HomeMy WebLinkAboutOrdinance No. 2024-014 An Ordinance to Refund Bonds CITY OF ARLINGTON, WASHINGTON
ORDINANCE NO. 2024-014
AN ORDINANCE of the City of Arlington, Washington, relating to
contracting indebtedness; providing for the issuance, sale and delivery of not to
exceed $6,500,000 aggregate principal amount of limited tax general obligation
refunding bonds to provide funds to refund certain outstanding limited tax general
obligation bonds of the City and to pay the costs of issuance of the bonds; fixing
or setting parameters with respect to certain terms and covenants of the bonds;
appointing the City's designated representative to approve the final terms of the
sale of the bonds; and providing for other related matters.
Passed July 15, 2024
This document prepared by:
Foster Garvey P.C.
1111 Third Avenue, Suite 3000
Seattle, Washington 98101
(206) 447-4400
FG: 102711121.3
TABLE OF CONTENTS*
Page
Section1. Definitions............................................................................................................... 1
Section 2. Findings and Determinations.................................................................................. 4
Section 3. Authorization of Bonds........................................................................................... 5
Section 4. Description of the Bonds; Appointment of Designated Representative................. 5
Section 5. Bond Registrar; Registration and Transfer of Bonds.............................................. 6
Section 6. Form and Execution of Bonds................................................................................ 7
Section7. Payment of Bonds................................................................................................... 8
Section8. Bond Fund............................................................................................................... 8
Section 9. Redemption Provisions and Purchase of Bonds..................................................... 8
Section 10. Failure to Pay Bonds.....................
Section 11. Pledge of Taxes.....................................................................................................
10
Section 12. Tax Covenants; Designation of Bonds as "Qualified Tax Exempt
Obligations".......................................................................................................... 10
Section 13. Refunding or Defeasance of the Bonds ................................................................ 11
Section 14. Refunding of the Refunded Bonds........................................................................ 11
Section 15. Call for Redemption of the Refunded Bonds........................................................ 13
Section 16. Findings with Respect to Refunding..................................................................... 13
Section 17. Sale and Delivery of the Bonds ............................................................................ 13
Section 18. Official Statement................................................................................................. 14
Section 19. Undertaking to Provide Continuing Disclosure.................................................... 14
Section 20. Supplemental and Amendatory Ordinances.......................................................... 17
Section 21. General Authorization and Ratification................................................................ 17
Section22. Severability........................................................................................................... 17
Section 23. Effective Date of Ordinance ................................................................................. 17
*The cover page, table of contents and section headings of this ordinance are for convenience of
reference only, and shall not be used to resolve any question of interpretation of this ordinance.
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FG: 102711121.3
CITY OF ARLINGTON, WASHINGTON
ORDINANCE NO. 2024-014
AN ORDINANCE of the City of Arlington, Washington, relating to
contracting indebtedness; providing for the issuance, sale and delivery of not to
exceed $6,500,000 aggregate principal amount of limited tax general obligation
refunding bonds to provide funds to refund certain outstanding limited tax general
obligation bonds of the City and to pay the costs of issuance of the bonds; fixing
or setting parameters with respect to certain terms and covenants of the bonds;
appointing the City's designated representative to approve the final terms of the
sale of the bonds; and providing for other related matters.
THE CITY COUNCIL OF THE CITY OF ARLINGTON, WASHINGTON,DO ORDAIN
AS FOLLOWS:
Section 1. Definitions. As used in this ordinance,the following capitalized terms shall
have the following meanings:
(a) "2014 Bonds"means the City's Limited Tax General Obligation Refunding Bonds,
2014, issued pursuant to Ordinance No. 2014-008.
(b) "Acquired Obligations" means those United States Treasury Certificates of
Indebtedness,Notes, and Bonds--State and Local Government Series and other direct, noncallable
obligations of the United States of America that may be purchased to accomplish the refunding of
the Refunded Bonds as authorized by this ordinance.
(c) "Authorized Denomination" means $5,000 or any integral multiple thereof within
a maturity of the Bonds sold through a negotiated sale,and in any denomination designated by the
Designated Representative for the Bonds sold by private placement.
(d) "Beneficial Owner" means, with respect to a Bond, the owner of any beneficial
interest in that Bond.
(e) "Bond" means each bond issued pursuant to and for the purposes provided in this
ordinance.
(f) "Bond Counsel" means the firm of Foster Garvey P.C., its successor, or any other
attorney or firm of attorneys selected by the City with a nationally recognized standing as bond
counsel in the field of municipal finance.
(g) "Bond Fund" means the fund or account known as the Limited Tax General
Obligation Refunding Bond Fund, 2024, of the City created for the payment of the principal of
and interest on the Bonds.
(h) "Bond Purchase Agreement" means an offer to purchase the Bonds, setting forth
certain terms and conditions of the issuance, sale and delivery of those Bonds, which offer is
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FG: 102711121.3
authorized to be accepted by the Designated Representative on behalf of the City, if consistent
with this ordinance.
(i) "Bond Register" means the books or records maintained by the Bond Registrar for
the purpose of identifying ownership of each Bond.
0) "Bond Registrar" means the Fiscal Agent, or any successor bond registrar selected
by the City for the Bonds sold by negotiated sale, and means the City's Finance Director or any
successor bond registrar selected for the Bonds sold by private placement.
(k) "City" means the City of Arlington, Washington, a municipal corporation duly
organized and existing under the laws of the State.
(1) "City Council" means the legislative authority of the City, as duly and regularly
constituted from time to time.
(m) "Code" means the United States Internal Revenue Code of 1986, as amended, and
applicable rules and regulations promulgated thereunder.
(n) "DTC" means The Depository Trust Company, New York, New York, or its
nominee.
(o) "Designated Representative" means the officer of the City appointed in Section 4
of this ordinance to serve as the City's designated representative in accordance with RCW
39.46.040(2).
