Capacity. The amount of indebtedness authorized by this ordinance is $3,658,350. Based on the following facts, this amount is to be issued within the amount permitted to be issued by the City for general municipal purposes without a vote: (1) The assessed valuation of the taxable property within the City as ascertained by the last preceding assessment for City purposes for collection in the calendar year 2020 is $1,864,397,348. (2) As of August 1, 2020, the City had limited tax general obligation indebtedness, consisting of bonds and loans outstanding in the principal amount of$1.7,031,191, which is incurred within the limit of up to I VM of the value of the taxable property 'within the City permitted for general municipal purposes without a vote. (3) As of August 1, 2020, the City has unlimited tax general obligation indebtedness outstanding in the principal amount of$2,835,000 for general municipal purposes. The indebtedness described in this paragraph has been incurred with the approval of the requisite proportion of the City's qualified voters at an election meeting the minimum turnout requirements, within the limit of up to 21/12% of the value of the taxable property \vithin the City for general municipal purposes (when combined with the outstanding limited tax general obligation indebtedness). (e) The Bond, For the purpose of providing the funds necessary to carry out the refunding of the Refunded Bonds, to repay the Dote, to pay a portion of tile costs of the Projects and to pay the costs of issuance and sale of the Bond, the City Council finds that it is in the best interests of the City and its taxpayers to issue the Bond consistent with this ordinance. Section 3. Authorization of the Bona The City is authorized to borrow money oul. the credit of the City and issue a tax-exempt limited tax general obligation and refunding bond evidencing indebtedness in the aggregate principal anIooIlt of $3,658,350 to provide funds necessary to carry out the refunding of the Refunded Bonds, to repay the Note,, to pay a portion of the costs of the Projects and to pay the costs of issuance and sale of the Bond. Section 4. lac scu mption of tl?e�oncl. The Bond shall be called the "City of Port Townsend, Washington, Limited Tax General Obligation and Refunding Bond, 2020," and shall be issued in the aggregate principal amount of$3,658,350. The Bond shall be dated the Issue Date, shall be numbered separately in the manner and with any additional designation as the Bond Registrar deems necessary for purposes of identification. The Bond shall mature on December 1, 2040, and shall bear interest at the rates per annunn set forth in Exhibit A (computed on the basis of a 360-day year of 12 30-day months), payable semiannually oil each Julie 1 and December 1, commencing June 1, 2021. Principal oil the Bond shall be payable annually on each December 1, commencing December 1, 2021, as set forth in Exhibit A, which is attached to this ordinance and incorporated by this reference. Section 5. I: onrl f c istrar` Ike xistration and "I'r°an fer of the ,Bond. Pursuant to RCW 39.46.030(4) the City's Finance Director shall serve as initial fiscal agent for the City (the "Bond Registrar") with respect to the Bond and is authorized, on behalf of the City, to authenticate and deliver the Bond in accordance with the provisions of the Bond and this Ordinance 3253 Page 4 of 8 ordinance. The Bond shall be issued only in registered form as to both principal and interest and shall be recorded on books or records maintained by the Bond Registrar (the "Bond Register"). The Bond Register shall contain the name and mailing address of the owner of the Bond. Upon a determination by the Finance Director that maintenance of the duties of the Bond Registrar is no longer convenient, the Fiscal Agent shall act as Bond Registrar. The Bond Registrar shall keep, or cause to be kept, at its office, sufficient books for the registration, assignment or transfer of the Bond, which books shall be open to inspection by the City at all times. The Bond Registrar is authorized, on behalf of the City, to authenticate and deliver the Bond transferred or exchanged in accordance with the provisions of the Bond and this ordinance, to serve as the City's paying agent for the Bond and to carry out all of the Bond Registrar's powers and duties under this ordinance. The Bond Registrar shall be responsible for its representations contained