(p) "Final Terms" means the terms and conditions for the sale of the Bonds including
the amount, date or dates, denominations, interest rate or rates (or mechanism for determining
interest rate or rates), payment dates, final maturity, redemption or prepayment rights, price, and
other terms or covenants, including minimum savings for refunding bonds(if the refunding bonds
are issued for savings purposes).
(q) "Finance Director" means the City's Finance Director or such other officer of the
City who succeeds to substantially all of the responsibilities of that office.
(r) "Fiscal Agent" means the fiscal agent of the State, as the same may be designated
by the State from time to time.
(s) "Government Obligations" has the meaning given in RCW 39.53.010, as now in
effect or as may hereafter be amended.
(t) "Issue Date"means,with respect to a Bond,the date of initial issuance and delivery
of that Bond to the Purchaser in exchange for the purchase price of that Bond.
(u) "Letter of Representations" means the Blanket Issuer Letter of Representations
between the City and DTC, dated July 15, 1997, as it may be amended from time to time, and any
successor or substitute letter relating to the operational procedures of the Securities Depository.
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FG: 102711121.3
(v) "MSRB"means the Municipal Securities Rulemaking Board.
(w) "Official Statement" means an offering document, disclosure document, private
placement memorandum or substantially similar disclosure document provided to purchasers and
potential purchasers in connection with the initial offering of the Bonds in conformance with Rule
15c2-12 or other applicable regulations of the SEC.
(x) "Owner" means, without distinction, the Registered Owner and the Beneficial
Owner.
(y) "Purchaser" means Piper Sandler & Co., or such other corporation, firm,
association, partnership, trust, bank, financial institution or other legal entity or group of entities
selected by the Designated Representative to serve as purchaser in a private placement,underwriter
or placement agent in a negotiated sale.
(z) "Rating Agency" means any nationally recognized rating agency then maintaining
a rating on the Bonds at the request of the City.
(aa) "Record Date"means the Bond Registrar's close of business on the 15th day of the
month preceding an interest payment date. With respect to redemption of a Bond prior to its
maturity, the Record Date shall mean the Bond Registrar's close of business on the date on which
the Bond Registrar sends the notice of redemption in accordance with Section 9.
(bb) "Refunded Bonds" means all or a portion of the Refunding Candidates selected by
the Designated Representative to be refunded with proceeds of the Bonds and included in a
Refunding Plan.
(cc) "Refunding Candidates" means the outstanding 2014 Bonds.
(dd) "Refunding Plan"means:
(1) the placement of sufficient proceeds of the Bonds which, with other money
of the City, if necessary,will be deposited with the Refunding Trustee or Fiscal Agent and may be
used to acquire the Acquired Obligations to be deposited along with cash, if necessary, with the
Refunding Trustee;
(2) the payment of the principal of and interest on the Refunded Bonds when
due up to and including such date as determined by the Designated Representative, and the call,
payment, and redemption on such date, of all of the then-outstanding Refunded Bonds at a price
of par; and
(3) may include the payment of the costs of issuing the Bonds and the costs of
carrying out the foregoing elements of the Refunding Plan.
(ee) "Refunding Trust Agreement" means a Refunding Trust Agreement between the
City and the Refunding Trustee.
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FG: 102711121.3
(ff) "Refunding Trustee" means the trustee or escrow agent or any successor trustee or
escrow agent serving as refunding trustee, if necessary,to carry out the Refunding Plan.
(gg) "Registered Owner"means,with respect to a Bond, the person in whose name that
Bond is registered on the Bond Register. For so long as the City utilizes the book-entry only
system for the Bonds under the Letter of Representations, Registered Owner shall mean the
Securities Depository.
(hh) "Rule 1 Sc2-12"means Rule 15c2-12 promulgated by the SEC under the Securities
Exchange Act of 1934, as amended.
(ii) "SEC"means the United States Securities and Exchange Commission.
0j) "Securities Depository" means DTC, any successor thereto, any substitute
securities depository selected by the City that is qualified under applicable laws and regulations to
provide the services proposed to be provided by it, or the nominee of any of the foregoing.
(kk) "State" means the State of Washington.
(11) "Term Bond" means each Bond designated as a Term Bond and subject to
mandatory redemption in the years and amounts set forth in the Bond Purchase Agreement.
(mm) "Undertaking"means the undertaking to provide continuing disclosure entered into
pursuant to Section 19 of this ordinance.
Section 2. Findinp-s and Determinations. The City takes note of the following facts
and makes the following findings and determinations:
(a) Authority and Description of the Refunding Plan.
(1) Pursuant to Ordinance No. 2014-008, the City heretofore issued its
$7,875,000 par value Limited Tax General Obligation Refunding Bonds,2014(the"2014 Bonds"),
for the purpose of refunding the City's outstanding Limited Tax General Obligation Bonds, 2004
and prepaying the City's Limited Tax General Obligation Bond, 2009, and by that ordinance
reserved the right to redeem the 2014 Bonds maturing on and after December 1, 2024, prior to
their maturity on or after June 1, 2024, at a price of par plus accrued interest to the date fixed for
redemption (the "Refunding Candidates").
(2) There are presently $5,850,000 par value of Refunding Candidates
outstanding.
(3) After due consideration, it appears to the City Council that all or a portion
of the Refunding Candidates may be refunded by the issuance and sale of the limited tax general
obligation refunding bonds authorized herein so that a savings will be effected by the difference
between the principal and interest cost over the life of the 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 Plan.
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FG: 102711121.3
(b) Debt Capacity. The maximum amount of indebtedness authorized by this
ordinance is $6,500,000. 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 2024 is $4,944,744,596.
(2) As of June 1,2024,the City had limited tax general obligation indebtedness,
consisting of bonds outstanding in the principal amount of$14,942,496,
which is incurred within the limit of up to 1'/z% of the value of the taxable
property within the City permitted for general municipal purposes without
a vote.
(3) As of June 1, 2024, the City had no unlimited tax general obligation debt
outstanding.
(c) The Bonds. For the purpose of providing the funds necessary to carry out the
Refunding Plan and to pay the costs of issuance and sale of the Bonds,the City Council finds that
it is in the best interests of the City and its taxpayers to issue and sell the Bonds to the Purchaser,
pursuant to the terms set forth in the Bond Purchase Agreement as approved by the City's
Designated Representative consistent with this ordinance.
Section 3. Authorization of Bonds. The City is authorized to borrow money on the
credit of the City and issue negotiable limited tax general obligation refunding bonds evidencing
indebtedness in one or more series in the aggregate principal amount of not to exceed $6,500,000
to provide funds necessary to carry out the Refunding Plan and to pay the costs of issuance and
sale of the Bonds.
Section 4. Description of the Bonds: Appointment of Designated Representative. The
Finance Director, or the City Administrator in the absence of the Finance Director, is appointed as
the Designated Representative of the City and is authorized and directed to conduct the sale of the
Bonds in the manner and upon the terms deemed most advantageous to the City, and to approve
the Final Terms of the Bonds, with such additional terms and covenants as the Designated
Representative deems advisable, within the following parameters:
(a) The Bonds may be issued in one or more series, and the aggregate principal amount
of the Bonds shall not exceed $6,500,000;
(b) One or more rates of interest may be fixed for the Bonds as long as no rate of interest
for any maturity of the Bonds exceeds 5.00%;
(c) The true interest cost to the City for the Bonds does not exceed 4.00%;
(d) The aggregate purchase price for the Bonds shall not be less than 98%and not more
than 130% of the aggregate stated principal amount of the Bonds, excluding any original issue
discount;
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FG: 102711121.3
(e) The Bonds may be issued subject to optional and mandatory redemption provisions;
(f) The Bonds shall be dated as of the date of their delivery, which date and time for
the issuance and delivery of the Bonds is not later than one year from the effective date of this
ordinance;
(g) The Bonds shall mature no later than December 31, 2034; and
(h) There is a minimum net present value savings of 3.00%of the Refunded Bonds.
In addition, the Bonds may not be issued if it would cause the indebtedness of the City to
exceed the City's legal debt capacity on the Issue Date. The Designated Representative may
determine whether it is in the City's best interest to provide for bond insurance or other credit
enhancement; and may accept such additional terms, conditions and covenants as the Designated
Representative may determine are in the best interests of the City, consistent with this ordinance.
In determining the number of series, the series designations, final principal amounts, date
of the Bonds, denominations, interest rates, payment dates, redemption provisions, tax status, and
maturity dates for the Bonds, the Designated Representative, in consultation with other City
officials and staff and advisors, shall take into account those factors that, in the judgment of the
Designated Representative, will result in the lowest true interest cost on the Bonds to their
maturity, including,but not limited to current financial market conditions and current interest rates
for obligations comparable to the Bonds.
Section 5. Bond Registrar; Registration and Transfer of Bonds.
(a) Registration of Bonds. Each Bond shall be issued only in registered form as to both
principal and interest and the ownership of each Bond shall be recorded on the Bond Register.
(b) Bond Registrar;Duties. The Fiscal Agent is appointed as initial Bond Registrar for
any Bonds sold by negotiated sale. The City's Finance Director will be appointed as the initial
Bond Registrar for any Bonds sold by private placement. The Bond Registrar shall keep, or cause
to be kept, sufficient books for the registration and transfer of the Bonds, which shall be open to
inspection by the City at all times. The Bond Registrar is authorized, on behalf of the City, to
authenticate and deliver Bonds transferred or exchanged in accordance with the provisions of the
Bonds and this ordinance, to serve as the City's paying agent for the Bonds and to carry out all of
the Bond Registrar's powers and duties under this ordinance. The Bond Registrar shall be
responsible for its representations contained in the Bond Registrar's Certificate of Authentication
on each Bond. The Bond Registrar may become an Owner with the same rights it would have if
it were not the Bond Registrar and, to the extent permitted by law, may act as depository for and
permit any of its officers or directors to act as members of, or in any other capacity with respect
to, any committee formed to protect the rights of Owners.
(c) Bond Register; Transfer and Exchange. The Bond Register shall contain the name
and mailing address of each Registered Owner and the principal amount and number of each Bond
held by each Registered Owner. A Bond surrendered to the Bond Registrar may be exchanged for
a Bond or Bonds in any Authorized Denomination of an equal aggregate principal amount and of
the same interest rate and maturity. A Bond may be transferred only if endorsed in the manner
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FG: 102711121.3
provided thereon and surrendered to the Bond Registrar. Any exchange or transfer shall be without
cost to the Owner or transferee. The Bond Registrar shall not be obligated to exchange any Bond
or transfer registered ownership during the period between the applicable Record Date and the
next upcoming interest payment or redemption date.
(d) Securities Depository; Book-Entry Only Form. If a Bond is to be issued in book-
entry form, DTC shall be appointed as initial Securities Depository and each such Bond initially
shall be registered in the name of Cede & Co., as the nominee of DTC. Each Bond registered in
the name of the Securities Depository shall be held fully immobilized in book-entry only form by
the Securities Depository in accordance with the provisions of the Letter of Representations.
Registered ownership of any Bond registered in the name of the Securities Depository may not be
transferred except: (i)to any successor Securities Depository; (ii)to any substitute Securities
Depository appointed by the City; or(iii)to any person if the Bond is no longer to be held in book-
entry only form. Upon the resignation of the Securities Depository, or upon a termination of the
services of the Securities Depository by the City, the City may appoint a substitute Securities
Depository. If(i)the Securities Depository resigns and the City does not appoint a substitute
Securities Depository, or (ii) the City terminates the services of the Securities Depository, the
Bonds no longer shall be held in book-entry only forn and the registered ownership of each Bond
may be transferred to any person as provided in this ordinance.