in the Bond Registrar's Certificate of Authentication on the Bond. The Bond may be assigned or transferred only in whole by the Purchaser to a single investor that is a financial institution or an entity reasonably believed to be a qualified institutional buyer within the meaning of the applicable federal securities laws. The transferee shall sign a certificate substantially in the form attached to the Bond. Any transfer shall be without cost to the owner or transferee, except for governmental charges imposed on any such transfer or exchange. The Bond registrar shall not be obligated to exchange or transfer the Bond during the 15 days preceding any payment or prepayment date. When the Bond has been paid in full, both principal and interest, the Bond shall be stirrendered to the Bond registrar, who shall cancel the Bond. ecfiioaa 6. corm and Execution of Q1e�Bond. (a) Form of the Bond; Signatures and Seal. The Bond shall be prepared in a form consistent with the provisions of this ordinance and Washington law. The Bond shall be signed by the Mayor and the City Clerk, either or both of whose signatures may be manual or in facsimile, and the seal of the City or a facsimile reproduction thereof shall be impressed or printed thereon. If any officer whose manual or facsimile signature appears on the Bond ceases to be in officer of the City authorized to sign bonds before the Bond bearing his or her manual or facsimile signature is authenticated by the Bond Registrar, or issued or delivered by the City, the Bond nevertheless may be authenticated, issued and delivered and, when authenticated, issued and delivered, shall be as binding on the City as though that person had continued to be an officer of the City authorized to sign bonds. The Bond also may be signed on behalf of the City by any person who, on the actual date of signing of the Bond, is an officer of the City authorized to sign bonds, although he or she slid not hold the required office on its Issue Date. (b) Authentication. Only the Bond bearing a Certificate of Authentication in substantially the following form, manually signed by the Bond Registrar, shall be valid or obligatory for any purpose or entitled to the benefits of this ordinance: "Certificate of tithentication. 'This Bond is the fully registered City of Port Townsend, Washington, Limited Tax General Obligation and Refunding Bond, 2020, described in the Bond Ordinance." The Ordinance 3253 Page 5 of 8 authorized signing of a Certificate of Authentication shall be conclusive evidence that the Bond so authenticated has been duly executed, authenticated and delivered and is entitled to the benefits of this ordinance. Section7. PqyM�g���d. Both principal of and interest on the Bond shall be payable in lawl,Lil money of the United States of America and shall be paid by electronic transfell, unless payment by check or drafl of the Bond Registrar is permitted by the Purchaser, and sent to the Purchaser so that the Purclu',iser receives said payinents \vhen, due ,it the address appearing on the Bond Register. The Bond is not subject to acceleration under any circumstances. Upon receipt of the final payment of princ,il-,)al of and interest on the Bond, whether at maturity or tipon prepaymcnt, the Rurchaser shall present and surrender the Bond to the Bond Registrar to be destroyed or cancelled in accordance with law. The City and the bond Registrar may deem and treat the Purchaser as the absolute owner of the Bond for the pUrpose of receiving payment of principal and interest and fbr all other purposes, and neither the City nor the Bond Registrar shall be affected by any notice to the contrary other than proper notice of assignment or transfer. Section 8. bond LFqnd� DeM)sLof bond-Proceeds. The Bond Fund is created as a slaeciaal I'Lind of the City for the sole ptit-pose of paying principal of and interest on the Bond. Bond proceeds in excess of the aniotints needed to carry out the refunding of the Ref"Unded Bonds, to repay the Note and pay the costs of issuance of the Bond, shall be deposited into a fund to pay costs of the Projects or into the Bond Fund to pay interest on the Bond on the first interest payment date. All amounts allocated to the payment of the principal of and interest on the Bond shall be deposited in the Bond Fund as necessary for the timely payment of amounts due with respect to the Bond. The principal of and interest on the Bond shall be paid out