Neither the City nor the Bond Registrar shall have any obligation to participants of any
Securities Depository or the persons for whom they act as nominees regarding accuracy of any
records maintained by the Securities Depository or its participants. Neither the City nor the Bond
Registrar shall be responsible for any notice that is permitted or required to be given to a Registered
Owner except such notice as is required to be given by the Bond Registrar to the Securities
Depository.
Section 6. Form and Execution of Bonds.
(a) Form of Bonds; Signatures and Seal. Each Bond shall be prepared in a form
consistent with the provisions of this ordinance and State law. Each 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 a Bond ceases to be an officer of the
City authorized to sign bonds before the Bond bearing such officer's manual or facsimile signature
is authenticated by the Bond Registrar, or issued or delivered by the City, that 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. Any Bond also may be signed on behalf of the City by any person who, on the
actual date of signing of the Bond, is an officer of the City authorized to sign bonds, although such
officer did not hold the required office on its Issue Date.
(b) Authentication. Only a 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
Authentication. This Bond is one of the fully registered City of Arlington, Washington, Limited
Tax General Obligation Refunding Bonds, [the year of issue], described in the Bond Ordinance."
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FG: 102711121.3
The 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.
Section 7. Payment of Bonds. Principal of and interest on each Bond shall be payable
in lawful money of the United States of America. Principal of and interest on each Bond registered
in the name of the Securities Depository is payable in the manner set forth in the Letter of
Representations. Interest on each Bond not registered in the name of the Securities Depository is
payable by electronic transfer on the interest payment date, or by check or draft of the Bond
Registrar mailed on the interest payment date to the Registered Owner at the address appearing on
the Bond Register on the Record Date. However, the City is not required to make electronic
transfers except pursuant to a request by a Registered Owner in writing received on or prior to the
Record Date and at the sole expense of the Registered Owner. Principal of each Bond not
registered in the name of the Securities Depository is payable upon presentation and surrender of
the Bond by the Registered Owner to the Bond Registrar. The Bonds are not subject to acceleration
under any circumstances.
Section 8. Bond Fund. The Bond Fund is created as a special fund of the City for the
sole purpose of paying principal of and interest and any redemption premium on the Bonds. Bond
proceeds in excess of the amounts needed to pay the costs of the Refunding Plan and the costs of
issuance of the Bonds, if any, shall be deposited into the Bond Fund. All amounts allocated to the
payment of the principal of and interest on the Bonds shall be deposited in the Bond Fund as
necessary for the timely payment of amounts due with respect to the Bonds. The principal of and
interest on the Bonds shall be paid out of the Bond Fund. Until needed for 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. Redemption Provisions and Purchase of Bonds.
(a) Optional Redemption. The Bonds shall be subject to redemption, or prepayment,
at the option of the City on terms acceptable to the Designated Representative, as set forth in the
Bond Purchase Agreement, consistent with the parameters set forth in Section 4.
(b) Mandatory Redemption. Each Bond that is designated as a Term Bond in the Bond
Purchase Agreement, consistent with the parameters set forth in Section 4 and except as set forth
below,shall be called for redemption at a price equal to the stated principal amount to be redeemed,
plus accrued interest,on the dates and in the amounts as set forth in the Bond Purchase Agreement.
If a Term Bond is redeemed under the optional redemption provisions, defeased or purchased by
the City and surrendered for cancellation, the principal amount of the Term Bond so redeemed,
defeased or purchased (irrespective of its actual redemption or purchase price),shall be credited
against one or more scheduled mandatory redemption installments for that Term Bond. The City
shall determine the manner in which the credit is to be allocated and shall notify the Bond Registrar
in writing of its allocation prior to the earliest mandatory redemption date for that Term Bond for
which notice of redemption has not already been given.
(c) Selection of Bonds for Redemption; Partial Redemption. If fewer than all of the
outstanding Bonds are to be redeemed at the option of the City,the City shall select the maturities
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FG: 102711121.3
to be redeemed. If fewer than all of the outstanding Bonds of a maturity are to be redeemed, the
Securities Depository shall select Bonds registered in the name of the Securities Depository to be
redeemed in accordance with the Letter of Representations, and the Bond Registrar shall select all
other Bonds to be redeemed randomly in such manner as the Bond Registrar shall determine. All
or a portion of the principal amount of any Bond that is to be redeemed may be redeemed in any
Authorized Denomination. If less than all of the outstanding principal amount of any Bond is
redeemed, upon surrender of that Bond to the Bond Registrar, there shall be issued to the
Registered Owner, without charge, a new Bond (or Bonds, at the option of the Registered Owner)
of the same maturity and interest rate in any Authorized Denomination in the aggregate principal
amount to remain outstanding.
(d) Notice of Redemption. Notice of redemption of each Bond registered in the name
of the Securities Depository shall be given in accordance with the Letter of Representations.
Notice of redemption of each other Bond, unless waived by the Registered Owner, shall be given
by the Bond Registrar not less than 20 nor more than 60 days prior to the date fixed for redemption
by first-class mail,postage prepaid, to the Registered Owner at the address appearing on the Bond
Register on the Record Date. The requirements of the preceding sentence shall be satisfied when
notice has been mailed as so provided, whether or not it is actually received by an Owner. In
addition,the redemption notice shall be mailed or sent electronically within the same period to the
MSRB (if required under the Undertaking), to each Rating Agency, and to such other persons and
with such additional information as the Finance Director shall determine, but these additional
mailings shall not be a condition precedent to the redemption of any Bond.
(e) Rescission of Optional Redemption Notice. In the case of an optional redemption,
the notice of redemption may state that the City retains the right to rescind the redemption notice
and the redemption by giving a notice of rescission to the affected Registered Owners at any time
prior to the scheduled optional redemption date. Any notice of optional redemption that is so
rescinded shall be of no effect, and each Bond for which a notice of optional redemption has been
rescinded shall remain outstanding.
(f) Effect of Redemption. Interest on each Bond called for redemption shall cease to
accrue on the date fixed for redemption,unless either the notice of optional redemption is rescinded
as set forth above, or money sufficient to effect such redemption is not on deposit in the Bond
Fund or in a trust account established to refund or defease the Bond.
(g) Purchase of Bonds. The City reserves the right to purchase any or all of the Bonds
offered to the City at any time at any price acceptable to the City plus accrued interest to the date
of purchase.
Section 10. Failure to Pay Bonds. If the principal of any Bond is not paid when the
Bond is properly presented at its maturity or date fixed for redemption, the City shall be obligated
to pay interest on that Bond at the same rate provided in the Bond from and after its maturity or
date fixed for redemption until that Bond, both principal and interest, is paid in full or until
sufficient money for its payment in full is on deposit in the Bond 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 Registered Owner.
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FG: 102711121.3
Section 11. Pledee of Taxes. The Bonds constitute a general indebtedness of the City
and are 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 on the Bonds. For as long as any
of the Bonds are outstanding, the City irrevocably pledges that it shall, in the manner provided by
law within the constitutional and statutory limitations provided by law without the assent of the
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 Bonds as the same become due. The
full faith, credit and resources of the City are pledged irrevocably for the prompt payment of the
principal of and interest on the Bonds and such pledge shall be enforceable in mandamus against
the City.
Section 12. Tax Covenants, Designation of Bonds as "Qualified Tax Exempt
Obligations."
(a) Preservation of Tax Exemption for Interest on Bonds. The City covenants that it
will take all actions necessary to prevent interest on the Bonds from being included in gross income
for federal income tax purposes, and it will neither take any action nor make or permit any use of
proceeds of the Bonds or other funds of the City treated as proceeds of the Bonds that will cause
interest on the Bonds to be included in gross income for federal income tax purposes. The City
also covenants that it will, to the extent the arbitrage rebate requirements of Section 148 of the
Code are applicable to the Bonds, take all actions necessary to comply (or to be treated as having
complied)with those requirements in connection with the Bonds.
(b) Post-Issuance Compliance. The Finance Director is authorized and directed to
review and update 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 must be satisfied after
the Issue Date to prevent interest on the Bonds from being included in gross income for federal
tax purposes.
(c) Designation of Bonds as "Qualified Tax-Exempt Obligations." The Bonds may be
designated as "qualified tax-exempt obligations" for the purposes of Section 265(b)(3) of the
Code, if the following conditions are met:
(1) the Bonds do not constitute "private activity bonds" 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 included 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 Bonds
are issued will not exceed $10,000,000; and
(3) the amount of tax-exempt obligations, including the Bonds, designated by
the City as "qualified tax-exempt obligations" for the purposes of
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FG: 102711121.3
Section 265(b)(3) of the Code during the calendar year in which the Bonds
are issued does not exceed $10,000,000.
Section 13. Refunding or Defeasance of the Bonds. The City may issue refunding
bonds pursuant to State law or use money available from any other lawful source to carry out a
refunding or defeasance plan,which may include (a) paying when due the principal of and interest
on any or all of the Bonds(the"defeased Bonds"); (b) redeeming the defeased Bonds prior to their
maturity; and(c)paying the costs of the refunding or defeasance. If the City sets aside in a special
trust fund or escrow account irrevocably pledged to that redemption or defeasance (the "trust
account"), money and/or Government Obligations maturing at a time or times and bearing interest
in amounts sufficient to redeem, refund or defease the defeased Bonds in accordance with their
terms, then all right and interest of the Owners of the defeased Bonds in the covenants of this
ordinance and in the funds and accounts obligated to the payment of the defeased Bonds shall
cease and become void. Thereafter, the Owners of defeased Bonds shall have the right to receive
payment of the principal of and interest on the defeased Bonds solely from the trust account and
the defeased Bonds shall be deemed no longer outstanding. In that event, the City may apply
money remaining in any fund or account(other than the trust account)established for the payment
or redemption of the defeased Bonds to any lawful purpose.
Unless otherwise specified by the City in a refunding or defeasance plan, notice of
refunding or defeasance shall be given, and selection of Bonds for any partial refunding or
defeasance shall be conducted, in the manner prescribed in this ordinance for the redemption of
Bonds.
Section 14. Refunding of the Refunded Bonds.
(a) Appointment of Refunding Trustee. If necessary to refund the Refunded Bonds,the
Designated Representative may select a Refunding Trustee in connection with the Bonds.
(b) Use of Bond Proceeds;Acquisition of Acquired Obligations. The proceeds of the
sale of the Bonds shall be deposited immediately upon the receipt thereof with the Refunding
Trustee, if one is appointed, or with the Fiscal Agent, and used to discharge the obligations of the
City relating to the Refunded Bonds under Ordinance No. 2014-008 by providing for the payment
of the amounts required to be paid by the Refunding Plan. If necessary, to the extent practicable,
such obligations shall be discharged fully by the Refunding Trustee's simultaneous purchase of
the Acquired Obligations, bearing such interest and maturing as to principal and interest in such
amounts and at such times so as to provide, together with a beginning cash balance, if necessary,
for the payment of the amount required to be paid by the Refunding Plan. The Acquired
Obligations, if acquired, will be listed and more particularly described in an exhibit to be attached
to the Refunding Trust Agreement between the City and the Refunding Trustee, but are subject to
substitution as set forth below. Any Bond proceeds or other money deposited with the Refunding
Trustee not needed to purchase the Acquired Obligations and provide a beginning cash balance, if
any, and pay the costs of issuance of the Bonds shall be returned to the City at the time of delivery
of the Bonds to the initial purchaser thereof and deposited in the Bond Fund to pay interest on the
Bonds on the first interest payment date.
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FG: 102711121.3
If payment of the costs of issuance of the Bonds is not included in the Refunding Plan,the
Bond proceeds that are not deposited with the Refunding Trustee will be deposited with the City
to be used to pay the costs of issuance of the Bonds. Any additional proceeds of the Bonds may
be deposited into the Bond Fund and used to pay interest on the Bonds on the first interest payment
date.