of the Bond Rind. Until needed foi,- that, purpose, the City may invest money in the Bond Fund temporarily in any legal investment, and the investment earnings shall be retained in the Bond Fund and used for the purposes of that fund. Section 9. prepayingLit. The City may prepay the Bond, in whole or in part, at any time, with at least 15 days' notice to the Purchaser. Any such prepayment will be applied to the earliest payments of principal due under the Bond. Each prepaynient will be accompanied by the amount of accrued interest on the amount prepaid and any prepayment made prior to the 10111 principal payment date of the Bond will be accompanied by a prepayment fee calculated by the Purchaser. The prepayment fee will be equal to the present V,I]LIC of the dif"Ierence, if positive, between (a)the sum of the interest payments that would have accrtied during the period from the date of the prepayment to and including the 10th principal payment date of the Bond on each prepaid installment of principal at a fixed interest rate for such installment equal to the Original Funding Rate, as if the prepayment had not been made, less (b) the Sum of the interest payments that would have accrued during such period on each prepaid installinent, of principal at a fixed interest rate for such installment equal to the Reinvestment Rate, as if the prepayinent laird not been made. No prepayment fee will be required for any prepayments made on or after the 10th principal payment date of the Bond. The following definitions will apply to the calculation of the prepayment fee: (i) "Original Funding Rate" means with respect to any prepaid installment of principal, the Swap Ordinance 3253 Page 6 of 8 Rate on the date of issuance of the Bond for a term of 10 years, (ii) "Reinvestment Rate" means with resi-.)ect to any, prepaid installment of principal, the Swap Rate oil the date (lie prepayment fee is calculated by the Purchaser for a term, interpolated, if necessary, corresponding to the period of time remaining witil such principal installment was scheduled to be made, and (iii) "Swap Rate" means, as of any date, the offered fixed rate for a U.S. Dollar interest rate swap rate with a floating rate equal to tile one-month LIBOR index, as determined by the Purchaser on such date by reference to the Bloomberg service or such other similar data source then used by the Purchaser for determining such rate; provided, that in the event that the one-month LIBOR index cannot be determined at the required time of determination, then the Swap Rate shall mean the offered fixed rate for as IJ.S. Dollar interest rate swap with a floating rate based on an index and, any adjustment to reflect a different credit spread designated by the Purchaser as being the most econornically comparable tca the one-month LIBOR index prior to such event. Section 10. L,ailure to Pa the Bond. If any payment of tile Bond is not paid when due, the City shall be obligated to pay interest on the Bond at the saine rate provided in the Bond from and after its maturity or date fixed for prepayment until the Bond, both principal and interest, is paid in full or until sufficient money for its payment in full is on deposit in the Bond Fund, or in a trust account established to refund or defease the Bond, and the Bond has been called for payment by giving notice of that call to the Purchaser. Section-11. Pledge orraxes. The Bond constitutes a general indebtedness of the City and is payable from tax revenues of the City and such other money as is lawfully available and pledged by the City for the payment of principal of and interest oil the Bond. For as long as the Bond is outstanding, the City irrevocably pledges that it shall, in the manner provided by law within the constitutional and statutory limitations provided by law without tile assent of tile voters, include in its annual property tax levy amounts sufficient, together with other money that is lawfully available, to pay principal of and interest on the Bond as the same become due. The full faith, credit and resources of the City are pledged irrevocably [or the prompt payment of the principal of and interest on the Bond and such pledge shall be enforceable in mandarnus against the City. Section 1 . Tax Covenants. (a) Preservation of Tax Exemption for Interest on the Bond. The City covenants that it will take all actions necessary to prevent interest on the Bond from being included