(c) Substitution of Acquired Obligations. Prior to the purchase of any Acquired
Obligations,if any are purchased,by the Refunding Trustee,the City reserves the right to substitute
other direct, noncallable obligations of the United States of America("Substitute Obligations")for
any of the Acquired Obligations and to use any savings created thereby for any lawful City purpose
if, (a) in the opinion of the City's bond counsel, the interest on the Bonds and the Refunded Bonds
will remain excluded from gross income for federal income tax purposes under Sections 103, 148,
and 149(d) of the Code, and (b) such substitution shall not impair the timely payment of the
amounts required to be paid by the Refunding Plan, as verified by a nationally recognized
independent certified public accounting firm.
After the purchase of the Acquired Obligations by the Refunding Trustee, if any are
purchased, the City reserves the right to substitute therefor cash or Substitute Obligations subject
to the conditions that such money or securities held by the Refunding Trustee shall be sufficient
to carry out the Refunding Plan, that such substitution will not cause the Bonds or the Refunded
Bonds to be arbitrage bonds within the meaning of Section 148 of the Code and regulations
thereunder in effect on the date of such substitution and applicable to obligations issued on the
issue dates of the Bonds and the Refunded Bonds, as applicable, and that the City obtain, at its
expense: (1) a verification by a nationally recognized independent firm acceptable to the
Refunding Trustee confirming that the payments of principal of and interest on the substitute
securities, if paid when due, and any other money held by the Refunding Trustee will be sufficient
to carry out the Refunding Plan; and (2) an opinion from a nationally recognized bond counsel to
the City,to the effect that the disposition and substitution or purchase of such securities, under the
statutes, rules, and regulations then in force and applicable to the Bonds,will not cause the interest
on the Bonds or the Refunded Bonds to be included in gross income for federal income tax
purposes and that such disposition and substitution or purchase is in compliance with the statutes
and regulations applicable to the Bonds. Any surplus money resulting from the sale,transfer,other
disposition, or redemption of the Acquired Obligations and the substitutions therefor shall be
released from the trust estate and transferred to the City to be used for any lawful City purpose.
(d) Administration of Refunding Plan. The Refunding Trustee is authorized and
directed to purchase the Acquired Obligations (or substitute obligations), if so directed by the
Designated Representative, and to make the payments required to be made by the Refunding Plan
from the Acquired Obligations(or substitute obligations)and money deposited with the Refunding
Trustee pursuant to this ordinance. All Acquired Obligations (or substitute obligations) and the
money deposited with the Refunding Trustee and any income therefrom shall be held irrevocably,
invested and applied in accordance with the provisions of Ordinance No. 2014-008,this ordinance,
chapter 39.53 RC W and other applicable statutes of the State of Washington and the Refunding
Trust Agreement. All necessary and proper fees, compensation, and expenses of the Refunding
Trustee for the Bonds and all other costs incidental to the setting up of the escrow to accomplish
the refunding of the Refunded Bonds and costs related to the issuance and delivery of the Bonds,
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FG: 102711121.3
including bond printing,verification fees(if any),Bond Counsel's fees, and other related expenses,
shall be paid out of the proceeds of the Bonds.
(e) Authorization for Refunding Trust Agreement. If necessary to carry out the
Refunding Plan provided for by this ordinance, the Finance Director is authorized and directed to
execute and deliver to the Refunding Trustee a Refunding Trust Agreement setting forth the duties,
obligations and responsibilities of the Refunding Trustee in connection with the payment,
redemption, and retirement of the Refunded Bonds as provided herein and stating that the
provisions for payment of the fees, compensation, and expenses of such Refunding Trustee set
forth therein are satisfactory to it. Prior to executing a Refunding Trust Agreement,the Designated
Representative of the City is authorized to make such changes therein that do not change the
substance and purpose thereof or that assure that the escrow provided therein and the Bonds are in
compliance with the requirements of federal law governing the exclusion of interest on the Bonds
from gross income for federal income tax purposes.
Section 15. Call for Redemption of the Refunded Bonds. The City will call for
redemption on such date as determined by the Designated Representative, all of the Refunded
Bonds at par plus accrued interest. Such call for redemption shall be irrevocable after the delivery
of the Bonds to the initial Purchaser thereof.
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. 2014-008 in order
to effect the redemption prior to their maturity of the Refunded Bonds.
Section 16. Findings with Respect to Refundinp,. The City Council authorizes the
Designated Representative to issue the Bonds if it will achieve debt service savings to the City and
is in the best interest of the City and its taxpayers and in the public interest. In making such finding
and determination, the Designated Representative will give consideration to the fixed maturities
of the Bonds and the Refunded Bonds, the costs of issuance of the Bonds and the known earned
income from the investment of the proceeds of the issuance and sale of the Bonds and other money
of the City used in the Refunding Plan, if any, pending payment and redemption of the Refunded
Bonds.
The Designated Representative finds and determines that if the money and/or Acquired
Obligations to be deposited with the Refunding Trustee or Fiscal Agent is sufficient to redeem the
Refunded Bonds in accordance with Section 15 of this ordinance, it will discharge and satisfy the
obligations of the City under Ordinance No. 2014-008 with respect to the Refunded Bonds and the
pledges, charges, trusts, covenants, and agreements of the City therein made or provided for as to
the Refunded Bonds, and that the Refunded Bonds shall no longer be deemed to be outstanding
under such ordinance immediately upon the deposit of such money with the Refunding Trustee or
Fiscal Agent.
Section 17. Sale and Delivery of the Bonds.
(a) Manner of Sale of Bonds; Delivery of Bonds. The Designated Representative is
authorized to sell the Bonds by negotiated sale or private placement, based on the assessment of
the Designated Representative of market conditions, in consultation with appropriate City officials
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FG: 102711121.3
and staff, Bond Counsel and other advisors. In determining the method of sale of the Bonds and
accepting the Final Terms,the Designated Representative shall take into account those factors that,
in the judgment of the Designated Representative, may be expected to result in the lowest true
interest cost to the City.
(b) Procedure for Negotiated Sale or Private Placement. If the Designated
Representative determines that the Bonds is to be sold by negotiated sale or private placement,the
Designated Representative shall select one or more Purchasers with which to negotiate such sale.
The Bond Purchase Agreement for the Bonds shall set forth the Final Terms. The Designated
Representative is authorized to execute the Bond Purchase Agreement on behalf of the City, so
long as the terms provided therein are consistent with the terms of this ordinance.
(c) Preparation, Execution and Delivery of the Bonds. The Bonds will be prepared at
City expense and will be delivered to the Purchaser in accordance with the Bond Purchase
Agreement, together with the approving legal opinion of Bond Counsel regarding the Bonds.
Section 18. Official Statement.
(a) Preliminary Official Statement Deemed Final. The Designated Representative
shall review and, if acceptable to the Designated Representative, approve the preliminary Official
Statement prepared in connection with the sale of the Bonds to the public or through a Purchaser
as a placement agent. For the sole purpose of the Purchaser's compliance with paragraph (b)(1)
of Rule 15c2-12, if applicable, the Designated Representative is authorized to deem that
preliminary Official Statement final as of its date,except for the omission of information permitted
to be omitted by Rule 15c2-12. The City approves the distribution to potential purchasers of the
Bonds of a preliminary Official Statement that has been approved by the Designated
Representative and been deemed final, if applicable, in accordance with this subsection.
(b) Approval of Final Official Statement. The City approves the preparation of a final
Official Statement for the Bonds to be sold to the public in the form of the preliminary Official
Statement that has been approved and deemed final in accordance with subsection (a), with such
modifications and amendments as the Designated Representative deems necessary or desirable,
and further authorizes the Designated Representative to execute and deliver such final Official
Statement to the Purchaser if required under Rule 15c2-12. The City authorizes and approves the
distribution by the Purchaser of the final Official Statement so executed and delivered to
purchasers and potential purchasers of the Bonds.
Section 19. Undertakin!,, to Provide Continuing Disclosure. If necessary to meet the
requirements of paragraph (b)(5) of Rule 15c2-12, as applicable to a participating underwriter for
the Bonds, the City makes the following written undertaking (the "Undertaking") for the benefit
of holders of the Bonds:
(a) Undertaking to Provide Annual Financial Information and Nolice ofListed Events.
The City undertakes to provide or cause to be provided, either directly or through a designated
agent, to the MSRB, in an electronic format as prescribed by the MSRB, accompanied by
identifying information as prescribed by the MSRB:
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FG: 102711121.3
(1) Annual financial information and operating data of the type included in the
final official statement for the Bonds and described in paragraph (b) ("annual financial
information");
(2) Timely notice(not in excess of 10 business days after the occurrence of the
event) of the occurrence of any of the following events with respect to the Bonds: (A) principal
and interest payment delinquencies; (B) non-payment related defaults, if material;
(C) unscheduled draws on debt service reserves reflecting financial difficulties; (D) unscheduled
draws on credit enhancements reflecting financial difficulties;(E) substitution of credit or liquidity
providers, or their failure to perform; (F) adverse tax opinions, the issuance by the Internal
Revenue Service of proposed or final determinations of taxability,Notice of Proposed Issue (IRS
Form 5701 —TEB) or other material notices or determinations with respect to the tax status of the
Bonds, or other material events affecting the tax status of the Bonds; (G) modifications to rights
of holders of the Bonds, if material; (H) bond calls (other than scheduled mandatory redemptions
of Term Bonds), if material, and tender offers; (I) defeasances; (J)release, substitution, or sale of
property securing repayment of the Bonds, if material; (K) rating changes; (L)bankruptcy,
insolvency, receivership or similar event of the City, as such "Bankruptcy Events" are defined in
Rule 15c2-12; (M)the consummation of a merger, consolidation, or acquisition involving the City
or the sale of all or substantially all of the assets of the City other than in the ordinary course of
business, the entry into a definitive agreement to undertake such an action or the termination of a
definitive agreement relating to any such actions, other than pursuant to its terms, if material;
(N) appointment of a successor or additional trustee or the change of name of a trustee, if material;
(0) incurrence of a financial obligation of the City or obligated person, if material, or agreement
to covenants, events of default, remedies, priority rights, or other similar terms of a financial
obligation of the City or obligated person, any of which affect security holders, if material; and
(P) default, event of acceleration,termination event, modification of terms, or other similar events
under the terms of the financial obligation of the City or obligated person, any of which reflect
financial difficulties. The term "financial obligation" means a (i) debt obligation; (ii) derivative
instrument entered into in connection with, or pledged as security or a source of payment for, an
existing or planned debt obligation; or(iii) guarantee of(i)or(ii). The term "financial obligation"
shall not include municipal securities as to which a final official statement has been provided to
the MSRB consistent with Rule 15c2-12.
(3) Timely notice of a failure by the City to provide required annual financial
information on or before the date specified in paragraph (b).
(b) TiPe ol'Annual Financial Information Undertaken to be Provided. The annual
financial information that the City undertakes to provide in paragraph (a):
(1) Shall consist of(A) annual financial statements prepared (except as noted
in the financial statements)in accordance with applicable generally accepted accounting principles
applicable to local governmental units of the State such as the City, as such principles may be
changed from time to time,which statements may be unaudited,provided,that if and when audited
financial statements are prepared and available they will be provided; (B) principal amount of
general obligation bonds outstanding at the end of the applicable fiscal year;(C) assessed valuation
for that fiscal year; and (D) regular property tax levy rate for the fiscal year;
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FG: 102711121.3
(2) Shall be provided not later than the last day of the ninth month after the end
of each fiscal year of the City (currently, a fiscal year ending December 31), as such fiscal year
may be changed as required or permitted by State law, commencing with the City's fiscal year in
which the Bonds are issued; and
(3) May be provided in a single or multiple documents, and may be
incorporated by specific reference to documents available to the public on the Internet website of
the MSRB or filed with the SEC.