in gross income for federal income tax purposes, and it will neither take any action nor make or permit any use of proceeds of the Bond or other funds of the City treated as proceeds of the Bond that will cause interest on the Bond to be included in gross income for federal incon-,te tax purposes, The City also covenants that it will, to the extent tile arbitrage rebate requirenients, of Section 148 of the Code are applicable to the Bond, take all actions necessary to comply (or to be treated as having complied) with those requirements in connection with the Bond. (b) Post-Issuance Compliance. The Finance Director is authorized and directed to review and update, if necessary, the City's written procedures to facilitate compliance by the City with the covenants in this ordinance and the applicable requirements of the Code that inust be satisfied after the Issue Date to prevent interest oil the Bond from being included in gross income for federal tax purposes. Ordinance 3253 Page 7 of 8 (c) DeSignation of the Bond as cl "QtWlrfled Tax-E:veny,)t Oblijg(ition," The City designates the Bond as a "qualified tax-exempt obligation" for the purposes of"Section 265(b)(3) of the Code, and makes the following findings and determinations: (1) the Bond does not constitute a "private activity bond" within the meaning of Section 141 of the Code; (2) the reasonably anticipated amount of tax-exempt obligations (other than private activity bonds and other obligations not required to be illChided in such calculation) that the City and any entity subordinate to the City (including any entity that the City controls, that derives its authority to issue tax-exempt obligations from the City, or that issues tax-exempt obligations on behalf of the City) will issue during the calendar year in which the Bond is issued will not exceed $10,000,000; and (3) the ainount of tax-exempt obligations, including the Bond, designated by the City as "qualified tax-exernpt obligations" for the purposes of Section 265(b)(3) of the Code during the calendar year in which the Bond is issued does not exceed $10,000,000. Section 13. R�j!Iniditw SLf the _" refunded 13onds. The City will deposit a portion of the proceeds of the Bond with the Fiscal Agent prior to the Redemption Date to carry out the refunding of the Refunded Bonds. The City will call for redemption on the Redemption Date:, all of the Refunded Bonds at par plus accrued interest. Such call for redemption shall be irrevocable after the delivery of the proceeds of the Bond to the Fiscal Agent. The Redemption Date is the first date on which those bonds may be called. The proper City officials are authorized and directed to give or cause to be given such notices as required, at the times and in the manner required by Ordinance No. 3050, in order to effect the redemption prior to their maturity of the Refunded Bonds. The City will work with the Fiscal Agent to give a conditional call notice with respect to the redemption of the Refunded Bonds prior to November 1, 2020. Section 14. Sale of the_13ond. The Bond shall be sold to the Purchaser at a price of par on the terms and conditions set forth herein; the City will furnish the Bond and the approving legal opinion of Foster Garvey P.C., municipal bond counsel, relative to the issuance of the Bond, at the City's expense. Section 15. Kec rain eui�gnients. While the Bond is outstanding, the City shall submit to the Purchaser its annual financial reports within 30 days after receipt of such annual financial report from the Washington State Auditor and such additional information as the Purchaser may reasonably request. Section 16. LI The Bond shall be governed and interpreted according to the laws of Washington. Section 17. G-jeneralAuthorization and-Ratification. The Mpiyor, Finance Director, City Clerk and other appropriate officers of the City are severally authorized to take such actions and to execute such, docuinents as in their judguient may be necessary or desirable to carry out the transactions contemplated in connection with this ordinance, and to do everything necessary Ordinance 3253 Page 8 of 8 for the prompt delivery of the Bond to the Purchaser thereof and for the proper application, use and investment of the proceeds of the Bond. All actions taken prior to the effective date of this ordinance in furtherance of the purposes described in this ordinance and not inconsistent with the terms of this