(c) Amendment of Underiuking. This Undertaking is subject to amendment after the
primary offering of the Bonds without the consent of any holder of any Bond, or of any broker,
dealer, municipal securities dealer, participating underwriter, Rating Agency or the MSRB, under
the circumstances and in the manner permitted by Rule 15c2-12. The City will give notice to the
MSRB of the substance (or provide a copy) of any amendment to the Undertaking and a brief
statement of the reasons for the amendment. If the amendment changes the type of annual financial
information to be provided, the annual financial information containing the amended financial
information will include a narrative explanation of the effect of that change on the type of
information to be provided.
(d) Beneficiaries. This Undertaking shall inure to the benefit of the City and the holder
of each Bond, and shall not inure to the benefit of or create any rights in any other person.
(e) Termination of Undertaking. The City's obligations under this Undertaking shall
terminate upon the legal defeasance of all of the Bonds. in addition, the City's obligations under
this Undertaking shall terminate if the provisions of Rule 15c2-12 that require the City to comply
with this Undertaking become legally inapplicable in respect of the Bonds for any reason, as
confirmed by an opinion of Bond Counsel delivered to the City,and the City provides timely notice
of such termination to the MSRB.
(f) Remedy,for Failure to Comte with Undertakirr. . As soon as practicable after the
City learns of any failure to comply with this Undertaking,the City will proceed with due diligence
to cause such noncompliance to be corrected. No failure by the City or other obligated person to
comply with this Undertaking shall constitute an event of default. The sole remedy of any holder
of a Bond shall be to take action to compel the City or other obligated person to comply with this
Undertaking, including seeking an order of specific performance from an appropriate court.
(g) Designation of Qf icial RMonsible to Administer Undertaking. The Finance
Director or a designee of the Finance Director is the person designated, in accordance with the
Bond Ordinance,to carry out the Undertaking in accordance with Rule 15c2-12, including,without
limitation, the following actions:
(1) Preparing and filing the annual financial information undertaken to be
provided;
(2) Determining whether any event specified in paragraph (a) has occurred,
assessing its materiality, where necessary, with respect to the Bonds, and preparing and
disseminating any required notice of its occurrence;
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FG: 102711121.3
(3) Determining whether any person other than the City is an "obligated
person"within the meaning of Rule 15c2-12 with respect to the Bonds, and obtaining from such
person an undertaking to provide any annual financial information and notice of listed events for
that person required under Rule 15c2-12;
(4) Selecting, engaging and compensating designated agents and consultants,
including advisors and legal counsel,to assist and advise the City in carrying out this Undertaking;
and
(5) Effecting any necessary amendment of this undertaking.
Section 20. Supplemental and Amendatory Ordinances. The City may supplement or
amend this ordinance for any one or more of the following purposes without the consent of any
Owners of the Bonds:
(a) To add covenants and agreements that do not materially adversely affect the
interests of Owners, or to surrender any right or power reserved to or conferred upon the City.
(b) To cure any ambiguities, or to cure, correct or supplement any defective provision
contained in this ordinance in a manner that does not materially adversely affect the interest of the
Beneficial Owners of the Bonds.
Section 21. General Authorization and Ratification. The Mayor, City Administrator,
Finance Director, City Clerk and other appropriate officers of the City are severally authorized to
take such actions and to execute such documents as in their judgment may be necessary or desirable
to carry out the transactions contemplated in connection with this ordinance, and to do everything
necessary for the prompt delivery of the Bonds to the Purchaser thereof and for the proper
application, use and investment of the proceeds of the Bonds, including paying the fees and costs
of the Purchaser, Bond Counsel and Rating Agency. 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 22. Severability. The provisions of this ordinance are declared to be separate
and severable. If a court of competent jurisdiction, all appeals having been exhausted or all appeal
periods having run, finds any provision of this ordinance to be invalid or unenforceable as to any
person or circumstance, such offending provision shall, if feasible, be deemed to be modified to
be within the limits of enforceability or validity. However, if the offending provision cannot be
so modified, it shall be null and void with respect to the particular person or circumstance, and all
other provisions of this ordinance in all other respects, and the offending provision with respect to
all other persons and all other circumstances, shall remain valid and enforceable.
Section 23. Effective Date of Ordinance. This ordinance shall take effect and be in
force from and after its passage and five days following its publication as required by law.
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FG: 102711121.3
PASSED by the City Council and APPROVED by the Mayor of the City of Arlington,
Washington, at an open public meeting thereof,this 15th day of July, 2024.
C.
Don E. Va ney, Mayor
ATTEST:
Wendy Van Oer Meersche, City Clerk
APPROVED AS TO FORM:
Stev ei A ey
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FG: 102711121.3
CERTIFICATION
I, the undersigned, City Clerk of the City of Arlington, Washington (the "City"), hereby
certify as follows:
1. The attached copy of Ordinance No. 2024-014 (the "Ordinance") is a full, true
and correct copy of an ordinance duly passed at a regular meeting of the City Council of the City
held at the regular meeting place thereof on July 15, 2024 (the "Meeting"), as that ordinance
appears on the minute book of the City.
2. The Ordinance will be in full force and in effect five days after publication in
the City's official newspaper, which publication date is expected to be July 18, 2024.
3. The Meeting was duly convened, held and included an opportunity for public
comment, in all respects in accordance with law; a quorum of the members of the City Council
was present throughout the meeting; and a majority of the members voted in the proper manner
for the passage of the Ordinance.
Dated: July 15, 2024.
CITY OF ARLINGTON, WASHINGTON
Wendy V Der Meersche, City Clerk
FG: 102711121.3