ordinance are ratified and confirmed in all respects. Section 18. Severability. If any one or more of the covenants or agreements provided in this ordinance to be performed on the part of the City shall be declared by any court of competent jurisdiction to be contrary to law, theca such covenant or covenants, agreement or agreements, shall be iiull and void and shall be deemed separable from the reinahiing covenants and agreements iti this ordinance and shall in no way affect the validity of the other provisions of this ordinance. Section 19. Effective Date. This ordinance shall be effective five days from and after its passage, approval and publication as required by law. ADOPTED by the Council of the City of Port Townsend, Washington, at a regular meeting thereof held this 19th day of October 2020. Michelle Sandoval Mayor Attest: Approved as to Form: -eeriwm Joanna Sanders, MMC 14�ei i�(�ireeriwoo, City Clerk City Attorney Ordinance 3253 Exhibit A Page 1 of I EXHIBIT A DEBT SERVICE SCHEDULE Interest Rate Interest Total 06/01/2021 .� __.. nte. ..._.�.�.._ $ 2.m 711.48 $ 27,711.48._..� .._ Payment Date Principal 12/01/2021 $ 301,450 1.07% 27,558.37 329,008.37 06/01/2022 25,945.62 25,945.62 12/01/2022 303,900 1.11 25,945.62 329,845.62 06/01/2023 -- 24,258.97 24,258.97 12/01/2023 305,800 1.13 24,258.97 330,058.97 06/01/2024 -- 22,531.21 22,531.21 12/01/2024 307,200 1.22 22,5 31.21 329,731.21 06/01/2025 -- 20,657.29 20,657.29 12/01/2025 313,400 1.30 20,657.29 334,057.29 06/01/2026 -- 18,620.19 18,620.19 12/01/2026 319,300 1.41 18,620.19 337,920.19 06/01/2027 _- 16,3 69.12 16,3 69.12 12/01/2027 319,800 1.52 16,369.12 336,169.12 06/01/2028 -- 13,938.64 13,938.64 12/01/2028 325,200 1.65 13,938.64 339,138.64 06/01/2029 -4 11,255.74 11,255.74 12/01/2029 330,300 1.75 11,255.74 341,555.74 06/01/2030 -- 8,365.61 8,365.61 12/01/2030 340,000 1.82 8,365.61 348,365.61 06/01/2031 -- 5,271.61 5,271.61 12/01/2031 44,800 1.89 5,271.61 50,071.61 06/01/2032 -- 4,848.25 4,848.25 12/01/2032 45,700 1.95 4,848.25 50,548.25 06/01/2033 - 4,402.68 4,402.68 12/01/2033 46,600 2.03 4,402.68 51,002.68 06/01/2034 __. 3,929.69 3,929.69 12/01/2034 47,500 2.09 3,929.69 51,429.69 06/01/2035 -- 3,433.31 3,433.31 12/01/2035 48,500 2.15 3,433.31 51,933.31 06/01/2036 2,911.94 2,911.94 12/01/2036 49,500 2.19 2,911.94 52,411.94 06/01/2037 µ_ 2,369.91 2,369.91 12/01/2037 50,600 2.21 2,369.91 52,969.91 06/01/2038 -- 1,810.78 1,810.78 12/01/2038 51,800 2.24 1,810.78 53,610.78 06/01/2039 -- 1,230.62 1,230.62 12/01/2039 52,900 2.28 1,230.62 54,130.62 06/01/2040 _._ 627.56 627.56 12/01/2040 54,100 2.32 627.56 54,727.56 $440,827.33 ..._ �$.4_ ...._ _ $3,658,350 ,099,177.3 Ordinance 3253 Certificate Page 1 of I CERTIFICATION I, the undersigned, City Clerk of the City of Port Townsend, Washington, (the "City") and keeper of the records of the City Council (the "Council"),hereby certifies as follows: 1. The attached copy of Ordinance No. 3253 of the Council (the "Ordinance"), is a full, true and correct copy of an ordinance duly passed at a regular meeting of the Council held at the regular meeting place thereof on October 19, 2020, as that ordinance appears on the minute book of the City; and the Ordinance will be in full force and effect five days after publication in the City's official newspaper. 2. That said meeting was duly convened and held in all respects in accordance with law (including Proclamation 20-28 made by the Governor of the State of Washington on March 24, 2020, as extended, and acts of the legislative leadership of the State of Washington) and to the extent required by law, due and proper notice of such meeting was given; thata quorum of the members of the Council was present throrughout the meeting, and a legally sufficient number of members of the Council voted in the proper manner liar the passage of the 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. 3. 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 quortirn was present throughout tlie meeting and a legally sufficient uinniber of members of the Coruncil voted in the proper unanner for the passage of the Ordinance; that all other requirements and proceedings incident to the proper passage of the Ordinance have been duly fulfilled, carried out and otherwise observed; and that I am authorized to execute this certificate. IN WITNESS WHEREOF, I have hereunto set my hand this 19th day of October, 2020. CITY OF PORT TOWNSEND, WASHINGTON City Clerk